April 30, se investment ke returns ko miley hain full marks.

Transcription

1 April 30, 2016 se investment ke returns ko miley hain full marks.

2 EXPERT SPEAK Mr. Nilesh Shah April 30, 2016 Dear Friends, Investing in equities is a positive sum game. In simple terms, it means that over a long period of time, a steady investor has a far higher possibility of positive payoffs than negative. In fact, if history is any indicator, then with a 15 year time horizon, the possibility of negative returns is almost zero. In other words, a 15 year investor in Sensex would have never lost his capital and may have also made (averagely) a return of around 14.5%. Risk Return Tradeoff of Sensex Particulars 5 yr returns 10 yr returns 15 year returns Positive Returns nos of days Negative Returns nos of days Total Opportunities Average Return Return-Risk Tradeoff % % N.A Source: ICRA. Returns Annualised Yet still, on a bad market day (or month), the complainants of equity market far overwhelm the main discourse. That is because the reason behind the issue is more behavioural and psychological. Humans tend to grieve more for a loss than to rejoice over a similar amount of gain. In other words, fear tends to be a stronger emotion than greed for a similar figure. Though this behaviour came in handy surviving in the wild Savannah and Serengeti millions of years ago, it is not appropriate for the Wall and Dalal street of today. For that reason, successful investing is increasing being seen as a Zen practice. A fund manager has to increasingly look inward to ascertain the emotion driving the logic. A whole new stream of investing discipline has opened up, called as behavioural finance. This discipline seeks to combine psychology with finance. If one were to adhere to the teaching of successful fund managers such as Warren Buffet, Charles Munger, Seth Klarman, one would conclude that investing is increasingly like a Zen practice. In his recent letter to his investors, Klarman went ahead and furnished the mental discipline required for investing success. As per him, a fund manager is expected to bring in hardwork, endless discipline, steely resolve and high patience to the job. Success still remains unguaranteed but odds can be improved if the investor has the right philosophy, right mind-set, right process, right team, right investors, and right culture at the table. To state paradoxically, a fund manager is to have an arrogance of action and the humility of a student. Having been a fund manager myself, I can say this with some degree of confidence that these prescriptions are more than true. At fund manager level, almost everybody has a high level of IQ. But what differentiates a winner from the average is EQ (Emotional quotient) & SQ (spiritual quotient). But we underappreciate this investment function. For a thought experiment, remove the fund manager and AMC business from the society and imagine the investing scene. In such a scenario everybody is expected to be his/her own direct fund manager. Imagine the scale of stress, confusion, costly mistakes and missed opportunities. This would lead to very few wealth stories and a large impoverishment. The point is that an AMC and a fund manager serve a critical social and economic function. A fund manager, for a few basis points, assumes a hard professional responsibility, a regulatory and auditory oversight, and fiduciary risk of his investors. In turn, this fund manager provides wealth creating potential and relative social opportunity to the investor. Not a hard bargain I say. Regards, Nilesh Shah Managing Director 1

3 EQUITY VIEW INDIA: Macro remains strong; global cues drive markets I Indian equity markets continued their up-move in the month of April 2016 even while a part of the gains were eroded as the Bank of Japan kept its monetary stimulus package unchanged. As we discussed in the report last month, the rally in oil prices and the related weakening in the US Dollar, have been the key reasons for the transition from a global risk off to risk on trade since mid-february. The large cap Nifty 50 rose 1.43% while the Nifty Midcap 100 Index rose 3.47% (INR terms). FIIs (Foreign Institutional Investors) were net buyers in Indian equity markets to the tune of USD1.3Bn. One trend to watch out for will be the quantum of flows from the Domestic Institutional investors (DIIs) who have been supporting the market for most of the last calendar year. In the month of April, the DIIs were net sellers to the tune of USD86mn. We are constructive on the domestic macro economic and earnings recovery cycle over FY17-18E. The market is keenly watching the Q4FY16 earnings season which is underway and has been largely encouraging so far with numbers slightly above estimates on an aggregate basis. Retail private sector banks have reported strong numbers with loan growth significantly above industry average. Companies linked to the rural economy have also shown initial signs of pick up in activity. Corporate banks continue to see asset quality stress and this would be a key factor to watch out for in FY17. Technology companies have however been grappling with slowdown in growth (in a seasonally weak fourth quarter) along with pressures on margins (despite INR weakness), which we believe is reflective of changing business dynamics in the sector. Overall, we remain positive on equity markets on the back of improvement in macro economic growth (with the initial forecast of a normal monsoon), lower interest rates and improvement in corporate earnings trajectory. However, the run up in stock prices in the last couple of months imply that valuations for the market are now in fair zone and earnings growth trajectory has to improve from here on. The Nifty is now trading at 17.4xFY17E EPS and 14.4xFY18E EPS (free float basis). Passage of key legislation could provide a positive trigger On the domestic front, the Union Parliament is in session (April 20-May 8th) and the focus is on the passage of key legislation. The Parliament passed the MMDR (Mines and Minerals Development and Regulation) Act which paves the way for transfer of captive mines in the country without the need for auction. The Joint Parliamentary Committee on Insolvency and Bankruptcy Code has submitted its report, which would lead to the clearance of the Bankruptcy bill by the Parliament. The bill adds to measures initiated by the government to deal with the problem of NPAs (Non Performing ) of banks. The Sarfaesi (Securitisation and Reconstruction of Financial and Enforcement of Security Interest) Act and Debt Recovery Tribunal (DRT) Act have also been amended to make recovery process more efficient. RBI changes liquidity stance; to remain accommodative in FY17; expect a further 25bps cut in policy rates While RBI cut key policy rates at the Monetary Policy meeting (held on April 5th) by 25bps largely in line with expectations, the key highlight was the change in stance on liquidity. We believe that the revised liquidity framework paves way for easier liquidity conditions and smoother monetary policy transmission over the medium term. Further, the reduction in cash balances of the central government with the RBI would also help in easing liquidity. We expect another 25 bps cut in policy rates, likely in H2CY16. This would however be dependent on the monsoon and the inflation trajectory. RBI announced a few key changes in its liquidity management framework. These include: Moving liquidity deficit towards neutral: RBI seeks to lower the average liquidity deficit in the system closer to neutral. This is a significant shift in RBI s stance and we believe that as this is achieved over time, it will help in reducing the banks cost of funding at the margin and help in better transmission in the form of lower lending rates. Narrowing the policy rate corridor: The policy rate corridor (repo-reverse repo spread) reduced to 50 bps from 100 bps with repo rate at 6.5%. With the MSF (Marginal Standing Facility) rate at 7% and reverse repo at 6%, this spread is reduced to 100 bps from 200 bps earlier. These steps should ensure that the weighted average call rate is more aligned to the repo rate. Short-term liquidity and durable liquidity management: RBI clarified that it intends to meet requirements of durable liquidity (through reserve money creation) first and then fine-tune short-term liquidity (through term repos/reverse repo). This brings back the focus on the use of OMOs (Open Market Operations) along with FX intervention strategies. This is in contrast to the strategy adopted by the central bank so far. Daily CRR maintenance: Reduction of the minimum daily CRR maintenance to 90% from 95% of the requirement. This will help banks in managing daily liquidity needs better and avoid resorting to market borrowings at the margin. Global monetary policy at the forefront; BoJ surprises by keeping asset purchase target unchanged The month of April 2016 saw almost all the large central banks meeting. While the actions by the US Federal Reserve and the ECB (European Central Bank) were largely along anticipated lines, the BoJ (Bank of Japan) surprised by keeping its asset purchase programme unchanged. The US Federal Reserve voted to keep the policy rates unchanged while maintaining the accommodative stance, thereby supporting further improvement in labour market conditions and a return to 2% inflation. It also mentioned that economic conditions would likely evolve in a manner, which would warrant gradual increases in the policy rate. The FOMC would also closely monitor indicators and global economic and financial developments. The recent soft economic data from the US has renewed the expectations of a continued dovish stance by the US Fed and the probability of a US Fed rate hikes in CY2016 has reduced considerably. At this point we are building in 2 rate hikes in the second half of the year. The ECB left its benchmark rates unchanged at 0%, deposit rates at (-)0.4% and asset purchases of EUR80Bn on a monthly basis at its meeting, in line with market expectations. ECB President stated that interest rates are expected to be at present levels or lower for extended period of time even beyond QE (Quantitative Easing) horizon. QE will run until at least Mar 2017 and until sustained inflation adjustment is seen. While expectations were that that the Bank of Japan would provide more monetary stimulus, they decided against it. The Bank of Japan (BoJ) kept its asset purchase target unchanged at JPY80Trn a year and continued with the (-)0.1% rate charged on some commercial bank deposits. The only change in the policy was provision of aid to areas devastated by the recent quakes. The thought process was that it is better to assess the impact of negative rates on the economy. While this was initially a dampener for markets, it does not rule out any further expansionary monetary policy if the situation so demands. Normal monsoon expectations bode well for equity markets The Indian Meteorological Department (IMD) forecasts that s the June-September monsoon would be at 106% of LPA (Long Period Average), which qualifies as above normal southwest monsoons. The IMD noted that El Niño conditions will likely weaken towards the first half of the monsoons. SkyMet, an independent agency, has forecast monsoon at 105% of LPA with 35% probability of above normal rainfall, 30% of normal rainfall, 20% of excess rainfall, 10% of below normal rainfall, and 5% of drought. While it is premature to conclude on effects of normal monsoons on growth and prices, but after two consecutive weak monsoons, a normal monsoon will provide much respite to the rural sector. This together with the steps being taken by the government to boost the rural economy augurs well for rural consumption, which has been stagnating. Overall we do expect that consumption would be a key driver of GDP growth recovery (from an aggregate expenditure side) in FY17/18E. The fillip to urban consumption as an outcome of the 7th Pay Commission would aid the economic recovery. At this point, we are building in real GDP growth at 7.3%/7.6% in FY16E/FY17E. A normal monsoon could boost agricultural growth (visà-vis our projections) and boost overall GDP in FY17E. Key Variables Short - term Economy Medium - term Remarks Improving growth, falling inflation Corporate Earnings FII Flow DII Flow Supply of paper Interest Rates Policy/Reform Initiative Improving operating leverage, falling interest costs and improvement in working capital can accelerate earnings, but a bit back-ended (FY17) India stands out among global asset classes, with faster EPS growth & improving macro-economic variables, however it is over-owned by FII and any near-term risk-off environment impacts Indian flows Focus on improving financial savings of households er disinvestment target and repair of leveraged balance sheet to create supply in markets Fall in interest rates to help revive demand and reduce stress for companies with significant debt GST is key reform for government to focus on; if it gets passed, can provide a significant fillip 2

4 DEBT VIEW Items Apr-16 Mar-16 Change Reverse Repo 6.00% 5.75% 25bps Repo 6.50% 6.75% -25bps CRR 4% 4% Nil SLR 21.25% 21.50% -25 bps Mibor Overnight 6.57% 9.00% -243 bps Call(O/N) 6.55% 9.36% -281 bps CBLO 5.37% 7.38% -201 bps 1 yr T Bill 6.88% 7.06% -18 bps 10 G Sec 7.44% 7.46% -2 bps 5 Year AAA 8.08% 8.31% -23 bps USD/INR paise Source: RBI; ICRAonline. Key Events: RBI cut its key interest rate the repo rate-- to a five-year low of 6.5%, a move that should eventually lead to lower borrowing cost. RBI has stated its intention to bring the liquidity deficit in the system to neutral - implying an infusion of around Rs 70, ,000 crs over a period of time CPI inflation softened to a six-month low of 4.8% in March 2016 from 5.3% in February 2016, driven by lower food and fuel price inflation. India's annual wholesale inflation rose a tad to (-) 0.85% for March from (-)0.91% in the month before, while still remaining in the negative zone for the 17th straight month. India's exports declined for the 16th month running in March to US22.72 billion, down 5.47% on YoY basis, whereas imports have also declined to US27.78 billion down 21.56% Y-o-Y. The trade deficit for March was at record low of US 5.07 billion v/s US billion reported during the corresponding month of IIP (Index of industrial production) data bounced back into positive zone in February reversing 3 month of contraction, reporting 2% growth, compared to - 1.5% in January. Electricity, gems and jewellery and minerals aided the overall industrial performance growth. Oil prices climbs and closed at 48.3/barrel from ~39.6 up by almost 22% on MoM on weaker dollar and optimism that a global oil glut will ease. The European Central Bank left all its interest rates unchanged at its rate call. It had started to expand the monthly purchases under its asset-purchase program to 80 billion (90.8 billion) The Federal Reserve left interest rates unchanged, noting that it will continue to "closely monitor" inflation indicators and global economic and financial developments. Bank of Japan chose to keep policy on hold with no additional stimulus defying market expectations for action. Debt Outlook Long Term Curve : We have Monetary policy review scheduled at 5th of April 2016 We believe that the expectation of a good monsoon, benign inflation outlook and conducive global environment may create room for additional rate cut of bps Having said that, the RBI s stated intention to reduce liquidity deficit to zero implies an OMO of arund Rs 1 lakh crore into the system. This creates downward bias of around 25 bps on the long term yield curve. For above stated reasons, we believe that the 10 year gilt may trend downward and hover in the range of % within next few months Investors may use this opportunity to invest in duration funds with a 18 month horizon Short-Term Curve (3m -24 m): The near term yield curve (less than 2 yr maturities) has steepened When RBI infuses significant liquidity or cuts the rate - the yield curve may flatten with a softening bias. Key variables & their impact on interest rates: Key Variables Short - term Medium - term Inflation Rupee Credit Demand Government Borrowing RBI Policy Global Event Risk Corporate bond Spread Debt FII flow Liquidity Denotes fall in interest rates 3 3

5 GOLD VIEW For the month, spot gold closed at per ounce, up per ounce or 3.32%. During the month gold prices have managed to hold up well, supported by continuing strong investor and fund buying. Gold prices started the month with an unclear trend as US Federal Chief Yellen s speech cooled down the bullion market while the US Non-Farm Payroll (NFP) dragged it back down. The Chair of the FOMC voiced her concern over the global economic growth that could eventually adversely impact the progress of the U.S. economy. This news was enough to pull up gold prices until the NFP report was released. It showed a bit higher than expected gain in jobs which slightly revived a possible rate hike in June During the month European Central Bank (ECB) policy meeting concluded with no change to policy, even though the Euro has slightly devaluated against the USD. The USD has also gained some strength against the Japanese yen. The stronger USD may have contributed to the modest fall of gold prices. Going forward Gold prices could face selloffs if the FOMC were to surprise and release a more hawkish than expected statement. But if the upcoming U.S. economic reports mainly US GDP and Personal consumption expenditures (PCE) disappoint and the FOMC were to maintain a dovish or even a balanced statement, the market is likely to react in favor, which will drive back up gold prices. 4

6 EQUITY SCHEMES KOTAK 50 An Open - Ended Equity INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small To generate capital appreciation from a portfolio of predominantly equity and equity related securities. The portfolio will generally comprise of equity and equity related instruments of around 50 companies which may go up to 59 companies but will not exceed 59 at any point in time. However, there is no assurance that the objective of the scheme will be realized. December 29,1998 Mr. Harish Krishnan* Nifty 50 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: 45.66% Beta: 1.06 ## Sharpe : 0.51 Standard Deviation : 16.57% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016) Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: i) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of investment: 1%. ii) For redemption/switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of investment: Nil. Note Any exit load charged (net off Service Tax, if any) shall be credited back to the respective scheme. Units issued on reinvestment of dividends shall not be subject to entry and exit load. Total Expense Ratio ** Regular:2.20% Direct: 1.00% Equity & Equity related (Listed/Awaiting listing on Stock Exchange) HDFC Bank Ltd. Banks 9.04 Infosys Ltd. Software 8.81 ICICI Bank Ltd. Banks 4.74 IndusInd Bank Ltd. Banks 4.50 Reliance Industries Ltd. Petroleum Products 4.46 Axis Bank Ltd Banks 3.79 ITC Ltd. Consumer Non Durables 3.69 Larsen And Toubro Ltd. Construction Project 3.66 Sun Pharmaceuticals Industries Ltd. Pharmaceuticals 3.45 Maruti Suzuki India Limited Auto 3.27 Tata Consultancy Services Ltd. Software 2.50 Mahindra & Mahindra Ltd. Auto 2.22 HDFC Ltd. Finance 2.15 Ultratech Cement Ltd. Cement 2.13 Tata Motors Ltd - DVR Auto 2.09 Bharat Petroleum Corporation Ltd. Petroleum Products 1.96 HCL Technologies Ltd. Software 1.95 Hero MotoCorp Ltd. Auto 1.82 Britannia Industries Ltd. Consumer Non Durables 1.55 Lupin Ltd. Pharmaceuticals 1.55 Shree Cement Ltd. Cement 1.54 Power Grid Corporation Of India Ltd Power 1.42 The Ramco Cements Ltd Cement 1.38 Grasim Industries Ltd. Cement 1.32 State Bank Of India Banks 1.19 Kajaria Ceramics Ltd. Construction 1.16 Persistent Systems Limited Software 1.16 Asian Paints Ltd. Consumer Non Durables 1.13 Jubilant Foodworks Limited Consumer Non Durables 1.12 MRF Limited Auto Ancillaries 1.09 Cadila Healthcare Ltd. Pharmaceuticals 1.06 Equitas Holdings Ltd Finance 1.06 Indraprastha Gas Ltd. Gas 1.03 Siemens Ltd. Industrial Capital Goods 1.01 Tech Mahindra Ltd. Software 0.98 Colgate Palmolive (India ) Ltd. Consumer Non Durables 0.96 Notes: Term Deposit as provided above is towards margin for derivatives transactions Total amount invested (Rs) Total Value as on Mar 31, 2016 (Rs) Returns (%) Nifty 50 (Rs)# Nifty 50 Returns (%) S&P BSE SENSEX (Rs)^ S&P BSE SENSEX Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Nestle India Ltd. Consumer Non Durables 0.96 Sanofi India Ltd. Pharmaceuticals 0.92 Alstom India Limited Industrial Capital Goods 0.85 Bharat Electronics Ltd Industrial Capital Goods 0.81 Supreme Industries Limited Industrial Products 0.76 Dabur India Ltd Consumer Non Durables 0.75 Adani Port and Special Economic Zone Limited Transportation 0.58 HDFC Ltd. Warrants Finance 0.39 DR.Lal Pathlabs Ltd Healthcare Services 0.34 Bank Of Baroda Banks 0.26 Fag Bearings India Ltd. Industrial Products 0.16 Listed/Awaiting Listing on Stock Exchange - Total Futures Tata Motors Ltd.-MAY Maruti Suzuki India Limited-MAY Futures (Market value represents Notional Value) - Total 0.00 Reverse Repo 4.49 TERM DEPOSITS Kotak Mahindra Bank Ltd Term Deposits - Total 1.22 Net Current /(Liabilities) Systematic Investment Plan (SIP) If you had invested `10,000 every month Inception : - December 29, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak 50 NAV as on April 29, 2016: ` (Dividend Option), `34.436(Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Banks Software Auto Consumer Non Durables Cement Pharmaceuticals Construction Project Petroleum Products Finance CBLO & Term Deposits & Rev.Repo Others 1 year 3 years 5 years 7 years 10 years Since Inception 120, , , ,000 1,200,000 2,080, , , ,048 1,274,163 2,129,545 12,152, , , ,998 1,110,053 1,825,804 6,932, , , ,196 1,093,213 1,787,924 7,009, Investors understand that their principal will be at moderately high risk Long term capital growth Investment in portfolio of predominantly equity & equity related securities * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 5 * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no 44-53

7 EQUITY SCHEMES KOTAK CLASSIC EQUITY An Open - Ended Equity Growth INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small To generate capital appreciation from a diversified portfolio of equity and equity related securities. However, there is no assurance that the objective of the scheme will be realized. July 27, 2005 Mr. Harish Krishnan* Nifty 100 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: % Beta: 0.87 ## Sharpe : 0.42 Standard Deviation : 14.06% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016) Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: Nil., (w.e.f December 01, 2014) Regular: 2.70% Direct: 1.30% Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Infosys Ltd. Software 7.11 HDFC Bank Ltd. Banks 5.67 Reliance Industries Ltd. Petroleum Products 4.53 Grasim Industries Ltd. Cement 3.49 Zee Entertainment Enterprises Ltd Media and Entertainment 3.40 Bharat Petroleum Corporation Ltd. Petroleum Products 3.07 Hero MotoCorp Ltd. Auto 2.77 Asian Paints Ltd. Consumer Non Durables 2.73 Hindustan Unilever Ltd. Consumer Non Durables 2.71 Tata Consultancy Services Ltd. Software 2.18 Tata Motors Ltd. Auto 2.11 HDFC Ltd. Finance 1.92 Bajaj Auto Ltd. Auto 1.70 Lupin Ltd. Pharmaceuticals 1.58 ITC Ltd. Consumer Non Durables 1.44 Bajaj Finance Limited Finance 1.43 Mahindra & Mahindra Ltd. Auto 1.37 Ultratech Cement Ltd. Cement 1.35 Dr Reddys Laboratories Ltd Pharmaceuticals 1.34 DR.Lal Pathlabs Ltd Healthcare Services 1.30 Power Grid Corporation Of India Ltd Power 1.29 Eicher Motors Ltd Auto 1.28 Britannia Industries Ltd. Consumer Non Durables 1.20 Axis Bank Ltd Banks 1.03 Bharti Infratel Ltd. Telecom - Equipment & Accessories 0.89 HCL Technologies Ltd. Software 0.89 HDFC Ltd. Warrants Finance 0.88 Bajaj Finserv Ltd. Finance 0.84 Alkem Laboratories Ltd Pharmaceuticals 0.80 GAIL (India) Ltd. Gas 0.80 Wipro Ltd. Software 0.77 Equitas Holdings Ltd Finance 0.73 Petronet LNG Ltd. Gas 0.70 Marico Ltd. Consumer Non Durables 0.65 Notes: Term Deposit as provided above is towards margin for derivatives transactions Total amount invested (Rs) Total Value as on Mar 31, 2016 (Rs) Returns (%) Nifty 100 (Rs)# Nifty 100 Returns (%) Nifty 50 (Rs)^ Nifty 50 Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Divi s Laboratories Limited Pharmaceuticals 0.62 JSW Steel Ltd. Ferrous Metals 0.58 Sun Pharmaceuticals Industries Ltd. Pharmaceuticals 0.58 Larsen And Toubro Ltd. Construction Project 0.50 National Thermal Power Corporation Limited Power 0.50 Ashok Leyland Ltd. Auto 0.49 IndusInd Bank Ltd. Banks 0.48 Tata Steel Limited. Ferrous Metals 0.47 Maruti Suzuki India Limited Auto 0.46 Bosch Limited Auto Ancillaries 0.41 Cummins India Ltd. Industrial Products 0.28 Titan Company Ltd. Consumer Durables 0.25 Oracle Financial Services Software Ltd Software 0.24 TVS Motors Company Ltd Auto 0.24 Just Dial Limited Software 0.18 Cadila Healthcare Ltd. Pharmaceuticals 0.11 Dish TV India Ltd. Media and Entertainment 0.10 Aurobindo Pharma Ltd. Pharmaceuticals 0.09 IDFC Bank Limited Banks 0.09 Bharti Airtel Ltd. Telecom - Services 0.07 Listed/Awaiting Listing on Stock Exchange - Total Futures CNX NIFTY-MAY ITC Ltd.-MAY IndusInd Bank Ltd.-MAY Maruti Suzuki India Limited-MAY Yes Bank Ltd-MAY ICICI Bank Ltd.-MAY Bajaj Auto Ltd.-MAY Bharat Heavy Electricals Ltd.-MAY Larsen And Toubro Ltd.-MAY Futures (Market value represents Notional Value) -Total Reverse Repo TERM DEPOSITS Kotak Mahindra Bank Ltd Term Deposits - Total 6.12 Net Current /(Liabilities) Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 120, , , ,000 1,200,000 1,290, , , ,643 1,206,498 2,034,785 2,301, , , ,958 1,140,909 1,893,325 2,167, , , ,998 1,110,053 1,825,804 2,092, Inception : - July 27,2005. The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak Classic Equity NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Banks Software Auto Finance Cement Consumer Non Durables Pharmaceuticals Derivatives Petroleum Products Others CBLO&Term Deposits&Rev.Repo * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no Investors understand that their principal will be at moderately high risk Long term capital growth Investment in portfolio of predominantly equity & equity related securities * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 6

8 EQUITY SCHEMES KOTAK OPPORTUNITIES An Open - Ended Equity Growth INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small To generate capital appreciation from a diversified portfolio of equity and equity related securities. However, there is no assurance that the objective of the scheme will be realized. September 9, 2004 Mr. Harsha Upadhyaya* Nifty 500 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan: B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: 29.46% Beta: 0.96 ## Sharpe :0.72 Standard Deviation : 15.78% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016) Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: I) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of investment: 1% ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of investment: NIL iii) Any exit load charged (net off Service Tax, if any) shall be credited back to the respective. iv) Units issued on reinvestment of dividends shall not be subject to exit load Regular: 2.37% Direct: 1.22% 7 Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Infosys Ltd. Software 6.61 HDFC Bank Ltd. Banks 5.27 Bajaj Finance Limited Finance 3.73 Shree Cement Ltd. Cement 3.16 Hero MotoCorp Ltd. Auto 3.13 ICICI Bank Ltd. Banks 2.82 Axis Bank Ltd Banks 2.81 Maruti Suzuki India Limited Auto 2.66 Larsen And Toubro Ltd. Construction Project 2.64 Bharat Petroleum Corporation Ltd. Petroleum Products 2.61 Hindustan Petroleum Corporation Ltd Petroleum Products 2.51 Ultratech Cement Ltd. Cement 2.44 IndusInd Bank Ltd. Banks 2.43 UPL Ltd Pesticides 2.27 State Bank Of India Banks 2.12 Britannia Industries Ltd. Consumer Non Durables 2.11 Torrent Pharmaceuticals Ltd. Pharmaceuticals 2.11 Sun Pharmaceuticals Industries Ltd. Pharmaceuticals 2.10 Reliance Industries Ltd. Petroleum Products 2.07 Tech Mahindra Ltd. Software 1.85 Tata Motors Ltd. Auto 1.81 Indraprastha Gas Ltd. Gas 1.69 HCL Technologies Ltd. Software 1.58 The Ramco Cements Ltd Cement 1.58 Petronet LNG Ltd. Gas 1.57 Dalmia Bharat Ltd Cement 1.49 Lupin Ltd. Pharmaceuticals 1.48 MRF Limited Auto Ancillaries 1.42 ITC Ltd. Consumer Non Durables 1.37 Ashok Leyland Ltd. Auto 1.35 Max Financial Services Ltd. Finance 1.30 Persistent Systems Limited Software 1.25 Va Tech Wabag Limited Engineering Services 1.21 Healthcare Global Enterprises Ltd Healthcare Services 1.18 Mahindra & Mahindra Ltd. Auto 1.12 Bank Of Baroda Banks 1.11 Notes: Term Deposit as provided above is towards margin for derivatives transactions Total amount invested (Rs) Total Value as on Mar 31, 2016 (Rs) Returns (%) Nifty 500 (Rs)# Nifty 500 Returns (%) Nifty 50 (Rs)^ Nifty 50 Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Inception : - September 09, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak Opportunities NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), `82.04 (Direct Growth Option) SECTOR ALLOCATION (%) Banks Software Others Petroleum Products Auto Pharmaceuticals Finance Consumer Non Durables Cement Industrial Products Construction Project * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no Systematic Investment Plan (SIP) If you had invested `10,000 every month year 3 years 5 years 7 years 10 years Since Inception 120, , , ,000 1,200,000 1,390, , , ,459 1,334,306 2,281,954 3,311, , , ,407 1,152,523 1,884,147 2,527, , , ,998 1,110,020 1,825,771 2,493, Multi Commodity Exchange of India Limited Finance 1.11 Arvind Ltd Textile Products 1.09 Fag Bearings India Ltd. Industrial Products 1.06 AIA Engineering Limited Industrial Capital Goods 1.04 DR.Lal Pathlabs Ltd Healthcare Services 1.03 Cummins India Ltd. Industrial Products 0.99 Whirlpool of India Ltd. Consumer Durables 0.97 Container Corporation of India Ltd. Transportation 0.95 JK Cement Ltd. Cement 0.91 CESC Ltd. Power 0.83 National Buildings Construction Corporation Limited Construction 0.82 Techno Electric & Engineering Co Ltd. Construction Project 0.73 MBL Infrastructures Ltd. Construction 0.72 Federal Bank Ltd. Banks 0.64 Equitas Holdings Ltd Finance 0.59 Prestige Estates Projects Limited Construction 0.59 D-Link (India) Ltd Hardware 0.58 Bharat Forge Ltd. Industrial Products 0.56 HDFC Ltd. Warrants Finance 0.55 SKF India Ltd Industrial Products 0.53 Swaraj Engines Ltd Industrial Products 0.46 Max India Limited Healthcare Services Redm Preference Sh Zee Entertainment Enterprises Ltd Media and Entertainment 0.15 Max Ventures and Industries Limited Industrial Products 0.01 Listed/Awaiting Listing on Stock Exchange - Total Reverse Repo 2.67 TERM DEPOSITS Kotak Mahindra Bank Ltd Term Deposits - Total 0.49 Net Current /(Liabilities) Investors understand that their principal will be at moderately high risk Long term capital growth Investment in portfolio of predominantly equity & equity related securities * Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

9 EQUITY SCHEMES KOTAK SELECT FOCUS FUND An Open - Ended Equity INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small The investment objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, generally focused on a few selected sectors. However, there is no assurance that the objective of the scheme will be realized. September 11, 2009 Mr. Harsha Upadhyaya* Nifty 200 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: 25.51% Beta: 1.00 ## Sharpe : 0.85 Standard Deviation : 16.27% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016). Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: I) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of investment:1% ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of investment: NIL iii) Any exit load charged (net off Service Tax, if any) shall be credited back to the respective. iv) Units issued on reinvestment of dividends shall not be subject to exit load Regular: 2.02% Direct: 1.00% Equity & Equity related (Listed/Awaiting listing on Stock Exchange) HDFC Bank Ltd. Banks 6.11 Infosys Ltd. Software 5.19 Reliance Industries Ltd. Petroleum Products 4.89 Ultratech Cement Ltd. Cement 4.11 The Ramco Cements Ltd Cement 3.66 Hero MotoCorp Ltd. Auto 3.44 IndusInd Bank Ltd. Banks 3.44 Shree Cement Ltd. Cement 3.30 Larsen And Toubro Ltd. Construction Project 2.72 Axis Bank Ltd Banks 2.71 Maruti Suzuki India Limited Auto 2.68 Bharat Electronics Ltd Industrial Capital Goods 2.34 Britannia Industries Ltd. Consumer Non Durables 2.26 Bajaj Finance Limited Finance 2.24 ICICI Bank Ltd. Banks 2.21 Indraprastha Gas Ltd. Gas 2.01 Hindustan Petroleum Corporation Ltd Petroleum Products 2.00 Petronet LNG Ltd. Gas 1.97 Tata Motors Ltd. Auto 1.93 Bharat Petroleum Corporation Ltd. Petroleum Products 1.88 HCL Technologies Ltd. Software 1.87 Max Financial Services Ltd. Finance 1.87 Sun Pharmaceuticals Industries Ltd. Pharmaceuticals 1.85 State Bank Of India Banks 1.77 Lupin Ltd. Pharmaceuticals 1.73 Ashok Leyland Ltd. Auto 1.70 Arvind Ltd Textile Products 1.49 Godrej Consumer Products Ltd. Consumer Non Durables 1.49 MRF Limited Auto Ancillaries 1.36 Container Corporation of India Ltd. Transportation 1.31 Colgate Palmolive (India ) Ltd. Consumer Non Durables 1.24 ITC Ltd. Consumer Non Durables 1.18 Notes: Term Deposit as provided above is towards margin for derivatives transactions Total amount invested (Rs) SYSTEMATIC INVESTMENT PLAN (SIP) Equitas Holdings Ltd Finance 1.16 Tech Mahindra Ltd. Software 1.12 Bajaj Finserv Ltd. Finance 1.06 Cadila Healthcare Ltd. Pharmaceuticals 1.01 Jk Lakshmi Cement Ltd. Cement 1.01 Solar Industries India Limited Chemicals 0.92 Federal Bank Ltd. Banks 0.91 Bank Of Baroda Banks 0.90 Techno Electric & Engineering Co Ltd. Construction Project 0.83 AIA Engineering Limited Industrial Capital Goods 0.79 Kec International Ltd. Power 0.62 Max India Limited Healthcare Services 0.60 Navkar Corporation Limited Transportation 0.54 Whirlpool of India Ltd. Consumer Durables 0.47 HDFC Ltd. Warrants Finance 0.36 CESC Ltd. Power 0.34 IFB Industries Ltd. Consumer Durables 0.34 Bayer Cropscience Ltd. Pesticides 0.24 Kirloskar Oil Engines Ltd. Industrial Products 0.24 Max Ventures and Industries Limited Industrial Products % Redm Preference Sh Zee Entertainment Enterprises Ltd Media and Entertainment 0.02 Listed/Awaiting Listing on Stock Exchange - Total Reverse Repo 3.99 TERM DEPOSITS Kotak Mahindra Bank Ltd Term Deposits - Total 0.56 Collateral Borrowing & Lending obligation 0.10 Net Current /(Liabilities) 1.89 Systematic Investment Plan (SIP) If you had invested `10,000 every month Total Value as on Mar 31, 2016 (Rs) Returns (%) Nifty 200 (Rs)# Nifty 200 Returns (%) Nifty 50 (Rs)^ Nifty 50 Returns (%) Inception : - September 11, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak Select Focus Fund NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Banks Software Petroleum Products Gas Auto Pharmaceuticals Finance Consumer Non Durables Cement CBLO & Term Deposits & Rev.Repo Others 1 year 3 years 5 years Since Inception 120, , , , , , ,364 1,303, , , ,196 1,033, , , ,998 1,011, Investors understand that their principal will be at moderately high risk Long term capital growth Investment in portfolio of predominantly equity & equity related securities generally focussed on a few selected sectors. * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no

10 EQUITY SCHEMES KOTAK TAX SAVER An Open - Ended Equity Linked Savings INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small To generate long-term capital appreciation from a diversified portfolio of equity and equity related securities and enable investors to avail the income tax rebate, as permitted from time to time. However, there is no assurance that the objective of the scheme will be realized. November 23, 2005 Mr. Harsha Upadhyaya* Nifty 500 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout & Growth.... Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: 17.85% Beta: 1.06 ## Sharpe : 0.56 Standard Deviation : 17.59% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016). Equity & Equity related (Listed/Awaiting listing on Stock Exchange) HDFC Bank Ltd. Banks 6.30 Infosys Ltd. Software 6.24 Reliance Industries Ltd. Petroleum Products 4.38 Shree Cement Ltd. Cement 3.28 Bajaj Finance Limited Finance 3.23 Whirlpool of India Ltd. Consumer Durables 3.21 IndusInd Bank Ltd. Banks 3.16 Axis Bank Ltd Banks 3.00 ICICI Bank Ltd. Banks 2.93 Britannia Industries Ltd. Consumer Non Durables 2.77 Ultratech Cement Ltd. Cement 2.72 Bharat Petroleum Corporation Ltd. Petroleum Products 2.63 Maruti Suzuki India Limited Auto 2.45 State Bank Of India Banks 2.22 Tech Mahindra Ltd. Software 2.22 Hero MotoCorp Ltd. Auto 2.18 Hindustan Petroleum Corporation Ltd Petroleum Products 2.15 ITC Ltd. Consumer Non Durables 1.99 SKF India Ltd Industrial Products 1.96 Larsen And Toubro Ltd. Construction Project 1.89 Tata Motors Ltd. Auto 1.85 Sun Pharmaceuticals Industries Ltd. Pharmaceuticals 1.75 Lupin Ltd. Pharmaceuticals 1.73 Techno Electric & Engineering Co Ltd. Construction Project 1.68 Solar Industries India Limited Chemicals 1.64 Ashok Leyland Ltd. Auto 1.61 MRF Limited Auto Ancillaries 1.45 The Ramco Cements Ltd Cement 1.45 Cadila Healthcare Ltd. Pharmaceuticals 1.41 UPL Ltd Pesticides 1.39 Federal Bank Ltd. Banks 1.32 HCL Technologies Ltd. Software 1.29 Bank Of Baroda Banks 1.27 Arvind Ltd Textile Products 1.19 Dalmia Bharat Ltd Cement 1.19 Container Corporation of India Ltd. Transportation 1.16 Multi Commodity Exchange of India Limited Finance 1.14 AIA Engineering Limited Industrial Capital Goods 1.07 Max Financial Services Ltd. Finance 1.06 Cummins India Ltd. Industrial Products 1.05 Blue Dart Express Ltd. Transportation 1.03 Navneet Education Ltd. Media and Entertainment 0.97 Thermax Ltd. Industrial Capital Goods 0.91 Hawkins Cooker Ltd Household Appliances 0.87 Bharat Forge Ltd. Industrial Products 0.86 MBL Infrastructures Ltd. Construction 0.79 SRF Ltd. Textile Products 0.78 Texmaco Rail & Engineering Ltd. Industrial Capital Goods 0.73 KSB Pump Ltd Industrial Products 0.57 Colgate Palmolive (India ) Ltd. Consumer Non Durables 0.54 Kewal Kiran Clothing Limited. Textile Products 0.46 Max India Limited Healthcare Services Redm Preference Sh Zee Entertainment Enterprises Ltd Media and Entertainment 0.15 Max Ventures and Industries Limited Industrial Products 0.02 Listed/Awaiting Listing on Stock Exchange - Total Debt Instruments Debentures and Bonds Corporate Debt/Financial Institutions Blue Dart Express Ltd ICRA AA 0.03 Corporate Debt/Financial Institutions - Total 0.03 Reverse Repo 2.84 Net Current /(Liabilities) Initial Investment: `500 and in multiple of `500 Investment: `500 & in multiples of `500 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: Exit Load is not applicable for Kotak Tax Saver. (applicable for all plans) Units issued on reinvestment of dividends shall not be subject to exit load (applicable for all plans) Regular: 2.47% Direct: 1.27% 9 Total amount invested (Rs) Total Value as on Mar 31, 2016 (Rs) Returns (%) Nifty 500 (Rs)# Nifty 500 Returns (%) Nifty 50 (Rs)^ Nifty 50 Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Inception : - November 23, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak Tax Saver NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Banks Software Pharmaceuticals Consumer Non Durables Petroleum Products Cement Finance Construction Project Industrial Products Others * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 120, , , ,000 1,200,000 1,250, , , ,412 1,271,431 2,041,971 2,176, , , ,407 1,152,644 1,884,267 2,015, , , ,998 1,110,053 1,825,804 1,962, Auto Investors understand that their principal will be at moderately high risk long term capital growth with a 3 year lock in Investment in portfolio of predominantly equity & equity related securities. * Investors should consult their financial advisors if in doubt about whether the product is suitable for them.

11 EQUITY SCHEMES KOTAK MID-CAP An Open - Ended Equity Growth INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small To generate capital appreciation from a diversified portfolio of equity and equity related securities. However, there is no assurance that the objective of the scheme will be realized. February 24, 2005 Mr. Pankaj Tibrewal* Nifty Midcap 100 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: 52.25% Beta: 1.04 ## Sharpe : 0.91 Standard Deviation : 19.96% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016). Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: I) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of investment:1% ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of investment: NIL iii) Any exit load charged (net off Service Tax, if any) shall be credited back to the. iv) Units issued on reinvestment of dividends shall not be subject to exit load Regular: 2.52% Direct: 1.27% Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Whirlpool of India Ltd. Consumer Durables 3.43 The Ramco Cements Ltd Cement 3.17 Persistent Systems Limited Software 3.10 Finolex Cables Ltd. Industrial Products 2.97 Techno Electric & Engineering Co Ltd. Construction Project 2.84 Solar Industries India Limited Chemicals 2.76 Hawkins Cooker Ltd Household Appliances 2.69 Fag Bearings India Ltd. Industrial Products 2.60 DB Corp Limited Media and Entertainment 2.52 Mahindra & Mahindra Financial Services Ltd. Finance 2.49 IndusInd Bank Ltd. Banks 2.47 ICICI Bank Ltd. Banks 2.20 Federal Bank Ltd. Banks 2.15 Va Tech Wabag Limited Engineering Services 2.15 Strides Arcolab Ltd. Pharmaceuticals 2.11 Hindustan Petroleum Corporation Ltd Petroleum Products 2.08 SRF Ltd. Textile Products 2.06 Kewal Kiran Clothing Limited. Textile Products 1.97 Divi s Laboratories Limited Pharmaceuticals 1.93 Torrent Pharmaceuticals Ltd. Pharmaceuticals 1.82 JK Cement Ltd. Cement 1.79 Britannia Industries Ltd. Consumer Non Durables 1.78 Motherson Sumi Systems Ltd. Auto Ancillaries 1.77 HSIL Ltd. Consumer Durables 1.69 MRF Limited Auto Ancillaries 1.61 PVR Ltd. Media and Entertainment 1.57 Atul Ltd. Chemicals 1.56 Adani Port and Special Economic Zone Limited Transportation 1.50 Arvind Ltd Textile Products 1.45 Axis Bank Ltd Banks 1.45 Total amount invested (Rs) Total Value as on Mar 31, 2016 (Rs) Returns (%) Nifty Midcap 100 (Rs)# Nifty Midcap 100 Returns (%) Nifty 50 (Rs)^ Nifty 50 Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) NIIT Technologies Ltd Software 1.45 Jubilant Foodworks Limited Consumer Non Durables 1.40 Pennar Engineered Building Systems Limited Ferrous Metals 1.39 Bajaj Finance Limited Finance 1.37 Jk Lakshmi Cement Ltd. Cement 1.37 Bharat Forge Ltd. Industrial Products 1.36 Voltas Ltd. Construction Project 1.34 Havells India Ltd. Consumer Durables 1.33 UPL Ltd Pesticides 1.33 Cadila Healthcare Ltd. Pharmaceuticals 1.23 Kansai Nerolac Paints Ltd Consumer Non Durables 1.19 Navneet Education Ltd. Media and Entertainment 1.17 WPIL Ltd Industrial Products 1.16 Supreme Industries Limited Industrial Products 1.15 Zuari Agro Chemicals Ltd Fertilisers 1.15 Sundaram Finance Ltd. Finance 1.11 Bharat Petroleum Corporation Ltd. Petroleum Products 1.09 Alkem Laboratories Ltd Pharmaceuticals 0.98 Power Mech Projects Ltd Power 0.92 Shriram Transport Finance Co Ltd. Finance 0.90 Bank Of Baroda Banks 0.89 SKF India Ltd Industrial Products 0.88 Tech Mahindra Ltd. Software 0.88 Balrampur Chini Mills Ltd Consumer Non Durables 0.86 Union Bank Of India Banks 0.21 Listed/Awaiting Listing on Stock Exchange - Total Collateral Borrowing & Lending obligation 1.22 Net Current /(Liabilities) 4.99 Inception : - February 24,2005. The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak Mid-cap NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Banks Others Pharmaceuticals Cement Consumer Non Durables Textile Products Finance Consumer Durables Media & Entertainment Software Industrial Products Midcap and Small cap stocks as a % age of Net : 76.43% * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no Systematic Investment Plan (SIP) If you had invested `10,000 every month 1 year 3 years 5 years 7 years 10 years Since Inception 120, , , ,000 1,200,000 1,340, , ,467 1,012,638 1,624,092 2,672,052 3,259, , , ,488 1,315,004 2,222,148 2,741, , , ,998 1,110,053 1,825,804 2,284, Investors understand that their principal will be at moderately high risk Long term capital growth Investment in equity & equity related securities predominantly in mid cap stocks. * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 10

12 EQUITY SCHEMES KOTAK EMERGING EQUITY An Open - Ended Equity Growth INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small The investment objective of the scheme is to generate long-term capital appreciation from a portfolio of equity and equity related securities, by investing predominantly in mid and small cap companies. However, there is no assurance that the objective of the scheme will be realized. March 30, 2007 Mr. Pankaj Tibrewal* S&P BSE MID SMALL CAP AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: 46.49% Beta: 1.00 ## Sharpe :1.08 Standard Deviation : 19.70% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016). Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: i) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of investment: 1%. ii) For redemption/switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of investment: Nil. Note Any exit load charged (net off Service Tax, if any) shall be credited back to the respective scheme. Units issued on reinvestment of dividends shall not be subject to entry and exit load. Regular: 2.30% Direct: 1.10% Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Whirlpool of India Ltd. Consumer Durables 4.03 The Ramco Cements Ltd Cement 3.53 Solar Industries India Limited Chemicals 3.11 V-Guard Industries Ltd. Industrial Capital Goods 3.10 Persistent Systems Limited Software 2.99 Finolex Cables Ltd. Industrial Products 2.96 Fag Bearings India Ltd. Industrial Products 2.71 Hawkins Cooker Ltd Household Appliances 2.69 Mahindra & Mahindra Financial Services Ltd. Finance 2.66 IndusInd Bank Ltd. Banks 2.57 SRF Ltd. Textile Products 2.54 Strides Arcolab Ltd. Pharmaceuticals 2.25 DB Corp Limited Media and Entertainment 2.23 ICICI Bank Ltd. Banks 2.11 Federal Bank Ltd. Banks 2.10 PVR Ltd. Media and Entertainment 1.96 Va Tech Wabag Limited Engineering Services 1.93 Motherson Sumi Systems Ltd. Auto Ancillaries 1.91 Atul Ltd. Chemicals 1.87 Jk Lakshmi Cement Ltd. Cement 1.85 Kewal Kiran Clothing Limited. Textile Products 1.79 Shriram City Union Finance Ltd. Finance 1.79 Navneet Education Ltd. Media and Entertainment 1.77 Torrent Pharmaceuticals Ltd. Pharmaceuticals 1.61 Jubilant Foodworks Limited Consumer Non Durables 1.57 Ramkrishna Forgings Ltd. Industrial Products 1.57 Indraprastha Gas Ltd. Gas 1.55 Divi s Laboratories Limited Pharmaceuticals 1.51 SKF India Ltd Industrial Products 1.50 PNC INFRATECH LIMITED Construction Project 1.49 Finolex Industries Ltd. Industrial Products 1.47 Sundaram Finance Ltd. Finance 1.47 Britannia Industries Ltd. Consumer Non Durables 1.46 Pennar Engineered Building Systems Limited Ferrous Metals 1.46 D-Link (India) Ltd Hardware 1.37 Supreme Industries Limited Industrial Products 1.36 Carborundum Universal Ltd. Industrial Products 1.28 Total amount invested (Rs) Total Value as on Mar 31, 2016 (Rs) Returns (%) S&P BSE MidSmallCap (Rs)# S&P BSE MidSmallCap Returns (%) Nifty 50 (Rs)^ Nifty 50 Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Axis Bank Ltd Banks 1.23 Bajaj Finance Limited Finance 1.20 WPIL Ltd Industrial Products 1.20 Alkem Laboratories Ltd Pharmaceuticals 1.19 Greaves Cotton Ltd. Industrial Products 1.18 Power Mech Projects Ltd Power 1.11 Oberoi Realty Ltd Construction 1.08 Zuari Agro Chemicals Ltd Fertilisers 1.06 KPIT Technologies LImited Software 1.04 Coromandel International Ltd. Fertilisers 1.01 Equitas Holdings Ltd Finance 1.01 Maharashtra Seamless Ltd. Ferrous Metals 0.99 Max Financial Services Ltd. Finance 0.99 GMM Pfaudler Ltd. Engineering 0.78 IDFC Bank Limited Banks 0.75 IFB Industries Ltd. Consumer Durables 0.75 Kirloskar Brothers Ltd. Industrial Products 0.70 Kec International Ltd. Power 0.65 Multi Commodity Exchange of India Limited Finance 0.59 Bank Of Baroda Banks 0.58 Engineers India Ltd. Construction Project 0.55 Blue Dart Express Ltd. Transportation 0.53 Max India Limited Healthcare Services 0.32 Max Ventures and Industries Limited Industrial Products 0.02 Listed/Awaiting Listing on Stock Exchange - Total Debt Instruments Debentures and Bonds Corporate Debt/Financial Institutions Blue Dart Express Ltd ICRA AA 0.01 Corporate Debt/Financial Institutions - Total 0.01 Reverse Repo 5.65 TERM DEPOSITS Kotak Mahindra Bank Ltd Term Deposits - Total 0.30 Net Current /(Liabilities) Inception : - March 30, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak Emerging Equity NAV as on April 29, 2016: `20.48 (Dividend Option), ` (Direct Dividend Option), `26.407(Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Industrial Products Pharmaceuticals Banks Consumer Durables Finance Cement Media and Entertainment CBLO & Term Deposits & Rev.Repo Chemicals Textile Products Others Midcap and Small cap stocks as a % age of Net : 91.75% * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no Systematic Investment Plan (SIP) If you had invested `10,000 every month year 3 years 5 years 7 years Since Inception 120, , , ,000 1,090, , ,415 1,058,886 1,669,231 2,354, , , ,064 1,264,267 1,800, , , ,998 1,110,053 1,584, Investors understand that their principal will be at moderately high risk Long term capital growth Investment in equity & equity related securities predominantly in mid & small cap companies * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 11

13 EQUITY SCHEMES KOTAK INFRASTRUCTURE & ECONOMIC REFORM FUND (formerly known as PineBridge Infrastructure & Economic Reform Fund ) An Open - Ended Equity INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small The investment objective of the is to generate long-term capital appreciation f ro m a d i v e r s i f i e d p o r t f o l i o o f predominantly (at least 65%) equity and equity-related securities of companies involved in economic development of India as a result of potential investments in infrastructure and unfolding economic reforms. There is no assurance that the investment objective of the will be achieved. However, there is no assurance that the objective of the scheme will be realized. February 25, 2008 Mr. Harish Krishnan S&P BSE 100 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: 55.29% Beta: 1.18 ## Sharpe : 0.73 Standard Deviation : 21.68% Source: ICRAMFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016). Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: I) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of investment 1%; ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of investment NIL; iii) Any exit load charged (net off Service Tax, if any) shall be credited back to the ; iv) Units issued on reinvestment of dividends shall not be subject to entry and exit load. Regular: 2.63% Direct: 1.23% Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Shree Cement Ltd. Cement 7.80 Ultratech Cement Ltd. Cement 7.16 Larsen And Toubro Ltd. Construction Project 6.09 Indraprastha Gas Ltd. Gas 6.08 SKF India Ltd Industrial Products 6.08 Bharti Airtel Ltd. Telecom - Services 5.72 Thermax Ltd. Industrial Capital Goods 5.12 Kirloskar Oil Engines Ltd. Industrial Products 4.96 KSB Pump Ltd Industrial Products 4.71 Fag Bearings India Ltd. Industrial Products 4.33 Cummins India Ltd. Industrial Products 3.48 Container Corporation of India Ltd. Transportation 3.09 Power Grid Corporation Of India Ltd Power 3.07 AIA Engineering Limited Industrial Capital Goods 3.04 Total amount invested (Rs) Total Value as on Mar 31, 2016 (Rs) Returns (%) S&P BSE 100 (Rs)# S&P BSE 100 Returns (%) Nifty 50 (Rs)^ Nifty 50 Returns (%) SYSTEMATIC INVESTMENT PLAN (SIP) Supreme Industries Limited Industrial Products 3.00 Gateway Distriparks Ltd. Transportation 2.91 Mahindra & Mahindra Financial Services Ltd. Finance 2.74 Siemens Ltd. Industrial Capital Goods 2.44 Adani Port and Special Economic Zone Limited Transportation 2.36 Solar Industries India Limited Chemicals 2.33 MRF Limited Auto Ancillaries 2.29 Kajaria Ceramics Ltd. Construction 2.09 Gujarat Gas Company Ltd Gas 1.39 CESC Ltd. Power 1.15 Bharat Electronics Ltd Industrial Capital Goods 1.06 Listed/Awaiting Listing on Stock Exchange - Total Reverse Repo 5.62 Net Current /(Liabilities) Inception : - February 25, The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak Infrastructure & Economic Reform Fund NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Systematic Investment Plan (SIP) If you had invested `10,000 every month Industrial Products Cement Power Industrial Capital Goods Telecom - Services Gas Transportation Construction Project CBLO & Term Deposits & Rev.Repo Finance Others 1 year 3 years 5 years 7 years Since Inception 120, , , , , , , ,173 1,334,163 1,674, , , ,955 1,113,922 1,408, , , ,998 1,110,053 1,399, Investors understand that their principal will be at high risk Long term capital growth Long term capital appreciation by investing in equity and equity related instruments of companies contributing to infrastructure and economic development of India * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. For last three dividends, please refer page no For scheme performance, please refer page no

14 EQUITY SCHEMES KOTAK BALANCE An Open - Ended Balanced Style Value INVESTMENT STYLE Maturity Blend Growth Size Large Mid Small Short Medium Long Volatility Medium To achieve growth by investing in equity & equity related instruments, balanced with income generation by investing in debt &money market instruments. However, there is no assurance that the objective of the scheme will be realized. November 25, 1999 s Mr. Pankaj Tibrewal and Mr. Abhishek Bisen* Crisil Balanced Fund AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Half Yearly (25th of Mar/Sep) Ratios Portfolio Turnover: 56.88% Beta: 1.05 ## Sharpe : 0.42 Standard Deviation : 11.71% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016). Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: I) For redemptions / switch outs (including SIP/STP) within 1 year from the date of allotment of units, irrespective of the amount of investment:1% ii) For redemptions / switch outs (including SIP/STP) after 1 year from the date of allotment of units, irrespective of the amount of investment: NIL iii) Any exit load charged (net off Service Tax, if any) shall be credited back to the respective. iv) Units issued on reinvestment of dividends shall not be subject to exit load Regular: 2.55% Direct: 1.35% Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Infosys Ltd. Software 4.39 HDFC Bank Ltd. Banks 4.27 ICICI Bank Ltd. Banks 4.11 Larsen And Toubro Ltd. Construction Project 2.62 Maruti Suzuki India Limited Auto 2.47 IndusInd Bank Ltd. Banks 2.19 Reliance Industries Ltd. Petroleum Products 2.15 Axis Bank Ltd Banks 2.00 Whirlpool of India Ltd. Consumer Durables 2.00 ITC Ltd. Consumer Non Durables 1.89 The Ramco Cements Ltd Cement 1.86 Solar Industries India Limited Chemicals 1.81 Tata Motors Ltd. Auto 1.79 SRF Ltd. Textile Products 1.76 Mahindra & Mahindra Ltd. Auto 1.61 JK Cement Ltd. Cement 1.50 HDFC Ltd. Finance 1.40 Ultratech Cement Ltd. Cement 1.40 Tata Consultancy Services Ltd. Software 1.39 Va Tech Wabag Limited Engineering Services 1.39 Finolex Cables Ltd. Industrial Products 1.37 Fag Bearings India Ltd. Industrial Products 1.30 HCL Technologies Ltd. Software 1.25 Hindustan Petroleum Corporation Ltd Petroleum Products 1.22 Mahindra & Mahindra Financial Services Ltd. Finance 1.12 State Bank Of India Banks 1.10 Engineers India Ltd. Construction Project 1.05 Ramkrishna Forgings Ltd. Industrial Products 1.04 Adani Port and Special Economic Zone Limited Transportation 1.03 Motherson Sumi Systems Ltd. Auto Ancillaries 0.99 UPL Ltd Pesticides 0.99 Strides Arcolab Ltd. Pharmaceuticals 0.94 Jubilant Foodworks Limited Consumer Non Durables 0.91 DB Corp Limited Media and Entertainment 0.88 Oil & Natural Gas Corporation Ltd. Oil 0.87 Navkar Corporation Limited Transportation 0.78 Havells India Ltd. Consumer Durables 0.72 Total amount invested (Rs) Total Value as on Mar 31, 2016 (Rs) Returns (%) Crisil Balanced Fund Index (Rs)# Crisil Balanced Fund Index Returns (%) Nifty 50 (Rs)^ Nifty 50 Returns (%) SECTOR ALLOCATION (%) Cement 4.76 Banks Software Finance Government Dated Securities Petroleum Products Construction Project Auto Others Industrial Products Consumer Non Durables SYSTEMATIC INVESTMENT PLAN (SIP) HDFC Ltd. Warrants Finance 0.69 Equitas Holdings Ltd Finance 0.68 Voltas Ltd. Construction Project 0.65 Coal India Ltd. Minerals/Mining 0.62 Colgate Palmolive (India ) Ltd. Consumer Non Durables 0.60 Bank Of Baroda Banks 0.59 Bharat Forge Ltd. Industrial Products 0.59 Pennar Engineered Building Systems Limited Ferrous Metals 0.55 Lupin Ltd. Pharmaceuticals 0.50 Balrampur Chini Mills Ltd Consumer Non Durables 0.49 Federal Bank Ltd. Banks 0.46 Arvind Ltd Textile Products 0.44 Tech Mahindra Ltd. Software 0.43 IDFC Bank Limited Banks 0.42 Divi s Laboratories Limited Pharmaceuticals 0.20 The Indian Hotels Company Ltd. Hotels 0.05 Listed/Awaiting Listing on Stock Exchange - Total Debt Instruments Debentures and Bonds Corporate Debt/Financial Institutions LIC Housing Finance Ltd. CRISIL AAA 0.20 Tata Sons Ltd. CRISIL AAA 0.08 Corporate Debt/Financial Institutions - Total 0.28 Public Sector Undertakings Bank of India ICRA AA Public Sector Undertakings - Total 0.35 Government Dated Securities 7.59% Central Government SOV % Central Government SOV % State Government SOV % Central Government SOV % State Government SOV % Central Government SOV 0.04 Government Dated Securities - Total Net Current /(Liabilities) 9.60 Systematic Investment Plan (SIP) If you had invested `10,000 every month Inception : - November 25,1999. The returns are calculated by XIRR approach assuming investment of `10,000/- on the 1st working day of every month. XIRR helps in calculating return on investments given an initial and final value and a series of cash inflows and outflows and taking the time of investment into consideration. Since inception returns are assumed to be starting from the beginning of the subsequent month from the date of inception. # ; ^ Kotak Balance NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option) ` (Direct Growth Option) year 3 years 5 years 7 years 10 years Since Inception 120, , , ,000 1,200,000 1,970, , , ,821 1,138,152 1,882,343 7,037, , , ,944 1,132,882 1,871,004 NA NA 115, , ,998 1,110,053 1,825,804 6,137, Investors understand that their principal will be at moderately high risk Long term capital growth Investment in equity & equity related securities balanced with income generation by investing in debt & money market instruments * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 13 * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no 44-53

15 EQUITY SCHEMES KOTAK EQUITY ARBITRAGE An Open - Ended Equity Growth Style Value INVESTMENT STYLE Maturity Blend Growth Size Large Mid Small Short Medium Long Volatility Medium The investment objective of the scheme is to generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and derivatives segment of the equity market, and by investing the balance in debt and money market instruments. However, there is no assurance that the objective of the scheme will be realized. September 29, 2005 Mr. Deepak Gupta* Crisil Liquid Fund AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth (applicable for all plans) Dividend Frequency Monthly (Monday preceding the last Thursday of the month), Bimonthly (Monday preceding the last Thursday of the following months - January, March, May, July, September, November) Ratio Portfolio Turnover: % Beta: 0.72 ## Sharpe : 2.09 Standard Deviation : 0.60% Source: ICRA MFI Explorer. ## Risk Free rate assumed to be 6.57% (FBIL Overnight Mibor rate as on 29th April 2016). Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 Ideal Investments Horizon: 3 months & above Entry Load: Nil. Exit Load: I) For redemptions/switch outs (including STP/SWP) within 90 days from the date of allotment of units, irrespective of the amount of investment: 0.50% II) For redemptions/switch outs (including STP/SWP) within 90 days from the date of allotment of units, irrespective of the amount of investment: Nil Note - 1) Any exit load charged (net off Service Tax, if any ) shall be credited back to the. 2) Units issued on reinvestment of dividends shall not be subject to exit load (applicable for all plans), (w.e.f. April 8, 2013) Regular: 1.10% Direct: 0.60% % to Net Derivatives Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Hedged HDFC Bank Ltd. Banks Reliance Industries Ltd. Petroleum Products Britannia Industries Ltd. Consumer Non Durables Indiabulls Housing Finance Ltd. Finance Maruti Suzuki India Limited Auto Adani Port and Special Economic Zone Limited Transportation Infosys Ltd. Software Aurobindo Pharma Ltd. Pharmaceuticals Tata Motors Ltd. Auto HDFC Ltd. Finance Cipla Ltd. Pharmaceuticals Coal India Ltd. Minerals/Mining Vedanta Ltd. Minerals/Mining Shriram Transport Finance Co Ltd. Finance Ashok Leyland Ltd. Auto Hindustan Petroleum Corporation Ltd Petroleum Products United Spirits Ltd. Consumer Non Durables Power Finance Corporation Ltd. Finance Tech Mahindra Ltd. Software Reliance Capital Ltd. Finance SKS Microfinance Limited Finance Grasim Industries Ltd. Cement LIC Housing Finance Ltd. Finance Adani Power Ltd Power Reliance Power Ltd Power L&T Finance Holdings Ltd Finance IDFC Limited Finance MRF Limited Auto Ancillaries Tata Elxsi Ltd. Software Castrol (India ) Ltd. Petroleum Products Bharti Infratel Ltd. Telecom - Equipment & Accessories Rural Electrification Corporation Ltd Finance Tata Global Beverages Limited Consumer Non Durables Asian Paints Ltd. Consumer Non Durables Aditya Birla Nuvo Limited Services NCC Limited Construction Project Pidilite Industries Ltd. Chemicals Reliance Communications Ltd. Telecom - Services Tata Communications Ltd Telecom - Services TV18 Broadcast Ltd Media and Entertainment Dewan Housing Finance Corporation Ltd. Finance Housing Development and Infrastructure Limited Construction India Cements Ltd. Cement Hindalco Industries Ltd Non - Ferrous Metals Sun Pharmaceuticals Industries Ltd. Pharmaceuticals Century Textiles & Industries Ltd. Cement GMR Infrastructure Ltd. Construction Project IRB Infrastructure Developers Ltd Construction Cairn India Limited Oil Indian Oil Corporation Ltd Petroleum Products Oracle Financial Services Software Ltd Software Dish TV India Ltd. Media and Entertainment * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no

16 EQUITY SCHEMES KOTAK EQUITY ARBITRAGE An Open - Ended Equity Growth 15 % to Net Derivatives United Breweries Ltd. Consumer Non Durables Karnataka Bank Ltd Banks Larsen And Toubro Ltd. Construction Project Wipro Ltd. Software HCL Technologies Ltd. Software Amara Raja Batteries Ltd. Auto Ancillaries Bajaj Finance Limited Finance Bharat Earth Movers Ltd. Industrial Capital Goods Axis Bank Ltd Banks Siemens Ltd. Industrial Capital Goods Sun TV Limited. Media and Entertainment ACC Ltd. Cement Ambuja Cements Ltd Cement Dr Reddys Laboratories Ltd Pharmaceuticals Jain Irrigation Systems Ltd. Industrial Products Tata Chemicals Ltd. Chemicals Mahindra & Mahindra Ltd. Auto NMDC Ltd. Minerals/Mining Oil & Natural Gas Corporation Ltd. Oil Punjab National Bank Banks DLF Limited Construction IFCI Ltd. Finance Jindal Steel & Power Ltd. Ferrous Metals NHPC Limited Power The South Indian Bank Ltd. Banks UPL Ltd Pesticides ITC Ltd. Consumer Non Durables Tata Consultancy Services Ltd. Software Glenmark Pharmaceuticals Ltd Pharmaceuticals Biocon Ltd. Pharmaceuticals Power Grid Corporation Of India Ltd Power Indraprastha Gas Ltd. Gas Torrent Pharmaceuticals Ltd. Pharmaceuticals Wockhardt Ltd. Pharmaceuticals Jet Airways (India) Ltd. Transportation Reliance Infrastructure Ltd Power Federal Bank Ltd. Banks Indiabulls Real Estate Ltd Construction Tata Motors Ltd - DVR Auto Eicher Motors Ltd Auto JSW Steel Ltd. Ferrous Metals Ultratech Cement Ltd. Cement Lupin Ltd. Pharmaceuticals National Thermal Power Corporation Limited Power Adani Enterprises Ltd Trading Hero MotoCorp Ltd. Auto TVS Motors Company Ltd Auto Hindustan Unilever Ltd. Consumer Non Durables Zee Entertainment Enterprises Ltd Media and Entertainment Andhra Bank Banks Container Corporation of India Ltd. Transportation Cummins India Ltd. Industrial Products Granules India Ltd. Pharmaceuticals Oil India Limited Oil Oriental Bank of Commerce Banks

17 EQUITY SCHEMES KOTAK EQUITY ARBITRAGE An Open - Ended Equity Growth % to Net Derivatives SRF Ltd. Textile Products Apollo Hospitals Enterprises Ltd. Healthcare Services Crompton Greaves Ltd. Industrial Capital Goods Godrej Consumer Products Ltd. Consumer Non Durables Bosch Limited Auto Ancillaries Dabur India Ltd Consumer Non Durables ICICI Bank Ltd. Banks Indo Count Industries Ltd. Textiles - Cotton Jubilant Foodworks Limited Consumer Non Durables Petronet LNG Ltd. Gas Apollo Tyres Ltd. Auto Ancillaries Bharat Petroleum Corporation Ltd. Petroleum Products Jaiprakash Associates Ltd Construction Kotak Mahindra Bank Ltd. Banks KPIT Technologies LImited Software Strides Arcolab Ltd. Pharmaceuticals Cadila Healthcare Ltd. Pharmaceuticals Divi s Laboratories Limited Pharmaceuticals Engineers India Ltd. Construction Project JSW Energy Ltd. Power Kaveri Seed Company Ltd. Consumer Non Durables Tata Power Co. Ltd. Power Hedged - Total Listed/Awaiting Listing on Stock Exchange - Total Mutual Fund Units Kotak Liquid Plan A 4.81 Kotak Floater Short Term Direct Growth 1.86 Mutual Fund Units - Total 6.67 Money Market Instruments Commercial Paper(CP)/Certificate of Deposits(CD) Corporate Debt/Financial Institutions Edelweiss Housing Finanance Limited CRISIL A Tata Motors Finance Ltd ICRA A JM Financial Products Limited ICRA A Corporate Debt/Financial Institutions - Total 6.05 Reverse Repo 0.59 TERM DEPOSITS Kotak Mahindra Bank Ltd IndusInd Bank Ltd Ratnakar Bank Ltd 1.50 Term Deposits - Total Collateral Borrowing & Lending obligation 0.07 Net Current /(Liabilities) 3.34 Notes: Term Deposit as provided above is towards margin for derivatives transactions Kotak Equity Arbitrage NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option), ` (Bimonthly Option), ` (Direct Bimonthly Option) SECTOR ALLOCATION (%) Commercial Paper (CP)/Certificate of Deposits (CD) Banks Pharmaceuticals Finance Petroleum Products Unrated Consumer Non Durables Software Others Auto CBLO & Term Deposits & Rev.Repo Investors understand that their principal will be at moderately low risk Income from arbitrage opportunities in the equity market Investment in arbitrage opportunities in the cash & derivatives segment of the equity market. * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 16

18 EQUITY SCHEMES KOTAK EQUITY SAVINGS FUND An Open Ended Equity Fund Style Value INVESTMENT STYLE Maturity Blend Growth Size Large Mid Small Short Medium Long Volatility Medium The investment objective of the scheme is to generate capital appreciation and income by predominantly investing in arbitrage opportunities in the cash and derivatives segment of the equity market, and enhance returns with a moderate exposure in equity & equity related instruments. There is no assurance or guarantee that the investment objective of the scheme will be achieved. However, there is no assurance that the objective of the scheme will be realized. October 13, 2014 s Mr. Deepak Gupta & Mr. Abhishek Bisen* 75% of Crisil Liquid Fund & 25% in Nifty 50 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout, Dividend Reinvestment & Growth Dividend Frequency Monthly (12th of every month) Quarterly (20th of March, June, September and December of every year) Ratios Portfolio Turnover: % Initial Investment: `5000 and in multiple of `1 for purchase and for `0.01 for switches Investment: `1000 & in multiples of `1 for purchase and for `0.01 for switches Ideal Investments Horizon: 3 years & above Entry Load: Nil. Exit Load: I) For exit within 1 year from date of allotment of units: 1%; ii) For exit after 1year from the date of allotment of units: Nil. Any exit load charged (net off Service Tax, if any) shall be credited back to the. iii) Units issued on reinvestment of dividends shall not be subject to entry and exit load. Regular: 1.60% Direct: 1.00% % to Net - Derivatives Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Non-Hedge Infosys Ltd. Software 1.88 HDFC Bank Ltd. Banks 1.51 Maruti Suzuki India Limited Auto 1.01 Reliance Industries Ltd. Petroleum Products 1.01 HDFC Ltd. Warrants Finance 0.90 ITC Ltd. Consumer Non Durables 0.84 Zee Entertainment Enterprises Ltd Media and Entertainment 0.83 Bharat Petroleum Corporation Ltd. Petroleum Products 0.80 Lupin Ltd. Pharmaceuticals 0.78 Grasim Industries Ltd. Cement 0.74 Bajaj Auto Ltd. Auto 0.73 Hindustan Unilever Ltd. Consumer Non Durables 0.72 IndusInd Bank Ltd. Banks 0.72 Asian Paints Ltd. Consumer Non Durables 0.67 Hero MotoCorp Ltd. Auto 0.66 Equitas Holdings Ltd Finance 0.61 Yes Bank Ltd Banks 0.49 Bajaj Finance Limited Finance 0.48 Adani Port and Special Economic Zone Limited Transportation 0.45 Tata Consultancy Services Ltd. Software 0.44 Britannia Industries Ltd. Consumer Non Durables 0.42 Dr Reddys Laboratories Ltd Pharmaceuticals 0.40 Power Grid Corporation Of India Ltd Power 0.39 Axis Bank Ltd Banks 0.38 Tata Motors Ltd. Auto 0.38 ICICI Bank Ltd. Banks 0.34 Eicher Motors Ltd Auto 0.33 Mahindra & Mahindra Ltd. Auto 0.33 Alkem Laboratories Ltd Pharmaceuticals 0.31 Bajaj Finserv Ltd. Finance 0.30 Geometric Software Solutions Co Ltd Software 0.30 S H Kelkar and Company Ltd Consumer Non Durables 0.29 Larsen And Toubro Ltd. Construction Project 0.28 Ultratech Cement Ltd. Cement 0.27 Bharti Infratel Ltd. Telecom - Equipment & Accessories 0.26 Bosch Limited Auto Ancillaries 0.21 GAIL (India) Ltd. Gas 0.20 Marico Ltd. Consumer Non Durables 0.18 Petronet LNG Ltd. Gas 0.18 Wipro Ltd. Software 0.18 Divi s Laboratories Limited Pharmaceuticals 0.15 Ashok Leyland Ltd. Auto 0.14 JSW Steel Ltd. Ferrous Metals 0.14 Dish TV India Ltd. Media and Entertainment 0.13 HDFC Ltd. Finance 0.13 Bank Of Baroda Banks 0.12 National Thermal Power Corporation Limited Power 0.12 Tata Steel Limited. Ferrous Metals 0.12 Sun Pharmaceuticals Industries Ltd. Pharmaceuticals 0.11 Aurobindo Pharma Ltd. Pharmaceuticals 0.10 Sun Pharma Advance Research Co.Ltd Pharmaceuticals 0.08 Cadila Healthcare Ltd. Pharmaceuticals 0.07 HCL Technologies Ltd. Software 0.07 Cummins India Ltd. Industrial Products 0.06 Emami Ltd. Consumer Non Durables 0.06 Titan Company Ltd. Consumer Durables 0.06 TVS Motors Company Ltd Auto 0.06 Bharti Airtel Ltd. Telecom - Services 0.05 CNX NIFTY Call Option - December Just Dial Limited Software 0.05 UPL Ltd Pesticides 0.04 Coal India Ltd. Minerals/Mining 0.03 Indian Oil Corporation Ltd Petroleum Products 0.03 Bharat Electronics Ltd Industrial Capital Goods 0.02 Chennai Super Kings Cricket Ltd. Media and Entertainment 0.02 Tech Mahindra Ltd. Software 0.02 Shree Cement Ltd. Cement 0.01 Non-Hedged- Total Hedged GMR Infrastructure Ltd. Construction Project Reliance Capital Ltd. Finance Tata Motors Ltd. Auto Maruti Suzuki India Limited Auto India Cements Ltd. Cement Ashok Leyland Ltd. Auto Vedanta Ltd. Minerals/Mining Tata Communications Ltd Telecom - Services Karnataka Bank Ltd Banks HDFC Bank Ltd. Banks Jain Irrigation Systems Ltd. Industrial Products Dish TV India Ltd. Media and Entertainment ITC Ltd. Consumer Non Durables Infosys Ltd. Software Housing Development and Infrastructure Limited Construction HDFC Ltd. Finance NCC Limited Construction Project Hindustan Petroleum Corporation Ltd Petroleum Products Century Textiles & Industries Ltd. Cement Castrol (India ) Ltd. Petroleum Products IRB Infrastructure Developers Ltd Construction Wockhardt Ltd. Pharmaceuticals L&T Finance Holdings Ltd Finance Aurobindo Pharma Ltd. Pharmaceuticals MRF Limited Auto Ancillaries SKS Microfinance Limited Finance Reliance Industries Ltd. Petroleum Products Tech Mahindra Ltd. Software Reliance Power Ltd Power * For experience, please refer page For last three dividends, please refer page no For scheme performance, please refer page no 44-53

19 EQUITY SCHEMES KOTAK EQUITY SAVINGS FUND An Open Ended Equity Fund % to Net - Derivatives Indiabulls Housing Finance Ltd. Finance Reliance Communications Ltd. Telecom - Services IFCI Ltd. Finance Adani Power Ltd Power Cipla Ltd. Pharmaceuticals Glenmark Pharmaceuticals Ltd Pharmaceuticals Rural Electrification Corporation Ltd Finance Bharat Petroleum Corporation Ltd. Petroleum Products DLF Limited Construction LIC Housing Finance Ltd. Finance Punjab National Bank Banks Amara Raja Batteries Ltd. Auto Ancillaries Dewan Housing Finance Corporation Ltd. Finance HCL Technologies Ltd. Software Wipro Ltd. Software Indiabulls Real Estate Ltd Construction Indian Oil Corporation Ltd Petroleum Products Jet Airways (India) Ltd. Transportation Shriram Transport Finance Co Ltd. Finance UPL Ltd Pesticides Hindalco Industries Ltd Non - Ferrous Metals Aditya Birla Nuvo Limited Services Tata Chemicals Ltd. Chemicals United Spirits Ltd. Consumer Non Durables Sun TV Limited. Media and Entertainment Ambuja Cements Ltd Cement Coal India Ltd. Minerals/Mining Power Finance Corporation Ltd. Finance Adani Enterprises Ltd Trading Federal Bank Ltd. Banks Strides Arcolab Ltd. Pharmaceuticals Tata Elxsi Ltd. Software TV18 Broadcast Ltd Media and Entertainment IDFC Limited Finance Tata Global Beverages Limited Consumer Non Durables Asian Paints Ltd. Consumer Non Durables Cairn India Limited Oil Larsen And Toubro Ltd. Construction Project National Thermal Power Corporation Limited Power Oracle Financial Services Software Ltd Software Reliance Infrastructure Ltd Power SRF Ltd. Textile Products ACC Ltd. Cement Bharti Infratel Ltd. Telecom - Equipment & Accessories Hindustan Unilever Ltd. Consumer Non Durables NMDC Ltd. Minerals/Mining Pidilite Industries Ltd. Chemicals Lupin Ltd. Pharmaceuticals Oil & Natural Gas Corporation Ltd. Oil Power Grid Corporation Of India Ltd Power Axis Bank Ltd Banks Tata Consultancy Services Ltd. Software Bharat Earth Movers Ltd. Industrial Capital Goods CESC Ltd. Power Grasim Industries Ltd. Cement Sun Pharmaceuticals Industries Ltd. Pharmaceuticals Jaiprakash Associates Ltd Construction Oriental Bank of Commerce Banks Tata Motors Ltd - DVR Auto Torrent Pharmaceuticals Ltd. Pharmaceuticals Zee Entertainment Enterprises Ltd Media and Entertainment Hedged - Total Listed/Awaiting Listing on Stock Exchange - Total Government Dated Securities 8.48% State Government SOV % State Government SOV 1.27 Government Dated Securities - Total 3.00 Reverse Repo 5.66 TERM DEPOSITS Kotak Mahindra Bank Ltd Ratnakar Bank Ltd 1.74 Term Deposits - Total Collateral Borrowing & Lending obligation 0.12 Net Current /(Liabilities) 8.38 Kotak Equity Savings Fund NAV as on April 29, 2016: ` (Growth Option), ` (Monthly Dividend Option), ` (Quarterly Dividend Option), ` (Direct Growth Option), ` (Direct Monthly Dividend Option), ` (Direct Quarterly Dividend Option) SECTOR ALLOCATION (%) CBLO & Term Deposits & Rev.Repo Banks Finance Software Pharmaceuticals Consumer Non Durables Cement Construction Project Petroleum Products Others Investors understand that their principal will be at moderately high risk Income from arbitrage opportunities in the equity market & long term capital growth Investment predominantly in arbitrage opportunities in the cash & derivatives segment of the equity market and equity & equity related securities * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 18

20 EQUITY SCHEMES KOTAK INDIA GROWTH FUND SERIES I 3 years Close- Ended Equity INVESTMENT STYLE Style Value Blend Growth Size Large Mid Small The investment objective of the scheme is to generate capital appreciation from a diversified portfolio of equity & equity related instruments across market capitalisation and sectors. There is no assurance or guarantee that the investment objective of the scheme will be achieved. However, there is no assurance that the objective of the scheme will be realized. May 06, 2015 Mr. Harish Krishnan Nifty 200 AAUM (` In Crores) AAUM as on Apr 30, 2016: ` AUM (` In Crores) AUM as on Apr 30, 2016: ` A) Regular Plan B) Direct Plan / Options: Dividend Payout & Growth Equity & Equity related (Listed/Awaiting listing on Stock Exchange) Infosys Ltd. Software HDFC Bank Ltd. Banks 9.32 ICICI Bank Ltd. Banks 7.09 IndusInd Bank Ltd. Banks 6.12 Sun Pharmaceuticals Industries Ltd. Pharmaceuticals 5.57 Reliance Industries Ltd. Petroleum Products 5.13 Axis Bank Ltd Banks 5.03 Maruti Suzuki India Limited Auto 5.00 Larsen And Toubro Ltd. Construction Project 4.99 Ultratech Cement Ltd. Cement 4.17 Tata Motors Ltd - DVR Auto 4.09 Britannia Industries Ltd. Consumer Non Durables 4.01 Hero MotoCorp Ltd. Auto 3.98 Shree Cement Ltd. Cement 3.24 Persistent Systems Limited Software 3.16 Oracle Financial Services Software Ltd Software 3.07 Power Grid Corporation Of India Ltd Power 2.95 Jubilant Foodworks Limited Consumer Non Durables 2.72 Kajaria Ceramics Ltd. Construction 2.72 Equitas Holdings Ltd Finance 2.60 Listed/Awaiting Listing on Stock Exchange - Total Reverse Repo 2.71 Net Current /(Liabilities) 2.05 Dividend Frequency Trustee s Discretion Ratios Portfolio Turnover: % The scheme is a close ended scheme. The units of the scheme can be traded on the stock exchange. Entry Load: Nil. Exit Load: Nil. Regular: 2.52% Direct: 2.02% Kotak India Growth Fund Series I NAV as on April 29, 2016: ` (Dividend Option), ` (Direct Dividend Option), ` (Growth Option), ` (Direct Growth Option) SECTOR ALLOCATION (%) Banks Cement Software Auto Consumer Non Durable Petroleum Products Pharmaceuticals Construction Project Construction Others Construction Investors understand that their principal will be at moderately high risk Long term capital growth Investment in equity and equity related securities across market capitalisation and sectors * Investors should consult their financial advisors if in doubt about whether the product is suitable for them. 19