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					ABRIDGED ANNUAL REPORT FOR F.Y. 2010-2011
                                                           HDFC MUTUAL FUND
                              Ramon House, 3rd Floor, H. T. Parekh Marg, 169, Backbay Reclamation, Churchgate, Mumbai - 400 020.
                                      TEL : (022) 6631 6333 l FAX : (022) 2282 1144 l WEBSITE : www.hdfcfund.com

                   SPONSORS                                               CUSTODIAN                                            BOARD OF DIRECTORS
Housing Development Finance Corporation              HDFC Bank Limited                                                           (As at March 31, 2011)
Limited                                              Custody Services,                                            HDFC Trustee Company Limited
Registered Office:                                   Lodha - I Think Techno Campus Office,                        Mr. Anil Kumar Hirjee - Chairman
Ramon House, H. T. Parekh Marg,                      Floor 8, Next to Kanjurmarg Railway Station,                 Mr. Shishir K. Diwanji
169, Backbay Reclamation,
                                                     Kanjurmarg (East),                                           Mr. Vincent O’Brien
Churchgate, Mumbai - 400 020.
                                                     Mumbai - 400 042.                                            Mr. V. Srinivasa Rangan
Standard Life Investments Limited                                                                                 Mr. Ranjan Sanghi
Registered Office :                                                STATUTORY AUDITORS
1 George Street, Edinburgh, EH2 2LL,                 Deloitte Haskins & Sells                                                  BOARD OF DIRECTORS
United Kingdom.                                      Chartered Accountants                                                      (As at March 31, 2011)
                                                     12, Dr. Annie Besant Road, Opp. Shiv Sagar Estate,           HDFC Asset Management Company Limited
                    TRUSTEE                          Worli, Mumbai - 400 018.                                     Mr. Deepak S. Parekh - Chairman
HDFC Trustee Company Limited                                                                                      Mr. N. Keith Skeoch
Registered Office :
                                                          REGISTRAR AND TRANSFER AGENT                            Mr. Keki M. Mistry
Ramon House, 3rd Floor, H. T. Parekh Marg,
169, Backbay Reclamation,                            Computer Age Management Services Pvt. Limited                Mr. James Aird
Churchgate, Mumbai - 400 020.                        New No. 10, Old No. 178,                                     Mr. P. M. Thampi
                                                     M.G.R. Salai, Nungambakkam,                                  Mr. Humayun Dhanrajgir
     ASSET MANAGEMENT COMPANY                        Chennai - 600 034.                                           Dr. Deepak B. Phatak
HDFC Asset Management Company Limited                                                                             Mr. Hoshang S. Billimoria
A Joint Venture with Standard Life Investments                                                                    Mr. Rajeshwar Raj Bajaaj
Limited                                                                                                           Mr. Vijay Merchant
Registered Office :                                                                                               Ms. Renu S. Karnad
Ramon House, 3rd Floor, H. T. Parekh Marg,
                                                                                                                  Mr. Milind Barve - Managing Director
169, Backbay Reclamation,
Churchgate, Mumbai - 400 020.



                                       HDFC HIGH INTEREST FUND
                                                               AN OPEN-ENDED INCOME SCHEME

                                                                      TRUSTEE REPORT

HDFC Trustee Company Limited (the “Trustee”) presents its eleventh report                for the investors. These Schemes invest in Debt/ Money Market Instruments and
and the audited financial statements of the Schemes of HDFC Mutual Fund (the             Government Securities with maturity not exceeding 30 months and 60 months
“Fund”), for the year ended March 31, 2011.                                              respectively.
The Fund continued to launch simple and innovative products / facilities for the         The Fund also launched 4 closed-ended income schemes viz, HDFC Fixed
Investors during the year. It launched 1 close-ended capital protection oriented         Maturity Plans – Series XIV with 16 Fixed Maturity Plans (FMPs), HDFC
income scheme, 1 open-ended exchange traded fund, 2 open-ended income                    Fixed Maturity Plans – Series XV with 11 FMPs, HDFC Fixed Maturity Plans
schemes and 4 closed-ended income schemes, as under:                                     – Series XVI with 6 FMPs and HDFC Fixed Maturity Plans – Series XVII with
                                                                                         22 FMPs. During the financial year, total of 49 FMPs were launched under the
To commemorate the occasion of completion of 10 successful years, the Fund
                                                                                         new/ existing FMP Schemes and listed on the NSE.
launched HDFC Debt Fund for Cancer Cure in association with Indian Cancer
Society, one of the oldest NGOs providing subsidy for treatment of cancer out            The Fund introduced HDFC Flex Systematic Transfer Plan (Flex STP) facility
of donations received every year. This innovative product is designed to provide         during the year wherein unit holder(s) of certain open-ended Scheme(s) of the
financial assistance to needy cancer patients for their treatment by encouraging         Fund can opt to transfer variable amount(s) linked to the value of investments
investors to donate part of the dividend or entire dividend declared under the           under Flex STP on the date of transfer to the Growth Option of other specified
Scheme towards this cause. Further, HDFC Asset Management Company                        open-ended Scheme(s) of the Fund at daily, weekly, monthly and quarterly
Limited (“HDFC AMC”) also does not charge any investment management or                   intervals. Under HDFC Flex STP, investors can take advantage of bearish
advisory fees under this product. The Scheme is a 3 year close-ended capital             phases in the markets and invest more when the markets are down. Further, in
protection oriented income scheme and is listed on the National Stock Exchange           a bullish market, investors can continue with normal STP and benefit from the
of India Limited (NSE) and Bombay Stock Exchange Limited (BSE).                          power of compounding.
HDFC Gold Exchange Traded Fund, an open-ended exchange traded fund was                   The Fund also introduced SIP Top-up facility, whereby investors enrolling for
launched to offer investors an opportunity to invest in an alternative asset class       SIP can opt to increase the amount of the SIP Installment by a fixed amount
and to earn returns that are in line with the performance of gold. The Scheme            at pre-defined intervals. This enhances the flexibility of the investor to invest
further offers investors the convenience of holding units in demat mode, thus            higher amounts during the tenure of the SIP.
doing away with the risks associated with holding gold in physical form such as          As of March 31, 2011, HDFC AMC managed 36 schemes of the Fund. The
theft. The Scheme is listed on the NSE and BSE.                                          break-up being 10 open-ended equity schemes (out of which 3 schemes were
HDFC Short Term Opportunities Fund and HDFC Medium Term Opportunities                    automatically converted from closed-ended equity schemes into open-ended
Fund, open-ended income schemes were launched to generate regular income                 equity schemes at the end of the maturity period), 1 open-ended index linked


                                                                                     1
scheme, 2 open-ended equity linked savings schemes, 3 open-ended balanced            1.   SCHEME PERFORMANCE,                    FUTURE         OUTLOOK          AND
schemes, 9 open-ended income schemes, 1 open-ended interval income scheme,                OPERATIONS
1 open-ended gilt scheme, 2 open-ended liquid income schemes, 1 open-ended                SCHEME PERFORMANCE AND OPERATIONS
exchange traded fund and 6 close-ended income schemes.
                                                                                          HDFC High Interest Fund - An Open-ended Income Scheme
During the financial year, HDFC Mutual Fund has recorded marginal growth
in Assets Under Management (AUM). The AUM as at March 31, 2011 was                        The performance of HDFC High Interest Fund – Growth Option as at
Rs.75,704.66 crore as against Rs.73,486.74 crore as at March 31, 2010,                    March 31, 2011 is presented below:
representing an increase of 3.02%. The equity-oriented schemes’ assets
                                                                                           Period                                              Benchmark
                                                                                                                                   Returns (%) ^
constitute 47.67% of the total assets under management of the Fund as at
                                                                                                                                              Returns (%)#
March 31, 2011. This year also HDFC Mutual Fund retained its market position
                                                                                           Last 1 Year                           6.27              5.06
of being 2nd largest Mutual Fund in India by Assets under Management.
                                                                                           Last 3 Years                          7.74              5.94
The total number of investors has increased from 39,02,350 as at                           Last 5 Years                          6.94              5.94
March 31, 2010 to 46,80,610 as at March 31, 2011, an increase of 19.94%.                   Since Inception@                      8.98              N.A
During the financial year, the Fund has witnessed 107.76% growth in the number            ^ Past performance may or may not be sustained in the future.
of transactions through Systematic Investment Plans (SIP) and Systematic                  Above returns are compounded annualized (CAGR)
Transfer Plans (STP) from investors. The number of systematic transactions                # Benchmark Index: CRISIL Composite Bond Fund Index
increased from 65,24,249 in F.Y. 2009-10 to 1,35,54,462 in F.Y. 2010-11.
                                                                                          @ Date of Inception/Allotment: April 28, 1997
Further, HDFC Mutual Fund, HDFC AMC and Housing Development Finance
                                                                                          N.A.: Not Available
Corporation Limited (HDFC) and Standard Life Investments Limited (SLI) (as
Sponsor Companies) have won various Awards & Accolades for the year ended                 Face Value: Rs.10 per unit
December 31, 2010, some of which have been summarized below:                              The Scheme outperformed its benchmark over the last one year as it had
                                                                                          lower allocation to cash equivalents, which helped in earning higher accrual
   Award           Name of         Award#           Total        Award
                                                                                          income compared to the Mark to Market (MTM) loss due to marginal
   Winner         the Award                       Number         Agency                   increase in yields. Performance over 3 years and 5 years continues to be
                  Ceremony                       of eligible                              healthy.
                                                 nominees
                                                                                          The Scheme has delivered 8.98% p.a. returns since inception. The
                          Star Fund
             ICRA Mutual                                        ICRA Ltd./                Benchmark returns since inception are not available.
                          House of the
             Fund Awards                             13        ICRA Online                The net assets of the Scheme amounted to Rs.119.13 crore as at March 31,
                          Year (Equity
             2011                                                  Ltd                    2011 as against Rs.201.23 crore as at March 31, 2010.
                          Category)
                          Best Equity                                                     As at March 31, 2011, 98.76% of the net assets of the Scheme were
                                                     19
             Morningstar Fund House                                                       invested in Debt & money market instruments (including Fixed Deposits)
                                                               Morningstar                and 1.24% in other current assets (including Reverse Repos / CBLO).
             India Fund   Best Multi-                            India
             Awards 2011 Asset Fund                  16                                   FUTURE OUTLOOK
                          House
                                                                                          Debt Market Outlook
                          Debt Mutual
   HDFC                                                                                   The global recovery is expected to sustain in 2011, although growth
                          Fund House of              41
 Mutual Fund                                                                              may slow down marginally due to the waning impact of fiscal stimulus
                          the Year
             CNBC TV18                                                                    measures in advanced economies, monetary tightening in EMEs and rising
                          Equity Mutual                          CRISIL
             - CRISIL                                                                     commodity prices.
                          Fund House of              41        FundServices,
             Mutual Fund
                          the Year                              CRISIL Ltd.               Growth of the Indian economy is also expected to moderate in FY12.
             Awards 2011
                          Mutual Fund                                                     Agricultural growth may be lower on account of the high base established
                          House of the               41                                   in the previous year. In addition, industrial activity is expected to slow
                          Year                                                            down mainly due to the impact of monetary tightening and high input
             Bloomberg    Best Mutual                                                     prices.
                                                                Bloomberg
             UTV          Fund - Equity              6                                    The headline Wholesale Price Index (WPI) inflation is expected to remain
                                                                   UTV
             Leadership   of the Year                                                     high during the first half due to an expected increase in fuel prices and the
             Business     Best Asset                                                      impact of high input cost on the price of manufactured products. The RBI
                                                                Business                  has projected WPI inflation for March 2012 at 6%, with an upward bias.
             World -Value Management
 HDFC AMC                                            23        World-Value
             Research     Company                                                         In the short term, government bonds yields are likely to remain firm
                                                                Research
             Survey                                                                       due to uncertainties emanating from both domestic as well as external
                          Best Group                                                      factors. On the domestic front, uncertainty associated with the inflation
                          over 3 Years-              14                                   trajectory, likely fiscal slippage on account of the subsidy burden and
             Lipper Fund Overall Group                                                    monetary policy actions by the RBI are the key issues. On the global front,
 HDFC & SLI Awards -      Best Group                              Lipper                  growth in advanced economies and sovereign debt problems in the Euro
             India 2011   over 3 Years-                                                   area are some of the main concerns. However, in the long term, yields on
                                                     15
                          Mixed Assets                                                    government bonds are likely to head lower due to a moderating inflation
                          Group                                                           outlook, possible subsidy reforms and efforts towards fiscal consolidation.
# Past Performance is no guarantee of future results.                                2.   BRIEF BACKGROUND OF SPONSORS, TRUST, TRUSTEE
Award Methodology and Disclaimer for the awards is annexed as Annexure                    COMPANY AND ASSET MANAGEMENT COMPANY
1 and forms part of the Trustee Report.                                                   a.   SPONSORS
The Fund declared dividend(s) under its Scheme(s) which is annexed as                          HDFC Mutual Fund is sponsored by Housing Development Finance
Annexure 2 and forms part of the Trustee Report.                                               Corporation Limited and Standard Life Investments Limited. The
                                                                                               Sponsors are the Settlors of the Mutual Fund Trust. The Sponsors
                                                                                               have entrusted a sum of Rs.1 lakh each to the Trustee as the initial



                                                                                 2
     contribution towards the corpus of the Mutual Fund.                                      as per the terms of the trust deed dated June 8, 2000 with Housing
                                                                                              Development Finance Corporation Limited (HDFC) and Standard
     HOUSING DEVELOPMENT FINANCE CORPORATION
                                                                                              Life Investments Limited as the Sponsors / Settlors and HDFC
     LIMITED (HDFC)
                                                                                              Trustee Company Limited, as the Trustee. The Trust Deed has been
     HDFC was incorporated in 1977 as the first specialized Mortgage                          registered under the Indian Registration Act, 1908. The Trustee has
     Company in India. HDFC is a Premier Housing Finance Company in                           entered into an Investment Management Agreement dated June 8,
     India. HDFC provides financial assistance to individuals, corporates                     2000 with HDFC Asset Management Company Ltd. to function as
     and developers for the purchase or construction of residential                           the Investment Manager for all the Schemes of the Fund. The Fund
     housing. It also provides property related services (e.g. property                       was registered with SEBI on June 30, 2000.
     identification, sales services and valuation), training and consultancy.
                                                                                         c.   HDFC TRUSTEE COMPANY LIMITED
     Of these activities, housing finance remains the dominant activity.
     HDFC has a client base of around 12 lakh borrowers, over 9 lakh                          HDFC Trustee Company Limited (the “Trustee”) is the exclusive
     depositors, over 2 lakh shareholders and over 25,000 deposit agents,                     owner of the Trust Fund and holds the same in trust for the benefit
     as at March 31, 2011. As at March 31, 2011, the Company has a                            of the Unit holders. The Trustee has been discharging its duties and
     total asset size of Rs.1,32,727 crore and cumulative approvals and                       carrying out the responsibilities as provided in the SEBI (Mutual
     disbursements of housing loans of Rs.3,73,246 crore and Rs.3,02,533                      Funds) Regulations, 1996 (the “Regulations”) and the Trust Deed.
     crore respectively.                                                                      The Trustee seeks to ensure that the Fund and the Schemes floated
                                                                                              thereunder are managed by HDFC Asset Management Company
     HDFC had raised funds from international agencies such as the
                                                                                              Limited in accordance with the Trust Deed, the Regulations,
     World Bank, IFC (Washington), USAID, DEG, ADB and KfW,
                                                                                              directions and guidelines issued by the SEBI, the Stock Exchanges,
     international syndicated loans, domestic term loans from banks and
                                                                                              the Association of Mutual Funds in India and other regulatory
     insurance companies, bonds and deposits. HDFC has received the
                                                                                              agencies.
     highest rating for its deposits program for the seventeenth year in
     succession.                                                                              As at March 31, 2011, HDFC holds 100% of the paid-up equity share
                                                                                              capital of HDFC Trustee Company Limited.
     HDFC Standard Life Insurance Company Limited, promoted by
     HDFC was the first life insurance company in the private sector to                       During the year under review, there has been no change in the
     be granted a Certificate of Registration (on October 23, 2000) by                        composition of the Board of Directors of the Trustee.
     the Insurance Regulatory and Development Authority to transact                      d.   HDFC ASSET MANAGEMENT COMPANY LIMITED
     life insurance business in India. For more information log on to
     www.hdfc.com.                                                                            HDFC Asset Management Company Limited (“HDFC AMC”) is
                                                                                              a public limited company incorporated under the Companies Act,
     STANDARD LIFE INVESTMENTS LIMITED                                                        1956 on December 10, 1999. HDFC AMC has been appointed as the
     Standard Life Investments was launched as an investment                                  Asset Management Company of HDFC Mutual Fund by the Trustee
     management company in 1998. It is the dedicated investment                               vide Investment Management Agreement (IMA) dated June 8, 2000,
     management company of the Standard Life group and is a wholly                            and executed between HDFC Trustee Company Limited and HDFC
     owned subsidiary of Standard Life Investments (Holdings) Limited,                        AMC. HDFC AMC was approved to act as an Asset Management
     which in turn is a wholly owned subsidiary of Standard Life plc.                         Company for HDFC Mutual Fund by SEBI vide its letter dated
                                                                                              July 3, 2000. HDFC AMC is also registered with SEBI as a Portfolio
     With global assets under management of approximately US$251.9
                                                                                              Manager.
     billion (£157.1 billion) as at March 31, 2011, Standard Life
     Investments Limited is one of the world’s major investment                               During the year under review, there has been no change in the
     companies, operating in the UK, Canada, Hong Kong, China, Korea,                         composition of the Board of HDFC AMC.
     Ireland and the USA, and is responsible for investing money on                 	    	    l     Shareholding Pattern
     behalf of five million retail and institutional clients worldwide.
                                                                                                    During the year under review, there has been a change in the
     The Standard Life Assurance Company was established in 1825                                    equity shareholding pattern of HDFC AMC.
     and has considerable experience in global financial markets. The
     company was present in the Indian life insurance market from 1847                              The equity shareholding pattern as at March 31, 2011 of HDFC
     to 1938 when agencies were set up in Kolkata and Mumbai. The                                   AMC is as follows:
     company re-entered the Indian market in 1995, when an agreement                                 Name of the Equity Shareholders                 % of the
     was signed with HDFC to launch an insurance joint venture.                                                                                   paid up equity
     On April 2006, the Board of The Standard Life Assurance Company                                                                                  capital
     recommended that it should demutualise and Standard Life plc float                              Housing Development Finance                       59.98
     on the London Stock Exchange. At a Special General Meeting held                                 Corporation Limited (HDFC)
     in May voting members overwhelmingly voted in favour of this. The                               Standard Life Investments Limited (SLI)           39.99
     Court of Session in Scotland approved this in June and Standard Life                            Other Shareholders (shares issued on               0.03
     plc floated on the London Stock Exchange on 10 July 2006.                                       exercise of stock options)
     In order to meet the different needs and risk profiles of its clients,         3.   INVESTMENT OBJECTIVE OF THE SCHEME
     Standard Life Investments Limited manages a diverse portfolio
     covering all of the major markets world-wide, which includes a                      Name of the Scheme Investment Objective
     range of private and public equities, government and company                        HDFC High Interest To generate income by investing in a range of
     bonds, property investments and various derivative instruments.                     Fund               debt and money market instruments of various
     The company’s current holdings in UK equities account for                                              maturity dates with a view to maximize income
     approximately 1.8% of the market capitalisation of the London                                          while maintaining the optimum balance of
     Stock Exchange. For more information log on to the website                                             yield, safety and liquidity.
     www.standardlifeinvestments.com
                                                                                    4.   SIGNIFICANT ACCOUNTING POLICIES:
b.   HDFC MUTUAL FUND
                                                                                         The Significant Accounting Policies form part of the Notes to the Accounts
     HDFC Mutual Fund (the “Fund”) has been constituted as a trust
                                                                                         annexed to the Balance Sheet of the Schemes in the Full Annual Report.
     in accordance with the provisions of the Indian Trusts Act, 1882,
                                                                                         The Accounting Policies are in accordance with Securities Exchange
                                                                                         Board of India (Mutual Funds) Regulations, 1996.


                                                                                3
5.   UNCLAIMED DIVIDENDS & REDEMPTIONS                                                           c.    Full Annual Report shall be disclosed on the website (www.hdfcfund.
     Summary of No. of Investors & Corresponding unclaimed amounts as at                               com) and shall be available for inspection at the Head Office of
     March 31, 2011:                                                                                   HDFC Mutual Fund. Present and prospective Unit holder can obtain
                                                                                                       copy of the trust deed, the full Annual Report of the Fund / HDFC
      Name of the   Unclaimed Dividends   Unclaimed Redemptions                                        AMC at a price.
      Scheme         Amount       No. of   Amount        No. of                             7.   ACKNOWLEDGEMENTS
                      (Rs.)     Investors   (Rs.)      Investors                                 The Trustee thanks SEBI, AMFI, the investors, Investor Service Centres,
      HDFC High 1,281,930         2,117    241,207         7                                     distributors, key partners, service providers, HDFC AMC and its
      Interest Fund                                                                              employees for their commitment and looks forward to their continued
6.   STATUTORY INFORMATION                                                                       support.
     a.  Housing Development Finance Corporation Limited and Standard
         Life Investments Limited (the Sponsors) are not responsible or liable                                                     For HDFC Trustee Company Limited
         for any loss resulting from the operation of the Schemes of the Fund
         beyond their initial contribution of Rs.1 lakh each for setting up the                                                                                       Sd/-
         Fund, and such other accretions / additions to the same.                                                                                           Ranjan Sanghi
     b.  The price and redemption value of the units, and income from them,                                                                                       Director
         can go up as well as down with fluctuations in the market value of its             Place : Mumbai
         underlying investments.                                                            Date : June 27, 2011


                                                           ANNEXURE TO TRUSTEE REPORT

ANNEXURE 1 - AWARD/RANKING METHODOLOGY & DISCLAIMER                                         3.   CNBC TV18 - CRISIL MUTUAL FUND AWARDS 2011
FOR THE AWARDS WON BY HDFC MUTUAL FUND / HDFC ASSET                                              Debt Mutual Fund House of the Year
MANAGEMENT COMPANY LIMITED / SPONSOR COMPANIES                                                   Eligibility Criteria: Gilt, Income, Income – Short, Liquid – Retail,
1.   ICRA MUTUAL FUND AWARDS 2011- STAR FUND HOUSE OF                                            Liquid – Institutional, Liquid – Super Institutional, MIP – Aggressive,
     THE YEAR                                                                                    MIP – Conservative, Ultra Short term debt – Retail, Ultra Short term debt
                                                                                                 – Institutional, Ultra Short term – Super Institutional, Consistent Debt and
     Star Fund House of the Year is determined in the Equity and Debt
                                                                                                 Consistent Liquid categories are considered.
     categories separately. Star Fund House of the Year Award indicates top
     overall performance within the eligible fund houses. To qualify for the                     Methodology: Quarterly CRISIL Fund Ranks during the year for the
     award a fund house needs to have at least one scheme ranked 3 star or                       above categories, for ranked schemes from eligible fund houses, are
     above in at least three of the equity and debt categories respectively                      multiplied with appropriate factors to arrive at the weighted scores. The
     defined by ICRA. The scoring aims at assessing the number of superior                       mutual fund house with the highest weighted score is awarded the ‘Debt
     performing schemes managed by the fund house over the current one-year                      Mutual Fund House of the Year’.
     period. The result also takes into account qualitative factors of an AMC’s                  Equity Mutual Fund House of the Year Award
     structure based on their responses to a due diligence questionnaire.
                                                                                                 Eligibility Criteria: Large cap, Diversified, Small & Mid cap, ELSS,
     Disclaimer:                                                                                 Index, Thematic – Infrastructure, Balanced, Consistent Equity and
     The ranks assigned by ICRA Limited (ICRA) /ICRA Online Limited                              Consistent Balanced categories are considered.
     (ICRON) are based on an objective analysis of information obtained from                     Methodology: Quarterly CRISIL Fund Ranks during the year for the
     the entities concerned as also other sources considered reliable by ICRA/                   above categories, for ranked schemes from eligible fund houses, are
     ICRON. However, the ranks must be construed solely as statements of                         multiplied with appropriate factors to arrive at the weighted scores. The
     opinion and ICRA/ICRON shall not be liable for any losses incurred by                       mutual fund house with the highest weighted score is awarded the ‘Equity
     any user from any use of the ranks. Also, the ranks are neither a certificate               Mutual Fund House of the Year’.
     of any statutory compliance nor any guarantee on the future performance
                                                                                                 Mutual Fund House of the Year Award
     of the ranked entities/schemes.
                                                                                                 Eligibility Criteria: The mutual fund house should have won at least one
     Please refer to www.mutualfundsindia.com for further information on the
                                                                                                 scheme level award.
     Award/Ranking Methodology.
                                                                                                 Methodology: Quarterly CRISIL Fund Ranks during the year across all
2.   MORNINGSTAR INDIA FUND AWARDS 2011
                                                                                                 categories, for ranked schemes from eligible fund houses, are multiplied
     Best Equity Fund House: The award recognizes sustained outperformance                       with appropriate factors to arrive at the weighted scores. The mutual fund
     over three years, based on the Morningstar Risk-Adjusted Return across its                  house with the highest weighted score is the ‘Mutual Fund House of the
     equity fund line-ups for the period ending December 31, 2010.                               Year’.
     Best Multi-Asset Fund House: The award recognizes sustained                                 Please refer to www.crisil.com for further information on Award
     outperformance over three years, based on the Morningstar Risk-Adjusted                     Methodology.
     Return across its equity, debt and allocation fund line-ups for the period             4.   BLOOMBERG UTV FINANCIAL LEADERSHIP AWARDS 2011
     ending December 31, 2010.
                                                                                                 Best Mutual Fund - Equity of the Year
     Disclaimer:
                                                                                                 All Mutual Funds operating in the country were evaluated and of them
     The award should not be construed as investment advice, an offer, and the                   6 fund houses were short-listed to make presentations to the jury based
     solicitation of an offer to buy or sell securities by Morningstar. It is neither            on the performance of their schemes. The final winners were selected by
     a certificate of statutory compliance nor a guarantee of future performance.                a Jury panel which considered weighted average Sharpe Ratio achieved
     Please refer to www.morningstar.co.in for further information on award                      by the fund houses in each of their schemes subject to minimum average
     methodology.                                                                                assets under management during FY10 for the debt and equity segments
                                                                                                 and the submissions made by the fund house on its risk management
                                                                                                 processes, investor education and category enhancement initiatives,
                                                                                                 leadership initiatives undertaken by the fund house to expand mutual fund
                                                                                                 operations.


                                                                                        4
5.   BUSINESS WORLD -VALUE RESEARCH SURVEY                                              ANNEXURE 2 - PARTICULARS OF DIVIDEND DISTRIBUTED
     Best Asset Management Company: AMCs were ranked based on funds                     DURING THE YEAR UNDER REVIEW
     rated either 4-star or 5-star by Value Research as a percentage of the total       HDFC High Interest Fund - Quarterly Dividend Option
     number of rated funds. AMCs with less than Rs 3,000 crore of average
     assets under management as of December 2010 were not included.                     Record Date              NAV per unit (Rs.)         Dividend per unit (Rs.)
                                                                                                                  Cum - Dividend          Individual &      Others
6.   LIPPER FUND AWARDS – INDIA 2011
                                                                                                                                              HUF
     The essence of the Lipper Fund Awards is to reward consistent out-                 25-Jun-10                      11.2909               0.1500         0.1398
     performance of individual funds and of fund companies. Winning funds               27-Sep-10                      11.2939               0.1500         0.1398
     have demonstrated consistently strong risk-adjusted returns compared
                                                                                        27-Dec-10                      11.2524               0.0500         0.0466
     with peers.
                                                                                        25-Mar-11                      11.3526               0.1000         0.0932
     Criteria (cumulative)
                                                                                        HDFC High Interest Fund - Half - Yearly Dividend Option
     l    Funds registered for sale in the country as of December 31, 2010.
                                                                                        Record Date              NAV per unit (Rs.)         Dividend per unit (Rs.)
     l    At least 36 months of performance history as of December 31, 2010.
                                                                                                                  Cum - Dividend          Individual &      Others
     l    Lipper Global classifications with at least ten distinct portfolios                                                                 HUF
          based on the primary share class definition, excluding residual               27-Sep-10                      11.1614               0.3000         0.2796
          classifications, institutional, private, closed-end, exchange - traded        25-Mar-11                      11.0991               0.1500         0.1398
          and insurance funds.
                                                                                        HDFC High Interest Fund - Yearly Dividend Option
	    l    Asset classes: equity, bond, and mixed-asset except for Absolute
          Return funds where money market and other fund asset types are                Record Date              NAV per unit (Rs.)         Dividend per unit (Rs.)
          considered as well.                                                                                     Cum - Dividend          Individual &      Others
     Asset Class Group Awards                                                                                                                 HUF
                                                                                        25-Mar-11                      12.0365               0.4500         0.4194
     Best Group over 3 Years – Mixed Assets Group: Fund groups with
     at least three equity, three bond, or three mixed asset portfolios in the          All Dividends are on face value of Rs. 10 per Unit.
     respective asset classes are eligible for a group award. The lowest average        Pursuant to payment of dividends, the per unit NAV falls to the extent of
     decile rank of the three years’ Consistent Return measure of the eligible          payout and statutory levy, if any.
     funds per asset class and group will determine the asset class group award
     winner over the three-year period. In cases of identical results the lower         Past performance may or may not be sustained in the future.
     average percentile rank will determine the winner.                                 Unit holders whose names appeared in the Register of Unit holders [in case of
     Overall Group Award                                                                units held in electronic (demat) form, Beneficial Owners whose names appeared
                                                                                        in the Statements of beneficial ownership maintained by the Depositories,
     Best Group over 3 Years – Overall Group: Fund groups with at least
                                                                                        as applicable] under the Dividend Option(s) of the above Scheme, as on the
     three equity, three bond, and three mixed-asset funds are eligible for an
                                                                                        respective record date(s) were eligible to receive dividend. Dividend warrants /
     overall group award. An overall group award is given to the group with the
                                                                                        drafts were sent to eligible Unit holders under the Dividend Payout Option of the
     lowest average decile ranking of its respective asset class results based on
                                                                                        Scheme immediately after the respective record date(s).
     the methodology described above. In cases of identical results the lower
     average percentile rank will determine the winner.                                 Some of these Unitholders have not presented their dividend warrants / drafts
     Asset class and overall group awards are given to the company that is              for collection and these warrants / drafts are still outstanding as per our banker’s
     responsible for establishing the fund by appointing the fund management            records. Unit holders who have not presented their dividend warrants / drafts
     company, promoting and/or distributing the fund, the brand of the fund and         for payment are requested to do so at the earliest. In case where the validity of
     the product range. This company is also referred as promoter or sponsor            the dividend warrants / drafts has expired, investors are requested to submit the
     company.                                                                           same for revalidation at any of the Investor Service Centres.
     Disclaimer:                                                                        Some of the warrants / drafts have been returned undelivered by the postal
                                                                                        authorities / courier agencies. Unit holders who have not received the
     Although Lipper makes reasonable efforts to ensure the accuracy and                warrants / drafts, please call any of the Investor Service Centres or email us at
     reliability of the data contained herein, the accuracy is not guaranteed by
                                                                                        cliser@hdfcfund.com
     Lipper. Users acknowledge that they have not relied upon any warranty,
     condition, guarantee, or representation made by Lipper. Any use of the
     data for analyzing, managing, or trading financial instruments is at the
     user’s own risk. This is not an offer to buy or sell securities.
     Please refer to http://www.lipperweb.com for further information on the
     Award Methodology.




                                                                                    5
                        AUDITORS’ REPORT                                                 ABRIDGED BALANCE SHEET AS AT MARCH 31, 2011
TO THE BOARD OF DIRECTORS OF                                                                                                                             Rupees in Lacs
HDFC TRUSTEE COMPANY LIMITED                                                                                                             As at              As at
HDFC MUTUAL FUND – HDFC HIGH INTEREST FUND                                                                                            Mar 31, 2011       Mar 31, 2010
                                                                                         LIABILITIES
We have audited the attached Balance Sheet of HDFC Mutual Fund – HDFC
                                                                                         Unit Capital                                      7,419.89          11,449.99
Interest Fund (the “Scheme”) as at March 31, 2011 and the related Revenue
Account for the year ended on that date annexed thereto. These financial                 Reserves & Surplus
statements are the responsibility of the Managements of the Trustee and the                  Unit Premium Reserves                         4,418.15          10,381.00
Asset Management companies. Our responsibility is to express an opinion on                   Unrealised Appreciation Reserve                      -                   -
the financial statements. We report as follows:                                              Other Reserves                                   86.72          (1,683.17)
a) Our audit was conducted in accordance with generally accepted auditing                Loans & Borrowings                                       -                   -
   standards in India. Those Standards require that we plan and perform the              Current Liabilities & Provisions
   audit to obtain reasonable assurance about whether the financial statements               Provision for doubtful Income/Deposits               -                  -
   are free of material misstatements. An audit includes examining, on a test                Other Current Liabilities & Provisions           93.80           4,077.18
   basis, evidence supporting the amounts and disclosures in the financial               TOTAL                                            12,018.56          24,225.00
   statements. An audit also includes assessing the accounting principles used
   and significant estimates made by the Management, as well as evaluating the           ASSETS
   overall financial statement presentation. We believe that our audit provides a        Investments
   reasonable basis for our opinion.                                                     Listed Securities:
b) We have obtained all the information and explanations which to the best of                 Equity Shares                                       -                  -
   our knowledge and belief were necessary for the purposes of our audit.                     Preference Shares                                   -                  -
                                                                                              Equity Linked Debentures                            -                  -
c) The Balance Sheet and the Revenue Account dealt with by this report are in
                                                                                              Other Debentures & Bonds                     2,458.51           7,915.60
   agreement with the books of account of the Scheme.
                                                                                              Securitised Debt securities                         -                  -
d) The Balance Sheet and the Revenue Account dealt with by this report have
                                                                                         Securities Awaited Listing:
   been prepared in accordance with accounting policies and standards as
                                                                                              Equity Shares                                          -                -
   specified in the Ninth Schedule of the Securities and Exchange Board of
   India (Mutual Funds) Regulations, 1996.                                                    Preference Shares                                      -                -
                                                                                              Equity Linked Debentures                               -                -
e) Non - traded securities have been valued in accordance with the guidelines
                                                                                              Other Debentures & Bonds                               -                -
   notified by the Securities and Exchange Board of India. In our opinion, these
   valuations are fair and reasonable.                                                        Securitised Debt securities                            -                -
                                                                                         Unlisted Securities
f) Without qualifying our opinion we draw attention to note no. 2.2 in Schedule
                                                                                              Equity Shares                                       -                  -
   8 of the financial statements wherein the Management of the HDFC Asset
                                                                                              Preference Shares                                   -                  -
   Management Company Limited has explained its rationale for regarding
   Accounting Standards issued by the Institute of Chartered Accountants of                   Equity Linked Debentures                            -                  -
   India as not being applicable to mutual funds.                                             Other Debentures & Bonds                            -                  -
                                                                                              Securitised Debt securities                         -                  -
g) In our opinion and to the best of our information and according to the
   explanations given to us, the said accounts give the information required             Government Securities                             3,242.66           6,276.12
   by the Securities and Exchange Board of India (Mutual Funds) Regulations,             Treasury Bills                                      467.22           3,966.79
   1996 and give a true and fair view:                                                   Commercial Paper                                    396.21                  -
   i.    in the case of the Balance Sheet of the state of affairs of the Scheme as       Certificate of Deposits                           5,200.52             958.29
         at March 31, 2011; and                                                          Bill Rediscounting                                       -                  -
                                                                                         Units of Domestic Mutual Fund                            -                  -
   ii.   in the case of the Revenue Account, of the surplus of the Scheme for
         the year ended on that date.                                                    Foreign Securities                                       -                  -
                                                                                         Total Investments                                11,765.12          19,116.80
                                                                                         Deposits                                                 -              17.84
                                                                                         Other Current Assets
                                        For DELOITTE HASKINS & SELLS                          Cash & Bank Balance                             80.50             278.36
                                                     Chartered Accountants                    CBLO/ Reverse Repo Lending                      87.41           4,605.57
                                                (Registration No. 117366W)                    Others                                          85.53             206.43
                                                                                         Deferred Revenue Expenditure                             -                  -
                                                         Sanjiv V. Pilgaonkar                 (to the extent not written off)
                                                                       Partner           TOTAL                                            12,018.56          24,225.00
                                                       (Membership No. 39826)
Mumbai, June 27, 2011




                                                                                     6
                                                                                          Notes to Accounts - Annexure I to the Abridged Balance Sheet and Revenue
             ABRIDGED REVENUE ACCOUNT
                                                                                          Account for the Year ended March 31, 2011
           FOR THE YEAR ENDED MARCH 31, 2011
                                                                                          1. Investments:-
                                                                     Rupees in Lacs           1.1. All investments of the scheme except Government Securities and
                                                     Current Year Previous Year                    Treasury Bills are registered in the name of the Trustees for the benefits
INCOME                                                                                             of the Schemes Unitholders. All investments in Government Securities
                                                                                                   and Treasury Bills are held in an SGL account in the name of “HDFC
Dividend                                                         -                -                Mutual Fund”.
Interest                                                  1,364.19        2,782.94            1.2. Open Position of derivatives as at March 31, 2011 is Rs. Nil (as at
Realised Gain / (Loss) on Foreign Exchange                                                         March 31, 2010 was Rs. Nil).
Transactions                                                     -                -
                                                                                              1.3. Investments in Associates and Group Companies.
Realised Gains / (Losses) on Interscheme sale
of investments                                             (11.04)           75.61                  Refer Annexure III

Realised Gains / (Losses) on External sale /                                                  1.4. There are no open position of securities borrowed and / or lent by the
redemption of investments                                   (0.10)         (403.50)                scheme as at March 31, 2011 and as at March 31, 2010.
Realised Gains / (Losses) on Derivative                                                       1.5. Non Performing Assets as at March 31, 2011 is Rs. Nil (as at March 31,
Transactions                                                     -                -                2010 was Rs. Nil).
Other Income                                                  0.86            0.01            1.6. The Aggregate Unrealised Gain / (Loss) as at March 31, 2011 is Rs.
                                               (A)        1,353.91        2,455.06                 (8.84) Lacs (as at March 31, 2010 was Rs. (37.12) Lacs) and as a
                                                                                                   percentage of net assets of the scheme as at March 31, 2011 is (0.07)%
EXPENSES                                                                                           (as at March 31, 2010 was (0.18)%).
Management fees                                            203.54           399.17            1.7. The Aggregate value of investments purchased and sold (including
Service tax on Management fees                               20.97           41.11                 matured) during the financial year and as a percentage of average
Transfer agents fees and expenses                            13.39           21.82                 weekly net assets are as under:

Custodian fees                                                0.76            2.34                                        Purchase Value       %        Sales Value    %
                                                                                                                           (Rs. in Lacs)                  (Rs. in
Trusteeship fees                                              1.97            4.14                                                                         Lacs)
Commission to Agents                                         57.30          279.21
                                                                                                    Current Year                 53,483.92    299.54      61,043.77 341.88
Marketing & Distribution expenses                             0.50            2.76
                                                                                                    Previous Year                78,359.68    208.96     129,112.25 344.30
Audit fees                                                    0.22            0.52
                                                                                              1.8. The aggregate fair value of non-traded investments, valued in ‘good
Interest on Borrowings                                           -            0.10                 faith’ by the Investment Manager on the basis of the valuation
Other operating expenses                                     43.77            9.78                 principles laid down by SEBI as at March 31, 2011 is Rs. 8,055.24
                                                                                                   Lacs (as at March 31, 2010 was Rs. 8,319.35 Lacs) and as a percentage
                                               (B)         342.42           760.95
                                                                                                   of net assets of the scheme as at March 31, 2011 is 67.62% (as at
NET REALISED GAINS / (LOSSES) FOR                                                                  March 31, 2010 was 41.34%).
THE YEAR / PERIOD         (A -B = C)                      1,011.49         1,694.11
                                                                                          2   Disclosure Under Regulation 25(8) of the SEBI Regulations and other
Change in Unrealised Depreciation in value of                                                 applicable Regulations.
investments                               (D)                81.66            1.72
                                                                                              Refer Annexure IV
NET GAINS / (LOSSES) FOR THE YEAR /
PERIOD                     (E=(C-D))                       929.83         1,692.39        3. There are no Unit Holders holding over 25% of the Net Asset Value of the
                                                                                             Scheme as at March 31, 2011 and as at March 31, 2010.
Change in unrealised appreciation in the value
of investments                              (F)             110.24        1,674.85        4. Unit Capital movement during the year ended March 31, 2011.
NET SURPLUS / (DEFICIT) FOR THE                                                               Refer Annexure II
YEAR / PERIOD             (E + F = G)                     1,040.07        3,367.24
                                                                                          5. Prior year figures have been reclassified wherever necessary.
Add: Balance transfer from Unrealised
Appreciation Reserve **                                          -           54.50        6. Expenses other than management fee are inclusive of service tax wherever
                                                                                             applicable.
Less: Balance transfer to Unrealised
Appreciation Reserve                                             -                -       7. Contingent Liability as at March 31, 2011 is Nil (as at March 31, 2010 was
                                                                                             Rs. Nil).
Add / (Less): Equalisation                                1,118.03      (18,472.98)
Total                                                     2,158.10      (15,051.24)       Annexure II - Unit Capital Movement
                                                                                                                                                           (Figures in Lacs)
Dividend appropriation
                                                                                                                           March 31, 2011               March 31, 2010
Income Distributed during the year / period                320.60           611.05                 Particulars
                                                                                                                          Units      Rupees            Units      Rupees
Tax on income distributed during the year /
period                                                       54.54          106.10         (A) Growth Option
                                                                                           At the beginning of the year    370.009      3,700.08    1,136.699     11,366.99
Retained Surplus / (Deficit) carried forward
to Balance sheet                                          1,782.96      (15,768.39)        Issued during the year          197.932      1,979.31      315.382      3,153.81
** Amount transferred from Revenue Reserve                                                                                 567.941      5,679.39    1,452.080     14,520.80
                                                                                           Repurchased during the
                                                                                           year                           (405.159)   (4,051.59)   (1,082.072)   (10,820.72)
                                                                                           At the end of the year (A)       162.782     1,627.80       370.009      3,700.08




                                                                                      7
                                    March 31, 2011               March 31, 2010                                                   March 31, 2011              March 31, 2010
        Particulars
                                   Units      Rupees            Units      Rupees                      Particulars
(B) Quarterly Dividend                                                                                                           Units         Rupees       Units       Rupees
Option                                                                                         (D) Yearly Dividend
At the beginning of the year        742.141       7,421.42     3,302.778     33,027.78         Option
Issued during the year                                                                         At the beginning of the year
(including dividend                                                                                                                 7.575          75.75      12.169      121.69
reinvested)                          484.968      4,849.68     2,062.058     20,620.58         Issued during the year
                                   1,227.109     12,271.10     5,364.835     53,648.36         (including dividend
Repurchased during the                                                                         reinvested)                          2.912          29.12       9.688       96.88
year                               (670.934)     (6,709.34)   (4,622.694)   (46,226.94)
At the end of the year (B)                                                                                                        10.487          104.87      21.857      218.57
                                    556.175       5,561.76       742.141      7,421.42         Repurchased during the
(C) Half Yearly Dividend                                                                       year                               (2.455)         (24.55)    (14.282)    (142.82)
Option
                                                                                               At the end of the year (D)           8.032          80.32       7.575       75.75
At the beginning of the year         25.274         252.74        34.106        341.06
Issued during the year                                                                         TOTAL (A) + (B) + (C) + (D)       741.989        7,419.89    1,144.999   11,449.99
(including dividend
reinvested)                          11.337         113.37        19.925        199.25        Face value of units is Rs. 10.
                                     36.611         366.11        54.031        540.31
Repurchased during the
year                                (21.610)      (216.10)       (28.757)     (287.57)
At the end of the year (C)            15.001        150.01         25.274       252.74

Annexure III - Investments in Associates and Group Companies
                                                                                                                                                              (Rupees in Lacs)
Nature of instruments                      Bill Re-discounting         Deep Discount Bonds             Equity Shares             Floating Rate Bonds/      NCD/ Khokha
                                                                                                                                         Notes
Name of the Issuer #                     Investment Aggregate Investment Aggregate Investment Aggregate                        Investment Aggregate Investment Aggregate
                                            by the   Investment   by the   Investment   by the   Investment                       by the    Investment   by the   Investment
                                           scheme       by all   scheme       by all   scheme       by all                       scheme        by all   scheme       by all
                                                      schemes               schemes               schemes                                     schemes              schemes
Bank of Baroda                                     -           -         -           -         -   21,472.26                              -           -         -            -
Exide Industries Ltd.                              -           -         -           -         -       136.67                             -           -         -            -
GlaxoSmithkline Pharmaceuticals                    -           -         -           -         -     1,475.61                             -           -         -            -
Ltd
Great Eastern Shipping Company                      -             -             -             -             -           -             -             -            -        997.34
Ltd.
HDFC Bank Ltd.                                      - 416,800.65                -             -             -  12,028.79              -             -            -              -
Hindustan Unilever Ltd.                             -             -             -             -             -    5,106.17             -             -            -              -
Housing Development Fin. Corp. Ltd.                 -             -             - 189,375.26                -    1,429.13             -     20,031.04     1,000.00     63,174.12
Indian Hotels Company Ltd.                          -             -             -             -             -       97.07             -             -            -              -
Mahindra & Mahindra Ltd.                            -             -             -             -             -  19,970.23              -             -            -              -
Siemens Ltd.                                        -             -             -             -             -      887.14             -             -            -              -
Sun Pharmaceutical Industries Ltd.                  -             -             -             -             -    5,831.37             -             -            -              -
Infrastructure Dev. Fin. Co. Ltd.                   -             -     1,201.29      21,858.06             -      169.30             -             -            -     37,780.69
Zydus Wellness Ltd                                  -             -             -             -             -    1,656.79             -             -            -              -
Total                                               - 416,800.65        1,201.29 211,233.32                 -  70,260.53              -     20,031.04     1,000.00 101,952.15
#
  This disclosure has been made as Director(s) of the AMC is/are also a Director on the Board of the above Companies. The above investments were considered sound at the point of
investment. Before making an investment, the same is evaluated on merits and on arm’s length basis and in accordance with the objective of the scheme. The investments under the
respective Plans of HDFC Index Fund were made pursuant to their Investment Objectives.
Annexure IV - Disclosure under Regulation 25 (8) of the SEBI Regulations                      Previous Year
as amended
(i) Disclosure under Regulation 25(8) of the SEBI Regulation have been made                       Name of          Nature of             Business given    Commission related to
     in respect of amount paid to parties associated with sponsors in which the                   associate/      Association/                                   the scheme
     Asset Management Company or its major shareholders have a substantial                         related         Nature of       Amount       % of total Amount % of total
     interest as in accordance with the requirements given in SEBI’s Circular No.              parties/group        relation        (Rs.in      business    (Rs.in    commission
     SEBI/IMD/CIR No 18 / 198647 /2010 dated 15th March, 2010.                                  companies of      (% holding)       Lacs)       received    Lacs) related to the
     (a) No brokerage on investments is paid to associates/related parties/group               Sponsor/AMC                                        by the                scheme
           companies of sponsor/AMC during the current year and previous year.                                                                   scheme
     (b) Commission on distribution of units paid to associates/related parties/              HDFC Bank              Associate
           group companies of sponsor/AMC during the current year and previ-                  Ltd.                   (23.73$)       1,253.58       3.87       27.47     9.79
           ous year.
                                                                                              The commission includes commission on retained business of prior periods.
 Current Year
                                                                                              Pursuant to SEBI directives, no payment of commission has been made in
      Name of          Nature of       Business given     Commission related to               respect of investments made by the Sponsor of the Mutual Fund.
 associate/related Association/                                  the scheme
   parties/group       Nature of    Amount % of total Amount % of total                       The above commission amount represents payments made to associates and is
    companies of        relation     (Rs.in    business    (Rs.in     commission              netted for the amount borne by the AMC, if any.
   Sponsor/AMC (% holding)           Lacs) received by Lacs) related to the
                                              the scheme                scheme
HDFC Bank Ltd.         Associate
                       (23.35$)         594.44       5.00          6.28       7.88

                                                                                          8
(ii) The Scheme has made payments to its associates, for services rendered by             Entity          Nature of            Amount          % of equity capital
them, during the year as under: -                                                                         Payment            (Rs.in Lacs)     held by the sponsors
      Entity         Nature of         Amount             % of equity capital                                                                   & its subsidiary/
                      Payment        (Rs.in Lacs)        held by the sponsors                                                                    associates as at
                                                           & its subsidiary/                                               March      March    March       March
                                                            associates as at                                              31, 2011   31, 2010 31, 2011 31, 2010
                                  Current Previous         March      March          HDFC Trustee      Trusteeship Fees
                                   Year        Year       31, 2011 31, 2010          Company Ltd.                           0.35        0.53 100**         100**
 HDFC Asset       Investment                                                         HDFC Bank Ltd.     Bank Charges        0.01        0.02 23.35$        23.73$
 Management       Management and                                                     HDFC Bank Ltd.     Custody Charges     0.05        0.09 23.35$        23.73$
 Company Ltd. Advisory Fees         224.51      440.28 99.97#           100*         HDFC Bank Ltd.     Commission on
 HDFC Trustee Trusteeship Fees                                                                          distribution of
 Company Ltd.                         1.97         4.14 100**          100**                            Units               1.20       10.90 23.35$        23.73$
 HDFC Bank Ltd. Bank Charges          0.12         0.35 23.35$        23.73$         Computer Age       Registrar and
                                                                                     Management         Transfer Agent
 HDFC Bank Ltd. Custody Charges       0.76         2.34 23.35$        23.73$         Services Pvt. Ltd. Fees                2.08        0.96     ##          ##
 Computer Age Registrar and                                                          The above commission amount represents payables to associates and is netted for
 Management       Transfer Agent                                                     the amount borne by the AMC, if any.
 Services Pvt.    Fees
 Ltd.                                13.39       21.82       ##          ##          *    60% by HDFC Ltd.; 40% by Standard Life Investments Ltd.
                                                                                     #    59.98% by HDFC Ltd.; 39.99% by Standard Life Investments Ltd.
(iii) Amounts outstanding as at the Balance Sheet date :-
                                                                                     ** Held by HDFC Ltd.
       Entity        Nature of             Amount          % of equity capital       $    Held by HDFC Ltd. (including through HDFC Investments Ltd. and
                      Payment            (Rs.in Lacs)     held by the sponsors
                                                            & its subsidiary/             HDFC Holdings Ltd.).
                                                             associates as at        ##   Held by HDFC Ltd. (15.09%), HDFC Bank Ltd. (10.17%), HDB
                                      March      March     March       March              Employees Welfare Trust (5.91%).
                                     31, 2011 31, 2010 31, 2011 31, 2010
 Payable
 HDFC Asset       Investment
 Management       Management and
 Company Ltd.     Advisory Fees           7.59        3.12 99.97#       100*


                                      KEY STATISTICS FOR THE YEAR ENDED MARCH 31, 2011
                                                    Current       Previous                                                                  Current     Previous
                                                     Year           Year                                                                     Year         Year
1.   NAV per unit (Rs.):                                                                      Quarterly Dividend Option                          1.14         1.06
     Open                                                                                     Half Yearly Dividend Option                        1.14         1.06
     Growth option                                     31.1638       29.2142                  Yearly Dividend Option                             1.14         1.06
     Quarterly Dividend Option                         11.0938       10.8883          5. Net Income as a percentage of AAuM2                     5.66         4.52
     Half Yearly Dividend Option                       10.7978       10.6097          6. Portfolio turnover ratio (%)3                            NA           NA
     Yearly Dividend Option                            11.3514       11.1237          7. Total Dividend per unit distributed during the
     High                                                                                year
     Growth option                                     33.1181       31.1679             Quarterly Dividend Option
     Quarterly Dividend Option                         11.3526       11.4845             Individuxal                                        0.4500        0.6500
     Half Yearly Dividend Option                       11.1614       11.1903             Corporate                                          0.4194        0.6050
     Yearly Dividend Option                            12.0365       11.8427             Half Yearly Dividend Option
     Low                                                                                 Individual                                         0.4500        0.6500
                                                                                         Corporate                                          0.4194        0.6050
     Growth option                                     31.1861       29.2142
                                                                                         Yearly Dividend Option
     Quarterly Dividend Option                         11.0641       10.8883             Individual                                         0.4500        0.6500
     Half Yearly Dividend Option                       10.7622       10.6097             Corporate                                          0.4194        0.6050
     Yearly Dividend Option                            11.3595       11.1237          8. Returns (%) ^ :
     End                                                                                 a. Last One Year
     Growth option                                     33.1181       31.1638                  Growth Option                                 6.27**       10.32**
     Quarterly Dividend Option                         11.2636       11.0938             Benchmark #                                        5.06**        7.35**
     Half Yearly Dividend Option                       10.9526       10.7978             b. Since Inception
     Yearly Dividend Option                            11.5499       11.3514                  Growth Option                                 8.98**        9.40**
                                                                                         Benchmark #                                          NA*           NA*
2.   Closing Assets Under Management
     (Rs. in Lacs)                                                                   ** Compounded Annualised Returns
     End                                             11,912.92      20,122.91        #    CRISIL Composite Bond Fund Index
                                                                                     ^    Past performance may or may not be sustained in the future
     Average (AAuM)                                  17,855.28      37,499.42        NA* Not Available
3.   Gross income as % of AAuM1                           7.58           6.55        NA Not Applicable
4.   Expense Ratio:                                                                  1.   Gross income = amount against (A) in the Revenue account i.e. Income.
     a. Total Expense as % of AAuM                                                   2.   Net income = amount against (C) in the Revenue account i.e. NET
          (plan wise)                                                                     REALISED GAINS / (LOSSES) FOR THE YEAR / PERIOD
          Growth option                                    1.92          2.03        3.   Portfolio Turnover = Lower of sales or purchase divided by the Average
                                                                                          AuM for the year/period.
          Quarterly Dividend Option                        1.92          2.03        4.   AAuM=Average daily net assets
          Half Yearly Dividend Option                      1.92          2.03
          Yearly Dividend Option                           1.92          2.03        Auditors’ Report and Abridged Audited Results have been extracted from
     b. Management Fee as % of AAuM                                                  the Auditors’ Report, Audited Balance Sheet, Revenue Account and Notes
          (plan wise)                                                                to Accounts. Full Annual Report shall be disclosed on the website (www.
          Growth option                                    1.14          1.06        hdfcfund.com) and shall be available for inspection at the Head Office of
                                                                                     HDFC Mutual Fund. Unit holder can obtain a copy of the same at a price.


                                                                                 9
Risk Factors: All mutual funds and securities investments are subject to market risks and there can be no assurance that the Scheme’s objectives will be
achieved and the NAV of the Schemes may go up or down depending upon the factors and forces affecting the securities market. Past performance of the
Sponsors and their affiliates / AMC / Mutual Fund and its Scheme(s) do not indicate the future performance of the Scheme of the Mutual Fund. There is no assurance
or guarantee to unit holders as to the rate of dividend distribution nor that dividends will be paid regularly. Investors in the Schemes are not being offered any
guaranteed / assured returns. The NAV of the units issued under the Schemes may be affected, inter-alia by changes in the interest rates, trading volumes, settlement
periods, transfer procedures and performance of individual securities. The NAV will inter-alia be exposed to Price / Interest Rate Risk and Credit Risk. The name(s)
of the Scheme(s) do not in any manner indicate either the quality of the Scheme(s), their future prospects and returns. Please read the Scheme Information
Document and Statement of Additional Information before investing.
Statutory Details: HDFC Mutual Fund has been set up as a trust sponsored by Housing Development Finance Corporation Limited and Standard Life Investments
Limited (liability restricted to their contribution of Rs. 1 lakh each to the corpus) with HDFC Trustee Company Limited as the Trustee (Trustee under the Indian Trusts
Act, 1882) and with HDFC Asset Management Company Limited as the Investment Manager.


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 Opt for receiving documents by email
 HDFC Mutual Fund offers eDocs facility which enables you to receive documents (account statements, annual reports etc.) by email. eDocs are convenient, easy
 to store / retrieve, free of cost as well as eco-friendly. After opting for the facility, if you need any document in the physical form, you may request for the same
 and we shall provide it to you. Additionally, you can receive SMS alerts for purchase, redemption, switch and non-financial transactions like change of address or
 bank details in your folio.
 Experienced the convenience of receiving your dividend and redemption payout(s) directly into your bank account?
 Register for receiving payouts electronically
 Save your time and experience the convenience of receiving your dividend and redemption payout(s) directly into your bank account. Electronic payouts facilitate
 safer, faster, reliable and hassle-free credit of redemption / dividend into your bank account
 Registered a nominee in your folio?
 Submit the form for nomination
 Registration of nomination will facilitate easy transmission of units to the nominee(s), especially if the unitholding is single.
                                                                           Did you know?
                                             KYC is mandatory for all investments with effect from January 1, 2011
 For more information on the above and a suite of other facilities and services offered by HDFC Mutual Fund, visit our Investor Service Centre closest to you or
 log on to www.hdfcfund.com.




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HDFC Asset Management Company Limited
Investor Service Centre
                                                         www.sapprints.com




2nd Floor, Mistry Bhawan,
122, Backbay Reclamation,
Dinshaw Vachha Road,
Mumbai - 400 020.


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