HSBC Global Asset Management€¦ · HSBC Global Asset Management Schemewise Annual Reports : 2008 - 2009. 2 SPONSOR HSBC Securities and Capital Markets (India) Private Limited Regd

Issued by HSBC Asset Management (India) Private Limited

HSBC Global Asset Management

Schemewise Annual Reports : 2008 - 2009

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SPONSORHSBC Securities and Capital Markets (India) Private LimitedRegd. Office: 52/60, Mahatma Gandhi Road, Fort, Mumbai 400 001.

TRUSTEEBoard of TrusteesOffice: 314, D. N. Road, Fort, Mumbai 400 001.

ASSET MANAGEMENT COMPANYHSBC Asset Management (India) Private LimitedCorp. & Regd. Office: 314, D. N. Road, Fort, Mumbai 400 001.

CUSTODIANJP Morgan Chase BankCorp. & Regd. Office: Mafatlal Centre, 9th Floor, Nariman Point, Mumbai - 400 021.

AUDITORS TO THE SCHEMEPrice WaterhouseChartered Accountants252, Veer Savarkar Marg, Shivaji Park, Dadar (West), Mumbai - 400 028.

LEGAL ADVISORSBharucha & Partners4th Floor, Cecil Court, Mahakavi Bhushan Marg, Colaba, Mumbai - 400 039.

REGISTRAR & TRANSFER AGENTSComputer Age Management Services (P) Ltd. (CAMS)Rayala Towers, Tower I, III Floor, 158 Anna Salai, Chennai - 600 002.

BOARD OF TRUSTEESMr. N. P. Gidwani - Chairman

Dr. Rudolf ApenbrinkMr. Nasser MunjeeMr. Manu TandonMr. Mehli MistriMr. Dilip J. Thakkar

BOARD OF DIRECTORSMs. Naina Lal Kidwai - Chairman

Mr. Ayaz EbrahimMr. S. P. Mustafa**Mr. Vithal PalekarMs. Kishori J. Udeshi*Mr. Vikramaaditya - Chief Executive Officer***

* Ms. Kishori Udeshi has been appointed as a Director with effect from 14 January 2009 andMr. Jagjit Lal Pasricha has resigned as a Director with effect from 19 January 2009.

** Mr. S. P. Mustafa has been appointed as a Director with effect from 2 September 2008 andMr. Nawshir Khurody has resigned as a Director with effect from 1 September 2008

*** Mr. Vikramaaditya has been appointed as the Chief Executive Officer with effect from 16 July 2008and Mr. Sanjay Prakash has resigned as the Chief Executive Officer with effect from 16 July 2008.

2Trustees’ Report 0For the year ended March 31, 2009 The Trustees present the seventh report and the audited financial statements of the Schemes of HSBC Mutual Fund (the "Fund"), for the year ended March 31, 2009. 1. Scheme Performance, Future Outlook And Operations of the Schemes

a) Operations And Performance of the Schemes

1HSBC Equity Fund (HEF) – an open-ended diversified Equity Scheme To generate long-term capital growth from an actively managed portfolio of equity and equity related securities. The Scheme offers investors two Options (1) Growth Option (2) Dividend Option. The Dividend Option offers Dividend Payout and Dividend Reinvestment Facilities. The net assets of the Scheme amounted to Rs. 1092.07 crores as at March 31, 2009 as against Rs.1052.51 crores as at March 31, 2008. Around 83% of the net assets were invested in equities, and 17% were invested in debt and money market instruments as at March 31, 2009. HSBC Equity Fund's approach is to invest across a range of market capitalizations with a preference for medium and large companies. Income is not a primary consideration in the investment policies of HEF. The fund outperformed its benchmark by approximately 900 bps in FY09 by holding higher than usual levels of CBLO/ reverse repos and a defensive (low beta) portfolio.

Date Of Inception : 10 Dec 02

Compounded Annualized Returns (%)

Schemes (P2P) 1 Year 3 Years 5 Years Since Inception

HSBC Equity Fund – Growth -31.92 -0.41 17.02 32.90

BSE200 -40.98 -6.88 9.22 18.78Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs.

HSBC India Opportunities Fund (HIOF) – an open-ended flexi-cap Equity Scheme

HIOF is a diversified equity scheme, which seeks long term capital growth through investments across all market capitalisations, including small, mid and large cap stocks. The fund aims to be predominantly invested in equity and equity related securities. However, it could move a significant portion of its assets towards fixed income securities if the fund manager becomes negative on equity markets.

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The net assets of the Scheme amounted to Rs. 279.93 crores as at March 31, 2009 as compared to Rs. 522.72 crores as at March 31, 2008. Around 92.43% of the net assets were invested in equities and 7.57% were invested in debt and money market instruments as at March 31, 2009.

The fund outperformed its benchmark by 600 bps in the past 1 year on higher than normal levels of CBLO/ reverse repos and a defensive portfolio. In Financial Year 2009, the fund completed 5 years of existence which is usually a metric tracked by various fund evaluators.

Date Of Inception : 24 Feb 04


Schemes (P2P) 1 Year 3 Years 5 Years Since Inception HSBC India Opportunities Fund – Growth -36.60 -5.10 15.40 14.21

BSE 500 -42.77 -7.94 9.44 9.15Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HSBC Midcap Equity Fund (HMEF) – an open-ended diversified Equity Scheme To generate long term capital growth from an actively managed portfolio of equity and equity related securities primarily being midcap stocks. However, it could move a portion of its assets towards fixed income securities if the fund manager becomes negative on the Indian equity markets. The net assets of the Scheme amounted to Rs. 93.67 crores as at March 31, 2009 as compared to Rs. 235.43 crores as at March 31, 2008. Around 90.74% of the net assets were invested in equities and 9.26% were invested in debt and money market instruments as at March 31, 2009. The fund outperformed its benchmark (BSE MIDCAP index) by 300 bps over the year. This was achieved by having higher than usual CBLO/ reverse repo levels and a more defensive portfolio.

Date Of Inception : 19 May 05 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year 3 Years Since Inception HSBC Midcap Equity Fund – Growth -51.01 -18.43 0.28

BSE MID CAP -54.01 -17.92 -2.40 Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HSBC Advantage India Fund (HAIF) – an open-ended flexi-theme Equity scheme

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w.e.f 16 June 2009, HSBC Advantage India Fund (HAIF) is renamed as HSBC Progressive Themes Fund (HPTF) The investment objective is to generate long term capital growth from an actively managed portfolio of equity and equity related securities by investing primarily in sectors, areas and themes that play an important role in, and / or benefit from, India's progress, reform process and economic development. The net assets of the Scheme amounted to Rs. 357.55 crores as at March 31, 2009 as compared to Rs. 712.21 crores as at March 31, 2008. Around 88.11% of the net assets were invested in equities and 11.89% were invested in debt and money market instruments as at March 31, 2009. HAIF underperformed its benchmark by 180 bps as one of the sector in which the Scheme invested (Infrastructure sector) underperformed its benchmark.

Date Of Inception : 23 Feb 06 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year 3 Years Since Inception HSBC Advantage India Fund – Growth -42.78 -9.66 -5.75

BSE200 -40.98 -6.88 -3.64Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. 3HSBC Tax Saver Equity Fund (HTSF) - an open ended Equity linked Savings Scheme HTSF seeks to provide long term capital appreciation by investing in a diversified portfolio of equity & equity related instruments of companies across various sectors and industries, with no capitalisation bias. The Fund may also invest in fixed income securities. The net assets of HSBC Tax Saver Equity Fund amounted to Rs. 180.58 crores as at March 31, 2009 compared to Rs. 227.83 crores as at March 31, 2008. Around 82.77 % of the net assets were invested in equities and 17.23% were invested in debt and money market instruments as at March 31, 2009. HTSF outperformed its benchmark by 1088 bps on the back of a defensive portfolio and higher levels of CBLO/ reverse repos than the normal circumstances.

Date Of Inception : 05 Jan 07 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year Since Inception HSBC Tax Saver Equity Fund – Growth -30.10 -12.76

BSE200 -40.98 -15.54Past performance may or may not be sustained in future. . ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs.

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4HSBC Dynamic Fund (HDF) - an open-ended Scheme HDF seeks to provide long term capital appreciation by allocating funds in equity and equity related instruments. It also has the flexibility to move, entirely if required, into debt instruments in times that the view on equity markets seems negative. The net assets of HSBC Dynamic Fund amounted to Rs. 234.13 crores as at March 31, 2009 compared to Rs. 405.29 crores as at March 31, 2008. Around 87.98 % of the net assets were invested in equities and 12.02% were invested in debt and money market instruments as at March 31, 2009. HDF outperformed its benchmark by 625 bps over the past 1 year on its active asset allocation calls taken during the year.

Date Of Inception : 24 Sep 07 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year Since Inception

HSBC Dynamic Fund – Growth -34.73 -26.18

BSE 200 -40.98 -32.50Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. 5HSBC Emerging Markets Fund (HEMF) - an open-ended Scheme HEMF seeks to provide long term capital appreciation by investing in India and in the emerging markets, in equity and equity related instruments, share classes and units/securities issued by overseas mutual funds or unit trusts. The fund may also invest a limited proportion in debt and money market instruments. The net assets of HSBC Emerging Markets Fund amounted to Rs. 84.59 crores as at March 31, 2009. Around 95.70 % of the net assets were invested in HSBC GEM Equity Fund (overseas mutual fund) and 4.29% were invested in debt and money market instruments as at March 31, 2009. The fund outperformed its benchmark by about 115 bps over the past 1 year period.

Date Of Inception : 17 Mar 08 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year Since Inception HSBC Emerging Markets Fund – Growth -37.63 -36.35

MSCI Emerging Markets Index -38.79 -34.58Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs.

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6HSBC Unique Opportunities Fund (HUOF) - a close ended equity scheme with automatic conversion into an open-ended equity scheme at the end of three years from the date of allotment of units HUOF seeks to provide long-term capital growth from a diversified portfolio of equity and equity related instruments. The focus would be to invest in stocks of companies facing “out-of-ordinary” conditions. The net assets of HSBC Unique Opportunities Fund amounted to Rs. 219.50 crores as at March 31, 2009 compared to Rs. 520.82 crores as at March 31, 2008. Around 86.20 % of the net assets were invested in equities, 13.80% was invested in debt and money market instruments as at March 31, 2009. HUOF underperformed the index by 640 bps over the past 1 year period on account of higher midcap allocations vis-à-vis the benchmark.


Schemes (P2P) 1 Year Since Inception HSBC Unique Opportunities Fund – Growth -47.38 -24.39

BSE200 -40.98 -13.74Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. 7HSBC Small Cap Fund (HSCF) - a close ended equity Scheme with automatic conversion into open–ended equity scheme at the end of three years from the date of allotment of units. HSCF seeks to provide long-term capital appreciation primarily from a diversified portfolio of equity and equity related instruments of small cap companies. The net assets of HSBC Small Cap Fund amounted to Rs. 35.50 crores as at March 31, 2009. Around 90.77 % of the net assets were invested in equities and 9.23% were invested in debt and money market instruments as at March 31, 2009. HSCF outperformed the BSE small cap index by 640 bps over the past 1 year on running higher cash levels in the early part of the year.


Schemes (P2P) 1 Year Since Inception

HSBC Small Cap Fund – Growth -52.23 -50.93

BSE SMALL CAP -58.60 -52.61Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs.

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HSBC MIP (HMIP) – an open-ended Fund (Monthly income is not assured and is subject to availability of distributable surplus.) HMIP an open-ended Fund seeks to generate reasonable returns through investments in Debt and Money Market Instruments. The secondary objective of the scheme is to invest in equity and equity related instruments to seek capital appreciation. The Fund offers two Plans: Regular Plan and Savings Plan. The Regular Plan can have up to 15 per cent of the corpus invested in equities while the Savings Plan can have up to 25 per cent invested in equities. The net assets of HMIP Regular Plan (HMIP – R) amounted to Rs. 57.26 crores as at March 31, 2009 as compared to Rs. 63.75 crores as at March 31, 2008. Around 97.10% in debt and money market instruments & 2.90% of the net assets were invested in equities as at March 31, 2009. The net assets of HMIP Savings Plan (HMIP – S) amounted to Rs. 103.38 crores as at March 31, 2009 as compared to Rs. 137.78 crores as at March 31, 2008. Around 94.75% in debt and money market instruments & 5.25% of the net assets were invested in equities as at March 31, 2009. The performance of HMIP – R and HMIP – S is benchmarked against CRISIL MIP Blended Index. Hence, the Plan having lower equity allocation i.e. HMIP – R has outperformed the benchmark index whilst HMIP – S, which has higher equity allocation has underperformed the index over the said period. HMIP – Regular Plan


Schemes (P2P) 1 Year 3 Years Since Inception

HSBC MIP - Regular Plan – Growth 2.88 7.29 7.09

Crisil MIP Blended Index 0.19 5.52 6.02Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HMIP – Savings Plan


Schemes (P2P) 1 Year 3 Years Since Inception

HSBC MIP - Savings Plan – Growth -0.24 7.21 8.32

Crisil MIP Blended Index 0.19 5.52 6.02Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs.

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HSBC Income Fund (HIF) – an open-ended Income Scheme HIF, launched in December 2002, seeks to generate reasonable income for the investor by investing in bonds, debentures, short-term instruments like commercial papers, repos, etc. The Scheme has two Plans - the Investment Plan and the Short Term Plan. The investment objective of Scheme/ Plan(s) is to generate reasonable income through a diversified portfolio of fixed income securities. The AMC's view of interest rate trends and the nature of the Plans will be reflected in the type and maturities of securities in which the Short Term and Investment Plans are invested. The net assets of HSBC Income Fund - Investment Plan (HIF – IP) amounted to Rs. 114.90 crores as at March 31, 2009 as compared to Rs. 35.98 crores as at March 31, 2008. Around 93.52% in debt and money market instruments, 3.01% of the net assets were invested in reverse repos/ CBLO and 3.47% in net current assets as at March 31, 2009. The net assets of HSBC Income Fund - Short Term Plan (HIF – STP) amounted to Rs. 151.55 crores as at March 31, 2009 as compared to Rs. 12.07 crores as at March 31, 2008. Around 95.26% in debt and money market instruments, 1.08% of the net assets were invested in reverse repos/ CBLO and 3.66% in net current assets as at March 31, 2009. HIF-IP has outperformed its benchmark through relatively active management of duration. 8HIF – IP

Date Of Inception : 10 Dec 02 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year 3 Years 5 Years Since

Inception HSBC Income Fund - IP – Regular - Growth 9.05 7.93 5.66 6.46Crisil Composite Bond Fund Index 7.23 6.38 4.50 5.22

Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HIF-STP has marginally underperformed its benchmark as low assets under management for an extended period had constrained ability to actively manage the fund. 9HIF – STP

Date Of Inception : 10 Dec 02


Schemes (P2P) 1 Year 2 Years 5 Years Since

Inception HSBC Income Fund - STP – Regular - Growth 9.45 8.01 6.61 6.49

CRISIL Short-Term Bond 9.67 8.05 6.18 6.00

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Fund Index

Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. 1 0HSBC Gilt Fund (HGF) – an open-ended Gilt Scheme HGF seeks to generate reasonable returns through investments in Government Securities (G-Secs) of various maturities. The AMC's view of interest rate trends and the nature of the plans will be reflected in the maturities of securities in which the Plans are invested. The net assets of HSBC Gilt Fund amounted to Rs. 17.96 crores as at March 31, 2009 as compared to Rs. 0.98 crores as at March 31, 2008. 76.47% of the net assets were invested in government securities, 26.56% of the net assets were invested in reverse repos/ CBLO and (3.03)% was invested in net current assets as at March 31, 2009. HGF underperformed the benchmark as low assets under management for an extended period had constrained ability to actively manage the fund.

Date Of Inception : 05 Dec 03 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year 3 Years 5 Years Since Inception

HSBC Gilt Fund – Growth -7.67 0.30 1.29 1.41

I Sec Composite Index 12.83 9.16 6.26 6.38Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs.

1 1HSBC Floating Rate Fund (HFRF) – an open-ended Income Scheme HFRF, launched in November 2004, is an open ended Income Scheme that seeks to generate reasonable return with commensurate risk from a portfolio comprised of floating rate debt instruments and fixed rate debt instruments swapped for floating rate returns. The Scheme may also invest in fixed rate money market and debt instruments. There can be no assurance that the Scheme objective can be realised. The Scheme has two Plans – Long Term Plan and Short Term Plan. The net assets of HSBC Floating Rate Fund - Long Term Plan (HFRF – LTP) amounted to Rs. 454.44 crores as at March 31, 2009 as compared to Rs. 69.37 crores as at March 31, 2008. Around 103.86% in debt and money market instruments, 3.34% of the net assets were invested in reverse repos/ CBLO and (7.21)% in net current assets as at March 31, 2009. The net assets of HSBC Floating Rate Fund - Short Term Plan (HFRF – STP) amounted to Rs. 87.85 crores as at March 31, 2009 as compared to Rs. 139.39 crores as at March 31, 2008. Around 99.32% of the net assets were invested in reverse repos/ CBLO and 0.68% in net current assets as at March 31, 2009.

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HFRF-LTP has marginally underperformed its benchmark index as focus on quality of the portfolio has impacted portfolio yield to some extent. HFRF – LTP

Date Of Inception : 16 Nov 04 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year 3 Years Since Inception HSBC FRF - LTP - Regular Plan – Growth 8.68 8.09 7.21

Crisil Liquid Fund Index 8.78 7.56 6.70Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HFRF-STP has underperformed its benchmark as incremental investments over the last few months have been made very conservatively in line with the general risk environment. HFRF – STP

Date Of Inception : 16 Nov 04

Simple Annualized Returns (%)


Schemes (P2P) 3 Months 6 Months 1 Year 3 Years Since

Inception HSBC FRF - STP - Regular Plan - Growth 4.42 6.38 7.60 7.53 6.86Crisil Liquid Fund Index 8.34 9.35 8.80 7.56 6.70

Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HSBC Cash Fund (HCF) – an open-ended Liquid Scheme HCF is a liquid scheme, aims to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolio of money market and debt securities. However, there can be no assurance that the scheme objective can be realised. The net assets of HSBC Cash Fund amounted to Rs. 492.65 crores as at March 31, 2009 as compared to Rs. 1332.08 crores as at March 31, 2008. Around 10.15% were invested in debt and money market instruments, 86.19% of the net assets were invested in reverse repos/ CBLO and 3.66% in net current assets as at March 31, 2009. HCF has underperformed the benchmark as incremental investments over the last few months have been made very conservatively in line with the general risk environment.

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Date Of Inception : 04

Dec 02 Simple Annualized

Returns (%) Compounded Annualized Returns (%)

Schemes (P2P) 3 Months 6 Months 1 Year 3 Years 5 Years Since

Inception HSBC Cash Fund – Regular – Growth 4.56 5.92 7.24 7.29 6.38 6.14Crisil Liquid Fund Index 8.34 9.35 8.80 7.56 6.33 5.94

Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HSBC Ultra Short Term Bond Fund (HUSBF) - an open ended Debt Scheme (formally the scheme was known as HSBC Liquid Plus Fund) HUSBF seeks to provide liquidity and reasonable returns by investing primarily in a mix of short term debt and money market instruments. The net assets of HSBC Ultra Short Term Bond Fund amounted to Rs. 984.19 crores as at March 31, 2009 as compared to Rs. 2711.35 crores as at March 31, 2008. Around 73.23% of the net assets were invested in debt and money market instruments, 22.86% were invested in reverse repos/ CBLO and 4.91% was invested in net current assets as at March 31, 2009. HUSBF has underperformed its benchmark as incremental investments over the last few months have been made very conservatively in line with the general risk environment.

Date of Inception : 17 Oct 06 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year Since Inception HSBC Ultra Short Term Bond Fund - Regular – Growth 7.94 8.14

Crisil Liquid Fund Index 8.78 7.87Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HSBC Flexi Debt Fund (HFDF) - an open ended Debt Scheme HFDF seeks to deliver returns in the form of interest income and capital gains, along with high liquidity, commensurate with the current view on the markets and the interest rate cycle, through active investment in debt and money market instruments. The net assets of HSBC Flexi Debt Fund amounted to Rs. 316.84 crores as at March 31, 2009 as compared to Rs. 234.69 crores as at March 31, 2008. Around 92.24% of the net assets were invested in debt and money market instruments, 3.06% were invested in net current assets and 4.70% was invested in reverse repos/ CBLO as at March 31, 2009. HFDF has outperformed its benchmark through relatively active management of duration.

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Date Of Inception : 05 Oct 07 Compounded Annualized Returns (%)

Schemes (P2P) 1 Year Since Inception HSBC Flexi Debt Fund – Growth 11.84 10.86Crisil Composite Bond Fund Index 7.23 7.18

Past performance may or may not be sustained in future. ‘Since inception’ returns are calculated on Rs 10 invested at inception. Calculations are based on Growth NAVs. HSBC Fixed Term Series (HFTS) – a close-ended Income Scheme HFTS seeks generation of reasonable returns by investing in a portfolio of fixed income instruments normally maturing in line with the time profile of the respective plan(s). The Plans which were launched during the year were HSBC Fixed Term Series 50, HSBC Fixed Term Series 51, HSBC Fixed Term Series 52, HSBC Fixed Term Series 53, HSBC Fixed Term Series 54, HSBC Fixed Term Series 55, HSBC Fixed Term Series 56, HSBC Fixed Term Series 57, HSBC Fixed Term Series 58, HSBC Fixed Term Series 59, HSBC Fixed Term Series 60, HSBC Fixed Term Series 61, HSBC Fixed Term Series 62, HSBC Fixed Term Series 63, HSBC Fixed Term Series 66, HSBC Fixed Term Series 68. The Plans which matured during the year were HSBC Fixed Term Series 21, HSBC Fixed Term Series 22, HSBC Fixed Term Series 23, HSBC Fixed Term Series 24, HSBC Fixed Term Series 25, HSBC Fixed Term Series 27, HSBC Fixed Term Series 28, HSBC Fixed Term Series 32, HSBC Fixed Term Series 33, HSBC Fixed Term Series 35, HSBC Fixed Term Series 36, HSBC Fixed Term Series 37, HSBC Fixed Term Series 47, HSBC Fixed Term Series 48, HSBC Fixed Term Series 51, HSBC Fixed Term Series 55, HSBC Fixed Term Series 58, HSBC Fixed Term Series 60, HSBC Fixed Term Series 68. The Fixed Term Series as on 31 March 2009 are as follows:

Scheme Name Date of Launch

(NFO Open date) Tenure Date of Maturity Net Assets as

on 31 March 2009 (in Rs.

Crores) HSBC Fixed Term Series 30

03-May-2007 3 years 10-June-2010 87.12

HSBC Fixed Term Series 41

28-November-2007 16 months 20-April-2009 36.08


29-January-2008 16 months 08-June-2009 685.099


04-March-2008 13 months 19-April-2009 99.52


18-March-2008 370 days 02-April-2009 19.98


24-March-2008 370 days 02-April-2009 248.71


28-March-2008 370 days 02-April-2009 361.50

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17-April-2008 370 days 04-May-2009 478.01


24-April-2008 1 year 07-May-2009 221.15


23-May-2008 370 days 03-June-2009 138.62


27-May-2008 370 days 17-June-2009 174.72


25-July-2008 370 days 12-August-2009 121.40


13-August-2008 370 days 27-August-2009 59.005


07-July-2008 1 year 16-July-2009 339.37


17-July-2008 1 year 30-July-2009 91.53


22-August-2008 1 year 27-August-2009 442.16


04-September-2008 1 year 10-September-2009 95.03


18-September-2008 18 months 01-April-2010 65.80

Past performance may or may not be sustained in future.

b) Market Overview & Outlook MARKET OVERVIEW (as furnished by HSBC Asset Management (India) Private Limited) MARKET OVERVIEW (As furnished by HSBC Asset Management (India) Private Limited) Equity Market Overview The financial year ended 31 March, 2009 was a highly eventful one with long standing institutions disappearing from the landscape in the whirlwind of the sub-prime crisis and derivative losses. The year can be split into three phases - the first from April 2008 till when Lehman Brothers filed for bankruptcy, which saw a blowout commodity rally (crude oil nudged close to USD 144/barrel) and 4 the sub-prime situation turning progressively worse. The United States (US) Government / Federal Reserve bailed out major institutions thought to be critical to the functioning of the financial system. The second phase from September 2008 till January 2009 saw a spate of bankruptcies most notably Lehman Brothers which saw the appearance of an acute level of risk aversion pushing the credit markets into a gridlock. This phase also coincided with the fiscal / monetary stimuli by various governments to take the credit crisis head on. Globally, markets stabilized around their October 2008 lows and a semblance of normality started re-appearing in financial markets in this period. The third phase from February 2009 onwards witnessed a sharp rally as a weakening US dollar spewed money into emerging markets. The sensex fell 38% during the financial year. For the financial year 2009, the popular indices viz. BSE Sensex and CNX Nifty were down 37.94% and 36.19% respectively. The BSE Midcap (54.01)% and the broader

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indices like BSE 200 (40.98)% and BSE 500 (42.77)% also reflected the correction across the markets. Within sectoral indices the best performing indices were BSE FMCG (11.08)% and BSE Oil and Gas (29.58)% while the worst performing indices were BSE Realty (79.37)%, due to the high leverage on the balance sheets, BSE Metals (58.67)%, due to slowdown in global growth and BSE Consumer Durables (58.14)% and BSE Capital goods (53.84%). In a year that saw sell-off across emerging markets, FIIs were net sellers of the tune USD 10.4 billion in the Indian equity markets while Domestic Institutional Investors (insurance & mutual funds) were buyers to the tune of USD 13.1 billion. Further, FIIs were net sellers in the derivative markets as hedge funds, and p-notes unwound positions in a rapidly deleveraging world. Thus, sentiment remained negative as few US based investment banks filed for bankruptcy in the midst of liquidity and credit crisis and safety took precedence over growth. Debt Market Overview Two contrarian forces one inflationary and the other deflationary had been in play since 2007: On the one hand strong demand from emerging economies were leading commodities higher and fuelling inflation, while on the other the housing led credit crisis in the US was starting to exert a deflationary force. The first force was dominant till early July 2008 leading commodity prices to fresh peaks and inflation to multi year highs. Since then, however, the second force took hold with the result that commodity prices fell sharply from the top, growth and inflation numbers toppled worldwide, and central bankers shifted focus to achieving financial stability and protecting growth. The financial crisis hit the domestic markets towards September 2008, leading to acute disruption in money markets. The Reserve Bank of India (RBI) acted proactively cutting the cash reserve ratio (CRR) by an unprecedented 400 bps between September 2008 and January 2009. Similarly, the reverse repo rate had been cut by 275 bps since October 2008 while the repo rate had been cut by 425 bps over the same period. Bond market yields fell in line with the unprecedented monetary easing up till the first week of January 2009. Thereon, supply pressures on bond markets rose as a result of government fiscal slippages aimed at stimulating the economy. The RBI, in line with similar measures elsewhere in the world, started buying government securities to lessen the impact on yields from the rise in government borrowing. Although this helped market sentiment, it could not prevent a general rise in yields towards fiscal close. As a result, the 10 year benchmark sovereign yield closed the fiscal at 7% from a low of sub 5% hit in early January 2009. Money market rates stabilized after the initial mayhem of September 2008 and October 2008 and liquidity came back to interbank markets. MARKET OUTLOOK (as furnished by HSBC Asset Management (India) Private Limited) Equity Market Outlook Financial Year (FY) 2008-09 was a year marked by a strong correlation between the Indian market and global markets with key indices ending deeply in the red on the back of the subprime crisis and derivative led losses across major financial stocks in the United States (US). Even in India forex losses ran across corporate India though at a smaller magnitude. FY 10 has begun on a better note on account of various fundamental and technical factors.

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GDP for FY 09 grew at 6.7% against FY 08 levels of 9%. Agriculture posted a below trend growth rate of 1.6% and industry grew by 3.9% (versus 8.1% in FY 08) with services registering a close to 9.7% growth. IIP grew by a mere 2.6%. Although order books of engineering / capital goods were running at record high levels, there was possibility of delays in execution as funding sources for the developers (equity, ECB, private equity, FCCB) had dried up. A sharp increase in subsidy on account of oil, fertilizers and food led to a cut back in discretionary spending. Inflation rose on the back of a surging crude and higher prices of agricultural commodities to top at 12.91% for the week ending 2 August, 2008. A slow down in the growth rates in the US / EU and other markets finally tamed the surge in crude. As growth rates stumbled, governments / monetary authorities the world over triggered fiscal stimuli / monetary easing to escape recessionary forces. This was followed in India as well which started monetary easing / fiscal stimuli to keep growth rates buoyant. On the positive side, India continues to do better in relative terms and we expect GDP growth of 6-6.5% for FY10. The broad themes that are driving domestic growth viz. capital expenditure, infrastructure building and domestic consumption are still intact. The key concerns at this point stems from a ballooning fiscal deficit at the consolidated level (Centre & State) with salary revision for Central / State Government employees threatening a cut back in discretionary spending. Inflation is likely to remain benign for the first half of FY10 on a favourable base effect but we anticipate it to go back to trend levels of 5-5.5% for the second half of FY10 as this base effect wears off. On a valuations perspective, the markets are currently trading at a P/E ratio of around 12 times FY 2010 earnings. This is well below the 10-year average given the extreme risk aversion prevailing in the markets. However, the underlying growth in the economy and corporate earnings growth (15% in the long term) makes the market attractive from a longer-term view. The short term could see enhanced volatility arising from various factors. Increase in commodity prices continues to be a risk in the medium term as the US dollar continues to struggle with the ballooning US fiscal situation. Debt Market Outlook Excess supply of government bonds, as a result of fiscal slippages to arrest the downward growth momentum, has been a reality for bond markets since January 2009. However, this is now compounded with some fatigue in buying longer duration as economic data is showing signs of recovery, commodities are showing signs of rally and expectations of incremental monetary easing from the RBI are beginning to unwind. However, system liquidity remains surplus and bank deposits continue to grow thereby providing resistance to bond yields from rising sharply. Given the above factors, we believe that the market would continue to provide tactical opportunities although the fundamental bias should be for lower duration. Also, any mitigation of bond supply pressure or a new downturn in the ongoing economic recovery may provide space for opportunistic longer duration plays. On the other hand, if the recovery cycle continues uninterrupted and commodity prices remain firm, central banks may start to worry about withdrawing the current monetary stimulus by sometime early 2010; with consequent impact on bond markets. 2. BRIEF BACKGROUND OF SPONSORS, BOARD OF TRUSTEES AND ASSET MANAGEMENT COMPANY a) Sponsor

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HSBC Mutual Fund is sponsored by HSBC Securities and Capital Markets (India) Private Limited (HSCI). The Sponsor is the Settler of the Mutual Fund Trust. The Sponsor has entrusted a sum of Rs. 1,00,000 (Rupees One Lakh only) to the Trustee as the initial contribution towards the corpus of the Mutual Fund. HSCI is a member of the HSBC Group, one of the largest banking and financial services organisations, in the world. Headquartered in London, HSBC operates through long-established businesses in five regions: Europe, Asia-Pacific, Middle East, America and Africa. Through its global network of 9,500 offices in 86 countries and territories, HSBC provides a comprehensive range of financial services to personal, commercial, corporate, institutional investment and private banking clients. HSCI offers integrated investment banking services, securities and corporate finance & advisory. HSCI is a member of The Bombay Stock Exchange Limited and National Stock Exchange (capital and derivative market segments) and is also a category I merchant banker and underwriter registered with Securities and Exchange Board of India. HSCI holds 100% of the paid-up equity share capital of the AMC. b) HSBC Mutual Fund HSBC Mutual Fund ("the Mutual Fund" or "the Fund") has been constituted as a Trust in accordance with the provisions of the Indian Trusts Act, 1882 (2 of 1882) vide a Trust Deed dated February 7, 2002 with HSBC Securities and Capital Markets (India) Private Limited, as the Sponsor and the Board of Individual Trustees. The Trustee has entered into an Investment Management Agreement dated February 7, 2002 with HSBC Asset Management (India) Private Limited (the AMC) to function as the Investment Manager for all the Schemes of the Fund. The Fund was registered with SEBI vide registration number MF/046/02/5 dated May 27, 2002. The Trust has been formed for the purpose of pooling of capital from the public for collective investment in securities / any other property for the purpose of providing facilities for participation by persons as beneficiaries in such properties / investments and in the profits / income arising therefrom. c) Board of Trustees (the Trustees) The Board of Trustees are the exclusive owner of the Trust Fund and holds the same in trust for the benefit of the unitholders. The Trustees have been discharging their duties and carrying out their responsibilities as provided in the SEBI (Mutual Funds) Regulations, 1996 and the Trust Deed. The Trustees seeks to ensure that the Fund and the Schemes floated there under are managed by the AMC in accordance with the Trust Deed, the said Regulations, directions and guidelines issued by SEBI, the Stock Exchanges, the Association of Mutual Funds of India and other regulatory agencies. d) Asset Management Company (the AMC) HSBC Asset Management (India) Private Limited (the Investment Manager or the AMC) is a private limited company incorporated under the Companies Act, 1956 on December 12, 2001 having its Registered Office at 314, D. N. Road, Fort, Mumbai 400 001. HSBC Asset Management (India) Private Limited has been appointed as the Asset Management Company of the HSBC Mutual Fund by the Trustee vide Investment Management Agreement (IMA) dated February 7, 2002 and executed between the Trustees and the AMC. SEBI approved the AMC to act as the Investment Manager of the Fund vide its letter No. MFD/BC/163/2002 dated May 27, 2002.

15

The paid-up equity share capital of the AMC is Rs. 9 crores. HSBC Securities and Capital Markets (India) Private Limited holds 100% of the paid-up equity share capital of the AMC. 3. INVESTMENT OBJECTIVE OF THE SCHEME The investment objective of the Scheme has been provided above under the heading "Scheme Performance, Future Outlook and Operation of the Scheme" 4. SIGNIFICANT ACCOUNTING POLICIES The accounting policies are in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1996. 5. UNCLAIMED DIVIDENDS & REDEMPTIONS Nil 6. INVESTOR SERVICES During the year, the number of official points of acceptance of transactions increased significantly to about 182 locations. In addition to the offices of the transfer agency, the company has Investor Service Centres in 14 locations at its own offices - namely Mumbai, New Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Pune, Ahmedabad, Indore, Chandigarh, Kochi, Coimbatore, Lucknow and Vadodara. With a view to enhancing customer convenience, the Asset Management Company has extended the facility of crediting investor bank accounts directly by way of NEFT / RTGS (for credit of redemption and dividend proceeds). Dividend payouts are done within 5 working days from the record date in all schemes. The internal standards on redemption payouts have been consistently met, with very few exceptions. The number of locations for the ECS Auto Debit facility for investments through Systematic Investment Plan also increased to about 74 by March 2009. On the distribution front, the number of empanelled distributors increased from 7859 as on 31 March, 2008 to 8632 as on 31 March, 2009. During the year, the Asset Management Company initiated tie-ups for online distribution of the Mutual Fund's schemes with several channel partners taking the total number of such tie-ups to 24 (Angel Capital & Department Market Ltd., Bajaj Capital Limited, Bonanza Portfolio Limited, Citibank N.A., Citigroup Wealth Advisors India Private Limited, HDFC Bank Limited, Hongkong & Shanghai Banking Corporation Limited, HSBC Corporate Investment Solution Services, ICICI Securities Limited, India Infoline Limited, Karvy Stock Broking Limited, Kotak Mahindra Bank Limited, Kotak Securities Limited, Motilal Oswal Securities Limited, NJ India Invest Private Limited, Reliance Securities Limited, RR Investors Capital Services Private Limited, SBICAP Securities Limited, Sharekhan Limited, SMC Global Securities Limited, Standard Chartered – STCI Capital Markets Ltd., Tom Distribution Services Limited, Yes Bank Limited). Call centre operations have been extended to cover the entire country. The Asset Management Company has outsourced certain back office services including call centre services to HSBC Operations and Processing Enterprise (India) Private Limited (HOPE). The migration of the call centre to HOPE, Chennai was successfully completed during the year. 7. STATUTORY DETAILS a) The Sponsors are not responsible or liable for any loss resulting from the operation of the Schemes of the Fund beyond initial contribution of Rs. 1 lakh for setting up the Fund.

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b) The price and redemption value of the units, and income from them, can go up as well as down with fluctuations in the market value of its underlying investments. c) Full Annual Report shall be disclosed on the website at www.assetmanagement.hsbc.com/in and shall be available for inspection at the Head Office of the mutual fund. Present and prospective unit holder can obtain copy of the trust deed, the full Annual Report of the Scheme(s), the Annual Report of HSBC Asset Management (India) Private Limited and the text of the relevant Scheme(s) at a price. 8. ACKNOWLEDGEMENTS The Trustees wish to thank the Unitholders of the Schemes for their support throughout the year and also thank the Government of India, the Securities and Exchange Board of India (SEBI), the Reserve Bank of India (RBI) and the Association of Mutual Funds in India (AMFI) for the guidance provided by them. The Trustees also appreciate the service provided by the Registrar and Transfer Agent, Fund Accountant, Custodian, Bankers, Distributors and Brokers. The guidance and services provided by the Auditors and advocates and the ebullience, sincerity and dedication of the employees of HSBC Asset Management (India) Private Limited is also appreciated. The Trustees look forward to the continued support of everyone. For and on behalf of the Board of Trustees of HSBC Mutual Fund Dilip J. Thakkar Trustee MUMBAI July 6, 2009

17

Disclaimers This content of this report has been prepared by HSBC Asset Management (India) Private Limited (HSBC) for information purposes only and should not be construed as an offer or solicitation of an offer for purchase of any of the funds of HSBC Mutual Fund. The information is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. Investments in mutual funds inherently involve risks and investors should read the relevant documents/ information for details and risk factors and consult their legal, tax and financial advisors before investing. Investors should understand that statements made herein regarding future prospects may not be realised. Neither this document nor the units of HSBC Mutual Fund have been registered in any jurisdiction. The distribution of this document in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this document are required to inform themselves about, and to observe, any such restrictions. Investors may obtain Statement of Additional Information, Scheme Information Document and Key Information Memorandums along with application forms from the office of HSBC Mutual Fund, 314 D. N. Road, Fort, Mumbai 400 001. Tel: 022-6666 8819. Statutory Details: HSBC Mutual Fund has been set up as a trust by HSBC Securities and Capital Markets (India) Private Limited (liability restricted to the corpus of Rs 1 lakh). The Sponsor/associates of the Sponsor/Asset Management Company (AMC) are not responsible or liable for any loss or shortfall resulting from the operation of the Schemes. The Trustees of HSBC Mutual Fund have appointed HSBC Asset Management (India) Private Limited as the Investment Manager. Risk Factors: All investments in mutual funds and securities are subject to market risks and the Net Asset Value (NAV) of the Scheme(s) may go up or down depending on the factors and forces affecting the securities markets. There can be no assurance that the objectives of the Scheme(s) will be achieved. Past performance of the Sponsor, AMC, Mutual Fund or any associates of the Sponsor/AMC does not indicate the future performance of the Scheme(s) of the Mutual Fund. HSBC Equity Fund (HEF), HSBC India Opportunities Fund (HIOF), HSBC Midcap Equity Fund (HMEF), HSBC Progressive Themes Fund (HPTF), HSBC Tax Saver Equity Fund (HTSF), HSBC Dynamic Fund (HDF), HSBC Emerging Markets Fund (HEMF), HSBC Unique Opportunities Fund (HUOF), HSBC Small Cap Fund (HSCF), HSBC Income Fund (HIF), HSBC Gilt Fund (HGF), HSBC Cash Fund (HCF), HSBC Ultra Short Term Bond Fund (HUSBF), HSBC MIP (HMIP), HSBC Floating Rate Fund (HFRF), HSBC Flexi Debt Fund (HFDF) & HSBC Fixed Term Series (HFTS) are the names of the Schemes and do not in any manner indicate the quality of the Schemes or their future prospects or returns. Scheme Classification & Investment Objective: HEF (an open-ended diversified equity Scheme) aims to generate long term capital growth from an actively managed portfolio of equity and equity related securities. HIOF (an open-ended flexi-cap equity Scheme) seeks long term capital growth through investments across all market capitalisations, including small, mid and large cap stocks. It aims to be predominantly invested in equity & equity related securities. However it could move a significant portion of its assets towards fixed income securities if the fund manager becomes negative on equity markets. HMEF (an open-ended diversified equity Scheme) seeks to generate long term capital growth from an actively managed portfolio of equity and equity related securities primarily being midcap stocks. However, it could move a portion of its assets towards fixed income securities if the fund manager becomes negative on the Indian equity markets. HPTF (an open-ended flexi-theme equity Scheme) seeks to generate long term capital growth from an actively managed portfolio of equity and equity related securities by investing primarily in sectors, areas and themes that play an important role in, and/or benefit from India’s progress, reform process and economic development. HTSF (an open ended Equity Linked Savings Scheme) seeks to provide long term capital appreciation by investing in a diversified portfolio of equity & equity related instruments of companies across various sectors and industries, with no capitalisation bias. The Fund may also invest in fixed income securities. HUOF (a 3 year close ended equity scheme with automatic conversion into an open ended equity scheme at the end of 3 years from the date of allotment of units) seeks to provide long-term capital growth from a diversified portfolio of equity and equity related instruments. The focus would be to invest in stocks of companies facing “out-of-ordinary” conditions and HDF (an open-ended Scheme) seeks to provide long term capital appreciation by allocating funds in equity and equity related instruments. It also has the flexibility to move, entirely if required, into debt & money market instruments in times when the view on equity markets seems negative. HEMF (an open ended Scheme) seeks to provide long term capital appreciation by investing in India and in the emerging markets, in equity and equity related instruments, share classes and units/securities issued by overseas mutual funds or unit trusts. The fund may also invest a limited proportion in debt and money market instruments. HSCF (a 3 year close-ended equity scheme with automatic conversion into open ended equity scheme at the end of three years from the date of allotment of Units) seeks to provide long-term capital appreciation primarily from a diversified portfolio of equity and equity related instruments of small cap companies. HIF (an open-ended income scheme) aims to provide a reasonable income through a diversified portfolio of fixed income securities. The AMC's view of interest rate trends and the nature of the Plans will be reflected in the type and

18

19

maturities of securities in which the Short Term and Investment Plans are invested. HGF (an open-ended gilt scheme) aims to generate reasonable returns through investments in Government Securities of various maturities. The AMC's view of interest rate trends and the nature of the plans will be reflected in the maturities of securities in which the Plans are invested. HCF (an open-ended liquid scheme) aims to provide reasonable returns, commensurate with low risk while providing a high level of liquidity, through a portfolio of money market and debt securities. HUSBF (an open-ended debt Scheme) seeks to provide liquidity and reasonable returns by investing primarily in a mix of short term debt and money market instruments. HMIP (an open-ended Fund with Regular & Savings Plans; monthly income is not assured and is subject to availability of distributable surplus) seeks to generate reasonable returns through investments in debt and money market instruments with a secondary objective to seek capital appreciation through investments in equity and equity related instruments. HFRF (an open-ended income scheme) seeks to generate a reasonable return with commensurate risk through investments in floating rate debt instruments and fixed rate debt instruments swapped for floating rate returns. The Scheme may also invest in fixed rate money market and debt instruments. HFDF (an open ended Debt Scheme) seeks to deliver returns in the form of interest income and capital gains, along with high liquidity, commensurate with the current view on the markets and the interest rate cycle, through active investment in debt and money market instruments. HFTS (a close-ended Income Scheme) seeks to generate reasonable returns by investing in a portfolio of fixed income instruments normally maturing in line with the time profile of the respective Plan(s). Terms of Issue: Units of the Scheme(s) are being offered at NAV based prices, subject to the prevailing loads. The AMC calculates and publishes NAVs and offers for sale, redemption and switch outs, units of the Scheme(s) on all Business Days, at the Applicable NAV for all Schemes (at least once a week, i.e., every Wednesday and daily during the period of redemption in case of HSCF). HUOF, HSCF & HFTS will not be open for ongoing subscriptions/ switch ins. HUOF & HSCF would be available for sale on an ongoing basis (after a period of 3 years from the date of allotment). Conversion of HUOF & HSCF to an open-ended scheme will be done only after the balance unamortized amount has been fully recovered from the Scheme. Units can be redeemed/switched out on every Business Day at NAV based prices, subject to prevailing exit loads. In case of HSCF, units can be redeemed / switched out on a monthly basis on the stipulated date i.e. last 3 business days of every month at NAV based prices, subject to provisions of exit load, if any and recovery of balance proportionate unamortized NFO expenses. Load Structure (includes SIP/STP): HEF – Entry – 2.25% for investments/switch ins* < Rs 5 crores, otherwise Nil. For switch transactions from HCF to HEF (excludes existing & prospective STP transactions) – Nil. Exit – 1.25% for < Rs 5 crores, if redeemed/switched out* within 1 year from date of investment, otherwise Nil. For switch transactions from HCF to HEF and subsequent switch transactions from HEF to any other debt or equity scheme (excludes existing & prospective STP transactions) - 2.25% for < Rs 5 crores, if above switch investments are redeemed/ switched out within 1 year from the date of switch, otherwise Nil. HIOF, HMEF, HPTF – Entry – 2.25% for investments/switch ins* < Rs 5 crores, otherwise Nil. Exit – 1% for < Rs 5 crores, if redeemed/switched out* within 1 year from date of investment, otherwise Nil. HTSF - Entry - 2.25% for investments/switch ins* < Rs 1 crore, otherwise Nil. Exit – Nil. HUOF - During close ended period - Exit - Nil. However the investor will have to bear the proportionate unamortized initial issue expenses for exiting during the close ended period. SIP/SEP/STP in HUOF available after conversion to an open-ended scheme. HSCF – During close ended period - Entry – Nil; Exit # – If the investments are redeemed/ switched out within: 1 year – 2%; 2 years – 1.5% and 3 years – 1%. # Balance proportionate unamortized NFO expenses to be recovered in case of exit within close-ended period. Upon conversion into an open ended scheme - Entry - For investments/ switched in below Rs. 5 Crores - 2.25%, otherwise Nil; Exit – Nil. HMIP-R – Entry – Nil. Exit - 1% - if redeemed/switched out within 1 year from date of investment. HMIP-S – Entry – Nil. Exit – 1.5% - if redeemed/switched out within 1 year from date of investment. HIF-IP - Entry - Nil. Exit - Regular & Institutional Options: 1%, if redeemed/ switched out within 1 year from date of investments. HIF-ST – Entry – Nil. Exit - 0.5% for investments in Regular Option, if redeemed/ switched out within 6 months from the date of investment. For HFRF-LT – Entry – Nil and Exit - 0.25% for investments/ switch-ins in Regular Option, if redeemed/ switched out within 3 months from date of investment. Daily dividend sub-option under Regular and Institutional Option – Nil. In case of HDF & HEMF - Entry - 2.50% for investments/switch in* below Rs 5 crores, otherwise Nil. Exit - 1% for investment below Rs. 5 crores, if redeemed/switched out* within 1 year from the date of allotment/investment, otherwise Nil. HUSBF – Entry and Exit - Nil. HFDF – Entry Nil. Exit – 0.75% - in Regular Option, if redeemed/ switched out within 6 months from the date of investment and 0.25% - in Regular Option, investments redeemed/ switched out from greater than 6 months to 1 year. HGF - Entry – Nil and Exit - 0.5%, if redeemed/ switched out within 6 months from the date of investment. *No load in case of switches between equity Schemes of HSBC Mutual Fund. No load in case of HCF & HFRF-ST. HFTS – Consult the nearest investor service centre for details. The entry/exit load set forth above is subject to change at the discretion of the AMC and such changes shall be implemented prospectively. Mutual Fund investments are subject to market risks. Please read the Statement of Additional Information and Scheme Information Document carefully before investing.

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Equity Fund ("The Scheme") as at

March 31, 2009, the related Revenue Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those

standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agent respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We have obtained all the information and explanations which to the best of our knowledge and belief

were necessary for the purpose of our audit. The Balance Sheet and the Revenue Account referred to above are in agreement with the books of account of the Scheme.

4. In our opinion and to the best of our information and according to the explanations given to us,

(i) The Balance Sheet, the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Equity Fund as at March 31, 2009, its net deficit and its cash flow for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended on that

date, together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.

PARTHA GHOSH Partner Membership No. F / 55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009

March 31, 2009 March 31, 2008Schedule Rupees Rupees

ASSETS

Investments 1 8,504,682,540 8,968,143,662

Deposits 2 625,603,000 335,603,000

Other Current Assets 3 1,924,369,609 1,619,260,643

TOTAL 11,054,655,149 10,923,007,305

LIABILITIES

Unit Capital 4 3,984,626,296 2,776,899,429

Reserves and Surplus 5 6,936,276,496 7,791,455,810

Current Liabilities and Provisions 6 133,752,357 354,652,066

TOTAL (0.52) 11,054,655,149 10,923,007,305

Diff

March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2008RECONCILIATION OF NET ASSET VALUE PER UNIT Growth Option Dividend Option Total Growth Option Dividend Option Total

Rupees Rupees Rupees Rupees Rupees Rupees

Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.6) 4,983,739,761 5,937,163,031 10,920,902,792 4,213,261,444 6,355,093,795 10,568,355,239

Number of Units in Issue 82,822,603.543 315,640,026.026 47,671,381.108 230,018,561.715 Net Asset Value per Unit 60.1737 18.8099 88.3814 27.6286

Notes to the Financial Statements. 8

This is the Balance Sheet referred to in our report of even date.

PARTHA GHOSH For Board of Trustees of For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants

VikramaadityaTrustee Director and Chief Executive Officer

Trustee Director

Place: Mumbai

Date : 06 July 2009 Fund Manager(s)

The schedules referred to herein form an integral part of the Financial Statements.

HSBC MUTUAL FUND - HSBC EQUITY FUND

Balance Sheet as at March 31, 2009

0

April 01, 2008 to April 01, 2007 to


INCOME AND GAINS

Dividends (Note 2.4) 112,999,751 60,711,388

Interest 7 142,694,000 76,098,650

Net Profit on Sale of Investments and Derivatives (Note 2.3 and 2.5) - 3,031,877,425

TOTAL 255,693,751 3,168,687,463

EXPENSES AND LOSSES

Net Loss on Sale of Investments and Derivatives (Note 2.3 and 2.5) 2,701,833,666 -

Realised Loss on Foreign Currency Transactions(Net) (Note 2.10) - 25,914

Investment Management and Advisory Fees (Note 3) 69,759,167 115,200,990

Transfer Agent Fees and Expenses 21,555,633 18,006,142

Trusteeship Fees and Expenses (Note 4) 44,943 35,647

Custodian Fees and Expenses (Note 5) 5,833,469 5,272,151

Audit Fees 550,000 700,000

Selling and Distribution Expenses 120,575,575 60,069,184

Other Operating Expenses 18,911,902 28,223,559

TOTAL 2,939,064,355 227,533,587

Less: Expenses to be Reimbursed by the Investment Manager (Note 7) 16,866,434 -

TOTAL 2,922,197,921 227,533,587

Net Realised (Losses)/Gains for the Year (2,666,504,170) 2,941,153,876

Net Change in Unrealised Depreciation in Value of Investments and Derivatives (501,741,889) -

Net (Losses)/Gains for the Year (3,168,246,058) 2,941,153,876

Net Change in Unrealised Appreciation in Value of Investments and Derivatives (1,166,575,576) (368,586,195)

Net (Deficit)/Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments and Derivatives (4,334,821,634) 2,572,567,681

Transferred to Unrealised Appreciation Reserve 1,166,575,576 368,586,195

Net (Deficit)/Surplus for the Year (3,168,246,058) 2,941,153,876

April 01, 2008 to April 01, 2007 toMarch 31, 2009 March 31, 2008

Rupees Rupees

Net (Deficit)/Surplus for the Year (3,168,246,059) 2,941,153,876

Transfer from Income Equalisation Reserve (Note 2.8) 3,116,497,351 719,726,210

Dividend / Distributions - (2,336,539,037)

Dividend / Distributions - Prior Year (24,610) -

Balance Transferred to Reserve Fund (51,773,318) 1,324,341,049


This is the Revenue Account referred to in our report of even date.


Vikramaaditya

Trustee Director and Chief Executive Officer

Trustee Director

Place: Mumbai


The Schedules referred to herein form an integral part of the Financial Statements.


Revenue Account for the year ended March 31, 2009

1

SCHEDULE 1 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

Investments Market/Fair Value Cost Market/Fair Value Cost

(Notes 2.2, 2.3, 8, 9 and 13) Rupees Rupees Rupees Rupees

(Refer to the attached Statement of Portfolio Holding as at March 31, 2009)

Equity Shares 8,504,682,540 9,006,424,429 8,968,143,662 7,809,396,716

TOTAL 8,504,682,540 9,006,424,429 8,968,143,662 7,809,396,716

SCHEDULE 2 March 31, 2009 March 31, 2008Deposits Rupees Rupees

Deposits with Scheduled Bank (Under Lien Towards Margin Deposit for Equity Derivatives Rs 330,000,000) 560,000,000 330,000,000

Margin Deposit with Clearing Corporation of India towards Collateralized Borrowing and Lending Obligation 5,603,000 5,603,000

Margin Deposit with Clearing Corporation of India Limited towards Reverse Repos and Governement Securities 60,000,000 -

TOTAL 625,603,000 335,603,000

SCHEDULE 3 March 31, 2009 March 31, 2008Other Current Assets Rupees Rupees

Balances with Banks- in Current Account 20,854,960 11,265,759 - in Dividend Account 569,361 14,620

Sales Contracts Awaiting Completion - Equity Shares 82,977,090 64,493,033

Application Money Pending Allotment - Equity Shares - 96,304,710

Collateralised Borrowing and Lending Obligation 846,127,582 1,113,682,970

Reverse Repos 808,729,589 155,927,371

Unit Subscription Receivable 44,416,733 53,703,059

Receivable on Outstanding Future Contracts 14,715,811

Inter-Scheme Receivable - For Switch - In 11,615,033 19,087,685 - For Others 124,604 525,000

Derivative Margin Deposit (Note 2.5) 81,000,000 81,000,000

Interest Receivable on :

- Deposits 7,188,219 3,488,493

- Reverse Repos 104,073 34,331

- Collateralised Borrowing and Lending Obligation 98,672 259,351

- Margin Deposits with the Clearing Corporation of India Limited 351,970 -

Receivable from Investment Manager 17,002,486 879,490

Investment Towards Unclaimed Redemption [(in 84,080.727 Units (Previous year: 34,483.548 units) (Market Value Rs. 12,25,426 (Previous year: Rs. 468,656)) of HSBC Cash Fund - Growth Option) (Note 15)] 1,092,846 409,448

Investment Towards Unclaimed Dividend [(in 187,986.128 units (Previous year 236,003.555 units) (Market Value Rs.2,739,785 (Previous year 3,210,474)) of HSBC Cash Fund - Growth Option) (Note 16)] 2,116,391 3,469,512

TOTAL 1,924,369,609 1,619,260,643


Schedules forming part of the Balance Sheet as at March 31, 2009

and the Revenue Account for the year ended March 31, 2009

2

SCHEDULE 4 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Unit Capital Rupees Units Rupees Units

Growth Option

Issued and Subscribed :Units of Rs. 10 each fully paid up 315,148,602 31,514,860.200 315,148,602 31,514,860.200 Outstanding:

At the beginning of the year 476,713,812 47,671,381.108 513,734,268 51,373,426.727

Issued during the year 547,674,751 54,767,475.116 262,281,520 26,228,151.971 1,024,388,563 102,438,856.224 776,015,788 77,601,578.698

Redeemed during the year 196,162,527 19,616,252.681 299,301,976 29,930,197.590 At the end of the year 828,226,036 82,822,603.543 476,713,812 47,671,381.108

Dividend Option

Issued and Subscribed :Units of Rs. 10 each fully paid up 36,688,499 3,668,849.900 36,688,499 3,668,849.900

Outstanding:

At the beginning of the year 2,300,185,617 230,018,561.715 2,092,120,397 209,212,039.708 Issued during the year 1,467,068,695 146,706,869.491 1,492,136,453 149,213,645.273

3,767,254,312 376,725,431.206 3,584,256,850 358,425,684.981 Redeemed during the year 610,854,052 61,085,405.180 1,284,071,233 128,407,123.266 At the end of the year 3,156,400,260 315,640,026.026 2,300,185,617 230,018,561.715

TOTAL 3,984,626,296 398,462,629.569 2,776,899,429 277,689,942.823

SCHEDULE 5 Dividend Option Total Dividend Option TotalReserves and Surplus March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

Rupees Rupees Rupees Rupees

Unit Premium Reserve (Note 2.7)At the beginning of the year 250,305,565 (151,261,257) 83,643,273 (223,153,218) Added during the year 277,777,432 363,169,580 166,662,292 71,891,961 At the end of the year 528,082,997 211,908,323 250,305,565 (151,261,257)

Income Equalisation Reserve (Note 2.8)Added during the year 963,762,549 3,116,497,351 806,670,842 719,726,210 Transferred to Revenue Account (963,762,549) (3,116,497,351) (806,670,842) (719,726,210) At the end of the year - - - -

Unrealised Appreciation ReserveAt the beginning of the year 926,017,105 1,168,778,802 - - Transferred from Revenue Reserve - - 1,218,045,948 1,537,364,997

Net Change in Unrealised Appreciation in Value of Investments and Derivatives Transferred from Revenue Account (704,549,611) (1,166,575,576) (292,028,843) (368,586,195) At the end of the year 221,467,494 2,203,226 926,017,105 1,168,778,802

Reserve FundAt the beginning of the year 2,878,585,508 6,773,938,265 3,707,624,928 6,986,962,213 Transferred to Unrealised Appreciation Reserve - - (1,218,045,948) (1,537,364,997)

(847,373,228) (51,773,318) 389,006,528 1,324,341,049

At the end of the year 2,031,212,280 6,722,164,947 2,878,585,508 6,773,938,265

TOTAL 2,780,762,771 6,936,276,496 * 4,054,908,178 7,791,455,810 *

* The share of the Options of the Reserves and Surplus is as follows : March 31, 2009 March 31, 2008

Growth Option : Rs. 4,155,513,725 3,736,547,632 Dividend Option : Rs. 2,780,762,771 4,054,908,178 Total : Rs. 6,936,276,496 7,791,455,810

Balance Transferred from Revenue Account




3

SCHEDULE 6Current Liabilities and Provisions March 31, 2009 March 31, 2008

Rupees RupeesCurrent Liabilities

Investment Management and Advisory Fees 2,486 9,010,212


Custodian Fees and Expenses 449,438 643,262

Audit Fees 550,000 700,000


Purchase Contracts Awaiting Completion - Equity Shares 57,732,918 197,979,448

Payable on Outstanding Future Contracts 3,534,685 -

Unit Redemptions Payable 22,030,183 50,477,558

Inter Scheme payable

- For Switch - Out 6,711,146 18,998,543

- For Others 16,056 2,173,486

Unclaimed Redemption (Note 15) 1,113,098 1,178,339

Unclaimed Dividend (Note 16) 2,686,582 3,476,048

Bank Overdraft - 44,289,462

Temporary Book Overdraft 801,764 453,050

Load Charges (Note 2.9) 13,830,710 579,899

Sundry Payables 3,211,896 5,978,731

TOTAL 133,752,357 354,652,066

SCHEDULE 7 April 01, 2008 to April 01, 2007 to

Interest and Discount (Note 2.4) March 31, 2009 March 31, 2008Rupees Rupees

Debentures / Bonds 1,352,498 -

Commercial Paper / Certificate of Deposit 14,024,158 795,592

Reverse Repos 30,814,654 46,216,923

Collateralized Borrowing and Lending Obligation 47,462,389 8,321,490

Deposits 48,658,329 20,741,466

Margin Deposit placed with Clearing Corporation of India Limited towards Collateralized Borrowing and Lending Obligation, Reverse Repo and Government Securities 381,972 20,116

Others - 3,063

TOTAL 142,694,000 76,098,650




4

Year ended March 31, 2009

Rupees


Rupees

A. Cashflow from Operating ActivitiesDeficit / Surplus for the year (2,666,504,170) 2,941,153,876

Adjustments for:- (Increase)/Decrease in Investments at cost (1,249,031,725) (701,719,941)

(Increase)/Decrease in Other Current Assets (19,013,637) 572,197

Increase/(Decrease) in Current Liabilities 487,658 2,622,924

Net cash generated from/(used in) operations ( A ) (3,934,061,874) 2,242,629,056

B Cashflow from Financing Activities Increase/(Decrease) in Unit Capital 1,207,726,867 171,044,764

Increase/(Decrease) in Unit Premium 3,479,666,931 791,618,171

Adjustments for:- Increase/(Decrease) in Sundry Creditors for Units Redeemed by Investors (40,734,773) 55,443,314

(Increase)/Decrease in Sundry Debtors for Units Issued to Investors 16,758,979 (51,077,194)

Dividend Paid During the Year (24,610) (2,336,539,037)

Net cash (used in)/generated from financing activities ( B ) 4,663,393,394 (1,369,509,982)

Net Increase/(Decrease) in Cash and Cash Equivalents (A+B) 729,331,521 873,119,074

Cash and Cash Equivalents as at the beginning of the year 1,652,751,208 779,632,134

Cash and Cash Equivalents as at the close of the year 2,382,082,729 1,652,751,208

Notes :

March 31, 2009Rupees


1 Cash and Cash Equivalents include the following :

Balances with Scheduled Banks : - In Current Account 20,854,960 11,265,759

- In Dividend Account 569,361 14,620

- In Bank Overdraft Account - (44,289,462)

- In Deposit Account 560,000,000 330,000,000

5,603,000 5,603,000

60,000,000 -

Temporary Book Overdraft (801,764) (453,050)

Other Collateralised lendingReverse Repo 808,729,589 155,927,371

Collateralised Borrowing and Lending Obligation 846,127,582 1,113,682,970

Derivative Margin Deposit 81,000,000 81,000,000

2,382,082,728 1,652,751,208

2 The above Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard - 3 on Cash Flow Statements,issued by The Institute of Chartered Accountants of India.

This is the Cash Flow Statement referred to in our report of even date.

PARTHA GHOSH For Board of Trustees of For HSBC Asset Management (India)

Partner HSBC Mutual Fund Private LimitedMembership No. F-55913

For and on behalf of

PRICE WATERHOUSE

Chartered Accountants

Vikramaaditya


Trustee Director

Place: Mumbai

Date : Fund Manager(s)

Margin Deposit with Clearing Corporation of India Limited towards Reverse Repos and Governement Securities

#REF!

Cash Flow Statement for the year ended March 31, 2009

Margin Deposit with Clearing Corporation of India towards Collateralized Borrowing and Lending Obligation

5

Annexure 1

(i) Transactions during the Year

Nature of Transaction Sponsor Investment ManagerAssociate of

Investment ManagerSchemes under Common

Control of Sponsor

Key Management Personnel and their

Relatives Total

Purchase of Investments - - - 2,652,087,757 - 2,652,087,757 Previous Year - - - - - -

Sale of Investments - - - 807,267,640 - 807,267,640 Previous Year - - - 812,200,814 - 812,200,814

Subscription of Units (including switch in and dividendreinvestment) - - - - 5,189,000 5,189,000 Previous Year - - - - 1,889,246 1,889,246

Redemption of Units (including switch out) - - - - - - Previous Year - - - - 2,805,912 2,805,912

Dividend Distribution( Including dividend reinvested) - - - - - - Previous Year - - - - 893,246 893,246

Sale of Mutual Fund Units - - - - - - Previous Year - - - 901,866,152 - 901,866,152

Investment Management and Advisory Fees - 69,759,167 - - - 69,759,167 Previous Year - 115,200,990 - - - 115,200,990

Brokerage/ Commission on Distribution of Units - - 72,415,284 - - 72,415,284 Previous Year - - 40,535,389 - - 40,535,389

Brokerage/ Commission on Purchase/Sale of Investments 1,965,799 - - - - 1,965,799 Previous Year 1,527,000 - - - - 1,527,000

Clearing Charges - - 2,429,235 - - 2,429,235 Previous Year - - 1,457,655 - - 1,457,655

Reimbursment of Expenses - 16,866,434 - - - 16,866,434 Previous Year - - - - - -

Fixed Deposits Matured - - - - - - Previous Year - - 200,000,000 - - 200,000,000

Charges for Services Provided by Bank - - 39,751 - - 39,751 Previous Year - - 251,447 - - 251,447

(ii) Outstanding As At Year End



Control of Sponsor


Relatives Total

Investment Management and Advisory Fees Payable - 2,486 - - - 2,486 Previous Year - 9,010,212 - - - 9,010,212

Brokerage/ Commission Payable for Distribution of Units - - 5,418,954 - - 5,418,954 Previous Year - - 6,791,536 - - 6,791,536

Units Outstanding As At Year End - - - - 12,267,725 12,267,725 Previous Year - - - - 3,029,942 3,029,942

Other Payables - - - 16,056 - 16,056 Previous Year - - - 2,173,486 - 2,173,486

Other Receivables - 17,002,486 - 124,604 - 17,127,090 Previous Year - 879,490 - 525,000 - 1,404,490

(iii) Details of material transactions with respect to parties referred to in Note 13 (I)(iv) for Schemes under common control othe Sponsor.

April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Cash Fund 1,117,614,922 - HSBC Interval Fund - Plan I 491,845,326 - HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund 486,669,548 -

Sale of InvestmentsHSBC Fixed Term Series 58 281,145,354 - HSBC Fixed Term Series 68 203,868,852 - HSBC Cash Fund - 812,200,814

Sale of mutual fund unitsHSBC Cash Fund - 901,866,152

Other PayablesHSBC India Opportunity Fund 14,556 1,898,556 HSBC Tax Saver Equity Fund 1,500 84,940 HSBC Midcap Fund - 20,000 HSBC Advantage India Fund - 170,000

Other ReceivablesHSBC Dynamic Fund - 502,000 HSBC Advantage India Fund - 14,000 HSBC Midcap Fund - 9,000 HSBC Cash Fund 95,000 - HSBC Floating Rate Fund - Long Term Plan 29,604 -

(iv) Disclosures in respect of material transactions with persons referred to in Note 13 (I)(v) for key management personneand their relatives

April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividendreinvestment)Naina Lal Kidwa 2,888,000 876,000 Kemaya Lal Kidwai (Relative 1,500,000 - Sanjay Prakash - 246,825 Nelum P Gidwan - 340,738 Avan Gidwani (Relative - 255,794 Rashid K Kidwai (Relative 672,000 -

Sale of Mutual Fund Units (including switch out)Naina Lal Kidwa - 2,805,912

Dividend Distribution( Including dividend reinvested)Nelum P Gidwan - 340,738 Sanjay Prakash - 126,825 Avan Gidwani (Relative - 255,794

Units Outstanding As At Year EndNaina Lal Kidwa 7,343,415 7,390,695 Sanjay Prakash - 8,627,041 Kemaya Lal Kidwai (Relative 1,185,201 -

6

DescriptionQuantity Market Value

Rupees

Equity Shares (100 %)Auto (3.06 %)

Hero Honda Motors Limited @ 243,000 260,289,450 260,289,450

Banks (14.05 %)HDFC Bank Limited @ 468,000 455,551,200 State Bank of India @ 360,000 384,156,000 ICICI Bank Limited @ 567,000 188,697,600 Punjab National Bank 405,000 166,637,250

1,195,042,050 Cement (2.49 %)

Jaiprakash Associates Limited 2,520,000 211,932,000 211,932,000

Construction Project (3.20 %)Larsen & Toubro Limited @ 405,000 271,917,000

271,917,000 Consumer Non Durables (17.58 %)

I T C Limited @ 3,690,000 682,096,500 Colgate Palmolive India Limited 630,000 296,856,000 United Spirits Limited 270,000 175,216,500 GlaxoSmithkline Consumer Healthcare Limited 245,158 172,664,779 Nestle India Limited 108,000 168,091,200

1,494,924,979 Diversified (3.52 %)

Hindustan Unilever Limited @ 1,260,000 299,250,000 299,250,000

Finance (2.36 %)Housing Development Finance Corporation Limited 142,000 200,532,400

200,532,400 Industrial Capital Goods (8.95 %)

Bharat Heavy Electricals Limited 398,200 601,501,010 Suzlon Energy Limited 3,780,000 160,083,000

761,584,010 Industrial Products (1.74 %)

Jain Irrigation Systems Limited 433,300 148,101,940 148,101,940

Non - Ferrous Metals (1.51 %)Sterlite Industries (India) Limited @ 360,000 128,736,000

128,736,000 Oil (7.09 %)

Oil and Natural Gas Corporation Limited 462,300 360,686,460 Cairn India Limited @ 1,316,355 242,340,956

603,027,416 Pesticides (1.98 %)

United Phosphorus Limited 1,710,000 168,007,500 168,007,500

Petroleum Products (12.80 %)Reliance Industries Limited @ 472,500 720,444,375 Indian Oil Corporation Limited 513,000 198,941,400 Bharat Petroleum Corporation Limited 450,000 169,222,500

1,088,608,275 Pharmaceuticals (2.42 %)

Cipla Limited 937,124 206,214,136 206,214,136

Power (4.27 %)Reliance Infrastructure Limited 396,000 204,157,800 Power Grid Corporation of India Limited 1,665,000 159,174,000

363,331,800 Software (5.04 %)

Infosys Technologies Limited 324,000 428,943,600 428,943,600

Telecom - Services (7.93 %)Bharti Airtel Limited @ 847,000 530,010,250 IDEA Cellular Limited @ 2,878,837 144,229,734

674,239,984 Total (Cost Rs. 9,006,424,429) 8,504,682,540 ## 8,504,682,540

Equity Derivatives Short Futures (100 %)

Bharat Heavy Electricals Limited - Futures - April 2009 (47.45 %) 39,000 58,698,900 Larsen & Toubro Limited - Futures - April 2009 (9.82 %) 18,000 12,145,500 Bharti Airtel Limited - Futures - April 2009 (42.73 %) 85,000 52,853,000

Total 123,697,400

Deposits (5.13 %)^ Tenure Face Value6.3 % Standard Chartered Bank 91 230,000,000 7% Axis Bank 181 160,000,000 7.3% Development Bank of Singapore 181 90,000,000 10.1% Axis Bank 182 80,000,000 Total Deposits 560,000,000

^ Denotes Percentage to Net Asset Value.

Confirmation has been received from J P Morgan Chase Bank, Mumbai Branch at the end of the financial year for the investments held by them.

@ Investment in companies which have invested more than five percent of the net asset value of any scheme of HSBC Mutual Fund.


Statement of Portfolio Holding as at March 31, 2009

(Referred to in Schedule 1 to the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March 31, 2009 )

7

HSBC MUTUAL FUND-HSBC EQUITY FUND

Schedules forming part of the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March 31, 2009

SCHEDULE 8

1Notes to the Financial Statements

1 Organisation

HSBC Equity Fund (the “Scheme”) is an open-ended growth scheme of HSBC Mutual Fund (the “Fund”) and was launched on November 14, 2002. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on December 3, 2002 and reopened for issue and redemption of units on December 27, 2002. The investment objective of the Scheme is to generate long term capital growth from an actively managed portfolio of equity and equity related securities. The Scheme has two Options - Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.

2 Significant Accounting Policies

2.1 Basis of Accounting

The Scheme maintains its books of account on an accrual basis. These financial statements have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (the “Regulations”) and amendments thereto, as applicable.

2.2 Portfolio Valuation

Investments are stated at market / fair value at the Balance Sheet date/date of determination. In valuing the Scheme’s investments:

i. Equity securities listed on a recognized stock exchange are valued at the last quoted closing

price on the National Stock Exchange of India Limited (NSE). If on a particular valuation date, a security is not traded on NSE, the value at which it is traded on Bombay Stock Exchange Limited (BSE) is used. If no sale is reported at that time, the last quoted closing price on the principal stock exchange on which the security is traded is used when it is not more than thirty days prior to the valuation date.

ii. Non-traded and thinly traded equity securities, including those not traded within thirty days

prior to the valuation date are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).



iii. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on the National Stock Exchange of India Limited (NSE). If no sale is reported at that time, such securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

iv. Non-traded and thinly traded debt securities are valued at fair value as determined by HSBC

Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).

v. Privately placed debt securities are valued at fair value as determined in good faith by HSBC

Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

vi. Traded money market securities are valued at the yield at which they are traded on the

valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market securities are valued at cost plus accrued interest.

vii. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable

interest up to the date of resale.

viii. Units in mutual fund are valued at the net asset value of the investee scheme. Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments and derivatives is determined separately for each category of investments and derivatives. In respect of each category of investments and derivatives, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.



2.3 Securities Transaction

Investment securities transactions are accounted for on a trade date basis. The Scheme uses the average cost method for determining the realized gain or loss on sale of investments.

2.4 Investment Income

Dividend and interest income are recorded on an accrual basis.

2.5 Derivatives The Scheme enters into derivative transactions in equity/ index futures for the purpose of hedging and

portfolio balancing.

“Derivative margin deposit” representing the margin towards equity derivative contracts entered into by the Scheme is disclosed under “Other Current Assets”.

Futures

• Futures contracts are marked to market daily at the futures settlement price as determined by the exchange. The variation margin calculated as the difference between the trade price or the previous day’s settlement price, as the case may be, and the current day’s settlement price is recorded as a receivable or payable. • When a contract is closed (squared off)/ settled (on expiry), the difference between the final settlement / square-off price and the contract price is recognised in the Revenue Account. If more than one futures contracts in respect of the same stock / index and expiry date, to which the squared off / settled contract pertains, is outstanding at the time of square off / settlement of the contract, the average method is followed for determining the gain or loss.

• As at the Balance Sheet date / date of determination, all open futures positions are valued at the futures settlement price as determined by the exchange where it is traded. The unrealised appreciation / depreciation on all open positions is considered for determining the net asset value.

2.6 Net Asset Value for Growth/Dividend Options

The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Dividend Options. For reporting the net asset value for the Options, daily income earned, including realized and unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the units outstanding.

2.7 Unit Premium Reserve Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted

against the unit premium reserve of the Scheme, after an appropriate portion of the issue proceeds and redemption payout is credited or debited respectively to the income equalization reserve.

The unit premium reserve is available for dividend distribution except to the extent it is represented by

unrealized net appreciation in value of investments.



2.8 Income Equalization Reserve

The net distributable income relating to units issued / repurchased is transferred to / from income equalization reserve for determining the net surplus / deficit, transferred from / to unit premium reserve.

2.9 Load Charges Load collected is retained under a separate account in the Scheme and is used to meet the selling and distribution expenses.

2.10 Foreign Currency Translation The books and records of the Fund are maintained in Indian rupees. Amounts denominated in or expected to settle in foreign currencies are translated into Indian rupees on the following basis. (i) Market value of investments, other assets and liabilities at the closing rate of exchange on the

Balance Sheet date / valuation date. (ii) Purchases and sales of investments, income and expense at the rate of exchange prevailing on

the respective date of such transactions

The Fund does not isolate that portion of the change in investment valuation resulting from changes in the foreign exchange rates from the fluctuations arising from changes in the local market prices of securities held. Such fluctuations are included in unrealised appreciation or depreciation on investments.

Net realised foreign exchange gains and losses arise from sales of foreign currency denominated securities, currency gains or losses realised between trade and settlement dates of foreign currency denominated securities transactions and the difference between the recorded amounts of foreign currency denominated dividends, interest and expenses recorded in the Fund’s books and the Indian rupee equivalent amounts actually received or paid. Net unrealised foreign exchange gains and losses arising from changes in value of assets and liabilities denominated in foreign currency resulting from changes in foreign exchange rate are included in net unrealised appreciation or depreciation in value of investments and foreign currency denominated assets and liabilities.

3 Investment Management and Advisory Fees

The Scheme has paid or provided for investment management and advisory fees payable to HSBC

Asset Management (India) Private Limited for managing the Scheme at an average annual rate of 0.64

% of the average daily net asset value recorded by the Scheme. All costs, charges and expenses

incurred by HSBC Asset Management (India) Private Limited in the administration and execution of

the activities of the Scheme, except costs allowed to be charged to the Scheme under the Regulations,

are on their own account for which they receive investment management and advisory fees. 4 Trusteeship Fees

In accordance with the Deed of Trust dated February 7, 2002 between HSBC Securities and Capital

Markets (India) Private Limited (“The Settlor”) and the Board of Trustees of HSBC Mutual Fund, the

Fund has paid or provided for a fee not exceeding Rs.20,000 for each meeting of the Board of Trustees

attended by such Trustee not affiliated with the Settlor.



5 Custodian Fees

J P Morgan Chase Bank provides custodial services to the Scheme for which it receives custody fees including safekeeping.

6 Income Taxes

No provision for income tax is made as the Scheme qualifies as a recognized mutual fund under Section 10(23D) of the Income Tax Act, 1961.

7. Limitation on Expenses The total expenses chargeable to the Scheme are limited to 2.03% of the average daily net assets. HSBC Asset Management (India) Private Limited has borne Rs 168,664,34 in excess of the above mentioned percentage of the average daily net assets to be charged to the Scheme as total expenses for the year.

8 Aggregate Appreciation and Depreciation In Value of Investments

0Aggregate appreciation and depreciation in value of investments are as follows:

March 31, 2009

(Rupees) March 31, 2008

(Rupees)

Equity Shares

-Appreciation 419,474,916 1,520,481,450

-Depreciation 921,216,805 361,734,504

Equity Futures

-Appreciation 2,218,589 10,031,857 -Depreciation 15,363 -

9 Aggregate Value of Purchases and Sale of Investments

The aggregate value of investments securities purchased and sold during the financial year (excluding

accretion of discount of Rs. 14,024,158) is Rs. 20,051,454,038 and Rs. 15,984,411,730 respectively

being 184.31 % and 146.93 % of the average daily net assets.

10 Income and Expenses

The total income (including net profit on sale of investments and derivatives and net change in

unrealized depreciation in value of investments and derivatives) and expenditure during the year is Rs. (2,947,881,805) and Rs. 220,364,255 respectively being (27.10)% and 2.03% of the average daily net

assets.



11 Equity Derivatives Disclosure:

Futures Details of open interest in equity futures as at March 31, 2009

Underlying Asset's Name Number of contracts

Units Outstanding (Short)

Bharat Heavy Electricals Limited April 09 130 (39,000)

Bharti Airtel Limited April 09 170 (85,000)

Larsen and Toubro Limited April 09 45 (18,000)

Notional value of futures contracts bought/ (sold) by the Scheme and outstanding as on March 31, 2009 aggregates to Rs. 123,697,400.

Net Profit/ (Loss) on futures transactions recognized in the Revenue Account for the year ended March 31, 2009 aggregates to Rs. 182,854,765.

12 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual

Funds) Regulation, 1996 as amended and in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India (ICAI)

The Scheme has entered into transactions with certain related parties. The information required in this regard in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India and regulation 25(8) of SEBI Regulation, is provided below :

I Related Party Relationships

Name Description of relationship (i) HSBC Securities and Capital Markets (India) Private Limited Sponsor of the Fund

(ii) HSBC Asset Management (India) Private Limited Investment Manager to the Schemes of HSBC Mutual Fund

(iii) The Hong Kong and Shanghai Banking Corporation Limited Associate of the Investment Manager (iv) Schemes of the Fund, Under Common Control of the Sponsor

HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30



HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund

(v) Key Management Personnel and their relatives:

Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008



Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani – Relative of a Key Management Personnel Rashid K Kidwai – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.

II The following transactions occurred with the related parties during the year in the ordinary course of business: Refer Annexure I

III HSBC Securities and Capital Markets (India) Private Limited, the Sponsor was paid brokerage

aggregating Rs. 1,965,799 on purchase and sale of investments. The Hongkong & Shanghai Banking

Corporation Limited, an associate entity of HSBC Asset Management (India) Private Limited was paid

collection/bank charges amounting to Rs. 39,751 and brokerage amounting to Rs. 72,415,284 for

procuring unit subscriptions for the Scheme and clearing member charges on derivative transactions Rs.

24,29,235. The brokerage paid was at rates similar to those offered to other brokers / distributors.

13 Disclosure under Regulation 25(11) of the Securities and Exchange Board of India (Mutual

Funds) Regulations, 1996 as amended

HSBC Mutual Fund has made investments in companies, which hold/ have held units in excess of 5% of the net asset value of any Scheme of HSBC Mutual Fund which have been listed in Annexure II. The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other debt instruments and were made solely on the basis of sound fundamentals of these companies.

14 Segment Reporting

The Scheme operates in one segment only viz. to primarily generate attractive returns from a diversified and actively managed portfolio of equity and equity related instruments.



15 Unclaimed Redemptions

As at March 31, 2009, unclaimed redemptions aggregate Rs. 10,93,116 payable to 37 investors.

16 Unclaimed Dividend

As at March 31, 2009, unclaimed dividends aggregate Rs. 26,86,582 payable to 344 investors.

17 Prior Year’s Figures Previous year’s figures have been re-grouped/re-arranged where necessary.

Signatures to the Schedules 1 to 8 forming part of the Balance Sheet and the Revenue Account.

PARTHA GHOSH Partner Membership No. F-55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants

For Board of Trustees of HSBC Mutual Fund

For HSBC Asset Management (India) Private Limited

Trustee

Vikramaaditya Director and Chief Executive Officer

Trustee

Director

Place: Mumbai Date :

Fund Manager(s)

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC India Opportunities Fund ("The

Scheme") as at March 31, 2009, the related Revenue Account for the year ended on that date annexed thereto, and the Cash Flow Statement for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.


standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agents respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.




(i) The Balance Sheet, the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC India Opportunities Fund as at March 31, 2009 and its net deficit and its cash flows for the year ended on that date.





ASSETS

Investments 1 2,337,385,216 4,677,062,433

Deposits 2 266,152,000 146,152,000

Other Current Assets 3 245,776,099 477,890,346

TOTAL 2,849,313,315 5,301,104,779

LIABILITIES

Unit Capital 4 2,207,557,533 2,624,873,746

Reserves and Surplus 5 591,732,844 2,598,885,548


TOTAL -0.70 2,849,313,315 5,301,104,779

March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2008

RECONCILIATION OF NET ASSET VALUE PER UNIT Growth Option Dividend Option Total Growth Option Dividend Option Total


Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions) (Note 2.6) 1,053,492,324 1,745,798,053 2,799,290,377 1,921,505,721 3,302,253,572 5,223,759,293

Number of Units in Issue 53,478,209.207 167,277,543.980 61,844,387.233 200,642,987.346

Net Asset Value per Unit 19.6995 10.4365 31.0700 16.4584




Partner HSBC Mutual Fund Private Limited

Membership No. F-55913For and on behalf of

PRICE WATERHOUSE

Chartered Accountants VikramaadityaTrustee Director and Chief Executive Officer

Trustee Director

Place: Mumbai

Date : 06 July 2009

Fund Manager(s)


HSBC MUTUAL FUND - HSBC INDIA OPPORTUNITIES FUND


0


Schedule Rupees Rupees

INCOME AND GAINS

Dividends (Note 2.4) 32,006,277 27,056,290

Interest and Discount 7 36,797,857 29,991,120

Net Profit on Sale of Investments and Derivatives (Note 2.3 and 2.5) - 1,796,911,592

TOTAL 68,804,134 1,853,959,001

EXPENSES AND LOSSES






Audit Fees 500,000 650,000



TOTAL 1,132,336,259 149,962,790



Net (Losses)/Gains for the Year 0.16 (1,260,300,989) 1,703,996,211

Net Change in Unrealised Appreciation in Value of Investments and Derivatives (481,262,582) (440,928,929)

Net (Deficit)/Surplus including Net Change in Unrealised Appreciation/Depreciation in Value of Investments and Derivatives (1,741,563,571) 1,263,067,282

Transferred to Unrealised Appreciation Reserve 481,262,582 440,928,929

Net (Deficit)/Surplus for the Year 0.16 (1,260,300,989) 1,703,996,211

April 1, 2008 to April 1, 2008 to April 1, 2008 to April 1, 2007 to April 1, 2007 to April 1, 2007 toMarch 31, 2009 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2008Growth Option Dividend Option Total Growth Option Dividend Option Total


Net (Deficit)/Surplus for the Year (460,294,516) (800,006,474) (1,260,300,989) 569,693,432 1,134,302,779 1,703,996,211

Transfer from Income Equalisation Reserve (Note 2.8) (145,348,729) (63,726,148) (209,074,877) (238,154,597) (304,052,261) (542,206,858)

Transfer from Reserve Fund - - - - 125,205,018 125,205,018

Dividend / Distribution (Net of Reversal of Prior Year Dividend Rs. 1,520 (Previous Year Rs. Nil)) - 1,520 1,520 - (532,437,884) (532,437,884)

Balance Transferred to Reserve Fund (605,643,245) (863,731,102) (1,469,374,346) 331,538,835 423,017,652 754,556,487






PRICE WATERHOUSE


Trustee Director

Place: Mumbai Date : 06 July 2009

Fund Manager(s)




1

SCHEDULE 1 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Investments Market/Fair Value Cost Market/Fair Value Cost(Notes 2.2, 2.3, 7, 8 and 12) Rupees Rupees Rupees Rupees


Equity Shares 2,337,385,216 2,534,154,080 4,677,062,433 4,194,797,608

TOTAL 2,337,385,216 2,534,154,080 4,677,062,433 4,194,797,608


Deposits with Scheduled Bank (Under Lien Towards Margin Deposit for Equity Derivatives Rs. 130,000,000 (2008 : Rs. 130,000,000) and Load Rs. Nil (2008 : Rs. 15,000,000 )) 250,000,000 145,000,000 Margin Deposit with Clearing Corporation of India Limited towards Collateralized Borrowing and Lending Obligation 1,152,000 1,152,000


TOTAL 266,152,000 146,152,000


Balances with Banks - in Current Account 710,931 5,141,382 - in Dividend Account 165,360 15,651



Reverse Repos 50,006,264 41,093,235

Collateralised Borrowing and Lending Obligation 52,318,761 289,265,708


Inter-Scheme Receivable:- For 'Switch In' 10,000 7,215,499 - For 'Others' 14,556 1,944,056


Receivable on Outstanding Equity Future Contracts 1,134,530 6,529,758

Interest Receivable on :- Reverse Repos 6,435 9,048 - Collateralised Borrowing and Lending Obligation 6,410 67,363 - Deposits 4,810,603 1,536,712

- Margin Deposit with Clearing Corporation of India Limited 87,288 -

Receivable from Investment Manager 6,185 1,016

Investment towards Unclaimed Redemption [(in 24,247.669 units (2008 : 24,949.997 units) (Market Value Rs. 353,395 (2008 : Rs. 339,088)) of HSBC Cash Fund - Growth Option) (Note 14)] 311,406 301,516

Investment towards Unclaimed Dividend [in 67,694.416 units (2008 : 79,455.789) (Market Value Rs. 986,606 (2008 : Rs. 1,079,860) of HSBC Cash Fund - Growth Option (Note 15)] 948,453 1,005,982

TOTAL 245,776,099 477,890,346




2


Growth Option

Issued and Subscribed :

Units of Rs. 10 each fully paid up 705,593,731 70,559,373.092 705,593,731 70,559,373.092

Outstanding:


Issued during the year 80,052,360 8,005,235.991 336,199,709 33,619,970.910

698,496,232 69,849,623.224 1,101,913,999 110,191,399.963

Redeemed during the year 163,714,140 16,371,414.017 483,470,127 48,347,012.730

At the end of the year 534,782,092 53,478,209.207 618,443,872 61,844,387.233

Dividend Option


Units of Rs. 10 each fully paid up 1,900,309,787 190,030,978.748 1,900,309,787 190,030,978.748

Outstanding:

At the beginning of the year 2,006,429,874 200,642,987.346 2,735,560,573 273,556,057.212


2,178,980,749 217,898,074.802 3,462,602,482 346,260,248.185

Redeemed during the year 506,205,308 50,620,530.822 1,456,172,608 145,617,260.839

At the end of the year 1,672,775,441 167,277,543.980 2,006,429,874 200,642,987.346

TOTAL 2,207,557,533 220,755,753.187 2,624,873,746 262,487,374.579

HSBC MUTUAL FUND - HSBC INDIA OPPORTUNITIES FUNDSchedules forming part of the Balance Sheet as at March 31, 2009


3

SCHEDULE 5 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2008Reserves and Surplus Growth Option Dividend Option Total Growth Option Dividend Option Total


Unit Premium Reserve (Note 2.7)

At the beginning of the year (68,092,626) (372,107,756) (440,200,382) 51,651,751 87,083,840 138,735,591

Added during the year (10,719,083) (45,796,692) (56,515,775) (119,744,377) (459,191,596) (578,935,973)

At the end of the year (78,811,709) (417,904,448) (496,716,157) (68,092,626) (372,107,756) (440,200,382)

Income Equalisation Reserve (Note 2.8)


Transferred to Revenue Account 145,348,729 63,726,148 209,074,877 238,154,597 304,052,261 542,206,858

At the end of the year - - - - - -

Unrealised Appreciation Reserve

At the beginning of the year 208,675,847 273,798,734 482,474,581 - - -

Balance transferred from Reserve Fund - - - 399,382,718 524,020,792 923,403,510

Net Change in Unrealised Appreciation in Value of Investments and Derivatives Transferred from Revenue Account (167,989,291) (313,273,291) (481,262,582) (190,706,871) (250,222,058) (440,928,929)

At the end of the year 40,686,556 (39,474,557) 1,211,999 208,675,847 273,798,734 482,474,581

Reserve Fund

At the beginning of the year 1,162,478,628 1,394,132,720 2,556,611,348 1,230,322,511 1,620,340,878 2,850,663,389

Transferred to Revenue Account - - - - (125,205,018) (125,205,018)

Transferred to Unrealised Appreciation Reserve - - - (399,382,718) (524,020,792) (923,403,510)

Balance Transferred from Revenue Account (605,643,245) (863,731,102) (1,469,374,346) 331,538,835 423,017,652 754,556,487

At the end of the year 556,835,383 530,401,618 1,087,237,002 1,162,478,628 1,394,132,720 2,556,611,348

TOTAL 518,710,230 73,022,613 591,732,844 * 1,303,061,849 1,295,823,698 2,598,885,548 *

* The share of the Options of the Reserves and Surplus is as follows : March 31, 2009 March 31, 2008Rupees Rupees

Growth Option : Rs. 518,710,232 1,303,061,849 Dividend Option : Rs. 73,022,612 1,295,823,699 Total : Rs. 591,732,844 2,598,885,548




4

SCHEDULE 6 March 31, 2009 March 31, 2008Current Liabilities and Provisions Rupees Rupees

Current Liabilities

Investment Management and Advisory Fees 2,462,824 4,813,721

Transfer Agent Fees and Expenses 364,116 729,208


Audit Fees 500,000 650,000


Purchase Contracts Awaiting Completion -Equity Shares 17,732,522 -


Inter Scheme Payable - For 'Switch-Out' 2,011,628 1,455,652 - For 'Others' - -

Load Charges (Note 2.9) 18,793,178 26,557,994

Unclaimed Redemption (Note 14) 311,406 314,690

Unclaimed Dividend (Note 15) 1,113,792 1,020,681

Bank Overdraft 101 -


TOTAL 50,022,938 77,345,486

SCHEDULE 7 April 1, 2008 to April 1, 2007 toInterest and Discount (Note 2.4) March 31, 2009 March 31, 2008

Rupees Rupees

Commercial Paper / Certificate of Deposit 2,875,943 237,533

Reverse Repos 8,777,697 15,967,868


Deposits 21,440,069 11,861,167

Margin Deposit with The Clearing Corporation of India Limited 97,934 17,843

Others 158 26,035

TOTAL 36,797,857 29,991,120


Schedules forming part of the Balance Sheet as at March 31, 2009and the Revenue Account for the year ended March 31, 2009

5

Description Quantity Market ValueRupees



Auto Ancillaries (2.96 %)Bosch Limited 22,500 69,134,625

69,134,625 Banks (12.40 %)

HDFC Bank Limited @ 99,000 96,366,600 State Bank of India @ 83,000 88,569,300 Punjab National Bank 135,000 55,545,750 ICICI Bank Limited @ 148,500 49,420,800

289,902,450 Brewers (0.56 %)

Shaw Wallace & Company Limited 90,000 13,000,500 13,000,500

Construction Project (3.10 %)Larsen & Toubro Limited @ 108,000 72,511,200


I T C Limited @ 855,000 158,046,750 Shree Renuka Sugars Limited 990,000 90,288,000 Nestle India Limited 54,000 84,045,600 Advanta India Limited 134,100 61,686,000 United Spirits Limited 54,000 35,043,300

429,109,650 Diversified (3.11 %)

Hindustan Unilever Limited @ 306,000 72,675,000 72,675,000


31,774,500 Hardware (0.54 %)

Allied Digital Services Limited 72,000 12,560,400 12,560,400

Industrial Capital Goods (5.79 %)Bharat Heavy Electricals Limited 72,000 108,759,600 Suzlon Energy Limited 630,000 26,680,500


Jain Irrigation Systems Limited 90,000 30,762,000 Max India Limited 270,000 26,514,000

57,276,000 Media & Entertainment (2.03 %)

IBN18 Broadcast Limited 646,840 47,478,056 47,478,056

Non - Ferrous Metals (2.07 %)Sterlite Industries (India) Limited @ 135,000 48,276,000

48,276,000 Oil (5.74 %)

Oil and Natural Gas Corporation Limited 92,500 72,168,500 Cairn India Limited @ 337,110 62,061,951

134,230,451 Pesticides (2.01 %)

United Phosphorus Limited 477,000 46,865,250 46,865,250

Petroleum Products (14.25 %)Reliance Industries Limited @ 135,000 205,841,250 Indian Oil Corporation Limited 180,000 69,804,000 Bharat Petroleum Corporation Limited 153,000 57,535,650

333,180,900 Pharmaceuticals (4.50 %)

Cipla Limited 257,787 56,726,029 Dr.Reddy's Laboratories Limited 99,000 48,529,800

105,255,829 Power (4.22 %)

Reliance Infrastructure Limited 108,000 55,679,400 Power Grid Corporation of India Limited 450,000 43,020,000

98,699,400 Software (5.10 %)


Telecom - Services (5.74 %)Bharti Airtel Limited @ 139,000 86,979,250 IDEA Cellular Limited @ 940,549 47,121,505

134,100,755 Total (Cost Rs. 2,534,154,080) 2,337,385,216 TOTAL INVESTMENTS (Cost Rs. 2,534,154,080) 2,337,385,216

Equity DerivativesLong Futures (32.76 %)

GVK Power & Infrastructures Limited - Futures - April 2009 (100.00 %) 855,000 20,049,750 20,049,750

Short Futures (67.24 %)Larsen & Toubro Limited - Futures - April 2009 (11.81 %) 7,200 4,858,200 Bharti Airtel Limited - Futures - April 2009 (9.07 %) 6,000 3,730,800 S&P CNX Nifty - Futures - April 2009 (79.13 %) 10,800 32,564,700

41,153,700 Total 61,203,450

Deposits (8.93 %)^ Tenure Face Value6.3 % Standard Chartered Bank 91 120,000,000 10.1% Axis Bank 182 80,000,000 7.3 % Development Bank of Singapore 181 50,000,000 Total Deposits 250,000,000


@ Investment in companies which have invested more than five percent of the net asset value of any scheme of HSBC Mutual Fund.

Confirmation has been received from J P Morgan Chase Bank, Mumbai Branch at the end of the financial year for the investments held by them.




6

Annexure 1



Investment Manager

Schemes under Common Control of

Sponsor


Relatives Total

Purchase of Investments - - - 383,347,017 - 383,347,017 Previous Year - - - - - -


Subscription of Units (including switch in and dividend reinvestment) - - - - 6,354,026 6,354,026 Previous Year - - - - 2,147,434 2,147,434

Redemption of Units (including switch out) - - - - 350,870 350,870 Previous Year - - - - - -

Dividend Distribution( Including dividend reinvested) - - - - - - Previous Year - - - - 12,500 12,500


Brokerage/ Commission on Purchase/Sale of Investments 447,580 - 20,160 - - 467,740 Previous Year 1,353,000 - - - - 1,353,000


Clearing Charges - - 1,179,175 - - 1,179,175 Previous Year - - 1,363,292 - - 1,363,292





Investment Manager


SponsorKey Management

Personnel Total

Investment Management and Advisory Fees Payable - 2,462,824 - - - 2,462,824 Previous Year - 4,813,721 - - - 4,813,721

Brokerage/ Commission Payable for Distribution of Units - - 732,193 - - 732,193 Previous Year - - 1,515,397 - - 1,515,397


Other Receivables - 6,185 - 14,556 - 20,741 Previous Year - 1,016 - 1,944,056 - 1,945,072

(iii) Details of material transactions with respect to parties referred to in Note 13 (I)(iv) for Schemes under common control ofthe Sponsor.

April 01, 2008 to March 31, 2009

April 01, 2006 to March 31, 2007

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 128,663,810HSBC Fixed Term Series 35 126,976,981HSBC Floating Rate Fund Long Term Plan 48,113,031 -

Sale of InvestmentsHSBC Fixed Term Series 37 138,984,631 - HSBC Unique Opportunities Fund 29,342,964 - HSBC Equity Fund 29,032,042 - HSBC Cash Fund - 236,216,164

Other ReceivablesHSBC Equity Fund 14,556 1,898,556

(iv) Disclosures in respect of material transactions with persons referred to in Note 13 (I)(v) for key management personneland their relatives

April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Naina Lal Kidwai 3,907,026 2,147,434 Kemaya Lal Kidwai 1,500,000 - Rashid K Kidwai 747,000 -

Redemption of Units (including switch out)Rashid K Kidwai 350,870 -

Dividend Distribution( Including dividend reinvested)Rahul Nelum Gidwani (Relative) - 12,500

Units Outstanding As At Year EndSanjay Prakash - 5,383,351 Kemaya Lal Kidwai 1,597,327 - Naina Lal Kidwai 8,388,928 8,470,345

7


Rupees


Rupees

A. Cashflow from Operating Activities(Deficit)/Surplus for the year (1,063,532,125) 1,703,996,211

Adjustments for:- (Increase)/Decrease in Investments at cost 1,713,376,170 994,758,743 (Increase)/Decrease in Other current assets (1,325,644) 4,595,501 Increase/(Decrease) in Current liabilities (16,045,190) (2,444,405) Net cash generated from operations ( A ) 632,473,211 2,700,906,050

B Cashflow from Financing Activities Increase/(Decrease) in Unit capital (417,316,213) (876,401,116) Increase/(Decrease) in Unit premium (265,590,652) (1,121,142,832)

Adjustments for:- Increase/(Decrease) in Sundry creditors for units redeemed by investors (29,009,980) 24,117,145 (Increase)/Decrease in Sundry debtors for units issued to investors 7,127,353 59,930,318

Dividend paid during the year (including reversal of Rs. 1,520 for prior year (previous year Rs. Nil) 1,520 (532,437,884)

Net cash (used in) financing activities ( B ) (704,787,972) (2,445,934,369)

Net Increase/(Decrease) in Cash and cash equivalents (A+B) (72,314,761) 254,971,681

Cash and Cash Equivalents at the beginning of the year 554,167,976 299,196,295 Cash and Cash Equivalents at the close of the year 481,853,215 554,167,976

Notes :March 31, 2009

Rupees March 31, 2008

Rupees


Balances with Scheduled Banks : - In Current Account 710,931 5,141,382 - In Dividend Account 165,360 15,651 - In Deposit Account 250,000,000 145,000,000 Margin Deposit with Clearing Corporation of India Limited towards Collateralized Borrowing and Lending Obligation 1,152,000 1,152,000 Margin Deposit with Clearing Corporation of India Limited towards Reverse Repos and Governement Securities 15,000,000 Temporary Book Overdraft (101) - Other Collaterised LendingReverse Repo 50,006,264 41,093,235 Collateralised Borrowing and Lending Obligation 52,318,761 289,265,708 Derivative Margin Deposit 112,500,000 72,500,000

481,853,215 554,167,976



PARTHA GHOSH For HSBC Asset Management (India)



PRICE WATERHOUSE


Trustee Director

Place: Mumbai Date : 06 July 2009 Fund Manager(s)



For Board of Trustees of

8

HSBC MUTUAL FUND-HSBC INDIA OPPORTUNITIES FUND

Schedules forming part of the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March 31, 2009.

SCHEDULE 8


1 Organisation

HSBC India Opportunities Fund (the “Scheme”) is an open-ended growth scheme of HSBC Mutual Fund (the “Fund”) and was launched on January 22, 2004. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on February 13, 2004 and reopened for issue and redemption of units on March 5, 2004. The investment objective of the Scheme is to seek long-term capital growth through investments across all market capitalizations, including small, mid and large cap stocks. The Scheme will endeavor to invest in large cap companies as well as identify mid-cap stocks, which have the potential to become blue chip large cap stocks over time. The Scheme aims to be predominantly invested in equity and equity related securities. However, it will move a significant portion of its assets towards fixed income securities if the Scheme becomes negative on equity markets. The Scheme has two Options - Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.



The Scheme maintains its books of account on an accrual basis. These financial statements have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (SEBI) (Mutual Funds) Regulations, 1996 (the “Regulations”) and amendments thereto, as applicable.









iii. Equity shares awaiting listing are valued at fair value as determined in good faith by HSBC


iv. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable interest up to the date of resale.

v. Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments and derivatives is determined separately for each category of investments and derivatives. In respect of each category of investments and derivatives, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.





2.5 Derivatives The Scheme enters into derivative transactions in equity / index futures / options for the purpose of

hedging and portfolio balancing.




Futures

• Futures contracts are marked to market daily at the futures settlement price as determined by the exchange. The variation margin calculated as the difference between the trade price or the previous day’s settlement price, as the case may be, and the current day’s settlement price is recorded as a receivable or payable. • When a contract is closed (squared off)/ settled (on expiry), the difference between the final settlement / square-off price and the contract price is recognised in the Revenue Account. If more than one futures contracts in respect of the same stock / index and expiry date, to which the squared off / settled contract pertains, is outstanding at the time of square off / settlement of the contract, the average method is followed for determining the gain or loss. • As at the Balance Sheet date / date of determination, all open futures positions are valued at the futures settlement price as determined by the exchange where it is traded. The unrealised appreciation / depreciation on all open positions is considered for determining the net asset value.





The unit premium reserve is available for dividend distribution except to the extent it is represented by unrealized net appreciation in value of investments.





The Scheme has paid or provided for investment management and advisory fees payable to HSBC Asset

Management (India) Private Limited for managing the Scheme at an average annual rate of 1.07 % of

the average daily net asset value recorded by the Scheme. All costs, charges and expenses incurred by

HSBC Asset Management (India) Private Limited in the administration and execution of the activities



of the Scheme, except costs allowed to be charged to the Scheme under the Regulations, are on their

own account for which they receive investment management and advisory fees.

4 Trusteeship Fees





5 Custodian Fees

JP Morgan Chase Bank provides custodial services to the Scheme for which it receives custody fees including safekeeping.

6 Income Taxes

No provision for income tax is made as the Scheme qualifies as a recognized mutual fund under Section 10(23D) of the Income Tax Act, 1961. For taxes deducted at source from the investment income, which are recoverable, a receivable is recorded in the books of account.



March 31, 2009


(Rupees) Equity Shares -Appreciation 216,543,449 1,007,175,391 -Depreciation 413,312,313 524,910,566 Equity Futures -Appreciation 2,252,115 2,232,978 -Depreciation 1,040,116 2,023,222

8 Aggregate Value of Purchase and Sale of Investments

The aggregate value of investments purchased and sold during the financial year (excluding accretion of discount of Rs. 2,875,943) is Rs. 4,802,419,100 and Rs. 5,302,898,939 respectively being 125.54 % and 138.62 % of the average daily net assets.


The total income (including net loss on sale of investments and net change in unrealized depreciation in

the value of investments and derivatives) and expenditure during the year is Rs. (1,172,555,646) and Rs.

87,745.445 respectively being (30.65) % and 2.29 % of the average daily net assets.



10 Equity Derivatives Disclosures:

Futures Details of open interest in equity futures as at March 31, 2009.

Underlying Asset's Name Number of contracts Units Outstanding (Short) Bharti Airtel Limited 12 (6,000)GVK Power & Infrastructures Limited 45 855,000Larsen and Toubro Limited 18 (7,200)S&P CNX Nifty 216 (10,800)

Notional value of futures contracts sold by the Scheme and outstanding as on March 31, 2009

aggregates to Rs. 61,203,450.

Net Profit on futures transactions recognized in the Revenue Account for the year ended March 31,

2009 aggregates to Rs. 118,448,717. 11 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual

Funds ) Regulation, 1996 as amended and in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India (ICAI)


I Related party relationships




HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008



HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008



Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.

II The following transactions occurred with the related parties during the year in the ordinary course of

business: Refer Annexure I

III During the year, HSBC Securities and Capital Markets (India) Private Limited, the Sponsor was paid

brokerage aggregating Rs. 447,580 on purchase and sale of investments. The Hongkong and Shanghai

Banking Corporation Limited, an associate entity of HSBC Asset Management (India) Private Limited

was paid collection/bank charges Rs. 22,424and brokerage amounting to Rs. 12,053,491 for procuring

unit subscriptions for the Scheme and clearing member charges on derivative transactions Rs.

1,179,175. The brokerage paid was at rates similar to those offered to other brokers / distributors.



HSBC Mutual Fund has made investments in companies, which hold/ have held units in excess of 5% of the net asset value of any Scheme of HSBC Mutual Fund which have been listed in Annexure II.

The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other debt instruments and were made solely on the basis of sound fundamentals of these companies




As at March 31, 2009, unclaimed redemptions aggregate Rs. 311,406 payable to 10 investors.




As at March 31, 2009, unclaimed dividends aggregate Rs. 11,13,792 payable to 285 investors.

16 Prior Year’s Figures

Previous year’s figures have been re-grouped/re-arranged where appropriate.





Trustee


Trustee

Director


Fund Manager(s)

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Midcap Equity Fund ("The Scheme") as at March 31, 2009, the related Revenue Account for the year ended on that date annexed thereto, and the Cash Flow Statement for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.


standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/ others and registrar and transfer agent respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.


were necessary for the purpose of our audit. The Balance Sheet, the Revenue Account and the Cash Flow Statement referred to above are in agreement with the books of account of the Scheme.


(i) The Balance Sheet, the Revenue Account and the Cash Flow Statement together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Midcap Equity Fund as at March 31, 2009, its net deficit and its cash flows for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended on that date,

together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.

PARTHA GHOSH Partner Membership No. F-55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009.

.


ASSETS

Investments 1 757,965,962 2,009,867,433

Deposits 2 93,213,000 33,213,000


Deferred Revenue Expenditure 4 4,333,045 8,116,690

TOTAL 952,267,148 2,385,713,172

LIABILITIES

Unit Capital 5 1,183,790,324 1,480,644,766

Reserves and Surplus 6 (247,085,099) 875,365,168


TOTAL -0.05 952,267,148 2,385,713,172


RECONCILIATION OF NET ASSET VALUE PER UNIT Growth Option Divdend Option Total Growth Option Divdend Option Total


Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions) (Note 2.6) 429,122,356 507,582,869 936,705,225 990,626,478 1,365,383,456 2,356,009,934







Membership No. F-55913


PRICE WATERHOUSE


Vikramaaditya


Trustee Director

Place: Mumbai



HSBC MUTUAL FUND - HSBC MIDCAP EQUITY FUND


0



INCOME AND GAINS

Dividends (Note 2.4) 17,094,730 19,639,904


Net Profit on Sale of Investments and Derivatives (Note 2.3 and 2.5) - 872,875,014

TOTAL 34,260,331 903,607,510

EXPENSES AND LOSSES

Net Loss on Sale of Investments and Derivatives (Note 2.3 and 2.5) 954,963,644 -




Custodian Fees and Expenses (Note 5) 963,666 1,234,950

Audit Fees 300,000 350,000


Amortisation of Deferred Revenue Expenditure (Note 2.10) 3,783,645 3,794,011


TOTAL 994,367,976 71,729,493

Less: Expenses to be Reimbursed by the Investment Manager (Note 7) 2,909,306 -

TOTAL 991,458,670 71,729,493

Net Realised (Losses)/Gains for the Year (957,198,339) 831,878,017

Net Change in Unrealised Depreciation in Value of Investments and Derivatives (103,013,793) (152,637,629)

Net (Losses)/Gains for the Year (1,060,212,132) 679,240,388

Net Change in Unrealised Appreciation in Value of Investments and Derivatives - (201,794,045)

Net (Deficit)/Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments and Derivatives (1,060,212,132) 477,446,343

Transferred to Unrealised Appreciation Reserve - 201,794,045

Net (Deficit)/Surplus for the Year -0.10 (1,060,212,132) 679,240,388



Net (Deficit)/Surplus for the Year (460,020,775) (600,191,356) (1,060,212,132) 262,659,434 416,580,954 679,240,388

Transfer From Reserve Fund - - - - 231,651,870 231,651,870

Transfer from Income Equalisation Reserve (Note 2.8) (45,838,696) (10,552,844) (56,391,540) (119,663,601) (92,519,192) (212,182,793)

Dividend Distributions - - - - (229,338,282) (229,338,282)

Balance Transferred to Reserve Fund (505,859,471) (610,744,200) (1,116,603,672) 142,995,833 326,375,350 469,371,183






PRICE WATERHOUSE



Trustee Director

Place: Mumbai





1

SCHEDULE 1 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Investments Market / Fair Value Cost Market / Fair Value Cost(Notes 2.2, 2.3, 8, 9 and 12) Rupees Rupees Rupees Rupees


Equity Shares 757,965,962 1,012,946,283 2,009,867,433 2,162,422,424

TOTAL 757,965,962 1,012,946,283 2,009,867,433 2,162,422,424


Deposits with Scheduled Bank (Under Lien Towards Margin Deposit for Equity Derivatives) 92,000,000 32,000,000

Margin Deposit with the Clearing Corporation of India Limited towards Collateralised Borrowing and Lending Obligation 1,213,000 1,213,000

TOTAL 93,213,000 33,213,000


Balances with Banks - in Current Account 33,499,281 3,591,471 - in Dividend Account 48,954 29,962


Reverse Repos 350,043 43,060,125

Collateralised Borrowing and Lending Obligation 366,011 175,318,608

Receivable on Outstanding Future Contracts 807,460 -

Unit Subscription Receivable 820,000 1,909,550

Inter-Scheme Receivable - For 'Switch in' - 3,260,882 - For 'Others' 5,000 44,000


Interest Receivables on:- Reverse Repos 45 9,481 - Collateralised Borrowing and Lending Obligation 45 40,828 - Deposits 740,898 643,069

- Margin Deposit with Clearing Corporation of India Limited 3,440 -

Dividend Receivable 37,796 -


Investment towards Unclaimed Redemption [(in 21,797.439 units (previous year 12,626.682 units) (Market Value Rs. 317,684.59) (previous year Rs 171,605) of HSBC Cash Fund - Growth Option) (Note 16)] 289,412 163,187

Investment towards Unclaimed Dividend [(in 27,353.879 units (previous year 30,929.405 units) (Market Value Rs. 398,666.37) (previous year Rs. 420,748) of HSBC Cash Fund - Growth Option) (Note 17)] 545,692 388,603

TOTAL 96,755,141 334,516,049

SCHEDULE 4 March 31, 2009 March 31, 2008Deferred Revenue Expenditure (Note 2.10) Rupees Rupees

Issue and Organisational Costs

At the beginning of the year 8,116,690 11,910,701

Less : Amortised during the year 3,783,645 3,794,011

At the end of the year 4,333,045 8,116,690


Schedules forming part of the Balance Sheet as at March 31, 2009 and the


2

SCHEDULE 5 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

Unit Capital Rupees Units Rupees Units

Growth Option


Units of Rs.10 each fully paid up 1,239,211,232 123,921,123.241 1,239,211,232 123,921,123.241

Outstanding:



553,875,566 55,387,556.632 799,228,376 79,922,837.645



Dividend Option


Units of Rs.10 each fully paid up 2,489,694,653 248,969,465.259 2,489,694,653 248,969,465.259

Outstanding:



1,060,933,183 106,093,318.291 1,606,339,352 160,633,935.166


At the end of the year 759,269,654 75,926,965.375 1,000,548,546 100,054,854.569

TOTAL 1,183,790,324 118,379,032.435 1,480,644,766 148,064,476.576

HSBC MUTUAL FUND - HSBC MIDCAP EQUITY FUNDSchedules forming part of the Balance Sheet as at March 31, 2009 and the


3

SCHEDULE 6 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2008Reserves and Surplus Growth Option Dividend Option Total Growth Option Dividend Option Total

Rupees Rupees Rupees Rupees Rupees RupeesUnit Premium Reserve (Note 2.7)

At the beginning of the year (125,756,671) (272,057,040) (397,813,711) (82,192,567) (150,007,873) (232,200,440)

Added during the year (69,101) (5,777,494) (5,846,595) (43,564,104) (122,049,167) (165,613,271)

At the end of the year (125,825,772) (277,834,534) (403,660,306) (125,756,671) (272,057,040) (397,813,711)



Transferred to Revenue Account 45,838,696 10,552,844 56,391,540 119,663,601 92,519,192 212,182,793



At the beginning of the year - - - - - -

Transferred from Reserve Fund - - - 92,846,436 108,947,609 201,794,045

Net Change in Unrealised Appreciation in Value of Investments and Derivatives Transferred from Revenue Account - - - (92,846,436) (108,947,609) (201,794,045)


Reserve Fund

At the beginning of the year 636,286,929 636,891,950 1,273,178,879 586,137,532 651,116,079 1,237,253,611

Transfer to Revenue Account - - - - (231,651,870) (231,651,870)

Transferred to Unrealised Appreciation Reserve - - - (92,846,436) (108,947,609) (201,794,045)

Balance Transferred from Revenue Account (505,859,471) (610,744,200) (1,116,603,672) 142,995,833 326,375,350 469,371,183

At the end of the year 130,427,458 26,147,750 156,575,207 636,286,929 636,891,950 1,273,178,879

TOTAL 4,601,686 (251,686,784) (247,085,099) * 510,530,258 364,834,910 875,365,168 *


Growth Option : Rs. 4,601,686 510,530,258

Dividend Option : Rs. (251,686,785) 364,834,910 Total : Rs. (247,085,099) 875,365,168




4


Current Liabilities

Investment Management and Advisory Fees 951,594 2,283,458



Audit Fees 300,000 350,000

Selling and Distribution Expenses 881,716 2,156,545

Purchase Contracts Awaiting Completion -Equity Shares 5,386,586 3,590,124

Inter Scheme Payable - For 'Switch-Out' 2,145,682 13,585,506 - For 'Others' - 61,500

Payable on Outstanding Future Contracts - 115,500

Temporary Book Overdraft 1,239 -

Unit Redemptions Payable 884,017 2,139,526

Unclaimed Redemption (Note 16) 304,061 294,471

Unclaimed Dividend (Note 17) 594,629 418,136


Payable for Initial Issue Expenses 92,372 92,422

Sundry Payables 779,219 1,342,482

TOTAL 15,561,923 29,703,238

SCHEDULE 8

Interest and Discount (Note 2.4) March 31, 2009 March 31, 2008Rupees Rupees

Deposits 7,059,314 2,998,757

Commercial Paper 1,777,294 -

Reverse Repos 6,688,348 7,492,200

Collateralised Borrowing and Lending Obligation 1,625,163 527,163

Margin Deposit with the Clearing Corporation of India Limited 15,478 20,934

Other Income 4 53,538

TOTAL 17,165,601 11,092,592


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the year ended March 31, 2009

5


Equity Shares (100 %)Auto Ancillaries (9.64 %)

Exide Industries Limited 780,830 32,287,321 Everest Kanto Cylinder Limited 225,000 26,988,750 Bosch Limited 4,500 13,826,925

73,102,996 Banks (11.34 %)

Union Bank of India 198,723 29,182,472 HDFC Bank Limited @ 21,000 20,441,400 Bank of Baroda @ 81,000 18,982,350 Indian Bank 210,639 17,314,526

85,920,748 Brewers (1.30 %)

Shaw Wallace & Company Limited 68,269 9,861,457 9,861,457

Cement (6.77 %)UltraTech Cement Limited @ 35,000 19,297,250 The India Cements Limited 174,495 18,496,470 Orient Paper & Industries Limited 553,706 13,482,741

51,276,461 Consumer Non Durables (15.07 %

Colgate Palmolive India Limite 90,000 42,408,000 Shree Renuka Sugars Limited 330,000 30,096,000 United Spirits Limited 27,000 17,521,650 Marico Limited 209,081 12,607,584 Advanta India Limited 25,197 11,590,620

114,223,854 Ferrous Metals (1.56 %)

PSL Limited 139,624 11,791,247 11,791,247

Finance (3.12 %)LIC Housing Finance Limited 105,529 23,680,708

23,680,708 Gas (3.66 %)

Indraprastha Gas Limited 253,350 27,729,158 27,729,158

Hardware (0.95 %)Allied Digital Services Limited 41,476 7,235,488

7,235,488 Hotels (1.66 %)

EIH Limited 91,375 7,903,937 Viceroy Hotels Limited 294,666 4,640,990


Kirloskar Pneumatic Company Limited 90,000 14,715,000 Crompton Greaves Limited 75,592 9,335,612


Jain Irrigation Systems Limited 82,473 28,189,271 Sintex Industries Limited 195,519 19,131,534


Zee News Limited 720,039 23,581,277 23,581,277

Pesticides (3.11 %)United Phosphorus Limited 240,000 23,580,000

23,580,000 Petroleum Products (7.21 %)

Reliance Industries Limited @ 15,000 22,871,250 Bharat Petroleum Corporation Limited 48,000 18,050,400 Hindustan Petroleum Corporation Limited 51,000 13,731,750


Lupin Limited 64,373 44,066,537 Cipla Limited 66,000 14,523,300 Opto Circuits (India) Limited 108,000 10,854,000

69,443,837 Power (6.73 %)

GVK Power and Infrastructure Limited 1,320,000 30,888,000 CESC Limited 95,400 20,129,400

51,017,400 Software (2.38 %)

Infotech Enterprises Limited 212,045 18,023,825 18,023,825

Telecom - Equipment & Accessories (3.82 %OnMobile Global Limited 90,768 28,927,762

28,927,762 Total (Cost Rs. 1,012,946,283) 757,965,962 Total INVESTMENTS (Cost Rs. 1,012,946,283) 757,965,962

Equity DerivativesLong Futures (100 %)

Jaiprakash Associates Limited - Futures - April 2009 (32.19 % 180,000 15,210,000 Hindustan Petroleum Corporation Limited - Futures - April 2009 (10.31 % 18,200 4,873,050 Reliance Industries Limited - Futures - April 2009 (29.15 % 9,000 13,775,400 IVRCL Infrastructures & Projects Limited - Futures - April 2009 (28.34 % 110,000 13,392,500

Total 47,250,950

Deposits (9.82 %)^ Tenure Face Value6.3 % Standard Chartered Bank 91 60,000,000 6.4% HSBC Bank 183 32,000,000 Total Deposits 92,000,000


@ Investment in companies which have invested more than five percent of the net asset value of any schemes of HSBC Mutual Fund.

Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial year for the investments held by them.



for the year ended March 31, 2009)(Referred to in Schedule 1 to the Balance Sheet as at March 31, 2009 and the Revenue Account

6

( ) p

Dividend -

Net cash (used in)/generated from financing activities ( B ) (367,437,478)

Net Increase/(Decrease) in Cash and Cash Equivalents (A+B) (118,437,116)

Cash and Cash Equivalents Beginning of the Year 269,213,166

Cash and Cash Equivalents End of the Year 150,776,050


Rupees


Balances with Scheduled Banks : - In Current Account 33,499,281

- In Dividend Account 48,954

- In Deposit Account 92,000,000

1,213,000

Temprorary Book Overdraft (1,239)

Other Collateralised LendingReverse Repo 350,043

Collateralised Borrowing and Lending Obligation 366,011

Derivative Margin Deposit 23,300,000

150,776,050

2






PRICE WATERHOUSE


Vikramaaditya


Trustee Director

Place: Mumbai


The above Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard - 3 on Cash Flow Statementsof Chartered Accountants of India.

Margin Deposit with the Clearing Corporation of India Limited for Collateralised Borrowing and Lending Obligation


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the year ended March 31, 2009.

Annexure 1


Nature of Transaction Sponsor Investment Manager

Associate of Investment Manager


Sponsor

Key Management Personnel and thier

Relatives Total


Sale of Investments - - - 139,433,529 - 139,433,529 Previous Year - - - - - -

Subscription of Units (including switch in and dividend reinvestment) - - - - 150,000 150,000 Previous Year - - - - 45,000 45,000

Redemption of Units (including switch out - - - - 2,230,960 2,230,960 Previous Year - - - - - -




Brokerage/ Commission on Purchase/Sale of Investments 179,416 - - - - 179,416 Previous Year 572,000 - - - - 572,000

Clearing Charges - - 445,071 - - 445,071 Previous Year - - 169,121 - - 169,121

Reimbursment of Expenses - 2,909,306 - - - 2,909,306 Previous Year - - - - - -







Sponsor


Relatives Total

Investment Management and Advisory Fees Payabl - 951,594 - - - 951,594 Previous Year - 2,283,458 - - - 2,283,458

Brokerage/ Commission Payable for Distribution of Units - - 171,485 - - 171,485 Previous Year - - 596,649 - - 596,649

Units Outstanding As At Year End - - - - 505,271 505,271 Previous Year - - - - 2,924,012 2,924,012

Other Payables - - - - - - Previous Year - - - 61,500 - 61,500

Other Receivables - 2,912,349 - 5,000 - 2,917,349 Previous Year - 3,286 - 44,000 - 47,286


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Cash Fund 138,763,130 - HSBC Fixed Term Series 52 45,296,814 -

Sale of InvestmentsHSBC Fixed Term Series 68 59,931,777 - HSBC Equity Fund 29,862,659 - HSBC Income Fund Investment Plan 25,811,375 -

Sale of Mutual Fund Units (including switch outHSBC Cash Fund - 148,241,948

Other PayablesHSBC Advantage India Fund - 24,000 HSBC Equity Fund - 20,000

Other ReceivablesHSBC Advantage India Fund - 38,500 HSBC Equity Fund - 20,000 HSBC Emerging Market Fund 5,000 -


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Sanjay Prakash - 45,000 Vikramaaditya 90,000 - Rashid K Kidwai (relative) 60,000 -

Redemption of Units (including switch outSanjay Prakash 2,230,960 -

Units Outstanding As At Year EndNaina Lal Kidwai 271,059 553,303 Sanjay Prakash - 2,370,709 Vikramaaditya 110,991 - Rashid K Kidwai 123,221 -

0

HSBC MUTUAL FUND-HSBC MIDCAP FUND


.

SCHEDULE 9


1 Organisation

HSBC Midcap Equity Fund (the “Scheme”) is an open-ended growth scheme of HSBC Mutual Fund (the “Fund”) and was launched on April 12, 2005. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on May 03, 2005 and reopened for issue and redemption of units on May 24, 2005. The investment objective of the Scheme is to provide long term capital growth from an actively managed portfolio of equity and equity related securities primarily being midcap stocks. However, it could move a portion of its assets towards fixed income securities if the fund manager becomes negative on equity market. The Scheme has two Options - Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.












.

iii. Equity shares awaiting listing are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

iv. Traded money market securities are valued at the yield at which they are traded on the

valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

v. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable


vi. Units in mutual fund are valued at the net asset value of the investee scheme.

Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments and derivatives is determined separately for each category of investments and derivatives. In respect of each category of investments and derivatives, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.









.


Futures



The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Dividend Options. For reporting the net asset value for the Options, daily income earned, including realized and unrealised gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the units outstanding.




unrealised net appreciation in value of investments.



2.9 Load Charges

Load collected is retained under a separate account in the Scheme and is used to meet the selling and distribution expenses.



.

2.10 Deferred Revenue Expenditure

Initial issue expenses comprise those costs directly associated with the issue of units of the Scheme and include brokerage, advertising, business promotion, marketing, printing, distribution and other miscellaneous expenses. Initial issue expenses upto 2.25% were borne from the entry load collected from the investors during the initial offer period. Costs of 0.50% of the amount collected in the initial offer have been charged to the Scheme and are being amortized over a period of five years from the date of allotment of units. Expenses over and above the applicable entry load and amounts debited to the Scheme were borne by the asset management company.



Asset Management (India) Private Limited for managing the Scheme at an average annual rate of

1.16 % of the average daily net asset value recorded by the Scheme. All costs, charges and expenses



are on their own account for which they receive investment management and advisory fees.

4 Trusteeship Fees





5 Custodian Fees


6 Income Taxes


7. Limitation on Expenses The total expenses excluding deferred revenue expenditure, chargeable to the Scheme are limited to 2.15% of the average daily net assets of the Scheme. HSBC Asset Management (India) Private Limited has borne Rs. 2,909,306 in respect of the Scheme in excess of the above mentioned percentage of the average daily net assets to be charged to the Scheme as total expenses for the year.



.

8 Aggregate Appreciation and Depreciation in Value of Investments


March 31, 2009 (Rupees) March 31, 2008 (Rupees)

Equity Shares

-Appreciation 33,463,640 231,329,430

-Depreciation 288,443,961 383,884,421

Equity Futures

-Appreciation 575,550 -

-Depreciation 1,246,651 82,638


The aggregate value of investments purchased (excluding accretion of discount of Rs. 1,777,294) and

sold (including matured) during the year is Rs. 2,819,476,499 and Rs. 3,005,664,350 respectively being

185.61 % and 197.87 % of the average daily net assets.


The total income (net of net loss on sale of investments and derivatives and net change in unrealised

depreciation in the value of investments and derivatives) and expenditure (excluding deferred revenue

expenditure amortized) during the period is Rs. (1,023,717,106) and Rs. 32,711,381 respectively being

(67.39 %) and 2.15 % of the average daily net assets. 11 Equity Derivatives Disclosures:


Underlying Asset's Name Number of contracts Units Outstanding Long

Jaiprakash Associates Limited

40 180,000

Hindustan Petroleum Corporation Limited

14 18,200

Reliance Industries Limited

30 9,000

IVRCL Infrastructure Projects Limited

55 110,000 Notional value of futures contracts bought by the Scheme and outstanding as on March 31, 2009 aggregates to Rs. 47,250,950 Net Profit on futures transactions recognized in the Revenue Account for the year ended March 31, 2009 aggregates to Rs. 10,094,300



.






14 Related Party Relationships


(ii) HSBC Asset Management (India) Private Limited Investment Manager to the Schemes of HSBC Mutual

Fund (iii) The Hong Kong and Shanghai Banking Corporation Limited Associate of the Investment Manager (iv) Schemes of the Fund, Under Common Control of the Sponsor

HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46



.

HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai*– Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008



.

Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.


business: Refer Annexure I III During the year, HSBC Securities and Capital Markets (India) Private Limited, the Sponsor was paid

brokerage aggregating Rs. 179,416 on purchase and sale of investments. The Hong Kong and Shanghai Banking Corporation Limited, an associate entity of HSBC Asset Management (India) Private Limited was paid collection/bank charges amounting to Rs. 23,153 and brokerage amounting to Rs. 3,850,949 for procuring unit subscriptions for the Scheme and clearing member charges on derivative transactions Rs. 445,071. The brokerage paid was at rates similar to those offered to other brokers / distributors.

Further, The Hong Kong and Shanghai Banking Corporation Limited, an associate of the Sponsor, is on

the panel of bankers with whom HSBC Mutual Fund places money on fixed deposits and enters into

reverse repo transactions from time to time at competitive rates.

15 Disclosure under Regulation 25(11) of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended

HSBC Mutual Fund has made investments in companies, which holds/ has held units in excess of 5% of the net asset value of any Scheme of HSBC Mutual Fund which have been listed in Annexure II.

The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other debt instruments and were made solely on the basis of sound fundamentals of these companies.

16 Unclaimed Redemptions: As at March 31, 2009, unclaimed redemptions aggregate Rs 304,061 payable to 16 investors. 17 Unclaimed Dividends: As at March 31, 2009, unclaimed dividends aggregate Rs 594,629 payable to 371 investors.



.

18 Prior Year’s Figures Previous year’s figures have been re–grouped/re-arranged where appropriate. Signatures to the Schedules 1 to 9 forming part of the Balance Sheet and the Revenue Account




Trustee


Trustee

Director


Fund Manager(s)

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Advantage India Fund ("The Scheme")

as at March 31, 2009, the related Revenue Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.


standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agent respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



4. In our opinion and to the best of our information and according to the explanations given to us;

(i) The Balance Sheet, the Revenue Account and the Cash Flow Statement together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Advantage India Fund as at March 31, 2009, its net deficit and its cash flows for the year ended on that date.



PARTHA GHOSH Partner Membership No. F/55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009


ASSETS

Investments 1 2,850,401,943 6,209,251,506

Deposits 2 316,250,000 251,250,000



TOTAL 3,641,192,262 7,230,965,411

LIABILITIES

Unit Capital 5 4,657,279,748 5,122,909,084

Reserves and Surplus 6 (1,081,762,569) 2,000,170,598


TOTAL -0.46 3,641,192,262 7,230,965,411



Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions) (Note 2.6) 1,864,151,788 1,711,365,391 3,575,517,179 3,439,316,127 3,683,763,555 7,123,079,682








PRICE WATERHOUSE

Chartered AccountantsVikramaaditya

Trustee

Trustee Director

Place: Mumbai


Director and Chief Executive Officer


HSBC MUTUAL FUND - HSBC ADVANTAGE INDIA FUND



0



INCOME AND GAINS

Dividends (Note 2.4) 48,328,468 33,071,828


Net Profit on Sale of Investments and Derivatives (Net of Net Loss on Inter-Scheme Sale of Investments Rs. 17,574 (Previous year: Rs. Nil)) (Note 2.3 and 2.5) - 3,209,433,291

TOTAL 93,691,516 3,284,614,178

EXPENSES AND LOSSES






Audit Fees 550,000 750,000


Amortisation of Deferred Revenue Expenditure (Note 2.10) 14,703,871 50,219,732


TOTAL 2,263,902,195 243,995,706



Net (Losses)/Gains for the Year (2,581,774,954) 3,040,618,472

Net Change in Unrealised Appreciation in Value of Investments and Derivatives (208,822,207) (530,049,712)

Net (Deficit)/Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments anDerivatives (2,790,597,161) 2,510,568,760

Transferred to Unrealised Appreciation Reserve 208,822,207 530,049,712

Net (Deficit)/Surplus for the Year -0.61 (2,581,774,954) 3,040,618,472



Net (Deficit)/Surplus for the Year (1,305,177,994) (1,276,596,959) (2,581,774,954) 1,388,244,594 1,652,373,878 3,040,618,472

Transfer from Income Equalisation Reserve (Note 2.8) (42,345,223) 33,858,021 (8,487,202) (236,587,999) (157,897,397) (394,485,396)

Transfer from Reserve Fund - 1,724,653,808 1,724,653,808 - 1,030,550,815 1,030,550,815

Dividend / Distribution - (268,185,007) (268,185,007) - (499,264,851) (499,264,851)

Balance Transferred to Reserve Fund (1,347,523,217) 213,729,863 (1,133,793,355) 1,151,656,595 2,025,762,445 3,177,419,040






PRICE WATERHOUSE


Trustees

Trustee Director





Fund Manager(s)


1


Rupees


Rupees

A. Cashflow from Operating ActivitiesNet (Deficit) / Surplus for the Year (2,170,210,679) 3,040,618,472

Initial Issue Expenses Charged to Revenue Account 14,703,871 50,219,732

Adjustments for:- (Increase)/Decrease in Investments at cost 2,807,715,392 3,884,905,481

(Increase)/Decrease in Other Current Assets (1,978,398) 10,136,214

Increase/(Decrease) in Current Liabilities and Provisions (3,332,502) 70,518

Net cash generated from operations ( A ) 646,897,684 6,985,950,417

B Cashflow from Financing Activities Increase/(Decrease) in Unit capital (465,629,335) (4,742,550,105)

Increase/(Decrease) in Unit premium (23,150,999) (1,723,325,355)

Adjustments for:- Increase/(Decrease) in Redemption Payable for Units Redeemed by Investors (3,577,301) (73,151,294)

(Increase)/Decrease in Subscription Receivable for Units Issued to Investors 3,234,337 2,417,917

Dividend Paid during the Year (268,185,007) (499,264,851)

Net cash used in financing activities ( B ) (757,308,305) (7,035,873,688)

Net Increase/(Decrease) in Cash and Cash Equivalents (A+B) (110,410,621) (49,923,271)

Cash and Cash Equivalents at the beginning of the year 838,036,986 887,960,257

Cash and Cash Equivalents at the end of the year 727,626,365 838,036,986



Rupees


Balances with Scheduled Banks :- In Current Account 2,364,863 6,505,962 - In Dividend Account 509,002 902,465

- In Deposit Account 300,000,000 250,000,000 Margin Deposit with the Clearing Corporation of India Towards Collateralized Borrowing and Lending Obligation 1,250,000 1,250,000 Margin Deposit with the Clearing Corporation of India Limited towards Reverse Repos and Governement Securities 15,000,000

Book Overdraft (661,334) (58,897)

Other Collaterised Lending- Reverse Repos 160,862,513 63,632,815

- Collateralised Borrowing and Lending Obligation 168,301,321 420,804,641

Derivative Margin Deposit 80,000,000 95,000,000

727,626,365 838,036,986






PRICE WATERHOUSE

Chartered Accountants Vikramaaditya


Trustee Director

Place: Mumbai





2



Equity Shares 2,850,401,943 3,261,966,217 6,209,251,506 6,003,859,389

TOTAL 2,850,401,943 3,261,966,217 6,209,251,506 6,003,859,389

SCHEDULE 2 March 31, 2009 March 31, 2008

Deposits Rupees Rupees

Deposits with Scheduled Bank (Under Lien Towards Margin Deposit For Equity Derivatives Rs 160,000,000) 300,000,000 250,000,000

Margin Deposit with the Clearing Corporation of India Towards Collateralized Borrowing and Lending Obligation 1,250,000 1,250,000

Margin Deposit with the Clearing Corporation of India Limited towards Reverse Repos and Governement Securities 15,000,000 -

TOTAL 316,250,000 251,250,000


Balances with Banks - in Current Account 2,364,863 6,505,962 - in Dividend Account 509,002 902,465



Reverse Repos 160,862,513 63,632,815



Inter-Scheme Receivable- For 'Switch-in' - 1,627,937 - For 'Others' - 208,500


Receivables on Outstanding Future Contracts - 9,643,561

Interest Receivable on:

- Deposits 4,520,493 2,735,836



- Margin Deposit with The Clearing Corporation of India Limited 87,565 -


Investment Towards Unclaimed Redemption [(in 64,121.597 Units (Previous year: 69,964.208 units) (Market Value Rs. 934,534 (Previous year: Rs. Rs. 950,863)) of HSBC Cash Fund - Growth Option) (Note 13)] 866,579 927,667

Investment Towards Unclaimed Dividend [(in 32,737.831 Units (Previous year: Nil units) (Market Value Rs. 477,134 (Previous year: Rs. Nil)) of HSBC Cash Fund - Growth Option) (Note 14)] 448,485 -

TOTAL 452,850,091 734,069,806




Incurred During the year - -

Less : Amortised during the year : - - NFO Units Reedemed 2,027,047 32,215,148 - Others 12,676,824 18,004,584





3

SCHEDULE 5 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Unit Capital Rupees Units Rupees Units Growth OptionIssued and Subscribed :Units of Rs. 10 each fully paid up 5,972,885,774 597,288,577.365 5,972,885,774 597,288,577.365

Outstanding:At the beginning of the year 2,364,667,624 236,466,762.306 4,048,291,189 404,829,118.856 Issued during the year 259,538,337 25,953,833.730 679,540,066 67,954,006.572


Dividend OptionIssued and Subscribed :Units of Rs. 10 each fully paid up 10,197,445,867 1,019,744,586.733 10,197,445,867 1,019,744,586.733

Outstanding:At the beginning of the year 2,758,241,460 275,824,146.002 5,817,167,999 581,716,799.865 Issued during the year 196,564,120 19,656,412.037 535,440,399 53,544,039.938


TOTAL 4,657,279,748 465,727,974.827 5,122,909,084 512,290,908.308

HSBC MUTUAL FUND - HSBC ADVANTAGE INDIA FUNDSchedules forming part of the Balance Sheet as at March 31, 2009


4

SCHEDULE 6 March 31, 2009 March 31, 2008Reserves and Surplus Total Total

Rupees Rupees

Unit Premium Reserve (Note 2.7 )

At the beginning of the year (2,164,233,326) (835,393,368)

Added during the year (14,663,797) (1,328,839,958)

At the end of the year (2,178,897,123) (2,164,233,326)


Added during the year (8,487,202) (394,485,396)

Transferred to Revenue Account 8,487,202 394,485,396

At the end of the year - -


At the beginning of the year 209,428,636 -

Balance Transferred from Reserve Fund - 739,478,348

Net Change in Unrealised Appreciation in Value of Investments and Derivatives Transferred from Revenue Account (208,822,207) (530,049,712)

At the end of the year 606,429 209,428,636

Reserve Fund

At the beginning of the year 3,954,975,288 2,547,585,411

Transferred to Unrealised Appreciation Reserve - (739,478,348)

Balance Transferred to Revenue Account (1,724,653,808) (1,030,550,815)

Balance Transferred from Revenue Account (1,133,793,355) 3,177,419,040

At the end of the year 1,096,528,125 3,954,975,288

TOTAL (1,081,762,569) * 2,000,170,598 *


Growth Option : Rs. (375,668,031) 1,074,648,503 Dividend Option : Rs. (706,094,538) 925,522,095 Total : Rs. (1,081,762,569) 2,000,170,598




5


Current Liabilities




Audit Fees 550,000 750,000


Payable on Outstanding Future Contracts 1,160,450 -


Unit Redemption Payable 2,349,659 8,619,591

Inter Scheme Payable - For 'Switch-Out' 3,824,365 1,131,733 - For 'Others' 21,786 38,000

Load Charges 6,749,459 1,534,003

Unclaimed Redemption (Note 13) 1,018,188 1,187,446


Temporary Book Overdraft 661,334 58,897

Deferred Revenue Expenditure Payable 67,101 67,101


TOTAL 65,675,083 107,885,729


Rupees Rupees

Debentures / Bonds 139,068 -

Commercial Paper / Certificate of Deposit 667,794 149,299

Reverse Repos 11,175,368 22,102,585


Deposits 26,257,562 17,823,329 Margin Deposit with the Clearing Corporation of India Limited 93,001 (96)

Others 16 6,906

TOTAL 45,363,048 42,109,059

HSBC MUTUAL FUND - HSBC ADVANTAGE INDIA FUNDSchedules forming part of the Balance Sheet as at March 31, 2009


6

Annexure 1




Control of Sponsor


Relatives Total

Purchase of Investments - - - 337,765,190 - 337,765,190Previous Year - - - - - -

Sale of Investments - - - 319,042,192 - 319,042,192Previous Year - - - 137,392,220 - 137,392,220

Subscription of Units (including switch in and dividend reinvestmen - - - - - - Previous Year - - - - 39,120 39,120

Dividend Distribution( Including dividend reinvested - - - - 42,601 42,601Previous Year - - - - 39,120 39,120

Sale of Mutual Fund Units - - - - - - Previous Year - - - 1,002,078,759 - 1,002,078,759


Brokerage/ Commission on Distribution of Units - - 7,349,775 - - 7,349,775Previous Year - - 22,388,210 - - 22,388,210

Brokerage/ Commission on Purchase/Sale of Investment 776,506 - 13,368 - - 789,874Previous Year 1,682,000 - - - - 1,682,000

Clearing Charges - - 1,220,316 - - 1,220,316Previous Year - - 1,289,244 - - 1,289,244


Charges for Services Provided by Bank - - 2,493 - - 2,493Previous Year - - 110,292 - - 110,292




Control of Sponsor


Relatives Total

Investment Management and Advisory Fees Payabl - 2,987,644 - - - 2,987,644Previous Year - 5,802,421 - - - 5,802,421

Brokerage/ Commission Payable for Distribution of Units - - 416,565 - - 416,565Previous Year - - 1,018,548 - - 1,018,548

Units Outstanding As At Year End - - - - 650,879 650,879Previous Year - - - - 3,002,917 3,002,917

Other Payables - - - 21,786 - 21,786Previous Year - - - 38,000 - 38,000

Other Receivables - 5,354 - - - 5,354Previous Year - 7,392 - 208,500 - 215,892


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Flexi Debt Fund 203,438,659 - HSBC Equity Fund 56,586,475 -

Sale of InvestmentsHSBC Floating Rate Fund Long Term Plan 120,491,100 - HSBC Fixed Term Series 68 62,251,241 - HSBC Equity Fund 49,611,472 - HSBC Fixed Term Series 66 38,800,005 - HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) - 137,392,220

Redemption of Units (including switch outHSBC Cash Fund - 1,002,078,759

Other PayablesHSBC Equity Fund - 14,000HSBC Midcap Fund - 24,000HSBC Cash Fund 21,786 -

Other ReceivablesHSBC Equity Fund - 170,000HSBC Midcap Fund - 38,500


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestmen - Nelum P Gidwani - 39,120

Dividend Distribution( Including dividend reinvested - Nelum P Gidwani 42,601 39,120

Units Outstanding As At Year EndNelum P Gidwani 325,293 568,951Sanjay Prakash - 1,864,984Avan Nelum Gidwani 325,585 568,982

7

96,187,500 Finance (2.33 %)

Housing Development Finance Corporation Limited 47,000 66,373,400 66,373,400

Hotels (0.59 %)EIH Limited 193,430 16,731,695


Bharat Heavy Electricals Limited 153,000 231,114,150 Suzlon Energy Limited 855,000 36,209,250


Jain Irrigation Systems Limited 180,000 61,524,000 61,524,000

Media & Entertainment (0.99 %)IBN18 Broadcast Limited 383,235 28,129,449

28,129,449 Oil (6.78 %)



Reliance Industries Limited @ 160,500 244,722,375 Indian Oil Corporation Limited 225,000 87,255,000 Hindustan Petroleum Corporation Limited 250,000 67,312,500


Cipla Limited 498,136 109,614,827 109,614,827

Power (6.67 %)Power Grid Corporation of India Limited 765,000 73,134,000 Reliance Infrastructure Limited 135,000 69,599,250 CESC Limited 225,000 47,475,000

190,208,250 Software (4.60 %)


Telecom - Services (7.46 %)Bharti Airtel Limited @ 247,000 154,560,250 IDEA Cellular Limited @ 1,158,243 58,027,974

212,588,224 Total (Cost Rs. 3,261,966,217) 2,850,401,943 TQTAL INVESTMENTS (Cost Rs. 3,261,966,217) 2,850,401,943

Equity DerivativesShort Futures (100 %)

Bharat Heavy Electricals Limited - Futures - April 2009 (55.81 %) 18,061,200 Bharti Airtel Limited - Futures - April 2009 (44.19 %) 14,301,400

Total 32,362,600

Deposits (8.39 %)^ Tenure Face Value6.3 % Standard Chartered Bank 91 140,000,000 10.1% Axis Bank 182 80,000,000 7% Axis Bank 181 80,000,000 Total Deposits 300,000,000


Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial year for the investmentsheld by them.

@ Investment in companies which have invested more than five percent of the net asset value of any schemes of HSBC MutualFund.

HSBC MUTUAL FUND-HSBC ADVANTAGE INDIA FUND


SCHEDULE 9


1 Organisation

HSBC Advantage India Fund (the “Scheme”) is an open-ended growth scheme of HSBC Mutual Fund (the “Fund”) and was launched on December 30, 2005. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on January 27, 2006, and reopened for issue and redemption of units on February 24, 2006. The investment objective of the Scheme is to generate long term capital growth from an actively managed portfolio of equity and equity related securities by investing primarily in sectors, areas and themes that play an important role in, and/or benefit from, India’s progress, reform process and economic development. The Scheme will attempt to take a medium term view when investing in such opportunities and will endeavour to run a more concentrated portfolio on a limited number of such opportunities. The Scheme has two Options - Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.








ii. Non-traded and thinly traded equity securities, including those not traded within thirty days prior to the valuation date are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).



iii. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price

on the National Stock Exchange of India Limited (NSE). If no sale is reported at that time, such securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

iv. Non-traded and thinly traded debt securities are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).

v. Privately placed debt securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

vi. Equity shares awaiting listing are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

vii. Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

viii. Units in mutual fund are valued at the net asset value of the investee scheme. ix. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable


Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments and derivatives is determined separately for each category of investments and derivatives. In respect of each category of investments and derivatives, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme










Futures

• Futures contracts are marked to market daily at the futures settlement price as determined by the exchange. The variation margin calculated as the difference between the trade price or the previous day’s settlement price, as the case may be, and the current day’s settlement price is recorded as a receivable or payable. • When a contract is closed (squared off)/ settled (on expiry), the difference between the final settlement / square-off price and the contract price is recognised in the revenue account. If more than one futures contracts in respect of the same stock / index and expiry date, to which the squared off / settled contract pertains, is outstanding at the time of square off / settlement of the contract, the average method is followed for determining the gain or loss. • As at the Balance Sheet date / date of determination, all open futures positions are valued at the futures settlement price as determined by the exchange where it is traded. Non-traded futures contracts are valued at fair value as per procedures determined by HSBC Asset Management (India) Private Limited and approved by the Board of Trustees. The unrealised appreciation / depreciation on all open positions is considered for determining the net asset value.













Initial issue expenses comprise those costs directly associated with the issue of units of the scheme and include advertising, brokerage, business promotion, marketing, printing, distribution and other miscellaneous expenses. Initial issue expenses upto 2.25 % were borne from the entry load collected from the investors during the initial offer period. Costs of 1.25 % of the amount collected in the initial offer have been charged to the Scheme and are being amortized over a period of five years from the date of allotment of units. Expenses over and above the applicable entry load and amounts debited to the Scheme were borne by the asset management company.



Asset Management (India) Private Limited for managing the Scheme at an average annual rate of 0.97

% of the average daily net asset value recorded by the Scheme. All costs, charges and expenses




4 Trusteeship Fees




attended by such Trustee not affiliated with the Settlor

5 Custodian Fees


6 Income Taxes





March 31, 2009


(Rupees)

Equity Shares

-Appreciation 78,574,286 921,690,431

-Depreciation 490,138,560 716,298,314

Equity Futures

-Appreciation 610,412 5,784,568

-Depreciation 3,982 1,748,049


The aggregate value of investments securities purchased and sold (including matured) during the year

(excluding accretion of discount of Rs. 667,794) is 7,016,898,573 and 7,575,919,895 respectively

being 140.42% and 151.61% of the average daily net assets.


The total income (net of net loss on sale of investments and net change in unrealized depreciation in the

value of investments) and expenditure (excluding deferred revenue expenditure amortized) during the

year is Rs. (2,456,073,451) and Rs. 110,997,632 respectively being (49.15) % and 2.22 % of the

average daily net assets. 10 Equity Derivatives Disclosures:


Underlying Asset's Name Number of contracts

Units Outstanding Long/(Short)

Bharat Heavy Electricals Limited 40 (12,000) Bharti Airtel Limited Futures 46 (23,000) Notional value of futures contracts bought/ (sold) by the Scheme and outstanding as on March 31, 2009 aggregates to Rs. (32,362,600).

Net Profit/ (Loss) on futures transactions recognized in the Revenue Account for the year ended March

31, 2009 aggregates to Rs. (45,338,953).




Funds) Regulation, 1996 as amended and in accordance with Accounting Standard 18 on

‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India (ICAI)






HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008



HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai* – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008



* There were no transactions during the year.






was paid collection/bank charges amounting to Rs. 1,220,316 and brokerage amounting to Rs. 7,349,775 for procuring unit subscriptions for the Scheme and clearing member charges on derivative

transactions Rs 2,493. The brokerage paid was at rates similar to those offered to other brokers /

distributors.







The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other debt instruments and were made solely on the basis of sound fundamentals of these companies

13 Unclaimed Redemption

As at March 31, 2009, unclaimed redemptions aggregate Rs. 10,18,188 payable to 66 Investors.


As at March 31, 2009, unclaimed dividends aggregate Rs. 900,152 payable to 380 investors.






Previous year’s figures have been re-grouped / re-arranged where appropriate. Signatures to the Schedules 1 to 9 forming part of the Balance Sheet and the Revenue Account




Trustee


Trustee

Director


Fund Manager(s)

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Tax Saver Fund ("The Scheme") as

at March 31, 2009, and the related Revenue Account for the year ended on that date both of which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.


standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agents respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.




(i) The Balance Sheet, the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Tax Saver Fund as at March 31, 2009 and its net deficit for the year on that date.





ASSETS

Investments 1 1,438,561,575 1,911,247,096

Deposits 2 60,000,000 -


TOTAL 1,854,390,429 2,401,140,851

LIABILITIES

Unit Capital 4 2,450,513,535 2,167,618,534



TOTAL -0.26 1,854,390,429 2,401,140,851

0.26



Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.6) 1,110,158,857 695,695,579 1,805,854,436 1,399,839,449 885,414,372 2,285,253,821





PARTHA GHOSH For Board of Trustees of For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913

For and on behalf of PRICE WATERHOUSE Chartered Accountants Vikramaaditya


Trustee Director

Place: Mumbai Fund Manager(s)Date : 06 July 2009


HSBC MUTUAL FUND - HSBC TAX SAVER EQUITY FUND


0

April 1, 2008 April 1, 2007March 31, 2009 March 31, 2008


INCOME AND GAINS

Dividends (Note 2.4) 22,219,056 9,249,021


Net Profit on Sale of Investments and Derivatives(Notes 2.3 and 2.5) - 137,481,957

TOTAL 47,154,322 160,657,776

EXPENSES AND LOSSES

Net Loss on Sale of Investments (Notes 2.3 and 2.5) 592,292,072 -




Custodian Fees and Expenses (Note 5) 658,308 921,926

Audit Fees 75,000 75,000



TOTAL 638,998,662 56,479,128

Net Realised (Losses)/Gains for the Year (591,844,340) 104,178,648

Net Change in Unrealised Depreciation in Value of Investments and Derivatives (113,087,320) 74,658,449

Net (Losses)/Gains for the Year (704,931,660) 178,837,097

Net Change in Unrealised Appreciation in Value of Investments and Derivatives - (60,982)Net (Deficit)/Surplus including Net Change in Unrealised Appreciation/Depreciation in Value of Investments and Derivatives (704,931,660) 178,776,115

Transferred to Unrealised Appreciation Reserve - 60,982

Net (Deficit)/Surplus for the Year (704,931,660) 178,837,097

April 01, 2008 to March 31, 2009 Rupees

April 01, 2007 to March 31, 2008 Rupees

Net (Deficit)/Surplus for the Year (704,931,660) # 178,837,097

Transfer from Income Equalisation Reserve (Note 2.8) (64,285,739) # 9,479,460

Balance Transferred to Reserve Fund (769,217,399) 188,316,557



PARTHA GHOSH For Board of Trustees of For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants Vikramaaditya


Trustee Director

Place: Mumbai





1

SCHEDULE 1 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Investments Market Value Cost Market Value Cost(Notes 2.2, 2.3, 7, 8 and 11) Rupees Rupees Rupees Rupees


Equity Shares 1,438,561,575 1,591,947,353 1,911,247,096 1,951,545,556

TOTAL 1,438,561,575 1,591,947,353 1,911,247,096 1,951,545,556


Deposits with Scheduled Bank (Under Lien Towards Margin Deposit for Equity Derivatives) 60,000,000 -

TOTAL 60,000,000 -


Balances with Banks- in Current Account 3,840,417 12,556,040



Reverse Repos 152,132,928 382,479,907

Collateralised Borrowing and Lending Obligation 159,167,745 -


Inter-Scheme Receivable - For 'Switch - In' 728,911 446,118 - For 'Others' 1,500 89,000

Interest Receivable on :- Deposits 735,287 - - Reverse Repos 19,578 84,212 - Collateralised Borrowing and Lending Obligation 19,500 -

Dividend Receivable 57,500 -


TOTAL 355,828,854 489,893,755




2


Growth OptionIssued and Subscribed :Units of Rs. 10 each fully paid up 992,369,263 99,236,926.282 992,369,263 99,236,926.282 Outstanding:At the beginning of the year 1,327,778,680 132,777,868.108 1,157,573,588 115,757,358.823 Issued during the year 183,360,346 18,336,034.648 174,528,016 17,452,801.638

1,511,139,026 151,113,902.756 1,332,101,604 133,210,160.461 Redeemed during the year 4,672,473 467,247.295 4,322,924 432,292.353 At the end of the year 1,506,466,553 150,646,655.461 1,327,778,680 132,777,868.108

Dividend Option

Issued and Subscribed :Units of Rs. 10 each fully paid up 645,008,528 64,500,852.832 645,008,528 64,500,852.832

Outstanding:

At the beginning of the year 839,839,854 83,983,985.503 748,615,911 74,861,591.180 Issued during the year 112,490,496 11,249,049.602 95,282,874 9,528,287.384

952,330,350 95,233,035.105 843,898,785 84,389,878.564 Redeemed during the year 8,283,368 828,336.755 4,058,931 405,893.061 At the end of the year 944,046,982 94,404,698.350 839,839,854 83,983,985.503

TOTAL 2,450,513,535 245,051,353.811 2,167,618,534 216,761,853.611

SCHEDULE 5 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Reserves and Surplus Dividend Option Total Dividend Option Total

Rupees Rupees Rupees RupeesUnit Premium Reserve (Note 2.7)At the beginning of the year 13,592,022 42,691,871 303,128 909,582 Added during the year 2,133,309 6,923,013 13,288,894 41,782,289 At the end of the year 15,725,331 49,614,884 13,592,022 42,691,871

Income Equalisation Reserve (Note 2.8)Added during the year (24,316,637) (64,285,739) 2,984,231 9,479,460 Transferred to Revenue Account 24,316,637 64,285,739 (2,984,231) (9,479,460) At the end of the year - - - -

Unrealised Appreciation ReserveAt the beginning of the year - - - - Balance transferred from Reserve Fund - - 26,493 60,982 Net Change in Unrealised Appreciation in Value of Investments and Derivatives Transferred from Revenue Account - - (26,493) (60,982) At the end of the year - - - -

Reserve FundAt the beginning of the year 31,982,496 74,943,416 (44,446,949) (113,312,159) Transferred to Unrealised Appreciation Reserve - - (26,493) (60,982)

(296,059,230) (769,217,399) 76,455,938 188,316,557 At the end of the year (264,076,735) (694,273,983) 31,982,496 74,943,416

TOTAL (248,351,403) (644,659,099) * 45,574,518 117,635,287 *

* The share of the Plans/Options of the Reserves and Surplus is as follows : March 31, 2009 March 31, 2008

Rupees RupeesGrowth Option : Rs. (396,307,696) 72,060,769 Dividend Option : Rs. (248,351,403) 45,574,518 Total : Rs. (644,659,099) 117,635,287





3






Audit Fees 75,000 75,000



Inter Scheme Payable for Others - 2,000


Payable to Investment Manager - -


TOTAL 48,535,993 115,887,030

SCHEDULE 7 April 1, 2008 April 1, 2007Interest (Note 2.4) March 31, 2009 March 31, 2008

Rupees Rupees

Reverse Repos 8,285,785 10,787,457

Collateralized Borrowing and Lending Obligation 3,273,313 970,002

Margin Deposit with Clearing Corporation of India Limited - 178

Debentures / Bonds 3,620,612 -

Commercial Paper / Certificate of Deposit 5,489,967 -

Deposits 4,265,589 2,114,393

Others - 54,768

TOTAL 24,935,266 13,926,798



HSBC MUTUAL FUND - HSBC TAX SAVER EQUITY FUND 4

Quantity Market ValueRupees


Maruti Suzuki India Limited @ 51,000 39,772,350 Hero Honda Motors Limited @ 36,000 38,561,400

78,333,750 Auto Ancillaries (2.62 %)

Bosch Limited 9,000 27,653,850 Shanthi Gears Limited 390,000 10,023,000

37,676,850 Banks (14.12 %)

HDFC Bank Limited @ 108,000 105,127,200 Bank of Baroda @ 175,000 41,011,250 Union Bank of India 163,899 24,068,568 Punjab National Bank 44,000 18,103,800 Indian Bank 180,000 14,796,000

203,106,818 Cement (6.62 %)

Jaiprakash Associates Limited 400,000 33,640,000 Grasim Industries Limited @ 19,500 30,851,925 The India Cements Limited 290,000 30,740,000

95,231,925 Construction Project (3.08 %)

Larsen & Toubro Limited @ 66,000 44,312,400 44,312,400

Consumer Non Durables (16.25 %)I T C Limited @ 500,000 92,425,000 GlaxoSmithkline Consumer Healthcare Limited 73,914 52,057,630 Nestle India Limited 31,500 49,026,600 Colgate Palmolive India Limited 63,173 29,767,118 Balrampur Chini Mills Limited 200,000 10,560,000

233,836,348 Diversified (2.48 %)



46,602,600 Hotels (0.52 %)

Viceroy Hotels Limited 473,364 7,455,483 7,455,483

Industrial Capital Goods (6.03 %)Bharat Heavy Electricals Limited 36,000 54,379,800 Thermax Limited 100,259 18,111,788 Crompton Greaves Limited 115,000 14,202,500


Zee News Limited 1,111,936 36,415,904 Dish TV India Limited 560,000 13,440,000

49,855,904 Oil (6.03 %)



Reliance Industries Limited @ 90,000 137,227,500 Hindustan Petroleum Corporation Limited 122,000 32,848,500 Indian Oil Corporation Limited 74,000 28,697,200


Cipla Limited 284,292 62,558,455 Sun Pharmaceutical Industries Limited 20,000 22,229,000

84,787,455 Power (3.82 %)

Power Grid Corporation of India Limited 342,000 32,695,200 CESC Limited 105,539 22,268,729

54,963,929 Software (2.37 %)


Telecom - Services (4.20 %)Bharti Airtel Limited @ 96,500 60,384,875


Deposits (3.32 %)^ Tenure Face Value6.3 % Standard Chartered Bank 91 60,000,000 Total Deposits 60,000,000

Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of thefinancial year for the investments held by them.


@ Investments in companies which have invested more than five percent of the net asset value of any scheme of HSBC Mutual Fund.

for the year ended March 31, 2009 )

Description



(Referred to in Schedule 1 to the Balance Sheet as at March 31, 2009 and the Revenue Account

5

HSBC MUTUAL FUND-HSBC TAX SAVER EQUITY FUND


Annexure 1



Associate of Investment

Manager


Sponsor


Relatives Total



Subscription of Units (including switch in and dividend reinvestment) - - - - 101,000 101,000 Previous Year - - - - - -



Brokerage/ Commission on Purchase/ Sale of Investments 269,324 - - - - 269,324 Previous Year 679,000 - - - - 679,000

Brokerage/ Commission on Distribution of Units - - 608,172 - - 608,172 Previous Year - - 2,050,035 - - 2,050,035

Clearing Charges - - - - - - Previous Year - - 95,784 - - 95,784

Fixed Deposits Placed - - - - - - Previous Year - - 64,000,000 - - 64,000,000


Charges for Services Provided by Bank - - 998 - - 998 Previous Year - - 8,128 - - 8,128




Manager


Sponsor


Relatives Total



Units Outstanding As At Year End - - - - 90,862 90,862 Previous Year - - - - - -


Other Receivables - 1,027 - 1,500 - 2,527 Previous Year - 9,218 - 89,000 - 98,218


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 264,866,489 - HSBC Cash Fund 89,204,870

Sale of Investments - HSBC Equity Fund 69,573,024 HSBC Fixed Term Series 68 66,378,818 HSBC Floating Rate Fund Long Term Plan 58,726,695 -

Sale of Mutual Fund Units (including switch out)HSBC Cash Fund - 150,283,334

Other PayablesHSBC Dynamic Fund - 2,000

Other ReceivablesHSBC Equity Fund 1,500 84,940


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Rashid K Kidwai (relative) 101,000 -

Redemption of Units (including switch out)- -

Dividend Paid/Payable( Including dividend reinvested)- -

Units Outstanding As At Year EndRashid K Kidwai (relative) 90,862 -

0



SCHEDULE 8


1 Organisation

HSBC Tax Saver Equity Fund (the “Scheme”) is an open ended equity linked savings scheme of HSBC Mutual Fund (the “Fund”) and was launched on November 20, 2006. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on December 14, 2006 and reopened for issue and redemption of units on January 17, 2007. The Scheme has been prepared pursuant to the notifications dated November 3, 2005 and December 13, 2005 issued by the Department of Economic Affairs, Ministry of Finance, Government of India or such other scheme as the Central Government may by notification in the Official Gazette specify under section 80C of the Income Tax Act, 1961. The investment objective of the Scheme is to provide long term capital appreciation by investing in a diversified portfolio of equity and equity related instruments of companies across various sectors and industries, with no capitalisation bias. The Scheme may also invest in fixed income securities. The Scheme has two Options - Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.















vi. Equity shares awaiting listing are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.



interest up to the date of resale. Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments and derivatives is determined separately for each category of investments and derivatives. In respect of each category of investments and derivatives, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.






Dividend and Interest income are recorded on an accrual basis.

2.5 Derivatives The Scheme enters into derivative transactions in equity/index futures for the purpose of hedging and



Futures













2.10 Initial Issue Expenses

Initial issue expenses comprise those costs directly associated with the issue of units of the Scheme and include advertising, brokerage, business promotion, marketing, printing, distribution and other miscellaneous expenses. Initial issue expenses upto 2.25% were borne from the entry load collected from the investors during the initial offer period. Expenses over and above the applicable entry load and amounts debited to the Scheme were borne by the asset management company.




0.91% of the average daily net asset value recorded by the Scheme. All costs, charges and expenses



are on their own account for which they receive investment management and advisory fees. 4 Trusteeship Fees




attended by such Trustee not affiliated with the Settlor

5 Custodian Fees


6 Income Taxes






March 31, 2009


(Rupees)

Equity Shares

-Appreciation 62,106,058 173,597,447

-Depreciation 215,491,836 213,895,907


The aggregate value of investments purchased (excluding accretion of discount of Rs. 5,489,967) and

sold (including matured) during the financial year is Rs. 5,161,259,484 and Rs. 4,934,062,477

respectively being 262.69% and 251.13% of the average daily net assets. 9 Income and Expenses

The total income (including net loss on sale of Investments and Derivatives and net change in

unrealized depreciation in the value of investments) and expenditure during the year is Rs.

(658,225,070) and Rs. 46,706,589 being (33.50)% and 2.38% respectively of the average daily net

assets.










HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund)



HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai*– Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.






was paid collection/bank charges amounting to Rs. 998 and brokerage amounting to Rs. 608,172 for


95,784. The brokerage paid was at rates similar to those offered to other brokers / distributors.








HSBC Mutual Fund has made investments in companies, which hold / have held units in excess of 5% of the net asset value of any Scheme of HSBC Mutual Fund which have been listed in Annexure II.



Previous year’s figures have been re-grouped / re-arranged where appropriate. Signatures to the Schedules 1 to 8 forming part of the Balance Sheet and the Revenue Account.




Trustee


Trustee

Director


Fund Manager(s)



Auditors’ Report To the Board of Trustees of HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Unique Opportunities Fund (The “Scheme”) as at March 31, 2009 and, the related Revenue Account for the year ended on that date annexed thereto, and the Cash Flow Statement for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agent respectively. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We have obtained all the information and explanations which, to the best of our knowledge and belief,

were necessary for the purposes of our audit. The Balance Sheet, the Revenue Account and the Cash Flow Statement referred to above are in agreement with the books of account of the Scheme.

4. In our opinion and to the best of our information and according to the explanations given to us ;

(i) The Balance Sheet, the Revenue Account and the Cash Flow Statement together with the

notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and the amendments thereto, as applicable, and also give respectively a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Unique Opportunities Fund as at March 31, 2009, its net deficit and its cash flows for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009, and the Revenue Account for the year ended on

that date, together with the notes thereon, have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable.

PARTHA GHOSH Partner M. No. F/55913 For and on behalf of PRICEWATERHOUSE Chartered Accountants Mumbai July , 2009


ASSETS

Investments 1 1,762,228,862 4,324,634,584 Deposits 2 165,000,000 180,000,000 Other Current Assets 3 324,080,285 623,142,229 Deferred Revenue Expenditure 4 50,255,009 126,831,644

TOTAL 2,301,564,156 5,254,608,457

LIABILITIES

Unit Capital 5 3,872,448,544 4,831,104,983 Reserves and Surplus 6 (1,677,447,411) 372,729,814 Current Liabilities and Provisions 7 106,563,023 50,773,660

TOTAL (0.21) 2,301,564,156 5,254,608,457


Rupees Rupees Rupees RupeesNet Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.7) 829,418,118 1,365,583,015 2,195,001,133 1,801,453,207 3,402,381,590 5,203,834,797

Number of Units in Issue 146,326,985.344 240,917,869.036 167,242,434.576 315,868,063.747 Net Asset Value per Unit 5.6683 5.6683 10.7715 10.7715





Trustee Director



HSBC MUTUAL FUND - HSBC UNIQUE OPPORTUNITIES FUND




INCOME AND GAINS

Dividends (Note 2.4) 38,414,191 39,357,072 Interest and Discount 8 38,531,162 37,593,810 Net Profit on Sale of Investments and Derivatives (Note 2.3 and 2.5) - 1,501,464,369

TOTAL 76,945,353 1,578,415,251

EXPENSES AND LOSSES

Net Loss on Sale of Investments and Derivatives (Note 2.3 and 2.5) 2,500,036,730 - Investment Management and Advisory Fees (Note 3) 35,627,202 68,182,205 Transfer Agent Fees and Expenses 6,982,422 11,023,799 Trusteeship Fees and Expenses (Note 4) 14,504 15,630 Custodian Fees and Expenses (Note 5) 1,716,758 3,117,574 Audit Fees 75,000 82,128 Selling and Distribution Expenses 25,606,468 48,379,779 Amortization of Deferred Revenue Expenditure (Note 2.6) 57,367,286 73,651,833 Other Operating Expenses 7,297,075 14,431,815

TOTAL 2,634,723,445 218,884,763

Less: Expenses to be Reimbursed by the Investment Manager (Note 7) 660,110 1,548,690

TOTAL 2,634,063,335 217,336,073


Net Change in Unrealised Depreciation in Value of Investments and Derivatives 356,129,960 (666,005,135)

Net (Losses)/Gains for the Year (2,200,988,022) 695,074,043

Net Change in Unrealised Appreciation in Value of Investments and Derivatives (472,071) (68,130,093)

Net (Deficit)/Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments and Derivatives (2,201,460,093) 626,943,950

Transferred to Unrealised Appreciation Reserve 472,071 68,130,093

Net (Deficit)/Surplus for the Year (2,200,988,022) 695,074,043


Rupees Rupees

Net (Deficit)/Surplus for the Year (2,200,988,022) 695,074,043

Balance transferred to Reserve Fund (2,200,988,022) 695,074,043





Trustee Director







Equity Shares 1,762,228,862 2,072,104,037 4,324,634,584 4,990,639,719

TOTAL 1,762,228,862 2,072,104,037 4,324,634,584 4,990,639,719



Margin Deposit with The Clearing Corporation of India Limited towards Collateralized Borrowing and Lending Obligation 20,000,000 20,000,000


TOTAL 165,000,000 180,000,000


Balances with Banks- in Current Account 494,022 7,589,052

Sales Contracts Awaiting Completion - Equity Shares 78,700,468 39,232,925 Application Money Pending Allotment - Equity Shares - 53,026,500 Reverse Repos 103,807,591 473,099,754 Collateralized Borrowing and Lending Obligation 108,607,356 - Inter-Scheme Receivable for Others - 6,000,000

Derivative Margin Deposit (Note 2.5) 30,000,000 40,000,000 Receivable on Outstanding Equity / Future Contracts 413,325 938,803 Interest Receivable on :- Deposits 1,070,055 1,174,685 - Reverse Repos 13,359 104,164 - Collateralized Borrowing and Lending Obligation 13,306 - - Margin Deposit with the Clearing Corporation of India Limited 140,740 - Receivable from Investment Manager 664,652 1,976,346

Investment Towards Unclaimed Redemption [(in 11,110.293 Units (Previous year: Nil units) (Market Value Rs. 161,925.85 (Previous year: Nil)) of HSBC Cash Fund - Growth Option) (Note 15)] 155,411 -

TOTAL 324,080,285 623,142,229


Issue and Organisational Costs (net of exit load)

At the Beginning of the year 126,831,644 252,288,850

Incurred during the year - - Less: Amortized during the year 57,367,286 73,651,833 Less: Recovered during the year 19,209,349 51,805,373





Growth OptionIssued and Subscribed :Units of Rs. 10 each fully paid up 2,206,433,286 220,643,328.644 2,206,433,286 220,643,328.644 Outstanding:At the beginning of the year 1,672,424,345 167,242,434.576 2,206,234,286 220,623,428.644 Issued during the year 29,492,767 2,949,276.671 5,752,307 575,230.744

1,701,917,112 170,191,711.247 2,211,986,593 221,198,659.388 Redeemed during the year 238,647,259 23,864,725.903 539,562,248 53,956,224.812 At the end of the year 1,463,269,853 146,326,985.344 1,672,424,345 167,242,434.576

Dividend Option

Issued and Subscribed :Units of Rs. 10 each fully paid up 4,165,861,924 416,586,192.440 4,165,861,924 416,586,192.440 Outstanding:At the beginning of the year 3,158,680,638 315,868,063.747 4,165,322,476 416,532,247.579 Issued during the year 52,676,333 5,267,633.300 58,527,783 5,852,778.315


TOTAL 3,872,448,544 387,244,854.380 4,831,104,983 483,110,498.323

SCHEDULE 6 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Reserves and Surplus Dividend Option Total Dividend Option Total


Unit Premium Reserve (Note 2.8)At the beginning of the year (233,584,063) (384,733,420) (7,564) (10,354) Added during the year 124,220,105 151,282,868 (233,576,499) (384,723,066) At the end of the year (109,363,958) (233,450,552) (233,584,063) (384,733,420)

Unrealised Appreciation ReserveAt the beginning of the year 593,779 882,340 - - Balance Transferred from Reserve Fund - - 46,442,526 69,012,433

Net Change in Unrealised Appreciation in Value of Investments and Derivatives Transferred from Revenue Account (Note 10) (288,814) (472,071) (45,848,747) (68,130,093) At the end of the year 304,965 410,269 593,779 882,340

Reserve FundAt the beginning of the year 476,691,236 756,580,894 85,326,978 130,519,284 Transferred to Unrealised Appreciation Reserve - - (46,442,526) (69,012,433)

(1,411,227,919) (2,200,988,022) 437,806,784 695,074,043 At the end of the year (934,536,683) (1,444,407,128) 476,691,236 756,580,894

TOTAL (1,043,595,676) (1,677,447,411) * 243,700,952 372,729,814 *


Growth Option : Rs. (633,851,735) 129,028,862 Dividend Option : Rs. (1,043,595,676) 243,700,952 Total : Rs. (1,677,447,411) 372,729,814


HSBC MUTUAL FUND - HSBC UNIQUE OPPORTUNITIES FUNDSchedules forming part of the Balance Sheet as at March 31, 2009




Investment Management and Advisory Fees 1,830,896 5,423,054 Transfer Agent Fees and Expenses 286,441 728,354 Custodian Fees and Expenses 92,378 315,519 Audit Fees 75,000 75,000 Selling and Distribution Expenses 2,095,904 3,857,602 Purchase Contracts Awaiting Completion -Equity Shares 98,536,378 24,185,614 Unit Redemptions Payable 1,574,814 12,616,980 Inter Scheme payable

- For 'Switch - Out' 823,338 1,210,701 - For 'Others' - - Unclaimed Redemption (Note 15) 155,411 80,842 Temporary Book Overdraft 972 - Sundry Payables 1,091,491 2,279,994

TOTAL 106,563,023 50,773,660


Rupees Rupees

Debentures / Bonds 442,959 - Commercial Paper / Certificate of Deposit 4,156,301 2,065,211 Reverse Repos 11,325,275 21,003,175 Collateralized Borrowing and Lending Obligation 5,896,045 2,324,672 Deposits 16,370,139 11,844,970 Margin Deposit with the Clearing Corporation of India Limited 340,443 355,782

TOTAL 38,531,162 37,593,810





Hero Honda Motors Limited @ 63,000 67,482,450 Maruti Suzuki India Limited @ 30,000 23,395,500

90,877,950 Banks (12.69 %)

Union Bank of India 364,419 53,514,930 State Bank of India @ 46,000 49,086,600 Bank of Baroda @ 200,000 46,870,000 ICICI Bank Limited @ 115,000 38,272,000 Punjab National Bank 87,000 35,796,150

223,539,680 Cement (5.19 %)

Jaiprakash Associates Limited 675,000 56,767,500 UltraTech Cement Limited @ 63,000 34,735,050



Consumer Non Durables (17.31 %)Colgate Palmolive India Limited 180,000 84,816,000 Shree Renuka Sugars Limited 750,000 68,400,000 United Spirits Limited 102,893 66,772,412 I T C Limited @ 320,300 59,207,455 Balrampur Chini Mills Limited 489,238 25,831,766

305,027,633 Diversified (2.43 %)




Bharat Heavy Electricals Limited 30,000 45,316,500 Kirloskar Pneumatic Company Limited 144,000 23,544,000


Jain Irrigation Systems Limited 126,000 43,066,800 Max India Limited 225,000 22,095,000


Dish TV India Limited 1,000,000 24,000,000 IBN18 Broadcast Limited 249,019 18,277,995

42,277,995 Oil (1.88 %)

Cairn India Limited @ 180,000 33,138,000 33,138,000

Petroleum Products (12.53 %)Reliance Industries Limited @ 81,000 123,504,750 Bharat Petroleum Corporation Limited 135,000 50,766,750 Indian Oil Corporation Limited 120,000 46,536,000


Lupin Limited 112,846 77,248,729 IPCA Laboratories Limited 136,108 44,976,889 Cipla Limited 150,600 33,139,530 Opto Circuits (India) Limited 240,000 24,120,000 Elder Pharmaceuticals Limited 110,412 23,931,801

203,416,949 Power (12.45 %)

GVK Power and Infrastructure Limited 3,000,000 70,200,000 Reliance Infrastructure Limited 120,000 61,866,000 CESC Limited 210,000 44,310,000 Power Grid Corporation of India Limited 450,000 43,020,000

219,396,000 Telecom - Services (5.35 %)

IDEA Cellular Limited @ 990,000 49,599,000 Mahanagar Telephone Nigam Limited 648,000 44,712,000



Jaiprakash Associates Limited - Futures - April 2009 (100 %) 126,000 10,647,000 Total 10,647,000

Deposits (5.92 %)^ Tenure Face Value5.25 % Standard Chartered Bank 182 60,000,000 7.5% Axis Bank 94 60,000,000 6.7 % Development Bank of Singapore 182 10,000,000 Total Deposits 130,000,000





Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial year for the investments held with them.



Rupees


Rupees

A. Cashflow from Operating ActivitiesDeficit / Surplus for the Year (2,557,117,982) 1,361,079,178 Initial Issue Expenses Charged to Revenue Account 76,576,635 125,457,206

Adjustments for:- (Increase)/Decrease in Investments at cost 3,006,498,810 1,182,299,405 (Increase)/Decrease in Other Current Assets 7,197,671 (8,002,673) Increase/(Decrease) in Current Liabilities (7,132,843) (263,764,900)

Net cash generated from/(used in) operations ( A ) 526,022,291 2,397,068,216

B Cashflow from Financing Activities Increase/(Decrease) in Unit Capital (958,656,439) (1,540,451,778) Increase/(Decrease) in Unit Premium 151,282,868 (384,723,066)

Adjustments for:- Increase/(Decrease) in Sundry Creditors for Units Redeemed by Investors (11,429,529) 13,009,974

Net cash (used in)/generated from financing activities ( B ) (818,803,100) (1,912,164,870)

Net Increase/(Decrease) in Cash and Cash Equivalents (A+B) (292,780,809) 484,903,346

Cash and Cash Equivalents as at the beginning of the Year 700,688,806 215,785,460 Cash and Cash Equivalents as at the close of the Year 407,907,997 700,688,806

Notes : March 31, 2009


Rupees

1 Components of cash and cash equivalents

Balances with banks in current accounts 494,022 7,589,052 Deposits with scheduled banks 130,000,000 160,000,000

35,000,000 20,000,000 Temporary Book Overdraft (972) Reverse Repo 103,807,591 473,099,754 Collateralised Borrowing and Lending Obligation 108,607,356 - Derivative Margin Deposit 30,000,000 40,000,000

407,907,997 700,688,806






PRICE WATERHOUSE


Trustee Director

Place: Mumbai

Date : 06 July 2009

Fund Manager(s)



Margin Deposit with Clearing Corporation of India Limited

HSBC MUTUAL FUND-HSBC UNIQUE OPPORTUNITIES FUND


SCHEDULE 9

Notes to the Financial Statements

1 Organisation

HSBC Unique Opportunities Fund (the “Scheme”) is a three year close-ended equity Scheme of HSBC Mutual Fund (the “Fund”) with automatic conversion into open-ended equity Scheme at the end of three years from the date of allotment of units. The Scheme was launched on February 2, 2007. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. At the end of three years from the date of allotment of units, the Scheme will automatically be converted into an open-ended scheme for the benefit of providing investors the facility of purchase and redemptions on any business day, without any further reference from the Fund /Board of Trustees of the Fund, subject to the Securities and Exchange Board of India (Mutual Funds) Regulations 1996 and amendments thereto as applicable. However, the Board of Trustees of the Fund reserves the right of not converting the Scheme into an open-ended Scheme, if deemed appropriate to protect the interest of the Scheme/investors. The Scheme closed for initial subscription on February 26, 2007, and reopened for redemption of units on March 28, 2007. The investment objective of the Scheme is to provide long term capital growth from a diversified portfolio of equity and equity related instruments with focus on investing in stocks of companies facing “out-of-ordinary” conditions. The Scheme has two Options - Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.







price on the National Stock Exchange of India Limited (NSE). If on a particular valuation date, a security is not traded on NSE, the value at which it is traded on the Bombay Stock Exchange Limited (BSE) is used. If no sale is reported at that time, the last quoted closing price on the principal stock exchange on which the security is traded is used when it is not more than thirty days prior to the valuation date.








vi. Equity securities awaiting listing are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.



interest up to the date of resale. Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments and derivatives is determined separately for each category of investments and derivatives. In respect of each category of investments and derivatives, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme






Dividend and Interest income are recorded on an accrual basis.

2.5 Derivatives The Scheme enters into derivative transactions in equity/ index futures for the purpose of hedging and portfolio balancing.

“Derivative margin deposits” representing the margin towards equity derivative contracts entered into by the Scheme are disclosed under “Other Current Assets”

Futures



Initial issue expenses of upto 4% of the amount mobilized during the initial offer period comprising advertising, brokerage, business promotion, marketing, printing, distribution and other miscellaneous expenses were borne by the Scheme and are being amortized over a period of three years from the date of allotment of units. Expenses over and above 4% were borne by the asset management company.





2.8 Unit Premium Reserve Upon redemption of units, the net premium or discount to the face value of units is adjusted against the

unit premium reserve of the Scheme. The unit premium reserve is available for dividend distribution except to the extent it is represented by

unrealized net appreciation in value of investments and derivatives.



The Scheme has paid or provided for investment management and advisory fees payable to HSBC Asset Management (India) Private Limited for managing the Scheme at an average annual rate of 1.02% of the average daily net asset value recorded by the Scheme. All costs, charges and expenses incurred by HSBC Asset Management (India) Private Limited in the administration and execution of the activities of the Scheme, except costs allowed to be charged to the Scheme under the Regulations, are on their own account for which they receive investment management and advisory fees.

4 Trusteeship Fees

In accordance with the Deed of Trust dated February 7, 2002 between HSBC Securities and Capital Markets (India) Private Limited (“The Settlor”) and the Board of Trustees of HSBC Mutual Fund, the Fund has paid or provided for a fee not exceeding Rs.20,000 for each meeting of the Board of Trustees attended by such Trustee not affiliated with the Settlor

5 Custodian Fees


6 Income Taxes




7. Limitation on Expenses

The total expenses excluding deferred revenue expenditure, chargeable to the Scheme are limited to 2.20% of the average daily net assets of the Scheme. HSBC Asset Management (India) Private Limited has borne Rs. 660,110 in respect of the Scheme in excess of the above mentioned percentage of the average daily net assets to be charged to the Scheme as total expenses for the year.

8 Aggregate Appreciation and Depreciation in Value of Investments and Derivatives

Aggregate appreciation and depreciation in value of investments are as follows:

March 31, 2009


(Rupees) Equity Shares -Appreciation 125,878,670 178,066,434 -Depreciation 435,753,845 844,071,569 Equity Futures -Appreciation 410,269 882,340 -Depreciation - -


The aggregate value of investments securities purchased and sold (including matured) during the financial period (excluding accretion of discount of Rs. 4,156,301) is Rs. 5,878,551,559 and Rs. 6,358,764,847 respectively being 168.32 % and 182.07 % of the average daily net assets.


The total income (including net loss on sale of investments and net change in unrealized depreciation in the value of investments and derivatives) and expenditure (excluding deferred revenue expenditure amortized) during the year is Rs. (2,066,961,417) and Rs. 76,659,319 being (59.18) % and 2.20 % respectively of the average daily net assets.


Futures Details of open interest in equity futures as at March 31, 2009

Underlying Asset's Name Number of contracts Units Outstanding Long/(Short)

Jaiprakash Associates Limited 28

126,000



Notional value of futures contracts bought/ (sold) by the Scheme and outstanding as on March 31, 2009 aggregates to Rs. 10,647,000

Net Profit/ (Loss) on futures transactions recognized in the Revenue Account for the year ended March 31, 2009 aggregates to Rs. (57,557,646).

12 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual Funds) Regulation, 1996 as amended and in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India (ICAI)






HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46



HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai*– Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008



Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.



III During the year, HSBC Securities and Capital Markets (India) Private Limited, the Sponsor was paid brokerage aggregating Rs. 435,189 on purchase and sale of investments. The Hongkong and Shanghai Banking Corporation Limited, an associate entity of HSBC Asset Management (India) Private Limited was paid brokerage amounting to Rs. 6,446,967 for procuring unit subscriptions for the Scheme and clearing member charges on derivative transactions Rs. 565,239. The brokerage paid was at rates similar to those offered to other brokers / distributors.

Further, The Hong Kong and Shanghai Banking Corporation Limited, an associate of the Sponsor, is on the panel of bankers with whom HSBC Mutual Fund places money on fixed deposits and enters into reverse repo transactions from time to time at competitive rates.







15 Unclaimed Redemptions: As at March 31, 2009, unclaimed redemptions aggregate Rs. 155,411 payable to 2 investors.




Previous year’s figures have been re-grouped / re-arranged where appropriate. Signatures to the Schedules 1 to 9 forming part of the Balance Sheet and the Revenue Account




Trustee


Trustee

Director


Fund Manager(s)



Annexure 1


Nature of Transaction SponsorInvestment

Manager


Manager


Sponsor


Relatives Total


Sale of Investments - - - 193,458,585 - 193,458,585 Previous Year - - - 2,148,174,843 - 2,148,174,843



Brokerage/ Commission on Purchase/Sale of Investments 435,189 - 10,488 - - 445,677 Previous Year 1,985,000 - - - - 1,985,000



Reimbursment of Expenses - 660,110 - - - 660,110 Previous Year - 1,548,690 - - - 1,548,690



Charges for Services Provided by Bank - - - - - - Previous Year - - 918 - - 918



Manager


Manager


Sponsor


Relatives Total



Units Outstanding As At Year End - - - - - - Previous Year - - - - 118,487 118,487

Other Receivables - 664,652 - - - 664,652 Previous Year - 1,976,346 - 6,000,000 - 7,976,346


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 198,541,455 - HSBC Cash Fund 89,204,870 - HSBC Fixed Term Series 54 88,656,850

Sale of InvestmentsHSBC Fixed Term Series 58 125,742,234 - HSBC Fixed Term Series 44 48,185,937 - HSBC Fixed Term Series 55 19,530,414 - HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) - 1,155,356,357 HSBC Cash Fund - 896,721,199

Sale of Mutual Fund Units (including switch out) - - HSBC Cash Fund - 450,735,661

Other Receivables - HSBC Dynamic Fund - 6,000,000


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Units Outstanding As At Year EndSanjay Prakash - 107,715

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Dynamic Fund ("The Scheme") as at March 31, 2009 and the related Revenue Account for year ended on that date, both of which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.





4. In our opinion and to the best of our information and according to the explanations given to us, (i) The Balance Sheet and the Revenue Account together with the notes thereon give the information

required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Dynamic Fund as at March 31, 2009 and its net deficit for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March 31, 2009, together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.

(iii) The method used to value non traded and thinly traded debt securities in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.

PARTHA GHOSH Partner Membership No. F/55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009


ASSETS

Investments 1 1,813,832,700 3,992,268,295

Deposits 2 261,000,000 146,000,000


TOTAL 2,393,748,218 4,351,193,605

LIABILITIES

Unit Capital 4 3,711,200,832 4,192,933,701

Reserves and Surplus 5 (1,369,862,489) (140,087,228)


TOTAL 2,393,748,218 4,351,193,605



Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.6) 1,200,245,402 1,141,092,941 2,341,338,343 1,981,587,812 2,071,258,661 4,052,846,473







Trustee Director

Place: Mumbai



HSBC MUTUAL FUND - HSBC DYNAMIC FUND


0

April 01, 2008 to August 03, 2007 toMarch 31, 2009 March 31, 2008


INCOME AND GAINS

Dividends (Note 2.4) 33,617,528 3,275,940


Net Profit on Sale of Investments and Derivatives (Note 2.3 and 2.5) - 301,027,092

TOTAL 100,946,073 373,688,168

EXPENSES AND LOSSES


(Including Net Loss on Inter-Scheme Sale of Investments Rs. (7,648,689) (Previous period: Rs Nil)) (Note 2.3)





Audit Fees 100,000 50,000



TOTAL 1,724,262,899 60,112,160

Net Realised (Losses)/Gains for the Year/Period (1,623,316,826) 313,576,008

Net change in Unrealised Depreciation in Value of Investments and Derivatives 302,654,251 (399,537,894)

Net Losses for the Year/Period (1,320,662,575) (85,961,886)

April 01, 2008 to August 03, 2007 toMarch 31, 2009 March 31, 2008

Total TotalRupees Rupees

Net (Deficit) for the Year/Period (1,320,662,575) (85,961,887)

Transfer from Income Equalisation Reserve 91,608,166 (11,091,064)

Balance transferred to Reserve Fund (1,229,054,409) (97,052,951)




Vikramaaditya


Trustee Director

Place: Mumbai





1

SCHEDULE 1 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Investments Market/Fair Value Cost Market/Fair Value Cost(Notes 2.2, 2.3, 7, 8, 9 and 13) Rupees Rupees Rupees Rupees


Equity Shares 1,655,767,413 1,750,429,287 2,837,700,186 3,235,747,059

Non Convertible Debentures and Bonds Listed / Awaiting Listing 158,065,287 159,421,648 528,610,517 529,763,635

Privately Placed Non Convertible Debentures / Bonds - - 230,219,121 230,225,193

Certificate of Deposit - - 395,738,471 395,738,471

TOTAL 1,813,832,700 1,909,850,935 3,992,268,295 4,391,474,358



Margin Deposit with Clearing Corporation of India towards Reverse Repos and Governement Securities 15,000,000 -

TOTAL 261,000,000 146,000,000


Balances with Banks- in Current Account 884,945 1,969,336




Reverse Repos 87,439,975 11,255,396

Unit Subscriptions Receivable 915,100 5,413,500

Inter-Scheme Receivable - For Switch - In 4,660,043 1,790,942 - For Others - 2,000


Interest Receivable on :- Debentures / bonds 5,790,231 32,796,759 - Deposits 3,404,334 2,508,000 - Reverse Repos 11,252 2,479 - Collateralised Borrowing and Lending Obligation 11,208 - - Margin Deposits for Reverse Repo and Government Securities 84,020 -

Receivable on Outstanding Equity Future Contracts - 7,810,689

Receivable from Investment Manager 514 314,738

Investment Towards Unclaimed Redemption [(in 9,009.782 Units (Previous year: Nil units) (Market Value Rs. 1,31,312 (Previous year: Nil)) of HSBC Cash Fund - Growth Option) (Note 14)] 127,659 -

TOTAL 318,915,518 212,925,310




2


Growth Option



Outstanding:

Initial Issue and Subscription - - 2,243,747,884 224,374,788.387

At the beginning of the year / period 2,050,089,279 205,008,927.831 - -

Issued during the year / period 155,554,534 15,555,453.448 374,072,286 37,407,228.589

2,205,643,813 220,564,381.279 2,617,820,170 261,782,016.976

Redeemed during the year / period 303,162,804 30,316,280.414 567,730,891 56,773,089.145

At the end of the year / period 1,902,481,009 190,248,100.865 2,050,089,279 205,008,927.831

Dividend Option



Outstanding:

Initial Issue and Subscription - - 2,334,936,263 233,493,626.288



2,269,000,533 226,900,053.400 2,695,501,025 269,550,102.530


At the end of the year / period 1,808,719,823 180,871,982.404 2,142,844,422 214,284,442.273

TOTAL 3,711,200,832 371,120,083.269 4,192,933,701 419,293,370.104

SCHEDULE 5 Dividend Option Total Dividend Option TotalReserves and Surplus March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008



At the beginning of the year / period (27,983,977) (43,034,277) - -

Added during the year / period (454,852) (720,852) (27,983,977) (43,034,277)

At the end of the year / period (28,438,828) (43,755,129) (27,983,977) (43,034,277)


Added during the year / period 64,680,041 91,608,166 (8,093,796) (11,091,064)

Transferred to Revenue Account (64,680,041) (91,608,166) 8,093,796 11,091,064

At the end of the year / period - - - -

Reserve Fund

At the beginning of the year / period (43,601,784) (97,052,951) - -

Balance Transferred from Revenue Account (595,586,269) (1,229,054,409) (43,601,784) (97,052,951)

At the end of the year / period (639,188,053) (1,326,107,360) (43,601,784) (97,052,951)

TOTAL (667,626,881) (1,369,862,489) * (71,585,761) (140,087,228) *


Growth Option : Rs. (702,235,607) (68,501,467) Dividend Option : Rs. (667,626,882) (71,585,761) Total : Rs. (1,369,862,489) (140,087,228)




3






Audit Fees 100,000 50,000




Inter Scheme payable

- For 'Switch - Out' 2,013,818 3,085,748

- For 'Others' - 6,506,000

Payable on Outstanding Equity Future Contracts 988,405 -

Dividend Payable - -

Unclaimed Redemption (Note 14) 286,239 -

Temporary Book Overdraft 7 773



TOTAL 52,409,875 298,347,131

SCHEDULE 7 April 01, 2008 to August 03, 2007 toInterest and Discount (Note 2.4) March 31, 2009 March 31, 2008

Rupees Rupees

Debentures / Bonds 17,340,340 10,185,085

Commercial Paper / Certificate of Deposit 11,956,445 12,610,807

Reverse Repos 9,078,272 36,498,288

Collateralized Borrowing and Lending Obligation 6,547,272 1,197,339

Government Securities 2,210,750 -

Deposits 20,111,446 8,893,617

Margin Deposit for Reverse Repo and Government Securities 84,020 -

TOTAL 67,328,545 69,385,136




4

Annexure 1



Investment Manager


Sponsor Total

Purchase of Investments - - - 2,285,159,407 2,285,159,407 Previous Year - - - 6,331,000,445 6,331,000,445

Sale of Investments - - - 3,383,370,888 3,383,370,888 Previous Year - - - 2,814,486,072 2,814,486,072

Investment Management and Advisory Fees - 33,826,891 - - 33,826,891 Previous Year - 29,365,941 - - 29,365,941

Brokerage/ Commission on Distribution of Units - - 6,097,974 - 6,097,974 Previous Year - - 36,171,822 - 36,171,822

Brokerage/ Commission on Purchase/ Sale of Investments 750,929 - - - 750,929 Previous Year 747,000 - - - 747,000

Clearing Charges - - 1,169,577 - 1,169,577 Previous Year - - 742,479 - 742,479

Charges for Services Provided by Bank - - 1,292 - 1,292 Previous Year - - 8,379 - 8,379



Investment Manager


Sponsor Total

Investment Management and Advisory Fees Payable - 2,145,701 - - 2,145,701 Previous Year - 3,763,875 - - 3,763,875

Brokerage/ Commission Payable for Distribution of Units - - 593,189 - 593,189 Previous Year - - 1,135,952 - 1,135,952

Other Payables - 204 - - 204 Previous Year - - - 6,506,000 6,506,000

Other Receivables - 718 - - 718 Previous Year - 314,738 - 2,000 316,738


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 993,429,891 1,223,902,265 HSBC Cash Fund 491,828,135 3,338,047,042 HSBC Fixed Term Series 46 229,242,575 - HSBC Interval Fund - Plan I - 703,942,973

Sale of InvestmentsHSBC Cash Fund 2,454,382,683 2,286,758,836 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 535,205,517 451,507,369

Other PayablesHSBC Unique Opportunities Fund - 6,000,000

Other ReceivablesHSBC Tax Saver Equity Fund - 2,000

5

Description Quantity Market /Fair ValueRupees

Equity Shares (91.29 %)Auto (4.66 %)


Banks (14.32 %)HDFC Bank Limited @ 87,000 84,685,800 State Bank of India @ 50,000 53,355,000 ICICI Bank Limited @ 153,000 50,918,400 Punjab National Bank 117,000 48,139,650



Consumer Non Durables (19.35 %)I T C Limited @ 945,000 174,683,250 United Spirits Limited 117,000 75,927,150 Colgate Palmolive India Limited 148,000 69,737,600

320,348,000 Diversified (5.16 %)


Industrial Capital Goods (4.93 %)Bharat Heavy Electricals Limited 54,000 81,569,700

81,569,700 Oil (7.60 %)



Reliance Industries Limited @ 81,000 123,504,750 Hindustan Petroleum Corporation Limited 200,000 53,850,000


Lupin Limited 91,232 62,452,866 Cipla Limited 263,162 57,908,798 IPCA Laboratories Limited 104,929 34,673,788

155,035,452 Power (6.28 %)

Power Grid Corporation of India Limited 630,000 60,228,000 CESC Limited 207,000 43,677,000

103,905,000 Software (4.68 %)


Telecom - Services (10.04 %)Bharti Airtel Limited @ 190,500 119,205,375 IDEA Cellular Limited @ 937,695 46,978,520

166,183,895 Total (Cost Rs. 1,750,429,287) 1,655,767,413

Non-Convertible Debentures / Bonds Listed / Awaiting listing (8.71 %)Petroleum Products (35.54 %)

11.00% Indian Oil Corporation Limited 2018 $ 50 56,180,578 56,180,578

Finance (58.65 %)8.70% Power Finance Corporation Limited 2010 10 10,160,470 11.45% Rural Electrification Corporation Limited 2010 $ 11 11,636,459 8.65% Rural Electrification Corporation Limited 2019 20 19,426,300 9.45% Rural Electrification Corporation Limited 2013 50 51,475,200

92,698,429 Finance & Term Lending (5.81 %)

9.15% National Bank For Agricultural and Rural Development Limited 2010 $ 9 9,186,280 9,186,280

Total (Cost Rs. 159,421,648) 158,065,287 TOTAL INVESTMENTS (Cost Rs. 1,909,850,935) 1,813,832,700

Equity DerivativesShort Futures(100 %)

Bharti Airtel Limited - Futures - April 2009 (42.30 %) 32,000 19,897,600 S&P CNX Nifty - Futures - April 2009 (57.70 %) 9,000 27,137,250

Total 47,034,850

Deposits (10.51 %)^ Tenure Face Value6.3 % Standard Chartered Bank 91 100,000,000 7.5 % Axis Bank 92 90,000,000 7.2 % Development Bank of Singapore 178 40,000,000 6.7 % Development Bank of Singapore 182 16,000,000 Total Deposits 246,000,000


$ Fair value of non traded and thinly traded debt securities as determined by HSBC Asset Management (India) Private Limitedunder procedures approved by the Board of Trustees in accordance with the guidelines for valuation of securities for Mutualfunds dated Septrmber 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India.

@ Investment in companies which have invested more than five percent of the net asset value of any schemes of HSBC MutualFund.

Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial period for theinvestments held by them.




6

HSBC MUTUAL FUND-HSBC DYNAMIC FUND


SCHEDULE 8


1 Organisation

HSBC Dynamic Fund (the “Scheme”) is an open-ended scheme of HSBC Mutual Fund (the “Fund”) and was launched on August 03, 2007. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on August 30, 2007 and reopened for issue and redemption of units on September 28, 2007. The investment objective of the Scheme is to provide long term capital appreciation by allocating funds in equity and equity related instruments and also has the flexibility to move, entirely if required, into debt instruments when the view on equity markets seems negative. The Scheme has two Options – Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.








ii. Non-traded and thinly traded equity securities, including those not traded within thirty days prior to the valuation date are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).



iii. Equity shares awaiting listing are valued at fair value as determined in good faith by HSBC


iv. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on the National Stock Exchange of India Limited (NSE). If no sale is reported at that time, such securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

v. Government securities are valued at prices obtained from The Credit Rating Information Services of India Limited in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by SEBI.

vi. Non-traded and thinly traded debt securities are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).

vii. Privately placed debt securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

viii. Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

ix. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable interest up to the date of resale.











Futures








The unit premium reserve is available for dividend distribution except to the extent it is represented by unrealized net appreciation in value of investments.











4 Trusteeship Fees



Fund has paid or provided for a fee not exceeding Rs.20,000 for each meeting of the Board of

Trustees attended by such Trustee not affiliated with the Settlor

5 Custodian Fees


6 Income Taxes






March 31, 2009 (Rupees)


Equity Shares -Appreciation 103,451,368 49,719,389 -Depreciation 198,113,243 447,766,262 Non Convertible Debentures and Bonds Listed / Awaiting Listing

-Appreciation 384,760 5,034

-Depreciation 1,741,120 1,158,154

Privately Placed Non Convertible Debentures / Bonds

- Appreciation - -

- Depreciation - 6,072

Equity Futures -Appreciation - 163,025

-Depreciation 865,408 494,855

8 Aggregate Fair Value of Non – Traded/ Privately Placed Investments Aggregate fair value of non-traded (including private placement) investments as determined by HSBC Asset Management India Private Limited under the procedures approved by the Board of Trustees as at March 31, 2009 is Rs. 77,003,317.


The aggregate value of investments securities purchased and sold during the financial year (excluding

accretion of discount of Rs. 11,758,508) is Rs. 10,072,387,041 and Rs. 10,882,064,228 respectively being

321.53% and 347.37% of the average daily net assets.


The total income (including net loss on sale of investments and derivatives and net change in unrealized

depreciation in the value of investments and derivatives) and expenditure during the year is

Rs.(1,247,677,788) and Rs. 72,984,787 respectively being (39.83) % and 2.33 % of the average daily net

assets.





Underlying Asset's Name Number of contracts Units Outstanding Short

Bharti Airtel Limited 64 (32,000)

S&P CNX Nifty 180 (9,000)

Notional value of futures contracts sold by the Scheme and outstanding as on March 31, 2009 aggregates to Rs. 47,034,850.

Net Profit on futures transactions recognized in the Revenue Account for the year ended March 31, 2009

aggregates to Rs. 32,507,071. 12 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual Funds )

Regulation, 1996 as amended and in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India (ICAI)

The Scheme has entered into transactions with certain related parties. The information required in this regard in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India and regulation 25(8) of SEBI Regulation, is provided below : I Related Party Relationships




HSBC Advantage India Fund HSBC Cash Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30



HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund




Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai* – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.




brokerage aggregating Rs. 750,929 on purchase and sale of investments. The Hong Kong & Shanghai

Banking Corporation Limited, an associate entity of HSBC Asset Management (India) Private

Limited was paid collection/bank charges amounting to Rs. 1,292 and brokerage amounting to Rs.

6,097,974 for procuring unit subscriptions for the Scheme and clearing member charges on derivative

transactions Rs. 1,169,577. The brokerage paid was at rates similar to those offered to other brokers /

distributors.

13 Disclosure under Regulation 25(11) of the Securities and Exchange Board of India (Mutual Funds)

Regulations, 1996 as amended

HSBC Mutual Fund has made investments in companies, which hold/ have held units in excess of 5% of the net asset value of any Scheme of HSBC Mutual Fund which have been listed in Annexure II. The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other debt instruments and were made solely on the basis of sound fundamentals of these companies.



14 Unclaimed Redemptions:

As at March 31, 2009, unclaimed redemptions aggregate Rs. 286,239 payable to 13 investors.


Previous year’s figures have been re-grouped / re-arranged where appropriate.





Trustee


Trustee

Director


Fund Manager(s)

Auditors' Report To the Board of Trustees of

HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Emerging Markets Fund ("The Scheme") as at

March 31, 2009 and the related Revenue Account for the year ended on that date, both of which we have signed

under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC

Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our

responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards

require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts

and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit

balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agent

respectively. An audit also includes assessing the accounting principles used and significant estimates made by the

Management as well as evaluating the overall financial statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary

for the purpose of our audit. The Balance Sheet and the Revenue Account referred to above are in agreement with

the books of account of the Scheme.


(i) The Balance Sheet and the Revenue Account together with the notes thereon give the information required

by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto,

as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund –

HSBC Emerging Markets Fund as at March 31, 2009 and its net deficit for the year on that date.


together with the notes thereon have been prepared in all material respects in accordance with the

accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of

India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.

PARTHA GOSH Partner Membership No. F/55913


PRICE WATERHOUSE


Place: Mumbai

Date: July 06, 2009


ASSETS

Investments 1 809,542,445 498,340,557


TOTAL 851,507,514 1,064,758,901

LIABILITIES

Unit Capital 3 1,352,253,861 1,022,632,022



TOTAL -0.57 851,507,514 1,064,758,901


RECONCILIATION OF NET ASSET VALUE PER UNIT Growth Option Dividend Option Total Growth Option Dividend Option Total


Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions) (Note 2.6) 527,343,177 318,541,598 845,884,775 613,973,190 411,732,329 1,025,705,519








PRICE WATERHOUSE


Trustee Director

Place: Mumbai



HSBC MUTUAL FUND - HSBC EMERGING MARKETS FUND


0

April 01, 2008 to January 28, 2008 toMarch 31, 2009 March 31, 2008


INCOME AND GAINS

Interest 6 5,738,739 5,966,240

Realised Profit on Foreign Currency Transactions (Note 2.3 ) - 1,000,000

TOTAL 5,738,739 6,966,240

EXPENSES AND LOSSES

Realised Loss in Foreign Currency Transaction (Note 2.3) 43,989

Net Loss on Sale of Investments (Note 2.4) 10,508,992 59,842

Investment Management and Advisory Fees (Note 3) 501,942 63,544

Transfer Agent Fees and Expenses 1,571,475 47,212

Trusteeship Fees and Expenses (Note 4) 4,151 342


Audit Fees 25,000 10,000

Selling and Distribution Expenses 8,294,732 161,131

Other Operating Expenses 775,054 151,722

TOTAL 22,010,184 507,472

Less: Expenses to be Reimbursed by the Investment Manager (Note 7) 3,934,805 90,641

TOTAL 18,075,379 416,831

Net Realised (Losses)/Gains for the Year/Period (12,336,640) 6,549,409

Net Change in Unrealised Depreciation in Value of Investments and Foreign Currency Transactions (497,585,301) (3,471,943)

Net (Deficit) / (Surplus) for the Year/Period (509,921,941) 3,077,466


Rupees Rupees

Net (Deficit)/Surplus for the Year/Period (509,921,941) 3,077,466

Transfer from Income Equalisation Reserve (Note 2.8) (25,485,078) 33,151

Balance Transferred to Reserve Fund (535,407,019) 3,110,617






PRICE WATERHOUSE


Trustee Director

Place: Mumbai





1

SCHEDULE 1 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Investments Market Value Cost Market Value Cost(Notes 2.2, 2.3, 2.4, 8 and 9) Rupees Rupees Rupees Rupees


Units in Mutual Fund 809,542,445 1,310,418,805 498,340,557 501,812,500

TOTAL 809,542,445 1,310,418,805 498,340,557 501,812,500


Balances with Banks - in Current Account 19,924,496 8,942,674

Reverse Repos 8,662,658 554,641,829

Collateralized Borrowing and Lending Obligation 9,063,093 -

Unit Subscription Receivable 314,500 1,871,500

Inter-Scheme Receivable :- Switch-in 61,534 - - Others - 693,892

Interest Receivable on:- Reverse Repos 1,115 122,118 - Collateralized Borrowing and Lending Obligation 1,110 -


TOTAL 41,965,069 566,418,344




2


Growth Option


Units of Rs.10 each fully paid up 612,212,613 61,221,261.269 612,212,613 61,221,261.269

Outstanding:

Initial Issue and Subscription - - 612,212,613 61,221,261.269

At the beginning of the year / period 612,133,437 61,213,343.633 - -

Issued during the year / period 420,926,157 42,092,615.754 2,246,558 224,655.809

1,033,059,594 103,305,959.387 614,459,171 61,445,917.078

Redeemed during the year / period 190,034,747 19,003,474.654 2,325,734 232,573.445

At the end of the year / period 843,024,847 84,302,484.733 612,133,437 61,213,343.633

Dividend Option



Outstanding:



Issued during the year / period 220,579,637 22,057,963.784 1,730,843 173,084.262

631,078,222 63,107,822.294 410,888,829 41,088,882.900

Redeemed during the year / period 121,849,208 12,184,920.802 390,244 39,024.390


TOTAL 1,352,253,861 135,225,386.225 1,022,632,022 102,263,202.143

HSBC MUTUAL FUND - HSBC EMERGING MARKETS FUNDSchedules forming part of the Balance Sheet as at March 31, 2009


3

SCHEDULE 4 Total TotalReserves and Surplus March 31, 2009 March 31, 2008

Rupees Rupees


At the beginning of the year / period (37,120) -

Added during the year / period 25,964,437 (37,120)

At the end of the year / period 25,927,317 (37,120)


Added during the year / period (25,485,078) 33,151

Transferred to Revenue Account 25,485,078 (33,151)

At the end of the year / period - -

Reserve Fund

At the beginning of the year / period 3,110,617 -

Balance Transferred from Revenue Account (535,407,020) 3,110,617

At the end of the year / period (532,296,403) 3,110,617

TOTAL (506,369,086) * 3,073,497 *


Growth Option : Rs. (315,681,670) 1,839,753

Dividend Option : Rs. (190,687,416) 1,233,744

Total : Rs. (506,369,086) 3,073,497




4


Current Liabilities

Investment Management and Advisory Fees 27,627 63,544



Audit Fees 25,000 10,000



Inter Scheme Payable - For 'Switch-Out' 2,181,084 483,672 - For 'Others' 40,000 9,050,685

Initial Issue and Subscription Money Refundable - 3,587,035


Sundry Payables 216,502 219,763

TOTAL 5,622,739 39,053,382

SCHEDULE 6 April 01, 2008 to January 28, 2008 toInterest (Note 2.5) March 31, 2009 March 31, 2008

Rupees Rupees

Reverse Repos 5,086,361 3,430,705

Collateralized Borrowing and Lending Obligation 652,378 2,535,535

TOTAL 5,738,739 5,966,240



5

Annexure 1

(i) Transactions during the Year/ Period


Investment Manager


Sponsor

Key Management Personnel and their Relatives Total

Subscription of Units (including switch in and dividend reinvestment) - - - - 36,000 36,000 Previous Period - - - - - -

Investment Management and Advisory Fees - 501,942 - - - 501,942 Previous Period - 63,544 - - - 63,544

Brokerage/ Commission on Distribution of Units - - 16,768,200 - - 16,768,200 Previous Period - - - - - -

Reimbursement of Expenses - 3,934,805 - - - 3,934,805 Previous Period - 90,641 - - - 90,641

Charges for Services Provided by Bank - - 3,612 - - 3,612 Previous Period - - 100 - - 100

(ii) Outstanding As At Year/ Period End


Investment Manager


Sponsor

Key Management Personnel and their Relatives Total

Investment Management and Advisory Fees Payable - 27,627 - - - 27,627 Previous Period - 63,544 - - - 63,544

Brokerage/ Commission Payable on Distribution of Units - - 406,698 - - 406,698 Previous Period - - 13,796,594 - - 13,796,594

Other Payables - - - 40,000 - 40,000 Previous Period - - - 9,050,685 - 9,050,685

Other Receivables - 3,936,564 - - - 3,936,564 Previous Period - 146,331 - 693,892 - 840,223

(iii) Details of material transactions with respect to parties referred to in Note 13 (I)(iv) for Schemes under common control of the Sponsor.

April 01, 2008 to March 31, 2009

January 28, 2008 to March 31, 2008

Other PayablesHSBC Small Cap Fund 35,000 - HSBC Midcap Equity Fund 5,000 - HSBC Fixed Term Series 49 - 8,317,370

Other ReceivablesHSBC Small Cap Fund - 683,892


April 01, 2008 to March 31, 2009

January 28, 2008 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Sanjay Prakash 36,000 -

6

Description Quantity Market ValueUnits Rupees

Mutual Fund Units (100 %) HSBC GIF Global Emerging Markets Equity Fund 3,353,571 809,542,445

809,542,445 Total (Cost Rs. 1,310,418,805) 809,542,445 TOTAL INVESTMENT (Cost Rs. 1,310,418,805) 809,542,445

Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch, at the end of the financialyear for the investments held by them.

for the year ended March 31, 2009 )




7



SCHEDULE 7


1 Organisation

HSBC Emerging Markets Fund (the “Scheme”) is an open-ended scheme of HSBC Mutual Fund (the “Fund”) and

was launched on January 28, 2008. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital

Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the

Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is

perpetual. The Scheme closed for initial subscription on February 25, 2008 and reopened for issue and redemption

of units on March 24, 2008. The investment objective of the Scheme is to provide long term capital appreciation

by investing in India and in the emerging markets, in equity and equity related instruments, share classes and units

/ securities issued by overseas mutual funds or unit trusts. The Scheme may also invest a limited proportion in

debt and money market instruments. The Scheme has two Options - Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on

such units will remain invested within the Scheme and will be reflected in the net asset value.



The Scheme maintains its books of account on an accrual basis. These financial statements have been prepared in

accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and

Exchange Board of India (Mutual Funds) Regulations, 1996 (the “Regulation”) and amendments thereto, as

applicable.


Investments are stated at market/fair value at the Balance Sheet date/date of determination. In valuing the

Scheme’s investments:

i. Units in mutual fund are valued at the net asset value of the investee scheme.

ii. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable interest up to the

date of resale.

iii. Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is

reported at that time such security is valued at the last traded price plus accretion of difference between the face

value and last traded price. Non traded money market instruments are valued at cost price plus accrued interest.

Following the issue of guidance note on accounting for investments in the financial statements of the mutual

funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations)

net unrealised appreciation / depreciation in the value of investments is determined separately for each category

of investments. In respect of each category of investments, the net change in the unrealised appreciation if any,

between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the

net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The

net depreciation if any, is accounted through the Revenue Account.



Net unrealised appreciation is reduced from the distributable income at the time of income distribution.

The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of

being first being adjusted against the provision for depreciation, if already created in the previous year/period as

recommended in the Guidance Note. However the departure from the Guidance Note does not have any net

impact on the net asset value of the options of the Scheme.

2.3 Foreign Currency Translation

The books and records of the Fund are maintained in Indian rupees. Amounts denominated in or expected to

settle in foreign currencies are translated into Indian rupees on the following basis.

(i) Market value of investments, other assets and liabilities at the closing rate of exchange on the Balance

Sheet date / valuation date.

(ii) Purchases and sales of investments, income and expense at the rate of exchange prevailing on the

respective date of such transactions.

The Fund does not isolate that portion of the change in investment valuation resulting from changes in the

foreign exchange rates from the fluctuations arising from changes in the local market prices of securities held.

Such fluctuations are included in unrealised appreciation or depreciation on investments.

Net realised foreign exchange gains and losses arise from sales of foreign currency denominated securities,

currency gains or losses realised between trade and settlement dates of foreign currency denominated securities

transactions and the difference between the recorded amounts of foreign currency denominated dividends,

interest and expenses recorded in the Fund’s books and the Indian rupee equivalent amounts actually received

or paid. Net unrealised foreign exchange gains and losses arising from changes in value of assets and liabilities

denominated in foreign currency resulting from changes in foreign exchange rate are included in net unrealised

appreciation or depreciation in value of investments and foreign currency denominated assets and liabilities.


Investment securities transactions are accounted for on a trade date basis. The Scheme uses the average cost

method for determining the realized gain or loss on sale of investments.


Interest income is recorded on an accrual basis.

2.6 Net Asset Value for Growth / Dividend Options

The net asset value of the units of the Scheme is determined separately for units issued under the Growth and

Dividend Options. For reporting the net asset value for the Options, daily income earned, including realized and

unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the

Options in proportion to the value of the units outstanding.

2.7 Unit Premium Reserve

Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the

unit premium reserve of the Scheme after an appropriate portion of the issue proceeds and redemption payout is

credited or debited respectively to the income equalization reserve.



The unit premium reserve is available for dividend distribution except to the extent it is represented by unrealized

net appreciation in value of investments.


The net distributable income relating to units issued / repurchased is transferred to / from income equalization

reserve for determining the net surplus / deficit, transferred from / to unit premium reserve.

2.9 Load Charges

Load collected is retained under a separate account in the Scheme and is used to meet the selling and distribution

expenses.



Management (India) Private Limited for managing the Scheme at an average annual rate of 0.05 % of the average

daily net asset value recorded by the Scheme. All costs, charges and expenses incurred by HSBC Asset

Management (India) Private Limited in the administration and execution of the activities of the Scheme, except

costs allowed to be charged to the Scheme under the Regulations, are on their own account for which they receive

investment management and advisory fees.

4 Trusteeship Fees

In accordance with the Deed of Trust dated February 7, 2002 between HSBC Securities and Capital Markets

(India) Private Limited (“The Settlor”) and the Board of Trustees of HSBC Mutual Fund, the Fund has paid or

provided for a fee not exceeding Rs. 20,000 for each meeting of the Board of Trustees attended by such Trustee

not affiliated with the Settlor.

5 Custodian Fees

JP Morgan Chase Bank provides custodial services to the Scheme for which it receives custody fees including

safekeeping.

6 Income Taxes

No provision for income tax is made as the Scheme qualifies as a recognized mutual fund under Section 10(23D)

of the Income Tax Act, 1961 of India.

7 Limitation on Expenses

The total expenses chargeable to the Scheme are limited to 0.75 % of the average daily net assets of the Scheme. HSBC Asset Management (India) Private Limited has borne Rs.39,34,805 in respect of the Scheme in excess of the above mentioned percentage of the average daily net assets to be charged to the Scheme as total expenses for the year.




Aggregate appreciation and depreciation in value of investments are as follows:

March 31, 2009


(Rupees) Units in Mutual Fund

- Appreciation - -

- Depreciation 500,876,360 3,471,943


The aggregate value of investments securities purchased and sold (including matured) during the year is Rs.

870,578,912 and 51,463,615 respectively being 86.76% and (5.13%) of the average daily net assets.


The total income net of net loss on sale of Investments, realized loss on foreign currency transactions and net

change in unrealized depreciation in the value of investments and Foreign Currency Transactions) and

expenditure during the year is Rs. (502,399,543) and Rs. 7,522,398 respectively being (50.07%) and 0.75% of the

average daily net assets.

11 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual Funds )

Regulation, 1996 as amended and in accordance with Accounting Standard 18 on ‘Related Party

Disclosures’ issued by the Institute of Chartered Accountants of India (ICAI)

The Scheme has entered into transactions with certain related parties. The information required in this regard in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India and regulation 25(8) of SEBI Regulation, is provided below:

I Related party relationships Name Description of relationship (i) HSBC Securities and Capital Markets (India) Private Limited Sponsor of the Fund


(iii) The Hongkong and Shanghai Banking Corporation Limited Associate of the Investment Manager

(iv) Schemes of the Fund, under common control of the Sponsor



HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund)



HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai* – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya*– Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink*– Relative of a Key Management Personnel Christian R Apenbrink*– Relative of a Key Management Personnel Katharina S Apenbrink*– Relative of a Key Management Personnel Yasmin Ebrahim*– Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim*– Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash*– Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.

II The following transactions occurred with the related parties during the year in the ordinary course of business:

Refer Annexure I

III During the year, The Hong Kong and Shanghai Banking Corporation Limited, an associate entity of HSBC Asset

Management (India) Private Limited was paid collection/bank charges amounting to Rs. 3,612 and brokerage

amounting to Rs. 16,768,200 for procuring unit subscriptions for the Scheme. The brokerage paid was at

rates similar to those offered to other distributors.

Further, The Hong kong and Shanghai Banking Corporation Limited, an associate of the Sponsor, is on the panel

of bankers with whom HSBC Mutual Fund places money on fixed deposits and enters into reverse repo

transactions from time to time at competitive rates.





HSBC Mutual Fund has made investments in companies, which holds/ has held units in excess of 5% of the net

asset value of any Scheme of HSBC Mutual Fund which have been listed in Annexure II.

The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other debt

instruments and were made solely on the basis of sound fundamentals of these companies.

13 Prior Period’s Figures

Previous period’s figures which are for the period January 28, 2008 to March 31, 2008 have been re-grouped / re-

arranged where appropriate.




HSBC Mutual Fund

For HSBC Asset Management (India)

Private Limited

Trustee

Vikramaaditya


Trustee

Director

Place: Mumbai

Date :

Fund Manager(s)

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Small Cap Fund ("The Scheme") as

at March 31, 2009, and the related Revenue Account for the year ended on that date both of which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.






(i) The Balance Sheet, the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Small Cap Fund as at March 31, 2009 and its net deficit for the year on that date.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended on that date, together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.



ASSETS

Investments 1 281,208,992 157,502,843

Deposits 2 41,000,000 -



TOTAL 373,475,029 936,696,514

LIABILITIES

Unit Capital 5 733,395,369 848,414,592



TOTAL 0.16 373,475,029 936,696,514



Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.5) 213,712,710 141,859,929 355,572,639 495,013,798 364,720,011 859,733,809





For Board of Trustees of For HSBC Asset Management (India)PARTHA GHOSH HSBC Mutual Fund Private LimitedPartnerMembership No. F-55913For and on behalf of PRICE WATERHOUSE VikramaadityaChartered Accountants Trustee Director and Chief Executive Officer

Trustee Director

Place: Mumbai




HSBC MUTUAL FUND - HSBC SMALL CAP FUND0



INCOME AND GAINS

Dividends (Note 2.4) 9,569,687 -


Net Profit on Sale of Investments (Note 2.3) - 962,936

TOTAL 18,834,266 4,562,061

EXPENSES AND LOSSES

Net Loss on Sale of Investments and Derivatives (Note 2.3 and 2.9) 277,865,618 -

Investment Management and Advisory Fees (Note 3) 7,152,874 823,949

Transfer Agent Fees and Expenses 1,042,260 20,880

Trusteeship Fees and Expenses (Note 4) 2,542 -


Audit Fees 50,000 5,000


Amortization of Deferred Revenue Expenditure (Note 2.8) 16,866,481 -

Other Operating Expenses 1,330,190 228,744

TOTAL 309,037,505 1,212,221

Less: Expenses to be Reimbursed by the Investment Manager - 82,644

TOTAL 309,037,505 1,129,577

Net Realised (Losses)/Gains for the Year / Period (290,203,239) 3,432,484

Net Change in Unrealised Depreciation in Value of Investments and Derivatives 0.17 (131,627,362) -

Net (Losses)/Gains for the Year / Period (421,830,601) 3,432,484

Net Change in Unrealised Appreciation in Value of Investments and Derivatives (7,886,733) 7,886,733

Net (Deficit)/Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments and Derivatives (429,717,334) 11,319,217

Transferred to Unrealised Appreciation Reserve 7,886,733 (7,886,733)

Net (Deficit)/Surplus for the Year / Period 0.17 (421,830,601) 3,432,484

April 01, 2008 to April 01, 2008 to April 01, 2008 to January 19, 2008 to January 19, 2008 to January 19, 2008 toMarch 31, 2009 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2008Growth Option Dividend Option Total Growth Option Dividend Option Total


Net (Deficit)/Surplus for the Year / Period (243,800,619) (178,029,982) (421,830,601) 1,976,341 1,456,143 3,432,484

Balance transferred to Reserve Fund (243,800,619) (178,029,982) (421,830,601) 1,976,341 1,456,143 3,432,484





Trustee Director

Place: Mumbai



HSBC MUTUAL FUND - HSBC SMALL CAP FUND


1

SCHEDULE 1 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Investments Market Value Cost Market Value Cost(Notes 2.2, 2.3, 7, 8 and 11) Rupees Rupees Rupees Rupees


Equity Shares 281,208,992 412,836,354 157,502,843 149,616,110

TOTAL 281,208,992 412,836,354 157,502,843 149,616,110


Deposits with Scheduled Bank (Under Lien Towards Margin Deposit for Equity Derivatives Rs 11,000,000) 41,000,000 -

TOTAL 41,000,000 -


Balances with Banks - in Current Account 14,347,770 11,209,092

Sales Contracts Awaiting Completion - Equity Shares 460,970 -

Reverse Repos 487,696 716,100,545

Collateralized Borrowing and Lending Obligation 509,576 -

Inter-Scheme Receivable - For Switch - In - 15,532 - For Others 35,000 723,315

Derivative Margin Deposit (Note 2.9) 4,000,000 -


- Deposits 369,572 - - Reverse Repos 63 157,667 - Collateralized Borrowing and Lending Obligation 62 -


TOTAL 20,280,627 728,288,795

SCHEDULE 4 March 31, 2009 March 31, 2008Deferred Revenue Expenditure (Notes 2.8) Rupees RupeesIssue and Organisational Costs


Incurred during the year / period - 50,904,876

Less: Amortized during the year / period 16,866,481 -

Less: Recovered during the year / period 3,052,985 -

At the end of the year / period 30,985,410 50,904,876




2


Growth OptionIssued and Subscribed :Units of Rs.10 each fully paid up 488,496,468 48,849,646.818 488,496,468 48,849,646.818 Outstanding:Initial Issue and Subscription - - 488,496,468 48,849,646.818 At the beginning of the year / period 488,496,468 48,849,646.818 - - Issued during the year / period 535,509 53,550.878 - -

489,031,977 48,903,197.696 488,496,468 48,849,646.818 Redeemed during the year / period 48,233,573 4,823,357.301 - - At the end of the year / period 440,798,404 44,079,840.395 488,496,468 48,849,646.818

Dividend Option

Issued and Subscribed :Units of Rs.10 each fully paid up 359,918,124 35,991,812.396 359,918,124 35,991,812.396

Outstanding:

Initial Issue and Subscription - - 359,918,124 35,991,812.396 At the beginning of the year / period 359,918,124 35,991,812.396 - - Issued during the year / period 3,518,453 351,845.309 - -

363,436,577 36,343,657.705 359,918,124 35,991,812.396 Redeemed during the year / period 70,839,612 7,083,961.175 - - At the end of the year / period 292,596,965 29,259,696.530 359,918,124 35,991,812.396

TOTAL 733,395,369 73,339,536.925 848,414,592 84,841,459.214

SCHEDULE 6 Growth Option Dividend Option Total Dividend Option TotalReserves and Surplus March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

Rupees Rupees Rupees Rupees Rupees

Unit Premium Reserve (Note 2.6)Added during the year / period 14,738,584 25,836,803 40,575,387 - - At the end of the year / period 14,738,584 25,836,803 40,575,387 - -

Unrealised Appreciation ReserveAt the beginning of the year / period 4,540,989 3,345,744 7,886,733 - -

Net change in Unrealised Appreciation in Value of Investments and Derivatives Transferred from Revenue Account (4,540,989) (3,345,744) (7,886,733) 3,345,744 7,886,733 At the end of the year / period - - - 3,345,744 7,886,733

Reserve FundAt the beginning of the year / period 1,976,341 1,456,143 3,432,484 - -

(243,800,619) (178,029,982) (421,830,601) 1,456,143 3,432,484 At the end of the year / period (241,824,278) (176,573,839) (418,398,117) 1,456,143 3,432,484

TOTAL (227,085,694) (150,737,036) (377,822,730) * 4,801,887 11,319,217 *


Growth Option : Rs. (227,085,694) 6,517,330 Dividend Option : Rs. (150,737,036) 4,801,887 Total : Rs. (377,822,730) 11,319,217





3






Audit Fees 50,000 5,000

Selling and Distribution Expenses 348,672 125,991

Purchase Contracts Awaiting Completion -Equity Shares 110,024 19,392,879

Unit Redemptions Payable 12,015,976 -

Inter Scheme Payables - For Switch-Out 1,241,370 - - For Others - 683,892

Deferred Revenue Expenditure Payable - 50,841,182

Units Pending Allotment 64,000 4,801,663

Load Charges (Note 2.7) 3,745,592 -


TOTAL 17,902,390 76,962,705

SCHEDULE 8 April 01, 2008 to January 19, 2008 toInterest and Discount(Note 2.4) March 31, 2009 March 31, 2008

Rupees Rupees

Deposits 3,038,394 -

Reverse Repos 5,526,176 1,907,019

Collateralized Borrowing and Lending Obligation 700,009 1,692,106

TOTAL 9,264,579 3,599,125




4



Eicher Motors Limited 63,000 13,699,350 TVS Motor Company Limited 297,000 6,741,900

20,441,250 Auto Ancillaries (5.85 %)

Everest Kanto Cylinder Limited 70,617 8,470,509 Amara Raja Batteries Limited 217,451 7,969,579

16,440,088 Banks (3.28 %)

Dena Bank 285,000 9,234,000 9,234,000

Brewers (1.86 %)Shaw Wallace & Company Limited 36,190 5,227,646

5,227,646 Construction (2.82 %)

The Phoenix Mills Limited 81,000 5,495,850 J Kumar Infraprojects Limited 60,730 2,426,164


Voltas Limited 91,480 4,221,802 4,221,802

Consumer Non Durables (17.83 %)Mcleod Russel India Limited 240,000 15,480,000 Bata India Limited 120,000 12,474,000 E I D Parry (India) Limited 79,470 11,225,138 Advanta India Limited 15,300 7,038,000 Eveready Industries India Limited 220,000 3,916,000

50,133,138 Ferrous Metals (1.62 %)

PSL Limited 53,874 4,549,659 4,549,659

Finance (2.15 %)LIC Housing Finance Limited 27,000 6,058,800

6,058,800 Gas (4.87 %)

Indraprastha Gas Limited 125,193 13,702,374 13,702,374



Ingersoll Rand (India) Limited 85,500 22,482,225 Sanghvi Movers Limited 81,000 5,706,450 Kirloskar Pneumatic Company Limited 27,000 4,414,500


Zee News Limited 585,000 19,158,750 IBN18 Broadcast Limited 130,957 9,612,244

28,770,994 Pesticides (1.91 %)

Rallis India Limited 13,683 5,374,682 5,374,682

Petroleum Products (8.39 %)Castrol India Limited 72,000 23,605,200


IPCA Laboratories Limited 12,475 4,122,364 4,122,364

Power (5.25 %)Power Trading Corporation of India Limited @ 150,853 10,552,166 Gujarat Industries Power Company Limited 90,000 4,207,500

14,759,666 Software (10.54 %)

Infotech Enterprises Limited 135,000 11,475,000 Tata Elxsi Limited 117,000 9,617,400 NIIT Technologies Limited 162,000 8,553,600

29,646,000 Total (Cost Rs. 412,836,354) 281,208,992 TOTAL INVESTMENTS (Cost Rs. 412,836,354) 281,208,992

Deposits (11.53 %)^ Tenure Face Value6.3 % Standard Chartered Bank 91 30,000,000 6.4% HSBC Bank 183 11,000,000 Total Deposits 41,000,000


HSBC MUTUAL FUND - HSBC SMALL CAP FUNDStatement of Portfolio Holding as at March 31, 2009

(Referred to in Schedule 1 to the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended April 01, 2008 to March 31, 2009)

Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial year for the investments held by them.@ Investments in companies which have invested more than five percent of the net asset value of any scheme of HSBC Mutual Fund.

5

HSBC MUTUAL FUND-HSBC SMALL CAP FUND


Annexure 1




Manager


Sponsor


Relatives Total

Investment Management and Advisory Fees - 7,152,874 - - - 7,152,874 Previous Year - 823,949 - - - 823,949

Brokerage/ Commission on Distribution of Units - - 311,641 - - 311,641 Previous Year - - - - - -

Brokerage/ Commission on Purchase/Sale of Investments 64,968 - - - - 64,968 Previous Year 10,000 - - - - 10,000

Clearing Charges - - 18,271 - - 18,271 Previous Year - - - - - -

Reimbursment of Expenses - - - - - - Previous Year - 82,644 - - - 82,644

Charges for Services Provided by Bank - - 2,001 - - 2,001 Previous Year - - - - - -




Manager


Sponsor


Relatives Total

Investment Management and Advisory Fees Payable - 61,419 - - - 61,419 Previous Year - 823,949 - - - 823,949

Brokerage/ Commission Payable for Distribution of Units - - 17,866 - - 17,866 Previous Year - - 2,372,881 - - 2,372,881


Other Receivables - 69,918 - 35,000 - 104,918 Previous Year - 82,644 - 723,315 - 805,959


April 01, 2008 to March 31, 2009

April 01, 2008 to March 31, 2009

Other PayablesHSBC Emerging Markets Fund - 683,892

Other ReceivablesHSBC Emerging Markets Fund 35,000 723,315

0



SCHEDULE 9


1 Organisation

HSBC Small Cap Fund (the “Scheme”) is a three year closed-ended equity scheme of HSBC Mutual Fund (the “Fund”) with automatic conversion into open ended equity scheme at the end of three years from the date of allotment of units. The Scheme was launched on January 19, 2008. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on March 03, 2008. Subscription to the units of the Plans will be permissible only during the New Fund Offer period. The Plans will not be open for ongoing subscriptions/ switch-ins. However units can be redeemed/ switched out at the end of every month during the last three business days of every month. The Scheme opened for redemption on March 31, 2008. The investment objective of the Scheme is to provide long-term capital appreciation primarily from a diversified portfolio of equity and equity related instruments of small cap companies. The Scheme has two Options - Growth Option and Dividend Option. The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.












iii. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable








The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Dividend Options. For reporting the net asset value for the Options, daily income earned, including realized and unrealised gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the units outstanding.


Upon redemption of units, the net premium or discount to the face value of units is adjusted against the unit premium reserve of the Scheme.


unrealized net appreciation in value of investments and derivatives.





Initial issue expenses comprise those costs directly associated with the issue of units of the Scheme and include advertising, brokerage, business promotion, marketing, printing, distribution and other miscellaneous expenses. Initial issue expenses upto 6% of the amount collected from the investors during the initial offer period have been charged to the Scheme and are being amortised over a period of three years from the date of allotment of units Balance proportionate unamortized NFO expenses to be recovered in case of exit within close ended period. Expenses over and above the amounts debited to the Scheme were borne by the asset management company.




Futures

• Futures contracts are marked to market daily at the futures settlement price as determined by the exchange. The variation margin calculated as the difference between the trade price or the previous day’s settlement price, as the case may be, and the current day’s settlement price is recorded as a receivable or payable. • When a contract is closed (squared off)/ settled (on expiry), the difference between the final settlement / square-off price and the contract price is recognised in the Revenue Account. If more than one futures contracts in respect of the same stock / index and expiry date, to which the squared off / settled contract pertains, is outstanding at the time of square off / settlement of the contract, the average method is followed for determining the gain or loss. • As at the Balance Sheet date / date of determination, all open futures positions are valued at the futures settlement price as determined by the exchange where it is traded. Non-traded futures contracts are valued at fair value as per procedures determined by HSBC Asset Management (India) Private Limited and approved by the Board of Trustees. The unrealised appreciation / depreciation on all open positions is considered for determining the net asset value.










4 Trusteeship Fees





5 Custodian Fees


6 Income Taxes




March 31, 2009


(Rupees)

Equity Shares

- Appreciation 11,913,805 10,312,476

- Depreciation 143,541,167 2,425,743


The aggregate value of investments purchased and sold during the year is Rs. 1,000,285,806 and Rs.

458,524,246 respectively being 163.46 % and 74.93 % of the average daily net assets.


The total income (including net loss on sale of investments and derivatives and net change in unrealized

depreciation in the value of investments and derivatives) and expenditure (excluding deferred revenue

expenditure amortized) during the year is Rs. (390,658,714) and Rs. 14,305,406 respectively being

(63.84) % and 2.34 % of the average daily net assets.









HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008



HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai*– Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash*– Relative of a Key Management Personnel upto July 16, 2008



Tara Prakash*– Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.

II The following transactions occurred with the related parties during the year in the ordinary course of business: Refer Annexure I


brokerage aggregating Rs. 64,968 on purchase and sale of investments. The Hong Kong & Shanghai


was paid collection/bank charges amounting to Rs. 2001 and brokerage amounting to Rs. 311,641 for


18,271. The brokerage paid was at rates similar to those offered to other brokers / distributors.







The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other

debt instruments and were made solely on the basis of sound fundamentals of these companies.


Previous year’s figures have been re-grouped / re-arranged where appropriate. Signatures to the Schedules 1 to 9 forming part of the Balance Sheet and the Revenue Account.




Trustee




Trustee

Director


Fund Manager(s)

Auditors' Report

To the Board of Trustees of

HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC MIP Fund ("The Scheme") as at March 31, 2009 and the

related Revenue Account for the year ended on that date, both of which we have signed under reference to this report.

These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of

HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these

financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31,

2009 by correspondence with the custodian/others and registrar and transfer agent respectively. An audit also includes

assessing the accounting principles used and significant estimates made by the Management as well as evaluating the

overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the

purpose of our audit. The Balance Sheet and the Revenue Account referred to above are in agreement with the books of

account of the Scheme.


(i) The Balance Sheet and the Revenue Account together with the notes thereon give the information required by the

Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable,

and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC MIP Fund as at

March 31, 2009 and its net surplus/ (deficit) for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended on that date, together with

the notes thereon have been prepared in all material respects in accordance with the accounting policies and

standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds)

Regulations, 1996 and amendments thereto as applicable.

(iii) The methods used to value:

(a) non traded debt securities in accordance with the guidelines for valuation of securities for mutual funds

dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange

Board of India and

(b) privately placed securities in good faith

as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures

approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.

PARTHA GHOSH

Partner Membership No. F/55913


PRICE WATERHOUSE


Place: Mumbai Date: July 06, 2009

March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008

Schedule Rupees Rupees Rupees RupeesASSETS

Investments 1 519,451,547 617,808,361 878,023,815 1,310,495,913

Deposits 2 18,204,000 5,204,000 25,204,000 5,204,000

Other Current Assets 3 41,362,640 26,417,731 143,341,328 78,603,288

TOTAL 0.47 -0.33 579,018,187 649,430,092 0.25 0.00 1,046,569,143 1,394,303,201

LIABILITIES

Unit Capital 4 465,877,158 544,699,319 854,507,482 1,096,495,216

Reserves and Surplus 5 106,709,964 90,525,961 179,309,381 282,559,934

Current Liabilities and Provisions 6 6,431,065 14,204,812 12,752,280 15,248,051

TOTAL 579,018,187 649,430,092 1,046,569,143 1,394,303,201

-0.33 0.00

RECONCILIATION OF NET ASSET VALUE PER UNIT

Growth Option

Monthly Dividend Option

Quarterly Dividend Option Total

Growth Option

Monthly Dividend Option


Net Assets as per Balance Sheet (Total Assets less Current 288,515,627 119,982,287 164,089,208 572,587,122 409,920,583 239,534,317 384,361,963 1,033,816,863

Liabilities and Provisions ) (Note 2.6) (206,605,512) (264,283,047) (164,336,721) (635,225,280) (577,048,732) (396,050,805) (405,955,613) (1,379,055,150)

Number of Units in Issue 20,343,046.918 11,179,392.387 15,065,276.417 27,263,343.045 22,335,867.542 35,851,537.631

(14,987,074.518) (24,470,779.653) (15,012,077.635) (38,287,542.486) (35,289,980.846) (36,071,998.339)

Net Asset Value per Unit 14.1825 10.7325 10.8919 15.0356 10.7242 10.7209

(13.7856) (10.7999) (10.9470) (15.0714) (11.2228) (11.2540)





PRICE WATERHOUSE



Trustee Director

Fund Manager(s)


Rupees(March 31, 2008)

REGULAR PLAN



REGULAR PLAN SAVINGS PLAN

(March 31, 2008)Rupees

SAVINGS PLAN

HSBC MUTUAL FUND - HSBC MIP FUND


March 31, 2009 March 31, 2009

April 01, 2008 to April 01, 2007 to April 01, 2008 to April 01, 2007 to


Schedule Rupees Rupees Rupees Rupees

INCOME AND GAINS

Dividends (Note 2.4) 696,108 210,227 2,382,733 571,265

Interest and Discount 7 56,957,092 36,005,243 104,230,936 58,384,227

Net Profit on Sale of Investments and Derivatives (Note 2.3 and 2.5) - 24,170,473 - 39,363,257

TOTAL 57,653,200 60,385,943 106,613,669 98,318,749

EXPENSES AND LOSSES

Net Loss on Sale of Investments and Derivatives (Including (Loss) on Inter- Scheme Sale of Investments Rs. (753,579) (Previous Year Rs. (62,199)) for Regular Plan and Rs. (1,103,342) (Previous Year Rs. 2,138,224) for Savings Plan) (Note 2.3 and 2.5) 33,855,596 - 115,863,880 -

Investment Management and Advisory Fees (Note 3) 6,459,806 6,342,399 14,354,901 10,737,409

Trusteeship Fees and Expenses (Note 4) 2,762 2,546 5,452 4,355

Transfer Agent Fees and Expenses 522,534 348,946 1,026,616 585,556

Custodian Fees and Expenses (Note 5) 151,370 120,327 329,280 221,738

Audit Fees 50,000 50,000 50,000 50,000

Selling and Distribution Expenses 6,362,968 4,657,053 10,888,250 10,606,798

Other Operating Expenses 286,734 465,109 381,695 512,430

TOTAL 47,691,770 11,986,380 142,900,074 22,718,286

Less: Expenses to be Reimbursed by the Investment Manager - 2,034,474 - 5,611,191

TOTAL 47,691,770 9,951,906 142,900,074 17,107,095

Net Realised (Losses)/Gains for the Year 9,961,430 50,434,037 (36,286,405) 81,211,654

Net Change in Unrealised Depreciation in Value of Investments and Derivatives (3,490,127) 5,563,613 (4,667,140) 2,713,764

Net (Losses)/Gains for the Year 6,471,303 55,997,650 (40,953,545) 83,925,418

Net Change in Unrealised Appreciation in Value of Investments and Derivatives 9,748,431 (3,449,563) 25,594,689 (7,446,975)

Net (Deficit)/Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments and Derivatives 16,219,734 52,548,087 (15,358,856) 76,478,443

Transferred to Unrealised Appreciation Reserve (9,748,431) 3,449,563 (25,594,689) 7,446,975

Net (Deficit)/Surplus for the Year 0.80 6,471,303 55,997,650 -0.43 (40,953,545) 83,925,418

REGULAR PLAN REGULAR PLAN SAVING PLAN SAVING PLAN April 01, 2008 to March 31, 2009

April 01, 2008 to March 31, 2009

April 01, 2008 to March 31, 2009

April 01, 2008 to March 31, 2009

(April 01, 2007 to March 31, 2008)

(April 01, 2007 to March 31, 2008)

(April 01, 2007 to March 31, 2008)

(April 01, 2007 to March 31, 2008)

Rupees Rupees Rupees Rupees Growth

Option Monthly Dividend

OptionQuarterly Dividend

Option TotalGrowth Option

Monthly DividendOption


Net (Deficit)/Surplus for the Year 3,127,174 1,777,464 1,566,664 6,471,303 (17,257,537) (10,476,486) (13,219,522) (40,953,545)

(27,274,643) (1,926,987) (26,796,020) (55,997,650) (34,462,902) (26,246,827) (23,215,689) (83,925,418)

Transfer from Income Equalisation Reserve 20,914,006 (4,841,218) 673,976 16,746,764 (46,377,469) 752,354 2,539,411 (43,085,704)

(2,474,403) (11,047,667) (-3,105,870) (10,416,200) (76,890,354) (20,509,034) (19,911,871) (117,311,259)

Transfer from Reserve Fund - 14,716,563 8,231,795 22,948,358 - 28,149,826 27,892,026 56,041,852

- (364,881) (5,071,974) (5,436,855) - (2,900,709) (12,916,768) (15,817,477)

Dividend / Distribution - (5,487,709) (5,315,674) (10,803,383) - (12,965,592) (17,152,137) (30,117,729)

- (-8,685,584) (-10,334,460) (-19,020,044) - (-19,023,107) (-20,630,706) (-39,653,813)

Dividend / Distribution Tax thereon - (917,581) (780,570) (1,698,150) - (2,002,561) (2,495,127) (4,497,688)

- (-1,417,248) (-1,509,888) (-2,927,136) - (-3,152,381) (-3,030,128) (-6,182,509)

Balance Transferred to Reserve Fund 24,041,180 5,247,520 4,376,191 33,664,892 (63,635,005) 3,457,541 (2,435,350) (62,612,814)

(29,749,046) (3,236,703) (16,917,776) (49,903,525) (111,353,256) (27,481,082) (32,383,494) (171,217,832)


The schedules referred to herein form an integral part of the Revenue Account


PARTHA GHOSH For Board of Trustees of For HSBC Asset Management (India)Partner HSBC Mutual Fund Private Limited Membership No. F-55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants


Trustee Director

Place: Mumbai



SAVINGS PLAN REGULAR PLAN


SCHEDULE 1Investments

(Notes 2.2, 2.3, 7, 8, 9 and 13) Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost

Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees


Equity Shares 16,602,288 18,287,213 47,231,960 45,969,276 54,257,592 60,868,052 146,736,073 149,822,411

Non Convertible Debentures and Bonds Listed / Awaiting Listing 290,516,346 280,983,783 312,355,130 313,770,658 449,441,854 425,244,283 564,748,567 568,995,244

Privately Placed Non Convertible Debentures / Bonds - - 60,099,338 60,038,176 49,781,695 50,268,393 321,857,900 321,800,087

Asset Backed Securities 167,095,913 165,556,979 168,161,843 168,508,359 207,664,674 206,209,743 197,259,799 197,736,451

Commercial Paper - - 29,960,090 29,960,090 - - 79,893,574 79,893,574

Government of India Securities 45,237,000 48,812,402 - - 116,878,000 122,272,921 - -

TOTAL 519,451,547 513,640,377 617,808,361 618,246,559 878,023,815 864,863,391 1,310,495,913 1,318,247,767

SCHEDULE 2

Deposits March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008


Deposits with Scheduled Bank (Under Lien Towards Margin Deposit for EquityDerivatives (Rs. 10,000,000 for Regular Plan and Rs. 10,000,000 for Savings Plan) 18,000,000 5,000,000 25,000,000 5,000,000

Margin Deposit with the Clearing Corporation of India Limited towards CollateralizedBorrowing and Lending Obligation 204,000 204,000 204,000 204,000

Total 18,204,000 5,204,000 25,204,000 5,204,000

SCHEDULE 3

Other Current Assets March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008


Balances with Banks

- in Current Account 947,060 3,875,506 605,135 10,028,941

- in Dividend Account 3,309 12,015 346,603 358,059

Reverse Repos 10,716,550 3,518,355 52,514,442 10,622,782

Collateralised Borrowing and Lending Obligation 11,212,270 - 54,942,622

Sales Contracts Awaiting Completion - Equity Shares 735,841 1,040,102 2,023,563 6,130,474

Application Money Pending Allotment - Equity Shares - 221,010 - 1,206,810

Unit Subscription Receivable 555,500 198,000 783,000 3,099,000

Receivable on Outstanding Future Contracts 21,720 - 62,445 -

Inter/Intra Scheme Receivable for :

- For 'Switch- In' 106,381 3 - 25,002

- For 'Others' - - 10,000 2,053,000

Derivative Margin Deposit (Note 2.5) 2,250,000 1,250,000 10,250,000 2,750,000


- Debentures and Bonds 13,885,967 13,944,459 20,043,107 36,449,130

- Government of India Securities 453,699 - 1,087,892 -

- Deposits 280,767 81,507 365,342 81,507

- Reverse Repos 1,379 775 6,758 2,339

- Collateralised Borrowing and Lending Obligation 1,374 - 6,731 -

- Margin Deposit with The Clearing Corporation of India Limited 579 - 579 -

Investment Towards Unclaimed Redemption in "10,912.725 " units (Previous Year3,558.520 Units) (Market Value Rs. "159,046 " (Previous Year Rs. 48,044)) of HSBCCash Fund - Growth Option for Regular Plan (Note 14) 44,427 44,427 - -

Investment Towards Unclaimed Dividend in 10,912.725 Units (Previous Year :15,886.843 Units) of HSBC Cash Fund - Growth Option (Market Value Rs. 159,046(Previous Year : Rs. 216,117)) for Regular Plan and 20,861.160 units (Previous Year :14,574.784 Units) of HSBC Cash Fund - Growth Option (Market Value Rs. 304,039(Previous Year :Rs. 198,268)) for Savings Plan (Note 15) 134,858 189,236 277,625 183,702

Receivable from Investment Manager 350 2,034,474 328 5,611,232

Miscellaneous Receivables 10,609 7,862 15,156 1,310

TOTAL 41,362,640 26,417,731 143,341,328 78,603,288

March 31, 2008 March 31, 2009 March 31, 2009

REGULAR PLAN

REGULAR PLAN

SAVINGS PLAN

SAVINGS PLAN

March 31, 2008



SAVINGS PLANREGULAR PLAN

SCHEDULE 4

Unit Capital March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Rupees Units Rupees Units Rupees Units Rupees Units

Growth OptionIssued and SubscribedUnits of Rs. 10 each fully paid up 903,797,314 90,379,731.393 903,797,314 90,379,731.393 783,535,021 78,353,502.035 783,535,021 78,353,502.035 Outstanding:At the beginning of the year 149,870,745 14,987,074.518 140,790,337 14,079,033.718 382,875,425 38,287,542.486 229,585,704 22,958,570.389 Issued during the year 112,509,342 11,250,934.216 111,938,515 11,193,851.516 177,355,745 17,735,574.480 390,170,776 39,017,077.635

262,380,087 26,238,008.734 252,728,852 25,272,885.234 560,231,170 56,023,116.966 619,756,480 61,975,648.024 Redeemed during the year 58,949,618 5,894,961.816 102,858,107 10,285,810.716 287,597,739 28,759,773.921 236,881,055 23,688,105.538 At the end of the year 203,430,469 20,343,046.918 149,870,745 14,987,074.518 272,633,431 27,263,343.045 382,875,425 38,287,542.486

Monthly Dividend Option Issued and SubscribedUnits of Rs. 10 each fully paid up 433,016,292 43,301,629.170 433,016,292 43,301,629.170 452,008,863 45,200,886.283 452,008,863 45,200,886.283 Outstanding:At the beginning of the year 244,707,798 24,470,779.653 88,742,977 8,874,297.567 352,899,808 35,289,980.846 138,790,411 13,879,041.121 Issued during the year 109,111,021 10,911,102.092 245,081,565 24,508,156.452 97,057,037 9,705,703.652 357,033,291 35,703,329.090


Quarterly Dividend Option Issued and SubscribedUnits of Rs. 10 each fully paid up 1,145,953,011 114,595,301.047 1,145,953,011 114,595,301.047 882,420,472 88,242,047.191 882,420,472 88,242,047.191 Outstanding:At the beginning of the year 150,120,776 15,012,077.635 200,913,854 20,091,385.421 360,719,983 36,071,998.339 180,030,401 18,003,040.120 Issued during the year 61,366,510 6,136,651.026 87,223,057 8,722,305.676 144,306,842 14,430,684.202 300,667,685 30,066,768.544


TOTAL 465,877,158 46,587,715.722 544,699,319 54,469,931.806 854,507,482 85,450,748.218 1,096,495,216 109,649,521.671




SCHEDULE 5Reserves and Surplus

Total Total



(-3,397,382) (-11,140,141)


(5,510,752) (40,656,082)Transferred to Revenue Account - -

(-) (-) At the end of the year (2,167,593) 19,325,365

(2,113,370) (29,515,941)


Added during the year 16,746,764 (43,085,704)

(10,416,200) (117,311,259)

Transferred to Revenue Account (16,746,764) 43,085,704

(-10,416,200) (-117,311,259)

At the end of the year - - (-) (-)


At the beginning of the year 1,323,845 57,814

(-) (-)

Transferred from Reserve Fund - -

(4,773,408) (7,504,789)Net change in Unrealised Appreciation in Value of Investments and Derivatives Transferred from Revenue Account 9,748,431 25,594,689

(-3,449,563) (-7,446,975)

At the end of the year 11,072,276 25,652,503 (1,323,845) (57,814)

Reserve Fund


(47,395,484) (105,090,613)

Transfer to Revenue Account (22,948,357) (56,041,852)

(-5,436,855) (-15,817,477)

Transferred to Unrealised Appreciation Reserve - -

(-4,773,408) (-7,504,789)

Balance Transferred from Revenue Account 33,664,892 (62,612,814)

(49,903,525) (171,217,832)


(87,088,746) (252,986,179)

TOTAL 106,709,964 * 179,309,381 * (90,525,961) (282,559,934)


( March 31, 2008) ( March 31, 2008)Rupees Rupees

Growth Option 85,085,158 137,287,152 (56,734,767) (194,173,307)

Monthly Dividend Option 8,188,362 16,175,642 (19,575,249) (43,150,997)

Quarterly Dividend Option 13,436,444 25,846,587 (14,215,945) (45,235,630)

Total 106,709,964 179,309,381 (90,525,961) (282,559,934)



( March 31, 2008)

SAVINGS PLANREGULAR PLAN


March 31, 2009 March 31, 2009

Rupees( March 31, 2008)

Rupees

SCHEDULE 6Current Liabilities and Provisions March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008

Rupees Rupees Rupees RupeesCurrent Liabilities

Investment Management and Advisory Fees 2,181,128 1,142,484 5,567,862 2,194,323

Transfer Agent Fees and Expenses 38,934 43,382 69,119 92,176

Custodian Fees and Expenses 13,572 26,747 23,001 59,101

Audit Fees 50,000 50,000 50,000 50,000

Selling and Distribution Expenses 309,185 441,172 563,794 1,234,181

Purchase Contracts Awaiting Completion - Equity Shares 1,478,945 465,828 4,331,983 2,697,917

Unit Redemption Payable - 40,000 47,610 1,981,826

Inter / Intra Scheme Payable:

- For 'Switch Out' - 8,526,171 9,290 4,081,262

- For 'Others' - 2,004,000 - 82,500

Load Payable 1,623,111 - 1,626,583 -

Payable on Outstanding Future Contracts - 202,598 - 405,194

Dividend Payable - 725,361 - 1,602,477

Dividend Tax Payable - 230,044 - 335,758

Unclaimed Redemption (Note 14) 44,427 44,427 10,000 103,028

Unclaimed Dividend (Note 15) 138,003 202,474 313,190 230,774

Temporary Book Overdraft 486,765 - 10,001 -

Sundry Payables 66,995 60,124 129,847 97,534

TOTAL 6,431,065 14,204,812 12,752,280 15,248,051

0

SCHEDULE 7Interest and Discount (Note 2.4) April 01, 2008 to April 01, 2007 to April 01, 2008 to April 01, 2007 to

March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008Rupees Rupees Rupees Rupees

Debentures / Bonds 33,851,404 19,240,004 66,330,027 35,904,727

Asset Backed Securities 16,092,627 12,342,304 20,774,897 16,227,885

Commercial Paper / Certificate of Deposits 195,997 6,646 3,399,428 17,724

Government of India Securities 2,427,202 1,591,889 7,468,240 2,912,978

Reverse Repos 2,665,146 2,444,311 3,373,402 2,940,715

Collateralised Borrowing and Lending Obligation 257,841 10,407 921,623 7,112

Margin Deposit with The Clearing Corporation of India Limited 2,593 3,488 2,593 3,488

Deposits 1,464,282 366,194 1,960,726 369,598

TOTAL 56,957,092 36,005,243 104,230,936 58,384,227





Quantity Market/ Fair ValueRupees



Banks (8.79 %)HDFC Bank Limited @ 1,500 1,460,100


I T C Limited @ 20,000 3,697,000 E I D Parry (India) Limited 2,000 282,500

3,979,500 Finance (4.25 %)

Housing Development Finance Corporation Limited 500 706,100 706,100

Industrial Capital Goods (10.51 %)Bharat Heavy Electricals Limited 700 1,057,385 Sanghvi Movers Limited 9,763 687,803


Zee News Limited 40,000 1,310,000 1,310,000

Oil (4.70 %)Oil and Natural Gas Corporation Limited 1,000 780,200

780,200 Petroleum Products (15.68 %)

Reliance Industries Limited @ 1,300 1,982,175 Indian Oil Corporation Limited 1,600 620,480


Cipla Limited 9,500 2,090,475 2,090,475

Total (Cost Rs. 18,287,213) 16,602,288

Non-Convertible Debentures / Bonds Listed / Awaiting listing (55.93 %)Finance (76.29 %)

10.85% Rural Electrification Corporation Limited 2018 $ 45 50,602,827 11.65% Deutsche Postbank Home Finance Limited 2013 $ 50 49,543,164 0.00% Sundaram Finance Limited 2010 $ @ 43 36,953,706 10.60% Indian Railway Finance Corporation Limited 2018 $ 23 25,679,237 9.80% Power Finance Corporation Limited 2012 $ 21 21,970,096 8.46% Indian Railway Finance Corporation Limited 2014 20 20,066,420 9.45% Rural Electrification Corporation Limited 2013 10 10,295,040 11.50% Rural Electrification Corporation Limited 2013 5 5,541,060 9.05% Infrastructure Development Finance Company Limited 2009 $ @ 1 996,452

221,648,002 Finance & Investments (10.23 %)

8.60% Mahindra and Mahindra Financial Services Limited 2009 $ @ 30 29,711,654 29,711,654

Finance & Term Lending (13.48 %)9.80% National Bank For Agricultural and Rural Development Limited 2012 $ 20 21,147,897 0.00% Kotak Mahindra Prime Limited 2010 $ 21 18,008,793

39,156,690 Total (Cost Rs. 280,983,783) 290,516,346

Government of India Securities (8.71 %)7.46% GOI Bonds 2017 150,000 15,240,000 7.95% GOI Bonds 2032 150,000 15,210,000 7.95% GOI Bonds 2025 150,000 14,787,000

45,237,000 Total (Cost Rs. 48,812,402) 45,237,000

Asset Backed Securities (32.17 %)Finance & Investments (100 %)

BHPC Auto Securitisation Trust November 2007 I (Tata Motors Services) PTC 2011 * 6 62,316,451 SCB Long Bond Receivables Trust 2006 Series A2 (Standard Chartered Bank) PTC 2009 * 5 43,275,223 Indian Loans Receivables Trust Series T2 (Tata Motors Finance ) PTC 2009 * 4 38,875,775 Corporate Loan Securitisation Series 15 Trust 2008 - A1 (L&T Finance ) PTC2010 * @ 4 22,628,464

Total (Cost Rs. 165,556,979) 167,095,913 TOTAL INVESTMENTS (Cost Rs. 513,640,378) 519,451,547


S&P CNX Nifty - Futures - April 2009 (100 %) 2,412,200 Total 2,412,200

Deposits (3.14 %)^ Tenure Face Value8 % Axis Bank 181 10,000,000 6.3 % Standard Chartered Bank 91 8,000,000 Total Deposits 18,000,000

for the year ended March 31, 2009)

Description

HSBC MIP REGULAR PLAN

HSBC MUTUAL FUND - HSBC MIP

Statement of Portfolio Holding as at March 31, 2009 (Referred to in Schedule 1 to the Balance Sheet as at March 31, 2009 and the Revenue Account



Banks (9.51 %)HDFC Bank Limited @ 5,300 5,159,020


I T C Limited @ 77,000 14,233,450 E I D Parry (India) Limited 8,000 1,130,000

15,363,450 Finance (6.51 %)

Housing Development Finance Corporation Limited 2,500 3,530,500 3,530,500

Industrial Capital Goods (8.91 %)Bharat Heavy Electricals Limited 2,000 3,021,100 Sanghvi Movers Limited 25,737 1,813,172


Zee News Limited 110,000 3,602,500 3,602,500

Oil (5.75 %)Oil and Natural Gas Corporation Limited 4,000 3,120,800


Reliance Industries Limited @ 3,900 5,946,525 Indian Oil Corporation Limited 5,000 1,939,000


Cipla Limited 27,000 5,941,350 5,941,350

Total (Cost Rs. 60,868,052) 54,257,592


10.85% Rural Electrification Corporation Limited 2018 $ 55 61,847,899 10.85% Rural Electrification Corporation Limited 2018 $ 50 56,278,440 8.80% Sundaram Finance Limited 2009 $ @ 40 39,959,295 9.01% Power Finance Corporation Limited 2011 $ 30 30,627,826 9.80% Power Finance Corporation Limited 2012 $ 29 30,339,656 8.46% Indian Railway Finance Corporation Limited 2014 30 30,099,630 11.50% Rural Electrification Corporation Limited 2013 6 6,649,272 10.95% Rural Electrification Corporation Limited 2011 $ 4 4,263,722


8.60% Mahindra and Mahindra Financial Services Limited 2009 $ @ 70 69,327,192 69,327,192

Finance & Term Lending (2.89 %)0.00% Kotak Mahindra Prime Limited 2010 $ 9 7,718,054 9.80% National Bank For Agricultural and Rural Development Limited 2012 $ 5 5,286,974



Power (11.32 %)9.47% Power Grid Corporation of India Limited 2017 $ 40 50,863,316

50,863,316 Total (Cost Rs. 425,244,283) 449,441,854

Privately Placed / Unlisted Non-Convertible Debentures / Bonds (5.67 %)Finance (95.59 %)

0.00% GE Capital Services India Limited 2010 * 55 47,588,789 47,588,789

Finance & Investments (4.41 %)8.85% GE Money Financial Services Limited 2009 * 2 2,192,906

2,192,906 Total (Cost Rs. 50,268,393) 49,781,695

Government of India Securities (13.31 %)7.46% GOI Bonds 2017 500,000 50,800,000 7.95% GOI Bonds 2032 360,000 36,504,000 7.95% GOI Bonds 2025 300,000 29,574,000

116,878,000 Total (Cost Rs. 122,272,921) 116,878,000


Indian Loans Receivables Trust Series T2 (Tata Motors Finance ) PTC 2009 * 10 97,189,439 BHPC Auto Securitisation Trust November 2007 I (Tata Motors Services) PTC 2011 * 9 93,474,677 Corporate Debt Trust 2008 – 09 Series 9 (Bajaj Auto Finance) PTC 2009 * 25 11,741,053 Collateralised Debt Trust Series 24 Series A2 (Power Finance Corporation ) PTC 2009 * 7 5,259,505

207,664,674 Total (Cost. Rs. 206,209,743) 207,664,674 TOTAL INVESTMENTS (Cost Rs. 864,863,391) 878,023,815


S&P CNX Nifty - Futures - April 2009 (100 %) 6,935,075 Total 6,935,075

Deposits (2.42 %)^ Tenure Face Value6.3 % Standard Chartered Bank 91 15,000,000 8 % Axis Bank 181 10,000,000 Total Deposits 25,000,000


$ Fair value of non traded debt securities as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board ofTrustees in accordance with guidelines for valuation of securities for mutual funds dated September 18, 2000 issued by Securities and Exchange Board of India.@ Investments in companies which have invested more than five percent of the net asset value of any scheme of HSBC Mutual Fund

HSBC MIP SAVINGS PLAN


* Fair value of privately placed securities as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by theBoard of Trustees.

HSBC MUTUAL FUND - HSBC MIP REGULAR PLAN


Annexure 1





Sponsor


Relatives Total

Purchase of Investments - - - 372,339,147 - 372,339,147 Previous Year - - - 493,002,328 - 493,002,328



Brokerage/ Commission on Distribution of Units - - 559,017 - - 559,017 Previous Year - - 1,191,572 - - 1,191,572




Reimbursement of Expenses - - Previous Year 2,034,474 2,034,474







Sponsor


Relatives Total



Other Payables - - - - - - Previous Year - - - 2,004,000 - 2,004,000

Other Receivables - 350 - - - 350 Previous Year - 2,034,474 - - - 2,034,474


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Flexi Debt Fund 114,697,623 110,347,746HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 74,845,593 255,021,405HSBC MIP Fund Savings Plan 57,434,427 802,134 HSBC Cash Fund 49,481,670 -

Sale of InvestmentsHSBC Cash Fund 119,266,517 - HSBC Floating Rate Fund Long Term Plan 39,888,150 48,314,004 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 39,865,004 183,669,398 HSBC Flexi Debt Fund 14,456,618 61,911,139 HSBC Income Fund Investment Plan 9,991,836 48,352,674 Other PayablesHSBC MIP Fund Savings Plan - 2,002,000

HSBC MUTUAL FUND - HSBC MIP SAVINGS PLAN


Annexure 1




Manager


Sponsor


Relatives Total

Purchase of Investments - - - 1,261,278,749 - 1,261,278,749 Previous Year - - - 1,030,325,938 - 1,030,325,938






Reimbursement of Expenses - - Previous Year 5,611,191 5,611,191




Borrowings for Redemptions - - 25,000,000 - - 25,000,000 Previous Year - - - - - -




Manager


Sponsor


Relatives Total




Other Receivables - 328 - 10,000.00 - 10,328 Previous Year - 5,611,232 - 2,053,000 - 7,664,232


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 393,647,753 570,928,329 HSBC Floating Rate Fund Long Term Plan 159,526,986 122,028,141 HSBC Cash Fund 148,445,009 - HSBC Flexi Debt Fund 132,326,943 160,805,149 HSBC Income Fund Short Term Plan 108,721,964 68,722,146

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 539,617,775 292,833,880 HSBC Flexi Debt Fund 59,695,940 135,764,947 HSBC Floating Rate Fund Long Term Plan 59,936,467 60,392,505

Other PayablesHSBC India Opportunities Fund - 82,500

Other ReceivablesHSBC Cash Fund 10,000 - HSBC MIP Fund Regular Plan - 2,002,000



SCHEDULE 8


1 Organisation

HSBC MIP (the “Scheme”) is an open-ended income scheme of HSBC Mutual Fund (the “Fund”) and was launched on January 22, 2004. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956, has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on February 13, 2004 and reopened for issue and redemption of units on March 5, 2004. The primary investment objective of the Scheme is to seek generation of reasonable returns through investment in debt and money market instruments. The secondary objective is to invest in equity and equity related instruments to seek capital appreciation. The Scheme has two Plans - Regular Plan and Savings Plan, each with a separate portfolio and each offering three options - Growth Option, Monthly Dividend Option and Quarterly Dividend Option. The Scheme will not declare dividend under the Growth Options of both the Plans in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value of these Plans.



The Scheme maintains its books of account on an accrual basis. These financial statements have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (SEBI) (Mutual Funds) Regulations, 1996 (the “Regulations”) and amendments there to, as applicable.


Investments are stated at market/fair value at the Balance Sheet date/date of determination. In valuing the Scheme’s investments:

i. Equity securities listed on a recognised stock exchange are valued at the last quoted closing price on the National Stock Exchange of India Limited (NSE). If on a particular valuation date, a security is not traded on NSE, the value at which it is traded on Bombay Stock Exchange Limited (BSE) is used. If no sale is reported at that time, the last quoted closing price of the principal stock exchange on which the security is traded is used when it is not more than thirty days prior to the valuation date.

ii. Non traded and thinly traded equity securities, including those not traded within thirty days prior

to valuation date are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).



iii. Equity shares awaiting listing are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

iv. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price

on the National Stock Exchange of India Limited (NSE). If no sale is reported at that time , such security is valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

v. Non traded and thinly traded debt securities are valued at fair value as determined by HSBC

Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable issued by SEBI.

vi. Privately placed debt securities are valued at fair value as determined in good faith by HSBC


vii. Traded money market securities are valued at the yield at which they are traded on the valuation

date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

viii. Government securities are valued at prices obtained from The Credit Rating Information Services

of India Limited in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by SEBI.

ix. Asset backed securities are valued at fair value as determined in good faith by HSBC Asset

Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

x. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable

interest upto the date of resale. Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments and derivatives is determined separately for each category of investments and derivatives. In respect of each category of investments and derivatives, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in



the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.








Futures



The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Dividend (Monthly and Quarterly) Options for the Regular and Savings Plans. For reporting the net asset value for the Options, daily income earned, including realized and unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the units outstanding.




Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit premium reserve of the Plans after an appropriate portion of the issue proceeds and redemption payout is credited or debited respectively to the income equalization reserve. The unit premium reserve is available for dividend distribution except to the extent it is represented by unrealized net appreciation in value of investments.


The net distributable income relating to units issued/repurchased is transferred to/from income equalization reserve for determining the net surplus/deficit, transferred from/to unit premium reserve.

2.9 Load Charges Load collected is retained under a separate account in the Scheme and is utilised to meet the selling and distribution expenses of the Scheme.




0.97% and 1.09% of the average daily net asset values of the Regular Plan and Savings Plan

respectively recorded by the Scheme. All costs, charges and expenses incurred by HSBC Asset

Management (India) Private Limited in the administration and execution of the activities of the

Scheme, except costs allowed to be charged to the Scheme under the Securities and Exchange Board

of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable, are on their own

account for which they receive investment management and advisory fees.

4 Trusteeship Fees




Trustees attended by such Trustee not affiliated with the Settlor.

5 Custodian Fees

JP Morgan Chase Bank provides custodial services to the Scheme for which it receives custody fees.

6 Income Taxes

No provision for income tax is made as the Scheme qualifies as a recognized mutual fund under Section 10 (23D) of the Income Tax Act, 1961. For taxes deducted at source from investment income, which are recoverable, a receivable is recorded in the books of account.

7 Aggregate Appreciation / (Depreciation )In Value of Investments and Derivatives



Aggregate appreciation / (depreciation) in value of investments and derivatives is as follows:

Regular Plan Savings Plan

March 31, 2009

(Rupees)

March 31, 2008

(Rupees)

March 31, 2009

(Rupees)

March 31, 2008

(Rupees)

Equity Shares

-Appreciation 930,850 4,506,995 2,465,476 10,924,860

- Depreciation 2,615,775 3,244,311 9,075,936 14,011,198

Non Convertible Debentures and Bonds Listed / Awaiting Listing

- Appreciation 12,106,129 150,202 24,617,261 350,472

- Depreciation 2,573,566 1,565,730 419,690 4,597,149


- Appreciation - 61,162 - 203,500

- Depreciation - - 486,698 145,687

Asset Backed Securities

- Appreciation 1,988,647 79,793 2,586,070 104,705

- Depreciation 449,713 426,309 1,131,139 581,357

Government of India Securities

- Appreciation - - - -

- Depreciation 3,575,402 - 5,394,921 -

Equity Futures

- Appreciation 779 - - -

- Depreciation - 8,156 1,043 16,313

8 Aggregate Fair Value of Non-Traded/ Privately Placed Investments

Aggregate fair value of non traded (including private placement)/thinly traded investments as determined by HSBC Asset Management (India) Private Limited under the procedures approved by the Board of Trustees as at March 31, 2009 is Rs. 439,709,739 for the Regular Plan and Rs. 670,139,321 for the Saving Plan.




The aggregate value of investments purchased and sold (including matured) during the year (excluding accretion of discount of Rs. 22,906,494 and Rs. 29,526,868 for Regular and Savings Plan respectively ) are :

Plan Aggregate Purchases Aggregate Sales

Rupees

Percentage of Average Daily Net Assets

Rupees Percentage of Average

Daily Net Assets

Regular Plan 1,264,636,217 189.56 % 1,360,346,341 203.91 %

Savings Plan 3,297,754,997 250.65 % 3,671,926,696 279.09 %


The total income (including net loss on sale of investments and net change in unrealized depreciation

in value of investments and derivatives) and expenditure during the year is :

Total Income Total Expenditure

Plan Rupees

Percentage of

Average Daily Net

Assets Rupees

Percentage of

Average Daily Net

Assets

Regular Plan 20,307,477 3.04 % 13,836,174 2.07 %

Savings Plan (13,917,351) (1.06) % 27,036,194 2.05 %


Futures Details of open interest in equity futures as at March 31, 2009:

Plan Underlying Asset's

Name Number of contracts

Units Outstanding Long

Regular Plan S&P CNX Nifty 16 800

Savings Plan S&P CNX Nifty 46 2300 Notional value of futures contracts bought by the Scheme and outstanding as on March 31, 2009 aggregates to Rs. 2,412,200 and Rs. 6,935,075 for the Regular Plan and Savings Plan respectively. Net Loss on futures transactions recognized in the Revenue Account for the year ended March 31, 2009 aggregates to Rs. 2,053,045 and Rs. 7,124,335 for the Regular Plan and Savings Plan respectively.







Name Description of relationship

(i) HSBC Securities and Capital Markets (India) Private Limited Sponsor of the Fund (ii) HSBC Asset Management (India) Private Limited Investment Manager to the

Schemes of HSBC Mutual Fund

(iii) The Hongkong and Shanghai Banking Corporation Limited Associate of the Investment Manager

(iv) Schemes of the Fund, under common control of the Sponsor

HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008



HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai* – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008






III During the year, HSBC Securities and Capital Markets (India) Private Limited, the Sponsor, was paid brokerage amounting to Rs. 25,017 and Rs. 68,515 on purchase and sale of investments for the Regular Plan and Savings Plan respectively. The Hongkong and Shanghai Banking Corporation Limited, an associate entity of HSBC Asset Management (India) Private Limited was paid Collection/Bank charges amounting to Rs. 169,266 and Rs. 170,403 for the Regular Plan and Savings Plan respectively, brokerage amounting to Rs 559,017 and Rs 1,141,499 for procuring unit subscriptions for the Regular Plan and Savings Plan respectively and clearing member charges on derivative transactions amounting to Rs. 33,705 and Rs. 95,235 for the Regular Plan and Savings Plan respectively. The brokerage paid was at rates similar to those offered to other distributors.

Further, The Hongkong and Shanghai Banking Corporation Limited, an associate of the Sponsor, is

on the panel of bankers with whom HSBC Mutual Fund places money on fixed deposits and enters

into reverse repo transactions from time to time at competitive rates.




The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and

other debt instruments and were made solely on the basis of sound fundamentals of these companies 14 Unclaimed Redemptions:

Details of unclaimed redemptions as at March 31, 2009 are as follows:-

Plan Amount (Rupees)

Number of Investors

Regular Plan 44,427 2 Saving Plan 10,000 1

15 Unclaimed Dividends:

As at March 31, 2009, unclaimed dividends payable to investors are:-


Number of Investors

Regular Plan 138,003 205 Saving Plan 313,190 277




Previous year’s figures have been regrouped/re-arranged where appropriate.

Signatures to the Schedules 1 to 8 forming part of the Balance Sheet and the Revenue Account




Trustee


Trustee

Director


Fund Manager(s)

Auditors' Report

To the Board of Trustees of

HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Income Fund ("The Scheme") as at March 31, 2009 and

the related Revenue Account for the year ended on that date, both of which we have signed under reference to this report.

These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of

HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these


2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the

financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31,

2009 by correspondence with the custodian/others and registrar and transfer agent respectively. An audit also includes

assessing the accounting principles used and significant estimates made by the Management as well as evaluating the

overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the

purpose of our audit. The Balance Sheet and the Revenue Account referred to above are in agreement with the books of

account of the Scheme.


(i) The Balance Sheet and the Revenue Account together with the notes thereon give the information required by the

Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable,

and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Income Fund as

at March 31, 2009 and its net surplus for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended on that date, together with

the notes thereon have been prepared in all material respects in accordance with the accounting policies and

standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds)

Regulations, 1996 and amendments thereto as applicable.

(iii) The methods used to value:

(a) non traded debt securities in accordance with the guidelines for valuation of securities for mutual funds

dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange

Board of India and

(b) privately placed securities in good faith

as at March 31, 2009 as determined in good faith by HSBC Asset Management (India) Private Limited

under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.

PARTHA GHOSH

Partner Membership No. F/55913


PRICE WATERHOUSE


Place: Mumbai Date: July 06, 2009

March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 Schedule Rupees Rupees Rupees Rupees

ASSETS

Investments 1 1,443,729,315 54,809,641 1,074,537,136 180,665,196

Deposits 2 404,000 404,000 205,000 205,000

Other Current Assets 3 76,713,392 65,728,361 93,375,860 180,223,709

TOTAL 1,520,846,707 120,942,002 1,168,117,996 361,093,905

LIABILITIES

Unit Capital 4 1,370,032,284 98,052,989 948,899,682 273,771,835

Reserves and Surplus 5 145,418,259 22,592,424 200,099,981 84,981,686

Current Liabilities and Provisions 6 5,396,164 296,589 19,118,332 2,340,384

TOTAL -0.61 1,520,846,707 120,942,002 -1.10 1,168,117,995 361,093,905


Growth Sub Option

Dividend Sub Option

Weekly Dividend Sub Option Total

Growth Sub Option

Weekly Dividend Sub Option

Monthly Dividend Sub-Option Total

Growth Sub Option

Dividend Sub Option

Weekly Dividend Sub Option Total Total

Growth Sub Option

Dividend Sub Option Total

Growth Sub Option

Dividend Sub Option Total Total

Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.5) 103,384,245 50,525,358 256,304,498 410,214,101 144,024,969 - 10,036,162 154,061,131 229,757,383 575,714,802 145,703,126 951,175,311 1,515,450,543 4,973,234 106,825,169 111,798,403 381,520,828 655,680,432 1,037,201,260 1,148,999,663

(5,315,491) (-) (-) (5,315,491) (-) (-) (-) (-) (63,207,369) (47,017,284) (5,105,269) (115,329,922) (120,645,413) (130,939,416) (-) (130,939,416) (158,841,287) (68,972,818) (227,814,105) (358,753,521)

Number of Units in Issue 8,845,986.502 4,837,013.350 24,995,115.818 14,250,000.000 - 1,000,000.000 15,450,409.839 53,157,406.512 14,467,296.399 519,254.435 10,013,416.171 25,707,313.077 58,649,984.489 (500,000.000) (-) (-) (-) (-) (-) (4,652,173.505) (4,147,785.788) (505,339.613) (9,264,262.136) (-) (11,671,564.647) (6,441,356.823)

Net Asset Value per Unit 11.6871 10.4456 10.2542 10.1070 - 10.0362 14.8706 10.8304 10.0712 9.5776 10.6682 14.8409 11.1795 (10.6310) (-) (-) (-) (-) (-) (13.5866) (11.3355) (10.1026) (14.1338) (-) (13.6093) (10.7078)






Membership No. F-55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants Vikramaaditya


TrusteeDirector

Place: Mumbai


March 31, 2009 Short Term Plan March 31, 2009

HSBC MUTUAL FUND - HSBC INCOME FUND

Investment PlanShort Term Plan


Institutional Plus Option

Investment Plan

RupeesInstitutional Option Institutional OptionRegular Option Regular Option

(March 31, 2008) Rupees

(March 31, 2008)

0

April 01, 2008 to April 01, 2007 to April 01, 2008 to April 01, 2007 to Schedule March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008


INCOME AND GAINS

Interest and Discount 7 45,988,592 15,748,351 33,885,223 19,910,987

3,179,409 - - 2,188,886

49,168,001 15,748,351 33,885,223 22,099,873

EXPENSES AND LOSSES

Net Loss on Sale of Investments - 4,442,144 9,538,376 -

(Including Net Loss on Inter - Scheme Sale of Investments Rs. 3,367,120 for Investment Plan (Previous year : Net Loss Rs. 6,00,263) (Note 2.3)

Investment Management and Advisory Fees (Note 3) 1,747,698 853,111 1,838,001 2,088,768


Trusteeship Fees and Expenses (Note 4) 2,206 401 1,679 1,293

Custodian Fees and Expenses (Note 5) 95,655 35,598 49,694 44,417

Audit Fees 50,000 50,000 50,000 50,000

Selling and Distribution Expenses 3,846,582 576,006 10,142,755 1,017,499

Other Operating Expenses 41,082 49,915 182,363 181,871

TOTAL 6,091,680 6,077,712 22,144,859 3,554,050

Less: Expenses to be Reimbursed by the Investment Manager 1,441,465 - 5,880,374 -

TOTAL 4,650,215 - 16,264,485 -

Net Realised Gains for the Year 44,517,786 9,670,639 17,620,738 18,545,823

Net Change in Unrealised Depreciation in Value of Investments - 6,632,778 (15,113,237) 5,041,554

Net Gains for the Year 44,517,786 16,303,417 2,507,501 23,587,377

Net Change in Unrealised Appreciation in Value of Investments 4,886,296 51,791 2,562,654 343,981

Net Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments 49,404,082 16,355,208 5,070,156 23,931,358

Transferred to Unrealised Appreciation Reserve (4,886,296) (51,791) (2,562,654) (343,981)

Net Surplus for the Year 0.25 44,517,786 16,303,417 0.63 2,507,501 23,587,377

0.05 0.63

Short Term Plan Short Term Plan Investment Plan Investment Plan

April 01, 2008 to March 31, 2009April 01, 2008 to March

31, 2009 April 01, 2008 to March 31, 2009April 01, 2008 to March

31, 2009

(April 01, 2007 to March 31, 2008)(April 01, 2007 to March

31, 2008) (April 01, 2007 to March 31, 2008)(April 01, 2007 to March

31, 2008)Rupees Rupees Rupees Rupees

Net Surplus for the Year 904,177 8,272,889 10,955,427 1,151,576 9,998,871 10,724 11,161,171 8,783,710 10,952,950 2,664,528 22,401,188 44,517,786 13,888 2,119,749 2,133,637 8,029,216 (7,655,352) 373,864 2,507,501

(343,937) (1,186,865) (2,905,779) (-) (-) (-) (-) (7,685,303) (5,134,843) (577,492) (13,397,638) (16,303,417) (2,941,551) (-) (2,941,551) (13,786,605) (6,859,221) (20,645,826) (23,587,377)

Transfer from Income Equalisation Reserve (Note 2.7) 13,464,971 816,996 14,295,568 - (929,979) - (929,979) 39,073,053 4,526,769 399,256 43,999,078 57,364,667 - 2,423,974 2,423,974 57,165,502 53,521,859 110,687,361 113,111,335

(-) (-58,578) (-188,008) (-) (-) (-) (-) (-7,462,906) (273,019) (22,170) (-7,167,717) (-7,355,725) (29,015,318) (-) (29,015,318) (-2,687,289) (-68,162) (-2,755,451) (26,259,867)

Transferred from Unit Premium Reserve (Note 2.6) - - - - - - - - - - - - - - - - - - -

(-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)

Transfer from Reserve Fund - - - - - - - - 4,824,003 38,861 4,862,864 4,862,864 - - - - 1,778,927 1,778,927 1,778,927

(-) (-) (8,867,609) (-) (-) (-) (-) (-) (-) (-) (-) (8,867,609) (-) (-) (-) (-) (2,799,688) (2,799,688) (2,799,688)

Dividend / Distribution - (6,513,773) (7,984,257) - (6,792,233) - (6,792,233) - (17,075,370) (2,530,993) (19,606,363) (34,382,853) - (2,028,301) (2,028,301) - (8,344,919) (8,344,919) (10,373,220)

(-) (-929,517) (-1,928,185) (-) (-) (-) (-) (-) (-) (-452,383) (-452,383) (-2,380,568) (-) (-) (-) (-) (-3,737,236) (-3,737,236) (-3,737,236)

Dividend / Distribution Tax thereon - (1,328,072) (1,594,846) - (1,539,120) - (1,539,120) - (2,673,723) (431,501) (3,105,224) (6,239,190) - (325,410) (325,410) - (1,230,570) (1,230,570) (1,555,980)

(-) (-192,604) (-368,261) (-) (-) (-) (-) (-) (-) (-101,236) (-101,236) (-469,497) (-) (-) (-) (-) (-532,962) (-532,962) (-532,962)

Balance Transferred to Reserve Fund 14,369,148 1,248,040 15,671,892 1,151,576 737,539 10,724 1,899,839 47,856,763 554,629 140,151 48,551,543 66,123,274 13,888 2,190,012 2,203,900 65,194,718 38,069,945 103,264,663 105,468,563 (343,937) (6,166) (9,288,934) (-) (-) (-) (-) (222,397) (5,407,862) (46,043) (5,676,302) (14,965,236) (31,956,869) (-) (31,956,869) (11,099,316) (5,320,549) (16,419,865) (48,376,734)





Membership No. F-55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants Vikramaaditya


Trustee Director

Place: Mumbai



TOTAL



Net Profit on Sale of Investments (Net of net loss on Inter-Scheme Sale of Investments Rs 2,75,414 for Short Term Plan (Previous year : Net Loss Rs. 3,951,883) (Note 2.3)

Short Term Plan Investment Plan

1

SCHEDULE 1 Investments

(Notes 2.2, 2.3, 7, 8, 9 ,10 and 13) Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees



Privately Placed Non Convertible Debentures / Bonds - - 20,837,942 20,804,796 - - - -

Asset Backed Securities - - - - 7,266,992 8,048,220 25,746,269 27,253,761

Commercial Paper / Certificate of Deposit 602,153,290 602,153,290 7,887,818 7,887,818 - - - -

Government of India Securities - - - - 453,340,434 469,185,683 34,266 40,016

TOTAL 1,443,729,315 1,438,791,228 54,809,641 54,757,850 1,074,537,136 1,088,256,978 180,665,196 181,834,457

SCHEDULE 2 Deposits March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008


Margin Deposit with the Clearing Corporation of India Limited towards Collateralized Borrowing and Lending Obligations. 404,000 404,000 205,000 205,000

TOTAL 404,000 404,000 205,000 205,000

SCHEDULE 3 Other Current Assets March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008


Balances with Banks - in Current Account 9,363,021 1,630,230 4,418,475 4,062,200 - in Dividend Account 905 897 61,486 78,184

Reverse Repos 7,965,248 63,190,549 16,912,468 169,612,209

Collateralised Borrowing and Lending Obligation 8,333,671 - 17,694,592 -

Sales Contracts Awaiting Completion - Government Securities - - 25,939,291 -

Unit Subscription Receivable 5,351,000 - 15,000 -

Inter-Scheme Receivable - For Switch-In 14,785,792 - 92,695 - - For Others 299,000 - - -

Interest Receivable on : -Debentures and Bonds 29,117,449 784,024 16,075,152 6,110,974 -Government of India Securities - - 5,932,588 720 -Reverse Repos 1,025 13,913 2,176 37,344 -Collateralised Borrowing and Lending Obligation 1,021 - 2,168 - -Margin Deposit with Clearing Corporation of India Limited 1,146 - 582 -

Investment Towards Unclaimed Redemption in 19,668.706 Units of HSBC Cash Fund - Growth Option for Investment Plan (Previous Year : 12,479.233 Units) Market Value Rs. 286,660 (Previous Year Rs. 169,602)) (Note 14) - - 239,310 140,767

Investment Towards Unclaimed Dividend in 4,643.099 Units of HSBC Cash Fund - Growth Option for Short Term Plan (market value Rs.67,670)(Previous Year : Rs.63,103) and 15,560.526 Units (Previous Year : in 15,378.241 Units) of HSBC Cash Fund - Growth Option for Investment Plan (Market Value Rs. 2,26,785) (Previous year Rs. 209,001) (Note 15) 52,508 52,508 101,710 181,311

Receivable from Investment Manager 1,441,587 - 5,880,588 -

Miscellaneous Receivables 19 56,240 7,578 -

TOTAL 76,713,392 65,728,361 93,375,860 180,223,709

#



Short Term Plan March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

Investment Plan



2

SCHEDULE 4 Unit Capital

March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Rupees Units Rupees Units Rupees Units Rupees Units

Institutional Option Growth Sub Option Issued and Subscribed: - - - - - - - - Units of Rs. 10 each fully paid up Outstanding: At the beginning of the year 5,000,000 500,000.000 - - 92,642,621 9,264,262.136 17,859,694 1,785,969.425 Issued during the year 114,118,405 11,411,840.508 125,000,000 12,500,000.000 10,192,544 1,019,254.435 74,782,927 7,478,292.711

119,118,405 11,911,840.508 125,000,000 12,500,000.000 102,835,165 10,283,516.571 92,642,621 9,264,262.136 Redeemed during the year 30,658,540 3,065,854.006 120,000,000 12,000,000.000 97,642,621 9,764,262.136 - - At the end of the year 88,459,865 8,845,986.502 5,000,000 500,000.000 5,192,544 519,254.435 92,642,621 9,264,262.136

Dividend Sub Option Issued and Subscribed: Units of Rs. 10 each fully paid up - - - - - - - - Outstanding: At the beginning of the year / period - - 31,133,708 3,113,370.838 - - - - Issued during the year / period 175,327,626 17,532,762.612 10,915,172 1,091,517.166 199,989,822 19,998,982.155 - -

175,327,626 17,532,762.612 42,048,880 4,204,888.004 199,989,822 19,998,982.155 - - Redeemed during the year / period 126,957,492 12,695,749.262 42,048,880 4,204,888.004 99,855,660 9,985,565.984 - - At the end of the year / period 48,370,134 4,837,013.350 - - 100,134,162 10,013,416.171 - -

Weekly Dividend Sub Option Issued and Subscribed: Units of Rs. 10 each fully paid up - - - - - - - - Outstanding: At the beginning of the year / period - - - - - - - - Issued during the year / period 830,214,028 83,021,402.762 45,535,812 4,553,581.232 - - - -

830,214,028 83,021,402.762 45,535,812 4,553,581.232 - - - - Redeemed during the year / period 580,262,869 58,026,286.944 45,535,812 4,553,581.232 - - - - At the end of the year / period 249,951,158 24,995,115.818 - - - - - -

- - - - TOTAL 386,781,157 38,678,115.670 5,000,000 500,000.000 105,326,706 10,532,670.606 92,642,621 9,264,262.136

Institutional Plus Option Growth Sub Option Issued and Subscribed: Units of Rs. 10 each fully paid up - - - - - - - - Outstanding: Issued during the period 142,500,000 14,250,000.000 - - - - - -

142,500,000 14,250,000.000 - - - - - - Redeemed during the period - - - - - - - - At the end of the period 142,500,000 14,250,000.000 - - - - - -

Weekly Dividend Sub Option Issued and Subscribed: Units of Rs. 10 each fully paid up - - - - - - - - Outstanding: Issued during the period 758,047,021 75,804,702.056 - - - - - -

758,047,021 75,804,702.056 - - - - - - Redeemed during the period 758,047,021 75,804,702.056 - - - - - - At the end of the period - - - - - - - -

Monthly Dividend Sub Option Issued and Subscribed: Units of Rs. 10 each fully paid up - - - - - - - - Outstanding: Issued during the period 10,000,000 1,000,000.000 - - - - - -

10,000,000 1,000,000.000 - - - - - - Redeemed during the period - - - - - - - - At the end of the period 10,000,000 1,000,000.000 - - - - - -

TOTAL 152,500,000 15,250,000.000 - - - - - -

Regular Option Growth Sub Option Issued and Subscribed:

Units of Rs. 10 each fully paid up 1,368,130,625 136,813,062.500 1,368,130,625 136,813,062.500 1,964,242,544 196,424,254.400 1,964,242,544 196,424,254.400 Outstanding: At the beginning of the year 46,521,735 4,652,173.505 82,666,880 8,266,687.991 116,715,646 11,671,564.647 137,597,102 13,759,710.196 Issued during the year / period 196,032,470 19,603,247.004 51,795,133 5,179,513.274 244,822,721 24,482,272.058 75,428,113 7,542,811.349

242,554,205 24,255,420.509 134,462,013 13,446,201.265 361,538,367 36,153,836.705 213,025,215 21,302,521.545

Redeemed during the year / period 88,050,107 8,805,010.670 87,940,278 8,794,027.760 104,465,236 10,446,523.628 96,309,569 9,630,956.898

At the end of the year 154,504,098 15,450,409.839 46,521,735 4,652,173.505 257,073,131 25,707,313.077 116,715,646 11,671,564.647




SCHEDULE 4 Unit Capital

March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Rupees Units Rupees Units Rupees Units Rupees Units




Dividend Sub Option Issued and Subscribed:

Units of Rs. 10 each fully paid up 53,896,150 5,389,615.000 53,896,150 5,389,615.000 108,128,820 10,812,882.000 108,128,820 10,812,882.000

Outstanding: At the beginning of the year 41,477,858 4,147,785.788 65,185,167 6,518,516.669 64,413,568 6,441,356.823 64,975,491 6,497,549.082 Issued during the year / period 635,631,889 63,563,188.891 29,557,387 2,955,738.745 595,715,032 59,571,503.172 31,158,403 3,115,840.309

677,109,747 67,710,974.679 94,742,554 9,474,255.414 660,128,600 66,012,859.995 96,133,894 9,613,389.391 Redeemed during the year / period 145,535,682 14,553,568.167 53,264,696 5,326,469.626 73,628,755 7,362,875.506 31,720,326 3,172,032.568 At the end of the year 531,574,065 53,157,406.512 41,477,858 4,147,785.788 586,499,845 58,649,984.489 64,413,568 6,441,356.823

Weekly Dividend Sub Option Issued and Subscribed:

Units of Rs. 10 each fully paid up 704,627 70,462.722 704,627 70,462.722 - - - -

Outstanding: At the beginning of the year 5,053,396 505,339.613 - - - - - - Issued during the year 178,835,452 17,883,545.155 24,769,905 2,476,990.544 - - - -

183,888,848 18,388,884.768 24,769,905 2,476,990.544 - - - - Redeemed during the year 39,215,884 3,921,588.369 19,716,509 1,971,650.931 - - - - At the end of the year 144,672,964 14,467,296.399 5,053,396 505,339.613 - - - -

TOTAL 830,751,127 83,075,112.750 93,052,989 9,305,298.906 843,572,976 84,357,297.566 181,129,214 18,112,921.470

TOTAL 1,370,032,284 137,003,228.420 98,052,989 9,805,298.906 948,899,682 94,889,968.172 273,771,835 27,377,183.606

Note: HSBC Asset Management (India) Private Limited, the investment manager holds 500,000 units (Previous year : 500,000 units) in the HSBC Income Fund - Short Term Plan Institutional Option Growth Sub Option as at March 31,2009.

SCHEDULE 5 Reserves and Surplus

Total Total


At the beginning of the year (11,580,047) (18,822,040)

(-6,085,445) (-18,945,104)

Added during the year 56,679,130 8,866,005

(-5,494,600) (123,064)

At the end of the year 45,099,083 (9,956,035)

(-11,580,046) (-18,822,040)


Added during the year 58,294,646 113,111,335

(-7,355,725) (26,259,866)

Transferred to Revenue Account (58,294,646) (113,111,335)

7,355,725 (-26,259,866)


(-) (-)


At the beginning of the year 51,791 343,981

(-) (-) Net change in Unrealised Appreciation in Value of Investments Transferred from Revenue Account 4,886,296 2,562,654

(51,791) (343,981)


(51,791) (343,981)

Reserve Fund


(28,023,052) (57,882,699)

Transfer to Revenue Account (4,862,864) (1,778,927)

(-8,867,609) (-2,799,688)

Balance Transferred from Revenue Account 66,123,274 105,468,563

(14,965,236) (48,376,734) At the end of the year 95,381,089 207,149,381

(34,120,679) (103,459,745)

TOTAL 145,418,259 * 200,099,981 * (22,592,424) * (84,981,686) *

* The share of the Plans / Options of the Reserves and Surplus is as follows : March 31, 2009 March 31, 2009

(March 31, 2008) (March 31, 2008)

Regular OptionGrowth Sub Option : Rs. 75,253,285 124,447,697

(16,685,634) (42,125,641)Dividend Sub Option : Rs. 44,140,737 69,180,587

(5,539,426) (4,559,250)

Weekly Dividend Sub Option : Rs. 1,030,162 -

(51,873) -

Total (A) 120,424,184 193,628,284

(22,276,933) (46,684,891)

Institutional Option

Growth Sub Option : Rs. 14,924,380 (219,310)

(315,491) (38,296,795)

Dividend Sub Option : Rs. 2,155,224 6,691,007

(-) (-)

Weekly Dividend Sub Option : Rs. 6,353,340 -

(-) - Total (B) 23,432,944 6,471,697

(315,491) (38,296,795)

Institutional Plus OptionGrowth Sub Option : Rs. 1,524,969 -

(-) -

Weekly Dividend Sub Option : Rs. - -

(-) -

Monthly Dividend Sub Option : Rs. 36,162 -

(-) - Total (C) 1,561,131 -

(-) -

Total (A+B+C) : Rs. 145,418,259 200,099,981

(22,592,424) (84,981,686)



Rupees

March 31, 2009Short Term Plan Investment PlanMarch 31, 2009

(March 31, 2008) (March 31, 2008)Rupees

3

SCHEDULE 6Current Liabilities and Provisions March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008

Rupees Rupees Rupees RupeesCurrent Liabilities

Investment Management and Advisory Fees 416,509 108,728 304,050 638,535


Custodian Fees and Expenses 35,450 2,929 14,173 7,578

Audit Fees 50,000 50,000 50,000 50,000

Selling and Distribution Expenses 1,597,899 38,030 2,434,277 135,710

Purchase Contracts Awaiting Completion - - 14,161,250 -

Unit Redemption Payable 2,151,630 - 28,088 -

Inter Scheme Payable - For Switch Out - - 1,272,632 1,003,301 - For Others - - 299,000 -

Units Pending Allotment - - - 24

Dividend Payable 930,882 - - -

Dividend Tax Payable - 848 - -

Unclaimed Redemption (Note 14) - - 239,310 202,786

Unclaimed Dividend (Note 15) 53,399 53,399 104,058 201,510

Load Payable - - - 26,605

Temporary Book Overdraft 78 - - -

Sundry Payables 101,897 37,949 140,443 54,049

TOTAL 5,396,164 296,589 19,118,332 2,340,384

SCHEDULE 7 Interest and Discount (Note 2.4) April 01, 2008 to April 01, 2007 to April 01, 2008 to April 01, 2007 to


Debentures / Bonds 15,659,194 4,930,740 18,138,317 9,245,990

Asset Backed Securities - - 587,348 3,900,418

Commercial Paper / Certificate of Deposit 26,611,387 9,059,476 1,184,936 331,018

Government of India Securities - 16,646 9,571,632 3,468,497

Reverse Repos 2,911,033 1,719,807 3,826,439 2,851,935

Collateralised Borrowing and Lending Obligations 801,821 14,705 573,951 109,641

Margin Deposit with the Clearing Corporation of India Limited 5,157 6,977 2,600 3,488

TOTAL 45,988,592 15,748,351 33,885,223 19,910,987


HSBC MUTUAL FUND - HSBC INCOME FUND Schedules forming part of the Balance Sheet as at March 31, 2009 and the



4

Description Quantity Market / Fair Value Rupees

HSBC INCOME FUND - SHORT TERM PLANNon-Convertible Debentures / Bonds Listed / Awaiting listing (58.29 %)Banks (21.27 %)

9.25% Exim Bank Limited 2013 $ @ 84 86,514,876 11.10% Exim Bank Limited 2011 $ @ 50 51,456,750 9.25% Exim Bank Limited 2012 $ @ 40 41,066,328

179,037,954 Finance (67.60 %)

8.70% Power Finance Corporation Limited 2010 90 91,444,230 8.46% Indian Railway Finance Corporation Limited 2014 68 68,225,828 9.68% Indian Railway Finance Corporation Limited 2010 $ 50 51,216,915 8.75% Indian Railway Finance Corporation Limited 2013 $ 50 50,908,428 8.65% National Housing Bank Limited 2012 $ 50 50,588,848 8.49% Power Finance Corporation Limited 2011 50 50,499,250 10.95% Rural Electrification Corporation Limited 2011 $ 46 49,032,803 11.50% Rural Electrification Corporation Limited 2013 39 43,220,268 11.45% Rural Electrification Corporation Limited 2010 $ 39 41,256,535 10.75% Power Finance Corporation 2011 25 26,341,025 9.45% Rural Electrification Corporation Limited 2013 25 25,737,600 9.01% Power Finance Corporation Limited 2011 $ 20 20,418,551


9.50% National Bank For Agricultural and Rural Development Limited 2012 $ 50 51,799,181 9.15% National Bank For Agricultural and Rural Development Limited 2010 $ 41 41,848,608

93,647,789 Total (Cost Rs. 836,637,938) 841,576,024 Commercial Papers/Certificate of Deposits (41.71 %)Certificate of Deposits (100 %)

Allahabad Bank $ @ 1,000 94,008,429 Corporation Bank $ @ 950 89,406,226 Canara Bank $ 900 84,900,534 Corporation Bank $ @ 500 48,839,563 State Bank of Indore $ @ 500 47,344,429 Punjab National Bank $ 500 47,213,136 Canara Bank $ 500 47,195,835 Punjab National Bank $ 500 46,572,624 IDBI Bank Limited $ @ 450 42,276,010 Oriental Bank of Commerce $ 300 28,403,714 Oriental Bank of Commerce $ 200 19,051,402 Exim Bank Limited $ @ 70 6,941,389

602,153,291 Total (Cost Rs. 602,153,290) 602,153,291 TOTAL INVESTMENTS (Cost Rs. 1,438,791,228) 1,443,729,315

HSBC INCOME FUND - INVESTMENT PLANNon-Convertible Debentures / Bonds Listed / Awaiting listing (57.13 %)Banks (28.02 %)

9.50% Exim Bank Limited 2013 @ 80 82,458,480 8.40% State Bank of India 2018 $ @ 50 48,767,892 9.25% Exim Bank Limited 2013 $ @ 16 16,479,024 8.90% State Bank of India 2023 $ @ 14 14,071,220 9.25% Exim Bank Limited 2012 $ @ 10 10,266,582

172,043,198 Finance (67.67 %)

11.25% Power Finance Corporation Limited 2018 106 119,729,120 8.65% Rural Electrification Corporation Limited 2019 117 113,643,855 8.46% Indian Railway Finance Corporation Limited 2014 52 52,172,692 8.55% Indian Railway Finance Corporation Limited 2019 50 48,735,650 10.60% Indian Railway Finance Corporation Limited 2018 $ 27 30,145,191 9.22% Power Finance Corporation Limited 2012 $ 25 25,621,051 9.45% Rural Electrification Corporation Limited 2013 15 15,442,560 9.07% Rural Electrification Corporation Limited 2018 $ 10 9,961,522


9.80% National Bank For Agricultural and Rural Development Limited 2012 $ 25 26,434,871 26,434,871

Total (Cost Rs. 611,023,075) 613,929,710

Government of India Securities (42.19 %)6.05% GOI Bonds 2019 2,725,000 254,079,000 7.46% GOI Bonds 2017 850,000 86,360,000 8.35% GOI Bonds 2022 400,000 42,200,000 7.56% GOI Bonds 2014 350,000 36,330,000 7.95% GOI Bonds 2032 290,000 29,406,000 7.95% GOI Bonds 2025 50,000 4,929,000 5.59% GOI Bonds 2016 400 36,434

453,340,434 Total (Cost Rs. 469,185,683) 453,340,434

Asset Backed Securities (0.68 %)Finance & Term Lending (100 %)

India MBS 2002 Series I-D (LIC Housing Finance) PTC 2017 * 5 7,266,992 7,266,992


HSBC MUTUAL FUND - HSBC INCOME FUNDStatement of Portfolio Holding as at March 31, 2009

(Referred to in Schedule 1 to the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March 31, 2009)

Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial year for the investments held by them and from The Hongkongand Shanghai Banking Corporation Limited for the securities held by them in the constituent subsidiary general ledger (CSGL) account.

* Fair value of privately placed securities as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board ofTrustees.

$ Fair value of non traded and thinly traded debt securities as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board ofTrustees in accordance with the guidelines for valuation of securities for Mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by theSecurities and Exchange Board of India.@ Investment in companies which have invested more than five percent of the net asset value of any schemes of HSBC Mutual Fund.

5

HSBC MUTUAL FUND - HSBC INCOME FUND - INVESTMENT PLAN


Annexure 1


Nature of Transaction Investment Manager


Manager


Sponsor Total

Purchase of Investments - - 285,228,959 285,228,959Previous Year - - 74,988,166 74,988,166

Sale of Investments - - 301,433,033 301,433,033Previous Year - - 112,600,801 112,600,801

Investment Management and Advisory Fees 1,838,001 - - 1,838,001Previous Year 2,088,768 - - 2,088,768

Brokerage/ Commission on Distribution of Units - 5,263,325 - 5,263,325Previous Year - 582,379 - 582,379

Charges for Services Provided by Bank - 41,395 - 41,395Previous Year - 102,302 - 102,302

Reimbursement of Expenses 5,880,374 5,880,374Previous Year - -




Manager


Sponsor Total

Investment Management and Advisory Fees Payable 304,050 - - 304,050Previous Year 638,535 - - 638,535

Commission Payable for Distribution of Units - 1,588,037 - 1,588,037Previous Year - 42,084 - 42,084

Other Payables - - 299,000 299,000Previous Year - - - -

Other Receivables 5,580,588 - - 5,580,588Previous Year - - - -


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 64,042,434 - HSBC Fixed Term Series 49 50,555,600 - HSBC Fixed Term Series 61 39,364,723 - HSBC Dynamic Fund 32,182,656 - HSBC MIP Fund Regular Plan 9,991,836 48,352,674HSBC Income Fund Short Term Plan - 1,951,510HSBC Interval Fund - Plan II - 24,683,982

Sale of InvestmentsHSBC Cash Fund 107,343,911 - HSBC MIP Fund Savings Plan 81,573,833 - HSBC Flexi Debt Fund 40,071,537 - HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) - 76,843,639 HSBC MIP Fund Regular Plan 27,810,155 24,107,608 HSBC Fixed Term Series 24 - 11,649,554

Other PayablesHSBC Income Fund Short term Plan 299,000 -

0

HSBC MUTUAL FUND - HSBC INCOME FUND - SHORT TERM PLAN


Annexure 1




Manager


Sponsor


Relatives Total

Purchase of Investments - - 1,195,459,978 - 1,195,459,978 Previous Year - - 272,441,376 - 272,441,376

Sale of Investments - - 614,136,281 - 614,136,281 Previous Year - - 250,629,083 - 250,629,083

Subscription of Units (including switch in and dividend reinvestment) - - - - - Previous Year 5,000,000 - - - 5,000,000

Redemption of Units (including switch out) - - - - - Previous Year - - - 305,261 305,261

Investment Management and Advisory Fees 1,747,698 - - - 1,747,698 Previous Year 853,111 - - - 853,111

Brokerage/ Commission on Distribution of Units - 1,678,765 - - 1,678,765 Previous Year - 251,473 - - 251,473

Reimbursement of Expenses 1,441,465 - - - 1,441,465 Previous Year - - - - -

Charges for Services Provided by Bank - 3,854 - - 3,854 Previous Year - 3,937 - - 3,937




Manager


Sponsor


Relatives Total

Investment Management and Advisory Fees Payable 416,509 - - - 416,509 Previous Year 108,728 - - - 108,728

Brokerage/ Commission Payable on Distribution of Units - 1,194,539 - - 1,194,539 Previous Year - 14,067 - - 14,067

Units Outstanding As At Year End 5,843,550 - - - 5,843,550 Previous Year 5,315,500 - - 304,078 5,619,578

Other Receivables 1,441,587 - 299,000 - 1,740,587 Previous Year - - - - -


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Cash Fund 234,790,337 89,947,569 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 508,322,846 73,588,898 HSBC Floating Rate Fund Long Term Plan 19,576,239 38,188,023 HSBC Fixed Term Series 15 - 19,561,839 HSBC Flexi Debt Fund 177,803,163 -

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 46,547,344 76,990,006 HSBC Cash Fund 123,985,965 - HSBC Flexi Debt Fund 180,636,003 - HSBC MIP Fund Savings Plan 108,721,964 68,722,146 HSBC Floating Rate Fund Long Term Plan - 62,951,413 HSBC Fixed Term Series 59 94,235,109 - HSBC MIP Fund Regular Plan - 27,318,663

Other ReceivablesHSBC Income Fund Investment Plan 299,000 -


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Redemption of Units (including switch out)Sanjay Prakash - 305,261

1



SCHEDULE 8


1 Organisation

HSBC Income Fund (the “Scheme”) is an open-ended income scheme of HSBC Mutual Fund (the “Fund”) and was launched on November 14, 2002. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956, has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on December 3, 2002 and reopened for issue and redemption of units on December 27, 2002. The investment objective of the Scheme is to provide a reasonable income whilst maintaining a prudent policy of capital conservation. The Scheme has two Plans – Short Term Plan and Investment Plan, each with a separate portfolio each offering Institutional and Regular Option. Both the Institutional and Regular Options under the Short Term Plan offer Growth, Dividend and Weekly Dividend Sub-options. Both the Institutional and Regular Options under the Investment Plan offer Growth and Dividend Sub-Options. The Weekly Dividend Sub-option under the Institutional and Regular Options of the Short Term Plan was introduced in accordance with the addendum dated October 31, 2006 made to the common offer document dated November 29, 2004 and units were allotted on November 7, 2006 and November 17, 2006 respectively at Rs. 10 per unit. The Institutional Option under the Short Term Plan and Investment Plan was introduced during the year ended March 31, 2004 and units were allotted on September 15, 2003 under the Growth and Dividend Sub-options at the net asset value of the Growth Sub-option of the Regular Option, while the terms of the addendum to the offer document dated August 29, 2003 stated that unit holders opting for the Growth or Dividend Sub-options in Institutional Option would be allotted units at the existing net asset values of the Growth and Dividend Sub-options respectively, of the Regular Option. However, this has not resulted in any loss or gain to the unit holders opting for the Sub-options under the Institutional Option nor has it had any impact on the ongoing net asset values of the respective Sub-options of the Institutional Option. In accordance with the addendum to the offer document dated April 29, 2008, Institutional Plus Option was introduced with Monthly Dividend, Quarterly Dividend, Weekly Dividend Re-investment and Growth sub-options with effect from May 05, 2008 under Short Term Plan and units were allotted on May 05, 2008, February 18, 2009 and March 26, 2009 in Weekly Dividend Re-investment, Growth and Monthly Dividend sub-options respectively. The Scheme will not declare dividend under the Growth Sub-Option of both the Plans in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value of these Plans.



The Scheme maintains its books of account on an accrual basis. These financial statements have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (the “Regulation”) and amendments thereto, as applicable.





i. Debt securities listed on a recognized stock exchange are valued at the last quoted closing price on the National Stock Exchange of India Limited (NSE). If no sale is reported at that time, such securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

ii. Non-traded and thinly traded debt securities, are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).

iii. Privately placed debt securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

iv. Asset backed securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

v. Government securities are valued at prices obtained from The Credit Rating Information Services of India Limited in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by SEBI.

vi. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable interest up to the date of resale.

vii. Traded money market securities are valued at the yield at which they were traded on the valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments is determined separately for each category of investments. In respect of each category of investments, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution.

The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of being first being adjusted against the provision for depreciation, if already created in the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.







2.5 Net Asset Value for Growth / Dividend Sub-Option of Institutional Plus, Institutional and Regular

Option

The net asset value of the units of the Scheme is determined separately for units issued under the Growth and Dividend Sub-options of the Institutional Plus, Institutional and Regular Options for the Short Term Plan and Institutional and Regular Options for the Investment Plan. For reporting the net asset value for the Sub-options, daily income earned, including realized and unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Sub-options in proportion to the value of the units outstanding.



2.7 Income Equalization Reserve The net distributable income relating to units issued / repurchased is transferred to / from income equalization reserve for determining the net surplus / deficit, transferred from / to unit premium reserve.




Asset Management (India) Private Limited for managing the Scheme at an average annual rate 0.32%

and 0.70% of the average daily net asset values of the Short Term Plan and Investment Plan

respectively recorded by the Scheme. All costs, charges and expenses incurred by HSBC Asset

Management (India) Private Limited in the administration and execution of the activities of the

Scheme, except costs allowed to be charged to the Scheme under the Securities and Exchange Board of

India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable, are on their own

account for which they receive investment management and advisory fees.



4 Trusteeship Fees





5 Custodian Fees

JPMorgan Chase Bank provides custodial services to the Scheme for which it receives custody fees.

6 Income Taxes


7 Aggregate Appreciation and Depreciation In Value of Investments Aggregate appreciation and depreciation in value of investments are as follows:

March 31 ,2009

(Rupees) March 31 ,2008

(Rupees)

Short Term

Plan Investment

Plan Short Term

Plan Investment

Plan


- Appreciation 5,080,372 6,317,746 58,671 899,178

- Depreciation 142,285 3,411,111 40,026 555,197 Privately Placed Non Convertible Debentures / Bonds

-Appreciation - - 49,012 -

- Depreciation - - 15,866 -



- Depreciation - 781,228 - 1,507,492



- Depreciation - 15,845,249 - 5,749 8 Registered Securities



In accordance with Regulation 44(1) of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, securities purchased should be held in the name of the Scheme. As at March 31, 2009 Government securities aggregating to Rs. 453,340,434 (market value) of the Investment Plan are held in the name of HSBC Mutual Fund.

9 Aggregate Fair Value of Non-Traded Investments Aggregate fair value of non traded investments as determined by HSBC Asset Management (India)

Private Limited under the procedures approved by the Board of Trustees as at March 31, 2009 is Rs. 1,138,261,114 for the Short Term Plan and Rs. 189,014,346 for the Investment Plan.


The aggregate value of investments purchased and sold (including matured) during the year (excluding accretion of discount of Rs. 26,773,795 and Rs. 1,815,499 for Short Term Plan and Investment Plan respectively) is :

Plan Aggregate Purchases Aggregate Sales


Daily Net Assets (Annualized)



Short Term Plan 3,827,871,811 710.63% 2,473,791,637 459.25%

Investment Plan 3,159,143,552 762.83% 2,244,998,154 542.10%


The total income (including net profit/loss on sale of investments and net change in the unrealized

appreciation/depreciation in the value of investments) and expenditure during the year is:

Plan Total Income Total Expenditure




Daily Net Assets(Annualized)

Short Term Plan 49,168,001 8.93% 4,650,215 0.84%

Investment Plan 9,233,610 2.23% 6,726,109 1.62%

12 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual Funds)Regulation, 1996 as amended and in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India (ICAI)

The Scheme has entered into transactions with certain related parties. The information required in this regard in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India and regulation 25(8) of SEBI Regulation, is provided below:








HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan)



HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund




business: Refer Annexure I III During the year, The Hong Kong and Shanghai Banking Corporation Limited, an associate entity of

HSBC Asset Management (India) Private Limited was paid collection/bank charges amounting to Rs. 3,854 for the Short Term Plan and Rs. 41,395 for the Investment Plan and brokerage amounting to Rs. 1,678,765 for the Short Term Plan and Rs. 5,263,325 for the Investment Plan for procuring unit subscriptions for the Scheme. The brokerage paid was at rates similar to those offered to other distributors. Further, The Hong Kong and Shanghai Banking Corporation Limited, an associate of the Sponsor, is on the panel of bankers with whom HSBC Mutual Fund places money on fixed deposits and enters into reverse repo transactions from time to time at competitive rates.






The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other

debt instruments and were made solely on the basis of sound fundamentals of these companies


As at March 31, 2009, unclaimed redemptions aggregate Rs. 239,310 payable to 12 investors of Investment Plan.

15 Unclaimed Dividends

As at March 31, 2009, unclaimed dividends payable to investors are:


Number of Investors

Short Term Plan 53,399 21 Investment Plan 104,058 251









Trustee


Trustee

Director


Fund Manager(s)

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Gilt Fund (Formerly HSBC Gilt Fund –

Short Term Plan) ("The Scheme") as at March 31, 2009, the related Revenue Account for the year ended on that date and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.






(i) The Balance Sheet, the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Gilt Fund as at March 31, 2009, its net deficit and its Cash Flow for the year on that date.





Rupees

A. Cashflow from Operating ActivitiesNet Realised Loss for the year (17,663,274)

Adjustments for:- (Increase)/Decrease in Investments at Cost (136,493,583)

(Increase)/Decrease in Other Current Assets (1,553,504)

Increase/(Decrease) in Current Liabilities 546,539

Net cash (used in) Operations ( A ) (155,163,822)

B Cashflow from Financing Activities Increase/(Decrease) in Unit Capital 186,519,360

Increase/(Decrease) in Unit Premium 37,319,183

Adjustments for:- Increase/(Decrease) in Redemption Payable for Units Redeemed by Investors 1,000,000

(Increase)/Decrease in Subscription Receivable for Units Issued to Investors (28,948)

Dividend / Distribution during the year (26,769,054)

Dividend / Distribution Tax paid during the year (4,785,406)

Net cash generated from financing activities ( B ) 193,255,135

Net Increase in Cash and Cash Equivalents (A+B) 38,091,313

Cash and Cash Equivalents at the Beginning of the Year 9,830,596

Cash and Cash Equivalents at the End of the Year 47,921,909


Rupees


Balances with Banks :- In Current Account 222,993 - In Dividend Account 7,372

Temporary Book Overdraft (13)

Other Collaterised Lending- Reverse Repos 23,306,994

- Collateralised Borrowing and Lending Obligation 24,384,563

47,921,909


3 This is the first year of applicability of Accounting Standard 3 on 'Cash Flow Statement' to the Scheme.





PRICE WATERHOUSE

Chartered Accountants Vikramaaditya

Trustee Officer

Trustee Director

Place: Mumbai

Date : , 22 July 2009 Fund Manager(s)

HSBC MUTUAL FUND - HSBC GILT FUND (FORMERLY, HSBC GILT FUND - SHORT TERM PLAN)



0


ASSETS

Investments 1 126,930,000 -


TOTAL 181,151,811 9,832,616

LIABILITIES

Unit Capital 3 195,268,050 8,748,690


Current Liabilities and Provisions 5 1,587,269 40,717

TOTAL -0.29 181,151,811 9,832,616


Growth Option Dividend Option Weekly Dividend Option

Total Growth Option Dividend Option Total

Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions) (Note 2.5) 27,518,748 28,853,884 123,191,910 179,564,542 4,962,232 4,829,667 9,791,899

Number of Units in Issue 2,554,537.361 3,037,397.103 13,934,870.718 425,297.259 449,571.839

Net Asset Value per Unit 10.7725 9.4995 8.8405 11.6677 10.7428



PARTHA GHOSH For Board of Trustees For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants Vikramaaditya


Trustee Director

Place: Mumbai Date : , 22 July 2009 Fund Manager(s)

Rupees



March 31, 2008



1


Schedule Rupees RupeesINCOME AND GAINS

Interest and Discount 6 45,899,256 430,156

TOTAL 45,899,256 430,156

EXPENSES AND LOSSES

Net Loss on Sale of Investments (Note 2.3) 58,067,649 2,978

Investment Management and Advisory Fees (Note 3) 2,283,007 47,858


Trusteeship Fees and Expenses (Note 4) 3,053 20


Audit Fees 5,000 5,000



TOTAL 63,562,530 89,055

Net Realised (Losses)/Gains for the Year (17,663,274) 341,101

Net change in Unrealised Depreciation in Value of Investments (4,848,166) -

Net (Losses)/Gains for the Year 0.40 (22,511,440) 341,101

April 01, 2008 to March 31, 2009 April 01, 2007 to March 31, 2008

April 01, 2007 to March 31, 2008

Rupees Rupees Rupees

Net (Deficit)/Surplus for the Year (22,511,440) 215,472 125,629 341,101

Transfer from Income Equalisation Reserve (Note 2.7) 35,428,165 (577,853) 12,684 (565,169)

Transfer from Reserve Fund 2,466 - 3,724 3,724

Dividend / Distribution (26,769,054) - (118,914) (118,914)

Dividend / Distribution Tax thereon (4,785,406) - (16,841) (16,841)

Balance Transferred to Reserve Fund (18,635,269) (362,381) 6,282 (356,099)



PARTHA GHOSH For Board of For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants Vikramaaditya


Trustee Director

Place: Mumbai Date : , 22 July 2009 Fund Manager(s)




2

SCHEDULE 1

Investments March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008(Notes 2.2, 2.3, 6 and 7) Market Value Cost Market Value Cost


Government of India Securities 126,930,000 131,778,166 - -

TOTAL 126,930,000 131,778,166 - -


Balances with Banks - in Current Account 222,993 650,390 - in Dividend Account 7,372 7,363

Sales Contracts Awaiting Completion - Government of India Securities 4,715,417 -


Reverse Repos 23,306,994 9,172,843

Unit Subscription Receivable 10,000 -

Inter Scheme Receivable for 'Switch-In' 18,948 -

Receivable from Investment Manager 169 -

Interest Receivable on :- Government of India Securities 1,549,369 -


- Collateralised Borrowing and Lending Obligation 2,987 -

TOTAL 54,221,811 9,832,616


Schedules forming part of the Balance Sheet as at March 31, 2009 and


3

SCHEDULE 3Unit Capital

March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008Rupees Units Rupees Units

Growth OptionIssued and Subscribed :


Outstanding :At the beginning of the year 4,252,972 425,297.259 8,855,812 885,581.249 Issued during the year 305,879,686 30,587,968.620 7,296,576 729,657.626

310,132,658 31,013,265.879 16,152,388 1,615,238.875 Redeemed during the year 284,587,285 28,458,728.518 11,899,416 1,189,941.616 At the end of the year 25,545,373 2,554,537.361 4,252,972 425,297.259

Dividend OptionIssued and Subscribed :Units of Rs. 10 each fully paid up 5,326,243 532,624.299 5,326,243 532,624.299

Outstanding :At the beginning of the year 4,495,718 449,571.839 398,157 39,815.723 Issued during the year 1,333,764,295 133,376,429.531 7,918,157 791,815.674

1,338,260,013 133,826,001.370 8,316,314 831,631.397 Redeemed during the year 1,307,886,043 130,788,604.267 3,820,596 382,059.558 At the end of the year 30,373,970 3,037,397.103 4,495,718 449,571.839

Weekly Dividend OptionIssued and Subscribed :Units of Rs. 10 each fully paid up - - - -

Outstanding :Issued during the year 4,554,683,008 455,468,300.800 - -

4,554,683,008 455,468,300.800 - - Redeemed during the year 4,415,334,301 441,533,430.082 - - At the end of the year 139,348,707 13,934,870.718 - -

TOTAL 195,268,050 19,526,805.182 8,748,690 874,869.098

HSBC MUTUAL FUND - HSBC GILT FUND (FORMERLY, HSBC GILT FUND - SHORT TERM PLAN)Schedules forming part of the Balance Sheet as at March 31, 2009 and


4

SCHEDULE 4

Reserves and Surplus March 31, 2009

Rupees

Reserves and Surplus Unit Premium Reserve (Note 2.6 )At the beginning of the year 333,328 22,779 Added during the year 1,891,018 310,549

At the end of the year 2,224,346 333,328

Income Equalisation Reserve (Note 2.7)Added during the year 35,428,165 (565,169) Transfer to Revenue Account (35,428,165) 565,169


Reserve FundAt the beginning of the year 709,881 1,069,704 Balance Transferred to Revenue Account (2,466) (3,724) Balance Transferred from Revenue Account (18,635,269) (356,099)

At the end of the year (17,927,854) 709,881

TOTAL (15,703,508) * 1,043,209 *


Growth Option : Rs. 1,973,375 709,260

Dividend Option : Rs. (1,520,086) 333,949

Institutional Weekly Dividend Option : Rs. (16,156,797) -

Total : Rs. (15,703,508) 1,043,209

March 31, 2008

Rupees




5

SCHEDULE 5Current Liabilities and Provisions

March 31, 2009 March 31, 2008Current Liabilites Rupees Rupees


Transfer Agent Fees and Expenses 18,496 577

Audit Fees 5,000 5,000

Selling and Distribution Expenses 54,943 2,262

Inter Scheme Payable for Switch Out 1,000,000 -


Dividend Payable - 6,491

Dividend Tax Payable - 1,952

Bank Overdraft 13 -


TOTAL 1,587,269 40,717


Rupees Rupees

Government of India Securities 5,556,169 -


Reverse Repos 25,103,853 430,156

Others (Refer Note 11) (39,114) -

TOTAL 45,899,256 430,156




6

Annexure 1



Investment Manager


Sponsor


Relatives Total


Brokerage/ Commission on Distribution of Units - - 131,578 - - 131,578 Previous Year - - 1,641 - - 1,641

Charges for Services Provided by Bank - - - - - - Previous Year - - 23 - - 23

Borrowings taken and repaid - - 124,800,000 - - 124,800,000 Previous Year - - - - - -

Interest Expense on Borrowings - - 39,114 - - 39,114 Previous Year - - - - - -



Investment Manager


Sponsor


Relatives Total


Brokerage/ Commission Payable on Distribution of Units - - 3,522 - - 3,522 Previous Year - - - - - -

Other Receivables - 169 - - - 169 Previous Year - - - - -

7


Government of India Securities (100 %)6.05% GOI Bonds 2019 1,250,000 116,550,000 7.56% GOI Bonds 2014 100,000 10,380,000



Statement of Portfolio Holding as at March 31,2009

Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financialyear for the investments held by them.

(Referred to in Schedule 1 to the Balance Sheet as at March 31,2009 and the Revenue Account for the year ended March 31, 2009 )

8

HSBC MUTUAL FUND - HSBC GILT FUND (FORMERLY, HSBC GILT FUND – SHORT TERM PLAN)


SCHEDULE 7


1 Organisation

HSBC Gilt Fund (the “Scheme”) is an open-ended gilt scheme of HSBC Mutual Fund (the “Fund”) and was launched on November 28, 2003. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on December 2, 2003 and reopened for issue and redemption of units on December 8, 2003. In accordance with the addendum dated October 06, 2008 a Weekly Dividend Sub-option was introduced during the year and units were allotted on October 10, 2008 at Rs. 10 per unit. The investment objective of the Scheme is to generate reasonable returns through investments in Government securities of various maturities. The Scheme has a Short Term Plan having three options – Growth Option, Dividend Option and Weekly Dividend Option. In accordance with the notice-cum-addendum dated March 02, 2009 the nomenclature of the Scheme has been changed from HSBC Gilt Fund – Short Term Plan to HSBC Gilt Fund.

The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value of the options.






i. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable

interest up to the date of resale. ii Government securities are valued at prices obtained from The Credit Rating Information Services of India Limited in accordance with the guidelines for valuation of securities for

mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by SEBI.

iii Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.



Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments is determined separately for each category of investments. In respect of each category of investments, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.






The net asset value of the units of the Scheme is determined separately for the units issued under the Growth Option, Dividend Option and Weekly Dividend Option. For reporting the net asset value for the Options, daily income earned, including realized and unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the units outstanding.


Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit premium reserve of the Plan after an appropriate portion of the issue proceeds and redemption payout is credited or debited respectively to the income equalization reserve. The unit premium reserve is available for dividend distribution except to the extent it is represented by unrealized net appreciation in value of investments.








0.31% of the average daily net asset value of the options recorded by the Scheme. All costs, charges

and expenses incurred by HSBC Asset Management (India) Private Limited in the administration and

execution of the activities of the Scheme, except costs allowed to be charged to the Scheme under the

Regulations and amendments thereto as applicable, are on their own account for which they receive

investment management and advisory fees.

4 Trusteeship Fees




Trustees attended by such Trustee not affiliated with the Settlor.

5 Income Taxes

No provision for income tax is made as the Scheme qualifies as a recognized mutual fund under Section 10 (23D) of the Income Tax Act, 1961 of India.



March 31, 2009


(Rupees) Government of India Securities -Appreciation - - -Depreciation 4,848,166 -


The aggregate value of investments purchased and sold during the financial year is Rs. 1,184,011,556 and Rs. 994,165,715 respectively being 161.74 % and 135.80 % of the average daily net assets.


The total income (including net loss on sale of investments and net change in unrealized depreciation

in value of investments) and expenditure during the year is Rs. (17,016,559) and Rs. 5,494,881

respectively being (2.32) % and 0.75 % of the average daily net assets.










HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008



HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai *– Relative of a Key Management Personnel Kemaya Lal Kidwai* – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.



III During the year, The Hong Kong and Shanghai Banking Corporation Limited, an associate entity of

HSBC Asset Management (India) Private Limited was paid collection/bank charges amounting to Rs



23 and brokerage amounting to Rs. 131,578 for procuring unit subscriptions. The brokerage paid was

at rates similar to those offered to other distributors. Further, The Hong Kong and Shanghai Banking

Corporation Limited, an associate of the Sponsor, is on the panel of bankers with whom HSBC

Mutual Fund places money on fixed deposits and enters into reverse repo transactions from time to

time at competitive rates.


As at March 31, 2009, unclaimed dividend aggregate to Rs. 7,358 payable to 1 investor.

11 Interest

Interest expense aggregating Rs.39,114 on borrowings made by the Scheme to meet temporary liquidity needs for the purpose of redemption of units has been netted off from interest income as disclosed in Schedule 6.

12 Prior Year’s Figures Previous year’s figures have been re-grouped/re-arranged where necessary.





Trustee


Trustee

Director

Place: Mumbai Date : July 22, 2009

Fund Manager(s)

0Auditors’ Report 1To the Board of Trustees of 2HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Cash Fund (The “Scheme”) as at March 31, 2009, the related Revenue Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.


standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agent respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit. The Balance Sheet, the Revenue Account and the Cash Flow Statement referred to above are in agreement with the books of account of the Scheme.


(i) The Balance Sheet, the Revenue Account and the Cash Flow Statement together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and the amendments thereto, as applicable, and also give respectively a true and fair view of the state of affairs of HSBC Mutual Fund – Cash Fund as at March 31, 2009, its net surplus and its cash flows for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009, and the Revenue Account for the year ended on that date, together with the notes thereon, have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable.

(iii) The method used to value: (a) non traded debt securities in accordance with the guidelines for valuation of securities for

mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India and

(b) privately placed securities in good faith as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.

PARTHA GHOSH Partner M. No. F/55913 For and on behalf of PRICEWATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009


ASSETS

Investments 1 499,774,250 13,045,459,110

Deposits 2 282,638,000 30,538,000

Other Current Assets 3 4,272,958,069 251,687,873

TOTAL 5,055,370,319 13,327,684,983

LIABILITIES

Unit Capital 4 4,600,896,332 12,268,155,038

Reserves and Surplus 5 325,574,756 822,161,050


TOTAL 5,055,370,319 13,327,684,983


Growth Sub Option

Dividend Sub Option

Weekly DividendSub Option Total

Growth Sub Option

Daily Dividend Sub Option

Weekly DividendSub Option

Monthly Dividend Sub Option Total

Growth Sub Option

Daily DividendSub Option


Monthly DividendSub Option Total Total

Net Assets as per Balance Sheet

(Total Assets less Current Liabilities and Provisions) (Note 2.6) 283,508,670 1,202,295,068 172,231,968 1,658,035,706 23,867,214 551,021,885 114,438,497 5,840,590 695,168,186 619,337,752 1,623,262,740 269,729,148 60,937,556 2,573,267,196 4,926,471,088

(319,967,251) (1,720,386,314) (314,916,114) (2,355,269,679) (235,226,848) (1,451,765,621) (74,348,098) (22,882,808) (1,784,223,375) (2,637,303,450) (6,091,674,442) (183,114,415) (38,730,727) (8,950,823,034) (13,090,316,088)

Number of Units in Issue 19,452,526.536 117,952,996.359 17,184,208.603 1,626,747.666 52,779,357.682 10,930,233.795 554,781.289 44,991,905.273 162,235,389.474 26,337,844.437 6,043,642.284

(23,543,346.007) (168,782,960.991) (31,459,108.549) (17,227,982.504) (139,058,165.422) (7,110,328.509) (2,187,696.477) (206,514,921.534) (608,832,365.711) (18,231,462.834) (3,867,165.460)

Net Asset Value per Unit 14.5744 10.1930 10.0227 14.6717 10.4401 10.4699 10.5277 13.7655 10.0056 10.2411 10.0829 (13.5906) (10.1929) (10.0103) (13.6538) (10.4400) (10.4564) (10.4598) (12.7705) (10.0055) (10.0439) (10.0153)



PARTHA GHOSH For Board of Trustees of For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of

PRICE WATERHOUSE Chartered Accountants

Vikramaaditya


Trustee Director




HSBC MUTUAL FUND - HSBC CASH FUND

Institutional OptionRegular Option Institutional Plus Option

March 31, 2009(March 31, 2008)

Rupees

0


Rs.


Rupees

A. Cashflow from Operating ActivitieSurplus for the year 1,171,493,160 1,821,495,422

Adjustments for:- (Increase)/Decrease in Investments at cost 12,545,547,060 4,371,614,374 (Increase)/Decrease in Other current assets (1) 153,410,810 Increase/(Decrease) in Current liabilities 4,984,930 (8,286,635)

Net cash generated from operations ( A ) 13,722,025,149 6,338,233,971

B Cashflow from Financing Activitie Increase/(Decrease) in Unit capital (7,667,258,706) (5,240,074,482) Increase/(Decrease) in Unit premium (956,483,776) (1,297,432,586)

Adjustments for:- Increase/(Decrease) in Sundry creditors for units redeemed by investors (113,309,573) 24,000,648 (Increase)/Decrease in Sundry debtors for units issued to investors 4,768 2,909,101

Dividend paid during the year (554,531,773) (780,748,774) Dividend Tax paid during the year (157,071,123) (221,145,255)

Net cash (used in) financing activitie ( B ) (9,448,650,183) (7,512,491,348)

Net Increase/(Decrease) in Cash and cash equivalent (A+B) 4,273,374,966 (1,174,257,377)

Cash and Cash Equivalents at the beginning of the year 230,139,572 1,404,396,948 Cash and Cash Equivalents at the end of the year 4,503,514,538 230,139,572



Rupees


Balances with Scheduled Banks : - In Current Account 16,772,748 149,924,637 - In Dividend Account 33 2,186 - In Deposit Account

Margin Deposit for National Depository Service 100,000 - Margin Deposit with the Clearing Corporation of India Towards Collateralized Borrowing and Lending Obligation 42,538,000 30,538,000 Margin Deposit with the Clearing Corporation of India Limited towards Reverse Repos and Governement Securities 240,000,000 - Other Collateralised LendingReverse Repo 2,075,137,335 49,674,749 Collateralised Borrowing and Lending Obligation 2,171,094,275 -

4,545,642,391 230,139,572

2 The above Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard - 3 on Cash Flow Statements, issued by The Institute of Chartered Accountants of India.


PARTHA GHOSH For Board of Trustees of For HSBC Asset Management (India)Partner HSBC Mutual Fund Private Limited



PRICE WATERHOUSE



Trustee Director



HSBC MUTUAL FUND - HSBC CASH FUND1



INCOME AND GAINS

Interest and Discount 7 1,221,211,006 1,873,594,163 Net Profit on Sale of Investments

(Including Net Profit on Inter-Scheme Sale of Investments Rs. 4,367,930 (Previous year: Rs 214,464)) (Note 2.4) 10,818,302 40,577,232

Miscellaneous Income (Note 11) 39,384 1,030,766

TOTAL 1,232,068,692 1,915,202,161

EXPENSES AND LOSSES





Audit Fees 300,000 400,000



TOTAL 60,575,532 94,232,804

Less: Expenses to be Reimbursed by the Investment Manager - 526,065

TOTAL 60,575,532 93,706,739

Net Realised Gains for the Year 1,171,493,160 1,821,495,422

Net Change in Unrealised Depreciation in Value of Investments 7,220 710,186

Net Surplus for the Year 1,171,500,380 1,822,205,608


31, 2009Rupees Rupees Rupees

Net Surplus for the Year 24,334,926 1,171,500,380 1,822,205,608

(56,659,979)

Transfer from Income Equalisation Reserve (Note 2.8) (19,847,748) (963,276,421) (1,301,373,003)

(-217,607,061)

Transfer from Reserve Fund - 62,374,628 44,134,132

(-)

Transferred from Unit Premium Reserve (Note 2.7) - - 544,652

(-)

Dividend / Distribution - (554,531,773) (780,748,774)

(-)

Dividend / Distribution Tax thereon - (157,071,123) (221,145,255)

(-)

Balance Transferred to Reserve Fund 4,487,178 (441,004,309) (436,382,639)



(4,487,178) (-441,004,309)



Trustee Director





April 01, 2007 to March 31, 2008

2

SCHEDULE 1

Investments Market /Fair Value Cost Market /Fair Value Cost(Notes 2.2, 2.4, 7, 8, 9 and 13) Rupees Rupees Rupees Rupees(Refer to the attached Statement of Portfolio Holding as at March 31, 2009)

Non Convertible Debentures and Bonds Listed / Awaiting Listing 148,333,096 148,333,096 2,100,548,297 2,100,555,518

Privately Placed Non Convertible Debentures / Bonds 106,195,000 106,195,000 - -

Asset Backed Securities - - 659,848,511 659,848,511

Commercial Paper / Certificate of Deposit 245,246,154 245,246,154 10,285,062,302 10,285,062,302

TOTAL 499,774,250 499,774,250 13,045,459,110 13,045,466,331


Margin Deposit for National Depository Service 100,000 -

Margin Deposit with Clearing Corporation of India Limited towards Collateralised Borrowing and Lending Obligation 42,538,000 30,538,000


TOTAL 282,638,000 30,538,000


Balances with Banks - in Current Account 16,772,748 149,924,637 - in Dividend Account 33 2,186

Unit Subscription Receivable - 250,000

Reverse Repos 2,075,137,335 49,674,749

Collateralised Borrowing and Lending Obligation 2,171,094,275 -

Inter-Scheme Receivable :- For 'Switch-In' 1,148,963 903,731 - For 'Others' 21,786 -

Interest Receivable on :- Debentures / Bonds 4,806,509 45,064,163 - Asset Backed Securities - 5,306,179 - Deposits 24,660 24,660 - Reverse Repos 267,044 10,937 - Collateralised Borrowing and Lending Obligation 265,984 - - Margin Deposit with Clearing Corporation of India Limited 3,262,115 -


Miscellaneous Receivables 100,000 114

TOTAL 4,272,958,069 251,687,873



March 31, 2009 March 31, 2008

3


Growth Sub Option

Issued and SubscribedUnits of Rs. 10 each fully paid up 1,087,475,000 108,747,500.000 1,087,475,000 108,747,500.000

Outstanding:


Issued during the year 697,456,171 69,745,617.114 2,870,128,022 287,012,802.208

932,889,632 93,288,963.121 3,809,181,780 380,918,177.952

Redeemed during the year 738,364,366 73,836,436.585 3,573,748,319 357,374,831.945


Dividend Sub Option

Issued and SubscribedUnits of Rs. 10 each fully paid up - - - -

Outstanding:


Issued during the year 3,085,190,109 308,519,010.875 5,472,862,568 547,286,256.767

4,773,019,719 477,301,971.866 8,196,655,540 819,665,553.981

Redeemed during the year 3,593,489,755 359,348,975.507 6,508,825,930 650,882,592.990



Issued and SubscribedUnits of Rs. 10 each fully paid up 450,000 45,000.000 450,000 45,000.000

Outstanding:



958,468,819 95,846,881.955 1,313,140,379 131,314,037.970



TOTAL 1,545,897,315 154,589,731.498 2,237,854,156 223,785,415.547


Growth Sub Option

Issued and SubscribedUnits of Rs. 10 each fully paid up 47,916,128 4,791,612.761 47,916,128 4,791,612.761

Outstanding:


Issued during the year 3,220,602,750 322,060,275.008 5,016,248,632 501,624,863.237

3,392,882,575 339,288,257.512 5,200,356,372 520,035,637.244

Redeemed during the year 3,376,615,098 337,661,509.846 5,028,076,547 502,807,654.740




Outstanding:

At the beginning of the year 1,390,581,654 139,058,165.422 828,639,837 82,863,983.736

Issued during the year 8,456,793,479 845,679,347.939 15,008,442,124 1,500,844,212.345

9,847,375,133 984,737,513.361 15,837,081,961 1,583,708,196.081

Redeemed during the year 9,319,581,557 931,958,155.679 14,446,500,307 1,444,650,030.659



Issued and SubscribedUnits of Rs. 10 each fully paid up 9,581,848 958,184.815 9,581,848 958,184.815

Outstanding:



430,174,085 43,017,408.509 525,479,530 52,547,953.029



Monthly Dividend Sub Option


Outstanding:


Issued during the year 58,711,860 5,871,186.049 8,400,504 840,050.367

80,588,824 8,058,882.526 36,188,351 3,618,835.143


At the end of the year 5,547,812 554,781.289 21,876,964 2,187,696.477

TOTAL 658,911,203 65,891,120.432 1,655,841,728 165,584,172.912


Regular Option


4


HSBC MUTUAL FUND - HSBC CASH FUNDSchedules forming part of the Balance Sheet as at March 31, 2009


4


Growth Sub Option


Outstanding:


Issued during the year 144,407,177,822 14,440,717,782.241 272,313,081,380 27,231,308,138.029

146,472,327,037 14,647,232,703.775 277,268,279,403 27,726,827,940.312

Redeemed during the year 146,022,407,985 14,602,240,798.502 275,203,130,188 27,520,313,018.778




Outstanding:



470,348,870,995 47,034,887,099.574 405,267,531,660 40,526,753,166.061





Outstanding:



11,509,967,333 1,150,996,733.251 22,041,283,161 2,204,128,316.014





Outstanding:



111,103,546 11,110,354.631 140,137,240 14,013,724.102



TOTAL 2,396,087,814 239,608,781.468 8,374,459,154 837,445,915.539

GRAND TOTAL 4,600,896,332 460,089,633.398 12,268,155,038 1,226,815,503.998

Note: HSBC Asset Management (India) Private Limited, the investment manager holds 5,069,436.298 units (Previous year : 38,138,23.129 units) in the Institutional Plus Option - Daily Dividend Sub - Option and 905,388.851 units (Previous year : 3,866,534.078 units) in the Institutional Plus Option Monthly Dividend Sub -Option as at March 31,2009.

HSBC Securities and Capital Markets (India) Private Limited, the sponsor holds 111,154,513.048 units (Previous year : 23,041,295.822 units) in the Institutional Plus Option - Daily Dividend Sub Option as at March 31,2009.



At the beginning of the year 2,088,119

(-1,307,646)

Added during the year 6,792,643

(3,940,417)

Transferred to Revenue Account -

(-544,652)

At the end of the year 8,880,762

(2,088,119)


Added during the year (963,276,421)

(-1,301,373,003)

Transferred to Revenue Account 963,276,421

(1,301,373,003)

At the end of the year -

Reserve Fund

At the beginning of the year 820,072,931

(1,300,589,703)

Transferred to Revenue Account (62,374,628)

(-44,134,132)

Balance Transferred from Revenue Account (441,004,309)

(-436,382,639)

At the end of the year 316,693,994

(820,072,931)

TOTAL 325,574,756 *

(822,161,050) *

* The share of the Options of the Reserves and Surplus is as follows : March 31, 2009(March 31, 2008)

Regular Option RupeesGrowth Sub-Option 88,983,404

(84,533,790)Daily Dividend Sub-Option 22,765,104

(32,556,704)Weekly Dividend Sub-Option 389,883

(325,029)Total (A) 112,138,391

(117,415,524)

Institutional OptionGrowth Sub-Option 7,599,737

(62,947,023)Daily Dividend Sub-Option 23,228,309

(61,183,967)Weekly Dividend Sub-Option 5,136,159

(3,244,813)Monthly Dividend Sub-Option 292,778

(1,005,844)Total (B) 36,256,983

(128,381,648)

Institutional Plus OptionGrowth Sub-Option 169,418,700

(572,154,235)Daily Dividend Sub-Option 908,846

(3,350,786)s 6,350,703

(799,786)Monthly Dividend Sub-Option 501,133

(59,073)Total (C) 177,179,382

(576,363,880)

Total (A+B+C) 325,574,756(822,161,052)



March 31, 2009(March 31, 2008)

Rupees


5

SCHEDULE 6 March 31, 2009 March 31, 2008Current Liabilities and Provisions Rupees RupeesCurrent Liabilities




Audit Fees 300,000 400,000


Unit Redemption Payable 398,693 -

Inter Scheme Payable

- For 'Switch-Out' 118,351,291 232,059,557

- For 'Others' 108,000 -

Units Pending Allotment 3,890,270 -

Dividend Payable 159,253 108,197

Dividend Tax Payable 237,254 468,982

Interest Rate Swaps (Note 2.3) - 145,021

Sundry Payables 1,094,410 293,828

TOTAL 128,899,231 237,368,895


Rupees Rupees


Asset Backed Securities 75,862,467 95,510,761

Treasury Bills - 10,006,003

Commercial Paper / Certificate of Deposit 747,514,935 1,079,700,083

Reverse Repos 103,872,960 102,247,270


Deposits 57,926,275 203,130,505

Margin Deposit with Clearing Corporation of India Limited 3,606,285 901,315

Interest Rate Swaps (Net) (Note 2.3 ) 224,281 8,803,082

TOTAL 1,221,211,006 1,873,594,163



6


Non-Convertible Debentures / Bonds Listed / Awaiting listing (29.68 %Chemicals (100 %)

Floating Finolex Industries Ltd 2009 $ 150 148,333,096 148,333,096

Total (Cost Rs. 148,333,096) 148,333,096

Privately Placed / Unlisted Non-Convertible Debentures / Bonds (21.25 %Construction (100 %)

19.00% Unitech Limited 2009 * 1,585 106,195,000 106,195,000

Total (Cost Rs. 106,195,000) 106,195,000

Commercial Papers/Certificate of Deposits (49.07 %)Certificate of Deposits (7.88 %)

Exim Bank Limited $ @ 200 19,327,524 19,327,524

Commercial Papers (92.12 %)Exim Bank Limited 2009 $ @ 460 225,918,630






Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial year for investments held by them.

* Fair value of privately placed securities as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by theBoard of Trustees.

$ Fair value of non traded debt securities as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board ofTrustees in accordance with guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issuedby the Securities and Exchange Board of India.

7



Annexure 1




Manager


Sponsor

Key Management Personnel & their

Relatives Total


Sale of Investments - - - 29,361,608,102 - 29,361,608,102 Previous Year - - - 47,801,653,794 - 47,801,653,794

Subscription of Units (including switch in and dividend reinvestment) 287,529,184,635 740,168,608 - - 3,677,678 288,273,030,921 Previous Year 113,095,582,553 1,332,470,572 - - 19,736,122 114,447,789,248

Redemption of Units (including switch out) 286,647,559,029 1,100,875,040 - - 6,942,693 287,755,376,762 Previous Year 112,885,054,000 1,166,805,322 - 3,154,023,254 24,665,395 117,230,547,970

Dividend Distribution (Including dividend reinvested) 70,484,635 14,768,608 - - 103,678 85,356,921 Previous Year 26,782,553 26,749,326 - - 289,099 53,820,978



Reimbursement of Expenses - - - - - - Previous Year - 526,065 - - - 526,065


Interest Rate Swaps Matured - - - - - - Previous Year - - 1,000,000,000 - - 1,000,000,000





Manager


Sponsor

Key Management Personnel & their

Relatives Total



Units Outstanding As At Year End 1,112,167,596 59,851,697 - - 65,930 1,172,085,223 Previous Year 230,541,989 420,321,191 - - 6,396,382 657,259,562

Other Payables - - - 108,000 - 108,000 Previous Year - - - - - -

Other Receivables - 56,617 - 21,786 - 78,403 Previous Year - 526,517 - - - 526,517


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 23,172,428,278 32,269,886,734

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 19,479,325,593 33,242,041,782

Redemption of Units (including switch out)HSBC Equity Fund - 901,866,152HSBC India Opportunities Fund - 500,817,400HSBC Advantage India Fund - 1,002,078,759HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) - 450,735,661

Other PayablesHSBC Equity Fund 95,000 - HSBC Floating Rate Fund - Long Term Plan 3,000 - HSBC MIP - Saving Plan 10,000 -

Other ReceivablesHSBC Advantage India Fund 21,786 -


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Sanjay Prakash 3,341,596 16,944,817Naina Lal Kidwai - 529,099Nelum P Gidwani - 2,003,402

Redemption of Units (including switch out)Sanjay Prakash 6,690,693 21,351,079Naina Lal Kidwai - 1,310,914

Dividend Distribution (Including dividend reinvested)Naina Lal Kidwai - 29,099Sanjay Prakash 91,596 244,793

Units Outstanding As At Year EndSanjay Prakash - 5,945,076Naina Lal Kidwai 65,930 192,616

0



SCHEDULE 8


1 Organisation

HSBC Cash Fund (the “Scheme”) is an open-ended liquid scheme of HSBC Mutual Fund (the “Fund”) and was launched

on November 14, 2002. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private

Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been

appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial

subscription on December 3, 2002 and reopened for issue and redemption of units on December 11, 2002. The

investment objective of the Scheme is to provide reasonable returns, commensurate with low risk while providing a high

level of liquidity, through a portfolio of money market and debt securities.

The Scheme has three Options – Regular Option, Institutional Option and Institutional Plus Option. The Regular Option

offers Growth, Daily Dividend and Weekly Dividend sub options. Weekly Dividend sub option was introduced during

the year ended March 31, 2006 and units were allotted on April 19, 2005 at the net asset value of Rs.10 per unit in

accordance with the addendum dated April 8, 2005 made to the common offer document dated November 29, 2004. The

Institutional Option was introduced during the year ended March 31, 2004 offering Growth, Daily Dividend, Weekly

Dividend and Monthly Dividend Sub-Options. Units were allotted on September 14, 2003 under the Growth and

Monthly Dividend Sub-Options and on September 15, 2003 under the Daily and Weekly Dividend Sub-Options at the

net asset value of the Growth Sub-Option of the Regular Option, while the terms of the addendum to the offer document

dated August 29, 2003 stated that unit holders opting for the Growth and Dividend Sub-Options in the Institutional

Option would be allotted units at the existing net asset values of the Growth and Dividend Sub-Options respectively, of

the Regular Option. However, this has not resulted in any loss or gain to the unit holders opting for the Sub – Options

under the Institutional Option nor has it had any impact on the ongoing net asset values of the respective Sub-Options of

the Institutional Option. An Institutional Plus Option was introduced during the year ended March 31, 2005 offering

Growth, Daily Dividend, Weekly Dividend and Monthly Dividend Sub-Options. Units were allotted on June 02, 2004

under the Growth, Daily Dividend, Weekly Dividend and Monthly Dividend Sub-Options at the net asset value of Rs.10

per unit in accordance with the addendum dated May 10, 2004 made to the offer document dated October 17, 2002.

The Scheme will not declare dividend under the Growth Sub - Options in normal circumstances. The income earned on

such units will remain invested within the Scheme and will be reflected in the net asset value.



The Scheme maintains its books of account on an accrual basis. These financial statements have been prepared in

accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange

Board of India (Mutual Funds) Regulations, 1996 (the “Regulations”) and amendments thereto, as applicable.


Investments are stated at market/fair value at the Balance Sheet date/date of determination. In valuing the Scheme’s

investments:

i. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on the National

Stock Exchange of India Limited (NSE). If no sale is reported at that time, such securities are valued at fair value

as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by

the Board of Trustees of HSBC Mutual Fund.



ii. Non-traded and thinly traded debt securities are valued at fair value as determined by HSBC Asset Management

(India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance

with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments

thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).

iii. Privately placed debt securities are valued at fair value as determined in good faith by HSBC Asset Management

(India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

iv. Asset backed securities are valued at fair value as determined in good faith by HSBC Asset Management (India)

Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund .

v. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable interest up to the

date of resale.

vi. Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is

reported at that time, such security is valued at the last traded price plus accretion of the difference between the

face value and the last traded price. Non traded money market instruments and bills purchased under

rediscounting schemes are valued at cost plus accrued interest.

Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments is determined separately for each category of investments. In respect of each category of investments, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account.

Net unrealised appreciation is reduced from the distributable income at the time of income distribution.

The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.

2.3 Interest Rate Swaps

Interest expense and income are accrued on a net basis daily in respect of interest rate swaps with maturity less than 182

days.

2.4 Securities Transactions

Investment securities transactions are accounted for on a trade date basis. The Scheme uses the average cost method for

determining the realized gain or loss on sale of investments.





2.6 Net Asset Value for Growth/Dividend Sub- Options

The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and

Dividend Sub-Options for the Regular, Institutional and Institutional Plus Options.

For reporting the net asset value for the Sub - Option, daily income earned, including realized and unrealized gain or loss

in the value of investments and expenses incurred by the Scheme are allocated to the Sub - Options in proportion to the

value of the units outstanding.


Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit

premium reserve of the Scheme, after an appropriate portion of the issue proceeds and redemption payout is credited or

debited respectively to the income equalization reserve.

The unit premium reserve is available for dividend distribution except to the extent it is represented by unrealised net

appreciation in value of investments.


The net distributable income relating to units issued/repurchased is transferred to/from income equalization reserve for

determining the net surplus/deficit, transferred from/to unit premium reserve. 3 Investment Management and Advisory Fees

The Scheme has paid or provided for investment management and advisory fees payable to HSBC Asset Management

(India) Private Limited for managing the Scheme at an average annual rate of 0.24% of the average daily net asset

value recorded by the Scheme. All costs, charges and expenses incurred by HSBC Asset Management (India) Private

Limited in the administration and execution of the activities of the Scheme, except costs allowed to be charged to the

Scheme under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as

applicable, are on their own account for which they receive investment management and advisory fees. 4 Trusteeship Fees

In accordance with the Deed of Trust dated February 7, 2002 between HSBC Securities and Capital Markets (India)

Private Limited (“The Settlor”) and the Board of Trustees of HSBC Mutual Fund, the Fund has paid or provided for a

fee not exceeding Rs.20,000 for each meeting of the Board of Trustees attended by such Trustee not affiliated with the

Settlor. 5 Custodian Fees

JP Morgan Chase Bank provides custodial services to the Scheme for which it receives custody fees. 6 Income Taxes

No provision for income tax is made as the Scheme qualifies as a recognized mutual fund under Section 10(23D) of the

Income Tax Act, 1961.



7 Aggregate Appreciation /(Depreciation) In Value of Investments

Aggregate appreciation /(depreciation) in value of investments is as follows:

March 31, 2009


(Rupees)


- Appreciation - -

- Depreciation - 7,220

8 Aggregate Fair Value of Non-Traded / Privately Placed Investments

Aggregate fair value of non-traded (including private placement) investments as determined by HSBC Asset

Management (India) Private Limited under the procedures approved by the Board of Trustees as at March 31, 2009 is

Rs. 499,774,250.


The aggregate value of investment securities purchased (excluding accretion of discount of Rs. 765,499,693) and sold

(including matured) during the financial year are Rs. 113,034,775,451 and Rs. 126,356,785,527 respectively being

745.22 % and 833.05% of the average daily net assets.


The total income (including net profit on sale of investments and net change in unrealized depreciation in the value of

investments) and expenditure during the year is Rs. 1,232,075,912 and Rs. 60,575,532 respectively being 8.12 % and

0.40 % of average daily net assets.

11 Miscellaneous Income

Miscellaneous income of Rs.39,384 represents amount compensated by HSBC Asset Management (India) Private

Limited, the investment adviser towards delayed recording of unit capital transactions.

12 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual Funds ) Regulation,

1996 as amended and in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the

Institute of Chartered Accountants of India (ICAI)

The Scheme has entered into transactions with certain related parties. The information required in this regard in

accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered

Accountants of India and regulation 25(8) of SEBI Regulation, is provided below :






Schemes of HSBC Mutual Fund (iii) The Hong Kong and Shanghai Banking Corporation Limited Associate of the Investment Manager (iv) Schemes of the Fund, Under Common Control of the Sponsor

HSBC Advantage India Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund



HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai* – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.

`II The following transactions occurred with the related parties during the year in the ordinary course of business: Refer Annexure I



III During the year, The Hongkong and Shanghai Banking Corporation Limited, an associate entity of HSBC Asset

Management (India) Private Limited was paid collection/bank charges Rs. 56,595 and brokerage amounting to Rs.

5,558,917 for procuring unit subscriptions for the Scheme. The brokerage paid was at rates similar to those offered to

other distributors.

Further, The Hong Kong and Shanghai Banking Corporation Limited, an associate of the Sponsor, is on the

panel of bankers with whom HSBC Mutual Fund places money on fixed deposits and enters into reverse repo



HSBC Mutual Fund has made investments in companies, which holds/ has held units in excess of 5% of the net asset

value of any Scheme of HSBC Mutual Fund which have been listed in Annexure II.

The investments comprise equity shares, debentures/ bonds, commercial paper, fixed deposits and other debt instruments

and were made solely on the basis of sound fundamentals of these companies.


The Scheme operates in one segment only viz. to primarily generate attractive returns from a diversified and actively

managed portfolio of debt and money market instruments.

15 Investment in Unitech Limited

As at March 31, 2009, HSBC Cash Fund had investments in secured redeemable debentures of Unitech Limited

aggregating Rs. 10.62 crores which were rescheduled for payment on April 18, 2009. Subsequent, to the year end the

terms and conditions of the said debentures were mutually extended in the interest of the unit holders, such that 50% of

the principal amount of the debentures would be payable in two equal installments before April 30, 2009 and June 30,

2009 and the balance 50% payable in April 2010. The Scheme has received Rs. 2.61 crores in April 2009. The interest on

the debentures has been serviced till March 31, 2009. The debenture holders are secured against immovable property

mortgaged by the company. In view of the above, in the opinion of the management, no provision is considered

necessary as at March 31, 2009.









Trustee


Trustee

Director


Fund Manager(s)

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Flexi Debt Fund ("The Scheme") as

at March 31, 2009 and the related Revenue Account for the year ended on that date, both of which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.





4. In our opinion and to the best of our information and according to the explanations given to us, (i) The Balance Sheet and the Revenue Account together with the notes thereon give the

information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Flexi Debt Fund as at March 31, 2009 and its net surplus for the year ended March 31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March 31, 2009, together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.

(iii) The method used to value: (a) non traded debt securities in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India and

(b) privately placed securities and government securities in good faith as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.

PARTHA GHOSH Partner Membership No. F-55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009


ASSETS

Investments 1 2,922,421,151 1,891,685,521


TOTAL 3,211,257,106 2,356,211,329

LIABILITIES

Unit Capital 3 2,986,843,230 2,317,959,342



TOTAL 0.70 3,211,257,106 2,356,211,329


Growth Sub Option


Fortnightly Dividend

Sub OptionQuarterly Dividend

Sub Option

Half Yearly Dividend

Sub Option TotalGrowth

Sub Option Monthly Dividend

Sub Option


Sub Option Quarterly Dividend

Sub Option Total TotalGrowth


Sub Option


Sub Option Total Growth

Sub Option Fortnightly Dividend


Sub Option Total Total

Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.5) 131,859,184 229,491,741 29,563,162 71,717,007 1,934,452 464,565,546 907,194,754 649,109,621 973,614,215 173,905,602 2,703,824,192 3,168,389,738 6,623,605 66,586,064 39,852,318 113,061,987 721,714,098 1,439,235,123 79,239,732 2,240,188,953 2,353,250,940

Number of Units in Issue 11,320,074.613 22,377,892.041 2,851,879.905 6,647,539.396 197,382.137 77,479,560.708 61,694,176.890 99,822,416.031 16,293,401.195 635,935.451 6,654,260.050 3,972,727.223 69,174,404.939 143,490,168.848 7,868,437.619

Net Asset Value per Unit 11.6483 10.2553 10.3662 10.7885 9.8005 11.7088 10.5214 9.7535 10.6734 10.4155 10.0065 10.0315 10.4333 10.0302 10.0706

131,859,184 229,491,741 29,563,162 71,717,007 1,934,452 464,565,546 907,194,754 649,109,621 973,614,215 173,905,602 2,703,824,192 3,168,389,738 Notes to the Financial Statements. 7



Membership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants Vikramaaditya


Trustee Director


RupeesInstitutional Option

March 31, 2009

HSBC MUTUAL FUND - HSBC FLEXI DEBT FUND



Regular Option Institutional Option



Regular Option

0


INCOME AND GAINS


Net Profit on Sale of Investments (Previous year Net Profit Rs. 1,663,038) (Note 2.3) - 12,534,578

TOTAL 137,817,674 100,801,559

EXPENSES AND LOSSES

Net Loss on Sale of investments (Including Net Loss on Inter-Scheme Sale of Investments Rs. 2,830,646(Previous period: Rs. Nil)) (Note 2.3) 27,041,105 -





Audit Fees 100,000 100,000



TOTAL 52,840,618 8,514,771

Net Realised Gains for the Year/Period 84,977,056 92,286,788

Net Change in Unrealised Depreciation in Value of Investments (30,180,533) (8,965,270)

Net Gains for the Year/Period 54,796,523 83,321,518

Net Change in Unrealised Appreciation in Value of Investments 12,881,525 (1,268,168)

Net Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments

67,678,048 82,053,350

Transferred to Unrealised Appreciation Reserve (12,881,525) 1,268,168

Net Surplus for the Year/Period 54,796,523 83,321,518

April 01, 2008to March 31, 2009

October 03, 2007 to March 31, 2008

Rupees Rupees

Net Surplus for the Year / Period 54,796,523 83,321,519

Transfer from Income Equalisation Reserve (Note 2.7) 82,196,992 22,031,836

Transfer from Unit Premium Reserve (Note 2.6) 662,064 223,020

Transfer from Reserve Fund 10,828,217 -

Dividend / Distribution (87,678,606) (59,638,385)

Dividend / Distribution Tax thereon (17,082,507) (12,917,342)

Balance Transferred to Reserve Fund 43,722,683 33,020,647





Membership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants Vikramaaditya


Trustee Director






April 01, 2008 to March 31, 2009

April 01, 2008to March 31, 2009



1

SCHEDULE 1

Investments Market/Fair Value Cost Market/Fair Value Cost(Notes 2.2, 2.3, 7, 8, 9 and 12) Rupees Rupees Rupees Rupees


Non Convertible Debentures and Bonds Listed / Awaiting Listing 1,739,136,506 1,725,365,366 1,071,992,014 1,080,957,284

Privately Placed Non Convertible Debentures / Bonds 20,693,775 20,315,222 316,202,448 314,934,279

Certificate of Deposit - - 503,491,059 503,491,059

Government of India Securities 1,162,590,870 1,201,736,673 - -

TOTAL 2,922,421,151 2,947,417,261 1,891,685,521 1,899,382,622


Balance with Banks- in Current Account 800,238 10,616,585 - in Dividend Account 9 -

Reverse Repos 72,747,433 417,241,885


Sales Contracts Awaiting Completion - Government of India Securities 63,668,625 -


Inter-Scheme Receivable for Switch In 207,481 -

Interest Receivable on :- Debentures and Bonds 60,426,134 29,675,470 - Government of India Securities 13,313,253 - - Reverse Repos 9,362 91,866 - Collateralised Borrowing and Lending Obligation 9,325 -

Receivable from Investment Manager 403 -

Miscellaneous Receivables 12,124 -

TOTAL 288,835,955 464,525,808





2

SCHEDULE 3Unit Capital March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

Rupees Units Rupees Units

Regular Option

Growth Sub Option


Units of Rs.10 each fully paid up 25,001 2,500.100 25,001 2,500.100

Outstanding:

Initial Issue and Subscription - - 25,001 2,500.100

At the beginning of the year / period 6,359,354 635,935.451 - -


132,271,962 13,227,196.243 13,281,636 1,328,163.631


At the end of the year / period 113,200,746 11,320,074.613 6,359,354 635,935.451



Units of Rs.10 each fully paid up 7,941,351 794,135.124 7,941,351 794,135.124

Outstanding: - -

Initial Issue and Subscription - - 7,941,351 794,135.124



297,717,003 29,771,700.370 123,809,859 12,380,985.966



Fortnightly Dividend Sub Option


Units of Rs.10 each fully paid up 1,469,757 146,975.683 1,469,757 146,975.683

Outstanding: - -

Initial Issue and Subscription - - 1,469,757 146,975.683



78,672,450 7,867,244.886 44,132,492 4,413,249.168



Quarterly Dividend Sub Option


Units of Rs.10 each fully paid up - - - -

Outstanding:

Issued during the year / period 71,808,103 7,180,810.305 - -

71,808,103 7,180,810.305

Redeemed during the year / period 5,332,709 533,270.909 - -

At the end of the year / period 66,475,394 6,647,539.396 - -

Half Yearly Dividend Sub Option



Outstanding:

Issued during the year / period 1,973,821 197,382.137 - -

1,973,821 197,382.137

Redeemed during the year / period - - - -

At the end of the year / period 1,973,821 197,382.137 - -


Growth Option



Outstanding:



Issued during the year / period 1,462,346,620 146,234,661.989 1,000,142,151 100,014,215.087

2,154,090,670 215,409,066.928 1,020,142,151 102,014,215.087

Redeemed during the year / period 1,379,295,062 137,929,506.220 328,398,101 32,839,810.148





Outstanding:



Issued during the year / period 1,164,783,863 116,478,386.310 84,870,867 8,487,086.689

1,243,468,239 124,346,823.929 837,329,507 83,732,950.689






Outstanding:



Issued during the year / period 2,298,280,005 229,828,000.535 2,057,140,548 205,714,054.776

3,733,181,694 373,318,169.383 2,571,036,964 257,103,696.336

Redeemed during the year / period 2,734,957,534 273,495,753.352 1,136,135,275 113,613,527.488

At the end of the year / period 998,224,160 99,822,416.031 1,434,901,689 143,490,168.848

Quarterly Dividend Sub Option



Outstanding:


214,432,560 21,443,255.956 - -

Redeemed during the year / period 51,498,548 5,149,854.761 - -

At the end of the year / period 162,934,012 16,293,401.195 - -

Half Yearly Dividend Sub Option



Outstanding:


28,194,751 2,819,475.063 - -

Redeemed during the year / period 28,194,751 2,819,475.063 - -

At the end of the year / period - - - -

TOTAL 2,986,843,230 298,684,322.916 2,317,959,342 231,795,934.130


HSBC MUTUAL FUND - HSBC FLEXI DEBT FUND3




Added during the year / period 101,140,983 1,225,803

Transferred to Revenue Account (662,064) (223,020)




Net change in Unrealised Appreciation in Value of Investments Transferred from Revenue Account (Note 7) 12,881,525 (1,268,168)



Added during the year / period 82,196,992 22,031,836

Transferred to Revenue Account (82,196,992) (22,031,836)

At the end of the year / period - -

Reserve Fund


Transferred to Revenue Account (10,828,217) -

Balance Transferred from Revenue Account 43,722,683 33,020,647


TOTAL 181,546,508 *. 35,291,598 *


Regular Option

Growth Sub Option : Rs. 18,658,438 264,251

Monthly Dividend Sub Option : Rs. 5,712,821 43,464

Fortnightly Dividend Sub Option : Rs. 1,044,362 125,045

Quarterly Dividend Sub Option : Rs. 5,241,613 N.A.

Half Yearly Dividend Sub Option : Rs. (39,369) N.A.Total (A) 30,617,865 432,760


Growth Sub Option : Rs. 132,399,146 29,970,048

Monthly Dividend Sub Option : Rs. 32,167,852 555,356

Fortnightly Dividend Sub Option : Rs. (24,609,945) 4,333,434

Quarterly Dividend Sub Option : Rs. 10,971,590 N.A.

Half Yearly Dividend Sub Option : Rs. - N.A.Total (B) 150,928,643 34,858,838

Total (A+B) 181,546,508 35,291,598

Rupees


March 31, 2009


March 31, 2008

Rupees

4



Investment Management and Advisory Fees 6,060,409 1,569,716 Transfer Agent Fees and Expenses 140,479 103,900 Custodian Fees and Expenses 43,759 72,148 Audit Fees 100,000 100,000 Purchase Contracts Awaiting Completion - Government of India Securities 33,042,917 - Selling and Distribution Expenses 3,242,038 469,564 Unit Redemption Payable 24,472 499,367 Dividend Payable - 809 Sundry Payables 213,294 144,885

TOTAL 42,867,368 2,960,389

SCHEDULE 6Interest and Discount (Note 2.4) April 01, 2008

to March 31, 2009October 03, 2007 to

March 31, 2008Rupees Rupees



Government of India Securities 41,113,448 7,836,687

Reverse Repos 8,046,750 11,392,505


TOTAL 137,817,674 88,266,981

0 0


HSBC MUTUAL FUND - HSBC FLEXI DEBT FUND5

Annexure 1



Investment Manager


Sponsor


Relatives Total



Subscription of Units (including switch in and dividend reinvestment) - - 329,926,684 - 8,106,755 338,033,439 Previous Year - - - - - -

Redemption of Units (including switch out - - 274,827,489 - - 274,827,489 Previous Year - - - - - -

Dividend Distribution (Including dividend reinvested - - 5,343,204 - 6,755 5,349,959 Previous Year - - - - -


Brokerage/ Commission on Distribution of Units - - 3,796,113 - - 3,796,113 Previous Year - - 180,163 - - 180,163



Investment Manager


Sponsor


Relatives Total


Brokerage/ Commission Payable on Distribution of Units - - 935,851 - - 935,851 Previous Year - - 113,904 - - 113,904

Units Outstanding As At Year End 322,563,745 - 8,085,971 330,649,716 Previous Year - - - -

Other Receivables - 403 - - - 403 Previous Year - - - - -


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Floating Rate Fund Long Term Plan 288,517,316 461,033,605 HSBC Fixed Term Series 46 229,242,575 - HSBC Income Fund Short Term Plan 180,636,003 8,086,040 HSBC Cash Fund - 2,090,831,849 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 112,018,162 1,609,898,922

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 425,775,781 686,889,717HSBC Cash Fund 258,246,595 1,621,275,367HSBC Advantage India Fund 203,438,659 -


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Kemaya Lall Kidwai 5,600,000 - Naina Lal Kidwai 2,006,755 -

Dividend Distribution (Including dividend reinvestedNaina Lal Kidwai 6,755 -

Units Outstanding As At Year EndKemaya Lall Kidwai 5,606,080 - Naina Lal Kidwai 1,973,766 -

6


Non-Convertible Debentures / Bonds Listed / Awaiting listing (59.51 %)Banks (32.38 %)

8.90% State Bank of India 2023 $ @ 386 387,963,638 9.25% Exim Bank Limited 2013 $ @ 100 102,993,900 9.50% Exim Bank Limited 2013 @ 70 72,151,170

563,108,708 Finance (53.12 %)

11.25% Power Finance Corporation Limited 2018 194 219,126,880 8.65% Rural Electrification Corporation Limited 2019 213 206,890,095 10.90% Rural Electrification Corporation Limited 2013 $ 150 162,634,250 8.55% Indian Railway Finance Corporation Limited 2019 100 97,471,300 8.46% Indian Railway Finance Corporation Limited 2014 80 80,265,680 10.60% Indian Railway Finance Corporation Limited 2018 $ 50 55,824,428 9.07% Rural Electrification Corporation Limited 2018 $ 40 39,846,090 10.75% Power Finance Corporation 2011 25 26,341,025 9.22% Power Finance Corporation Limited 2012 $ 25 25,621,051 9.65% Deutsche Postbank Home Finance Limited 2012 $ 10 9,842,392


9.83% Kotak Mahindra Prime Limited 2009 $ 20 19,724,240 0.00% Kotak Mahindra Prime Limited 2010 $ 9 7,718,054



Total (Cost Rs. 1,725,365,366) 1,739,136,506 Privately Placed / Unlisted Non-Convertible Debentures / Bonds (0.71 %)Finance (100 %)

10.40% SREI Equipments Finance Private Limited 2009 * 200 19,828,524 0.00% GE Capital Services India Limited 2010 * 1 865,251

20,693,775 Total (Cost Rs. 20,315,222) 20,693,775 Government of India Securities (39.78 %)

6.05% GOI Bonds 2019 7,525,000 701,631,000 7.46% GOI Bonds 2017 2,500,000 254,000,000 7.95% GOI Bonds 2032 700,000 70,980,000 8.35% GOI Bonds 2022 600,000 63,300,000 7.56% GOI Bonds 2014 550,000 57,090,000 8.30% Maharashtra SDL 2019 # 157,500 15,589,870

Total (Cost Rs. 1,201,736,673) 1,162,590,870 TOTAL INVESTMENTS (Cost Rs. 2,947,417,261) 2,922,421,151





# Fair value of Government securities as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the

$ Fair value of non traded debt securities and partly placed securities as determined by HSBC Asset Management (India) Private Limited underprocedures approved by the Board of Trustees in accordance with the guidelines for valuation of securities for Mutual funds dated September 18, 2000and amendments thereto, as applicable, issued by the Securities and Exchange Board of India.

* Fair value of privately placed securities as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved bythe Board of Trustees.


7



SCHEDULE 7


1 Organisation

HSBC Flexi Debt Fund (the “Scheme”) is an open-ended debt scheme of HSBC Mutual Fund (the “Fund”) and was launched on October 03, 2007. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on October 3, 2007 and reopened for issue and redemption of units on October 8, 2007. The investment objective of the Scheme is to deliver returns in the form of interest income and capital gains along with high liquidity commensurate with the current view on the market and the interest rate cycle through active investment in debt and money market instruments. The Scheme was launched with two Options – Regular Option and Institutional Option; each offering Growth and Monthly Dividend sub Options. During the previous year, the Scheme introduced fortnightly dividend sub Options in both the Regular and Institutional Options with effect from 8th October 2007 and 15th October 2007 respectively. In accordance with the addendum to the Offer Document dated October 5, 2007 and February 22, 2008 respectively the Scheme has introduced quarterly dividend sub Options in both the Regular and Institutional Options with effect from April 09, 2008 and October 01, 2008 and half yearly dividend sub Options in Regular Option with effect from December 16, 2008. The Scheme will not declare dividend under the Growth Sub - Options in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.






i. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on the

National Stock Exchange of India Limited (NSE). If no sale is reported at that time, such securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

ii. Non-traded and thinly traded debt securities are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).




iv. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable interest

up to the date of resale.

v. Government securities are valued at prices obtained from The Credit Rating Information Services of India Limited in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by SEBI. If no sale is reported at that time, such security is valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

vi. Traded money market securities are valued at the yield at which they are traded on the valuation date. If

no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments is determined separately for each category of investments. In respect of each category of investments, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of being first adjusted against the provision for depreciation, if already created in the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.






The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Dividend Sub-Options for the Regular and Institutional Options. For reporting the net asset value for the Sub - Option, daily income earned, including realized and unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Sub - Options in proportion to the value of the units outstanding.



2.6 Unit Premium Reserve Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit premium reserve of the Scheme, after an appropriate portion of the issue proceeds and redemption payout is credited or debited respectively to the income equalization reserve. The unit premium reserve is available for dividend distribution except to the extent it is represented by unrealised net appreciation in value of investments.



2.8 Load Charges

Load collected is retained under a separate account in the Scheme and is utilized to meet the selling and distribution expenses of the Scheme.



Management (India) Private Limited for managing the Scheme at an average annual rate of 0.61% of the

average daily net asset values of the Regular and Institutional Option recorded by the Scheme. All costs,

charges and expenses incurred by HSBC Asset Management (India) Private Limited in the administration and

execution of the activities of the Scheme, except costs allowed to be charged to the Scheme under the

Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as

applicable, are on their own account for which they receive investment management and advisory fees. 4 Trusteeship Fees


(India) Private Limited (“The Settlor”) and the Board of Trustees of HSBC Mutual Fund, the Fund has paid

or provided for a fee not exceeding Rs.20,000 for each meeting of the Board of Trustees attended by such

Trustee not affiliated with the Settlor. 5 Custodian Fees





7 Aggregate Appreciation and Depreciation In Value of Investments Aggregate appreciation and depreciation in value of investments is as follows:




- Appreciation 19,512,641 762,733

- Depreciation 5,741,501 9,728,003


- Appreciation 403,039 1,268,169

- Depreciation 24,486 -




- Appreciation - -

- Depreciation 39,145,803 - 8 Aggregate Fair Value of Non-Traded / Privately Placed Investments

Aggregate fair value of non-traded (including private placement)/ as determined by HSBC Asset

Management (India) Private Limited under the procedures approved by the Board of Trustees as at March 31,

2009 is Rs.1,057,584,131. 9 Aggregate Value of Purchase and Sale of Investments

The aggregate value of investment securities purchased (excluding accretion of discount of Rs. 7,919,570)

and sold (including matured) during the financial year are Rs. 15,365,196,103 and Rs. 14,298,039,929

respectively being 869.38 % and 809.00 % of the average daily net assets respectively.


The total income (including net loss on sale of investments and net unrealized depreciation in the value of

investments) and expenditure during the year is Rs. 80,596,036 and Rs. 25,799,513 respectively being 4.79 %

and 1.50 % of average daily net assets. 11 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual Funds)








(iii) The Hong Kong and Shanghai Banking Corporation Limited Associate of the Investment Manager (iv) HSBC Software Development India Private Limited Associate Company (v) Schemes of the Fund, Under Common Control of the Sponsor

HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan



HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund

(vi) Key Management Personnel and their relatives:

Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai* – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya*– Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink*– Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.



III During the year, The Hong Kong and Shanghai Banking Corporation Limited, an associate entity of HSBC

Asset Management (India) Private Limited was paid brokerage amounting to Rs. 3,796,113 for procuring unit

subscriptions for the Scheme. The brokerage paid was at rates similar to those offered to other distributors.

Further, The Hong Kong and Shanghai Banking Corporation Limited, an associate of the Sponsor, is on the

panel of bankers with whom HSBC Mutual Fund places money on fixed deposits and enters into reverse repo








13 Prior Period’s Figures

Previous period’s figures which are for the period October 03, 2007 to March 31, 2008 have been re-grouped /re-arranged where appropriate. Signatures to the Schedules 1 to 7 forming part of the Balance Sheet and the Revenue Account




Trustee


Trustee

Director


Fund Manager(s)

Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Floating Rate Fund ("The Scheme")

as at March 31, 2009, the related Revenue Account for the year ended on that date and the cash Flow Statement for HSBC Floating Rate Fund Long Term Plan for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.






(i) The Balance Sheet and the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Floating Rate Fund as at March 31, 2009, its net surplus and cash flow of HSBC Floating Rate Fund Long Term Plan for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended on that date, together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.

(iii) The method used to value: (a) non traded debt securities in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India and (b) privately placed debt securities in good faith as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.

PARTHA GHOSH Partner Membership No. F-55913 For and on behalf of PRICE WATERHOUSE Chartered Accountants Place: Mumbai Date: July 22, 2009


Rupees

A. Cashflow from Operating ActivitiesNet Realised Gains for the Year 223,587,251

Adjustments for:- (Increase)/Decrease in Investments at Cost (3,706,614,121) (Increase)/Decrease in Other Current Assets (6,588,797) Increase/(Decrease) in Current Liabilities 3,615,096

Net cash (used in) Operations ( A ) (3,486,000,571)

B Cashflow from Financing Activities Increase/(Decrease) in Unit Capital 3,295,936,922 Increase/(Decrease) in Unit Premium 507,539,692

Adjustments for:- Increase/(Decrease) in Sundry Creditors for Units Redeemed by Investors 1,041,943 (Increase)/Decrease in Sundry Debtors for Units Issued to Investors (1,068,864)

Dividend / Distribution paid during the year (149,342,433) Dividend / Distribution Tax paid during the year (29,966,630)

Net cash generated from financing activities ( B ) 3,624,140,630

Net Increase/(Decrease) in Cash and Cash Equivalents (A+B) 138,140,059

Cash and Cash Equivalents at the beginning of the year 16,957,962 Cash and Cash Equivalents at the end of the year 155,098,021

Notes :



Balances with Banks : - In Current Account 542,660 - In Dividend Account 42,877 Margin Deposit with the Clearing Corporation of India Towards Collateralised Borrowing and Lending Obligation 2,510,000 Temporary Book Overdraft (110) Other Collateralised LendingReverse Repo 74,283,717 Collateralised Borrowing and Lending Obligation 77,718,877

155,098,021

2 The above Cash Flow Statement has been prepared under the "Indirect Method" set out in AccountingStandard - 3 on Cash Flow Statements, issued by The Institute of Chartered Accountants of India.






PRICE WATERHOUSE


Vikramaaditya


Trustee Director

Place: Mumbai Date : July 22, 2009 Fund Manager(s)

HSBC MUTUAL FUND - HSBC FLOATING RATE FUND LONG TERM PLAN


0


ASSETS

Investments 1 4,719,906,538 677,788,896

Deposits 2 2,510,000 2,510,000


TOTAL 4,883,968,117 696,052,645

LIABILITIES

Unit Capital 4 3,916,019,949 620,083,027



TOTAL 4,883,968,117 696,052,645


Growth Sub Option



Weekly Dividend Sub Option Total Growth Sub Option




Institutional Daily Dividend Sub Option Total Total

Growth Sub Option

Daily DividendSub Option

Weekly DividendSub Option Total Su

Net Assets as per Balance Sheet(Total Assets less Current Liabilities and Provisions ) (Note 2.6) 99,953,268 431,643,699 47,243,892 58,737,752 637,578,611 1,215,972,561 2,447,687,110 5,575,792 111,778,767 125,839,791 3,906,854,021 4,544,432,632 106,504,887 258,499,809 269,557,042 634,561,738 1,3

(93,348,717) (163,834,255) (257,182,972) (212,967,017) (104,286,667) (8,844,798) (111,133,504) (437,231,986) (694,414,958) (140,590,665) (466,127,174) (213,469,349) (820,187,188) (32,0

Number of Units in Issue 7,361,353.037 43,136,652.841 4,719,009.792 5,869,893.642 88,532,331.128 217,865,967.972 545,333.900 11,109,646.396 12,461,806.332 7,967,470.081 25,849,979.215 26,900,500.774 97,05

(7,471,705.625) (16,372,183.719) (16,920,635.005) (9,287,147.224) (881,553.972) (11,075,077.247) (11,316,444.277) (46,612,712.234) (21,330,117.806) (2,558,8

Net Asset Value per Unit 13.5781 10.0064 10.0114 10.0066 13.7348 11.2348 10.2245 10.0614 10.0980 13.3675 10.0000 10.0205 13

(12.4936) (10.0069) (12.5862) (11.2291) (10.0332) (10.0346) (12.4236) (10.0000) (10.0079) (12


PARTHA GHOSH For Board of Trustees of Partner HSBC Mutual FundMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants

Trustee

Trustee


Long Term Plan

Long Term Plan

March 31, 2009(March 31, 2008)



Regular Option

HSBC MUTUAL FUND - HSBC FLOATING RATE FUND

Regular OptionInstitutional OptionRupees


1

April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

April 01, 2008 to March 31, 2009

A

Schedule Rupees Rupees Rupees

INCOME AND GAINS

Interest and Discount 7 222,375,584 95,560,192 109,107,654 Net Profit on Sale of Investments 16,175,615 2,630,232 1,231,489

(Including Net Profit on Inter Scheme Sale of Investment Rs. 589,092 (Previous year: Rs. 225,518)and Rs. 1,207,840 (Previous year: Rs. 506,151) for Long Term Plan and Short Term Planrespectively) (Note 2.4)

Miscellaneous Income (73,429) - (615)

TOTAL 238,477,770 98,190,424 110,338,528

EXPENSES AND LOSSES

Investment Management and Advisory Fees (Note 3) 8,065,890 3,416,630 4,244,575

Transfer Agent Fees and Expenses 1,692,031 528,228 620,322

Trusteeship Fees and Expenses (Note 4) 11,376 2,421 5,524

Custodian Fees and Expenses (Note 5) 454,531 230,860 153,208

Audit Fees 25,000 25,000 150,000

Selling and Distribution Expenses 5,497,649 2,877,869 2,629,838

Other Operating Expenses 207,324 82,013 167,657

TOTAL 15,953,801 7,163,021 7,971,124

Less: Expenses to be Reimbursed by the Investment Manager 1,063,282 454,630 -

TOTAL 14,890,519 6,708,391 7,971,124

Net Realised Gains for the Year 223,587,251 91,482,033 102,367,404

Net Change in Unrealised Depreciation in Value of Investments (642,490) (21,310) -

Net Gains for the Year 222,944,761 91,460,723 102,367,404

Net Change in Unrealised Appreciation in Value of Investments 2,905,361 (547,920) -


225,850,122 90,912,803 102,367,404

Transferred to Unrealised Appreciation Reserve (2,905,361) 547,920 -

Net Surplus for the Year 222,944,761 91,460,723 102,367,404

Long Term Plan Short Te

April 01, 2008 to March 31, 2009

April 01,March 31

(April 01, 2007 to March 31, 2008)

(April 01March 31

Rupees

Net Surplus for the Year 192,235,462 222,944,761 23,107,124

(60,389,375) (91,460,723) (76,095,122)

Transfer from Income Equalisation Reserve (Note 2.8) 245,651,884 245,075,183 (4,538,285)

(1,633,515) (-8,941,156) (-17,768,401)

- - -

Transfer from Reserve Fund 613,294 2,312,954 1,755,274

(1,765,079) (3,197,470) (2,004,710)

Dividend / Distribution (129,949,311) (149,342,433) (12,086,049)

(-24,047,930) (-40,542,347) (-42,628,427)

Dividend / Distribution Tax thereon (27,005,711) (29,966,630) (3,423,373)

(-5,275,392) (-7,819,384) (-12,074,502)

Balance Transferred to Reserve Fund 281,545,617 291,023,835 4,814,690

(34,464,647) (37,355,306) (5,628,502)




PARTHA GHOSH For Board of Trustees of For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of



Long Term Plan Short Term Plan

RupeesRupees

2

SCHEDULE 1Investments (Notes 2.2, 2.4, 7, 8, 9, and 12) Market/Fair Value Cost Market/Fair Value Cost



Non Convertible Debentures and Bonds Listed / Awaiting Listing 53,285,900 53,949,700 - -

Privately Placed Non Convertible Debentures / Bonds 34,816,277 33,979,200 - -

Asset Backed Securities 133,157,343 131,089,059 149,797,118 149,818,428

Commercial Paper / Certificate of Deposit 4,498,647,018 4,498,647,018 527,991,778 527,991,778

TOTAL 4,719,906,538 4,717,664,977 677,788,896 677,810,206

SCHEDULE 2Deposits March 31, 2009 March 31, 2008

Rupees Rupees


TOTAL 2,510,000 2,510,000

SCHEDULE 3Other Current Assets March 31, 2009 March 31, 2008

Rupees Rupees

Balance with Banks- in Current Account 542,660 1,504,026 - in Dividend Account 42,877 42,721

Reverse Repos 74,283,717 12,901,215


Unit Subscription Receivable 235,000 500,000

Inter-Scheme Receivable - For 'Switch In' 1,337,662 3,798 - For 'Others' 3,000 -


- Debentures and Bonds 5,816,192 -

- Asset Backed Securities - 344,518

- Reverse Repos 9,559 -


- Margin Deposit for Repo and Government of India Securities 481,480 - - Margin Deposit with Clearing Corporation of India Limited towards Collateralised Borrowing and Lending Obligation 7,118 -


Miscellaneous Receivables - - TOTAL 161,551,579 15,753,749

Long Term Plan

Long Term Plan


Schedules forming part of the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March

Long Term Plan March 31, 2009 March 31, 2008

3

SCHEDULE 4Unit Capital March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009

Rupees Units Rupees Units Rupees Units

Regular Option

Growth Sub Option

Issued and Subscribed :Units of Rs. 10 each fully paid up 90,733,362 9,073,336.230 90,733,362 9,073,336.230 309,034,416 30,903,441.632

Outstanding:

At the beginning of the year/ period 74,717,056 7,471,705.625 119,799,725 11,979,972.490 113,164,442 11,316,444.277 Issued during the period / year 146,833,860 14,683,385.964 120,202,747 12,020,274.704 205,626,874 20,562,687.385

221,550,916 22,155,091.589 240,002,472 24,000,247.194 318,791,316 31,879,131.662 Redeemed during the period / year 147,937,386 14,793,738.552 165,285,416 16,528,541.569 239,116,616 23,911,661.581 At the end of the period / year 73,613,530 7,361,353.037 74,717,056 7,471,705.625 79,674,700 7,967,470.081


Issued and Subscribed :Units of Rs. 10 each fully paid up - - - - 629,390,645 62,939,064.483

Outstanding:

At the beginning of the period / year - - - - 466,127,122 46,612,712.234 Issued during the period / year 135,748,548 13,574,854.752 - - 575,644,523 57,564,452.273

135,748,548 13,574,854.752 - - 1,041,771,645 104,177,164.507 Redeemed during the period / year 88,558,450 8,855,844.960 - - 783,271,853 78,327,185.292 At the end of the period / year 47,190,098 4,719,009.792 - - 258,499,792 25,849,979.215


Issued and Subscribed :Units of Rs. 10 each fully paid up 300,945,647 30,094,564.714 300,945,647 30,094,564.714 - -

Outstanding:

At the beginning of the year 163,721,838 16,372,183.719 272,611,281 27,261,128.013 - - Issued during the year 458,485,585 45,848,558.548 394,174,795 39,417,479.522 - -

622,207,423 62,220,742.267 666,786,076 66,678,607.535 - - Redeemed during the year 190,840,894 19,084,089.426 503,064,238 50,306,423.816 - - At the end of the year 431,366,529 43,136,652.841 163,721,838 16,372,183.719 - -


Issued and Subscribed :Units of Rs. 10 each fully paid up - - - - 5,240,627 524,062.745

Outstanding:

At the beginning of the period / year - - - - 213,301,177 21,330,117.806 Issued during the period / year 58,799,125 5,879,912.477 - - 452,962,454 45,296,245.444

58,799,125 5,879,912.477 - - 666,263,631 66,626,363.250 Redeemed during the period / year 100,188 10,018.835 - - 397,258,625 39,725,862.476 At the end of the period / year 58,698,937 5,869,893.642 - - 269,005,006 26,900,500.774


Growth Sub Option

Issued and Subscribed :Units of Rs. 10 each fully paid up 722,808,862 72,280,886.195 722,808,862 72,280,886.195 2,848,706,983 284,870,698.304

Outstanding:

At the beginning of the year 169,206,349 16,920,635.005 33,947,595 3,394,759.592 25,588,194 2,558,819.389 Issued during the year 4,596,579,832 459,657,983.206 2,477,594,979 247,759,497.924 229,314,588 22,931,458.891

4,765,786,181 476,578,618.211 2,511,542,574 251,154,257.516 254,902,782 25,490,278.280 Redeemed during the year 3,880,462,871 388,046,287.083 2,342,336,225 234,233,622.511 253,932,228 25,393,222.835 At the end of the year 885,323,310 88,532,331.128 169,206,349 16,920,635.005 970,554 97,055.445



Outstanding:

At the beginning of the period / year - - - - 38,299,510 3,829,950.745 Issued during the period / year 11,132,384,271 1,113,238,427.088 - - 310,519,445 31,051,944.545

11,132,384,271 1,113,238,427.088 - - 348,818,955 34,881,895.290 Redeemed during the period / year 11,007,766,208 1,100,776,620.756 - - 279,869,194 27,986,919.437 At the end of the period / year 124,618,063 12,461,806.332 - - 68,949,761 6,894,975.853


Issued and Subscribed:Units of Rs. 10 each fully paid up 153,001,670 15,300,166.976 153,001,670 15,300,166.976 737,101,461 73,710,146.095

Outstanding:

At the beginning of the year 92,871,473 9,287,147.224 5,811,952 581,195.178 100,115,188 10,011,518.785 Issued during the year 6,826,364,842 682,636,484.183 1,002,715,366 100,271,536.552 37,334,947 3,733,494.717

6,919,236,315 691,923,631.407 1,008,527,318 100,852,731.730 137,450,135 13,745,013.502 Redeemed during the year 4,740,576,634 474,057,663.435 915,655,845 91,565,584.506 103,040,181 10,304,018.067 At the end of the year 2,178,659,681 217,865,967.972 92,871,473 9,287,147.224 34,409,954 3,440,995.435


Issued and Subscribed :Units of Rs. 10 each fully paid up 82,500,000 8,250,000.000 82,500,000 8,250,000.000 272,425,380 27,242,537.996

Outstanding:

At the beginning of the year 110,750,772 11,075,077.247 149,242,170 14,924,217.043 40,943,653 4,094,365.416

HSBC MUTUAL FUND - HSBC FLOATING RATE FUNDSchedules forming part of the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March 31, 2009

Long Term Plan Short Term

4

HSBC MUTUAL FUND - HSBC FLOATING RATE FUNDSchedules forming part of the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ended March 31, 2009

4


Growth Sub Option


Outstanding:

At the beginning of the year - - - - 64,003,470 6,400,346.993 Issued during the year - - - - 1,177,175,725 117,717,572.514

- - - - 1,241,179,195 124,117,919.507 Redeemed during the year - - - - 1,191,305,873 119,130,587.323 At the end of the year - - - - 49,873,322 4,987,332.184



Outstanding:

At the beginning of the year - - - - 119,184,385 11,918,438.460 Issued during the year - - - - 4,744,780,924 474,478,092.435

- - - - 4,863,965,309 486,396,530.895 Redeemed during the year - - - - 4,863,965,309 486,396,530.895 At the end of the year - - - - - -



Outstanding:

At the beginning of the year - - - - - - Issued during the year - - - - - -

- - - - - - Redeemed during the year - - - - - - At the end of the year - - - - - -


Issued and Subscribed :Units of Rs. 10 each fully paid up - - - - - -

Outstanding:

At the beginning of the year - - - - 179,205,139 17,920,513.941 Issued during the year - - - - 5,310,436 531,043.585

- - - - 184,515,575 18,451,557.526 Redeemed during the year - - - - 148,710,103 14,871,010.335 At the end of the year - - - - 35,805,472 3,580,547.191

TOTAL 3,916,019,949 391,601,995.040 620,083,027 62,008,302.792 840,583,520 84,058,352.231

Note : HSBC Asset Management (India) Private Limited, the investment manager holds 1,032,306.247 units in the Long Term Plan - Institutional Option - Daily Dividend Sub Option and 545,333.91 units

(Previous Year : 515,731.786 units) in the Long Term Plan - Institutional Option - Fortnightly Dividend Sub Option and 4,987,332.176 units (Previous Year : 4,987,332.176 units) in the Short Term Plan - Institutional Plus Option - Growth Sub Option as a

Reserve Fund

At the beginning of the year 45,430,989 64,509,949 4,452,

(12,940,966) (30,900,031) (1,001,9

Transferred to Revenue Account (613,294) (2,312,954) (1,755,2

(-1,765,079) (-3,197,470) (-2,004,7

Transferred to Unrealised Appreciation Reserve - -

(-209,547) (-547,920) (-173,2

Balance Transferred from Revenue Account 281,545,617 291,023,835 4,814,

(34,464,648) (37,355,306) (5,628,5

At the end of the year 326,363,312 353,220,830 7,511,

(45,430,988) (64,509,947) (4,452,4

TOTAL 601,703,164 628,412,683 * 7,411, (74,331,931) * (4,443,8

* The share of the Plans / Options of the Reserves and Surplus is as follows : March 31, 2009(March 31, 2008)

Regular OptionGrowth Sub Option 26,339,738

(18,631,661)Monthly Dividend Sub Option 277,170

(112,417)Daily Dividend Sub Option 53,794

(-)Weekly Dividend Sub Option 38,815

(-)Total (A) 26,709,517

(18,744,078)Institutional OptionGrowth Sub Option 330,649,251

(43,760,668)Weekly Dividend Sub Option 269,027,429

(11,415,194)Fortnightly Dividend Sub Option 122,454

(29,259)Monthly Dividend Sub Option 682,304

(382,732)Daily Dividend Sub Option 1,221,728

0 Total (B) 601,703,166

(55,587,853)Institutional Plus OptionGrowth Sub Option -

- Daily Dividend Sub Option -

- Weekly Dividend Sub Option -

- Monthly Dividend Sub Option -

- Total (C) -

-

Total (A+B+C) 628,412,683

(74,331,931)

SCHEDULE 6Current Liabilities and Provisions March 31, 2009 March 31, 2008 March 31, 20

Rupees Rupees RupeesCurrent Liabilities

Investment Management and Advisory Fees 2,236,155 282,624 690,8

Transfer Agent Fees and Expenses 294,562 45,354 37,5

Custodian Fees and Expenses 150,334 35,912 3

Audit Fees 25,000 25,000 150,0

Selling and Distribution Expenses 1,421,429 230,348 213,3

Purchase Contracts Awaiting Completion - Certificate of Deposits 333,240,650 -

Unit Redemption Payable 1,195,327 113,543

Units Pending Allotment - - 2,775,0

Inter Scheme Payable :

- for Switch-Out - 39,842 449,9

- for Others 29,604 -



Temporary Book Overdraft 110 -

Dividend Distribution Tax Payable to be reclassed 14,170 16,8

Sundry Payables 198,375 350,679 148,9

TOTAL 339,535,485 1,637,688 4,482,8

S Long Term Plan

SCHEDULE 7Interest and Discount (Note 2.5) April 01, 2008 to

March 31, 2009April 01, 2007 toMarch 31, 2008

Rupees Rupees




Deposits - 38,323

Reverse Repos 19,885,138 2,507,705


Margin Deposit with The Clearing Corporation of India Limited 513,604 43,612

TOTAL 222,375,584 95,560,192


Schedules forming part of the Balance Sheet as at March 31, 2009 and the Revenue Account for the year ende

Long Term Plan

6

( , , )


Allahabad Bank $ @ 4 Oriental Bank of Commerce $ 2 State Bank of Indore $ @ 2 Punjab National Bank $ 2 Union Bank of India $ 2 Bank of Baroda $ @ 2 Oriental Bank of Commerce $ 2 Allahabad Bank $ @ 2 Bank of India $ @ 2 Vijaya Bank $ 2 Canara Bank $ 2 State Bank of Bikaner and Jaipur $ @ 2 National Housing Bank Limited $ 2 Canara Bank $ 2 Canara Bank $ 1 Allahabad Bank $ @ 1 IDBI Bank Limited $ @ 1 Corporation Bank $ @ 1 Punjab National Bank $ 1 IDBI Bank Limited $ @ 1 Punjab National Bank $ Bank of Baroda $ @ Oriental Bank of Commerce $ Oriental Bank of Commerce $ Allahabad Bank $ @ State Bank of Indore $ @ IDBI Bank Limited $ @ State Bank of Bikaner and Jaipur $ @

Commercial Papers (0.44 %)Exim Bank Limited 2009 $ @

Total (Cost Rs. 4,498,647,018)TOTAL INVESTMENTS (Cost Rs. 4,717,664,977)

@ Investment in companies which have invested more than five percent of the net asset value of any schemes of HSBC Mutual F

$ Fair value of non traded and thinly traded debt securities as determined by HSBC Asset Management (India) Private Limited undBoard of Trustees in accordance with the guidelines for valuation of securities for Mutual funds dated September 18, 2000applicable, issued by the Securities and Exchange Board of India.

* Fair value of privately placed securities as determined in good faith by HSBC Asset Management (India) Private Limited undeBoard of Trustees.

Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial year for the investments

HSBC MUTUAL FUND - HSBC FLOATING RATE FUND - LONG TERM PLAN


Annexure 1




Manager


Sponsor


Relatives Total



Subscription of Units (including switch in and dividendreinvestment) - 10,620,606 331,667,878 - 18,848,546 361,137,030 Previous Year - 6,428,611 - - - 6,428,611

Redemption of Units (including switch out) - - 100,000,000 - 5,414,442 105,414,442 Previous Year - 113,780,922 - - - 113,780,922

Dividend Distribution (Including dividend reinvested) - - 5,519,120 - 138,546 5,657,666 Previous Year - 1,428,611 - - - 1,428,611



Reimbursement of Expenses - 1,063,282 - - - 1,063,282 Previous Year - 454,630 - - - 454,630

Charges for Services Provided by Bank - - 12 - - 12 Previous Year - - 2,028 - - 2,028




Manager


Sponsor


Relatives Total

Investment Management and Advisory Fees Payable - 2,236,155 - - - 2,236,155 Previous Year - 282,624 - - - 282,624


Units Outstanding As At Year End - 15,999,995 231,479,342 - 13,385,946 260,865,283 Previous Year - 5,174,440 - - - 5,174,440

Other Payables - - - 29,604 - 29,604 Previous Year - - - 3,643 - 3,643

Other Receivables - 1,063,917 - 3,000 - 1,066,917 Previous Year - 454,630 - - - 454,630


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 3,343,392,374 785,037,921 HSBC Cash Fund 2,883,366,678 1,023,240,446 HSBC Floating Rate Fund Short Term Plan 9,380,689 1,016,149,617 HSBC Income Fund Short Term Plan - 62,951,413

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 2,045,579,782 738,104,064 HSBC Cash Fund 814,371,527 928,421,790 HSBC Floating Rate Fund Short Term Plan 135,287,342 645,167,219

0

HSBC MUTUAL FUND - HSBC FLOATING RATE FUND - LONG TERM PLAN


Other PayablesHSBC Equity Fund 29,604 - HSBC Cash Fund - 3,643

Other ReceivablesHSBC Cash Fund 3,000 - HSBC Floating Rate Fund Short Term Plan - 40,000


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividendreinvestment)Naina Lal Kidwai 15,617,440 -

Redemption of Units (including switch out)Naina Lal Kidwai 3,900,000 - Rashid K Kidwai 1,514,442

Dividend Distribution (Including dividend reinvested)Naina Lal Kidwai 117,440 - Kemaya Lall Kidwai 13,745 - Nelum Pahlaj Gidwani 7,361 -

Units Outstanding As At Year EndNaina Lal Kidwai 11,679,349 - Kemaya Lall Kidwai 1,706,569 -

HSBC MUTUAL FUND - HSBC FLOATING RATE FUND - SHORT TERM PLAN


Annexure 1





Sponsor


Relatives Total



Subscription of Units (including switch in and dividend reinvestment) - - - - 286,373 286,373 Previous Year - 50,950,606 - - 23,851 50,974,456

Redemption of Units (including switch out - - - - 431,752 431,752 Previous Year - 57,399,003 - - 853,485 58,252,487

Dividend Distribution (Including dividend reinvested - - - - 6,373 6,373 Previous Year - 950,606 - - 23,851 974,456








Sponsor


Relatives Total

Investment Management and Advisory Fees Payabl - 690,888 - - - 690,888 Previous Year - 1,835,742 - - - 1,835,742


Units Outstanding As At Year End - 57,407,186 - - - 57,407,186 Previous Year - 52,956,491 - - 67,617 53,024,107

Other Receivables - 359 - - - 359 Previous Year - 48,316 - - - 48,316


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Cash Fund 394,510,683 2,869,950,426 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 214,414,582 1,969,774,505 HSBC Floating Rate Fund Long Term Plan 135,287,342 645,167,219 HSBC Flexi Debt Fund 162,191,422 -

Sale of InvestmentsHSBC Cash Fund 482,263,578 2,628,617,388 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 429,944,276 3,212,036,479 HSBC Dynamic Fund 119,425,372 - HSBC Floating Rate Fund Long Term Plan 9,380,689 1,016,149,617


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Sanjay Prakash - 1,800 Naina Lal Kidwai 196 22,051 Rashid K Kidwai 280,000 -

Redemption of Units (including switch outSanjay Prakash - 241,485 Naina Lal Kidwai 67,813 612,000 Rashid K Kidwai 363,939 -

Dividend Distribution( Including dividend reinvestedSanjay Prakash - 1,800 Naina Lal Kidwai 196 22,051 Rashid K Kidwai 6,177 -

Units Outstanding As At Year EndSanjay Prakash - - Naina Lal Kidwai - 67,617

1



SCHEDULE 8


1 Organisation

HSBC Floating Rate Fund (the “Scheme”) is an open-ended income scheme of HSBC Mutual Fund (the “Fund”) and was launched on November 01, 2004. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on November 8, 2004 and reopened for issue and redemption of units on November 17, 2004. The investment objective of the Scheme is to generate reasonable return with commensurate risk from a portfolio comprising of floating rate debt instruments, fixed rate debt instruments swapped for floating rate returns, fixed rate money market instruments and debt instruments. The Scheme has two Plans – Long Term Plan and Short Term Plan, each with a separate portfolio. Both the Long Term Plan and Short Term Plan offers Regular and Institutional Options. The Regular Option under both the plans offers Growth and Dividend Sub-Options - Monthly Dividend for Long Term Plan and Daily Dividend and Weekly Dividend for Short Term Plan. The Weekly Dividend Sub- Option under the Regular Option of the Short Term Plan was introduced during the year ended March 31, 2006 and units were allotted on April 19, 2005 at the net asset value of Rs. 10 per unit in accordance with the addendum dated April 8, 2005 to the common offer document dated November 29, 2004. The Institutional Option under both the Plans offer Growth, Weekly Dividend and Monthly Dividend Sub – Options. The Institutional Option under Short Term Plan further offers a Daily Dividend Sub-Option. Institutional Plus Option under Short Term Plan was introduced during the year ended March 31, 2006 offering Growth, Daily Dividend, Weekly Dividend and Monthly Dividend Sub-Options. Units were allotted on November 21, 2005 at the net asset value of Rs. 10 per unit under the Growth, Daily Dividend and Monthly Dividend Sub-Options in accordance with the addendum dated October 25, 2005 to the common offer document dated November 29, 2004. A fortnightly dividend sub option and Institutional Option of the Long Term Plan was launched during the year ended March 31, 2008 in accordance with the addendum dated September 18, 2007 to the common offer document dated November 29, 2004. In accordance with the addendum to the offer document dated August 29, 2008, Daily Dividend Reinvestment sub-options were introduced in the Regular and the Institutional option respectively in Long Term Plan. Further, In accordance with the addendum to the offer document dated February 12, 2009, Weekly Dividend Reinvestment sub-option was introduced in the Regular Option with effect from February 20, 2009 in Long Term Plan. The Scheme will not declare dividend under the Growth Sub-option of both the Plans in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value of these Plans.



The Scheme maintains its books of account on an accrual basis. These financial statements have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (the “Regulation”) and amendments thereto, as applicable.





i. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on

the National Stock Exchange of India Limited. If no sale is reported at that time such securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

ii. Non-traded and thinly traded debt securities, are valued at fair value as determined by HSBC Asset

Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).

iii. Privately placed debt securities are valued at fair value as determined in good faith by HSBC Asset

Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

iv. Asset backed securities are valued at fair value as determined in good faith by HSBC Asset

Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund .

v. Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

vi. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable interest up to the date of resale.


The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of being first being adjusted against the provision for depreciation, if already created in the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.

2.3 Interest Rate Swaps



Interest expense and income are accrued on a net basis daily in respect of interest rate swaps with maturity less than 182 days.





2.6 Net Asset Value for Growth / Dividend Sub-Options of Regular, Institutional and Institutional Plus

Options

The net asset value of the units of the Scheme is determined separately for units issued under the Growth and Dividend Sub-options of the Regular, Institutional and Institutional Plus Options for the Long Term Plan and Short Term Plan. For reporting the net asset value for the Sub-options, daily income earned, including realized and unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Sub-options in proportion to the value of the units outstanding.



2.8 Income Equalization Reserve The net distributable income relating to units issued / repurchased is transferred to / from income equalization reserve for determining the net surplus / deficit, transferred from / to unit premium reserve.







0.26% and 0.23% of the average daily net asset values of Reguler Plan and Institutional Plan

respectively of the Long Term Plan and 0.33%,0.33% and 0.27% of the average daily net asset value of

Regular, Institutional and Institutional Plus Plan respectively of the Short Term Plan respectively

recorded by the Scheme. All costs, charges and expenses incurred by HSBC Asset Management (India)

Private Limited in the administration and execution of the activities of the Scheme, except costs

allowed to be charged to the Scheme under the Securities and Exchange Board of India (Mutual Funds)

Regulations, 1996 and amendments thereto as applicable, are on their own account for which they

receive investment management and advisory fees.

4 Trusteeship Fees



Fund has paid or provided for a fee not exceeding Rs. 20,000 for each meeting of the Board of Trustees


5 Custodian Fees

JP Morgan Chase Bank provides custodial services to the Scheme for which it receives custody fees.

6 Income Taxes

No provision for income tax is made as the Scheme qualifies as a recognized mutual fund under Section 10(23D) of the Income Tax Act, 1961 of India.

7 Aggregate Appreciation and Depreciation In Value of Investments Aggregate appreciation and depreciation in value of investments are as follows:

Long Term Plan Short Term Plan

March 31,

2009 March 31,

2008 March 31,

2009 March 31,

2008 Non Convertible Debentures and Bonds Listed / Awaiting Listing - Appreciation - - - - - Depreciation 663,800 - - - Privately Placed Non Convertible Debentures / Bonds - Appreciation 837,077 - - - - Depreciation - - - Asset Backed Securities - - Appreciation 2,068,284 - - - - Depreciation - 21,310 - -



8 Aggregate Fair Value of Non-Traded/ Privately Placed Investments Aggregate fair values of non traded (including private placement) investments as determined by HSBC

Asset Management (India) Private Limited under the procedures approved by the Board of Trustees as at March 31, 2009 are Rs. 4,666,620,638 and Nil for Long Term Plan and Short Term Plan respectively.


The aggregate value of investments purchased and sold (including matured) during the year (excluding accretion of discount of Rs. 135,102,262 and Rs. 81,656,313 for Long Term and Short Term Plan respectively) are :

Aggregate Purchases Aggregate Sales

Plan Rupees Percentage of Average

Daily Net Assets Rupees

Percentage of Average Daily Net

Assets

Long Term Plan 27,141,086,721 794.97 % 23,252,509,827 681.08 %

Short Term Plan 2,241,718,740 167.79 % 3,687,513,072 276.00 % 10 Income and Expenses

The total income (including net profit on sale of investments and net change in unrealized depreciation

in the value of investments) and expenditure during the year are:

Total Income Total Expenditure

Plan Rupees Percentage of

Average Daily Net Assets

Rupees Percentage of

Average Daily Net Assets

Long Term Plan 237,835,280 6.97 % 14,890,519 0.44 %

Short Term Plan 110,338,528 8.26 % 7,971,124 0.60 %








(ii) HSBC Asset Management (India) Private Limited Investment Manager to the


(iii) The Hong Kong and Shanghai Banking Corporation Limited Associate of the Investment Manager (iv) HSBC Software Development India Private Limited Associate Company (v) Schemes of the Fund, Under Common Control of the Sponsor of the Fund

HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008 HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan)



HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund) HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund

(vi) Key Management Personnel and their relatives:



business: Refer Annexure I III During the year, The Hong Kong and Shanghai Banking Corporation Limited, an associate entity of

HSBC Asset Management (India) Private Limited was paid collection/bank charges amounting to Rs. 12 and Rs. 1,385 and brokerage amounting to Rs 955,380 and Rs. 1,557,875 for procuring unit subscriptions for the Long Term and Short Term Plan respectively. The brokerage paid was at rates similar to those offered to other distributors. Further, The Hong Kong and Shanghai Banking Corporation Limited, an associate of the Sponsor, is on the panel of bankers with whom HSBC Mutual Fund places money on fixed deposits and enters into reverse repo transactions from time to time at competitive rates.








As at March 31, 2009, unclaimed dividend aggregates Rs. 41,564 payable to 56 investors of Long

Term Plan. 14 Prior Year’s Figures

Previous year’s figures have been re-grouped/re-arranged where appropriate. Signatures to the Schedules 1 to 8 forming part of the Balance Sheet and the Revenue Account.




Trustee


Trustee

Director


Fund Manager(s)

0Auditors’ Report 1To the Board of Trustees of 2HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Ultra Short Term Bond Fund (Formerly HSBC Liquid Plus Fund) (The “Scheme”) as at March 31, 2009, the related Revenue Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Investment Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.


standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian / others and registrar and transfer agent respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were

necessary for the purposes of our audit. The Balance Sheet, the Revenue Account and the Cash Flow Statement referred to above are in agreement with the books of account of the Scheme.


(i) The Balance Sheet, the Revenue Account and the Cash Flow Statement together with the notes

thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and the amendments thereto, as applicable, and also give respectively a true and fair view of the state of affairs of HSBC Mutual Fund – Ultra Short Term Bond Fund as at March 31, 2009, its net surplus and its cash flows for the year ended on that date.

(ii) The Balance Sheet as at March 31, 2009, and the Revenue Account for the year ended on that date,

together with the notes thereon, have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable.

(iii) The method used to value:

(a) non traded debt securities in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India and

(b) privately placed securities in good faith as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.

PARTHA GHOSH Partner M. No. F/55913 For and on behalf of PRICEWATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009


Rupees


Rupees

A. Cashflow from Operating ActivitiesSurplus for the year 2,539,982,580 4,168,274,307

Adjustments for:- (Increase)/Decrease in Investments at cost 19,694,056,754 (16,251,531,740) (Increase)/Decrease in Other current assets 86,088,341 (165,363,207) Increase/(Decrease) in Current liabilities 13,157,218 9,932,963

Net cash generated from/(used in) operations ( A ) 22,333,284,893 (12,238,687,677)

B Cashflow from Financing Activities Increase/(Decrease) in Unit capital (17,501,561,170) 14,579,003,517 Increase/(Decrease) in Unit premium (642,500,866) (590,523,965)

Adjustments for:- Increase/(Decrease) in Sundry creditors for units redeemed by investors (158,619,844) 176,263,263 (Increase)/Decrease in Sundry debtors for units issued to investors 271,178,718 322,383,673

Dividend paid during the year (1,663,214,211) (2,680,607,985) Dividend Tax paid during the year (321,867,398) (560,911,474)

Net cash (used in)/generated from financing activities ( B ) (20,016,584,771) 11,245,607,029

Net Increase/(Decrease) in Cash and cash equivalents (A+B) 2,316,700,122 (993,080,648)

Cash and Cash Equivalents as at the beginning of the year 78,483,291 1,071,563,939 Cash and Cash Equivalents as at the close of the year 2,395,183,413 78,483,291



Rupees


Balances with Scheduled Banks : - In Current Account 45,859,266 21,956,318 - In Dividend Account 23 11 - Margin Deposit with Clearing Corporation of India Limited towards Collateralised Borrowing and Lending Obligation 1,000,000 1,000,000 - Margin Deposit with Clearing Corporation of India Limited towards Reverse Repos and Governement Securities 100,000,000 - Bank Overdraft (68,367) - Other Collateralised LendingCollateralised Borrowing and Lending Obligation 1,149,601,991 - Reverse Repos 1,098,790,499 55,526,961

2,395,183,412 78,483,291

2. The above Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard - 3 on Cash Flow Statements,issued by The Institute of Chartered Accountants of India.





PRICE WATERHOUSE



Trustee Director


HSBC MUTUAL FUND - HSBC ULTRA SHORT TERM BOND FUND (FORMERLY, HSBC LIQUID PLUS FUND)

CashFlow Statement for the year ended March 31, 2009

0


ASSETS

Investments 1 7,211,438,115 26,902,192,518

Deposits 2 101,000,000 1,000,000

Other Current Assets 3 2,609,082,230 749,580,798

TOTAL 9,921,520,345 27,652,773,316

LIABILITIES

Unit Capital 4 9,484,826,174 26,986,387,344



TOTAL 0.41 9,921,520,345 27,652,773,316


Growth Sub-Option

Daily Dividend Sub-Option

Weekly Dividend Sub-Option Total

Growth Sub-Option

Daily Dividend Sub-Option

Weekly Dividend Sub-Option

Monthly Dividend Sub-Option Total

Growth Sub-Option

Daily DividendSub-Option

Weekly Dividend Sub-Option

Monthly Dividend Sub-Option Total Total

B A K C D E F G H I J

Net Assets as per Balance Sheet

(Total Assets less Current Liabilities and Provisions) (Note 2.6) 372,084,675 3,261,196,189 849,300,045 4,482,580,909 231,378,288 1,494,087,382 393,863,254 125,778,751 2,245,107,675 1,240,618,472 1,385,505,887 396,483,324 91,642,679 3,114,250,362 9,841,938,946

(145,367,107) (3,430,256,957) (805,997,948) (4,381,622,012) (484,104,860) (3,515,300,451) (749,590,906) (152,283,254) (4,901,279,471) (2,913,946,662) (12,755,019,987) (2,363,479,385) (112,401,797) (18,144,847,831) (27,427,749,314)

Number of Units in Issue 30,701,774.121 325,722,386.273 84,576,307.762 19,011,827.930 149,222,257.022 39,216,714.706 12,394,879.767 101,445,807.318 137,853,200.124 39,471,878.513 8,865,584.027

(12,947,562.502) (342,608,641.233) (80,326,610.335) (43,024,316.645) (351,092,342.074) (74,699,504.743) (15,102,418.972) (258,473,165.696) (1,273,900,193.819) (235,516,908.995) (10,947,069.442)

Net Asset Value per Unit 12.1193 10.0122 10.0418 12.1702 10.0125 10.0432 10.1476 12.2294 10.0506 10.0447 10.3369

(11.2274) (10.0122) (10.0340) (11.2519) (10.0125) (10.0348) (10.0834) (11.2737) (10.0126) (10.0353) (10.2678)

Notes to the Financial Statements. 8 372,084,675 3,261,196,189 849,300,045 4,482,580,909 231,378,288 1,494,087,382 393,863,254 125,778,751 2,245,107,675 1,240,618,472 1,385,505,887 396,483,324 91,642,679 3,114,250,362 9,841,938,946


PARTHA GHOSH For Board of Trustees of Partner HSBC Mutual Fund For HSBC Asset Management (India)Membership No. F-55913 Private LimitedFor and on behalf of

PRICE WATERHOUSE Chartered Accountants Vikramaaditya


Trustee Director



March 31, 2009




(March 31, 2008)

RupeesInstitutional OptionRegular Option

1



INCOME AND GAINS

Interest and Discount 7 2,699,741,906 4,234,032,832 Net Profit on Sale of Investments(Including Net Profit on Inter-SchemeSale of Investments Previous YearRs. 195,894,487) (Note 2.4) - 138,180,018

Miscellaneous Income (Note 11) 258,197 578,123

TOTAL 2,700,000,103 4,372,790,973

EXPENSES AND LOSSES

Net Loss on Sale of Investments (Net of Net Profit on Inter - Scheme Sale of Investments Rs. 1,486,483 Previous Year Rs. Nil) (Note 2.4) 17,365,149 -





Audit Fees 150,000 200,000



TOTAL 160,017,523 207,253,803

Less: Expenses Reimbursed by the Investment Manager - 2,737,137

TOTAL 160,017,523 204,516,666

Net Realised Gains for the Year 2,539,982,580 4,168,274,307

Net change in Unrealised Depreciation in Value of Investments - 197,837

Net Gains for the Year 0.02 2,539,982,580 4,168,472,144

Net Change in Unrealised Appreciation in Value of Investments 3,350,695 540,144

Net Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments 2,543,333,275 4,169,012,288

Transferred to Unrealised Appreciation Reserve (3,350,695) (540,144)

Net Surplus for the Year -0.58 2,539,982,580 4,168,472,144


Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees

Net Surplus for the Year 28,426,777 359,375,400 95,411,284 483,213,461 40,002,938 282,182,408 63,609,600 15,735,000 401,529,946 476,871,906 972,138,582 194,651,575 11,577,110 1,655,239,173 2,539,982,580 4,168,472,144

(16,907,030) (236,144,964) (76,662,685) (329,714,679) (68,255,959) (304,384,199) (69,914,370) (17,720,536) (460,275,064) (841,021,812) (2,146,135,356) (371,796,580) (19,528,653) (3,378,482,401) (4,168,472,144)

Transfer from Income Equalisation Reserve (Note 2.8) 20,168,606 45,582 234,438 20,448,626 (52,547,000) (1,995,666) (1,238,281) (966,086) (56,747,033) (579,764,005) (5,975,224) (8,312,092) (311,367) (594,362,687) (630,661,094) (591,860,409)

(-3,564,412) (2,793,149) (2,417,841) (1,646,578) (-20,440,646) (1,928,096) (2,363,616) (2,599,888) (-13,549,046) (-593,178,542) (11,061,672) (5,158,165) (-2,999,236) (-579,957,941) (-591,860,409)

Transfer from Reserve Fund - 1,880,680 645,272 2,525,952 - 3,261,484 1,790,384 92,679 5,144,547 - 13,513,889 7,737,675 - 21,251,564 28,922,063 1,555,346

(-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (801,768) (-) (753,578) (1,555,346) (1,555,346)

Transferred from Unit Premium Reserve (Note 2.7) - - - - - - - - - - - - 73,216 73,216 73,216 (-)

(-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)

Dividend / Distribution - (312,424,420) (82,311,713) (394,736,133) - (240,178,652) (54,159,835) (12,291,636) (306,630,123) - (795,494,910) (157,665,168) (8,687,877) (961,847,954) (1,663,214,211) (2,680,607,985)

(-) (-204,001,999) (-66,632,431) (-270,634,430) (-) (-257,731,260) (-59,515,642) (-15,735,171) (-332,982,073) (-) (-1,760,779,584) (-302,238,136) (-13,973,762) (-2,076,991,482) (-2,680,607,985)

Dividend / Distribution Tax thereon - (47,396,914) (12,494,518) (59,891,432) - (42,475,607) (9,013,313) (1,914,018) (53,402,938) - (171,512,161) (35,092,194) (1,968,673) (208,573,028) (321,867,398) (560,911,474)

(-) (-31,440,627) (-10,180,554) (-41,621,181) (-) (-46,102,999) (-10,703,009) (-3,284,692) (-60,090,700) (-) (-387,833,310) (-68,199,828) (-3,166,455) (-459,199,593) (-560,911,474)

Balance Transferred to Reserve Fund 48,595,383 1,480,329 1,484,763 51,560,475 (12,544,063) 793,967 988,556 655,939 (10,105,601) (102,892,100) 12,670,176 1,319,796 682,410 (88,219,717) (46,764,844) 336,647,622

Notes to the Financial Statements 8

This is the Revenue Account referred to in our report of even dat


Trustee VikramaadityaDirector and Chief Executive Officer

TrusteeDirector




The Schedules referred to herein form an integral part of the Financial Statement

2

SCHEDULE 1

Investments Market / Fair ValueCost

Market /Fair ValueCost

(Notes 2.2, 2.4, 7, 8 , 9, and 13) Rupees Rupees Rupees Rupees(Refer to the attached Statement of Portfolio Holding as at March 31, 2009)

Non Convertible Debentures and Bonds Listed / Awaiting Listing 3,413,631,765 3,413,078,926 4,054,965,779 4,053,889,775

Privately Placed Non Convertible Debentures / Bonds 1,830,888,145 1,830,888,145 1,970,292,466 1,970,191,796

Asset Backed Securities 1,808,112,794 1,803,671,197 4,323,075,446 4,322,608,375

Commercial Paper / Certificate of Deposit 158,805,411 158,805,411 16,553,858,827 16,553,858,827

TOTAL 7,211,438,115 7,206,443,679 26,902,192,518 26,900,548,773




TOTAL 101,000,000 1,000,000


Balances with Banks - in Current Account 45,859,266 21,956,318 - in Dividend Account 23 11


Reverse Repos 1,098,790,499 55,526,961

Collateralised Borrowing and Lending Obligation 1,149,601,991 -

Inter-Scheme Receivable for Switch-In 120,266,655 235,438,973

Interest Receivable on :- Debentures/Bonds 162,643,308 183,203,916 - Asset Backed Securities 19,353,973 83,753,558 - Deposits 41,923 41,923 - Reverse Repos 141,400 12,226 - Collateralised Borrowing and Lending Obligation 140,840 - - Margin Deposit with Clearing Corporation of India Limited 1,329,804 -

Receivable from Investment Manager 14,048 2,742,012

TOTAL 2,609,082,230 749,580,798

March 31, 2008March 31, 2009



3


Regular OptionGrowth Sub-OptionIssued and SubscribedUnits of Rs.10 each fully paid up 14,685,000 1,468,500.000 14,685,000 1,468,500.000 Outstanding:At the beginning of the year 129,475,625 12,947,562.502 59,277,813 5,927,781.325 Issued during the year 994,695,166 99,469,516.553 864,899,097 86,489,909.687

1,124,170,791 112,417,079.055 924,176,910 92,417,691.012 Redeemed during the year 817,153,049 81,715,304.934 794,701,285 79,470,128.510 At the end of the year 307,017,742 30,701,774.121 129,475,625 12,947,562.502

Daily Dividend Sub-OptionIssued and SubscribedUnits of Rs.10 each fully paid up 42,018,439 4,201,843.898 42,018,439 4,201,843.898 Outstanding:At the beginning of the year 3,426,086,412 342,608,641.233 372,473,571 37,247,357.112 Issued during the year 11,851,448,710 1,185,144,871.026 14,081,152,057 1,408,115,205.692

15,277,535,122 1,527,753,512.259 14,453,625,628 1,445,362,562.804 Redeemed during the year 12,020,311,260 1,202,031,125.986 11,027,539,216 1,102,753,921.571 At the end of the year 3,257,223,862 325,722,386.273 3,426,086,412 342,608,641.233

Weekly Dividend Sub-OptionIssued and SubscribedUnits of Rs.10 each fully paid up 18,656,079 1,865,607.901 18,656,079 1,865,607.901 Outstanding:At the beginning of the year 803,266,104 80,326,610.335 166,752,141 16,675,214.106 Issued during the year 3,153,435,321 315,343,532.080 3,653,052,357 365,305,235.663

3,956,701,425 395,670,142.415 3,819,804,498 381,980,449.769 Redeemed during the year 3,110,938,347 311,093,834.653 3,016,538,394 301,653,839.434 At the end of the year 845,763,078 84,576,307.762 803,266,104 80,326,610.335

TOTAL 4,410,004,682 441,000,468.156 4,358,828,141 435,882,814.070

Institutional OptionGrowth Sub-OptionIssued and SubscribedUnits of Rs.10 each fully paid up 30,000,000 3,000,000.000 30,000,000 3,000,000.000 Outstanding:At the beginning of the year 430,243,167 43,024,316.645 159,855,024 15,985,502.362 Issued during the year 1,305,345,144 130,534,514.385 4,401,299,752 440,129,975.164


Daily Dividend Sub-OptionIssued and SubscribedUnits of Rs.10 each fully paid up 198,200,000 19,820,000.000 198,200,000 19,820,000.000 Outstanding:At the beginning of the year 3,510,923,421 351,092,342.074 1,387,492,069 138,749,206.903 Issued during the year 12,420,883,272 1,242,088,327.212 18,359,586,374 1,835,958,637.371


Weekly Dividend Sub-OptionIssued and SubscribedUnits of Rs.10 each fully paid up 40,000,000 4,000,000.000 40,000,000 4,000,000.000 Outstanding:At the beginning of the year 746,995,047 74,699,504.743 203,024,117 20,302,411.727 Issued during the year 1,957,301,742 195,730,174.224 3,040,613,807 304,061,380.731


Monthly Dividend Sub-OptionIssued and SubscribedUnits of Rs.10 each fully paid up - - - - Outstanding:At the beginning of the year 151,024,190 15,102,418.972 10,070,767 1,007,076.666 Issued during the year 445,634,888 44,563,488.833 961,614,112 96,161,411.208

596,659,078 59,665,907.805 971,684,879 97,168,487.874 Redeemed during the year 472,710,280 47,271,028.038 820,660,689 82,066,068.902 At the end of the year 123,948,798 12,394,879.767 151,024,190 15,102,418.972

TOTAL 2,198,456,794 219,845,679.425 4,839,185,825 483,918,582.434

Institutional Plus OptionGrowth Sub-Option Issued and SubscribedUnits of Rs.10 each fully paid up 920,000,000 92,000,000.000 920,000,000 92,000,000.000 Outstanding:At the beginning of the year 2,584,731,657 258,473,165.696 2,166,074,121 216,607,412.104 Issued during the year 37,338,802,716 3,733,880,271.611 92,445,673,527 9,244,567,352.676


Daily Dividend Sub-Option Issued and SubscribedUnits of Rs.10 each fully paid up 400,038,954 40,003,895.444 400,038,954 40,003,895.444 Outstanding:At the beginning of the year 12,739,001,938 1,273,900,193.819 7,259,033,705 725,903,370.527 Issued during the year 76,531,584,559 7,653,158,455.898 167,548,798,438 16,754,879,843.763

89,270,586,497 8,927,058,649.717 174,807,832,143 17,480,783,214.290 Redeemed during the year 87,892,054,496 8,789,205,449.593 162,068,830,205 16,206,883,020.471 At the end of the year 1,378,532,001 137,853,200.124 12,739,001,938 1,273,900,193.819

Weekly Dividend Sub-Option Issued and SubscribedUnits of Rs.10 each fully paid up 50,000,000 5,000,000.000 50,000,000 5,000,000.000 Outstanding:At the beginning of the year 2,355,169,090 235,516,908.995 530,872,405 53,087,240.496 Issued during the year 12,620,138,952 1,262,013,895.241 17,234,973,468 1,723,497,346.835

14,975,308,042 1,497,530,804.236 17,765,845,873 1,776,584,587.331 Redeemed during the year 14,580,589,257 1,458,058,925.723 15,410,676,783 1,541,067,678.336 At the end of the year 394,718,785 39,471,878.513 2,355,169,090 235,516,908.995

Monthly Dividend Sub-Option Issued and SubscribedUnits of Rs.10 each fully paid up 50,000,000 5,000,000.000 50,000,000 5,000,000.000 Outstanding:At the beginning of the year 109,470,693 10,947,069.442 92,458,095 9,245,809.572 Issued during the year 227,151,646 22,715,164.623 1,338,998,275 133,899,827.537

336,622,339 33,662,234.065 1,431,456,370 143,145,637.109 Redeemed during the year 247,966,500 24,796,650.038 1,321,985,677 132,198,567.667 At the end of the year 88,655,839 8,865,584.027 109,470,693 10,947,069.442

TOTAL 2,876,364,698 287,636,469.982 17,788,373,378 1,778,837,337.952

GRAND TOTAL 9,484,826,174 948,482,617.563 26,986,387,344 2,698,638,734.456



Note: HSBC Asset Management (India) Private Limited, the investment manager holds 17,264,359.780 units in the HSBC Ultra Short Term Bond Fund Institutional Plus Daily Dividend Sub Option as at March 31,2009.

4


Total

Unit Premium Reserve (Note 2.7)At the beginning of the year 19,829

(-1,316,616)


Transferred to Revenue Account (73,216) (-)

At the end of the year (11,893,157) (19,829)

Income Equalisation Reserve (Note 2.8)Added during the year (630,661,094)

(-591,860,410)

Transferred to Revenue Account 630,661,094 (591,860,410)

At the end of the year - (-)

Unrealised Appreciation ReserveAt the beginning of the year 1,643,743

(-)

Transferred from Reserve Fund - (1,103,599)

Net change in Unrealised Appreciation in Value of Investments Transferred from Revenue Account 3,350,695

(540,144)


Reserve FundAt the beginning of the year 439,698,398

(105,709,721)

Transferred to Revenue Account (28,922,063) (-1,555,346)

Transferred to Unrealised Appreciation Reserve - (-1,103,599)

Balance Transferred from Revenue Account (46,764,844) (336,647,622)


TOTAL 357,112,772 *

(441,361,970) *

* The share of the Plans / Options of the Reserves and Surplus is as follows : March 31, 2009

(March 31, 2008)

Regular Option

Growth Sub-Option : Rs. 65,066,933

(15,891,482)

Daily Dividend Sub-Option : Rs. 3,972,327

(4,170,545)

Weekly Dividend Sub-Option : Rs. 3,536,967

(2,731,844)

Total (A) 72,576,227

(22,793,871)



(53,861,693)


(4,377,030)


(2,595,859)

Monthly Dividend Sub-Option : Rs. 1,829,953

(1,259,064)

Total (B) 46,650,881

(62,093,646)



(329,215,005)


(16,018,049)


(8,310,295)

Monthly Dividend Sub-Option : Rs. 2,986,840

(2,931,104)

Total (C) 237,885,664

(356,474,453)

Total (A+B+C) : Rs. 357,112,772

(441,361,970)

March 31, 2009

Rupees(March 31, 2008)

HSBC MUTUAL FUND - HSBC ULTRA SHORT TERM BOND FUND (FORMERLY, HSBC LIQUID PLUS


5


Current Liabilities


Transfer Agent Fees and Expenses 408,955 1,391,121


Audit Fees 150,000 200,000



Inter Scheme Payable: - For Switch Out 16,006,877 2,473,739 - For Others - 2,231,686


Dividend Tax Payable 819,507 4,073,773


Interest Rate Swaps - 48,340


TOTAL 79,581,399 225,024,002


Rupees Rupees

Debentures / Bonds 792,236,537 1,282,710,833


Treasury Bills - 18,983,761

Commercial Paper / Certificate of Deposit 1,313,347,174 2,000,940,461

Reverse Repos 36,907,629 92,787,465


Deposits 47,247,580 480,680,477

Margin Deposit with the Clearing Corporation of India Limited 1,249,020 482,827

Interest Rate Swaps (Net) (Note 2.3) (16,075,543) (1,106,765)

Others (Refer Note 15) (20,655,039) - TOTAL 2,699,741,906 4,234,032,832



6


Non-Convertible Debentures / Bonds Listed / Awaiting listing (48.01 %)Banks (27.86 %)

Floating ICICI Bank Ltd 2010 $ @ 500 501,281,871 Floating Axis Bank Ltd 2012 $ 450 449,896,971

951,178,842 Ferrous Metals (4.39 %)

Floating Tata Steel Limited 2011 $ @ 150 150,000,000 150,000,000

Finance (53.09 %)Floating Housing Development Finance Corporation Limited 2011 $ 500 502,249,299 Floating Indian Railway Finance Corporation Limited 2010 $ 500 500,057,294 Floating Housing Development Finance Corporation Limited 2009 $ 500 500,000,000 Floating Power Finance Corporation Limited 2010 $ 300 300,054,590 8.80% Sundaram Finance Limited 2009 $ @ 10 9,989,824

1,812,351,007 Finance & Investments (14.66 %)

Floating Citicorp Finance India Limited 2009 $ 500 500,101,916 500,101,916

Total (Cost Rs. 3,413,078,926) 3,413,631,765

Privately Placed / Unlisted Non-Convertible Debentures / Bonds (25.75 %)Construction (18.07 %)

19.00% Unitech Limited 2009 * 4,937 330,779,000 330,779,000

Finance (81.93 %)Floating Tata Sons Limited 2010 * @ 1,500 1,500,109,145

1,500,109,145 Total (Cost Rs. 1,830,888,145) 1,830,888,145

Asset Backed Securities (24.00 %)Finance & Investments (97.36 %)

BHPC Auto Securitisation Sr A1 (Tata Motors Services) PTC2010 * 208 784,981,233 KUL Loan Trust Series A1 (Unitech) PTC2009 * 50 602,632,312 Corporate Debt Trust Series 15- Sereis A1 (National Housing Bank) PTC2010 * 13 119,955,405 Indian Loans Receivables Trust May 2008 Series A2 (DLF ) PTC2009 * @ 50 50,092,304 Corporate Loan Securitisation Series XXXIII Trust 2006 (Shriram Transport Finance Company ) PTC2009 * 5 49,955,404 Corporate Debt Trust Series 15- Sereis A2 (National Housing Bank) PTC2010 * 25 30,356,081 Loans Receivable Trust July 2008 Series A2 (Shriram Transport Finance Company )PTC2009 * 3 29,170,569 Loans Receivable Trust July 2008 Series A1 (Shriram Transport Finance Company )PTC2009 * 50 23,521,236 Indian Loans Receivables Trust Series T1 (Tata Motors Finance) PTC2009 * 80 20,838,679 Corporate Loan Securitisation Series XXIX Trust 2006 (Shriram Transport Finance Company ) PTC2009 * 2 20,680,691 Corporate Loan Securitisation Series XXIX Trust 2006 (L&T Finance) PTC2009 * @ 25 13,009,065 Corporate Loan Securitisation Series 7 Trust 2009 Series A1 (DLF ) PTC2009 * @ 10 10,706,986 Corporate Loan Securitisation Trust Series 15 Trust 2008 - A1 (L&T Finance ) PTC2010 * @ 1 5,657,115 Corporate Loan Securitisation Series 8 Trust 2009 Series A1 (DLF ) PTC2009 * @ 1 1,537,035

1,763,094,115 Finance & Term Lending (2.64 %)

Corporate Debt Trust 2008-09 Series 5 A1 (LIC Housing Finance) PTC2009 * 3 27,320,921 Corporate Debt Trust 2008-09 Series 5 A2 (LIC Housing Finance ) PTC2009 * 50 11,533,775 ISH Loan Trust Series A1 (Simplex Infrastructure) PTC2009 * 5 6,163,983

45,018,679 Total (Cost Rs. 1,803,671,197) 1,808,112,794

Commercial Papers/Certificate of Deposits (2.23 %)Certificate of Deposits (100 %)

Kotak Mahindra Bank Limited $ 750 74,469,260 ICICI Bank Limited $ @ 300 29,787,652 National Bank For Agricultural and Rural Development Limited $ 300 29,757,824 Exim Bank Limited $ @ 250 24,790,675





Confirmation has been received from JP Morgan Chase Bank, Mumbai Branch at the end of the financial year for investments held by them.

* Fair value of privately placed securities as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees.

$ Fair value of non traded debt securities as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees in accordancewith guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board ofIndia.


7



Annexure 1





Sponsor


Relatives Total



Subscription of Units (including switch in and dividendreinvestment) 496,098,463 529,579,294 - - 39,700,060 1,065,377,816 Previous Year - - - - 42,452,446 42,452,446

Redemption of Units (including switch out 496,098,463 357,900,000 - - 35,672,163 889,670,626 Previous Year - - - - 46,227,617 46,227,617

Dividend Paid/Payable( Including dividend reinvested 98,463 10,617,568 - - 615,100 11,331,130 Previous Year - - - - 747,035 747,035



Fixed Deposits Placed - - - - - - Previous Year - - 1,400,000,000 - - 1,400,000,000

Fixed Deposits Matured - - - - - - Previous Year - - 1,485,000,000 - - 1,485,000,000

Interest Rate Swaps placed - - - - - - Previous Year - - - 500,000,000 - 500,000,000


Borrowings taken and repaid - - 41,150,700,000 - - 41,150,700,000 Previous Year - - - - - -

Interest Expense on Borrowings - - 6,328,829 - - 6,328,829 Previous Year - - - - - -





Sponsor


Relatives Total



Units Outstanding As At Year End - 173,517,174 - - 2,061,798 175,578,972 Previous Year - - - - 9,436,104 9,436,104

Other Payables - - - - - - Previous Year - - - 2,231,686 - 2,231,686

Other Receivables - 14,048 - - - 14,048 Previous Year - 2,742,012 - - - 2,742,012


April 01, 2008 to March 31, 2009

April 01, 2007 to March31, 2008

Purchase of InvestmentsHSBC Cash Fund 19,479,325,593 33,242,041,782 HSBC Income Fund Short Term Plan - 76,990,006

Sale of InvestmentsHSBC Cash Fund 23,172,428,278 32,269,886,734 HSBC Fixed Term Series 55 - 20,089,349

Other PayablesHSBC Fixed Term Series 49 - 2,231,686


April 01, 2008 to March 31, 2009

April 01, 2007 to March31, 2008

Subscription of Units (including switch in and dividendreinvestment)Sanjay Prakash 7,196,336 26,237,427 Naina Lal Kidwai 10,344,788 14,154,989 Kemaya Lal Kidwai (relative) 21,338,525

Redemption of Units (including switch outNaina Lal Kidwai 13,688,796 20,017,313 Kemaya Lal Kidwai (relative) 21,407,575 - Sanjay Prakash - 26,210,304

Dividend Paid/Payable( Including dividend reinvestedSanjay Prakash 190,376 439,594 Naina Lal Kidwai 204,788 247,411 Nelum P Gidwani - 60,030 Kemaya Lal Kidwai (relative) 208,525 -

Units Outstanding As At Year EndSanjay Prakash - 4,031,904 Naina Lal Kidwai - 3,344,008 Nelum P Gidwani 2,061,798 2,060,192

0




SCHEDULE 8


1 Organisation

HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) (the “Scheme”) is an open-ended debt scheme of HSBC Mutual Fund (the “Fund”) and was launched on October 11, 2006. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on October 12, 2006 and reopened for issue and redemption of units on October 18, 2006. The investment objective of the Scheme is to provide liquidity and reasonable returns by investing primarily in a mix of short term debt and money market instruments.

The Scheme has three Options – Regular Option, Institutional Option and Institutional Plus Option. The Regular Option offers Growth, Daily Dividend and Weekly Dividend sub options. The Institutional Option and the Institutional Plus Option offer Growth, Daily Dividend, Weekly Dividend and Monthly Dividend Sub-Options. In accordance with the notice-cum-addendum dated February 16, 2009 the nomenclature of the Scheme has been changed from HSBC Liquid Plus Fund to HSBC Ultra Short Term Bond Fund.

The Scheme will not declare dividend under the Growth Sub - Options in normal circumstances. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value.






i. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on the

National Stock Exchange of India Limited (NSE). If no sale is reported at that time, such securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

ii. Non-traded and thinly traded debt securities are valued at fair value as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).







v. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable interest

up to the date of resale.

vi. Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.


The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of

being first adjusted against the provision for depreciation, if already created in the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.

2.3 Interest Rate Swaps Interest expense and income are accrued on a net daily basis in respect of interest rate swaps with maturity

less than 182 days. 2.4 Securities Transactions








The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Dividend Sub-Options for the Regular, Institutional and Institutional Plus Options. For reporting the net asset value for the Sub - Option, daily income earned, including realized and unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Sub - Options in proportion to the value of the units outstanding.




2.9 Load Charges

Load collected is retained under a separate account in the Scheme and is utilized to meet the selling and distribution expenses of the Scheme.



Management (India) Private Limited for managing the Scheme at an average annual rate of 0.31%, 0.29% and

0.28% of the average daily net asset value of Regular Plan, Institutional Plan and Institutional Plus Plans

respectively recorded by the Scheme. All costs, charges and expenses incurred by HSBC Asset Management

(India) Private Limited in the administration and execution of the activities of the Scheme, except costs

allowed to be charged to the Scheme under the Securities and Exchange Board of India (Mutual Funds)

Regulations, 1996 and amendments thereto as applicable, are on their own account for which they receive

investment management and advisory fees. 4 Trusteeship Fees


(India) Private Limited (“The Settlor”) and the Board of Trustees of HSBC Mutual Fund, the Fund has paid

or provided for a fee not exceeding Rs.20,000 for each meeting of the Board of Trustees attended by such

Trustee not affiliated with the Settlor. 5 Custodian Fees







March 31, 2009


(Rupees) Non Convertible Debentures and Bonds Listed / Awaiting Listing

- Appreciation 552,846 1,080,798

- Depreciation 7 4,794


- Appreciation - 100,670

- Depreciation - -


- Appreciation 4,506,181 510,068

- Depreciation 64,584 42,997

8 Aggregate Fair Value of Non-Traded / Privately Placed Investments Aggregate fair value of non traded (including private placement) investments as determined by HSBC Asset

Management (India) Private Limited under the procedures approved by the Board of Trustees as at March 31, 2009 is Rs. 7,211,438,117.


The aggregate value of investment securities purchased (excluding accretion of discount of Rs. 1,434,575,544) and sold (including matured) during the financial year are Rs. 215,473,358,101 and Rs. 236,584,673,590 respectively being 699.27% and 767.78% of the average daily net assets.


The total income (net of net loss on sale of investments) and expenditure during the year is Rs. 2,682,634,954

and Rs. 142,652,374 respectively being 8.71 % and 0.46 % of average daily net assets.





Miscellaneous income of Rs.258,197 represents compensation received from HSBC Asset Management

(India) Private Limited, the investment advisor for non utilization of investible funds.

12 Related party Disclosures

Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual Funds ) Regulation, 1996 as amended and in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India (ICAI)

The Scheme has entered into transactions with certain related parties. The information required in this regard in accordance with Accounting Standard 18 on ‘Related Party Disclosures’ issued by the Institute of Chartered Accountants of India and regulation 25(8) of SEBI Regulation, is provided below




HSBC Advantage India Fund HSBC Cash Fund HSBC Dynamic Fund HSBC Emerging Market Fund HSBC Equity Fund HSBC Fixed Term Series 21 upto April 02, 2008 HSBC Fixed Term Series 22 upto April 22, 2008 HSBC Fixed Term Series 23 upto April 02, 2008 HSBC Fixed Term Series 24 upto December 15, 2008 HSBC Fixed Term Series 25 upto April 23, 2008 HSBC Fixed Term Series 27 upto April 02, 2008 HSBC Fixed Term Series 28 upto May 26, 2008 HSBC Fixed Term Series 30 HSBC Fixed Term Series 32 upto July 10, 2008 HSBC Fixed Term Series 33 upto September 08, 2008 HSBC Fixed Term Series 35 upto September 18, 2008 HSBC Fixed Term Series 36 upto October 07, 2008 HSBC Fixed Term Series 37 upto October 22, 2008 HSBC Fixed Term Series 41 HSBC Fixed Term Series 42 HSBC Fixed Term Series 44 HSBC Fixed Term Series 45 HSBC Fixed Term Series 46 HSBC Fixed Term Series 47 upto June 26, 2008 HSBC Fixed Term Series 48 with effect from March 28, 2008 upto October 07, 2008 HSBC Fixed Term Series 49 HSBC Fixed Term Series 50 with effect from April 17, 2008 HSBC Fixed Term Series 51 with effect from April 23, 2008 upto October 23, 2008 HSBC Fixed Term Series 52 with effect from April 24, 2008




HSBC Fixed Term Series 53 with effect from May 23, 2008 HSBC Fixed Term Series 54 with effect from May 27, 2008 HSBC Fixed Term Series 55 with effect from June 26, 2008 upto December 29, 2008 HSBC Fixed Term Series 56 with effect from July 25, 2008 HSBC Fixed Term Series 57 with effect from August 13, 2008 HSBC Fixed Term Series 58 with effect from July 22, 2008 upto November 05, 2008 HSBC Fixed Term Series 59 with effect from July 07, 2008 HSBC Fixed Term Series 60 with effect from July 10, 2008 upto October 13, 2008 HSBC Fixed Term Series 61 with effect from July 17, 2008 HSBC Fixed Term Series 62 with effect from August 22, 2008 HSBC Fixed Term Series 63 with effect from September 04, 2008 HSBC Fixed Term Series 66 with effect from September 18, 2008 HSBC Fixed Term Series 68 with effect from October 06, 2008 to January 14, 2009 HSBC Flexi Debt Fund HSBC Floating Rate Fund Long Term Plan HSBC Floating Rate Fund Short Term Plan HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan) HSBC Income Fund Investment Plan HSBC Income Fund Short Term Plan HSBC India Opportunities Fund HSBC Interval Fund - Plan I upto November 20, 2008 HSBC Interval Fund - Plan II upto December 10, 2008 HSBC Interval Fund - Plan III upto December 17, 2008 HSBC Midcap Fund HSBC MIP Fund Regular Plan HSBC MIP Fund Savings Plan HSBC Small Cap Fund HSBC Tax Saver Equity Fund HSBC Unique Opportunities Fund


Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai* – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008







III During the year, The Hongkong & Shanghai Banking Corporation Limited, an associate entity of HSBC

Asset Management (India) Private Limited was paid collection/bank charges amounting to Rs. 3,131 and

brokerage amounting to Rs. 12,864,725 for procuring unit subscriptions for the Scheme. The brokerage paid

was at rates similar to those offered to other distributors. Further, The Hongkong and Shanghai Banking

Corporation Limited, an associate of the Sponsor, is on the panel of bankers with whom HSBC Mutual Fund

places money on fixed deposits and enters into reverse repo transactions from time to time at competitive

rates.





The Scheme operates in one segment only viz. to primarily generate attractive returns from a diversified and actively managed portfolio of debt and money market instruments.

15 Interest

Interest expense aggregating Rs. 20,655,039 on borrowings made by the Scheme to meet temporary liquidity needs for the purpose of redemption of units has been netted off from interest income as disclosed in Schedule 7.


As at March 31, 2009, HSBC Ultra Short Term Bond Fund had investments in;

Secured redeemable debentures of Unitech Limited aggregating Rs. 33.08 crores which were rescheduled for payment on April 18, 2009. Subsequent, to the year end the terms and conditions of the said debentures were mutually extended in the interest of the unit holders, such that 50% of the principal amount of the debentures would be payable in two equal installments before April 30th 2009 and June 30th 2009 and the balance 50% payable in April 2010. The Scheme has received Rs. 8.14 crores in April 2009. The interest on the debentures has been serviced till March 31, 2009. The debenture holders are secured against immovable property mortgaged by the company.

Secured redeemable asset backed security of Unitech Limited aggregating Rs. 60.26 crores (including interest of Rs. 10.16 crores) which were rescheduled for payment on or before 31st July, 2009. Subsequent, to the year end the terms and conditions of the said asset backed security were mutually extended in the interest of




the unit holders, such that Rs. 12 crores would be payable on or before 31st March, 2009, Rs. 20 crores on or before 31st May, 2009 and balance Principal and Interest on or before 31st July, 2009. The Scheme has received Rs. 31.48 crores till May 2009. The interest on the asset backed securities has been serviced till March 31, 2009. This is secured against land mortgaged by the Company with IL&FS for the benefit of KUL Loan Trust and post dated cheques.

In view of the above, in the opinion of the management, no provision is considered necessary as at March 31, 2009.


Prior year’s figures have been regrouped/ rearranged where appropriate. Signatures to the Schedules 1 to 8 forming part of the Balance Sheet and the Revenue Account.


For Board of

Trustees of HSBC

Mutual Fund

For HSBC Asset Management (India) Private

Limited

Trustee

Vikramaaditya


Trustee

Director

Place: Mumbai

Date :

Fund Manager(s)


HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Fixed Term Series 30 ("The Scheme") as at March

31, 2009 and the related Revenue Account for the year ended on that date, both of which we have signed under

reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual

Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our





and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital












HSBC Fixed Term Series 30 as at March 31, 2009 and its net surplus for the year ended on that date.





(iii) The method used to value: i. non traded debt securities in accordance with the guidelines for valuation of securities for


ii. privately placed securities in good faith as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.

PARTHA GHOSH Partner M. No. F-55913 For and on behalf of PRICEWATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009


HSBC MUTUAL FUND




























ii. Privately placed securities in good faith as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.



HSBC MUTUAL FUND































HSBC MUTUAL FUND


























(iii) The method used to value non traded debt securities in accordance with the guidelines for

valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.



HSBC MUTUAL FUND

























India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable. PARTHA GHOSH Partner M. No. F-55913 For and on behalf of PRICEWATERHOUSE Chartered Accountants Place: Mumbai Date: July 06, 2009


HSBC MUTUAL FUND


31, 2009, the related Revenue Account for the period July 07, 2008 to March 31, 2009 and the Cash Flow Statement

for the period July 07, 2008 to March 31, 2009 which we have signed under reference to this report. These financial

statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset

Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these











for the purpose of our audit. The Balance Sheet, the Revenue Account and Cash Flow Statement referred to above

are in agreement with the books of account of the Scheme.














HSBC MUTUAL FUND





























Auditors' Report To the Board of Trustees of HSBC MUTUAL FUND 1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Fixed Term Series 50 ("The Scheme") as at March

31, 2009 and the related Revenue Account for the period April 17, 2008 to March 31, 2009, both of which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.


require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agent respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.


for the purpose of our audit. The Balance Sheet and the Revenue Account referred to above are in agreement with the books of account of the Scheme.


(i) The Balance Sheet and the Revenue Account together with the notes thereon give the information required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Fixed Term Series 50 as at March 31, 2009 and its net deficit for the period April 17, 2008 to March 31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the period April 17, 2008 to March

31, 2009, together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.


i. non traded debt securities in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India and




HSBC MUTUAL FUND
















for the purpose of our audit. The Balance Sheet, the Revenue Account and the Cash Flow Statement referred to

above are in agreement with the books of account of the Scheme.





HSBC Fixed Term Series 52 as at March 31, 2009 and its net surplus for the period April 24, 2008 to March

31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the period April 24, 2008 to March 31, 2009, together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.




PARTHA GHOSH Partner M. No. F-55913 For and on behalf of PRICEWATERHOUSE Chartered Accountants Place: Mumbai

Date: July 22, 2009


HSBC MUTUAL FUND






















HSBC Fixed Term Series 53 as at March 31, 2009 and its net surplus for the period May 23, 2008 to March

31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the period May 23, 2008 to March

31, 2009, together with the notes thereon have been prepared in all material respects in accordance with

the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board

of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.






HSBC MUTUAL FUND






















HSBC Fixed Term Series 54 as at March 31, 2009 and its net surplus for the period May 27, 2008 to March

31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the period May 27, 2008 to March








Date: July 22, 2009


HSBC MUTUAL FUND






















HSBC Fixed Term Series 56 as at March 31, 2009 and its net surplus for the period July 25, 2008 to March

31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the period July 25, 2008 to March 31,

2009, together with the notes thereon have been prepared in all material respects in accordance with the







Date: July 22, 2009


HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – HSBC Fixed Term Series 57 ("The Scheme") as at March 31, 2009 and the related Revenue Account for the period August 13, 2008 to March 31, 2009, both of which we have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”). Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned and unit capital balances as at March 31, 2009 by correspondence with the custodian/others and registrar and transfer agent respectively. An audit also includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. The Balance Sheet and the Revenue Account referred to above are in agreement with the books of account of the Scheme.

4. In our opinion and to the best of our information and according to the explanations given to us, i. The Balance Sheet and the Revenue Account together with the notes thereon give the information

required by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectively, a true and fair view of the state of affairs of HSBC Mutual Fund – HSBC Fixed Term Series 57 as at March 31, 2009 and its net surplus for the period August 13, 2008 to March 31, 2009.

ii. The Balance Sheet as at March 31, 2009 and the Revenue Account for the period August 13, 2008

to March 31, 2009, together with the notes thereon have been prepared in all material respects in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.

iii. The method used to value non traded debt securities in accordance with the guidelines for valuation

of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable.



HSBC MUTUAL FUND























31, 2009.









Date: July 22, 2009


HSBC MUTUAL FUND


31, 2009 and the related Revenue Account for the period July 17, 2008 to March 31, 2009, both of which we have

signed under reference to this report. These financial statements are the responsibility of the Board of Trustees of

HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”).

Our responsibility is to express an opinion on these financial statements based on our audit.

















31, 2009.










HSBC MUTUAL FUND


31, 2009 and the related Revenue Account for the period August 22, 2008 to March 31, 2009, both of which we have



















HSBC Fixed Term Series 62 as at March 31, 2009 and its net surplus for the period August 22, 2008 to

March 31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the period August 22, 2008 to March






ii. Privately placed securities in good faith as at March 31, 2009 as determined by HSBC Asset Management (India) Private Limited

under procedures approved by the Board of Trustees of HSBC Mutual Fund are fair and reasonable



HSBC MUTUAL FUND


31, 2009 and the related Revenue Account for the period September 04, 2008 to March 31, 2009, both of which we

have signed under reference to this report. These financial statements are the responsibility of the Board of Trustees

of HSBC Mutual Fund and the Management of HSBC Asset Management (India) Private Limited (the “Management”).

















HSBC Fixed Term Series 63 as at March 31, 2009 and its net surplus for the period September 04, 2008 to

March 31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the period September 04, 2008 to

March 31, 2009, together with the notes thereon have been prepared in all material respects in accordance

with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange

Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.






HSBC MUTUAL FUND

1. We have audited the Balance Sheet of HSBC Mutual Fund – Fixed Term Series 66 ("The Scheme") as at March 31,

2009 and the related Revenue Account for the period September 18, 2008 to March 31, 2009, both of which we have



















Fixed Term Series 66 as at March 31, 2009 and its net surplus for the period September 18, 2008 to March

31, 2009.

(ii) The Balance Sheet as at March 31, 2009 and the Revenue Account for the period September 18, 2008 to

March 31, 2009, together with the notes thereon have been prepared in all material respects in accordance

with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange

Board of India (Mutual Funds) Regulations, 1996 and amendments thereto as applicable.





Fixed Term Series 50 Fixed Term Series 52

March 31, 2009 March 31, 2009

Schedule Rupees RupeesASSETS

Investments 1 4,718,524,615 2,120,473,920


TOTAL 0.58 4,781,883,590 0.29 2,229,296,316

LIABILITIES

Unit Capital 4 4,412,481,467 2,055,499,232



TOTAL -0.58 4,781,883,589 -0.29 2,229,296,316

RECONCILIATION OF NET ASSET VALUE PER UNITRegular Option

Growth Sub OptionInstitutional Option Growth

Sub Option TotalRegular Option

Growth Sub OptionRegular Option

Dividend Sub OptionInstitutional Option Growth

Sub OptionInstitutional Option Dividend

Sub Option Total

Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.5) 227,703,618 4,552,439,310 4,780,142,928 891,564,975 24,275,424 1,268,453,586 27,174,714 2,211,468,699

Number of Units in Issue 21,018,994.800 420,229,151.872 82,908,810.639 2,411,220.616 117,531,222.044 2,698,669.974

Net Asset Value per Unit 10.8332 10.8332 10.7536 10.0677 10.7925 10.0697





Vikramaaditya


Trustee Director

Place: Mumbai


Fixed Term Series 50

March 31, 2009

Rupees Rupees


March 31, 2009

HSBC FIXED TERM SERIES 50, HSBC FIXED TERM SERIES 52, HSBC FIXED TERM SERIES 53, HSBC FIXED TERM SERIES 54, HSBC FIXED TERM SERIES 56, HSBC FIXED TERM SERIES 57, HSBC FIXED TERM SERIES 59, HSBC FIXED TERM SERIES 61, HSBC FIXED TERM SERIES 62, HSBC FIXED TERM SERIES 63, HSBC FIXED TERM SERIES 66


0

ScheduleASSETS

Investments 1

Other Current Assets 2

TOTAL

LIABILITIES

Unit Capital 4

Reserves and Surplus 5

Current Liabilities and Provisions 6

TOTAL


Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.5)

Number of Units in Issue

Net Asset Value per Unit




PARTHA GHOSHPartnerMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants

Place: Mumbai

Date : 22 July 2009

0

Fixed Term Series 53 Fixed Term Series 54 Fixed Term Series 56



1,265,233,113 1,625,891,785 1,139,421,007

142,335,356 141,317,820 81,361,793

0.90 1,407,568,469 -0.30 1,767,209,605 -0.50 1,220,782,800

1,295,162,350 1,644,656,490 1,143,802,751

91,064,660 102,586,497 70,201,752

21,341,459 19,966,618 6,778,297

-0.90 1,407,568,469 0.30 1,767,209,605 0.50 1,220,782,800

Regular OptionGrowth Sub Option

Regular OptionDividend Sub Option

Institutional Option GrowthSub Option Total



Institutional Option GrowthSub Option

Institutional Option DividendSub Option Total





582,783,949 75,547,153 727,895,908 1,386,227,010 1,041,624,594 71,251,818 459,790,932 174,575,643 1,747,242,987 324,923,507 43,779,935 681,291,600 164,009,461 1,214,004,503

54,364,719.496 7,478,257.861 67,673,257.564 97,312,275.008 7,087,939.668 42,714,525.882 17,350,908.374 30,440,734.449 4,322,700.253 63,455,612.351 16,161,228.002

10.7199 10.1022 10.7560 10.7039 10.0525 10.7643 10.0615 10.6740 10.1279 10.7365 10.1483

For Board of Trustees of For HSBC Asset Management (India)HSBC Mutual Fund Private Limited

Vikramaaditya


Trustee Director

Fund Manager(s)


Rupees

March 31, 2009

Rupees


March 31, 2009

Rupees


March 31, 2009



ScheduleASSETS

Investments 1


TOTAL

LIABILITIES

Unit Capital 4



TOTAL









Place: Mumbai

Date : 22 July 2009

0




587,472,629 3,206,563,895 839,761,005

3,403,612 197,495,136 83,121,505

0.20 590,876,241 0.15 3,404,059,031 -0.05 922,882,510

554,735,824 3,161,781,651 855,013,075

35,314,939 231,868,589 60,238,513

825,478 10,408,791 7,630,922

-0.20 590,876,241 -0.15 3,404,059,031 -0.05 922,882,510












104,907,761 12,548,322 472,594,680 590,050,763 511,779,924 38,886,098 2,757,536,770 85,447,448 3,393,650,240 229,067,368 32,123,950 643,434,765 10,625,505 915,251,588

9,887,151.531 1,248,815.860 44,337,614.974 47,776,020.134 3,863,711.673 256,051,526.035 8,486,907.255 21,408,119.591 3,188,393.733 59,851,112.810 1,053,681.411

10.6105 10.0482 10.6590 10.7121 10.0644 10.7695 10.0681 10.7000 10.0753 10.7506 10.0842


Vikramaaditya


Trustee Director

Fund Manager(s)


March 31, 2009

Rupees


March 31, 2009

Rupees


March 31, 2009

Rupees



ScheduleASSETS

Investments 1


TOTAL

LIABILITIES

Unit Capital 4



TOTAL









Place: Mumbai

Date : 22 July 2009

0




4,335,630,893 933,840,736 628,322,625

89,839,826 19,103,086 30,802,260

-0.72 4,425,470,719 -0.90 952,943,822 659,124,885

4,156,201,950 899,448,145 625,957,075

265,437,973 50,882,959 31,996,223

3,830,796 2,612,719 1,171,587

-0.72 4,425,470,719 0.90 952,943,823 659,124,885










4,288,102,952 5,611,867 127,925,104 4,421,639,923 263,676,457 11,017,179 675,637,468 950,331,104 431,549,543 56,011,468 170,392,287 657,953,298

403,062,100.032 558,094.931 12,000,000.000 25,007,241.395 1,092,018.996 63,845,554.072 40,902,819.241 5,542,888.156 16,150,000.000

10.6388 10.0554 10.6604 10.5440 10.0888 10.5824 10.5506 10.1051 10.5506


Vikramaaditya


Trustee Director

Fund Manager(s)


March 31, 2009

Rupees


March 31, 2009

Rupees


March 31, 2009

Rupees



Fixed Term Series 50 Fixed Term Series 52 Fixed Term Series 53 Fixed Term Series 54 Fixed Term Series 56 Fixed Term Series 57 Fixed Term Series 59 Fixed Term Series 61 Fixed Term Series 62 Fixed Term Series 63 Fixed Term Series 66

April 17, 2008 to April 24, 2008 to May 23, 2008 to May 27, 2008 to July 25, 2008 to August 13, 2008 to July 07, 2008 to July 17, 2008 to August 22, 2008 to September 04, 2008 to September 18, 2008 to

March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009Schedule Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees

INCOME AND GAINS

Interest and Discount 7 383,398,645 226,343,312 151,924,615 164,903,761 94,858,243 37,595,121 276,437,848 75,148,355 291,218,361 56,880,651 32,163,851 Net Profit on Sale of Investments (Note 2.3) - - - - - 95,214 - - 625,592 - 1,190,628

Other Income (Note 17) - - - - - - - - 1,386,957 718,497

TOTAL 383,398,645 226,343,312 151,924,615 164,903,761 94,858,243 37,690,335 276,437,848 75,148,355 291,843,953 58,267,608 34,072,976

EXPENSES AND LOSSES

Net Loss on Sale of Investments (Net of Net loss on Inter- Scheme sale of investments Rs. 15,810 for Fixed Term Series 50, Rs. 2,585,654 for Fixed Term Series 52, Rs. 548,154 for Fixed Term Series 53, Rs. 1,665,760 for Fixed Term Series 54 and Rs. 3,358,025 for Fixed Term Series 61) (Note 2.3) 23,586 27,555,684 25,828,904 14,488,000 6,321,284 - 6,277,548 5,357,654 - 7,466,560 -

Investment Management and Advisory Fees (Note 3) 9,295,622 9,657,908 7,227,464 10,167,088 4,075,993 1,460,131 8,425,354 2,702,643 6,078,300 330,353 514,044

Transfer Agent Fees and Expenses 779,467 398,005 252,727 272,966 134,997 64,705 412,576 105,010 482,674 104,977 72,118

Trusteeship Fees and Expenses (Note 4) 18,918 10,271 7,399 8,283 5,118 2,370 14,100 4,056 17,682 3,904 2,684

Custodian Fees and Expenses (Note 5) 470,461 250,501 170,798 179,075 91,597 40,819 273,635 73,883 294,813 59,698 35,672

Audit Fees 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000

Selling and Distribution Expenses - 2,040 2,040 2,040 - - - - 11,785,458 1,844,303 2,629,512

Other Operating Expenses 4,483 27,839 8,863 21,378 8,178 4,965 16,537 8,826 4,983 6,047 11,501

TOTAL 10,597,537 37,907,248 33,503,195 25,143,830 10,642,167 1,577,990 15,424,750 8,257,072 18,668,910 9,820,842 3,270,531

Less: Expenses to be Reimbursed by the Investment Manager (Note 7) - - - - - - - - - 305,845 -

TOTAL 10,597,537 37,907,248 33,503,195 25,143,830 10,642,167 1,577,990 15,424,750 8,257,072 18,668,910 9,514,997 3,270,531

Net Gains for the Period 372,801,108 188,436,064 118,421,420 139,759,931 84,216,076 36,112,345 261,013,098 66,891,283 273,175,043 48,752,611 30,802,445

Net Change in Unrealised Depreciation in Value of Investments (5,139,648) (18,726,611) (1,893,577) (7,664,269) (4,136,264) - (17,323,268) (2,327,068) (7,117,648) - -

Net Gains for the Period 367,661,460 169,709,453 116,527,843 132,095,662 80,079,812 36,112,345 243,689,830 64,564,215 266,057,395 48,752,611 30,802,445

Net Change in Unrealised Appreciation in Value of Investments - - - - 2,854,618 - - 1,744,148 - 3,274,784 4,036,618

Net Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments 367,661,460 169,709,453 116,527,843 132,095,662 82,934,430 36,112,345 243,689,830 66,308,363 266,057,395 52,027,395 34,839,063

Transferred to Unrealised Appreciation Reserve - - - - (2,854,618) - - (1,744,148) - (3,274,784) (4,036,618)

Net Surplus for the Period 367,661,460 169,709,453 116,527,843 132,095,662 80,079,812 36,112,345 243,689,830 64,564,215 266,057,395 48,752,611 30,802,445

Net Surplus for the Period 367,661,460 169,709,453 116,527,843 132,095,662 80,079,812 36,112,345 243,689,830 64,564,215 266,057,395 48,752,611 30,802,445

Transfer from Reserve Fund - - - - - - - - - - -

Dividend / Distribution - (3,313,101) (3,852,159) (13,333,629) (9,029,261) (583,359) (6,978,174) (2,168,045) (357,595) (419,237) (2,241,183)

Dividend / Distribution Tax thereon - (606,702) (587,426) (2,679,946) (1,633,965) (90,349) (1,003,933) (385,736) (60,643) (59,374) (325,742)

Balance Transferred to Reserve Fund 367,661,460 165,789,650 112,088,258 116,082,087 69,416,586 35,438,637 235,707,723 62,010,434 265,639,157 48,274,000 28,235,520




PARTHA GHOSH For HSBC Asset Management (IndiPartner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants


Place: Mumbai DirectorDate : 22 July 2009 Trustee

Fund Manager(s)


July 07, 2008 to to March 31, 2009

RupeesRupeesRupees RupeesRupees




May 27, 2008 to to March 31, 2009

RupeesRupees

May 23, 2008 to to March 31, 2009

April 24, 2008 to to March 31, 2009

Rupees

July 25, 2008 to to March 31, 2009

August 13, 2008 to to March 31, 2009


Rupees


August 22, 2008 to to March 31, 2009

Rupees


September 18, 2008 to to March 31, 2009Rupees


Revenue account for the period ended March 31, 2009

July 17, 2008 to to March 31, 2009

September 04, 2008 to to March 31, 2009

April 17, 2008 to to March 31, 2009

Fixed Term Series 50 Fixed Term Series 52 Fixed Term Series 53 Fixed Term Series 61

1

Fixed Term Series 52 Fixed Term Series 53 Fixed Term Series 54 Fixed Term Series 56 Fixed Term Series 59

Period ended March 31, 2009

Rupees


Rupees


Rupees


Rupees


Rupees

A. Cashflow from Operating ActivitiesNet Realised Gains for the period 188,436,064 118,421,420 139,759,931 84,216,076 261,013,098

Adjustments for:- (Increase)/Decrease in Investments at Cost (2,139,200,530) (1,267,126,690) (1,633,556,053) (1,140,702,653) (3,223,887,162)

(Increase)/Decrease in Other Current Assets (69,245,140) (71,211,938) (100,373,167) (44,372,625) (180,888,141)

Increase/(Decrease) in Current Liabilities 17,827,617 21,341,459 19,966,618 6,778,297 10,408,791

Net cash (used in) Operations ( A ) (2,002,181,989) (1,198,575,749) (1,574,202,671) (1,094,080,905) (3,133,353,414)

B Cashflow from Financing Activities Increase/(Decrease) in Unit Capital 2,055,499,232 1,295,162,350 1,644,656,490 1,143,802,751 3,161,781,651

Increase/(Decrease) in Unit Premium (9,820,183) (21,023,598) (13,495,590) (2,069,452) (3,839,134)

Adjustments for:-Increase/(Decrease) in Sundry Creditors for Units Redeemed by Investors - - - - -

(Increase)/Decrease in Sundry Debtors for Units Issued to Investors - - - - -

Dividend / Distribution during the period (3,313,101) (3,852,159) (13,333,629) (9,029,261) (6,978,174)

Dividend / Distribution Tax paid during the period (606,702) (587,426) (2,679,946) (1,633,965) (1,003,933)

Net cash generated from financing activities ( B ) 2,041,759,246 1,269,699,167 1,615,147,325 1,131,070,073 3,149,960,410

Net Increase/(Decrease) in Cash and Cash Equivalents (A+B) 39,577,257 71,123,418 40,944,654 36,989,168 16,606,996

Cash and Cash Equivalents at the Beginning of the Period - - - - -

Cash and Cash Equivalents at the Close of the Period 39,577,257 71,123,418 40,944,654 36,989,168 16,606,996






Rupees


Balances with Banks : - In Current Account 91,606 160,922 92,471 83,072 98,505

Other Collateralised LendingReverse Repos 19,296,667 34,679,530 19,964,469 18,035,791 8,067,746

Collateralised Borrowing and Lending Obligation 20,188,984 36,282,966 20,887,714 18,870,305 8,440,745

39,577,257 71,123,418 40,944,654 36,989,168 16,606,996

- - - - -

2



PARTHA GHOSH For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants


Director

Place: Mumbai Trustee Fund Manager(s)Date : 22 July 2009


The above Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard - 3 on Cash FlowStatements, issued by The Institute of Chartered Accountants of India.

HSBC MUTUAL FUND

Cash Flow Statement for the period ended March 31, 2009

2

SCHEDULE 1

Investments

Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost(Notes 2.2, 2.3, 8 , 9, 10, and 13) Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees(Refer to the attached Statement of Portfolio Holding as at March 31, 2009)

Equities


Privately Placed Non Convertible Debentures / Bonds - - 246,014,133 250,000,000 - - 376,741,962 380,000,000

Commercial Paper / Certificate of Deposit 3,306,432,297 3,306,432,297 - - 5,992,705 5,992,705 - -

Asset Backed Securities 476,161,898 478,991,444 1,440,901,337 1,449,200,530 1,061,133,985 1,061,133,985 854,104,208 854,104,208

TOTAL 4,718,524,615 4,723,664,262 2,120,473,920 2,139,200,530 1,265,233,113 1,267,126,690 1,625,891,785 1,633,556,053

0.00 2.00 0.00 0.00

SCHEDULE 2 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009Other Current Assets Rupees Rupees Rupees Rupees

Balances with Banks - in Current Account 46,991 91,606 160,922 92,471

Reverse Repos 9,182,530 19,296,667 34,679,530 19,964,469

Collateralised Borrowing and Lending Obligation 9,606,661 20,188,984 36,282,966 20,887,714

Unit Subscription Receivable - - - -

Application Money Pending Allotment - - - -

Inter-Scheme Receivable for 'Switch-In' - - - -


- Debentures / Bonds 44,519,388 60,919,357 16,060,876 63,743,697

- Asset Backed Securities - 8,320,258 55,141,745 36,623,883

- Reverse Repos 1,182 2,483 4,463 2,569

- Collateralised Borrowing and Lending Obligation 1,177 2,473 4,445 2,559

Receivable from Investment Manager 1,046 568 409 458

Miscellaneous Receivables - - - -

TOTAL 63,358,975 108,822,396 142,335,356 141,317,820

SCHEDULE 3

Deferred Revenue Expenditure (Note 2.8)

Issue and Organisational Costs - - - -

Less : Amortised during the period - - - -

At the end of the period - - - -


March 31, 2009 March 31, 2009March 31, 2009Rupees Rupees Rupees



Schedules forming part of the Balance Sheet as at March 31, 2009and the Revenue account for the period ended March 31, 2009

3

SCHEDULE 1

Investments

(Notes 2.2, 2.3, 8 , 9, 10, and 13)(Refer to the attached Statement of Portfolio Holding as at March 31, 2009)

Equities



Commercial Paper / Certificate of Deposit


TOTAL

SCHEDULE 2Other Current Assets

Balances with Banks - in Current Account

Reverse Repos

Collateralised Borrowing and Lending Obligation

Unit Subscription Receivable

Application Money Pending Allotment

Inter-Scheme Receivable for 'Switch-In'


- Debentures / Bonds

- Asset Backed Securities

- Reverse Repos

- Collateralised Borrowing and Lending Obligation

Receivable from Investment Manager

Miscellaneous Receivables

TOTAL

SCHEDULE 3



Less : Amortised during the period

At the end of the period

3

Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value CostRupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees

407,154,291 410,000,000 - - 1,627,361,861 1,636,383,901 363,130,249 364,000,000

198,709,446 200,000,000 - - 586,902,957 591,212,721 233,542,683 235,000,000

28,725,383 28,725,383 587,472,629 587,472,629 - - - -

504,831,887 501,977,269 - - 992,299,077 996,290,540 243,088,073 241,343,925

1,139,421,007 1,140,702,652 587,472,629 587,472,629 3,206,563,895 3,223,887,162 839,761,005 840,343,925

0.00 0.00 0.00 0.00


83,072 44,440 98,505 89,115

18,035,791 1,641,037 8,067,746 19,040,584

18,870,305 1,717,582 8,440,745 19,920,950

- - - -

- - - -

- - - -

44,367,709 - 180,801,753 44,065,741

- - - -

2,321 211 1,038 2,450

2,312 211 1,034 2,441

283 131 2,606 224

- - 81,709 -

81,361,793 3,403,612 197,495,136 83,121,505

- - - -

- - - -

- - - -


Fixed Term Series 57March 31, 2009 March 31, 2009

Rupees Rupees

Fixed Term Series 59Fixed Term Series 56 Fixed Term Series 61March 31, 2009

Rupees

HSBC FIXED TERM SERIES 50, HSBC FIXED TERM SERIES 52, HSBC FIXED TERM SERIES 53, HSBC FIXED TERM SERIES 54, HSBC FIXED TERM SERIES 56, HSBC FIXED TERM SERIES 57, HSBC FIXED TERM SERIES59, HSBC FIXED TERM SERIES 61, HSBC FIXED TERM SERIES 62, HSBC FIXED TERM SERIES 63, HSBC FIXED TERM SERIES 66

Schedules forming part of the Balance Sheet as at March 31, 2009and the Revenue account for the period ended March 31, 2009

SCHEDULE 1

Investments

(Notes 2.2, 2.3, 8 , 9, 10, and 13)(Refer to the attached Statement of Portfolio Holding as at March 31, 2009)

Equities





TOTAL


Balances with Banks - in Current Account

Reverse Repos


Unit Subscription Receivable

Application Money Pending Allotment

Inter-Scheme Receivable for 'Switch-In'


- Debentures / Bonds

- Asset Backed Securities

- Reverse Repos

- Collateralised Borrowing and Lending Obligation

Receivable from Investment Manager

Miscellaneous Receivables

TOTAL

SCHEDULE 3



Less : Amortised during the period


3

Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value CostRupees Rupees Rupees Rupees Rupees Rupees

531,546,970 535,865,753 195,284,722 195,284,722 202,707,639 201,932,100

547,201,134 550,000,000 - - - -

3,256,882,789 3,256,882,789 527,723,554 527,723,554 314,886,920 314,886,920

- - 210,832,460 207,557,677 110,728,066 107,466,986

4,335,630,893 4,342,748,542 933,840,736 930,565,953 628,322,625 624,286,006

0.00 0.00 0.00

March 31, 2009 March 31, 2009 March 31, 2009Rupees Rupees Rupees

116,241 30,268 57,089

25,004,675 6,495,170 11,920,782

26,161,030 6,795,945 12,471,863

- - -

- - -

- - -

38,550,479 5,473,973 6,349,316

- - -

3,218 836 1,534

3,205 833 1,528

978 306,061 148

- - -

89,839,826 19,103,086 30,802,260

- - -

- - -

- - -



and the Revenue account for the period ended March 31, 2009

Fixed Term Series 66March 31, 2009March 31, 2009


HSBC FIXED TERM SERIES 50, HSBC FIXED TERM SERIES 52, HSBC FIXED TERM SERIES 53, HSBC FIXED TERM SERIES 54, HSBC FIXED TERM SERIES 56, HSBC FIXED TERM SERIES 57, HSBC FIXED TERM SERIES 59, HSBC FIXED TERM SERIES 61, HSBC FIXED TERM SERIES 62, HSBC FIXED TERM SERIES 63, HSBC FIXED

TERM SERIES 66


March 31, 2009

March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009

SCHEDULE 4 Rupees Units Rupees Units Rupees Units Rupees Units

Unit Capital

Regular Plan

Growth Option

Issued and Subscribed

Units of Rs. 10 each fully paid up 210,189,948 21,018,994.800 1,056,151,207 105,615,120.708 694,681,327 69,468,132.732 1,183,140,774 118,314,077.412

Outstanding

Initial Issue and Subscription 210,189,948 21,018,994.800 1,056,151,207 105,615,120.708 694,681,327 69,468,132.732 1,183,140,774 118,314,077.412

Issued during the period - - 12,417,907 1,241,790.745 8,700,000 870,000.000 3,000,000 300,000.000

210,189,948 21,018,994.800 1,068,569,114 106,856,911.453 703,381,327 70,338,132.732 1,186,140,774 118,614,077.412

Redeemed during the period - - 239,481,008 23,948,100.814 159,734,132 15,973,413.236 213,018,024 21,301,802.404

At the end of the period 210,189,948 21,018,994.800 829,088,106 82,908,810.639 543,647,195 54,364,719.496 973,122,750 97,312,275.008

Dividend Option


Units of Rs. 10 each fully paid up 31,965,000 3,196,500.000 75,775,940 7,577,593.998 78,904,000 7,890,400.000

Outstanding

Initial Issue and Subscription 31,965,000 3,196,500.000 75,775,940 7,577,593.998 78,904,000 7,890,400.000

Issued during the period 3,150,948 315,094.780 4,048,423 404,842.256 4,018,291 401,829.051

35,115,948 3,511,594.780 79,824,363 7,982,436.254 82,922,291 8,292,229.051

Redeemed during the period 11,003,742 1,100,374.164 5,041,784 504,178.393 12,042,894 1,204,289.383

At the end of the period 24,112,206 2,411,220.616 74,782,579 7,478,257.861 70,879,397 7,087,939.668

Institutional Plan

Growth Option


Units of Rs. 10 each fully paid up 4,202,291,519 420,229,151.872 1,608,665,019 160,866,501.944 1,411,588,099 141,158,809.866 857,781,326 85,778,132.620

Outstanding

Initial Issue and Subscription 4,202,291,519 420,229,151.872 1,608,665,019 160,866,501.944 1,411,588,099 141,158,809.866 857,781,326 85,778,132.620

Issued during the period - - 46,200,000 4,620,000.000 - - - -

4,202,291,519 420,229,151.872 1,654,865,019 165,486,501.944 1,411,588,099 141,158,809.866 857,781,326 85,778,132.620

Redeemed during the period - - 479,552,799 47,955,279.900 734,855,523 73,485,552.302 430,636,067 43,063,606.738

At the end of the period 4,202,291,519 420,229,151.872 1,175,312,220 117,531,222.044 676,732,576 67,673,257.564 427,145,259 42,714,525.882

Dividend Option



Outstanding

Initial Issue and Subscription 39,500,000 3,950,000 164,196,113 16,419,611.304

Issued during the period 1,762,132 176,213.169 9,312,971 931,297.070

41,262,132 4,126,213.169 173,509,084 17,350,908.374

Redeemed during the period 14,275,432 1,427,543.195 - -

At the end of the period 26,986,700 2,698,669.974 173,509,084 17,350,908.374

TOTAL 4,412,481,467 441,248,146.672 2,055,499,232 205,549,923.273 1,295,162,350 129,516,234.921 1,644,656,490 164,465,648.932


Schedule forming part of the Balance Sheet as at March 31, 2009


4

SCHEDULE 4

Unit Capital

Regular Plan

Growth Option


Units of Rs. 10 each fully paid up

Outstanding

Initial Issue and Subscription

Issued during the period

Redeemed during the period


Dividend Option



Outstanding





Institutional Plan

Growth Option



Outstanding





Dividend Option



Outstanding





TOTAL

4


Rupees Units Rupees Units Rupees Units Rupees Units

375,493,598 37,549,359.829 103,072,467 10,307,246.746 569,582,355 56,958,235.528 241,723,588 24,172,358.802

375,493,598 37,549,359.829 103,072,467 10,307,246.746 569,582,355 56,958,235.528 241,723,588 24,172,358.802

6,086,361 608,636.080 - - 9,786,000 978,600.000 1,800,000 180,000.000

381,579,959 38,157,995.909 103,072,467 10,307,246.746 579,368,355 57,936,835.528 243,523,588 24,352,358.802

77,172,615 7,717,261.460 4,200,952 420,095.215 101,608,154 10,160,815.394 29,442,392 2,944,239.211

304,407,344 30,440,734.449 98,871,515 9,887,151.531 477,760,201 47,776,020.134 214,081,196 21,408,119.591

42,729,929 4,272,992.870 13,412,208 1,341,220.848 42,121,000 4,212,100.000 31,772,676 3,177,267.580

42,729,929 4,272,992.870 13,412,208 1,341,220.848 42,121,000 4,212,100.000 31,772,676 3,177,267.580

1,907,269 190,726.875 583,358 58,335.752 2,210,442 221,044.178 1,628,562 162,856.243

44,637,198 4,463,719.745 13,995,566 1,399,556.600 44,331,442 4,433,144.178 33,401,238 3,340,123.823

1,410,195 141,019.492 1,507,407 150,740.740 5,694,325 569,432.505 1,517,301 151,730.090

43,227,003 4,322,700.253 12,488,159 1,248,815.860 38,637,117 3,863,711.673 31,883,937 3,188,393.733

760,056,124 76,005,612.351 443,376,150 44,337,614.974 2,816,567,257 281,656,725.736 853,511,128 85,351,112.810

760,056,124 76,005,612.351 443,376,150 44,337,614.974 2,816,567,257 281,656,725.736 853,511,128 85,351,112.810

54,000,000 5,400,000.000 - - - - - -

814,056,124 81,405,612.351 443,376,150 44,337,614.974 2,816,567,257 281,656,725.736 853,511,128 85,351,112.810

179,500,000 17,950,000.000 - - 256,051,997 25,605,199.701 255,000,000 25,500,000.000

634,556,124 63,455,612.351 443,376,150 44,337,614.974 2,560,515,260 256,051,526.035 598,511,128 59,851,112.810

160,908,882 16,090,888.223 80,000,000 8,000,000.000 10,000,000 1,000,000.000

160,908,882 16,090,888.223 80,000,000 8,000,000.000 10,000,000 1,000,000.000

61,686,279 6,168,627.946 4,869,073 486,907.255 536,814 53,681.411

222,595,161 22,259,516.169 84,869,073 8,486,907.255 10,536,814 1,053,681.411

60,982,881 6,098,288.167 - - - -

161,612,280 16,161,228.002 84,869,073 8,486,907.255 10,536,814 1,053,681.411

1,143,802,751 114,380,275.055 554,735,824 55,473,582.365 3,161,781,651 316,178,165.097 855,013,075 85,501,307.545




Fixed Term Series 57Fixed Term Series 56

SCHEDULE 4

Unit Capital

Regular Plan

Growth Option



Outstanding





Dividend Option



Outstanding





Institutional Plan

Growth Option



Outstanding





Dividend Option



Outstanding





TOTAL

4


Rupees Units Rupees Units Rupees Units

4,031,121,000 403,112,100.032 270,946,765 27,094,676.541 418,275,321 41,827,532.076

4,031,121,000 403,112,100.032 270,946,765 27,094,676.541 418,275,321 41,827,532.076

- - - - 17,200,000 1,720,000.000

4,031,121,000 403,112,100.032 270,946,765 27,094,676.541 435,475,321 43,547,532.076

500,000 50,000.000 20,874,351 2,087,435.146 26,447,128 2,644,712.835

4,030,621,000 403,062,100.032 250,072,414 25,007,241.395 409,028,193 40,902,819.241

9,320,000 932,000.000 13,205,531 1,320,553.126 65,176,697 6,517,669.671

9,320,000 932,000.000 13,205,531 1,320,553.126 65,176,697 6,517,669.671

357,587 35,758.678 1,417,707 141,770.681 17,456,888 1,745,688.784

9,677,587 967,758.678 14,623,238 1,462,323.807 82,633,585 8,263,358.455

4,096,637 409,663.747 3,703,048 370,304.811 27,204,703 2,720,470.299

5,580,950 558,094.931 10,920,190 1,092,018.996 55,428,882 5,542,888.156

130,100,000 13,010,000.000 728,455,541 72,845,554.072 151,500,000 15,150,000.000

130,100,000 13,010,000.000 728,455,541 72,845,554.072 151,500,000 15,150,000.000

- - - - 10,000,000 1,000,000.000

130,100,000 13,010,000.000 728,455,541 72,845,554.072 161,500,000 16,150,000.000

10,100,000 1,010,000.000 90,000,000 9,000,000.000 - -

120,000,000 12,000,000.000 638,455,541 63,845,554.072 161,500,000 16,150,000.000

10,000,000 1,000,000.000

10,000,000 1,000,000.000

- -

10,000,000 1,000,000.000

10,000,000 1,000,000.000

- -

4,156,201,950 415,620,194.963 899,448,145 89,944,814.463 625,957,075 62,595,707.397





SCHEDULE 5

Reserves and Surplus Total Total Total Total Total Total Total Total Total Total Total


Added during the period - (9,820,183) (21,023,598) (13,495,590) (2,069,452) (123,698) (3,839,134) (3,516,069) (201,184) (665,825) (275,915)

At the end of the period - (9,820,183) (21,023,598) (13,495,590) (2,069,452) (123,698) (3,839,134) (3,516,069) (201,184) (665,825) (275,915)


Net change in Unrealised Appreciation in Value of Investments Transferred from Revenue Account (Note 12) - - - - 2,854,618 - - 1,744,148 - 3,274,784 4,036,618

At the end of the period - - - - 2,854,618 - - 1,744,148 - 3,274,784 4,036,618

Reserve Fund

Balance Transferred from Revenue Account 367,661,460 165,789,650 112,088,258 116,082,087 69,416,586 35,438,637 235,707,723 62,010,434 265,639,157 48,274,000 28,235,520

At the end of the period 367,661,460 165,789,650 112,088,258 116,082,087 69,416,586 35,438,637 235,707,723 62,010,434 265,639,157 48,274,000 28,235,520

TOTAL 367,661,460

* 155,969,467

* 91,064,660

* 102,586,497

* 70,201,752 * 35,314,939 * 231,868,589 * 60,238,513 * 265,437,973 * 50,882,959

* 31,996,223

*

* The share of the Plans / Options of the Reserves and Surplus is as follows : March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009Regular Option Growth Option : Rs. 17,513,670 62,476,869 39,136,754 68,501,844 20,516,163 6,036,246 34,019,723 14,986,172 257,481,952 13,604,043 22,521,350 Dividend Option : Rs. - 163,218 764,574 372,421 552,932 60,163 248,981 240,013 30,917 96,989 582,586 Total (A) 17,513,670 62,640,087 39,901,328 68,874,265 21,069,095 6,096,409 34,268,704 15,226,185 257,512,869 13,701,032 23,103,936

Institutional Option Growth Option : Rs. 350,147,791 93,141,366 51,163,332 32,645,673 46,735,476 29,218,530 197,021,510 44,923,637 7,925,104 37,181,927 8,892,287 Dividend Option : Rs. - 188,014 - 1,066,559 2,397,181 - 578,375 88,691 - - - Total (B) 350,147,791 93,329,380 51,163,332 33,712,232 49,132,657 29,218,530 197,599,885 45,012,328 7,925,104 37,181,927 8,892,287

Total (A+B) : Rs. 367,661,461 155,969,467 91,064,660 102,586,497 70,201,752 35,314,939 231,868,589 60,238,513 265,437,973 50,882,959 31,996,223


March 31, 2009


March 31, 2009


March 31, 2009


March 31, 2009

Rupees

March 31, 2009

Rupees

March 31, 2009

Rupees


March 31, 2009

Rupees RupeesRupees RupeesRupees

Fixed Term Series 54Fixed Term Series 52 Fixed Term Series 53

March 31, 2009


March 31, 2009 March 31, 2009

Rupees



and the Revenue account for the period ended March 31, 2009

Rupees


March 31, 2009

Rupees


5

SCHEDULE 6

Current Liabilities and Provisions

Fixed Term Series 50 Fixed Term Series 52 Fixed Term Series 53 Fixed Term Series 54 Fixed Term Series 56 Fixed Term Series 57

March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009Current Liabilities Rupees Rupees Rupees Rupees Rupees Rupees

Investment Management and Advisory Fees 1,556,366 4,466,971 3,043,613 6,532,414 2,593,270 678,875

Transfer Agent Fees and Expenses 87,709 40,521 25,439 32,086 22,353 10,825

Trusteeship Fees and Expenses - - - - - -

Custodian Fees and Expenses 87,091 39,285 23,925 30,509 21,468 10,836

Audit Fees 5,000 5,000 5,000 5,000 5,000 5,000

Selling and Distribution Expenses - - - - - -

Load Payable - 13,220,696 18,232,567 13,319,592 4,129,556 116,489

Sundry Payables 4,496 55,144 10,915 47,017 6,650 3,453

TOTAL 1,740,662 17,827,617 21,341,459 19,966,618 6,778,297 825,478

SCHEDULE 7 Fixed Term Series 50 Fixed Term Series 52 Fixed Term Series 53 Fixed Term Series 54 Fixed Term Series 56 Fixed Term Series 57

Interest and Discount (Note 2.4) April 17, 2008 to April 24, 2008 to May 23, 2008 to May 27, 2008 to July 25, 2008 to August 13, 2008 to

March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009Rupees Rupees Rupees Rupees Rupees Rupees

Debentures / Bonds 80,919,024 69,782,968 50,004,999 90,340,801 47,628,818 38,341

Asset Backed Securities 42,441,171 126,060,325 91,761,275 73,891,721 34,091,626 -

Commercial Paper / Certificate of Deposit 257,804,436 30,516,909 13,530,839 613,045 12,282,051 36,407,297

Reverse Repos 523,810 1,076,171 978,563 927,129 754,477 1,004,138

Collateralised Borrowing and Lending Obligation 1,713,399 99,011 267,999 1,977,668 101,271 147,124

Others (Refer note 15) (3,195) (1,192,072) (4,619,060) (2,846,603) - (1,779)

383,398,645 226,343,312 151,924,615 164,903,761 94,858,243 37,595,121



and the Revenue Account for the period ended March 31, 2009

6

SCHEDULE 6


Current Liabilities

Investment Management and Advisory Fees

Transfer Agent Fees and Expenses

Trusteeship Fees and Expenses

Custodian Fees and Expenses

Audit Fees

Selling and Distribution Expenses

Load Payable

Sundry Payables

TOTAL

SCHEDULE 7

Interest and Discount (Note 2.4)

Debentures / Bonds



Reverse Repos


Others (Refer note 15)

6


March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009Rupees Rupees Rupees Rupees Rupees

3,095,513 1,832,175 1,680,187 52,084 119,744

62,785 16,918 81,093 17,448 12,094

- - - - -

59,734 15,958 80,425 17,240 11,777

5,000 5,000 5,000 5,000 5,000

- - 1,683,793 230,007 374,383

7,144,960 5,752,862 295,969 2,285,112 640,027

40,799 8,009 4,329 5,828 8,562

10,408,791 7,630,922 3,830,796 2,612,719 1,171,587


July 07, 2008 to July 17, 2008 to August 22, 2008 to September 04, 2008 to September 18, 2008 to

March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009 March 31, 2009Rupees Rupees Rupees Rupees Rupees

193,377,872 55,747,718 78,134,350 2,026,136 9,484,377

68,930,659 15,529,004 - 13,230,650 6,196,490

14,350,455 3,784,543 210,911,697 41,114,986 15,948,728

1,329,333 364,501 1,022,451 343,423 288,846

1,797,920 114,610 1,149,863 165,456 245,410

(3,348,391) (392,021) - - -

276,437,848 75,148,355 291,218,361 56,880,651 32,163,851



and the Revenue Account for the period ended March 31, 2009

Description Quantity Market / Fair Value

Rupees

HSBC FIXED TERM SERIES 50

Non-Convertible Debentures / Bonds Listed / Awaiting listing (19.84 %)Finance (100 %)

9.05% Infrastructure Development Finance Company Limited 2009 $ @ 499 497,229,163 9.70% GE Capital Services India Limited 2009 $ 440 438,701,257

935,930,420 Total (Cost Rs. 938,240,522) 935,930,420


Corporate Loan Securitisation Series 7 Trust 2009 Series A2 (DLF ) PTC 2009 * @ 43 476,161,898 476,161,898

Total (Cost Rs. 478,991,444) 476,161,898


ICICI Bank Limited 2009 $ @ 7,200 714,903,651 National Bank For Agricultural and Rural Development Limited 2009 $ 7,200 714,192,828 ABN Amro Bank 2009 $ 7,000 695,142,948 Kotak Mahindra Bank Limited 2009 $ 5,000 496,461,736 Exim Bank Limited 2009 $ @ 2,180 216,174,687 State Bank of Hyderabad 2009 $ @ 230 22,908,858

2,859,784,709 Commercial Papers (13.51 %)

ICICI Securities Limited 2009 $ @ 600 297,942,236 ICICI Securities Limited 2009 $ @ 300 148,705,351




9.65% Deutsche Postbank Home Finance Limited 2012 $ 190 187,005,451 187,005,451

Finance & Term Lending (56.87 %)9.83% Kotak Mahindra Prime Limited 2009 $ 250 246,552,999

246,552,999 Total (Cost Rs. 440,000,000) 433,558,450

Privately Placed / Unlisted Non-Convertible Debentures / Bonds (11.60 %)Engineering (100 %)

9.90% SREI Equipment Finance Private Limited 2009 * 2,500 246,014,133 246,014,133

Total (Cost Rs. 250,000,000) 246,014,133

Asset Backed Securities (67.95 %)

Finance & Investments (82.95 %)IWH Loan Trust Series A1 (Indiabulls Financial Services) PTC 2009 * 54 591,224,249 Corporate Loan Securitisation Series 7 Trust 2009 Series A2 (DLF ) PTC 2009 * @ 37 409,720,703 Corporate Loan Securitisation Series XXXIII Trust 2006 (Shriram Transport Finance Company ) PTC 2009 * 10 99,910,808 Corporate Loan Securitisation Series 8 Trust 2009 Series A2 (DLF ) PTC 2009 * @ 8 94,376,271


ISH Loan Trust Series A2 (Simplex Infrastructure) PTC 2009 * 25 245,669,306 245,669,306

Total (Cost Rs. 1,449,200,530) 1,440,901,337 TOTAL INVESTMENTS (Cost Rs. 2,139,200,530) 2,120,473,920



9.63% Deutsche Postbank Home Finance Limited 2009 $ 150 148,209,986 9.55% GRUH Finance Limited 2009 $ 50 49,896,437

198,106,423

Total (Cost Rs. 200,000,000) 198,106,423

Asset Backed Securities (83.87 %)Finance & Investments (59.66 %)

Indian Loans Receivables Trust May 2008 Series A2 (DLF ) PTC 2009 * @ 429 429,791,964 Corporate Loan Securitisation Series XXIX Trust 2006 (Shriram Transport Finance Company ) PTC 2009 * 10 103,403,455 Corporate Loan Securitisation Series XXXIII Trust 2006 (Shriram Transport Finance Company ) PTC 2009 * 10 99,910,808


Corporate Debt Trust 2008-09 Series 5 A1 (LIC Housing Finance) PTC 2009 * 47 428,027,758 428,027,758

Total (Cost Rs. 1,061,133,984) 1,061,133,985


State Bank of Bikaner and Jaipur $ @ 60 5,992,705 5,992,705


Statement of Portfolio Holdings as at March 31, 2009

HSBC FIXED TERM SERIES 50,HSBC FIXED TERM SERIES 52,HSBC FIXED TERM SERIES 53,HSBC FIXED TERM SERIES 54,HSBC FIXED TERM SERIES 56,HSBC FIXED TERM SERIES 57,HSBC FIXED TERM SERIES 59,HSBC FIXED TERM SERIES 61,HSBC FIXED TERM SERIES 62,HSBC FIXED TERM SERIES

63,HSBC FIXED TERM SERIES 66

HSBC MUTUAL FUND



7


Rupees







Non-Convertible Debentures / Bonds Listed / Awaiting listing (24.30 %)Consumer Finance (50.03 %)

10.40% CitiFinancial Consumer Finance India Limited 2009 $ 200 197,653,993 197,653,993

Finance (25.01 %)9.63% Deutsche Postbank Home Finance Limited 2009 $ 100 98,806,658


10.33% Kotak Mahindra Prime Limited 2009 $ 100 98,584,964 98,584,964

Total (Cost Rs. 399,451,845) 395,045,615


10.40% SREI Infrastructure Finance Limited 2009 * 3,800 376,741,962 376,741,962

Total (Cost Rs. 380,000,000) 376,741,962


Indian Loans Receivables Trust May 2008 Series A2 (DLF ) PTC 2009 * @ 450 450,830,732 Corporate Loan Securitisation Series XXIX Trust 2006 (Shriram Transport Finance Company ) PTC 2009 * 39 403,273,476



Non-Convertible Debentures / Bonds Listed / Awaiting listing (35.73 %)

Finance (51.25 %)11.76% Sundaram Finance Limited 2009 $ @ 210 208,686,676


11.85% Kotak Mahindra Prime Limited 2009 $ 100 99,408,743 12.15% Kotak Mahindra Prime Limited 2009 $ 100 99,058,872

198,467,615 Total (Cost Rs. 410,000,000) 407,154,291

Privately Placed / Unlisted Non-Convertible Debentures / Bonds (17.44 %)Finance (100 %)


Total (Cost Rs. 200,000,000) 198,709,446


Corporate Loan Securitisation Series XXXVII Trust 2006 (Shriram Transport Finance Company) PTC 2009 * 24 266,314,687 Indian Corporate Loan Securitisation Trust 2008 Series 33 (L&T Finance) PTC 2009 * @ 25 238,517,200

504,831,887 Total (Cost Rs. 501,977,269) 504,831,887


State Bank of Bikaner and Jaipur 2009 $ @ 300 28,725,383 28,725,383



Commercial Papers/Certificate of Deposits (100 %)Certificate of Deposits (100 %)

State Bank of Bikaner and Jaipur $ @ 1,190 113,944,021 IDBI Bank Limited $ @ 1,000 95,685,053 The Jammu And Kashmir Bank Limited $ @ 1,000 95,663,557 ICICI Bank Limited $ @ 1,000 95,647,380 State Bank of Hyderabad $ @ 1,000 95,577,890 Oriental Bank of Commerce $ 950 90,954,728

587,472,629



Privately Placed / Unlisted Non-Convertible Debentures / Bonds (18.30 %)

Finance (100 %)11.60% GE Capital Services India Limited 2009 * 590 586,902,957

586,902,957 Total (Cost Rs. 591,212,721) 586,902,957

Non-Convertible Debentures / Bonds Listed / Awaiting listing (50.75 %)Consumer Non Durables (30.53 %)

11.75% Barclays Investments and Loans India Limited 2009 $ 500 496,759,835 496,759,835

Finance (15.22 %)11.65% Deutsche Postbank Home Finance Limited 2013 $ 250 247,715,819


12.15% Kotak Mahindra Prime Limited 2009 $ 250 247,933,422 11.65% IL & FS Limited 2009 $ 236,000 238,007,034 11.70% Kotak Mahindra Prime Limited 2009 $ 200 198,549,149 11.70% Kotak Mahindra Prime Limited 2009 $ 100 99,293,232 12.05% Kotak Mahindra Prime Limited 2009 $ 100 99,103,370

882,886,207 Total (Cost Rs. 1,636,383,901) 1,627,361,861


Corporate Loan Securitisation Series 24 Trust 2009 (Shriram Transport Finance Company) PTC 2009 * 50 538,848,153 Corporate Debt Trust 2008 -09 Series 9 (Bajaj Auto Finance) PTC 2009 * 25 239,533,419 Loans Receivable Trust July 2008 Series A2 (Shriram Transport Finance Company )PTC 2009 * 22 213,917,505



Rupees









Finance & Term Lending (46.76 %)11.50% Kotak Mahindra Prime Limited 2009 * 110 109,198,836

109,198,836 Total (Cost Rs. 235,000,000) 233,542,683


11.76% Sundaram Finance Limited 2009 $ @ 190 188,811,755 188,811,755

Finance & Term Lending (48.00 %)11.65% IL & FS Limited 2009 $ 114,000 114,969,499 11.80% Kotak Mahindra Prime Limited 2009 $ 60 59,348,995

174,318,494 Total (Cost Rs. 364,000,000) 363,130,249


Loans Receivable Trust July 2008 Series A2 (Shriram Transport Finance Company) PTC 2009 * 25 243,088,073 243,088,073



Privately Placed / Unlisted Non-Convertible Debentures / Bonds (12.62 %)Finance & Investments (54.51 %)

12.15% GE Money Financial Services Limited 2009 * 300 298,260,728 298,260,728

Finance & Term Lending (45.49 %)12.35% Kotak Mahindra Prime Limited 2009 * 250 248,940,406

248,940,406

Total (Cost Rs. 550,000,000) 547,201,134

Non-Convertible Debentures / Bonds Listed / Awaiting listing (12.26 %)Finance & Term Lending (100 %)

12.35% Tata Capital Limited 2009 $ @ 500 531,546,970 531,546,970

Total (Cost Rs. 535,865,753) 531,546,970


IDBI Bank Limited 2009 $ @ 9,000 861,165,477 Oriental Bank of Commerce 2009 $ 8,550 818,623,160 ICICI Bank Limited 2009 $ @ 5,000 478,236,902

2,158,025,539 Commercial Papers (33.74 %)

GE Capital Services India Limited 2009 $ 1,000 477,705,933 GE Capital Services India Limited 2009 $ 800 382,280,732 Deutsche Postbank Home Finance Limited 2009 $ 500 238,870,585

1,098,857,250 Total (Cost Rs. 3,256,882,789) 3,256,882,789

TOTAL INVESTMENTS (Cost Rs. 4,342,748,542) 4,335,630,893



9.00% Sundaram Finance Limited 2009 $ @ 100 99,285,431 99,285,431

Finance & Term Lending (49.16 %)0.00% Kotak Mahindra Prime Limited 2009 $ 100 95,999,291

95,999,291 Total (Cost Rs. 195,284,722) 195,284,722


Corporate Loan Securitisation Series XXXVII Trust 2006 (Shriram Transport Finance Company) PTC 2009 * 19 210,832,460 210,832,460

Total (Cost Rs. 207,557,676) 210,832,460


Oriental Bank of Commerce 2009 $ 2,000 188,083,833 Exim Bank Limited 2009 $ @ 1,300 125,691,491

313,775,324 Commercial Papers (40.54 %)

Power Finance Corporation Limited 2009 $ 248 117,014,714 Reliance Capital Limited 2009 $ 100 48,734,295 Reliance Capital Limited 2009 $ 100 48,199,221




10.00% Housing Development Finance Corporation Limited 2010 100 102,216,600 12.50% ICICI Home Finance Company Limited 2010 $ @ 100 100,491,039

202,707,639 Total (Cost Rs. 201,932,100) 202,707,639


Corporate Debt Trust Series 15- Sereis A1 (National Housing Bank) PTC 2010 * 12 110,728,066 110,728,066

Total (Cost Rs. 107,466,986) 110,728,066


Vijaya Bank $ 1,000 93,080,703 State Bank of Indore $ @ 375 35,508,322 Allahabad Bank $ @ 370 35,128,106 Oriental Bank of Commerce $ 200 18,952,526 Punjab National Bank $ 150 14,152,406

196,822,063 Commercial Papers (37.49 %)

Aditya Birla Nuvo Limited 2009 $ 200 93,529,514 Power Finance Corporation Limited 2009 $ 52 24,535,343


@ Investment in companies which have invested more than five percent of the net asset value of any scheme of HSBC Mutual Fund

Confirmation has been received from J P Morgan Chase Bank, Mumbai Branch at the end of the financial year / period for investments held by them.

* Fair value of non-traded (privately placed) securities as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approvedby the Board of Trustees in accordance with the Regulations.

$ Fair Value of non traded and thinly traded debt securities as determined by HSBC Asset Management (India) Private Limited under procedures approved by theTrustee in accordance with guidelines for valuation of securities for mutual funds dated September



Schedule Rupees Rupees Rupees Rupees Rupees RupeesASSETS

Investments 1 870,636,238 1,040,976,126 305,582,876 555,094,366 6,746,080,680 6,263,385,458

Other Current Assets 2 3,806,446 2,014,610 60,898,563 32,873,432 106,059,304 40,456,259

Deferred Revenue Expenditure 3 5,098,329 12,489,078 12,747 562,322 787,022 5,011,485

TOTAL 879,541,013 1,055,479,814 366,494,186 588,530,120 6,852,927,006 6,308,853,202

LIABILITIES

Unit Capital 4 769,337,349 971,878,184 324,164,565 573,469,559 6,249,889,006 6,249,889,006

Reserves and Surplus 5 101,438,897 81,173,981 36,662,758 14,896,981 601,099,402 57,939,147

Current Liabilities and Provisions 6 8,764,767 2,427,649 5,666,863 163,580 1,938,598 1,025,049

TOTAL (0.00) 879,541,013 1,055,479,814 0.41 366,494,186 588,530,120 0.39 6,852,927,006 6,308,853,202

RECONCILIATION OF NET ASSET VALUE PER UNITRegular Option

Growth Sub OptionRegular Option

Dividend Sub OptionInstitutional OptionGrowth Sub Option

Institutional OptionDividend Sub Option Total



Institutional OptionGrowth Sub Option



Institutional OptionGrowth Sub Option Total

Net Assets as per Balance Sheet (Total Assets less Current Liabilities and Provisions ) (Note 2.5) 616,803,190 144,619,474 109,353,582 - 870,776,246 87,164,479 14,322,066 248,327,992 11,012,786 360,827,323 131,360,772 6,719,627,636 6,850,988,408

(728,661,226) (178,906,999) (124,614,820) (20,869,122) (1,053,052,167) (110,529,097) (14,367,289) (453,208,117) (10,262,037) (588,366,540) (120,946,225) (6,186,881,928) (6,307,828,153)

Number of Units in Issue 53,156,931.064 14,352,566.066 9,424,237.930 - 7,793,526.628 1,422,983.668 22,106,119.643 1,093,826.354 11,983,530.000 613,005,370.600

(66,659,279.315) (17,128,539.151) (11,400,000.000) (2,000,000.000) (10,781,890.753) (1,401,500.000) (44,163,565.052) (1,000,000.000) (11,983,530.000) (613,005,370.624)

Net Asset Value per Unit 11.6034 10.0762 11.6034 - 11.1842 10.0648 11.2335 10.0681 10.9618 10.9618 (10.9311) (10.4450) (10.9311) (10.4346) (10.2514) (10.2514) (10.2620) (10.2620) (10.0927) (10.0927)




For Board of Trustees of For HSBC Asset Management (India)PARTHA GHOSH HSBC Mutual Fund Private LimitedPartnerMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants


Trustee Director


Fixed Term Series 30 Fixed Term Series 42Fixed Term Series 41

Rupees

(March 31, 2008)

March 31, 2009

(March 31, 2008)

HSBC FIXED TERM SERIES 30, HSBC FIXED TERM SERIES 41, HSBC FIXED TERM SERIES 42, HSBC FIXED TERM SERIES 44, HSBC FIXED TERM SERIES 45, HSBC FIXED TERM SERIES 46, HSBC FIXED TERM SERIES 49


Rupees

March 31, 2009

(March 31, 2008)

Rupees

March 31, 2009

0

ScheduleASSETS

Investments 1


Deferred Revenue Expenditure 3

TOTAL

LIABILITIES

Unit Capital 4



TOTAL









Place: Mumbai

Date : 22 July 2009

0

Fixed Term Series 44 Fixed Term Series 44 Fixed Term Series 45 Fixed Term Series 45 Fixed Term Series 46 Fixed Term Series 46 Fixed Term Series 49 Fixed Term Series 49



910,418,282 1,329,557,250 - 182,942,973 351,950,777 2,454,545,214 499,917,890 3,284,795,768

95,138,238 7,679,409 202,131,943 99,753,612 2,144,460,320 115,796,746 3,116,447,366 20,446,066

- - - - - - - -

1,005,556,520 1,337,236,659 202,131,943 282,696,585 2,496,411,097 2,570,341,960 3,616,365,256 3,305,241,834

905,508,399 1,331,008,952 183,925,716 281,848,872 2,280,453,826 2,567,547,071 3,301,539,245 3,301,839,245

89,643,599 6,110,092 15,827,839 819,680 206,688,654 2,676,227 313,439,140 3,305,225

10,404,522 117,615 2,378,388 28,033 9,268,617 118,662 1,386,871 97,364

0.00 1,005,556,520 1,337,236,659 -0.30 202,131,943 282,696,585 0.30 2,496,411,097 2,570,341,960 -0.51 3,616,365,256 3,305,241,834









Institutional OptionGrowth Sub Option





220,892,427 5,417,203 768,842,368 995,151,998 54,980,455 2,845,872 141,927,228 199,753,555 89,774,601 8,020,529 2,378,597,555 10,749,795 2,487,142,480 207,284,876 547,468 3,407,146,041 3,614,978,385

(234,579,480) (5,022,210) (1,097,517,354) (1,337,119,044) (58,970,764) (2,657,616) (221,040,172) (282,668,552) (116,523,333) (7,457,355) (2,436,232,165) (10,010,445) (2,570,223,298) (189,801,911) (500,501) (3,114,842,058) (3,305,144,470)

20,169,814.556 540,194.981 69,840,830.283 5,071,075.089 283,752.905 13,037,743.665 8,257,668.926 798,973.690 217,918,028.939 1,070,711.061 18,931,210.400 50,000.000 311,172,714.100

(23,354,214.556) (500,000.000) (109,246,680.608) (5,880,176.978) (265,000.000) (22,039,710.250) (11,640,684.365) (744,990.000) (243,369,032.680) (1,000,000.000) (18,961,210.400) (50,000.000) (311,172,714.112)

10.9516 10.0282 11.0085 10.8420 10.0294 10.8859 10.8717 10.0385 10.9151 10.0399 10.9494 10.9494 10.9494 (10.0444) (10.0444) (10.0462) (10.0287) (10.0287) (10.0292) (10.0100) (10.0100) (10.0104) (10.0104) (10.0100) (10.0100) (10.0100)



Trustee Director

Fund Manager(s)

Rupees


Rupees

March 31, 2009 March 31, 2009

(March 31, 2008)(March 31, 2008)

Rupees

March 31, 2009

(March 31, 2008)



Fixed Term Series 45 Fixed Term Series 46Fixed Term Series 44

Rupees

March 31, 2009

(March 31, 2008)

April 01, 2008 to May 03, 2007 to April 01, 2008 to December 17, 2007 to April 01, 2008 to January 29, 2008 toMarch 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008

Schedule Rupees Rupees Rupees Rupees Rupees Rupees

INCOME AND GAINS

Interest and Discount 7 101,080,493 87,850,983 47,482,214 15,228,678 599,961,803 89,114,373

Net Profit on Sale of Investments (Note 2.3)(Including Net of Net Loss on Inter-Scheme Sale of Investments Rs. 1,908,328 for Fixed Term Series 30, Rs. 121,495 for Fixed Term Series 41, Rs. 39,389 for Fixed Term Series 42 and Rs. 1,091,733 for Fixed term Series 42 (Previous year: Rs. 2,291,031 for Fixed Term Series 30)) (Note 2.3) - 2,280,947 - 54,251 - -

TOTAL 101,080,493 90,131,930 47,482,214 15,282,929 599,961,803 89,114,373

EXPENSES AND LOSSES

Net Loss on Sale of Investments including Net Loss on Inter-Scheme Sale of Investments ofRs.1,091,733 for Fixed Term Series 46 (Previous year is Nil )(Note 2.3) 9,044,455 - 2,854,840 - 38,712 8,357

Investment Management and Advisory Fees (Note 3) 4,573,322 3,978,447 482,641 162,820 8,357,467 1,246,570

Transfer Agent Fees and Expenses 197,040 153,881 99,533 25,948 1,310,668 117,377

Trusteeship Fees and Expenses (Note 4) 3,985 6,121 2,048 4,878 26,917 2,610

Custodian Fees and Expenses (Note 5) 117,733 90,101 58,856 14,546 719,218 110,491

Audit Fees 10,000 6,000 5,000 6,000 5,000 6,000

Selling and Distribution Expenses 1,001,240 1,229,040 2,040 - - -

Initial Issue Expenses Amortised 5,447,599 4,919,107 464,767 150,831 4,224,463 613,415

Other Operating Expenses 4,734 25,124 20,576 5,515 2,180 5,116

TOTAL 20,400,108 10,407,821 3,990,301 370,538 14,684,625 2,109,936

Less: Expenses to be Reimbursed by the Investment Manager - 91,853 - - - -

TOTAL 20,400,108 10,315,968 3,990,301 370,538 14,684,625 2,109,936

Net Realised Gains for the Year/Period 80,680,385 79,815,962 43,491,913 14,912,391 585,277,178 87,004,437

Net change in Unrealised Depreciation in Value of Investments (16,666,465) - 324,815 (346,160) (42,116,923) (29,065,290)

Net Gains for the Year/Period 0.69 64,013,920 79,815,962 0.80 43,816,728 14,566,231 0.01 543,160,255 57,939,147

Net change in Unrealised Appreciation in Value of Investments (14,447,597) 15,193,470 (330,750) 330,750 - -

Net Surplus including Net change in Unrealised Appreciation/Depreciation in Value of Investments 49,566,323 95,009,432 43,485,978 14,896,981 543,160,255 57,939,147

Transferred to Unrealised Appreciation Reserve 14,447,597 (15,193,470) 330,750 (330,750) - -

Net Surplus for the Year/Period 64,013,920 79,815,962 43,816,728 14,566,231 543,160,255 57,939,147



31, 2009 April 01, 2008 to March 31, 2009April 01, 2008 to March 31,

2009 April 01, 2008 to March 31, 2009April 01, 2008 to March 31,

2009

(May 03, 2007 to March 31, 2008)(May 03, 2007 to March

31, 2008) (December 17, 2007 to March 31, 2008)(December 17, 2007 to March

31, 2008) (January 29, 2008 to March 31, 2008)(January 29, 2008 to March

31, 2008)Rupees Rupees Rupees Rupees Rupees Rupees

Regular Option Growth Sub Option

Regular Option Dividend Sub Option

Institutional Option Growth Sub Option

Institutional Option Dividend Sub Option Total






Institutional Option Growth Sub Option Total

Net Surplus for the Year / Period 45,164,219 11,036,724 7,558,852 254,119 64,013,919 8,826,236 1,250,178 32,771,079 969,235 43,816,728 10,414,547 532,745,709 543,160,255

(54,824,321) (13,904,282) (9,534,093) (1,553,266) (79,815,962) (2,648,229) (344,235) (11,317,505) (256,262) (14,566,231) (1,110,925) (56,828,222) (57,939,147)

Transfer from Reserve Fund - 5,207,263 - 397,576 5,604,839 - 347,845 - 258,408 606,253 - - -

(-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)

Dividend / Distribution - (13,628,576) - (964,244) (14,592,820) - (1,215,365) - (938,710) (2,154,076) - - -

(-) (-7,339,143) (-) (-852,119) (-8,191,262) (-) (-) (-) (-) (-) (-) (-) (-)

Dividend / Distribution Tax thereon - (1,988,590) - (136,562) (2,125,152) - (225,778) - (212,712) (438,489) - - -

(-) (-1,072,390) (-) (-120,681) (-1,193,071) (-) (-) (-) (-) (-) (-) (-) (-)

Balance Transferred to Reserve Fund 45,164,219 626,821 7,558,852 (449,110) 52,900,786 8,826,236 156,881 32,771,079 76,221 41,830,416 10,414,547 532,745,709 543,160,255

(54,824,321) (5,492,749) (9,534,093) (580,466) (70,431,629) (2,648,229) (344,235) (11,317,505) (256,262) (14,566,231) (1,110,925) (56,828,222) (57,939,147)



Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants


Director

Place: Mumbai

Date : 22 July 2009 Trustee Fund Manager(s)








1

Schedule

INCOME AND GAINS

Interest and Discount 7

Net Profit on Sale of Investments (Note 2.3)(Including Net of Net Loss on Inter-Scheme Sale of Investments Rs. 1,908,328 for Fixed Term Series 30, Rs. 121,495 for Fixed Term Series 41, Rs. 39,389 for Fixed Term Series 42 and Rs. 1,091,733 for Fixed term Series 42 (Previous year: Rs. 2,291,031 for Fixed Term Series 30)) (Note 2.3)

TOTAL

EXPENSES AND LOSSES

Net Loss on Sale of Investments including Net Loss on Inter-Scheme Sale of Investments ofRs.1,091,733 for Fixed Term Series 46 (Previous year is Nil )(Note 2.3)

Investment Management and Advisory Fees (Note 3)


Trusteeship Fees and Expenses (Note 4)

Custodian Fees and Expenses (Note 5)

Audit Fees


Initial Issue Expenses Amortised

Other Operating Expenses

TOTAL

Less: Expenses to be Reimbursed by the Investment Manager

TOTAL

Net Realised Gains for the Year/Period

Net change in Unrealised Depreciation in Value of Investments

Net Gains for the Year/Period

Net change in Unrealised Appreciation in Value of Investments


Transferred to Unrealised Appreciation Reserve

Net Surplus for the Year/Period

Net Surplus for the Year / Period

Transfer from Reserve Fund

Dividend / Distribution

Dividend / Distribution Tax thereon

Balance Transferred to Reserve Fund


PARTHA GHOSH

PartnerMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants

Place: Mumbai

Date : 22 July 2009



1

April 01, 2008 to March 04, 2008 to April 01, 2008 to March 18, 2008 to April 01, 2008 to March 24, 2008 to April 01, 2008 to March 28, 2008 toMarch 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008


107,759,948 6,229,436 22,921,587 841,300 245,007,168 2,673,704 318,804,874 3,272,120

183,717 - - - - - 108,713 -

107,943,665 6,229,436 22,921,587 841,300 245,007,168 2,673,704 318,913,587 3,272,120

- 6,306 1,545,537 2,561 14,934,389 441 - 2,547

1,976,109 83,042 647,051 14,916 10,410,719 99,072 7,592,639 73,267

213,482 10,476 45,019 682 475,116 6,206 648,023 7,980

4,807 448 1,036 - 10,607 - 14,273 -

129,203 8,533 27,418 1,178 261,038 3,051 358,499 4,299

5,000 6,000 5,000 6,000 5,000 6,000 5,000 6,000

10,838 - 2,040 - 2,040 - - -

- - - - - - - -

2,525 4,539 15,728 2,873 93,791 4,355 20,609 4,089

2,341,964 119,344 2,288,829 28,210 26,192,700 119,125 8,639,043 98,182

- - - 6,590 - 1,006 - 5,406

2,341,964 119,344 2,288,829 21,620 26,192,700 118,119 8,639,043 92,776

105,601,701 6,110,092 20,632,758 819,680 218,814,468 2,555,585 310,274,544 3,179,344

- - - - - - - -

0.00 105,601,701 6,110,092 0.90 20,632,758 819,680 0.30 218,814,468 2,555,585 -0.09 310,274,544 3,179,344

- - - - (120,642) 120,642 (125,881) 125,881

105,601,701 6,110,092 20,632,758 819,680 218,693,826 2,676,227 310,148,664 3,305,224

- - - - 120,642 (120,642) 125,881 (125,881)

105,601,701 6,110,092 20,632,758 819,680 218,814,468 2,555,585 310,274,544 3,179,344

Fixed Term Series 44 Fixed Term Series 44 Fixed Term Series 45 Fixed Term Series 45 Fixed Term Series 46 Fixed Term Series 46 Fixed Term Series 49 Fixed Term Series 49

April 01, 2008 to March 31, 2009April 01, 2008 to March 31,




2009

(March 04, 2008 to March 31, 2008)(March 04, 2008 to March 31,

2008) (March 18, 2008 to March 31, 2008)(March 18, 2008 to March 31,



2008)Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees














19,967,314 452,095 85,182,292 105,601,701 4,489,136 214,814 15,928,806 20,632,758 8,326,819 639,986 208,947,596 900,067 218,814,468 17,804,942 46,987 292,422,615 310,274,544

(1,037,335) (22,210) (5,050,547) (6,110,092) (168,994) (7,616) (643,070) (819,680) (111,019) (7,105) (2,427,486) (9,975) (2,555,585) (182,578) (482) (2,996,284) (3,179,344)

- 19,972 - 19,972 - 7,193 - 7,193 - 4,396 - 6,240 10,636 - - -

(-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)

- (401,950) - (401,950) - (187,529) - (187,529) - (539,892) - (707,179) (1,247,070) - - -

(-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)

- (56,926) - (56,926) - (26,559) - (26,559) - (76,462) - (160,247) (236,709) - - -

(-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-) (-)

19,967,314 13,191 85,182,292 105,162,797 4,489,136 7,919 15,928,806 20,425,863 8,326,819 28,028 208,947,596 38,881 217,341,325 17,804,942 46,987 292,422,615 310,274,544

(1,037,335) (22,210) (5,050,547) (6,110,092) (168,994) (7,616) (643,070) (819,680) (111,019) (7,105) (2,427,486) (9,975) (2,555,585) (182,578) (482) (2,996,284) (3,179,344)

For HSBC Asset Management (India)

HSBC Mutual Fund Private Limited


Director

Trustee Fund Manager(s)


Fixed Term Series 46Fixed Term Series 44 Fixed Term Series 45




SCHEDULE 1

Investments

Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost(Notes 2.2, 2.3, 8, 9, 10, and 13) Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees


Non Convertible Debentures and Bonds Listed / Awaiting Listing 255,425,223 262,012,616 427,546,348 418,753,779 9,970,483 9,991,827 - - 2,282,411,876 2,310,391,106 1,193,600,626 1,200,000,000

Privately Placed Non Convertible Debentures / Bonds 427,433,850 437,512,922 444,380,229 439,225,974 26,532,000 26,532,000 220,330,750 220,000,000 2,036,545,436 2,060,333,044 3,005,685,116 3,021,904,940

Commercial Paper / Certificate of Deposit - - - - 104,886,212 104,886,212 164,462,977 164,462,977 1,019,787,020 1,019,787,020 - -

Asset Backed Securities 187,777,165 187,031,293 169,049,549 167,802,904 164,194,181 164,194,181 170,300,639 170,646,798 1,407,336,348 1,426,751,723 2,064,099,716 2,070,545,809

TOTAL 870,636,238 886,556,831 1,040,976,126 1,025,782,657 305,582,876 305,604,220 555,094,366 555,109,775 6,746,080,680 6,817,262,893 6,263,385,458 6,292,450,749

SCHEDULE 2 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008Other Current Assets Rupees Rupees Rupees Rupees Rupees Rupees

Balances with Banks - in Current Account 1,262,299 65,494 115,168 419,068 50,102 68,600 - in Dividend Account 124,704 6 - - - -

Sales Contracts Awaiting Completion - Non Convertible Debentures - - - - - -

Reverse Repos 1,181,820 1,851,022 25,065,536 26,737,572 10,313,979 4,441,817

Collateralised Borrowing and Lending Obligation 1,237,099 - 26,224,815 - 10,790,673 -

Inter-Scheme Receivable for 'Others' - - - - - -

Interest Receivable on :- Debentures / Bonds - - 9,486,492 5,610,904 84,900,412 35,944,864 - Reverse Repos 152 408 3,226 5,888 1,327 978 - Collateralised Borrowing and Lending Obligation 152 - 3,213 - 1,322 -

Receivable from Investment Manager 220 97,680 113 100,000 1,489 - TOTAL 3,806,446 2,014,610 60,898,563 32,873,432 106,059,304 40,456,259

SCHEDULE 3Deferred Revenue Expenditure (Note 2.8)

Issue and Organisational Costs - 17,408,185 - 713,153 - 5,624,900

At the beginning of the year / period 12,489,078 - 562,322 - 5,011,485 -

Less : Amortised during the year / period (7,390,749) (4,919,107) (549,575) (150,831) (4,224,463) (613,415)

At the end of the year / period 5,098,329 12,489,078 12,747 562,322 787,022 5,011,485


RupeesMarch 31, 2008March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008

Rupees Rupees



and the Revenue account for the year ended March 31, 2009

2

SCHEDULE 1

Investments

(Notes 2.2, 2.3, 8, 9, 10, and 13)






TOTAL


Balances with Banks - in Current Account- in Dividend Account

Sales Contracts Awaiting Completion - Non Convertible Debentures

Reverse Repos


Inter-Scheme Receivable for 'Others'

Interest Receivable on :- Debentures / Bonds- Reverse Repos- Collateralised Borrowing and Lending Obligation

Receivable from Investment ManagerTOTAL

SCHEDULE 3Deferred Revenue Expenditure (Note 2.8)


At the beginning of the year / period

Less : Amortised during the year / period

At the end of the year / period

2

Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value Cost Market/Fair Value CostRupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees

- - - - - - - - - - - - - - - -

- - - - - - - - - - 800,120,642 800,000,000 - - 450,125,880 450,000,000

910,418,282 910,418,282 1,329,557,250 1,329,557,250 - - 182,942,973 182,942,973 351,950,777 351,950,777 1,654,424,572 1,654,424,572 499,917,890 499,917,890 2,834,669,888 2,834,669,888

- - - - - - - - - - - - - - - -

910,418,282 910,418,282 1,329,557,250 1,329,557,250 - - 182,942,973 182,942,973 351,950,777 351,950,777 2,454,545,214 2,454,424,572 499,917,890 499,917,890 3,284,795,768 3,284,669,888

March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008 March 31, 2009 March 31, 2008Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees

214,686 122,343 454,593 3,434,378 4,821,412 38,851,714 5,991,692 4,924,388 - - - - - - - -

- - - - - - 450,682,495 -

46,383,088 7,555,402 98,547,183 96,291,443 1,045,511,103 76,019,641 1,299,669,332 4,505,129

48,528,284 - 103,104,796 - 1,093,858,664 - 1,359,769,219 -

- - - - - - - 10,549,055

- - - - - 907,647 - 461,096 5,969 1,664 12,682 21,201 134,544 16,738 167,251 992 5,945 - 12,632 - 134,010 - 166,588 -

266 - 57 6,590 587 1,006 789 5,406 95,138,238 7,679,409 202,131,943 99,753,612 2,144,460,320 115,796,746 3,116,447,366 20,446,066

- - - - - - - -

- - - - - - - -

- - - - - - - -

- - - - - - - -

Fixed Term Series 46 Fixed Term Series 49Fixed Term Series 44March 31, 2009March 31, 2008March 31, 2009

Rupees Rupees RupeesMarch 31, 2009March 31, 2008

RupeesMarch 31, 2009 March 31, 2008




March 31, 2008Fixed Term Series 45

March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

SCHEDULE 4 Rupees Units Rupees Units Rupees Units Rupees Units Rupees Units Rupees Units

Unit Capital

Regular Plan

Growth Option


Units of Rs. 10 each fully paid up 709,293,717 70,929,371.725 709,293,717 70,929,371.725 107,818,908 10,781,890.753 107,818,908 10,781,890.753 119,835,300 11,983,530.000 119,835,300 11,983,530.000

Outstanding

Initial Issue and Subscription - - 709,293,717 70,929,371.725 - - 107,818,908 10,781,890.753 - - 119,835,300 11,983,530.000

At the Beginning of the year / period 666,592,793 66,659,279.315 - - 107,818,908 10,781,890.753 - - 119,835,300 11,983,530.000 - -

Issued during the year / period 5,130,000 513,000.000 3,765,000 376,500.000 185,000 18,500.000 - - - - - -

671,722,793 67,172,279.315 713,058,717 71,305,871.725 108,003,908 10,800,390.753 107,818,908 10,781,890.753 119,835,300 11,983,530.000 119,835,300 11,983,530.000

Redeemed during the year / period 140,153,483 14,015,348.251 46,465,924 4,646,592.410 30,068,641 3,006,864.125 - - - - - -

At the end of the year / period 531,569,310 53,156,931.064 666,592,793 66,659,279.315 77,935,267 7,793,526.628 107,818,908 10,781,890.753 119,835,300 11,983,530.000 119,835,300 11,983,530.000

Dividend Option



Outstanding

Initial Issue and Subscription - - 183,538,658 18,353,865.762 - - 14,015,000 1,401,500.000

At the Beginning of the year / period 171,285,391 17,128,539.151 - - 14,015,000 1,401,500.000 - -

Issued during the year / period 10,130,523 1,013,052.321 1,181,078 118,107.845 1,214,837 121,483.668 - -

181,415,914 18,141,591.472 184,719,736 18,471,973.607 15,229,837 1,522,983.668 14,015,000 1,401,500.000

Redeemed during the year / period 37,890,254 3,789,025.406 13,434,345 1,343,434.456 1,000,000 100,000.000 - -

At the end of the year / period 143,525,660 14,352,566.066 171,285,391 17,128,539.151 14,229,837 1,422,983.668 14,015,000 1,401,500.000

Institutional Plan

Institutional Growth Option


Units of Rs. 10 each fully paid up 124,000,000 12,400,000.000 124,000,000 12,400,000.000 441,635,651 44,163,565.052 441,635,651 44,163,565.052 6,130,053,706 613,005,370.600 6,130,053,706 613,005,370.600

Outstanding

Initial Issue and Subscription - - 124,000,000 12,400,000.000 - - 441,635,651 44,163,565.052 - - 6,130,053,706 613,005,370.600

At the Beginning of the year / period 114,000,000 11,400,000.000 - - 441,635,651 44,163,565.052 - - 6,130,053,706 613,005,370.600 - -

Issued during the year / period - - - - 10,050,000 1,005,000.000 - - - - - -

114,000,000 11,400,000.000 124,000,000 12,400,000.000 451,685,651 45,168,565.052 441,635,651 44,163,565.052 6,130,053,706 613,005,370.600 6,130,053,706 613,005,370.600

Redeemed during the year / period 19,757,621 1,975,762.070 10,000,000 1,000,000.000 230,624,454 23,062,445.409 - - - - - -

At the end of the year / period 94,242,379 9,424,237.930 114,000,000 11,400,000.000 221,061,197 22,106,119.643 441,635,651 44,163,565.052 6,130,053,706 613,005,370.600 6,130,053,706 613,005,370.600

Institutional Dividend Option



Outstanding

Initial Issue and Subscription - - 20,000,000 2,000,000.000 - - 10,000,000 1,000,000.000

At the Beginning of the year / period 20,000,000 2,000,000.000 - - 10,000,000 1,000,000.000 - -

Issued during the year / period - - - - 938,264 93,826.354 - -

20,000,000 2,000,000.000 20,000,000 2,000,000.000 10,938,264 1,093,826.354 10,000,000 1,000,000.000

Redeemed during the year / period 20,000,000 2,000,000.000 - - - - - -

At the end of the year / period - - 20,000,000 2,000,000.000 10,938,264 1,093,826.354 10,000,000 1,000,000.000

TOTAL 769,337,349 76,933,735.060 971,878,184 97,187,818.466 324,164,565 32,416,456.293 573,469,559 57,346,955.805 6,249,889,006 624,988,900.600 6,249,889,006 624,988,900.600




3

SCHEDULE 4

Unit Capital

Regular Plan

Growth Option



Outstanding


At the Beginning of the year / period

Issued during the year / period

Redeemed during the year / period


Dividend Option



Outstanding






Institutional Plan

Institutional Growth Option



Outstanding






Institutional Dividend Option



Outstanding






TOTAL

3

March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008 March 31, 2009 March 31, 2009 March 31, 2008 March 31, 2008

Rupees Units Rupees Units Rupees Units Rupees Units Rupees Units Rupees Units Rupees Units Rupees Units

233,542,146 23,354,214.556 233,542,146 23,354,214.556 58,801,770 5,880,176.978 58,801,770 5,880,176.978 116,406,844 11,640,684.365 116,406,844 11,640,684.365 189,612,104 18,961,210.400 189,612,104 18,961,210.400

- - 233,542,146 23,354,214.556 - - 58,801,770 5,880,176.978 - - 116,406,844 11,640,684.365 - - 189,612,104 18,961,210.400

233,542,146 23,354,214.556 - - 58,801,770 5,880,176.978 - - 116,406,844 11,640,684.365 - - 189,612,104 18,961,210.400 - -

- - - - - - - - - - - - 700,000 70,000.000 - -

233,542,146 23,354,214.556 233,542,146 23,354,214.556 58,801,770 5,880,176.978 58,801,770 5,880,176.978 116,406,844 11,640,684.365 116,406,844 11,640,684.365 190,312,104 19,031,210.400 189,612,104 18,961,210.400

31,844,000 3,184,400.000 - - 8,091,019 809,101.889 - - 33,830,156 3,383,015.439 - - 1,000,000 100,000.000 - -

201,698,146 20,169,814.556 233,542,146 23,354,214.556 50,710,751 5,071,075.089 58,801,770 5,880,176.978 82,576,686 8,257,668.926 116,406,844 11,640,684.365 189,312,104 18,931,210.400 189,612,104 18,961,210.400

5,000,000 500,000.000 5,000,000 500,000.000 2,650,000 265,000.000 2,650,000 265,000.000 7,449,900 744,990.000 7,449,900 744,990.000 500,000 50,000.000 500,000 50,000.000

- - 5,000,000 500,000.000 - - 2,650,000 265,000.000 - - 7,449,900 744,990.000 - - 500,000 50,000.000

5,000,000 500,000.000 - - 2,650,000 265,000.000 - - 7,449,900 744,990.000 - - 500,000 50,000.000 - -

452,231 45,223.130 - - 187,529 18,752.905 - - 539,837 53,983.690 - - - - - -

5,452,231 545,223.130 5,000,000 500,000.000 2,837,529 283,752.905 2,650,000 265,000.000 7,989,737 798,973.690 7,449,900 744,990.000 500,000 50,000.000 500,000 50,000.000

50,281 5,028.149 - - - - - - - - - - - - - -

5,401,950 540,194.981 5,000,000 500,000.000 2,837,529 283,752.905 2,650,000 265,000.000 7,989,737 798,973.690 7,449,900 744,990.000 500,000 50,000.000 500,000 50,000.000

1,092,466,806 109,246,680.609 1,092,466,806 109,246,680.609 220,397,102 22,039,710.249 220,397,102 22,039,710.249 2,433,690,327 243,369,032.680 2,433,690,327 243,369,032.680 3,111,727,141 311,172,714.100 3,111,727,141 311,172,714.100

- - 1,092,466,806 109,246,680.609 - - 220,397,102 22,039,710.249 - - 2,433,690,327 243,369,032.680 - - 3,111,727,141 311,172,714.100

1,092,466,806 109,246,680.609 - - 220,397,102 22,039,710.249 - - 2,433,690,327 243,369,032.680 - - 3,111,727,141 311,172,714.100 - -

20,000,000 2,000,000.000 - - - - - - 60,546,765 6,054,676.489 - - - - - -

1,112,466,806 111,246,680.609 1,092,466,806 109,246,680.609 220,397,102 22,039,710.249 220,397,102 22,039,710.249 2,494,237,092 249,423,709.169 2,433,690,327 243,369,032.680 3,111,727,141 311,172,714.100 3,111,727,141 311,172,714.100

414,058,503 41,405,850.326 - - 90,019,666 9,001,966.584 - - 315,056,802 31,505,680.230 - - - - - -

698,408,303 69,840,830.283 1,092,466,806 109,246,680.609 130,377,436 13,037,743.665 220,397,102 22,039,710.249 2,179,180,290 217,918,028.939 2,433,690,327 243,369,032.680 3,111,727,141 311,172,714.100 3,111,727,141 311,172,714.100

10,000,000 1,000,000.000 10,000,000 1,000,000.000

- - 10,000,000 1,000,000.000

10,000,000 1,000,000.000 - -

707,111 70,711.061 - -

10,707,111 1,070,711.061 10,000,000 1,000,000.000

- - - -

10,707,111 1,070,711.061 10,000,000 1,000,000.000

905,508,399 90,550,839.820 1,331,008,952 133,100,895.165 183,925,716 18,392,571.659 281,848,872 28,184,887.227 2,280,453,826 228,045,382.616 2,567,547,071 256,754,707.045 3,301,539,245 330,153,924.500 3,301,839,245 330,183,924.500



Fixed Term Series 45 Fixed Term Series 46 Fixed Term Series 49Fixed Term Series 44

SCHEDULE 5

Reserves and Surplus Total Total Total


At the beginning of the year / period (4,451,118) - -

(-) (-) (-)

Added during the year / period (12,583,434) (19,127,636) -

(-4,451,118) (-) (-)

At the end of the year / period (17,034,552) (19,127,636) -

(-4,451,118) (-) (-)


At the beginning of the year / period 15,193,469 330,750 -

(-) (-) (-)

Net change in Unrealised Appreciation in Value of Investments Transferred from Revenue Account (Note 8) (14,447,597) (330,750) -

(15,193,470) (330,750) (-)

At the end of the year / period 745,873 - -

(15,193,470) (330,750) (-)

Reserve Fund

At the beginning of the year / period 70,431,629 14,566,231 57,939,147

(-) (-) (-)

Transfer to Revenue Account (5,604,839) (606,253) -

(-) (-) (-)

Balance Transferred from Revenue Account 52,900,786 41,830,416 543,160,255

(70,431,629) (14,566,231) (57,939,147)

At the end of the year / period 117,727,576 55,790,394 601,099,402

(70,431,629) (14,566,231) (57,939,147)

TOTAL 101,438,897 * 36,662,758 * 601,099,402 *

(81,173,981) * (14,896,981) * (57,939,147) *

* The share of the Plans / Options of the Reserves and Surplus is as follows : March 31, 2009 March 31, 2009 March 31, 2009

(March 31, 2008) (March 31, 2008) (March 31, 2008)Regular Option Growth Option : Rs. 85,233,880 9,229,212 11,525,472

(62,068,434) (2,710,190) (1,110,925) Dividend Option : Rs. 1,093,814 92,229 -

(7,621,606) (352,289) - Total (A) 86,327,694 9,321,441 11,525,472

(69,690,040) (3,062,478) (1,110,925) Institutional Option Growth Option : Rs. 15,111,203 27,266,795 589,573,930

(10,614,820) (11,572,467) (56,828,222) Dividend Option : Rs. - 74,522 -

(869,121) (262,035) - Total (B) 15,111,203 27,341,317 589,573,930

(11,483,941) (11,834,502) (56,828,222)

Total (A+B) 101,438,897 36,662,758 601,099,402

(81,173,981) (14,896,981) (57,939,147)


Rupees

March 31, 2009

(March 31, 2008)

Rupees

Fixed Term Series 30March 31, 2009

(March 31, 2008)

Rupees

March 31, 2009

(March 31, 2008)


HSBC FIXED TERM SERIES 30, HSBC FIXED TERM SERIES 41, HSBC FIXED TERM SERIES 42, HSBC FIXED TERM SERIES 44, HSBC FIXED TERM SERIES 45, HSBC FIXED

TERM SERIES 46, HSBC FIXED TERM SERIES 49


4

SCHEDULE 5

Reserves and Surplus



Added during the year / period




Net change in Unrealised Appreciation in Value of Investments Transferred from Revenue Account (Note 8)


Reserve Fund


Transfer to Revenue Account



TOTAL

* The share of the Plans / Options of the Reserves and Surplus is as follows :

Regular Option Growth Option : Rs.

Dividend Option : Rs.

Total (A)

Institutional Option Growth Option : Rs.

Dividend Option : Rs.

Total (B)

Total (A+B)

4

Total Total Total Total

- - - -

(-) (-) (-) (-)

(21,609,318) (5,410,511) (13,197,620) (14,748)

(-) (-) (-) (-)

(21,609,318) (5,410,511) (13,197,620) (14,748)

(-) (-) (-) (-)

- - 120,642 125,881

(-) (-) (-) (-)

- - (120,642) (125,881)

(-) (-) (120,642) (125,881)

- - - -

(-) (-) (120,642) (125,881)

6,110,092 819,680 2,555,585 3,179,344

(-) (-) (-) (-)

(19,972) (7,193) (10,636) -

(-) (-) (-) (-)

105,162,797 20,425,863 217,341,325 310,274,544

(6,110,092) (819,680) (2,555,585) (3,179,344)

111,252,917 21,238,350 219,886,274 313,453,888

(6,110,092) (819,680) (2,555,585) (3,179,344)

89,643,599 * 15,827,839 * 206,688,654 * 313,439,140 *

(6,110,092) * (819,680) * (2,676,227) * (3,305,225) *


(March 31, 2008) (March 31, 2008) (March 31, 2008) (March 31, 2008)

19,194,281 4,269,704 7,197,913 17,972,772 (1,037,335) (168,994) (116,489) (189,807)

15,253 8,343 30,792 47,468 (22,210) (7,616) (7,455) (501)

19,209,534 4,278,047 7,228,705 18,020,240

(1,059,544) (176,610) (123,944) (190,308)

70,434,065 11,549,792 199,417,265 295,418,900 (5,050,547) (643,070) (2,541,838) (3,114,917)

- - 42,684 - - - (10,445) -

70,434,065 11,549,792 199,459,949 295,418,900

(5,050,547) (643,070) (2,552,283) (3,114,917)

89,643,599 15,827,839 206,688,654 313,439,140

(6,110,092) (819,680) (2,676,227) (3,305,225)


Fixed Term Series 49March 31, 2009

Fixed Term Series 46March 31, 2009 March 31, 2009

(March 31, 2008)

RupeesRupees RupeesRupees

(March 31, 2008)


(March 31, 2008)

March 31, 2009

(March 31, 2008)



SCHEDULE 6



Current Liabilities Rupees Rupees Rupees Rupees Rupees Rupees

Investment Management and Advisory Fees 600,286 396,148 191,247 89,098 1,671,655 783,565

Transfer Agent Fees and Expenses 16,055 19,643 6,624 10,958 125,567 117,377

Custodian Fees and Expenses 16,121 19,446 5,903 10,468 124,468 106,949

Audit Fees 10,000 6,000 5,000 6,000 5,000 6,000

Selling and Distribution Expenses 554,241 559,943 41,937 41,937 7,380 7,380

Redemption of Units 452,032 - - - - -

Load Payable 5,746,188 1,410,376 5,411,873 - - -

Dividend Payable 124,704 - - - - -

Bank Overdraft 1,229,574 - - - - -

Dividend Tax Payable - - - - - -

Sundry Payables 15,566 16,093 4,279 5,119 4,528 3,778

TOTAL 8,764,767 2,427,649 5,666,863 163,580 1,938,598 1,025,049

SCHEDULE 7

Interest and Discount (Note 2.4) April 1, 2008 to May 03, 2007 to April 1, 2008 to December 17, 2007 to April 1, 2008 to January 29, 2008 to



Debentures / Bonds 81,890,269 71,915,628 18,806,521 6,387,117 399,033,726 59,964,365

Asset Backed Securities 19,228,390 15,491,015 18,114,596 3,865,677 192,756,844 28,419,817

Government Securities - - - - - -

Commercial Paper / Certificate of Deposit 51,399 - 9,719,959 4,182,652 7,876,463 -

Reverse Repos (Net) 171,542 439,669 772,912 793,232 199,493 730,191

Collateralised Borrowing and Lending Obligation 51,934 4,606 150,284 - 95,277 -

Margin Money with The Clearing Corporation of India Limited - 65 - - - -

Others (Refer note 15) (313,041) (82,058)

TOTAL 101,080,493 87,850,983 47,482,214 15,228,678 599,961,803 89,114,373






5

SCHEDULE 6


Current Liabilities

Investment Management and Advisory Fees


Custodian Fees and Expenses

Audit Fees


Redemption of Units

Load Payable

Dividend Payable

Bank Overdraft

Dividend Tax Payable

Sundry Payables

TOTAL

SCHEDULE 7

Interest and Discount (Note 2.4)

Debentures / Bonds


Government Securities


Reverse Repos (Net)


Margin Money with The Clearing Corporation of India Limited

Others (Refer note 15)

TOTAL

5



1,406,275 83,042 290,903 14,916 2,117,909 99,072 1,218,942 73,267

18,288 10,476 3,671 682 45,671 6,206 66,413 7,980

17,595 7,630 2,106 718 24,352 2,966 37,622 3,969

5,000 6,000 5,000 6,000 5,000 6,000 5,000 6,000

- - - - - - - -

- - - - - - - -

8,949,794 - 2,070,588 - 7,030,403 - 4,722 -

- - - - - - - -

- - - - - - - -

- - - - - - - -

7,570 10,467 6,120 5,717 45,282 4,418 54,172 6,148

10,404,522 117,615 2,378,388 28,033 9,268,617 118,662 1,386,871 97,364

April 1, 2008 to March 04, 2008 to April 1, 2008 to March 18, 2008 to March 28, 2008 to March 28, 2008 to March 28, 2008 to March 28, 2008 to



- - - - 107,608,753 1,331,466 42,075,000 461,096

- - - - 103,874,404 - 33,110,753 -

- - 69,600 - 1,670,400 - 196,389 -

106,961,146 5,652,484 22,378,038 510,918 29,140,336 1,258,722 240,280,830 2,371,482

513,565 576,952 358,747 330,382 1,529,370 83,516 1,861,709 439,542

285,237 - 120,535 - 1,190,517 - 1,280,193 -

- - - - - - - -

(5,333) (6,612)

107,759,948 6,229,436 22,921,587 841,300 245,007,168 2,673,704 318,804,874 3,272,120






Main Cat Quantity M Val.


Rupees


Non-Convertible Debentures / Bonds Listed / Awaiting listing (29.34 %)

Consumer Finance (94.28 %)

0.00% CitiFinancial Consumer Finance India Limited 2010 $ 280 240,815,618 240,815,618

Finance (5.72 %)

0.00% Sundaram Finance Limited 2010 $ @ 17 14,609,605

14,609,605 Total (Cost Rs. 262,012,616) 255,425,223


0.00% GE Capital Services India Limited 2010 * 195 168,723,888 0.00% GE Capital Services India Limited 2010 * 24 20,766,017


0.00% GE Money Financial Services Limited 2010 * 250 216,312,677 0.00% GE Money Financial Services Limited 2010 * 25 21,631,268

237,943,945 427,433,850

Total (Cost Rs. 437,512,922) 427,433,850


Corporate Loan Securitisation Series 15 Trust 2008 - A2 (L&T Finance) PTC 2010 * @ 15 187,777,165

187,777,165



Privately Placed / Unlisted Non-Convertible Debentures / Bonds (8.68 %)Construction (100 %)

19.00% Unitech Limited 2009 * 396 26,532,000 26,532,000

Total (Cost Rs. 26,532,000) 26,532,000


9.70% GE Capital Services India Limited 2009 $ 10 9,970,483 9,970,483

Total (Cost Rs. 9,991,828) 9,970,483


Corporate Loan Securitisation Series XXIX Trust 2006 (Shriram Transport Finance Company ) PTC 2009 * 9 93,063,110 Indian Loans Receivables Trust May 2008 Series A2 (DLF ) PTC 2009 * @ 71 71,131,071

164,194,181 Total (Cost Rs. 164,194,180) 164,194,181


State Bank of Patiala $ @ 600 59,940,921 State Bank of Bikaner and Jaipur $ @ 450 44,945,291



HSBC MUTUAL FUNDHSBC FIXED TERM SERIES 30, HSBC FIXED TERM SERIES 41, HSBC FIXED TERM SERIES 42, HSBC FIXED TERM SERIES 44, HSBC FIXED TERM

SERIES 45, HSBC FIXED TERM SERIES 46, HSBC FIXED TERM SERIES 49


6

Main Cat Quantity M Val.


Rupees






9.90% SREI Infrastructure Finance Limited 2010 * 5,000 491,353,994 491,353,994

Finance & Investments (56.42 %)8.85% GE Money Financial Services Limited 2009 * 1,048 1,149,082,526


9.95% Kotak Securities Limited 2009 * 40 396,108,916 396,108,916

Total (Cost Rs. 2,060,333,044) 2,036,545,436


9.30% Citicorp Maruti Finance Limited 2009 $ 400 394,444,834 394,444,834

Finance & Investments (61.04 %)9.20% Citicorp Finance India Limited 2009 $ 800 788,683,311 9.45% Cholamandalam DBS Finance Limited 2009 $ 550 604,428,253


9.63% Kotak Mahindra Prime Limited 2009 $ 500 494,855,478 494,855,478

Total (Cost Rs. 2,310,391,106) 2,282,411,876


IL&FS Trust (Deutsche Postbank Home Finance) PTC 2009 * 70 765,886,054 Indian Loans Receivables Trust Series T2 (Tata Motors Finance ) PTC 2009 * 66 641,450,294

1,407,336,348 Total (Cost Rs. 1,426,751,723) 1,407,336,348


Union Bank of India $ 10,000 992,894,012 State Bank of Hyderabad $ @ 270 26,893,008

1,019,787,020 Total (Cost Rs. 1,019,787,019) 1,019,787,020 TOTAL INVESTMENTS (Cost Rs. 6,817,262,893) 6,746,080,680



State Bank of Bikaner and Jaipur $ @ 1,990 198,757,852 Punjab National Bank $ 1,980 197,973,739 ICICI Bank Limited $ @ 1,500 149,681,206 Allahabad Bank $ @ 1,500 149,670,306 State Bank of Patiala $ @ 1,400 139,865,919 Kotak Mahindra Bank Limited $ 750 74,469,260




Punjab National Bank $ 3,520 351,950,777 351,950,777




Punjab National Bank $ 5,000 499,917,890 499,917,890



Rupees

A. Cashflow from Operating ActivitiesNet Realised Gains for the year 218,814,468

Adjustments for:- (Increase)/Decrease in Investments at Cost 2,102,473,795

(Increase)/Decrease in Other Current Assets 656,250

Increase/(Decrease) in Current Liabilities 9,149,955

Net cash generated from Operations ( A ) 2,331,094,468

B Cashflow from Financing Activities Increase/(Decrease) in Unit Capital (287,093,245)

Increase/(Decrease) in Unit Premium (13,197,620)

Adjustments for:-Increase/(Decrease) in Sundry Creditors for Units Redeemed by Investors -

(Increase)/Decrease in Sundry Debtors for Units Issued to Investors -

Dividend / Distribution during the year (1,247,070)

Dividend / Distribution Tax paid during the year (236,709)

Net cash (used in) financing activities ( B ) (301,774,644)

Net Increase in Cash and Cash Equivalents (A+B) 2,029,319,824

Cash and Cash Equivalents at the Beginning of the Year 114,871,355

Cash and Cash Equivalents at the Close of the Year 2,144,191,179



Balances with Banks : - In Current Account 4,821,412

Other Collateralised lendingReverse Repos 1,045,511,103

Collateralised Borrowing and Lending Obligation 1,093,858,664

2,144,191,179

2



PARTHA GHOSH For HSBC Asset Management (India)Partner HSBC Mutual Fund Private LimitedMembership No. F-55913For and on behalf of PRICE WATERHOUSE Chartered Accountants


Director

Place: Mumbai Trustee Fund Manager(s)Date : 22 July 2009

HSBC MUTUAL FUND



The above Cash Flow Statement has been prepared under the "Indirect Method" set out in Accounting Standard - 3 on Cash FlowStatements, issued by The Institute of Chartered Accountants of India.


7

HSBC MUTUAL FUND - HSBC FIXED TERM SERIES 30 FUND


Annexure 1




Manager


Sponsor


Relatives Total









Manager


Sponsor


Relatives Total





April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Sale of InvestmentsHSBC MIP Fund Savings Plan 66,762,439 27,966,324 HSBC Flexi Debt Fund 28,629,992 - HSBC MIP Fund Regular Plan 12,242,186 45,451,328

0



Annexure 1



ManagerAssociate of


Control of Sponsor


Relatives Total



Investment Management and Advisory Fees - 482,641 - - - 482,641 Previous Year - 162,820 - - - 162,820





ManagerAssociate of


Control of Sponsor


Relatives Total


Brokerage/ Commission Payable on Distribution of Units - - - - - - Previous Year - - 234,084 - - 234,084



April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 109,910,105 299,997,444 HSBC Cash Fund 37,547,211 156,341,755 HSBC Fixed Term Series 52 28,485,048 - HSBC Floating Rate Fund Long Term Plan - 59,911,597

Sale of InvestmentsHSBC Dynamic Fund 119,861,699 - HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 95,301,261 59,560,331 HSBC Cash Fund 67,879,558 - HSBC Floating Rate Fund Short Term Plan - 46,884,975

1



Annexure 1


Nature of Transaction Sponsor Investment ManagerAssociate of Investment

ManagerSchemes under Common

Control of SponsorKey Management Personnel

and their Relatives Total

Sale of Investments - - - 2,081,978 - 2,081,978 Previous Year


Brokerage/ Commission on Purchase/Sale of Investments - - - - - - Previous Year - - 5,617,520 - - 5,617,520



ManagerSchemes under Common

Control of SponsorKey Management Personnel

and their Relatives Total


Other Receivables 1,489 1,489 Previous Year - -


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Sale of InvestmentsHSBC MIP Fund Savings Plan 2,081,978 -

2



Annexure 1



Investment Manager


Sponsor


Relatives Total



Subscription of Units (including switch in and dividend reinvestment) - - - - - - Previous Year - - - - 2,000,000 2,000,000





Investment Manager


Sponsor


Relatives Total

Investment Management and Advisory Fees Payable - 1,406,275 - - - 1,406,275 Previous Year 83,042 - - - 83,042


Other Receivables 266 266 Previous Year - -

(iii) Details of material transactions with respect to parties referred to in Note 13 (I)(iv) for Schemes under common control of the Sponsor.

April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 52,435,323 227,969,674 HSBC Unique Opportunities Fund 48,185,937 - HSBC Cash Fund - 229,012,992

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 25,480,433 - HSBC Cash Fund 18,943,508 - HSBC Unique Opportunities Fund 9,526,658 -

(iv) Disclosures in respect of material transactions with persons referred to in Note 13 (I)(v) for key management personnel and their relatives

April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Sanjay Prakash - 1,000,000Naina Lal Kidwai - 1,000,000

Units Outstanding As At Year EndSanjay Prakash - 1,004,440Naina Lal Kidwai 1,095,163 1,004,440

3



Annexure 1



Manager


Manager


Sponsor


Relatives Total


Sale of Investments 38,186,143 38,186,143 Previous Year - -

Investment Management and Advisory Fees - 647,051 - - - 647,051 Previous Year - 14,916 - - - 14,916





Manager


Manager


Sponsor


Relatives Total




April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 82,523,280 182,432,055 HSBC Cash Fund 9,226,783

Sale of InvestmentsHSBC Fixed Term Series 46 19,161,234 - HSBC Income Short Term Plan 19,024,909 -

4



Annexure 1



ManagerAssociate of

Investment Manager


Sponsor


Relatives Total


Sale of Investments - - - 3,043,810,910 - 3,043,810,910 Previous Year - - - - - -







ManagerAssociate of

Investment Manager


Sponsor


Relatives Total





April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Cash Fund 467,727,890 - 467,727,890 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 108,872,580 - 108,872,580

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 1,932,343,961 - 1,932,343,961 HSBC Fixed Term Series 53 404,073,532 - 404,073,532


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Naina Lal Kidwai - 2,000,000

Units Outstanding As At Year EndNaina Lal Kidwai 2,174,333 2,002,000

5



Annexure 1



Manager


Sponsor


Relatives Total

Purchase of Investments - - - 13,882,629 - 13,882,629 Previous Year - - - 1,460,869,706 - 1,460,869,706






Manager


Sponsor


Relatives Total


Units Outstanding As At Year End - - - - - - Previous Year - - - - 1,501,500 1,501,500

Other Receivables - 789 - - - 789 Previous Year - 5,406 - 10,549,055 - 10,554,461


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Purchase of InvestmentsHSBC Midcap Fund 13,882,629 - HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) - 1,324,400,894

Sale of InvestmentsHSBC Cash Fund 229,940,974 - HSBC Income Fund Investment Plan 50,555,600 -

Other ReceivablesHSBC Emerging Market Fund 8,317,370 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 2,231,685


April 01, 2008 to March 31, 2009

April 01, 2007 to March 31, 2008

Subscription of Units (including switch in and dividend reinvestment)Sanjay Prakash - 1,500,000

Units Outstanding As At Year EndSanjay Prakash - 1,501,500

6


Schedules forming part of the Balance Sheet as at March 31, 2008 and theRevenue Account for the period April 17, 2008 to March 31, 2009.

Annexure 1



Manager


Sponsor


Relatives Total

Sale of Investments - - - 12,041,071 - 12,041,071

Investment Management and Advisory Fees - 9,295,622 - - - 9,295,622

Borrowings taken and repaid - - 8,200,000 - - 8,200,000

Interest Expense on Borrowings - - 3,194 - - 3,194



Manager


Sponsor


Relatives Total

Investment Management and Advisory Fees Payable - 1,556,366 - - - 1,556,366

Other Receivables - 1,046 - - - 1,046


April 17, 2008 to March 31, 2009

Sale of InvestmentsHSBC Fixed Term Series 52 9,182,825 HSBC Fixed Term Series 53 1,875,579

7


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the period April 24, 2008 to March 31, 2009.

Annexure 1



Manager


Sponsor


Relatives Total

Purchase of Investments - - - 239,811,337 - 239,811,337


Subscription of Units (including switch in and dividend reinvestment) - - - - 500,000 500,000


Borrowings taken and repaid - - 4,756,100,000 - - 4,756,100,000

Interest Expense on Borrowings - - 1,192,072 - - 1,192,072



Manager


Sponsor


Relatives Total

Investment Management Fees Payable - 4,466,971 - - - 4,466,971

Other Receivables - 568 - - - 568

Units Outstanding As At Year End - - - - 537,678 537,678


April 24, 2008 to March 31, 2009

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 230,628,512

Sale of InvestmentsHSBC Dynamic Fund 138,149,556 HSBC Fixed Term Series 54 93,653,611 HSBC Fixed Term Series 63 82,084,463 HSBC Flexi Debt Fund 67,899,080


April 24, 2008 to March 31, 2009

Subscription of Units (including switch in and dividend reinvestment)Rashid K Kidwai (relative) 500,000

Units Outstanding As At Year EndRashid K Kidwai (relative) 537,678

8


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the period May 23, 2008 to March 31, 2009.

Annexure 1



Manager


Sponsor


Relatives Total


Sale of Investments 406,723,407 406,723,407






Manager


Sponsor


Relatives Total




May 23, 2008 to March 31, 2009

Purchase of InvestmentsHSBC Fixed Term Series 46 404,073,532 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 99,918,277

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 172,137,057 HSBC Fixed Term Series 54 99,451,845 HSBC Dynamic Fund 68,773,949

9


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the period May 27, 2008 to March 31, 2009.

Annexure 1



Manager


Sponsor


Relatives Total

Purchase of Investments - - - 1,053,944,240 - 1,053,944,240







Manager


Sponsor


Relatives Total




May 27, 2008 to March 31, 2009

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 452,519,186 HSBC Fixed Term Series 46 248,908,268

Sale of InvestmentsHSBC Unique Opportunities Fund 88,656,850 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 49,955,404 HSBC Flexi Debt Fund 48,829,814 HSBC Floating Rate Fund Long Term Plan 39,364,987

10


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the period July 25, 2008 to March 31, 2009.

Annexure 1



Manager


Sponsor


Relatives Total


Sale of Investments 618,658,508 - 618,658,508

Subscription of Units (including switch in and dividend reinvestment) - - 150,000,000 - - 150,000,000





Manager


Sponsor


Relatives Total



Units Outstanding As At Year End - - 161,047,500 - - 161,047,500


July 25, 2008 to March 31, 2009

Purchase of InvestmentsHSBC Fixed Term Series 58 247,730,332 HSBC Floating Rate Fund Long Term Plan 217,016,351 HSBC Fixed Term Series 55 144,183,318

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 446,184,716 HSBC Cash Fund 144,758,997

11


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the peiord August 13, 2008 to March 31, 2009.

Annexure 1



ManagerAssociate of

Investment Manager


Sponsor


Relatives Total

Subscription of Units (including switch in and dividend reinvestment) - - - - - -






ManagerAssociate of

Investment Manager


Sponsor


Relatives Total

Investment Management and Advisory Fees Payable - 678,875 - - - 678,875


12



Annexure 1



ManagerAssociate of Investment

Manager


Sponsor


Relatives Total


Sale of Investments - - - 1,570,293,813 - 1,570,293,813






ManagerAssociate of Investment

Manager


Sponsor


Relatives Total




July 04, 2008 to March 31, 2009

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 3,348,632,684

Sale of InvestmentsHSBC Cash Fund 1,439,371,332

13



Annexure 1



Manager


Sponsor


Relatives Total








Manager


Sponsor


Relatives Total

Investment Management and Advisory Fees Payable - 1,832,175 - - - 1,832,175 Previous Year -



July 17, 2008 to March 31, 2009

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 995,468,941

Sale of InvestmentsHSBC Cash Fund 663,188,077 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 177,833,040

14


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the period August 22, 2008 to March 31, 2009.

Annexure 1



Manager


Sponsor


Relatives Total




Brokerage/ Commission on Distribution of Units - - 87,518 - - 87,518



Manager


Sponsor


Relatives Total


Brokerage/ Commission Payable for Distribution of Units - - 16,396 - - 16,396



August 22, 2008 to March 31, 2009

Purchase of InvestmentsHSBC Cash Fund 895,795,642

Sale of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 902,330,892

15


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the period September 04, 2008 to March 31, 2009.

Annexure 1



Manager


Sponsor


Relatives Total



Investment Management and Advisory Fees - 330,353 - - - 330,353

Reimbursement of Expenses - - 305,845 - - 305,845



Manager


Sponsor


Relatives Total




September 04, 2008 to March 31, 2009

Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 1,241,166,555 HSBC Cash Fund 228,321,432

Sale of InvestmentsHSBC Cash Fund 369,433,851 HSBC Fixed Term Series 66 158,098,442 HSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 95,298,632

16


Schedules forming part of the Balance Sheet as at March 31, 2009 and theRevenue Account for the period September 18, 2008 to March 31, 2009.

Annexure 1



Manager


Sponsor


Relatives Total


Subscription of Units (including switch in and dividend reinvestment) - - - - 2,400,000 2,400,000

Investment Management and Advisory Fees - 514,044 - - - 514,044



Manager


Sponsor


Relatives Total





Purchase of InvestmentsHSBC Ultra Short Term Bond Fund (Formerly, HSBC Liquid Plus Fund) 240,758,392 HSBC Fixed Term Series 63 158,098,442 HSBC Floating Rate Fund Long Term Plan 121,469,231 HSBC Equity Fund 78,703,374



Subscription of Units (including switch in and dividend reinvestment)Manu Tandon 2,400,000

Units Outstanding As At Year EndManu Tandon - 2,532,144

17

HSBC MUTUAL FUND - HSBC FIXED TERM SERIES 30, HSBC FIXED TERM SERIES 41, HSBC FIXED TERM SERIES 42, HSBC FIXED TERM SERIES 44, HSBC FIXED TERM SERIES 45, HSBC FIXED TERM SERIES 46, HSBC FIXED TERM SERIES 49, HSBC FIXED TERM SERIES 50, HSBC FIXED TERM SERIES 52, HSBC FIXED TERM SERIES 53, HSBC FIXED TERM SERIES 54, HSBC FIXED TERM SERIES 56, HSBC FIXED TERM SERIES 57, HSBC FIXED TERM SERIES 59, HSBC FIXED TERM SERIES 61, HSBC FIXED TERM SERIES 62, HSBC FIXED TERM SERIES 63, HSBC FIXED TERM SERIES 66.


SCHEDULE 8


1 Organisation HSBC Fixed Term Series (the “Scheme”) is a closed-ended income scheme of HSBC Mutual Fund (the “Fund”) offering a series of fixed maturity plans. HSBC Mutual Fund has been sponsored by HSBC Securities and Capital Markets (India) Private Limited. HSBC Asset Management (India) Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset management company. The Scheme has a series of close ended plans (the “plan”) having fixed maturity. The investment objective of the Scheme and the plans launched thereunder is to seek generation of reasonable returns by investing in a portfolio of fixed income instruments normally maturing in line with the time profile of the respective Scheme(s). The key features of the fixed term series presented in these financial statements are mentioned below.

Scheme Name

New Fund Offering (NFO)

Open Date

NFO Close Date

Date of Allotment

Tenure of the Scheme

Options Offered


May 03, 2007

May 31, 2007

June 11, 20073 years from the date of allotment

Regular and Institutional Options - Growth and Dividend Sub Options


December 17, 2007

December 17, 2007

December 20, 2007

487 days from the date of allotment



January 29, 2008

February 05, 2008

February 08, 2008

16 months from the date of allotment



March 04, 2008

March 11, 2008

March 19, 2008




March 18, 2008

March 18, 2008

March 28, 2008




March 24, 2008

March 27, 2008

March 28, 2008





Scheme Name


Open Date

NFO Close Date

Date of Allotment


Options Offered


March 28, 2008

March 28, 2008

March 28, 2008




April 17, 2008

April 28, 2008

April 29, 2008




April 24, 2008

May 05, 2008

May 06, 20081 year from the date of allotment



May 23, 2008

May 26, 2008

May 29, 2008




May 27, 2008

June 09, 2008

June 12, 2008




July 25, 2008

August 04, 2008

August 07, 2008




August 13, 2008

August 18, 2008

August 22, 2008




July 07, 2008

July 10, 2008

July 15, 2008 1 year from the date of allotment



July 17, 2008

July 23, 2008

July 29, 2008 1 year from the date of allotment




Scheme Name


Open Date

NFO Close Date

Date of Allotment


Options Offered


August 22, 2008

August 22, 2008

August 26, 2008

1 year from the date of allotment



September 04, 2008

September 08, 2008

September 09, 2008

1 year from the date of allotment



September 18, 2008

September 25, 2008

October 03, 2008



The Scheme will not declare dividend under the Growth Option\ Sub- Option of any of the Plans in normal circumstance. The income earned on such units will remain invested within the Scheme and will be reflected in the net asset value of these Plans.



The Schemes maintain their books of account on an accrual basis. These financial statements have been prepared in accordance with the accounting policies and standards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (the “Regulations”) and amendments thereto, as applicable.


Investments are stated at market/fair value at the Balance Sheet date/date of determination. In valuing the Schemes investments:

i. Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on

the National Stock Exchange of India Limited (NSE). If no sale is reported at that time, such securities are valued at fair value as determined in good faith by HSBC Asset Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund.

ii. Non-traded and thinly traded debt securities, are valued at fair value as determined by HSBC Asset

Management (India) Private Limited under procedures approved by the Board of Trustees of HSBC Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of India (SEBI).






v. Instruments bought on ‘repo’ basis are valued at the resale price after deduction of applicable


vi. Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reported at that time, such security is valued at the last traded price plus accretion of the difference between the face value and the last traded price. Non traded money market instruments are valued at cost plus accrued interest.

Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by the Institute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealised appreciation / depreciation in the value of investments is determined separately for each category of investments. In respect of each category of investments, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation dates is accounted through the Revenue Account and thereafter the net unrealised appreciation is transferred from the Revenue Account to the Unrealised Appreciation Reserve. The net depreciation if any, is accounted through the Revenue Account. Net unrealised appreciation is reduced from the distributable income at the time of income distribution. The loss on investments sold/transferred during the year/period is charged to the Revenue Account instead of being first being adjusted against the provision for depreciation, if already created in the previous year/period as recommended in the Guidance Note. However the departure from the Guidance Note does not have any net impact on the net asset value of the options of the Scheme.





2.5 Net Asset Value

The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Dividend Options/ Sub-Options.



For reporting the net asset value for the Options/ Sub-Options, daily income earned, including realized and unrealized gain or loss in the value of investments and expenses incurred by the Scheme are allocated to the Options / Sub - Options in proportion to the value of the units outstanding.


2.7 Load Charges

Load collected is retained under a separate account in the Scheme and is used to meet the selling and distribution expenses.

2.8 Initial Issue Expenses

Initial issue expenses comprise those costs directly associated with the issue of units of the Scheme and include brokerage, advertising, business promotion, marketing, printing, distribution and other miscellaneous expenses. Initial issue expenses upto 6% of the amount collected from the investors during the initial offer period have been charged to the Scheme and are being amortized over tenure of the Scheme from the date of allotment of units.


The Schemes have paid or provided for investment management and advisory fees payable to HSBC

Asset Management (India) Private Limited for managing the Schemes at an average annual rate of the

average daily net asset values recorded by the respective Scheme as follows.

Name of the Scheme

Investment Management and Advisory fees as a

percentage of the average daily net asset

value Fixed Term Series – 30 0.47% Fixed Term Series – 41 0.10% Fixed Term Series – 42 0.13% Fixed Term Series – 44 0.17% Fixed Term Series – 45 0.26% Fixed Term Series – 46 0.41% Fixed Term Series – 49 0.22% Fixed Term Series – 50 * 0.22% Fixed Term Series – 52 * 0.43% Fixed Term Series – 53 * 0.48% Fixed Term Series – 54 * 0.63%



Name of the Scheme

Investment Management and Advisory fees as a

percentage of the average daily net asset

value Fixed Term Series – 56 * 0.51% Fixed Term Series – 57 * 0.42% Fixed Term Series – 59 * 0.35% Fixed Term Series – 61 * 0.41% Fixed Term Series – 62 * 0.24% Fixed Term Series – 63 * 0.06% Fixed Term Series – 66 * 0.16%

* Annualised

All costs, charges and expenses incurred by HSBC Asset Management (India) Private Limited in the

administration and execution of the activities of the Scheme, except costs allowed to be charged to the

Scheme under the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and

amendments thereto as applicable, are on their own account for which they receive investment

management and advisory fees. 4 Trusteeship Fees




attended by such Trustee not affiliated with the Settlor. 5 Custodian Fees

JP Morgan Chase Bank provides custodial services to the Schemes for which it receives custody fees. 6 Income Taxes

No provision for income tax is made as the Schemes qualify as a recognized mutual fund under Section 10(23D) of the Income Tax Act, 1961.

7 Limitation on Expenses

The total expenses chargeable to the Scheme HSBC Fixed Term Series 63 are limited to 0.12% of the average daily net assets of the Scheme. HSBC Asset Management (India) Private Limited has borne Rs. 305,845 in respect of the Scheme in excess of the above mentioned percentage of the average daily net assets to be charged to the Scheme as total expenses for the period.




March 31, 2009

March 31, 2008

Non Convertible Debentures and Bonds

Listed / Awaiting Listing

Privately Placed Non Convertible Debentures /

Bonds





Bonds



- Appreciation - - 745,872 8,792,569 5,154,255 1,246,645

- Depreciation 6,587,393 10,079,072 - - - -


- Appreciation - - - - 330,750 -

- Depreciation 21,345 - - - - 346,160


- Appreciation - - - - - 1,142,480

- Depreciation 27,979,231 23,787,608 19,415,374 6,399,374 16,219,823 7,588,573


- Appreciation - - - - 139,867 -

- Depreciation - - - - 19,226 -


- Appreciation - - - - 125,881 -

- Depreciation - - - - - -


- Appreciation - - - - - -

- Depreciation 2,310,102 - 2,829,546 - - -



- Depreciation 6,441,550 3,985,867 8,299,194 - - -



- Depreciation 1,893,577 - - - - -



- Depreciation 4,406,230 3,258,038 - - - -



March 31, 2009

March 31, 2008




Bonds





Bonds



- Appreciation - - 4,136,569 - - -

- Depreciation 2,845,709 1,290,554 1,281,951 - - -


- Appreciation 1,623,132 - 1,534,851 - - -

- Depreciation 10,645,173 4,309,763 5,526,314 - - -


- Appreciation 969,499 - 1,744,148 - - -

- Depreciation 1,839,250 1,457,317 - - - -



- Depreciation 4,318,783 2,798,866 - - - -


- Appreciation - - 3,274,784 - - -



- Appreciation 775,539 - 3,261,080 - - -


9 Aggregate Fair Value of Non-Traded / Thinly Traded Investments

Aggregate fair value of non traded (including private placement)/ thinly traded investments as determined by HSBC Asset Management (India) Private Limited under the procedures approved by the Board of Trustees as at March 31, 2009 is as follows:

Name of the Scheme Fair value (Rupees) Fixed Term Series 30 870,636,238 Fixed Term Series 41 200,696,664 Fixed Term Series 42 5,726,293,660 Fixed Term Series 50 1,412,092,318 Fixed Term Series 52 2,120,473,920 Fixed Term Series 53 1,259,240,408 Fixed Term Series 54 1,625,891,784



Fixed Term Series 56 1,110,695,623 Fixed Term Series 59 3,206,563,894 Fixed Term Series 61 839,761,005 Fixed Term Series 62 1,078,748,105 Fixed Term Series 63 406,117,183 Fixed Term Series 66 211,219,104


The aggregate value of investment securities purchased and sold (including matured) during the period (excluding accretion of discount) are as follows:

Name of the Scheme Accretion of

Discount

Aggregate Purchase Aggregate Sale

Rupees Rupees


Assets Rupees


Assets Fixed Term Series 30 101,170,058 11,907,733 1.24% 243,259,449 25.26%Fixed Term Series 41 13,611,763 678,603,855 137.44% 938,785,330 190.13%Fixed Term Series 42 351,573,882 1,031,733,156 15.83% 858,457,108 13.17%Fixed Term Series 44 106,961,146 1,368,975,111 117.89% 1,895,260,845 163.21%Fixed Term Series 45 22,378,038 215,442,237 86.13% 419,218,541 167.60%Fixed Term Series 46 114,209,187 5,525,056,026 215.30% 7,726,807,558 301.09%Fixed Term Series 49 273,391,583 1,309,350,956 37.88% 4,367,613,757 126.36%Fixed Term Series 50* 300,245,607 4,451,334,896 105.22% 27,892,660 0.66%Fixed Term Series 52* 148,256,976 4,819,409,655 214.87% 2,799,719,317 124.82%Fixed Term Series 53* 13,530,839 3,060,723,206 204.10% 1,779,689,319 118.68%Fixed Term Series 54* 613,045 2,979,450,294 185.64% 1,329,172,678 82.82%Fixed Term Series 56* 46,373,677 3,266,348,832 406.41% 2,165,699,243 269.46%Fixed Term Series 57* 36,407,297 706,660,939 202.38% 155,691,522 44.59%Fixed Term Series 59* 83,281,114 11,650,148,373 479.29% 8,499,917,134 349.69%Fixed Term Series 61* 19,313,547 2,378,804,484 360.27% 1,552,025,100 235.06%Fixed Term Series 62* 246,777,450 10,102,035,398 394.88% 6,006,692,554 234.80%Fixed Term Series 63* 55,508,759 2,973,025,958 563.02% 2,090,502,207 395.89%Fixed Term Series 66* 22,172,816 1,552,743,929 484.59% 951,822,774 297.05%

* Annualized




The total income (including net loss on sale of investments and net change in unrealized depreciation in

the value of investments) and expenditure during the year/ period are as follows:

Total Income Total Expenses Name of the Scheme

Rupees Percentage of Average Daily

Net Assets

Rupees Percentage of Average Daily

Net Assets Fixed Term Series 30 75,369,573 7.83 5,908,055 0.61Fixed Term Series 41 44,952,189 9.1 670,694 0.14Fixed Term Series 42 557,806,168 8.56 10,421,450 0.16Fixed Term Series 44 107,943,665 9.30 2,341,964 0.20Fixed Term Series 45 21,376,050 8.55 743,292 0.30Fixed Term Series 46 230,072,779 8.97 11,258,311 0.44Fixed Term Series 49 318,913,586 9.23 8,639,042 0.25Fixed Term Series 50* 378,235,410 8.94 10,573,950 0.25Fixed Term Series 52* 180,061,018 8.03 10,351,563 0.46Fixed Term Series 53* 124,202,133 8.28 7,674,291 0.51Fixed Term Series 54* 142,751,493 8.89 10,655,830 0.66Fixed Term Series 56* 84,400,695 10.50 4,320,884 0.54Fixed Term Series 57* 37,690,335 10.79 1,577,991 0.45Fixed Term Series 59* 252,837,033 10.40 9,147,202 0.38Fixed Term Series 61* 67,463,633 10.22 2,899,418 0.44Fixed Term Series 62* 284,726,306 11.13 18,668,908 0.73Fixed Term Series 63* 50,801,048 9.62 2,048,438 0.39Fixed Term Series 66* 34,072,976 10.63 3,270,530 1.02

* Annualized 12 Disclosure Under Regulation 25(8) of the Securities and Exchange Board of India (Mutual Funds )






(iii) The Hong Kong and Shanghai Banking Corporation Limited Associate of the Investment Manager (iv) HSBC Software Development India Private Limited Associate Company (v) Schemes of the Fund, Under Common Control of the Sponsor

HSBC Advantage India Fund



HSBC Cash Fund

HSBC Dynamic Fund

HSBC Emerging Market Fund

HSBC Equity Fund

HSBC Flexi Debt Fund

HSBC Floating Rate Fund Long Term Plan

HSBC Floating Rate Fund Short Term Plan

HSBC Gilt Fund (Formerly, HSBC Gilt Fund – Short Term Plan)

HSBC Income Fund Investment Plan

HSBC Income Fund Short Term Plan

HSBC India Opportunities Fund

HSBC Interval Fund - Plan I upto November 20, 2008

HSBC Interval Fund - Plan II upto December 10, 2008

HSBC Interval Fund - Plan III upto December 17, 2008

HSBC Ultra Short Term Bond Fund (Formerly , HSBC Liquid Plus Fund)

HSBC Midcap Fund

HSBC MIP Fund Regular Plan

HSBC MIP Fund Savings Plan

HSBC Small Cap Fund

HSBC Tax Saver Equity Fund

HSBC Unique Opportunities Fund

(vi) Key Management Personnel and their relatives: Nelum Pahlaj Gidwani – Associate Trustee Naina Lal Kidwai – Chairman of the Investment Manager Vikramaditya – Director and the Chief Executive Officer of the Investment Manager with effect from July 16, 2008 Dr. Rudolf Apenbrink – Associate Tustee Ayaz Ebrahim – Director with effect from April 11, 2008 Sanjay Prakash – Director and the Chief Executive Officer upto July 16, 2008 Avan Nelum Gidwani* – Relative of a Key Management Personnel Rashid K Kidwai – Relative of a Key Management Personnel Rumaan Kidwai* – Relative of a Key Management Personnel Kemaya Lal Kidwai* – Relative of a Key Management Personnel Amrita Vikramaaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Raaghav Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Rhea Aaditya* – Relative of a Key Management Personnel with effect from July 16, 2008 Gabriele A Apenbrink* – Relative of a Key Management Personnel Christian R Apenbrink* – Relative of a Key Management Personnel Katharina S Apenbrink* – Relative of a Key Management Personnel Yasmin Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Daanyal Ebrahim* – Relative of a Key Management Personnel with effect from April 11, 2008 Nilufer Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Tara Prakash* – Relative of a Key Management Personnel upto July 16, 2008 Anahita Prakash* – Relative of a Key Management Personnel upto July 16, 2008 * There were no transactions during the year.



II The transactions with the related parties during the period in the ordinary course of business have been listed

in Annexure I

III During the year, The Hongkong and Shanghai Banking Corporation Limited, an associate entity of HSBC

Asset Management (India) Private Limited was paid brokerage for procuring unit subscriptions for the

Schemes as follows:

Name of the Scheme

Brokerage for procuring unit Subscriptions

(Rupees) Fixed Term Series 30 54,938 Fixed Term Series 62 87,518

The brokerage paid was at rates similar to those offered to other brokers/distributors.






The Scheme operates in one segment only viz. to primarily generate attractive returns from a diversified and actively managed portfolio of fixed income instruments.

15 Interest

Interest expense aggregating Rs. 12,417,143 on borrowings made by the Scheme to meet temporary liquidity needs for the purpose of redemption of units has been netted off from interest income as disclosed in Schedule 7 .


As at March 31, 2009, HSBC Fixed Term Series 41 had investments in secured redeemable debentures of Unitech Limited aggregating Rs. 2.65 crores which were rescheduled for payment on April 18, 2009. Subsequent, to the year end the terms and conditions of the said debentures were mutually extended in the interest of the unit holders, such that 50% of the principal amount of the debentures would be payable in two equal installments before April 30th 2009 and June 30th 2009 and the balance 50% payable in April 2010. The Scheme has sold these debentures to HSBC Asset Management India Private Limited in April 2009. The interest on the debentures has been serviced for all the schemes till March 31, 2009. The debenture holders are secured against immovable property mortgaged by the company. In view of the above, in the opinion of the management, no provision is considered necessary as at March 31, 2009.




Miscellaneous income includes Rs. 1,386,957 for HSBC Fixed Term Series 63 and Rs. 718,497 for HSBC Fixed Term Series 66 received from HSBC Asset Management India Private Limited towards compensation for loss incurred on transfers of investments to the other Schemes of the HSBC Mutual Fund.


Previous period’s figures have been re-grouped/re-arranged where necessary.





Trustee


Trustee

Director


Fund Manager(s)

Annexure II

HSBC Mutual Fund has made the following investments in companies, which hold units in excess of 5% of the net asset value of any Scheme of HSBC Mutual Fund.

Company NameSchemes

invested in by the Company

Investment made by schemes of HSBC

Mutual Fund in the company/subsidiary

Aggregate cost of acquisition during the year ended March 31,

2009

Outstanding as at March 31, 2009

( At Market / Fair Value)

(Rupees in Lakhs) (Rupees in Lakhs)

Allahabad Bank HCF HAIF 675.66 - HCF 27,697.92 - HDF 198.91 - HEF 3,225.32 - HFDF 3,101.61 - HFRF 15,999.99 7,791.76 HFTS21 2,985.84 - HFTS27 1,990.56 - HFTS41 99.18 - HFTS44 1,492.94 1,496.70 HFTS48 496.71 - HFTS49 138.83 - HFTS58 6,511.65 - HFTS60 757.58 - HFTS63 1,486.41 - HFTS66 1,978.47 351.28 HFTS68 3,977.51 - HIF 1,293.32 940.08 HINF 1,979.18 - HMEF 1,387.63 - HTSEF 1,071.51 - HUOF 1,251.06 - HUSBF 28,994.09 -

Bank of Baroda HCF HFRF 7,128.22 2,915.45 HFTS62 288.31 - HFTS66 192.21 - HIF 945.27 - HMEF 855.98 189.82 HMIP 21.94 - HTSEF 1,049.18 410.11 HUOF 786.24 468.70

Bank of India HCF HAIF 2,094.26 - HDF 194.45 - HEF 1,518.46 - HFRF 2,421.13 2,427.68 HMEF 1,142.12 - HMIP 124.53 - HTSEF 159.20 - HUOF 541.97 -

Bharti Airtel Limited HAIF 4,201.30 1,545.60 (Holding company of Bharti Infratel Limited) HDF 4,173.14 1,192.05

HEF 8,483.97 5,300.10 HIOF 3,336.42 869.79 HMIP 194.01 - HTSEF 2,913.27 603.85 HUOF 2,353.55 -

Bharti Infratel Limited HCF - - (Subsidiary company of Bharti Airtel Limited)

Birla Corporation Limited HFTS51 HDF 707.05 -

Cairn India Limited HCF HAIF 4,812.04 840.17 HUSBF HDF 5,521.35 556.42

HEF 10,868.55 2,423.41 HIOF 2,257.94 620.62 HMEF 630.47 - HMIP 340.80 - HTSEF 1,726.20 243.48 HUOF 2,779.93 331.38

Corporation Bank HCF HCF 22,529.91 - HDF 1,194.25 - HEF 6,191.24 - HFRF 5,488.40 1,458.73 HFTS55 999.04 - HFTS56 2,477.30 - HFTS58 4,457.01 - HFTS59 2,465.25 - HFTS62 2,985.31 - HIF 1,651.03 1,382.46 HINF 1,997.64 - HMIP 893.83 - HUSBF 20,050.65 -

DLF Limited HCF HCF 4,666.87 - HFRF 938.85 - HIOF 195.91 - HMIP 102.01 - HTSEF 212.28 - HUSBF 7,027.78 -

Disclosure under Regulation 25(11) of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended

0

Company NameSchemes





2009



(Rupees in Lakhs) (Rupees in Lakhs)DSP Merrill Lynch Capital Limited HCF HCF 40,786.84 -

HFRF 4,500.00 - HFTS32 2,276.98 - HUSBF 163,027.72 -

Export Import Bank of India HFRF HCF 13,046.43 2,452.46 HUSBF HFDF 3,212.53 1,751.45 HCF HFRF 5,838.93 196.45

HFTS50 2,111.56 2,161.75 HFTS52 1,456.51 HFTS53 64.90 HFTS63 1,204.11 1,256.91 HIF 3,752.01 2,951.83 HUSBF 16,206.72 247.91

Global Trade Finance Limited HFRF HCF 54,600.00 - HFRF 15,200.00 - HFTS57 1,000.00 - HFTS59 9,500.00 - HFTS60 7,200.00 - HFTS62 5,000.00 - HINF 7,900.00 - HUSBF 225,600.00 -

Grasim Industries Limited HFTS47 HAIF 1,571.51 - (Holding company of Ultratech Cement Limited) HDF 2,040.14 -

HEF 2,369.29 - HIOF 915.14 - HMIP 104.94 - HTSEF 896.74 308.52 HUOF 299.17 -

Ultratech Cement Limited HMEF 147.47 192.97 (Subsidiary company of Grasim Industries Limited) HUOF 263.82 347.35

HDFC Bank Limited HCF HAIF 3,625.62 1,168.08 HUSBF HCF 60,487.15 -

HDF 3,458.53 846.86 HEF 6,496.34 4,555.51 HFDF 2,100.00 - HFRF 10,932.29 - HFTS31 2,701.00 - HFTS34 1,907.96 - HFTS41 599.12 - HFTS60 3,898.12 - HIF 400.00 - HINF 7,837.09 - HIOF 899.44 963.67 HMEF 1,316.02 204.41 HMIP 907.61 66.19 HTSEF 2,802.01 1,051.27 HUOF 2,057.29 - HUSBF 68,092.37 -

Hero Honda Motors Limited HCF HDF 832.16 771.23 (Holding company of Hero Honda Finlease Limited) HFRF HEF 2,767.41 2,602.89

HFTS51 HIOF 1,051.26 867.63 HFTS60 HMIP 71.73 67.48 HINF HTSEF 472.03 385.61

HUOF 739.98 674.82

Hero Honda Finlease Limited HCF 3,000.00 - (Subsidiary company of Hero Honda Motors Limited) HUSBF 3,000.00 -

Hindalco Industries Limited HFDF HEF 1,672.47 - HFTS33 HIOF 451.17 - HFTS44 HMIP 39.91 - HFTS47 HTSEF 339.50 - HFTS51 - - HFTS58 - - HFTS60 - - HINF - -

Hindustan Unilever Limited HFTS21 HAIF 965.51 961.88 HFTS22 HDF 853.42 855.00 HFTS25 HEF 3,433.27 2,992.50

HIOF 696.79 726.75 HMEF 150.08 - HTSEF 801.96 356.25 HUOF 504.71 427.50

Company NameSchemes





2009



(Rupees in Lakhs) (Rupees in Lakhs)ICICI Bank Limited HCF HAIF 7,408.57 449.28

HCF 157,435.91 - HDF 12,139.24 509.18 HEF 14,181.63 1,886.98 HFDF 13,124.04 - HFRF 16,913.32 - HFTS21 693.62 - HFTS22 72.65 - HFTS23 5,403.23 - HFTS25 48.06 - HFTS28 4,521.99 - HFTS29 6,660.04 - HFTS31 2,474.32 - HFTS33 19.19 - HFTS35 3,301.30 - HFTS36 5,664.20 - HFTS37 3,988.02 - HFTS41 9.80 - HFTS44 3,760.14 1,496.81 HFTS45 943.65 - HFTS46 5,185.99 - HFTS47 2,431.39 - HFTS48 1,012.04 - HFTS49 4,548.96 - HFTS50 6,587.45 7,149.04 HFTS51 823.89 - HFTS52 927.13 - HFTS53 927.13 - HFTS54 439.81 - HFTS55 2,355.84 - HFTS57 896.06 956.47 HFTS58 7,677.51 - HFTS59 2,900.51 - HFTS60 5,827.47 - HFTS62 4,480.29 4,782.37 HFTS63 2,758.26 - HFTS66 695.33 - HFTS68 6,286.91 - HFTSIX 2,470.06 - HIF 1,969.80 - HINF 20,233.48 - HIOF 5,587.54 494.21 HMIP 2,210.59 - HTSEF 1,368.45 - HUOF 4,404.39 382.72 HUSBF 334,877.56 5,310.70

ICICI Home Finance Company Limited HCF 9,863.68 - (Subsidiary company of ICICI Bank Limited) HFDF 916.88 -

HFRF 3,735.44 - HFTS32 2,351.28 - HFTS36 3,206.74 - HFTS51 770.50 - HFTS66 1,000.00 1,004.91 HIF 483.81 - HUSBF 13,798.69 -

ICICI Securities Primary Dealership Limited HCF 47,900.00 - (Subsidiary company of ICICI Bank Limited) HDF 7,500.00 -

HEF 5,000.00 - HFDF 400.00 - HFRF 900.00 - HFTS29 1,473.30 - HFTS62 2,500.00 - HFTS66 600.00 - HIF 200.00 - HINF 16,798.21 - HMIP 1,000.00 - HTSEF 1,500.00 - HUSBF 130,447.78 -

ICICI Securities Limited HCF HFTS50 4,101.56 4,466.48 (Subsidiary company of ICICI Bank Limited) HUSBF 1,118.53 -

ICRA Limited HFTS41 HMEF 6.29 - HMIP 26.14 - HTSEF 23.48 -

IDEA Cellular Limited HCF HAIF 524.56 580.28 HDF 422.88 469.79 HEF 3,696.23 1,442.30 HIOF 1,375.28 471.22 HUOF 2,167.87 495.99

(Holding company for ICICI Home Finance Company Limited, ICICI Securities Primary Dealership Limited, ICICI Securities Limited)

Company NameSchemes





2009



(Rupees in Lakhs) (Rupees in Lakhs)IDBI Bank Limited HCF HCF 60,464.56 - (Holding company of IDBI Home Finance Limited) HDF 7,767.48 -

HEF 1,657.71 - HFDF 4,208.34 - HFRF 12,432.42 2,485.38 HFTS29 1,984.53 - HFTS30 69.83 - HFTS32 19.53 - HFTS41 706.10 - HFTS44 2,279.70 - HFTS45 549.18 - HFTS46 191.61 - HFTS47 9.90 - HFTS52 219.48 - HFTS57 897.20 956.85 HFTS58 3,023.78 - HFTS61 28.43 - HFTS62 8,074.76 8,611.65 HFTS63 1,851.60 - HFTS66 685.29 - HFTS68 4,045.67 - HIF 1,415.32 422.76 HINF 4,696.98 - HIOF 96.75 - HMIP 970.00 - HTSEF 2,286.27 - HUSBF 102,912.95 -

IDBI Home Finance Limited HUSBF 4,957.41 - (Subsidiary company of IDBI Bank Limited)

Indiabulls Financial Services Limited HCF HAIF 2,450.77 - HCF 14,865.60 - HDF 1,589.61 - HINF 1,700.00 - HIOF 1,359.87 - HMEF 1,022.86 - HMIP 169.33 - HTSEF 1,341.62 - HUOF 2,253.25 -

India Infoline Investment Services Limited HFDF HUSBF 10,000.00 -

Info Edge (India) Limited HFTS44 HMIP 160.24 - HGF HTSEF 142.73 - HFTS21

Infrastructure Development Finance Company Limited HFTS22 HAIF 1,178.15 - HCF 4,875.47 - HEF 2,196.32 - HFDF 5,406.37 - HFRF 245.13 - HFTS14 2,491.16 - HFTS46 5,000.00 - HFTS49 4,500.00 - HFTS50 4,992.39 4,972.29 HFTS54 1,200.20 - HFTS66 699.55 - HIF 906.14 - HIOF 1,430.64 - HMIP 520.38 9.96 HTSEF 285.14 - HUOF 800.61 - HUSBF 29,612.13 -

ITC Limited HFTS47 HAIF 4,024.86 2,495.48 HFTS58 HDF 2,978.79 1,746.83 HFTS60 HEF 8,266.70 6,820.97 HFTS68 HIOF 1,856.73 1,580.47 HINF HMIP 233.16 179.30

HTSEF 1,181.42 924.25 HUOF 976.56 592.07

Jammu and Kashmir Bank Limited HCF HCF 28,693.06 - HDF 1,468.67 - HFDF 3,934.96 - HFRF 4,331.01 - HFTS34 2,880.92 - HFTS37 686.84 - HFTS55 1,423.38 - HFTS57 896.97 956.64 HFTS58 4,350.84 - HFTS68 483.85 - HIF 391.67 - HINF 13,025.55 - HMEF 46.84 - HMIP 64.76 - HUSBF 33,072.54 -

Kolte Patil Developers Limited HFDF HMIP 11.57 - HFRF HTSEF 60.32 -

Company NameSchemes





2009




Larsen & Toubro Limited HCF HAIF 4,010.57 832.54 (Holding company of L & T Finance Limited) HFTS60 HDF 3,121.00 483.41

HEF 5,528.54 2,719.17 HIOF 2,799.10 725.11 HMEF 218.53 - HMIP 575.68 - HTSEF 2,659.92 443.12 HUOF 2,532.64 483.41

L & T Finance Limited HCF HCF 30,723.13 - (Subsidiary company of Larsen & Toubro Limited) HFDF 200.00 -

HFRF 15,012.89 - HFTS21 112.67 - HFTS27 24.41 - HFTS29 4,749.79 - HFTS31 5,000.00 - HFTS33 23.74 - HFTS59 2,496.06 - HFTS60 2,491.48 - HIF 93.96 - HINF 6,463.53 - HUSBF 88,983.78 -

Mahindra & Mahindra Limited HCF - - HFRF - -

Mahindra Lifespace Developers Limited HINF - - (Subsidiary company of Mahindra & Mahindra Limited)

Mahindra & Mahindra Financial Services Limited HCF 22,199.53 (Subsidiary company of Mahindra & Mahindra Limited) HFRF 5,000.00

HFTS59 1,600.00 HMIP - 990.39 HUSBF 59,130.87

Mahindra Finance Limited HCF 88,000.00 - (Subsidiary company of Mahindra & Mahindra Limited) HFRF 2,900.00 -

HFTS56 2,000.00 - HFTS57 500.00 - HFTS58 4,500.00 - HFTS59 7,000.00 - HFTS62 12,500.00 - HINF 2,000.00 - HMIP 500.00 - HUSBF 89,400.00 -

Tech Mahindra Limited HFRF - - (Subsidiary company of Mahindra & Mahindra Limited)

Punjab Tractors Limited HFRF - - (Subsidiary company of Mahindra & Mahindra Limited) HFTS47 - -

HFTS54 - - HFTS55 - -

Maruti Suzuki India Limited HCF HAIF 2,785.36 - HFTS21 HDF 1,086.00 - HFTS23 HEF 6,447.84 - HUSBF HIOF 574.66 -

HMIP 58.37 - HTSEF 1,197.62 397.72 HUOF 1,268.70 233.96

Praj Industries Limited HFTS41 HAIF 1,496.25 - HFTS57 HIOF 732.16 -

HMEF 87.56 -

PTC India Limited HFTS47 HAIF 29.75 - HSCF 105.60 105.52

Reliance Industries Limited HCF HAIF 8,589.56 2,447.22 (Holding company of Reliance Petroleum Limited) HDF 10,608.91 1,235.05

HEF 10,428.65 7,204.44 HIOF 501.52 2,058.41 HMEF 206.52 228.71 HMIP 427.31 79.29 HTSEF 2,282.86 1,372.28 HUOF 2,308.09 1,235.05

Reliance Petroleum Limited(Subsidiary company of Reliance Industries Limited) HFTS33 HAIF 3,620.14 -

HFTS36 HDF 4,256.41 - HEF 6,307.27 - HIOF 702.63 - HMIP 185.79 - HTSEF 859.73 - HUOF 1,266.86 -

(Holding company of Mahindra Lifespace Developers Limited, Mahindra & Mahindra Financial Services Limited, Mahindra Finance Limited, Tech Mahindra Limited, Punjab Tractors Limited)

Company NameSchemes





2009




State Bank of India HUSBF HAIF 7,920.50 1,067.10 HCF 52,742.58 - HDF 6,085.51 533.55 HEF 15,007.92 3,841.56 HFDF 11,520.07 3,879.64 HFRF 2,080.96 - HFTS30 49.23 - HFTS52 819.89 - HFTS54 393.86 - HFTS56 189.69 - HFTS61 443.09 - HFTS63 820.84 - HFTS66 96.55 - HIF 2,401.17 628.39 HIOF 7,457.17 885.69 HMIP 2,523.99 - HTSEF 1,967.78 - HUOF 5,037.93 490.87 HUSBF 100,361.08 -

State Bank of Bikaner and Jaipur HAIF 98.04 - (Subsidiary company of State Bank of India) HCF 22,656.71 -

HEF 294.13 - HFDF 1,510.82 - HFRF 27,062.02 2,369.70 HFTS36 990.27 - HFTS41 448.06 449.45 HFTS44 3,837.13 1,987.58 HFTS46 7,545.88 - HFTS49 4,129.92 - HFTS53 59.74 59.93 HFTS55 1,418.50 - HFTS56 4,883.33 287.25 HFTS57 1,078.47 1,139.44 HFTS58 4,347.91 - HFTS59 396.22 - HFTS63 1,788.79 - HFTS66 294.34 - HFTS68 3,473.01 - HIF 979.42 - HINF 4,568.91 - HTSEF 148.66 - HUOF 9.62 - HUSBF 57,053.07 -

State Bank of Hyderabad HCF 45,185.22 - (Subsidiary company of State Bank of India) HDF 2,482.16 -

HEF 977.60 - HFRF 7,081.08 - HFTS21 887.40 - HFTS25 4,535.61 - HFTS27 493.00 - HFTS35 976.72 - HFTS36 3,667.78 - HFTS42 465.32 268.93 HFTS44 99.01 - HFTS49 39.60 - HFTS50 386.12 229.09 HFTS55 2,925.39 - HFTS57 900.28 955.78 HFTS58 296.44 - HFTS63 2,347.61 - HFTS66 492.69 - HFTS68 3,248.08 - HINF 4,585.36 - HUSBF 72,520.42 -

State Bank of Indore HCF 6,824.62 - (Subsidiary company of State Bank of India) HFRF 3,063.53 2,597.06

HFTS66 349.43 355.08 HFTS68 3,093.04 - HIF 465.91 473.44 HINF 892.13 - HUSBF 4,163.57 -

State Bank of Mysore HAIF 197.99 - (Subsidiary company of State Bank of India) HCF 66,433.53 -

HEF 891.19 - HFDF 2,995.93 - HFRF 6,664.64 - HFTS31 2,700.00 - HFTS36 1,187.67 - HFTS37 1,389.85 - HFTS41 228.16 - HFTS44 277.77 - HFTS46 745.30 - HFTS48 99.46 - HFTS53 198.40 - HFTS54 39.68 - HFTS58 1,091.00 - HFTS59 6,885.38 - HFTS61 2,146.47 - HINF 4,769.54 - HIOF 1,583.62 - HUSBF 117,044.87 -

(Holding company of State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, State Bank of Travancore, SBI Cards & Payment Services Private Limited, SBI Factors & Commercial Services Private Limited)

Company NameSchemes





2009



(Rupees in Lakhs) (Rupees in Lakhs)State Bank of Patiala HCF 43,785.65 - (Subsidiary company of State Bank of India) HFDF 1,945.00 -

HFRF 6,498.88 - HFTS41 598.62 599.41 HFTS44 1,396.95 1,398.66 HFTS48 1,734.65 - HFTS52 3,394.00 - HFTS55 999.04 - HFTS58 4,433.20 - HFTS68 1,387.92 - HINF 21,630.40 - HUSBF 87,137.65 -

State Bank of Saurashtra HCF 20,945.31 - (Subsidiary company of State Bank of India) HFRF 3,482.79 -

HFTS23 982.10 - HFTS46 694.23 - HINF 6,783.99 - HUSBF 16,522.29 -

State Bank of Travancore HCF 52,939.32 - (Subsidiary company of State Bank of India) HFDF 2,433.56 -

HFRF 15,861.88 - HFTS31 2,987.28 - HFTS44 2,290.13 - HFTS45 550.52 - HFTS46 4,607.87 - HFTS49 2,757.89 - HFTS53 19.03 - HFTS54 902.60 - HFTS55 1,415.75 - HFTSIX 3,481.64 - HIF 1,750.20 - HUSBF 60,809.64 -

SBI Cards & Payment Services Private Limited HCF 7,295.49 - (Subsidiary company of State Bank of India) HDF 4,994.27 -

HFTS32 2,001.98 - HUSBF 3,992.49 -

SBI Factors & Commercial Services Private Limited HCF 63,500.00 - (Subsidiary company of State Bank of India) HFTS59 7,500.00 -

HFTS60 11,500.00 - HFTS62 4,000.00 - HINF 4,300.00 - HUSBF 121,700.00 -

Sterlite Industries (India) Limited HFTS58 HAIF 1,871.64 - (Holding company of Hindustan Zinc Limited) HDF 986.22 -

HEF 5,633.19 1,287.36 HIOF 838.23 482.76 HMIP 128.37 - HTSEF 871.50 - HUSBF 36,100.00 -

Hindustan Zinc Limited HFTS21 HEF 1,548.06 - (Subsidiary company of Sterlite Industries (India) Limited) HFTS25 HUOF 705.71 -

HFTS27 - - HFTS32 - - HFTS36 - - HFTS44 - - HFTS58 - - HINF - -

Vedanta Aluminium Limited HFRF - - (Subsidiary company of Sterlite Industries (India) Limited)

Sundaram Finance Limited HFRF HCF 3,858.08 - HFTS41 HFDF 765.09 -

HFRF 2,910.59 - HFTS25 4,000.00 - HFTS30 1,531.80 146.10 HFTS34 1,929.27 - HFTS52 1,486.39 - HFTS54 936.54 - HFTS56 2,100.00 2,086.87 HFTS59 650.00 - HFTS61 2,250.00 1,888.12 HFTS63 991.04 992.85 HIF 735.88 - HMIP 912.59 769.13 HUSBF 8,010.64 99.90

Tata Communications Limited HFTS21 HAIF 1,142.18 - HIOF 308.38 - HTSEF 192.74 - HUOF 364.88 -

Tata Sons Limited HCF 480.15 - (Holding company of Tata Consultancy Services Limited) HFRF 463.52 -

HUSBF 15,485.87 15,001.09

Tata Consultancy Services Limited HFDF HAIF 464.63 - (Subsidiary company of Tata Sons Limited) HFTS44 HDF 636.30 -

HEF 4,170.21 - HIOF 2,048.04 - HTSEF 617.22 - HUOF 1,931.00 -

Company NameSchemes





2009



(Rupees in Lakhs) (Rupees in Lakhs)Tata Power Limited HCF HAIF 2,164.21 -

HDF 2,325.94 - HEF 4,612.70 - HIOF 2,809.14 - HTSEF 539.53 - HUOF 1,018.86 -

Tata Steel Limited HCF HEF 758.38 - HUSBF HIOF 2,201.31 -

HUOF 758.38 - HUSBF 1,500.00 1,500.00

The Great Eastern Shipping Company Limited HFDF HDF 2,068.80 - HFRF HEF 2,619.95 - HIF HIOF 2,562.00 -

HMEF 1,962.88 - HMIP 170.01 - HTSEF 1,214.27 - HUOF 4,904.96 -

The Indian Hotels Company Limited HFTS60 HUOF 451.27 -

Wipro Limited HFRF HTSEF 112.70 - HFTS27 - - HFTS32 - - HFTS33 - - HFTS36 - - HFTS61 - - HINF - -

Yes Bank Limited HCF HCF 19,321.73 - HFRF 3,701.04 - HFTS25 6,029.70 - HFTS27 2,524.54 - HFTS28 901.97 - HFTS41 839.15 - HFTS56 2,224.20 2,385.17 HIF 643.80 - HINF 18,938.91 - HMIP 321.28 - HUSBF 41,686.17 130.09

The above investments comprise equity shares, debentures / bonds, commercial paper, fixed deposits and other debt instruments. These investments have been made on account of their high credit quality and competitive yield for the investment in fixed income/ moneymarket instruments and in case of equity shares because of attractive valuations of these companies.

HEF - HSBC Equity FundHIOF - HSBC India Opportunities FundHIF - HSBC Income FundHCF - HSBC Cash FundHMIP - HSBC Monthly Income PlanHFRF - HSBC Floating Rate FundHMEF - HSBC Midcap Equity FundHAIF - HSBC Advantage India FundHFTSI - HSBC Fixed Term Series IHFTSIV - HSBC Fixed Term Series IVHFTSV - HSBC Fixed Term Series VHFTSVI - HSBC Fixed Term Series VIHFTSIX - HSBC Fixed Term Series IXHFTS13 - HSBC Fixed Term Series 13HFTS14 - HSBC Fixed Term Series 14HFTS15 - HSBC Fixed Term Series 15HFTS21 - HSBC Fixed Term Series 21HUSBF - HSBC Ultra Short Term Bond Fund *HTSEF - HSBC Tax Saver Equity FundHFTS22 - HSBC Fixed Term Series 22HFTS23 - HSBC Fixed Term Series 23HFTS24 - HSBC Fixed Term Series 24HFTS25 - HSBC Fixed Term Series 25HFTS26 - HSBC Fixed Term Series 26HFTS27 - HSBC Fixed Term Series 27HFTS29 - HSBC Fixed Term Series 29HUOF - HSBC Unique Opportunities FundHFTS28 - HSBC Fixed Term Series 28HFTS30 - HSBC Fixed Term Series 30HFTS31 - HSBC Fixed Term Series 31HFTS32 - HSBC Fixed Term Series 32HFTS33 - HSBC Fixed Term Series 33HFTS34 - HSBC Fixed Term Series 34HFTS35 - HSBC Fixed Term Series 35HDF - HSBC Dynamic FundHFDF - HSBC Flexi Debt FundHINF - HSBC Interval FundHFTS41 - HSBC Fixed Term Series 41HFTS42 - HSBC Fixed Term Series 42HFTS44 - HSBC Fixed Term Series 44HFTS46 - HSBC Fixed Term Series 46HFTS36 - HSBC Fixed Term Series 36HFTS37 - HSBC Fixed Term Series 37HFTS45 - HSBC Fixed Term Series 45HFTS47 - HSBC Fixed Term Series 47HFTS49 - HSBC Fixed Term Series 49HFTS48 - HSBC Fixed Term Series 48HFTS50 - HSBC Fixed Term Series 50HFTS51 - HSBC Fixed Term Series 51HFTS52 - HSBC Fixed Term Series 52HFTS53 - HSBC Fixed Term Series 53HFTS54 - HSBC Fixed Term Series 54HFTS55 - HSBC Fixed Term Series 55HFTS56 - HSBC Fixed Term Series 56HFTS57 - HSBC Fixed Term Series 57HFTS58 - HSBC Fixed Term Series 58HFTS59 - HSBC Fixed Term Series 59HFTS60 - HSBC Fixed Term Series 60HFTS61 - HSBC Fixed Term Series 61HFTS62 - HSBC Fixed Term Series 62HFTS63 - HSBC Fixed Term Series 63HFTS66 - HSBC Fixed Term Series 66HFTS68 - HSBC Fixed Term Series 68HSCF - HSBC Small Cap FundHGF - HSBC Gilt Fund **

Company NameSchemes





2009




* Formerly known as HSBC Liquid Plus Fund** Formerly known as HSBC Gilt Fund - Short Term Plan

Documents

HSBC Global Asset Management€¦ · HSBC Global Asset Management Schemewise Annual Reports : 2008 - 2009. 2 SPONSOR HSBC Securities and Capital Markets (India) Private Limited Regd