Annual report Cover - JPMorgan AMC Annual Report

SPONSOR

JPMorg an Asset Management (Asia) Inc.

270 Park Avenue, New York,

New York 10017, USA

TRUSTEE

JPMorg an Mutu al Fund India Private Limited

Registered office:

Kalpataru Synergy, 3rd Floor,

West Wing, Santacruz (East),

Mumbai 400 055,

India.

ASSET MANAGEMENT COMPANY

JPMorg an Asset Management India Private Limited

Registered office:

Kalpataru Synergy, 3rd Floor,

West Wing, Santacruz (East),

Mumbai 400 055,

India.

CUSTODIAN

Deutsche Bank AG,

Mumbai Branch,

Sir Hazarimal Somani Marg,

Fort, Mumbai 400 001,

India.

STATUTORY AUDITORS

Price Waterhou se

252, Veer Savarkar Marg,

Shivaji Park, Dadar (West),

Mumbai 400 028,

India.

REGISTRAR & TRANSFER AGENT

Deutsche Investor Services Private Limited

2nd Floor, Tower 1, Logitech Park,

M.V. Road, Saki Naka,

Andheri (East), Mumbai 400 072,

India.

BOARD OF DIRECTORS

JPMorg an Mutu al Fund India Private Limited.

1) Mr. Jagadish Salunkhe

2) Mr. P. G. R. Prasad

3) Dr. Dharmendra Bhandari

4) Mr. N. Balasubramanian

5) Mr. M. G. Bhide

6) Mr. Dominic E. Price [resigned, effective June 19, 2008]

JPMorg an Asset Management India Private Limited

1) Mr. Anthony J. Morgan

2) Mr. Krishnamurthy Vijayan

3) Mr. K. G. Vassal

4) Mr. D. N. Mungale

5) Mr. A. P. Kurian

6) Mr. T. P. Ostwal

1

Trustees’ Report for the year ended March 31, 2008

1) SCHEMES PERFORMANCE, FUTURE OUTLOOK AND OPERATIONSOF SCHEMES

From the date of inception till March 31, 2008 the Fund has launched twoEquity Schemes – JPMorgan India Equity Fund (“JPMIEF”) and JPMorganIndia Smaller Companies Fund (“JPMISCF”), a Liquid Scheme - JPMorganIndia Liquid Fund (“JPMILF”) and an Income Scheme - JPMorgan IndiaLiquid Plus Fund (“JPMILPF”).

a) Scheme Perform ance

JPMorg an Ind ia Equity Fund

JPMorgan India Equity underperformed the index by 258bps sinceinception.

Scheme Return s as on March 31, 2008

Scheme BSE – 200

Since Inception 9.15% 11.73%

--raeY 1

Note: Absolute returns of the growth option are computed. “Sinceinception” returns are calculated on Rs. 10/- invested at inception.Past performance may or may not be sustained in future.

JPMorg an India Smaller Comp anies Fund

JPMorgan India Smaller Companies Fund outperformed the indexby 242bps since inception.


Scheme CNX – Mid Cap

Since Inception - 27.37% - 29.79%

--raeY 1


JPMorg an India Liquid Fund

JPMorgan Liquid Fund has outperformed the Crisil Liquid Fund Indexby 62bps. This was because of high cash components and thus takingadvantage of tight liquidity condition in March’08.


Scheme CRISIL LiquidFund Index


--raeY 1


JPMorg an India Liquid Plus Fund

JPMorgan Liquid Fund Plus has outperformed the Crisil Liquid FundIndex by 90bps. This was because of high cash components andthus taking advantage of tight liquidity condition in March’08.


Scheme CRISIL LiquidFund Index


--raeY 1


JPMorgan Mutual Fund Ind ia Priva te LimitedKalpataru Synergy, 3rd Floor, West Wing, Santacruz (E),

Mumbai - 400 055

b) Futur e Out look

Going forward, efforts to achieve sustainable growth would continueto be made, by a strong focus over key constituents, namely, ourproducts, performance, processes and most importantly people. Inpartnership with our distributors we hope to grow our business at aconvenient pace for longer term growth and stability. Also, our outlookis very positive towards working along with our industry association,AMFI and our Regulators, to help raise the awareness levels of thepublic towards the mutual funds and thus accelerate the growth ofthis sector.

c) Operations of Schemes

With a view to safeguard the interests of investors, our constantendeavour will be towards evolving suitable product offerings, aswould suit investors needs, such as Systematic Investment Plans,Systematic Transfer Plans and so forth.

2) BRIEF BACKGROUND OF SPONSORS, TRUST, TRUSTEE CO. ANDAMC CO.

a) JPMorg an Asse t Management (Asia ) Inc. (Spon sor)

The Sponsor for JPMorgan Mutual Fund is JPMorgan AssetManagement (Asia) Inc. The Sponsor is a wholly-owned indirectsubsidiary of JPMorgan Chase & Co. and a part of the JPMorganChase Group. JPMorgan Chase is among the world’s leading globalfinancial services firms. The Sponsor serves as the holdingcompany for many Asian asset management businesses ofJPMorgan Chase and its principal activity is to undertake assetmanagement businesses through operating subsidiariesestablished for this purpose in the Asia Pacific region. The Sponsorholds 75% of the paid-up equity capital of the AMC. The balance25% is held by J.P. Morgan India Private Limited. J.P. Morgan IndiaPrivate Limited is a SEBI registered merchant banker, underwriter,a trading member of the capital market segments of the BSE andthe NSE and trading-cum-clearing member of the derivativessegments of the BSE and the NSE.

b) JPMorg an Mutu al Fund (Trust)

JPMorgan Mutual Fund (JPMMF) was set up as a Trust by theSettlers, JPMorgan Asset Management (Asia) Inc. on December4, 2006 with JPMorgan Mutual Fund India Private Limited (theTrustee Company) as a Trustee in accordance with the provisionsof the Indian Trust Act, 1882 and is duly registered under the IndianRegistration Act, 1908. The Trustee has entered into an InvestmentManagement Agreement dated December 6, 2006 with JPMorganAsset Management India Private Limited (the AMC) to function asthe Investment Manager for all the Schemes of JPMMF. JPMMFwas registered with SEBI on February 8, 2007.

c) JPMorg an Mutu al Fund Ind ia Priva te Limited (Trustee Co.)

JPMorgan Mutual Fund India Private Limited is a companyincorporated and registered under the provisions of the CompaniesAct, 1956 having its registered office at Kalpataru Synergy, 3rdFloor, West Wing, Santacruz - East, Mumbai 400 055. The TrusteeCompany acts as the Trustee of the JPMorgan Mutual Fund and isthe exclusive owner of the Trust Fund and holds the same in trustfor the benefit of the unitholders. The Trustee Company has beendischarging its duties and carrying out the responsibilities asprovided in the Regulations and the Trust Deed. The TrusteeCompany seeks to ensure that the Fund and the Schemes floatedthere under are managed by the AMC in accordance with the TrustDeed, the Regulations, directions and guidelines issued by theSEBI, the Association of Mutual Funds in India and other regulatoryagencies.

Trustees’ Report for the year ended March 31, 2008

d) JPMorgan Asset Management Ind ia Priva te Limited (AMC Co.)

JPMorgan Asset Management India Private Limited is a companyincorporated and registered under the provisions of the CompaniesAct, 1956 having its registered office at Kalpataru Synergy, 3rd Floor,West Wing, Santacruz - East, Mumbai 400 055. The AMC has beenappointed to act as an Asset Management Company for JPMorganMutual Fund (JPMMF), a mutual fund approved by the Securitiesand Exchange Board of India (SEBI), by way of an InvestmentManagement agreement dated December 6, 2006.

3) INVESTMENT OBJECTIVES OF THE SCHEMES

a) JPMorg an India Equity Fund

The investment objective of the Scheme is to generate income andlong-term capital growth from a diversified portfolio of predominantlyequity and equity-related securities including equity derivatives.However, there can be no assurance that the investment objectiveof the scheme will be realised.

b) JPMorg an India Smalle r Comp anies Fund

The investment objective is to seek to generate long term capitalappreciation from a portfolio that is substantially constituted of equityand equity related securities focused on smaller companies.Generally, the universe will be the companies constituting the bottomfourth by way of market capitalization of stocks listed on the NSE orthe BSE. The fund manager may from time to time include otherequity and equity related securities outside the universe to achieveoptimal portfolio construction. However, there can be no assurancethat the investment objective of the scheme will be realised.

c) JPMorg an Ind ia Liquid Fund

The investment objective of the Scheme is to provide reasonablereturns, commensurate with low risk while providing a high level ofliquidity, through a portfolio of money market and debt securities.However, there can be no assurance that the investment objectivesof the Scheme will be realised.

d) JPMorg an Ind ia Liquid Plus Fund

The investment objective is to provide liquidity and optimal returns tothe investors by investing primarily in a mix of short-term debt andmoney market instruments which results in a portfolio havingmarginally higher maturity and moderately higher credit risk ascompared to a liquid fund, at the same time maintaining a balancebetween safety and liquidity.

However, there can be no assurance that the investment objectiveof the Scheme will be realised.

4) ACCOUNTING POLICIES

All accounting policies are in accordance with Securities Exchange Boardof India (Mutual Fund) Regulations 1996.

5) UNCLAIMED DIVIDENDS & REDEMPTIONS

Summary of No. of Investors & Corresponding amount Scheme-wise

Unclai med Unclai medDivi dends Redempt ions

Amount No . of Amount No . ofScheme (Rs.) Inves tor s (Rs.) Inves tor s

JPMorgan India 18.30Equity Fund NIL NIL Lakhs 39

JPMorgan IndiaLiquid Fund NIL NIL NIL NIL

JPMorgan IndiaLiquid Plus Fund NIL NIL NIL NIL

Note: Reminder letters have been sent to the investors on variousoccasions, with regard to unclaimed redemptions.

6) STATUTORY INFORMATION

a) The Sponsors are not responsible or liable for any loss resultingfrom the operation of the Schemes of the Fund beyond their initialcontribution (to the extent contributed) of Rs. 1,00,000/- for settingup the Fund, and such other accretions / additions to the same.

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 itsunderlying investments.

c) Full Annual Report shall be disclosed on the website(www.jpmorganmf.com) and shall be available for inspection at theHead Office of the mutual fund. Present and prospective unit holdercan obtain copy of the trust deed, the full Annual Report of the Fund/ AMC at a price.

For JPMorg an Mutu al Fund India Priva te Limited

Sd/-Mr. Jagadish SalunkheChairman

Place: MumbaiDate: September 29, 2008

2

1

Auditors’ ReportTo

The TrusteeJPMORGAN MUTUAL FUND

1. We have audited the Balance Sheet of JPMorgan Mutual Fund – JPMorgan India Equity Fund (“The Scheme”) as at March 31, 2008,the related Revenue Account for the period April 19, 2007 to March 31, 2008 and the Cash Flow Statement for the period April 19, 2007to March 31, 2008 which we have signed under reference to this report. These financial statements are the responsibility of Trusteeof JPMorgan Mutual Fund and the Management of JPMorgan Asset Management India Private Limited (the “Management”). Ourresponsibility 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 planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Ourprocedures included confirmation of securities owned at March 31, 2008 by correspondence with the custodian and others. An auditalso includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating theoverall 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 purposesof our audit. The Balance Sheet, the Revenue Account and the Cash Flow Statement referred to above are in agreement with the booksof 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 informationrequired by the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and the amendments thereto, asapplicable, and also give respectively a true and fair view of the state of affairs of JPMorgan Mutual Fund – JPMorgan IndiaEquity Fund as at March 31, 2008 its net surplus for the period April 19, 2007 to March 31, 2008 and its cash flows for the periodApril 19, 2007 to March 31, 2008.

(ii) The Balance Sheet as at March 31, 2008, and the Revenue Account for the period April 19, 2007 to March 31, 2008, together withthe notes thereon, have been prepared in all material respects in accordance with the accounting policies and standardsspecified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendmentsthereto, as applicable.

(iii) The methods used to value

(a) Privately placed debt securities in good faith and

(b) Non traded and thinly traded debt securities in accordance with the guidelines for valuation of securities for mutual fundsdated September 18, 2000 and amendments thereto, as applicable, issued by the Securities and Exchange Board of Indiaas at March 31, 2008 as determined by JPMorgan Asset Management India Private Limited under procedures approved bythe Trustee of JPMorgan Mutual Fund are fair and reasonable.

K. H. VachhaPartnerMembership No. F/30798

For and on behalf of

PRICE WATERHOUSEChartered Accountants

MumbaiSeptember 29, 2008

2

Balance Sheet as at March 31, 2008March 31, 2008

Schedule Rupees

ASSETS

Investments 1 9,987,493,088

Deposits 2 352,100,000

Other Current Assets 3 255,715,222

TOTAL 10,595,308,310

LIABILITIES

Unit Capital 4 9,990,073,861

Reserves and Surplus 5 493,031,231

Current Liabilities and Provisions 6 112,203,218

TOTAL 10,595,308,310

March 31, 2008 March 31, 2008 March 31, 2008RECONCILIATION OF NET ASSET VALUE PER UNIT Growth Opt ion Divi dend Opt ion Tot al

Rupees Rupees Rupees

Net Assets as per Balance Sheet (Total Assets less CurrentLiabilities and Provisions ) (Note 2.7) 4,985,949,563 5,497,155,529 10,483,105,092

Number of Units in Issue 456,816,456.899 542,190,929.241

Net Asse t Value per Unit 10.915 10.139

Notes to the Financial Statements 8

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

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

K. H. VACHHA Fo r and on behalf of Fo r and on behalf ofPartner JPMorgan Asset JPMorgan Mutu al Fund

Management Ind ia Priva te Limi ted Ind ia Priva te Limi ted


PRICE WATERHOUSE Mr. Kris hn amurth y Vijaya n Mr. Jagadish SalunkheChartered Accountants Whole-time director and CEO Chairman

Mr. K. G. Vassal Dr. Dharmendra BhandariDirector Director

Place : Mumbai Mr. Harshad M PatwardhanDate : September 29, 2008 Head - Equity and Fund Manager

3

Cash Flow Statementfor the period April 19, 2007 to March 31, 2008

April 19, 2007 toMarch 31, 2008

Rupees

A. Cashf low from Operating Activi ty

Net Surplus for the period 932,948,318

Adjustments for:-

(Increase)/Decrease in Investments at cost (10,509,069,335)

(Increase)/Decrease in Other Current Assets (18,310,026)

Increase/(Decrease) in Current Liabilities 96,524,095

Net cash used in operations ( A ) (9,497,906,948)

B Cashf low from Financing Activi ties

Increase/(Decrease) in Unit Capital 9,990,073,861

Increase/(Decrease) in Unit Premium Reserve 573,666,786

Adjustments for:-

Increase/(Decrease) in Redemption Payable for Units Redeemed by Investors 15,679,122

(Increase)/Decrease in Subscription Receivable for Units Issued to Investors (23,044,845)

Dividend Distribution (492,600,720)

Net cash generated from financing activi ties ( B ) 10,063,774,204

Net Increase/ (Decrease ) in Cash and Cash Equ ivale nts (A+B) 565,867,256

Cash and Cash Equivalents as at the beginning of the period -

Cash and Cash Equivalents as at the close of the period 565,867,256

Notes :

March 31, 2008Rupees

1. Cash and Cash Equivalents include the following :

Balances with Scheduled Banks :

- In Current Account 43,219,884

- In Deposit Account 350,000,000

Other Collaterised Lending

Reverse Repos 69,448,944

Margin Deposit with Clearing Corporation of India Limited towardsCollateralised Borrowing and Lending Obligation 2,100,000

Derivative Margin Deposit 101,098,428

565,867,256

2. 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.

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




PRICE WATERHOUSE Mr. Kris hnamurth y Vijaya n Mr. Jagadish SalunkheChartered Accountants Whole-time director and CEO Chairman



4

Revenue Account for the period April 19, 2007 to March 31, 2008

April 19, 2007 toMarch 31, 2008

Schedule Rupees

INCOME AND GAINS

Dividends (Note 2.4) 54,200,447

Interest and Discount 7 36,932,805

Net Profit on Sale of Investments and Derivatives(Net of Net Loss on Inter Scheme Sale of Investments Rs.91,952) (Note 2.3) 1,025,148,076

Miscellaneous Income (Note 10) 869,257

TOTAL 1,117,150,585

EXPENSES AND LOSSES

Investment Management and Advisory Fees (Note 4) 92,622,706

Transfer Agent Fees and Expenses 13,311,546

Trusteeship Fees and Expenses (Note 5) 4,520,617

Custodian Fees and Expenses (Note 6) 2,586,316

Audit Fees 1,215,000

Selling and Distribution Expenses 64,016,797

Other Operating Expenses 5,929,285

TOTAL (Note 11 (b)) 184,202,267

Net Surplus fo r the Peri od 932,948,318Net Unrealised Depreciation in Value of Investments (525,059,163)

Net Surplus incl ud ing Net Unrealise d Deprecia tion in Value of Inves tments 407,889,155

RECONCILIATION OF NET ASSET VALUE PER UNIT

Ap ril 19, 2008 to Ap ril 19, 2008 to Ap ril 19, 2008 toMarch 31, 2008 March 31, 2008 March 31, 2008Growth Opt ion Divi dend Opt ion Tot al


Net Surplus for the Period Including Net Unrealised Depreciation inthe value of Investments by Option 17,067,945 390,821,210 407,889,155

Transfer from Income Equalisation Reserve (Note 2.9) 117,904,936 36,453,849 154,358,785

Dividend Distribution - (492,600,720) (492,600,720)

Balance transferred to Reserve Fund 134,972,881 (65,325,661) 69,647,220


The Schedules referred to herein form an integralpart of the Financial Statements

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







5

Schedules forming part of the Balance Sheetfor the period April 19, 2007 to March 31, 2008

SCHEDULE 1 March 31, 2008 March 31, 2008Marke t/Fair Val ue Cost

Rupees Rupees

Investments(Notes 2.2, 2.3,7,8,9 and 12)(Refer to the attached Statement of Portfolio Holding as at March 31, 2008)

Equity Shares 9,310,339,227 9,834,754,944

Privately Placed Non-Convertible Debentures / Bonds 400,414,442 401,057,887

Certificate of Deposit 276,739,419 276,739,419

TOTAL 9,987,493,088 10,512,552,250

SCHEDULE 2 March 31, 2008Rupees

Deposits

Deposits with Scheduled Bank(Under Lien Towards Margin Deposit for Equity Derivatives) 350,000,000

Margin Deposit with Clearing Corporation of India towards CollateralizedBorrowing and Lending Obligation 2,100,000

TOTAL 352,100,000


Other Current Asse ts

Balances with Banks - in Current Account 43,219,884Sales Contracts Awaiting Completion - Equity Shares 593,095Reverse Repos 69,448,944Unit Subscriptions Receivable 15,984,265Inter-Scheme Receivable– For Switch - In 7,060,580– For Others 243,473Derivative Margin Deposit (Note 2.5) 101,098,428Interest Receivable– Debentures / Bonds 16,662,797– Reverse Repos 12,843– Deposits 637,671Miscellaneous 753,242

TOTAL 255,715,222


Unit Capital

Growth Opt ion

Issued and Subscri bed :

Units of Rs.10 each fully paid up 3,296,609,696 329,660,969.636

Outstanding:Initial Issue and Subscription 3,296,609,696 329,660,969.636

Issued during the period 3,151,878,309 315,187,830.841

6,448,488,005 644,848,800.477

Redeemed during the period 1,880,323,436 188,032,343.578

At the end of the period 4,568,164,569 456,816,456.899

Dividend OptionIssued and Subscri bed :


Outstanding:

Initial Issue and Subscription 4,605,511,986 460,551,198.617

Issued during the period 2,586,506,753 258,650,675.340

7,192,018,739 719,201,873.957

Redeemed during the period 1,770,109,447 177,010,944.716


TOTAL 9,990,073,861 999,007,386.140

6

Schedules forming part of the Balance Sheetfor the period April 19, 2007 to March 31, 2008SCHEDULE 5

Growth Opt ion Divi dend Option Tot alMarch 31, 2008 March 31, 2008 March 31, 2008


Reserves a nd Surplus

Unit Premium Reserve (Note 2.8)

Added during the period 279,807,617 139,500,384 419,308,001

At the end of the period 279,807,617 139,500,384 419,308,001

Income Equalisa tion Reserve (Note 2.9)

Added during the period 117,904,936 36,453,849 154,358,785

Transferred to Revenue Account (117,904,936) (36,453,849) (154,358,785)

At the end of the period - - -

Unrealise d App recia tion ReserveNet Unrealised Appreciation in Value of Investments and Derivatives 3,004,496 1,071,514 4,076,010


Reserve Fund

Balance Transferred from Revenue Account 134,972,881 (65,325,661) 69,647,220

At the end of the period 134,972,881 (65,325,661) 69,647,220

TOTAL 417,784,994 75,246,237 493,031,231

SCHEDULE 6

Current Liabili ties and Provisi ons March 31, 2008Rupees

Current Liabili ties

Investment Management and Advisory Fees 8,236,702


Trusteeship Fees and Expenses 407,112

Custodian Fees and Expenses 255,096

Audit Fees 1,215,000


Unit Redemptions Payable 12,947,878

Inter Scheme Payable - For Switch - Out 2,731,244

Dividend Payable 4,694

Payable to Investment Manager 14,733,917

Load (Note 2.10) 30,367,833

Payable for Outstanding Futures Contracts 21,776,595

Unclaimed Redemption (Note 16) 1,830,285

Sundry Payables 4,985,920

TOTAL 112,203,218

April 19, 2008 toMarch 31, 2008

RupeesSCHEDULE 7Interest and Disc ount(Not e 2.4)

Debentures / Bonds 20,189,188

Commercial Paper / Certificate of Deposit 5,525,782


Collateralized Borrowing and Lending Obligation 6,231,811

Margin Deposit with the Clearing Corporation of India Limited 376,618

Deposits 637,671

TOTAL 36,932,805

7

Statement of Portfo lio Holdingas at March 31, 2008(Referred to in Schedule 1 to the Balance Sheet as at March 31, 2008 and the Revenue Account fo r the period April 19, 2007 toMarch 31, 2008)

Descri pt ion Quant ity Marke t /Fair Val ueRupees

EQUITY SHARES (93.22%)

AUTO (2.13%)

Maruti Suzuki India Ltd. 239,866 198,369,182

AUTO ANCILLAR IES (0.63%)

Asahi India Glass limited 879,602 58,845,374

BANK S (8.98%)

HDFC Bank Ltd.@ 184,920 246,174,750

State Bank of India 129,887 207,851,672

Axis Bank Limited 248,444 196,233,493

ICICI Bank Ltd. 241,762 186,011,683

CEMENT (2.10%)

Grasim Industries Ltd. 75,929 195,539,954

CONSTRUCTION (6.37%)

Jaiprakash Associates Ltd. 925,869 209,755,622

Punj Lloyd Ltd. 643,962 200,143,390

DLF Limited 198,815 128,384,786

Mahindra Lifespace Developers Ltd. 131,761 54,542,466

CONSUMER DURABL ES (1.44%)

Voltas Ltd. 747,214 134,236,995

CONSUMER NON DURABL ES (4.06%)ITC LTD 1,832,164 377,883,825

DIVERSIFIED (3.82%)

Larsen & Toubro Ltd.@ 117,197 355,804,232

FERROUS METALS (2.44%)

Jindal Steel & Power Ltd. 109,949 227,594,430

FINANCE (12.16%)Housing Development Finance Corporation Ltd.@ 278,581 662,953,135

Reliance Capital Ltd. 132,415 162,711,552

Infrastructure Development Finance Company Ltd.@ 1,026,584 155,014,184

Shriram Transport Finance Co Ltd. 450,000 151,920,000

GAS (0.88%)

Indraprastha Gas Limited 623,416 81,729,838

INDUSTRIAL CAPITAL GOODS (9.57%)

Bharat Heavy Electricals Ltd. 180,005 371,053,307

ABB Ltd. 126,623 149,408,809

Bharati Shipyard Ltd. 191,114 103,966,016

Elecon Engineering Ltd. 527,288 103,691,185

Crompton Greaves Ltd. 315,390 86,874,176

Suzlon Energy Ltd. 286,905 75,685,539

INDUSTRIAL PRODUCTS (4.34%)

Sintex Industries Ltd. 518,361 184,147,745

Max India Limited 885,000 131,201,250

Jain Irrigation Systems Ltd. 150,000 88,800,000

MINERALS/MINING (3.04%)

Gujarat NRE Coke Ltd 1,064,201 146,912,948

Sesa Goa Ltd. 43,096 135,819,199

NON - FERROUS METALS (1.56%)Sterlite Industries Ltd. 203,838 145,642,251

OIL (4.39%)

Oil & Natural Gas Corporation Ltd. 416,382 408,283,370

PETROLEUM PRODUCTS (7.01%)

Reliance Industries Ltd. 287,967 652,475,629

PHARMACEUTICALS (6.69%)Jubilant Organosys Limited 683,502 224,086,131

Divis Laboratories Ltd. 146,479 185,859,879

Sun Pharmaceutical Industries Ltd. 113,620 139,678,747

Biocon Limited 170,552 73,422,636

8

Statement of Portfo lio Holding (Continued)as at March 31, 2008(Referred to in Schedule 1 to the Balance Sheet as at March 31,2008 and the Revenu e Account for the peri od April 19, 2007 to March31, 2008)

Descri pt ion Quant ity Marke t /Fair Val ueRupees

POWER (5.24%)

Jyoti Structures Ltd. 894,728 143,022,271

Tata Power Co. Ltd. 113,513 132,980,480

NTPC Ltd. 591,593 116,307,184

Reliance Energy Ltd. 76,613 95,831,371

SOFTWARE (6.95 %)

Educomp Solutions Ltd. 56,402 215,678,428

Infosys Technologies Ltd. 120,277 173,186,852

Satyam Computers Ltd. 271,711 107,692,655

Financial Technologies India 50,762 81,176,052

Everonn Systems India Limited 118,115 69,020,500

TELECOM - SERVICES (6.19%)

Bharti Airtel Ltd. 446,431 368,863,614

Reliance Communications Ltd 407,789 207,870,443

Total (Cost Rs. 9,834,754,944) 9,310,339,227

PRIVATELY PLACED NON CONVERTIBLE DEBENTURES/BONDS (4.01%)FINANCE (100 %)

9.13% First Leasing Co Ltd (30/04/2008)* 2,000,000 200,215,868

8.87% Magma Shrachi Finance Ltd (20/05/2008)* 2,000,000 200,198,574

Total (Cost Rs. 401,057,887) 400,414,442

CERTIFICATE OF DEPOSIT (2.77%)BANK S (100 %)

State Bank Of Travancore (03/10/2008)# 2,500,000 240,296,285

ICICI Bank Ltd. (17/02/2009)# 390,000 36,443,134

Total (Cost Rs. 276,739,419) 276,739,419

Total Inves tments (Cost Rs. 10,512,552,250) 9,987,493,088

EQUITY DERIVATIVES

LONG FUTURES (80.24%)

JINDAL STEEL & POWER LIMITED (FV Rs 5/-) APRIL 2008 FUTURE 51,200 106,150,400

RELIANCE INDUSTRIES LIMITED APRIL 2008 FUTURE 45,000 102,123,000

RELIANCE CAPITAL LIMITED APRIL 2008 FUTURE 76,176 93,932,626

Axis Bank Limited APRIL 2008 FUTURE 71,550 56,345,625

BHARAT HEAVY ELECTRICALS LIMITED APRIL 2008 FUTURE 21,975 45,239,933

403,791,583

SHORT FUTURES (19.76%)NTPC Limited APRIL 2008 FUTURE 208,000 41,038,400

HDFC BANK APRIL 2008 FUTURE 44,200 58,377,150

99,415,550

Total 503,207,133

FIXED DEPOSITS

BANK S (100%)

9.25% Centurion Bank Of Punjab Ltd. (24/06/2008)

Duration Rs. % to Net Assets

91 days 350,000,000 3.34%

Confirmation has been received from Deutsche Bank AG, Mumbai Branch at the end of financial period for investments held by them

* Fair value of privately placed securities as determined in good faith by JPMorgan Asset Management India Private Limited underprocedures approved by the Trustee.

# Fair value of non-traded and thinly traded debt securities as determined JPMorgan Asset Management India Private Limited underprocedures approved by the Trustee 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.

@ Investment in companies which have invested more than 5% of the net asset value of any scheme of JPMorgan Mutual Fund.

9

Annexure 1Discl osure und er Regulation 25 (11) of the Securi ties and Exchange Board of Ind ia (Mutu al Fund s) Regu lations 1996 as amended.

JPMorgan Mutu al Fund has made fo llowing investments in companies or their s ubsidiaries w hich ho ld units in excess of 5% of the netasset value of any sc heme of JPMorgan Mutu al Fund fo r the period ended March 31, 2008.

Rupees

Name o f the Company Schemes Invested in by the Company Investments made by the Schemes of Agg regated for the OutstandingJPMorgan Mutual Fund in the Company or Period under as on March 31, its Subsidiary Regulation 25(11) 2008 at Market /

at Cost Fair Value

DSP Merrill Lynch Capital Limited JPMorgan India Liquid Fund JPMorgan India Equity Fund 817,500,000 -

JPMorgan India Liquid Fund 1,619,110,100 -

JPMorgan India Liquid Plus Fund 2,756,549,938 -

JPMorgan India Smaller Companies Fund 192,000,000 -

Finolex Cables Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 410,781,693 -


Global Trade Finance Limited JPMorgan India Liquid Plus Fund JPMorgan India Smaller Companies Fund 500,000,000 -

HDFC Bank Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 333,203,752 246,174,750

JPMorgan India Liquid Fund JPMorgan India Smaller Companies Fund 147,381,657 -

Housing Development Finance JPMorgan India Liquid Fund JPMorgan India Equity Fund 960,590,509 662,953,135Corporation Limited

JPMorgan India Smaller Companies Fund 233,165,914 -Infrastructure Development Finance JPMorgan India Liquid Fund JPMorgan India Equity Fund 191,326,192 155,014,184Company Limited JPMorgan India Liquid Plus Fund

Larsen and Toubro Limited JPMorgan India Liquid Fund JPMorgan India Equity Fund 957,833,357 355,804,232

JPMorgan India Liquid Plus Fund JPMorgan India Smaller Companies Fund 281,970,666 -

LIC Housing Finance Limited JPMorgan India Liquid Plus Fund JPMorgan India Liquid Plus Fund 100,000,000 100,090,340

Tata Consultancy Services Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 204,243,470 -

10

Schedu les fo rming part of the Balance Sheet as at March 31, 2008 andthe Revenue Account fo r the period April 19,2007 to March 31, 2008

Schedule 8Notes to the Financial S tatements1 Organisation

JPMorgan India Equity Fund (the”Scheme”) is an open-ended equity growth scheme of JPMorgan Mutual Fund (the “Fund”) and waslaunched on April 19, 2007. JPMorgan Mutual Fund has been sponsored by JPMorgan Asset Management (Asia) Inc. JPMorgan AssetManagement India Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset managementcompany. The duration of the Scheme is perpetual. The Scheme closed for initial sunscription on May 18, 2007 and reopened for issueand redemption of units on June 14, 2007. The investment objective of the Scheme is to generate income and long-term capital growthfrom a diversified portfolio of predominantly equity and equity-related securities including equity derivatives. The Scheme has twooptions - Growth and Dividend Option.The Scheme will not declare dividend under the Growth Option in normal circumstances. Theincome earned on such units will remain invested within the Scheme and will be reflected in the net asset value.

2 Sign ificant Account ing Policies

2.1 Basis O f Account ing

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

2.2 Portfo lio Valuation

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

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

(ii) Non-traded and thinly traded equity securities including those not traded within thirty days prior to the valuation date arevalued at fair value as determined by JPMorgan Asset Management India Private Limited under procedures approved by theTrustee of JPMorgan Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds datedSeptember 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 NSE. If no saleis reported at that time, such security is valued at fair value as determined in good faith by JPMorgan Asset ManagementIndia Private Limited under procedures approved by the Trustee of JPMorgan Mutual Fund.

(iv) Non-traded and thinly traded debt securities are valued at fair value as determined by JPMorgan Asset Managament IndiaPrivate Limited under procedures approved by the trustee of JPMorgan Mutual Fund in accordance with the guidelines forvaluation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable, issued by theSecurities and Exchanges Board of India (SEBI).

(v) Privately placed debt securities are valued at fair value as determined in good faith by JPMorgan Asset Management IndiaPrivate Limited under procedures approved by the Trustee of JPMorgan Mutual Fund

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

(vii) Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reportedat that time, such security is valued at the last traded price plus accretion of the difference between the face value andthe 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 schemes.

Following the issue of the guidance note on accounting for investments in the financial statements of mutual funds by theInstitute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the Regulations) net unrealisedappreciation / depreciation in the value of investments is determined separately for each category of investments.Furtherin respect of each category of investments, the net change in the unrealised appreciation if any, between two balancesheet dates / valuation dates is accounted through the Unrealised Appreciation Reserve and net depreciation if any, isaccounted through the Revenue Account.

Unrealised appreciation is reduced from the distributable income at the time of income distribution.

2.3 Securi ties Transac tions

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

2.4 Inves tment Income

Interest and dividend income are recorded on an accrual basis.

2.5 Deriva tives

The Scheme enters into derivatives transactions in equity/index futures for the purpose of hedging and portfolio balancing.‘Derivatives margin deposit’ representing the margin towards equity derivative contracts entered into by the Schemes isdisclosed under ‘Other Current Assets’.

Futu res

Futures contracts are marked to market daily at the futures settlement price as determined by the exchange. The variation margin

11

calculated as the difference between the trade price or the previous day’s settlement price, as the case may be, and the currentday’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 andthe contract price is recognised in the Revenue Account. If more than one futures contracts in respect of the same stock / indexand expiry date, to which the squared-off / settled contract pertains, is outstanding at the time of square-off / settlement of thecontract, the average method is followed for determining the gain/loss.

As at the Balance Sheet date / date of determination, all open futures positions are valued at the futures settlement price asdetermined by the exchange where it is traded. Non-traded futures contract are valued at fair value as per procedures /determined by JPMorgan Asset Management India Private Limited and approved by the Trustee. The unrealised appreciation /depreciation on all open positions is considered for determining the net assets value.

2.6 Initial Iss ue Expenses

Initial issue expenses upto 2.25% of the amount mobilised during the new fund offering period was borne from the entry loadcollected from the investors during the new fund offering period. Expenses over and above the applicable entry load were borneby the asset management company.

2.7 Net Asse t Value fo r Growth / Divi dend Opt ion

The net asset value of the units of the Scheme is determined separately for the units issued under Growth and Dividend Option.

For reporting the net asset value for the Options, daily income earned, including realised and unrealised gain or loss in the valueof investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the unitsoutstanding.

2.8 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 premiumreserve of the Scheme, after an appropriate portion of the issue proceeds and redemption payout is credited or debitedrespectively to the income equalization reserve.

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

2.9 Income Equalization Reserve

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

2.10 Load

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

3. Income Taxes

No provision for taxation has been made as the Scheme qualifies as a recognised mutual fund under Section 10 (23D) of the Incometax Act, 1961 of India.

4. Investment Management Fees

The Scheme has paid or provided for investment management and advisory fees payable to JPMorgan Asset Management India PrivateLimited for managing the Scheme at an average annual rate of 1.02% of the average daily net asset values recorded by the Scheme.All costs, charges and expenses incurred by JPMorgan Asset Management India Private Limited in the administration and executionof the activities of the Scheme, except costs allowed to be charged to the Scheme under the Regulations are on their own account forwhich they receive investment management and advisory fees.

5. Trustee Fees

In accordance with the Trust Deed dated December 4,2006 between JPMorgan Asset Management (Asia) Inc. (the “Settlor”) andJPMorgan Mutual Fund India Private Limited (the Trustee), the Scheme has paid or provided for trustee fees payable to the Trusteeat the rate of 0.05% of the average daily net asset values recorded by the Scheme of the Fund or Rs. one crore per annum, whicheveris lower.

6. Custod ian Fees

Deutsche Bank AG, Mumbai Branch provides custodial services to the Scheme for which it receives custody fees.

7. Agg regate App recia tion And Deprecia tion In Value Of Investments

Aggregate appreciation and depreciation in the value of investments is as follows:


Equity Shares

- Appreciation 521,087,583

- Depreciation 1,045,503,301

Privately Placed Non Convertible Debentures / Bonds

- Appreciation -

- Depreciation 643,445

Equity Futures


- Depreciation -

8. Agg regate Fair Val ue of Non-Traded Inves tments

Aggregate fair value of non-traded (including privately placed) investments as determined by JPMorgan Asset Management IndiaPrivate Limited under the procedures approved by the Trustee as at March 31,2008 is Rs.677,153,861.

12

9. Aggregate Value Of Purchases And Sales Of Inves tments

The aggregate value of investment securities purchased and sold (including matured) during the financial period is Rs. 39,366,684,713(excluding accretion of discount Rs. 11,757,592) and Rs. 29,915,685,374 respectively being 436.12% (annualised) and 331.42%(annualised) of the average daily net assets.

10. Miscella neous Income

Miscellaneous Income Rs. 869,257 represents amount received from JPMorgan Asset Management India Private Limted on accountof delayed recording of unit capital transactions calculated as the difference between the net asset value on the date of recording andthe transaction date.

11. Income / Expenses

(a) The total Income (including net profit on sale of investments and derivatives and net unrealised depreciation in the value ofinvestments) and total expenses is Rs. 592,091,422 and Rs. 184,202,267 respecively being 6.56% (annualised) and 2.04%(annualised) of the average daily net assets.

(b) The expenses have been accrued from the date of closure of the new fund offering period.

12. Discl osure Under Regu lation 25(11) Of The Securi ties And Exchange Bo ard Of Ind ia (Mutu al Fund s) Regu lations, 1996, AsAmended

JPMorgan Mutual Fund has made investments in companies, which hold / have held units in excess of 5% of the net asset value ofany scheme of JPMorgan Mutual Fund which have been listed in Annexure I.

13. Equ ity Deriva tives Discl osures

Futu res

Details of open interest in equity futures of April 2008 Series as at March 31, 2008 is as follows :

Underlyi ng Asse t Name Number of Cont rac ts Units Outstanding

Short Long

Bharat Heavy Electricals Limited 293 21,975

HDFC Bank 221 (44,200)

Jindal Steel & Power Limited (Fv Rs 5/-) 320 51,200

NTPC Limited 128 (208,000)

Reliance Capital Limited 552 76,176

Reliance Industries Limited 600 45,000

Axis Bank Limited 318 71,550

Notional value of futures contracts bought/sold by the Scheme and outstanding as at March 31, 2008 aggregates to Rs. 503,207,133.Net loss on futures and options transactions recognised in the Revenue Account for the period ended March 31, 2008 aggregates toRs. 24,647,243.

14 Discl osure Under Regulation 25(8) of the Securi ties and Exchang e Board of Ind ia (Mutu al Fund s ) Regulation , 1996 as amended(SEBI Regulation) and in accordance wi th Account ing Standard 18 on ‘Related Party Discl osures’ iss ued by the Institut e ofChartered Account ants of India (ICAI)

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

(i) Related Party rela tionships during the period

Name Descri pt ion of Relationship

JPMorgan Asset Management (Asia) Inc.* Sponsor of the Fund

JPMorgan Asset Management India Private Limited Investment Manager to the Schemes of JPMorgan Mutual Fund

JPMorgan India Private Limited Associate of the Investment Manager

Geojit Financial Services Limited

Mahindra And Mahindra Financial Services Limited

Mentor Technologies Private Limited

JPMorgan Mutual Fund India Private Limited Trustee to the Schemes of JPMorgan Mutual Fund

Bank of Baroda Associate of the Trustee to the Schemes of JPMorgan Mutual Fund

* - There were no transaction during the period

(ii ) Schemes of the Fund , und er common cont rol of the Spon sor during the period

JPMorgan India Liquid Fund

JPMorgan India Liquid Plus Fund

JPMorgan India Smaller Companies Fund

(iii ) Key Management Personn el and their Relatives during the period

Krishnamurthy Vijayan - Whole-time director and CEO, JPMorgan Asset Management India Private Limited

Usha Vijayan* (Relative of Key Management Personnel)

Keshav Vijayan* (Relative of Key Management Personnel)

* - There were no transaction during the period

13

(iv ) Transac tions during the Period

Rupees

Natu re of Transaction Trustee Associate Invest ment Associate of Schemes Key Totalof Trustee Manager Investment under Management

Manager Common PersonnelControl of and their

Sponsor of Relativesthe Fund

Purchase of Investments - - - 6,406,344,651 - 6,406,344,651

Sale of Investments - - - - 3,122,942,249 - 3,122,942,249

Subscription of Units(including switch in and dividendreinvestment) - 50,000,000 - 533,611 1,000,000,000.00 100,000 1,050,633,611

Redemption of Units(including switch out) - 70,179,112 - - 70,000,000.00 - 140,179,112

Dividend(Including dividend reinvested) - 5,000,000 - 33,611 - - 5,033,611

Investment Management andAdvisory Fees - - 92,622,706 - - - 92,622,706

Trusteeship Fees and Expenses 4,520,617 - - - - - 4,520,617

Brokerage/ Commission onPurchase/Sales of Investments - - - 3,818,405 - - 3,818,405

Brokerage/ Commission onDistribution of Units - - - 388,764 - - 388,764

(v) Outstanding As At Period End

Rupees

Nature of Transaction Trustee Associate Investment Asso ciate of Schemes Key Totalof Trustee Manager Investment under Management

Manager Common PersonnelControl of and their

Sponsor of Relativesthe Fund

Investment ManagementFees Payable - - 8,236,702 - - - 8,236,702

Trusteeship Fees andExpenses Payable 407,112 - - - - - 407,112

Units OutstandingAs At Period End - - - 366,841 664,133,391.00 90,497 664,590,729

Other Payables - - 14,733,917 - - - 14,733,917

Other Receivables - - - - 243,473 - 243,473

(vi ) Discl osures i n res pect of material transac tions wi th parties re ferred to in Note 14 (i) fo r Associa te of Inves tment Manager

April 19, 2007 toMarch 31, 2008

Rupees

Subscri pt ion of Units (includ ing swi tch in and divi dend reinves tment)

Mentor Technologies Private Limited 533,611

Divi dend ( Including divi dend reinves ted)


Brokerage/ Commissi on on Purchase/Sale of Investments

J P Morgan India Private Limited 3,818,405

Brokerage/ Commissi on on Dis tribut ion of Units

Geojit Financial Services Ltd. 346,950

Mahindra And Mahindra Financial Services Ltd. 41,814

Units Outstanding As At Period End


(vii ) Discl osures i n respect of material transac tion s wi th parties re ferred to in Note 14 (i) fo r Associa te of Trustee

April 19, 2007 toMarch 31, 2008

Rupees


Bank of Baroda 50,000,000

Redemption of Units (includ ing swi tch in and divi dend reinves tment)


Divi dend (Includ ing divi dend reinves ted)


14

(viii ) Details of material transac tions wi th persons referred to in Note 14 (ii ) fo r Schemes und er common cont rol of the Spon sorof the Fund

April 19, 2007 toMarch 31, 2008

Rupees

Purchase of Inves tments

JPMorgan India Liquid Fund 1,806,439,320

JPMorgan India Liquid Plus Fund 4,089,176,740

JPMorgan India Smaller Companies Fund 510,728,591

Sale of Inves tments


JPMorgan India Liquid Plus Fund 969,054,680



JPMorgan India Smaller Companies Fund 1,000,000,000

Redemption of Units (includ ing swi tch out)




Other Receiva bles

JPMorgan India Liquid Plus Fund 46,073

JPMorgan India Smaller Companies Fund 190,800

(ix) Discl osures i n respect of material transactions wi th persons re ferred to in Note 14 (iii ) for key ma nagement personn el andtheir rela tives

April 19, 2007 toMarch 31, 2008

Rupees


Krishnamurthy Vijayan 100,000

Units Outstanding As At Year End March 31, 2008


15 Segment Reporting

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

16 Unclaime d Redemptions

As at March 31, 2008, unclaimed redemptions aggregate Rs.1,830,285 payable to investors.

17 Prior Year Comparatives

As these are the first financial statements of the Scheme since the date of its commencement, there are no comparative figures.







15

Auditors’ ReportTo the Trustee

JP MORGAN MUTUAL FUND

1. We have audited the Balance Sheet of JPMorgan Mutual Fund – JPMorgan India Smaller Companies Fund (“The Scheme”) as at March31, 2008 and the related Revenue Account for the period November 9, 2007 to March 31, 2008, both of which we have signed underreference to this report. These financial statements are the responsibility of Trustee of JPMorgan Mutual Fund and the Management ofJPMorgan Asset Management India Private Limited (the “Management”). Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Ourprocedures included confirmation of securities owned at March 31, 2008 by correspondence with the custodian and others. An auditalso includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating theoverall 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 purposesof 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 andExchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectivelya true and fair view of the state of affairs of JPMorgan Mutual Fund – JPMorgan India Smaller Companies Fund as at March 31,2008 and its net deficit for the period November 9, 2007 to March 31, 2008.

(ii) The Balance Sheet as at March 31, 2008, and the Revenue Account for the period November 9, 2007 to March 31, 2008, togetherwith the notes thereon, have been prepared in all material respects in accordance with the accounting policies and standardsspecified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and amendmentsthereto, as applicable.

(iii) The methods used to value non traded securities as at March 31, 2008 as determined by JPMorgan Asset Management IndiaPrivate Limited under procedures approved by the Trustee of JPMorgan Mutual Fund in accordance with the guidelines forvaluation of securities of mutual funds dated September 18, 2000 and amendments thereto as applicable issued by the Securitiesand Exchange Board of India are fair and reasonable.





16


Schedule Rupees

ASSETS


Deposits 2 59,500,000


TOTAL 3,862,297,722

LIABILITIES

Unit Capital 4 5,261,161,438

Reserves and Surplus 5 (1,439,949,681)


TOTAL 3,862,297,722

RECONCILIATION OF NET ASSET VALUE PER UNIT

March 31, 2008 March 31, 2008 March 31, 2008Growth Opt ion Divi dend Option Tot al


Net Assets as per Balance Sheet(Total Assets less Current Liabilities and Provisions ) (Note 2.7) 1,961,600,443 1,859,611,314 3,821,211,757


Net Asset Value per Unit 7.263 7.263




K. H. VACHHA Fo r and on behalf of Fo r and on behalf of

Partner JPMorgan Asset JPMorgan Mutual Fund

For and on behalf of Management Ind ia Priva te Limi ted Ind ia Priva te Limi ted

PRICE WATERHOUSE

Chartered Accountants

Mr. Kris hnamurthy Vijaya n Mr. Jagadish Salunkhe

Whole-time director and CEO Chairman

Mr. K. G. Vassal Dr. Dharmendra Bhandari

Director Director

Place: Mumbai Mr. Harshad M Patwardhan

Date: September 29, 2008 Head - Equity and Fund Manager

17

Revenue Accoun t fo r the period November 9, 2007 toMarch 31, 2008

November 9, 2007 to

March 31, 2008

Schedule Rupees

INCOME AND GAINS

Dividends (Note 2.4) 932,195


Miscellaneous Income (Note 10) 93,108

TOTAL 27,844,912

EXPENSES AND LOSSES

Net Loss on Sale of Investments and Derivatives

(including Net Loss on Inter Scheme Sale of Investments Rs. 7,196) (Note 2.3) 305,856,286



Trusteeship Fees and Expenses (Note 5) 649,169

Custodian Fees and Expenses (Note 6) 474,012

Audit Fees 225,000


Other Operating Expenses 1,225,208

TOTAL (Note 11(b)) 335,732,572

Net Defici t fo r the Peri od (307,887,660)

Net Unrealised Depreciation in Value of Investments (1,138,201,709)

Net Defici t incl ud ing Net Unrealise d Deprecia tion in Value of Inves tments (1,446,089,369)

November 9, 2007 to No vember 9, 2007 to No vember 9, 2007 to

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

Growth Opt ion Divi dend Opt ion Tot al


Net Deficit for the Period including Net Unrealised Depreciation in Value of Investments by Option (738,219,862) (707,869,507) (1,446,089,369)

Transfer from Income Equalisation Reserve (Note 2.9) (2,973,202) 5,893,796 2,920,594

Balance transferred to Reserve Fund (741,193,064) (701,975,711) (1,443,168,775)




K. H. VACHHA Fo r and on behalf of Fo r and on behalf of

Partner JPMorgan Asset JPMorgan Mutual Fund

For and on behalf of Management Ind ia Priva te Limi ted Ind ia Priva te Limi ted

PRICE WATERHOUSE


Mr. Kris hnamurthy Vijaya n Mr. Jagadish Salunkhe

Whole-time director and CEO Chairman


Director Director

Place: Mumbai Mr. Harshad M Patwardhan

Date: September 29, 2008 Head - Equity and Fund Manager

18

Schedules forming part of the Balance Sheet as at March 31, 2008 and theRevenue Account for the period November 9, 2007 to March 31, 2008

SCHEDULE 1 March 31, 2008 March 31, 2008

Investments Marke t/Fair Val ue Cost

(Notes 2.2, 2.3, 7, 8, 9 and 12) Rupees Rupees

(Refer to the attached Statement of Portfolio Holding as at March 31, 2008)

Equity Shares 2,960,191,569 3,863,005,831

Certificate of Deposit 158,650,075 158,650,075

Units in Mutual Fund 663,889,918 899,277,365

TOTAL 3,782,731,562 4,920,933,271

SCHEDULE 2 March 31, 2008

Deposits Rupees

Deposits with Scheduled Bank (Under Lien Towards Margin Deposit for Equity Derivatives) 50,000,000

Margin Deposit with Clearing Corporation of India towards Collateralized Borrowing and Lending Obligation 9,500,000

TOTAL 59,500,000


Other Current Asse ts Rupees

Balances with Banks - in Current Account 7,464,896

Unit Subscriptions Receivable 5,745,991

Inter-Scheme Receivable - Switch - In 1,531,382

Derivative Margin Deposit (Note 2.5) 4,818,454

Interest Receivable - Deposits 88,699

Receivable on Outstanding Futures Contracts 416,738

TOTAL 20,066,160


Unit Capital Rupees Units

Growth Opt ion



Outstanding:


Issued during the period 288,666,052 28,866,605.158

2,812,015,110 281,201,510.919

Redeemed during the period 111,235,144 11,123,514.398


Dividend Opt ion



Outstanding:


Issued during the period 230,112,948 23,011,294.834

2,710,173,075 271,017,307.535

Redeemed during the period 149,791,603 14,979,160.257


TOTAL 5,261,161,438 526,116,143.799

19

Schedules forming part of the Balance Sheet as at March 31, 2008 and theRevenue Account for the period November 9, 2007 to March 31, 2008

SCHEDULE 5 Growth Opt ion Divi dend Option Tot al

Reserves a nd Surplus March 31, 2008 March 31, 2008 March 31, 2008


Unit Premium Reserve (Note 2.8)

Added during the period 1,657,131 872,700 2,529,831

At the end of the period 1,657,131 872,700 2,529,831

Income Equ alisa tion Reserve (Note 2.9)

Added during the period (2,973,202) 5,893,796 2,920,594

Transferred to Revenue Account 2,973,202 (5,893,796) (2,920,594)


Unrealise d App recia tion Reserve

Net Unrealised Appreciation in Value of Investments and Derivatives 356,410 332,853 689,263

At the end of the period 356,410 332,853 689,263

Reserve Fund

Balance Transferred from Revenue Account (741,193,064) (701,975,711) (1,443,168,775)

At the end of the period (741,193,064) (701,975,711) (1,443,168,775)

TOTAL (739,179,523) (700,770,158) (1,439,949,681)

SCHEDULE 6

Current Liabili ties and Provisi ons March 31, 2008

Rupees






Audit Fees 225,000


Purchase Contracts Awaiting Completion -Equity Shares 12,673,260


Inter Scheme Payable

- For Switch - Out 7,574,467

- For Others 190,800

Load (Note 2.10) 3,291,230

Payable to Investment Manager 3,396,045

Sundry Payables 1,802,977

TOTAL 41,085,965

SCHEDULE 7 November 9, 2007 to

Interes t and Disc ount (Note 2.4) March 31, 2008

Rupees






Deposits 88,699

TOTAL 26,819,609

20

Statement of Portfo lio Holding as at March 31,2008

(Referred to in Schedule 1 to the Balance Sheet as at March 31,2008 and theRevenue Account for the period November 9, 2007 to March 31, 2008)

Description Quant ity Marke t /Fair Value

Rupees

EQUITY SHARES (78.26%)

AUTO ANCILLAR IES (3.63%)

Balkrishna Industries Limited 148,000 80,142,000

Asahi India Glass Limited 410,000 27,429,000

BANK S (3.32%)

Indian Overseas Bank 469,742 63,462,144

Yes Bank Ltd. 205,811 34,730,606

CONSTRUCTION (3.84%)

SIMPLEX INFRASTRUCTURE LTD. 95,500 58,632,225

Consolidated Const. Consortium Ltd. 56,000 41,031,200

Kalindee Rail Nirman Engineers Ltd 49,582 14,135,828

CONSUMER DURABL ES (3.33%)

Voltas Ltd. 549,347 98,690,189

CONSUMER NON DURABL ES (8.78%)

Advanta India Limited 167,277 177,924,181

Kaveri Seed Company Limited 148,698 41,620,570

Lakshmi Energy And Foods Ltd 176,000 40,480,000

FERROUS METALS (4.17%)

Welspun Guj Stahl Rohren Ltd 222,591 85,285,742

Usha Martin Ltd. 480,000 38,160,000

FINANCE (8.01%)

Shriram Transport Finance Co Ltd. 491,400 165,896,640

SREI Infrastructure Finance Ltd. 526,950 71,243,640

GAS (0.94%)

Gujarat Fluorochemicals Ltd 154,000 27,881,700

INDUSTRIAL CAPITAL GOODS (12.17%)

Bharati Shipyard Ltd. 297,202 161,677,888

Thermax India Ltd. 155,444 94,354,508

Elecon Engineering Ltd. 335,000 65,877,750

BGR Energy Systems Limited 112,108 38,329,725

INDUSTRIAL PRODUCTS (16.61%)

Sintex Industries Ltd. 405,300 143,982,825

Jain Irrigation Systems Ltd. 162,000 95,904,000

Max India Limited 571,000 84,650,750

Everest Kanto Cylinder Limited 282,500 76,020,750

Time Technoplast Limited 68,607 54,319,592

Asian Electronics Ltd. 100,000 19,905,000

Ess Dee Aluminium Limited 31,445 16,780,624

MINERALS/MINING (5.08%)

Gujarat NRE Coke Ltd 753,000 103,951,650

Sesa Goa Ltd. 14,699 46,324,633

OIL (3.11%)

Shiv-Vani Oil & Gas Exploration Services Limited 175,697 92,056,443

PHARMACEUTICALS (6.19%)

Jubilant Organosys Limited 425,030 139,346,086

Glenmark Pharmaceuticals Ltd. 90,000 44,010,000

21

Statement of Portfo lio Holding as at March 31,2008

(Referred to in Schedule 1 to the Balance Sheet as at March 31,2008 and theRevenue Account for the period November 9, 2007 to March 31, 2008)

Description Quant ity Marke t /Fair Value

Rupees

POWER (8.97%)

Techno Elec & Engineering Co Ltd 400,000 91,340,000

Jyoti Structures Ltd. 557,000 89,036,450

GVK Power & Infrastructure Ltd 1,250,000 50,062,500

Lanco Infratech Limited 90,000 34,969,500

SOFTWARE (8.59%)

Everonn Systems India Limited 178,609 104,370,169

Educomp Solutions Ltd. 21,087 80,635,634

KLG Systel Limited 63,003 35,508,491

Financial Technologies India 21,034 33,636,521

TELECOM - EQUIPMENT & ACCESSORIES (1.47%)

Onmobile Global Limited 79,890 43,468,149

TEXTILE PRODUCTS (1.79%)

Bombay Rayon Fashions Ltd. 181,971 52,926,265

Total (Cost Rs. 3,863,005,831) 2,960,191,569

CERTIFICATE OF DEPOSIT (4.19%)

BANK S (100 %)

State Bank Of Mysore (28/05/2008)# 1,606,000 158,650,075

Total (Cost Rs. 158,650,075) 158,650,075

UNITS IN MUTUAL FUND (17.55%)

JPMorgan India Equity Fund - Growth 60,823,630 663,889,918

Total (Cost Rs. 899,277,365) 663,889,918

Total Investments (Cost Rs. 4,920,933,271) 3,782,731,562

EQUITY DERIVATIVES

LONG FUTURES (50.68%)

Axis Bank Limited APRIL 2008 FUTURE 11,025 8,682,188

BHARAT HEAVY ELECTRICALS LIMITED APRIL 2008 FUTURE 3,975 8,183,332

16,865,520

SHORT FUTURES (49.32%)

NTPC Limited APRIL 2008 FUTURE 39,000 7,694,700

HDFC BANK APRIL 2008 FUTURE 6,600 8,716,950

16,411,650

Total 33,277,170

FIXED DEPOSITS

BANK S (100%)

9.25% Centurion Bank Of Punjab Ltd. (24/06/2008) Duration Rup ees % to Net Asse ts

91 days 50,000,000 1.31%

Confirmation has been received from Deutsche Bank AG, Mumbai Branch at the end of financial period for investments held by them.

# Fair value of non-traded and thinly traded debt securities as determined by JPMorgan Asset Management India Private Limited underprocedures approved by the Trustee in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000and amendments thereto as applicable issued by Securities and Exchange Board of India.

22

Annexure IDiscl osure und er Regu lation 25 (11) of the Securi ties and Exchange Board of Ind ia (Mutu al Fund s) Regu lations 1996 as amended

JPMorgan Mutu al Fund has made fo llowing investments in companies or their s ubsidiaries w hich ho ld units in excess of 5% of the netasse t value of any sc heme of JPMorgan Mutu al Fund fo r the period ended March 31,2008

Rupees

Name o f the Company Schemes Invested in by the Investments made by the S chemes Agg regated for the Outstanding as onCompany of JP Morgan Mutual Fund in the Period under March 31, 2008

Company or its Subsidiary Regulation 25(11) at Mar ket / Fair Valueat Cost

DSP Merrill Lynch Capital Limited JPMorgan India Liquid Fund JPMorgan India Equity Fund 817,500,000 -

JPMorgan India Liquid Fund 1,619,110,100 -

JPMorgan India Liquid Plus Fund 2,756,549,938 -


Finolex Cables Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 410,781,693 -


Global Trade Finance Limited JPMorgan India Liquid Plus Fund JPMorgan India Smaller Companies Fund 500,000,000 -

HDFC Bank Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 333,203,752 246,174,750

JPMorgan India Liquid Fund JPMorgan India Smaller Companies Fund 147,381,657 -

Housing Development Finance JPMorgan India Liquid Fund JPMorgan India Equity Fund 960,590,509 662,953,135Corporation Limited JPMorgan India Smaller Companies Fund 233,165,914 -

Infrastructure Development Finance JPMorgan India Liquid Fund JPMorgan India Equity Fund 191,326,192 155,014,184Company Limited JPMorgan India Liquid Plus Fund

Larsen and Toubro Limited JPMorgan India Liquid Fund JPMorgan India Equity Fund 957,833,357 355,804,232

JPMorgan India Liquid Plus Fund JPMorgan India Smaller Companies Fund 281,970,666 -

LIC Housing Finance Limited JPMorgan India Liquid Plus Fund JPMorgan India Liquid Plus Fund 100,000,000 100,090,340

Tata Consultancy Services Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 204,243,470

23

Schedules forming part of the Balance Sheet as at March 31, 2008 and theRevenue Account for the period November 9, 2007 to March 31,2008Schedu le 8

Notes to the Financial S tatements

1 Organisation

JPMorgan India Smaller Companies Fund (the”Scheme”) is an open-ended equity growth scheme of JPMorgan Mutual Fund (the “Fund”)and was launched on November 9, 2007. JPMorgan Mutual Fund has been sponsored by JPMorgan Asset Management (Asia) Inc.JPMorgan Asset Management India Private Limited incorporated under the Companies Act, 1956 has been appointed as assetmanagement company. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on Novemeber 30, 2007 andreopened for issue and redemption of units on December 26, 2007. The investment objective of the Scheme is to seek to generate longterm capital appreciation from a portfolio that is substantially constituted of equity and equity related securities focussed on smallercompanies. The Scheme has two options - Growth and Dividend Option.

The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remaininvested within the Scheme and will be reflected in the net asset value.


2.1 Basis of Account ing


2.2 Portfo lio Valuation


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

(ii) Non-traded and thinly traded equity securities including those not traded within thirty days prior to the valuation date arevalued at fair value as determined by JPMorgan Asset Management India Private Limited under procuedures approved bythe Trustee of JPMorgan Mutual Fund in accordance with the guidelines for valuation of securities for mutual funds datedSeptember 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 NSE. If no saleis reported at that time, such security is valued at fair value as determined in good faith by JPMorgan Asset ManagementIndia Private Limited under procedures approved by the Trustee of JPMorgan Mutual Fund.

(iv) Non-traded and thinly traded debt securities are valued at fair value as determined by JPMorgan Asset Managament IndiaPrivate Limited under procedures approved by the trustee of JPMorgan Mutual Fund in accordance with the guidelines forvaluation of securities for mutual fund dated September 18, 2000 and amendments thereto, as applicable, issued by theSecurities and Exchange Board of India (SEBI).

(v) Privately placed debt securities are valued at fair value as determined in good faith by JPMorgan Asset Management IndiaPrivate Limited under procedures approved by the Trustee of JPMorgan Mutual Fund

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

(vii) Traded money market securities are valued at the yield at which they are traded on the valuation date. If no sale is reportedat that time, such security is valued at the last traded price plus accretion of the difference between the face value andthe 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 schemes.

Following the issue of guidance note on accounting for investments in the financial statements of the mutual funds by theInstitute 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 investment.Further in respect of eachcategory of investments, the net change in the unrealised appreciation if any, between two balance sheet dates / valuation datesis accounted through the Unrealised Appreciation Reserve and net depreciation if any, is accounted through the RevenueAccount.


2.3 Securi ties Transac tions

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

2.4 Inves tment Income

Interest and dividend income are recorded on an accrual basis.

2.5 Deriva tives

The Scheme enters into derivatives transactions in equity/index futures for the purpose of hedging and portfolio balancing.‘Derivatives margin deposit’ representing margin towards equity derivative contracts entered into by the Schemes is disclosedunder ‘Other Current Assets’.

Futu res

Futures contracts are marked to market daily at the futures settlement price as determined by the exchange. The variation margincalculated as the difference between the trade price or the pervious day’s settlement price, as the case may be, and the currentday’s settlement price is recorded as a receivable or payable.

24

When a contract is closed (squared-off) / settled (on expiry), the difference between the final settlement / square-off price andthe contract price is recognised in the Revenue Account. If more than one futures contracts in respect of the same stock / indexand expiry date, to which the squared-off / settled contract pertains, is outstanding at the time of square-off / settlement of thecontract, the average method is followed for determining the gain/loss.

As at the Balance Sheet date / date of determination, all open futures positions are valued at the futures settlement price asdetermined by the exchange where it is traded. Non-traded futures contract are valued at fair value as per procedures /determined by JPMorgan Asset Management India Private Limited and approved by the Trustee. The unrealised appreciation /depreciation on all open positions is considered for determining the net assets.

2.6 Initial Issue Expenses

Initial issue expenses upto 2.25% of the amount mobilised during the new fund offering period was borne from the entry loadcollected from the investors during the new fund offer period. Expenses over and above the applicable entry load were borne bythe asset management company.

2.7 Net Asset Value for Growth / Dividend Option

The net asset value of the units of the Scheme is determined separately for the units issued under Growth and Dividend Option.

For reporting the net asset value for the Options, daily income earned, including realised and unrealised gain or loss in the valueof investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the unitsoutstanding.


Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit premiumreserve of the Scheme, after an appropriate portion of the issue proceeds and redemption payout is credited or debitedrespectively to the income equalization reserve.

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


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

2.10 Load

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

3 Income Taxes

No provision for taxation has been made as the Scheme qualifies as a recognised mutual fund under Section 10 (23D) of the IncomeTax Act, 1961 of India.

4 Investment Management Fees

The Scheme has paid or provided for investment management and advisory fees payable to the JPMorgan Asset Management IndiaPrivate Limited for managing the Scheme at an average annual rate 0.91% of the average daily net asset value recorded by theScheme. All costs, charges and expenses incurred by JPMorgan Asset Management India Private Limited in the administration andexecution of the activities of the Scheme, except costs allowed to be charged to the scheme under the Regulations are on theiraccount for which they receive investment management and advisory fees.

5 Trustee Fees

In accordance with the Trust Deed dated December 4,2006 between JPMorgan Asset Management (Asia) Inc. (the “Settlor”) andJPMorgan Mutual Fund India Private Limited (the Trustee), the Scheme has paid or provided for trustee fees payable to the Trustee atthe rate of 0.05% of the average daily net asset values recorded by the Schemes of the Fund or Rs. one crore per annum, whicheveris lower.

6 Custod ian Fees


7 Agg regate App recia tion And Deprecia tion In The Value Of Investments

Aggregate appreciation and depreciation in the value of investments is as follows:

March 31, 2008(Rupees)

Equity Shares


- Depreciation 917,698,775

Units in Mutual Fund

- Appreciation -


Equity Futures

- Appreciation 689,263

- Depreciation -

8 Agg regate Fair Val ue of Non-Traded Investments

Aggregate fair value of non-traded (including privately placed) investments as determined by JPMorgan Asset Management IndiaPrivate Limited under the procedures approved by the Trustee as at March 31,2008 is Rs. 158,650,075.

25

9 Aggregate Value Of Purchase And Sale Of Inves tments

The aggregate value of investments purchased and sold (including matured) during the financial period is Rs. 8,351,182,119 (excludingaccretion of discount of Rs. 7,172,795) and Rs. 3,137,463,309 being 551.78% (annualized) and 207.30% (annualized) respectively ofthe average daily net assets.

10 Miscella neous Income

Miscellaneous Income Rs. 93,108 represents amount received from JPMorgan Asset Management India Private Limted on account ofdelayed recording of unit capital transactions calculated as the difference between the net asset value on the date of recording andthe transaction date.

11 Income And Expenses

(a) The total income (including net loss on sale of investments and derivatives and net unrealised depreciation in the value ofinvestments and derivatives) and total expenses during the period is Rs. (1,416,213,083) and Rs. 29,876,286 respecively being(93.57)% (annualized) and 1.97% (annualized) of the average daily net assets.

(b) The expenses have been accrued from the date of closure of the new fund offering period.

12 Discl osure Under Regu lation 25(11) Of The Securi ties And Exchange Bo ard Of Ind ia (Mutu al Fund s) Regu lations, 1996, AsAmended


13 Equ ity Deriva tives Discl osures

Futu res

Details of open interest in equity futures of April 2008 Series as at March 31,2008 :

Underlyi ng Asse t Name Number of Cont racts Units Outstanding

Short Long

Bharat Heavy Electricals Limited 53 3,975

HDFC Bank 33 (6,600)

NTPC Limited 24 (39,000)

Axis Bank Limited 49 11,025

Notional Value of futures contracts bought/sold by the Scheme and outstanding as at March 31, 2008 aggregates to Rs. 33,277,170.Net loss on futures transactions recognised in the Revenue Account for the period ended March 31, 2008 aggregates to Rs. 5,897,952

14 Discl osure Under Regulation 25(8) of the Securi ties and Exchang e Board of Ind ia (Mutu al Fund s ) Regu lation , 1996 as amended(SEBI Regu lations) and in accordance wi th Account ing Standard 18 on ‘Related Party Discl osures’ iss ued by the Institut e ofChartered Account ants of Ind ia (ICAI)

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

(i) Related party rela tionships during the period


JPMorgan Asset Management (Asia) Inc. * Sponsor of the Fund

JPMorgan Mutual Fund Private Limited Trustee to the Schemes of JPMorgan Mutual Fund


JPMorgan India Private Limited Associates of the Investment Manager

Geojit Financial Services Limited

Mahindra And Mahindra Financial Services Limited

Muthoot Fincorp Limited

Mentor Technologies Private Limited

JBF Industries Limited Associates of the Trustee of the Schemes of JPMorgan Mutual Fund

Global Trade Finance Limited

* - There were no transactions during the period


JPMorgan India Equity Fund



(iii ) Key Management Personn el and their Relatives du ring the period





26

(iv) Transac tions during the period

Rupees

Nature of Transaction Trustee Associate of Invest ment Associate of Schemes under Key Management TotalTrustee Manager Investment Common Control Personnel a nd

Manager of Sponsor of their Relativesthe Fund

Purchase of Investments - 500,000,000 - 250,014,822 4,095,693,100 - 4,845,707,922

Sale of Investments 501,138,711 - 250,528,644 2,408,747,543 - 3,160,414,898

Subscription of Units(including switch in anddividend reinvestment) - 20,000,000 - 1,000,000 100,000 21,100,000

Brokerage/ Commission onPurchase/Sale of Investments - - 1,982,565 - - 1,982,565

Brokerage/ Commission onDistribution of Units - - 222,063 - - 222,063

Investment Managementand Advisory Fees - 13,841,804 - - - 13,841,804

Trusteeship Fees and Expenses 649,169 - - - - - 649,169

Investment in units of otherSchemes of the Fund (includingdividend reinvestment) 1,000,000,000 - - - - - 1,000,000,000

Redemption of units ofother Schemes of the Fund - - - - 70,000,000 - 70,000,000

(v) Outstand ing as at Period

Rupees

Nature of Transaction Trustee Associate of Investment A ssociate of Schemes under Key Management TotalTrustee Manager Investment Common Control Personnel a nd


Investment ManagementFees Payable - 2,582,914 - - - 2,582,914

Trusteeship Fees Payable 121,144 - - - 121,144

Brokerage on Purchase/Saleof Investments Payable - - 221 - - 221

Units Outstanding As At Period 14,206,357 - 710,318 663,889,918 71,032 678,877,625

Other Payables - 3,396,045 - 190,800 - 3,586,845

(vi ) Discl osures i n respect of material transac tions wi th parties re ferred to in Note 14 (i) fo r Associa te of Inves tment Manager

November 09, 2007 toMarch 31, 2008

Rupees


Mahindra and Mahindra Financial Services Limited 250,014,822




Muthoot Fincorp Limited 500,000



Muthoot Fincorp Limited 355,159


Brokerage on purchase/sale of Inves tments

J P Morgan India Private Limited 1,982,565

Brokerage/ Commissi on on Dis tribut ion of Units

Geojit Financial Services Limited 207,902

Mahindra and Mahindra Financial Services Limited 14,161

Brokerage on purchase/sale of inves tments payable

JPMorgan India Private Limited 221

27

(vii ) Discl osures i n respect of material transac tions wi th parties re ferred to in Note 14 (i) fo r Associa te of Trustee

November 09, 2007to March 31, 2008

Rupees


Global Trade Finance Limited 500,000,000


Global Trade Finance Limited 501,138,711


JBF Industries Limited 20,000,000


JBF Industries Limited 14,206,357

(viii ) Details of material transac tions wi th respect to parties re ferred to in Note 14 (ii ) fo r Schemes und er common cont rol of theSponsor.


Rupees


JPMorgan India Equity Fund 461,409,592






JPMorgan India Liquid Plus Fund 889,209,145

Inves tments in Units of oth er Schemes of the Fund

JPMorgan India Equity Fund 1,000,000,000



Units Outstand ing as at Period End


Other Payable

JPMorgan India Equity Fund 190,800



Rupees





15 PRIOR YEAR COMPARATIVES

As these are the first financial statements of the Scheme, since the date of its commencement there are no comparative figures.

K. H. VACHHA Fo r and on behalf of Fo r and on behalf ofPartner JPMorgan Asset JPMorgan Mutual Fund




Mr. Kris hnamurthy Vijaya n Mr. Jagadish SalunkheWhole-time director and CEO Chairman


Place: Mumbai Mr. Harshad M PatwardhanDate: September 29, 2008 Head - Equity and Fund Manager

28

Auditors’ Report

To the Trustee

JPMORGAN MUTUAL FUND

1. We have audited the Balance Sheet of JPMorgan Mutual Fund – JPMorgan India Liquid Fund (The “Scheme”) as at March 31, 2008 andthe related Revenue Account for the period September 18, 2007 to March 31, 2008, both of which we have signed under reference tothis report. These financial statements are the responsibility of the Trustee of JPMorgan Mutual Fund and the Management ofJPMorgan Asset Management India Private Limited (the “Management”). Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Ourprocedures included confirmation of securities owned at March 31, 2008 by correspondence with the custodian and others. An auditalso includes assessing the accounting principles used and significant estimates made by the Management as well as evaluating theoverall 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 purposesof 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 andExchange Board of India (Mutual Funds) Regulations, 1996 and amendments thereto, as applicable, and also give respectivelya true and fair view of the state of affairs of JPMorgan Mutual Fund – JPMorgan India Liquid Fund as at March 31, 2008, and itsnet surplus for the period September 18, 2007 to March 31, 2008.

(ii) The Balance Sheet as at March 31, 2008, and the Revenue Account for the period September 18, 2007 to March 31, 2008together with the notes thereon, have been prepared in all material respects in accordance with the accounting policies andstandards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 andamendments thereto, as applicable.

(iii) The method used to value non traded debt securities as at March 31, 2008 as determined by JPMorgan Asset Management IndiaPrivate Limited under procedures approved by the Trustee of JPMorgan Mutual Fund in accordance with the guidelines forvaluation of securities of mutual funds dated September 18, 2000 and amendments thereto as applicable issued by the Securitiesand Exchange Board of India are fair and reasonable.

K. H. VachhaPartner

Membership No. F/30798


PRICE WATERHOUSE


Mumbai

September 29, 2008

29


Schedule Rupees

ASSETS


Deposits 2 1,000,000


TOTAL 3,230,012,303

LIABILITIES

Unit Capital 4 2,786,809,641



TOTAL 3,230,012,303

March 31, 2008 March 31, 2008 March 31, 2008RECONCILIATION OF NET ASSET VALUE PER UNIT Growth Daily Divi dend Tot al

Option ReinvestmentOption


Net Assets as per Balance Sheet

(Total Assets less Current Liabilities and Provisions) (Note 2.5) 1,592,736,633 1,258,937,095 2,851,673,728


Net Asse t Value per Unit 10.418 10.008




K. H. VACHHA Fo r and on behalf of For and on behalf of

Partner JPMorgan Asset Management Ind ia Priva te Limi ted JPMorgan Mutu al Fund IndiaFor and on behalf of Priva te Limi ted

PRICE WATERHOUSE Mr. Kris hnamurthy Vijaya n Mr. Jagadish SalunkheChartered Accountants Whole-time director and CEO Chairman


Mr. Nandkumar R SurtiCIO - Fixed Income and Fund Manager

Place: Mumbai

Date: September 29, 2008

30

Revenue Accoun t for the period September 18, 2007 to March 31, 2008

September 18, 2007 toMarch 31, 2008

Schedule Rupees

INCOME AND GAINS


Net Profit on Sale of Investments (including Net Profit onInter Scheme Sale of Investments Rs.146,505) (Note 2.3) 837,740

Miscellaneous Income (Note 11) (2,101,301)

TOTAL 113,035,099

EXPENSES AND LOSSES


Transfer Agent Fees and Expenses 494,676



Audit Fees 225,000

Selling and Distribution Expenses 739,192

Other Operating Expenses 362,829

3,457,731

Less: Expenses to be Reimbursed by the Investment Manager (Note 7) 315,299

TOTAL 3,142,432

Net Surplus fo r the Peri od 109,892,667

September 18, 2007 September 18, 2007 September 18, 2007to to to

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

Growth Opt ion Daily Divi dendReinvestment

Opt ion Tot al


Net Surplus for the Period by Option 76,244,951 33,647,716 109,892,667

Transfer from Income Equalisation Reserve (Note 2.7) 64,653,125 (99,440) 64,553,685

Dividend Distributions - (25,358,995) (25,358,995)

Dividend Tax Thereon - (7,182,932) (7,182,932)

Balance Transferred to Reserve Fund 140,898,076 1,006,349 141,904,425







Mr. Nandkumar R SurtiCIO - Fixed Income and Fund Manager

Place: Mumbai


31

Schedules forming part of the Balance Sheetas at March 31, 2008 and the Revenue Account fo r the period September 18, 2007 to March 31,2008


Investments Fair Val ue Cost

(Notes 2.2, 2.3, 8, 9 and 12) Rupees Rupees

(Refer to the attached Statement of Portfolio Holding as at March 31, 2008)

Commercial Paper / Certificate of Deposit 3,179,656,091 3,179,656,091

TOTAL 3,179,656,091 3,179,656,091


Deposits Rupees

Margin Deposit with Clearing Corporation of India towards


TOTAL 1,000,000


Oth er Current Asse ts Rupees

Balances with Banks - in Current Account 629,024

Sales Contracts Awaiting Completion - Certificate of Deposits 48,439,300

Inter-Scheme Receivable - Switch - In 134,621

Receivable from Investment Manager 153,267

TOTAL 49,356,212


Unit Capital Rupees Units

Growth Opt ion



Outstanding:


Issued during the period 38,237,598,682 3,823,759,868.206

41,387,598,682 4,138,759,868.206

Redeemed during the period 39,858,751,715 3,985,875,171.528


Daily Divi dend Reinves tment Opt ion



Outstanding:



38,312,602,980 3,831,260,298.065



TOTAL 2,786,809,641 278,680,964.125

32

Schedules forming part of the Balance Sheetas at March 31, 2008 and the Revenue Account fo r the period September 18, 2007 to March 31,2008SCHEDULE 5 Growth Daily Divi dend Tot al

Opt ion ReinvestmentOption

Reserves a nd Surplus March 31, 2008 March 31, 2008 March 31, 2008


Unit Premi um Reserve (Note 2.6)

Added during the period (77,008,410) (31,928) (77,040,338)

Transferred to Revenue Account - - -

At the end of the period (77,008,410) (31,928) (77,040,338)


Added during the period 64,653,125 (99,440) 64,553,685

Transferred to Revenue Account (64,653,125) 99,440 (64,553,685)


Reserve Fund

Balance Transferred from Revenue Account 140,898,076 1,006,349 141,904,425


TOTAL 63,889,666 974,421 64,864,087


Current Liabili ties and Provisi ons Rupees


Investment Management and Advisory Fees 777,166




Audit Fees 225,000


Inter Scheme payable


- For Others 12,000

Dividend Payable 21

Sundry Payables 697,908

TOTAL 378,338,575

SCHEDULE 7 September 18, 2007

Interes t and Disc ount (Note 2.4) to March 31, 2008

Rupees




Deposits 260,822



TOTAL 114,298,660

33

Statement of Portfo lio Holding as at March 31,2008(Referred to in Schedu le 1 to the Balance Sheet as at March 31,2008 and th e Revenue Account

fo r the period September 18, 2007 to March 31, 2008)

Descri pt ion Quant ity Fair Val ue

Rupees

COMMERCIAL PAPER / CERTIFICATE OF DEPOSIT (100 %)

COMMERCIAL PAPER (13.75 %)

NON BANK ING FINANCE COMPANY (100%)

Fullerton India Credit Co. Ltd. (11/11/2008)# 2500 238,589,240

Fullerton India Credit Co. Ltd. (08/05/2008)# 2000 198,593,079

CERTIFICATE OF DEPOSIT (86.25 %)

BANK S (100%)

State Bank Of Mysore (28/05/2008)# 3394 335,279,175

State Bank of India (29/05/2008)# 3000 295,898,795

State Bank Of Patiala (29/05/2008)# 2500 246,715,490

State Bank Of Saurashtra (10/06/2008)# 2500 246,227,606

State Bank Of Mysore (11/06/2008)# 2500 245,828,750

State Bank of Hyderabad (25/09/2008)# 2500 240,699,477

State Bank Of Travancore (03/10/2008)# 2500 240,296,285

ICICI Bank Ltd. (27/02/2009)# 2500 229,322,284

Oriental Bank of Commerce (25/03/2009)# 2500 228,198,144


State Bank Of Patiala (06/06/2008)# 1500 147,760,715

ICICI Bank Ltd. (17/02/2009)# 965 90,173,395

TOTAL (Cost Rs 3,179,656,091) 3,179,656,091

Confirmation has been received from Deutsche Bank AG , Mumbai Branch at the end of financial period for investments held by them.

# Fair value of non-traded and thinly traded debt securities as determined JPMorgan Asset Management India Private Limited underprocedures approved by the trustee 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.

Ann exure I

Discl osure und er Regu lation 25 (11) of the Securi ties and Exchange Board of Ind ia (Mutu al Fund s) Regu lations 1996 as ame nded

JPMorgan Mutu al Fund has made fo llowing investments in companies or their s ubsidiaries w hich ho ld units in excess of 5% of the netasse t value of any sc heme of JPMorgan Mutu al Fund fo r the period ended March 31,2008

Rupees

Name of the Company Schemes invested Investments made by Agg regated for Outstanding as onin by the Company the Schemes of JP Morgan the period under March 31, 2008 at

Mutual Fund in the Regulation 25(11) Market/ FairCompany or its subsidiary at Cost Value

DSP Merrill Lynch Capital Limited JPMorgan India Liquid Fund JPMorgan India Equity Fund 817,500,000 -JPMorgan India Liquid Fund 1,619,110,100 -JPMorgan India Liquid Plus Fund 2,756,549,938 -JPMorgan India SmallerCompanies Fund 192,000,000 -

Finolex Cables Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 410,781,693 -JPMorgan India SmallerCompanies Fund 500,000,000 -

Global Trade Finance Limited JPMorgan India Liquid Plus Fund JPMorgan India Smaller 500,000,000 -Companies Fund

HDFC Bank Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 333,203,752 246,174,750JPMorgan India Liquid Fund JPMorgan India Smaller 147,381,657 -

Companies FundHousing Development Finance JPMorgan India Liquid Fund JPMorgan India Equity Fund 960,590,509 662,953,135Corporation Limited JPMorgan India Smaller

Companies Fund 233,165,914 -Infrastructure Development Finance JPMorgan India Liquid Fund JPMorgan India Equity Fund 191,326,192 155,014,184Company Limited JPMorgan India Liquid Plus FundLarsen and Toubro Limited JPMorgan India Liquid Fund JPMorgan India Equity Fund 957,833,357 355,804,232

JPMorgan India Liquid Plus Fund JPMorgan India SmallerCompanies Fund 281,970,666 -

LIC Housing Finance Limited JPMorgan India Liquid Plus Fund JPMorgan India Liquid Plus Fund 100,000,000 100,090,340Tata Consultancy Services Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 204,243,470 -

34

Schedules forming part of the Balance Sheetas at March 31, 2008 and the Revenue Account fo r the period September 18, 2007 to March 31, 2008Schedu le 8


1 Organisation

JPMorgan India Liquid Fund (the”Scheme”) is an open-ended liquid scheme of JPMorgan Mutual Fund (the “Fund”) and was launchedon September 18, 2007. JPMorgan Mutual Fund has been sponsored by JPMorgan Asset Management (Asia) Inc. JPMorgan AssetManagement India Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset managementcompany. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on September 20, 2007 and reopenedfor issue and redemption of units on September 21, 2007. 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. TheScheme has two options - Growth and Daily Dividend Reinvestment Option.

The Scheme will not declare dividend under the Growth Option in normal circumstances. The income earned on such units will remaininvested within the Scheme and will be reflected in the net asset value.


2.1 Basis Of Accounting

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

2.2 Portfolio Valuation


(i) Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on the National StockExchange of India Limited (NSE). If no sale is reported at that time , such security is valued at fair value as determined ingood faith by JPMorgan Asset Management India Private Limited under procedures approved by the Trustee of JP MorganMutual Fund.

(ii) Non traded and thinly traded debt securities are valued at fair value as determined by JPMorgan Asset Management IndiaPrivate Limited under procedures approved by the Trustee of JP Morgan Mutual Fund in accordance with the guidelines forvaluation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable issued by SEBI.

(iii) Privately placed debt securities are valued at fair value as determined in good faith by JPMorgan Asset Management IndiaPrivate Limited under procedures approved by the Trustee of JPMorgan 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 reportedat that time, such security is valued at the last traded price plus accretion of the difference between the face value andthe 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 interest up to the date ofresale.

Following the issue of the guidance note on accounting for investments in the financial statements of mutual funds by theInstitute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the SEBI Regulations), net unrealisedappreciation/ depreciation in the value of investments is determined separately for each category of investments. Furtherin respect of each category of investments, the change in the net unrealised appreciation if any, between two balancesheet dates/ valuation dates is accounted through the Unrealized Appreciation Reserve and net unrealized depreciation,if any, is accounted through the Revenue Account.


2.3 Securities Transactions

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

2.4 Investment Income

Interest income is recorded on an accrual basis.

2.5 Net Asset Value for Growth / Daily Dividend Reinvestment Option

The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Daily DividendReinvestment Option.

For reporting the net asset value for the Options, daily income earned, including realized and unrealized gain or loss in the valueof investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the unitsoutstanding.


Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit premiumreserve of the Scheme after an appropriate portion of the issue proceeds and redemption payout is credited or debitedrespectively to the income equalization reserve.

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


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

3 Income Taxes

No provision for taxation has been made as the Scheme qualifies as a recognized mutual fund under Section 10 (23D) of the IncomeTax Act, 1961.

35


The Scheme has paid or provided for investment management and advisory fees payable to the JPMorgan Asset Management IndiaPrivate Limited for managing the Scheme at an average annual rate of 0.09% of the average daily net asset values recorded by theScheme. All costs, charges and expenses incurred by JPMorgan Asset Management India Private Limited in the administartion andexecution of the activities of the Scheme, except costs allowed to be charged to the Scheme under the Regulations are on their ownaccount for which they receive investment management fees.

5 Trustee Fees

In accordance with the Trust Deed dated December 4, 2006 between the JPMorgan Asset Management (Asia) Inc. (the “Settlor”) andJPMorgan Mutual Fund Private Limited, the Scheme has paid or provided for trustee fees payable to the Trustee at an annual rate of0.05% of the average daily net asset values recorded by the Schemes of the Fund or Rs. one crore per annum, whichever is lower.

6 Custod ian Fees


7 Limi tation on Expenses

The total expenses chargeable to the Scheme are limited to 0.23% (annualized) of the average daily net assets of the Scheme.JPMorgan Asset Management India Private Limited has borne Rs. 315,299 in excess of the above mentioned percentage of theaverage daily net assets to be charged to the Scheme as total expenses for the period.

8 Agg regate Fair Val ue of Non-T raded/ Priva tely Place d Investments

Aggregate fair value of non traded (including privately placed) investments as determined by JPMorgan Asset Management IndiaPrivate Limited under the procedures approved by the Trustee is Rs. 3,179,656,091.

9 Agg regate Value Of Purchases And Sales Of Inves tments

The aggregate value of investment securities purchased and sold (including matured) during the period is Rs. 52,942,501,980(excluding accretion of discount Rs.77,810,049) and Rs. 49,841,493,678 respectively being 3799.38% (annualized) and3576.84%(annualized) of the average daily net assets.


The total income (including net profit on sale of investments) and expenditure during the period is Rs. 113,035,099 and Rs. 3,142,432respectively being 8.11% (annualised) and 0.23% (annualised) of the average daily net assets.


Miscellaneous income Rs. (2,101,301) represents amount paid to other schemes of the Fund on account of movement of inter schemeswitch out funds to the other schemes calculated for the period on the basis of NSE Mibor.

12 Discl osure Under Regu lation 25(11) Of The Securi ties and Exchang e Bo ard Of Ind ia (Mutu al Fund s) Regu lations, 1996, AsAmended


13 Discl osure Under Regulation 25(8) of the Securi ties and Exchang e Board of Ind ia (Mutu al Fund s ) Regu lation , 1996 as amended(SEBI Regu lations) and in accordance wi th Account ing Standard 18 on ‘Related Party Discl osures’ iss ued by the Institut e ofChartered Account ants of Ind ia (ICAI)

The Scheme has entered into transactions with certain related parties. The information required in this regard in accordance withAccounting 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 du ring the period


JPMorgan Asset Management (Asia) Inc.* Sponsor of the Fund



Mahindra And Mahindra Financial Services Limited Associate of the Investment Manager

LIC Housing Finance Limited

Finolex Industries Limited Associate of the Trustee of the Schemes of JPMorgan Mutual Fund

Bank of Baroda

GTL Infrastructure Limited

Global Trade Finance Limited






(iii ) Key Management Personn el and their Relatives during the period





36

(iv) Transac tions during the period

Rupees

Natu re of Transaction Trustee Associate Invest ment Associate of Scheme of the Key Management Totalof Trustee Manager Investment Fund under Personnel and

Manager Common Control their Relativesof the Sponsor

Purchase of Investments - - - 660,000,000 16,180 ,456,586 - 16,840,456,586

Sale of Investments - - - 660,375,711 18,328 ,284,646 - 18,988,660,357

Subscription of Units(including switch in anddividend reinvestment) - 4,151,408,228 10,053,847 500,036,075 - 3,245,313 4,664,743,463

Redemption of Units(including switch out) - 4,154,764,816 10,053,847 500,101,784 - 3,245,433 4,668,165,880

Dividend(Including dividendreinvested) - 8,228 53,847 36,075 - 40,313 138,463

Investment Managementand Advisory Fees - 1,250,869 - - - 1,250,869

Trusteeship Fees andExpenses 194,262 - - - - 194,262

Reimbrusementof Expenses - - 315,299 - - - 315,299

(v) Outstanding as at period end

Rupees

Nature of Transaction Trustee Associate Investment Asso ciate of Scheme of the Key Management Totalof Trustee Manager Investment Fund under Personnel and

Manager Common Control their Relativesof the Sponsor

Investment ManagementFees Payable - - 777,166 - - - 777,166

Trusteeship Fees Payable 34,189 - - - - - 34,189

Other Payables - - - - 12,000 - 12,000

Other Receivables - - 153,267 - - - 153,267

(vi ) Discl osures i n respect of material transactions wi th parties re ferred to in Note 13(i) fo r Associa te of Inves tment Manager

Rupees

September 18, 2007to March 31, 2008






LIC Housing Finance Limited 300,000,000





Divi dend (Including divi dend reinves ted)


37

(vii ) Discl osures i n respect of material transac tion s wi th parties re ferred to in Note 13(i) for Ass ocia te of Trustee

Rupees



Finolex Industries Limited 88,000,000


GTL Infrastructure Limited 223,408,228

Global Trade Finance Limited 3,440,000,000







GTL Infrastructure Limited 8,228

(viii ) Details of material transac tions wi th respect to parties re ferred to in Note 13 (ii ) fo r Schemes und er common cont rol of theSponsor

Rupees










Other payable



Rupees



Krishnamurthy Vijayan 3,245,313



Divi dend (Including divi dend reinves ted)






PRICE WATERHOUSE Mr. Kris hnamurthy Vijaya n Mr. Jagadish Salunkhe

Chartered Accountants Whole-time director and CEO Chairman


Director Director

Mr. Nandkumar R Surti

CIO - Fixed Income and Fund Manager

Place: Mumbai


38

Auditors’ ReportTo

The TrusteeJPMORGAN MUTUAL FUND

1. We have audited the Balance Sheet of JPMorgan Mutual Fund – JPMorgan India Liquid Plus Fund (The “Scheme”) as at March 31, 2008and, the related Revenue Account for the period September 18, 2007 to March 31, 2008, both of which we have signed under referenceto this report. These financial statements are the responsibility of the Board of Trustees of JPMorgan Mutual Fund and the Managementof JPMorgan Asset Management India Private Limited (the “Management”). Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Ourprocedures included confirmation of securities owned at March 31, 2008 by correspondence with the custodian. An audit also includesassessing the accounting principles used and significant estimates made by the management, as well as evaluating the overallfinancial 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 purposesof 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 andExchange Board of India (Mutual Funds) Regulations, 1996 and the amendments thereto, as applicable, and also give respectivelya true and fair view of the state of affairs of JPMorgan Mutual Fund – JPMorgan India Liquid Plus Fund as at March 31, 2008 andits net surplus for the period September 18, 2007 to March 31, 2008.

(ii) The Balance Sheet as at March 31, 2008, and the Revenue Account for the period September 18, 2007 to March 31, 2008,together with the notes thereon, have been prepared in all material respects in accordance with the accounting policies andstandards specified in the Ninth Schedule of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 andamendments thereto, as applicable.

(iii) The method used to value

(i) privately placed debt securities in good faith and

(ii) non traded and thinly traded debt securities in accordance with the guidelines for valuation of securities for mutual fundsdated September 18, 2000 and amendments thereto as applicable issued by the Securities and Exchange Board of Indiaas at March 31, 2008 as determined by JPMorgan Asset Management India Private Limited under procedures approved bythe Trustee of JPMorgan Mutual Fund are fair and reasonable.





39

Balance Sheet as at March 31, 2008

March 31, 2008

Schedule Rupees


Deposits 2 2,500,000


TOTAL 3,706,492,671

LIABILITIES

Unit Capital 4 3,639,345,145



TOTAL 3,706,492,671

March 31, 2008 March 31, 2008 March 31, 2008RECONCILIATION OF NET ASSET VALUE PER UNIT Daily Divi dend

Growth Opt ion Reinvestment Option Tot alRupees Rupees Rupees

Net Assets as per Balance Sheet(Total Assets less Current Liabilities and Provisions)(Note 2.5) 1,248,220,765 2,446,608,785 3,694,829,550

Number of Units in Issue 119,490,492.498 244,444,021.940 -

Net Asset Value per Unit 10.446 10.009

Notes to the Financial Statements. 8

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


K. H. VACHHA For and on behalf of Fo r and on behalf ofPartner JPMorgan Asset JPMorgan Mutu al Fund





Place : Mumbai Mr. Nand kumar R SurtiDate : September 29, 2008 CIO - Fixed Income and Fund Manager

40

Revenue Account for the period September 18, 2007 to March 31, 2008


Schedule Rupees

INCOME AND GAINS


Net Profit on Sale of Investments (including Net Profit on Inter Scheme Sale ofInvestments of Rs. 1,010,426) (Note 2.3) 10,306,095

Miscellaneous Income (Note 12) 2,267,929

TOTAL 269,621,792

EXPENSES AND LOSSES





Audit Fees 335,000


Other Operating Expenses 521,972

TOTAL 11,650,322

Less: Expenses to be Reimbursed by the Investment Manager (Note 7) 649,662

TOTAL 11,000,660

Net Surplus fo r the Peri od 258,621,132

Net Unrealised Depreciation in Value of Investments (3,731,236)

Net Surplus including Net Unrealise d Deprecia tion in Value of Inves tments 254,889,896

September 18, September 18, September 18,2007 to 2007 to 2007 to

March 31, 2008 March 31, 2008 March 31, 2008Growth Opt ion Daily Divi dend

Reinvestment Opt ion Tot al


Net Surplus for the Period including Net Unrealised Depreciationin Value of Investments by Option 136,967,313 117,922,583 254,889,896

Transfer from Income Equalisation Reserve (Note 2.7) (83,751,886) 1,143,416 (82,608,470)

Dividend Distributions - (95,688,749) (95,688,749)

Dividend Tax thereon - (21,170,257) (21,170,257)

Balance Transferred to Reserve Fund 53,215,427 2,206,993 55,422,420

Notes to the Financial Statements. 8

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







Place : Mumbai Mr. Nand kumar R SurtiDate : September 29, 2008 CIO - Fixed Income and Fund Manager

41

Schedules forming part of the Balance Sheetas at March 31, 2008 and the Revenue Account fo r the period September 31, 2008

March 31, 2008 March 31, 2008Fair Value Cost

Rupees Rupees

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, 2008)

Non Convertible Debentures / Bonds Listed / Awaiting Listing 99,493,354 100,057,700

Privately Placed Non Convertible Deventures / Bonds 597,046,610 600,213,500

Certificate of Deposit 2,603,112,037 2,603,112,037

TOTAL 3,299,652,001 3,303,383,237


SCHEDULE 2

Deposits

Margin Deposit with Clearing Corporation of India towards Collateralized Borrowing and Lending Obligation 2,500,000

TOTAL 2,500,000


SCHEDULE 3

Oth er Current Asse ts

Balances with Banks - in Current Account 1,027,925

Unit Subscriptions Receivable 224,398

Inter-Scheme Receivable for Switch in 377,707,151

Interest Receivable Debentures / Bonds 24,832,466

Receivable from Investment Manager 548,730

TOTAL 404,340,670

Schedu les fo rmi ng part of the Balance Sheet as at March 31, 2008

and the Revenue Account fo r the period September 18, 2007 to March 31, 2008

March 31, 2008 March 31, 2008Rupees Units

SCHEDULE 4

Unit Capital

Growth Opt ion



Outstanding:



26,937,154,613 2,693,715,461.292



Daily Divi dend Reinves tment Opt ion



Outstanding:



18,515,348,418 1,851,534,841.731



TOTAL 3,639,345,145 363,934,514.438

42

Growth Opt ion Daily Divi dend Tot alReinvestment Opt ion

March 31, 2008 March 31, 2008 March 31, 2008Rupees Rupees Rupees

SCHEDULE 5

Reserves a nd Surplus

Unit Premi um Reserve (Note 2.6)

Added during the period 100,413 (38,428) 61,985

At the end of the period 100,413 (38,428) 61,985


Added during the period (83,751,886) 1,143,416 (82,608,470)

Transferred to Revenue Account 83,751,886 (1,143,416) 82,608,470


Reserve Fund

Balance Transferred from Revenue Account 53,215,427 2,206,993 55,422,420


TOTAL 53,315,840 2,168,565 55,484,405


SCHEDULE 6

Current Liabili ties and Provisi ons






Audit Fees 335,000



Inter Scheme payable


- For Others 40,673

Dividend Distribution Tax Payable 1,599,938

Sundry Payables 191,204

TOTAL 11,663,121


Rupees

SCHEDULE 7

Interest and Disc ount(Not e 2.4)




Collateralized Borrowing and Lending Obligation 147,347

Margin Deposit with the Clearing Corporation of India Limited 582

Deposits 260,822

TOTAL 257,047,768

Schedules forming part of the Balance Sheetas at March 31, 2008 and the Revenue Account fo r the period September 31, 2008

43

Description Quant ity Fair ValueRupees

NON CONVERTIBLE DEBENTURES/BONDS LISTED / AWAITING LISTING (3.02 %)

FINANCE (100%)

9.22% Sundaram Finance Limited (29/10/2009)# 100 99,493,354

Total (Cost Rs. 100,057,700) 99,493,354

PRIVATELY PLACED NON CONVERTIBLE DEBENTURES/BONDS (18.09 %)

FINANCE (16.76%)

9.75% LIC Housing Finance Ltd. (24/09/2009)* @ 100 100,090,340

Total (Cost Rs. 100,000,000) 100,090,340

NON BANK ING FINANCE COMPANY (83.24%)

9.05% GE Capital Services India (17/10/2009)* 500 496,956,270

Total (Cost Rs. 500,213,500) 496,956,270

Total (Cost Rs. 600,213,500) 597,046,610

CERTIFICATE OF DEPOSIT (78.89 %)

BANK S (100 %)

ICICI Bank Ltd. (10/03/2009)# 5000 456,945,499

Industrial Develop Bank Of India (12/03/2009)# 4500 411,880,781

State Bank Of Bikaner & Jaipur (29/05/2008)# 2500 246,841,598


National Bank for Agri. & Rural Dev (09/10/2008)# 2500 239,738,552

Canara Bank (15/10/2008)# 2500 239,679,140

State Bank Of Travancore (25/11/2008)# 2500 234,853,360

State Bank Of Bikaner & Jaipur (08/12/2008)# 2500 234,159,474

Punjab National Bank (06/01/2009)# 2500 232,635,440

ICICI Bank Ltd. (17/02/2009)# 645 60,271,336

Total (Cost Rs. 2,603,112,037) 2,603,112,037

Total Investments (Cost Rs. 3,303,383,237) 3,299,652,001

Confirmation has been received from Deutsche Bank AG , Mumbai Branch at the end of financial period for investments held by them.

# Fair value of non-traded and thinly traded debt securities as determined by JPMorgan Asset Management India Private Limited underprocedures approved by the Trustee in accordance with the guidelines for valuation of securities for mutual funds dated September 18, 2000and amendments thereto as applicable issued by Securities and Exchange Board of India.

* Fair value of privately placed securities as determined in good faith by JPMorgan Asset Management India Private Limited underprocedures approved by the Trustee.

@ Investment in companies which have invested more than 5% of the net asset value of any scheme of JPMorgan Mutual Fund.

Statement of Portfo lio Holding as at March 31,2008(Referred to in Schedu le 1 to the Balance Sheet as at March 31,2008 and the Revenu e Account fo r the period September 18, 2007 toMarch 31, 2008)

44

Annexure IDiscl osure und er Regu lation 25 (11) of the Securi ties and Exchange Board of Ind ia (Mutu al Fund s) Regu lations 1996 as amendedJPMorgan Mutu al Fund has made fo llowing investments in companies or their s ubsidiaries w hich ho ld units in excess of 5% of the net

asse t value of any sc heme of JPMorgan Mutu al Fund fo r the period end ed March 31, 2008

Rupees

Name of the Company Schemes invested Investments made by Agg regated for Outstanding as onin by the Company the Schemes of JP Morgan the period under March 31, 2008 at

Mutual Fund in the Regulation 25(11) Market/ FairCompany or its subsidiary at Cost Value

DSP Merrill Lynch Capital Limited JPMorgan India Liquid Fund JPMorgan India Equity Fund 817,500,000 -JPMorgan India Liquid Fund 1,619,110,100 -JPMorgan India Liquid Plus Fund 2,756,549,938 -JPMorgan India SmallerCompanies Fund 192,000,000 -

Finolex Cables Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 410,781,693 -JPMorgan India SmallerCompanies Fund 500,000,000 -

Global Trade Finance Limited JPMorgan India Liquid Plus Fund JPMorgan India Smaller 500,000,000 -Companies Fund

HDFC Bank Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 333,203,752 246,174,750JPMorgan India Liquid Fund JPMorgan India Smaller 147,381,657 -

Companies FundHousing Development Finance JPMorgan India Liquid Fund JPMorgan India Equity Fund 960,590,509 662,953,135Corporation Limited JPMorgan India Smaller

Companies Fund 233,165,914 -Infrastructure Development Finance JPMorgan India Liquid Fund JPMorgan India Equity Fund 191,326,192 155,014,184Company Limited JPMorgan India Liquid Plus FundLarsen and Toubro Limited JPMorgan India Liquid Fund JPMorgan India Equity Fund 957,833,357 355,804,232

JPMorgan India Liquid Plus Fund JPMorgan India SmallerCompanies Fund 281,970,666 -

LIC Housing Finance Limited JPMorgan India Liquid Plus Fund JPMorgan India Liquid Plus Fund 100,000,000 100,090,340Tata Consultancy Services Limited JPMorgan India Liquid Plus Fund JPMorgan India Equity Fund 204,243,470 -

45

Schedules forming part of the Balance Sheetas at March 31, 2008 and the Revenue Account for the period September 18, 2007 to March 31, 2008

Schedu le 8


1 Organisation

JPMorgan India Liquid Plus Fund (the”Scheme”) is an open-ended income scheme of JPMorgan Mutual Fund (the “Fund”) and waslaunched on September 18, 2007. JPMorgan Mutual Fund has been sponsored by JPMorgan Asset Management (Asia) Inc. JPMorganAsset Management India Private Limited incorporated under the Companies Act, 1956 has been appointed as the asset managementcompany. The duration of the Scheme is perpetual. The Scheme closed for initial subscription on September 20, 2007 and reopened forissue and redemption of units on September 21, 2007. The investment objective of the Scheme is to provide liquidity and optimalreturns to the investors by investing primarily in a mix of short term debt and money market instruments which results in a portfoliohaving marginally higher maturity and moderately higher credit risk as compared to a liquid fund at the same time maintaining a balancebetween safety and liquidity. The Scheme has two options - Growth and Daily Dividend Reinvestment Option.The Scheme will notdeclare dividend under the Growth Option in normal circumstances. The income earned on such units will remain invested within theScheme and will be reflected in the net asset value.


2.1 Basis of Accounting


2.2 Portfolio Valuation


(i) Debt securities listed on a recognised stock exchange are valued at the last quoted closing price on the National StockExchange of India Limited (NSE). If no sale is reported at that time, such security is valued at fair value as determined ingood faith by JPMorgan Asset Management India Private Limited under procedures approved by the Trustee of JP MorganMutual Fund.

(ii) Non traded and thinly traded debt securities are valued at fair value as determined by JPMorgan Asset Management IndiaPrivate Limited under procedures approved by the Trustee of JPMorgan Mutual Fund in accordance with the guidelines forvaluation of securities for mutual funds dated September 18, 2000 and amendments thereto, as applicable issued by SEBI.

(iii) Privately placed debt securities are valued at fair value as determined in good faith by JPMorgan Asset Management IndiaPrivate Limited under procedures approved by the Trustee of JPMorgan 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 reportedat that time, such security is valued at the last traded price plus accretion of the difference between the face value andthe 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 interest up to the date ofresale.

Following the issue of the guidance note on accounting for investments in the financial statements of mutual funds by theInstitute of Chartered Accountants of India (pursuant to the Eleventh Schedule of the SEBI Regulations), net unrealisedappreciation/ depreciation in the value of investments is determined separately for each category of investments. Furtherin respect of each category of investments, the change in the net unrealised appreciation if any, between two balance sheetdates/ valuation dates is accounted through the Unrealized Appreciation Reserve and net unrealized depreciation, if any,is accounted through the Revenue Account.Unrealised appreciation is reduced from the distributable income at the time ofincome distribution.

2.3 Securities Transactions

Investment securities transactions are accounted for on a trade date basis. The Scheme uses the average cost method fordetermining the reliased gain or loss on sale of investments. Transaction for purchase and sale of investments are recognisedas of the trade date.

2.4 Investment Income

Interest income is recorded on an accrual basis.

2.5 Net Asset Value for Growth / Daily Dividend Reinvestment Option

The net asset value of the units of the Scheme is determined separately for the units issued under the Growth and Daily DividendReinvestment Option.

For reporting the net asset value for the Options, daily income earned, including realized and unrealized gain or loss in the valueof investments and expenses incurred by the Scheme are allocated to the Options in proportion to the value of the unitsoutstanding.


Upon issue and redemption of units, the net premium or discount to the face value of units is adjusted against the unit premiumreserve of the Scheme after an appropriate portion of the issue proceeds and redemption payout is credited or debitedrespectively to the income equalization reserve.The unit premium reserve is available for dividend distribution except to theextent 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 equalisation reserve fordetermining the net surplus / deficit, transferred from / to unit premium reserve.

3 Income Taxes

No provision for taxation has been made as the Scheme qualifies as a recognized mutual fund under Section 10 (23D) of the IncomeTax Act, 1961.

46


The Scheme has paid or provided for investment management and advisory fees payable to the JPMorgan Asset Management IndiaPrivate Limited for managing the Scheme at an average annual rate of 0.18% of the average daily net asset values recorded by theScheme. All costs, charges and expenses incurred by JPMorgan Asset Management India Private Limited in the administartion andexecution of the activities of the Scheme, except costs allowed to be charged to the Scheme under the Regulations are on their ownaccount for which they receive investment management and advisory fees.

5 Trustee Fees

In accordance with the Trust Deed dated December 4, 2006 between the JPMorgan Asset Management (Asia) Inc. (the “Settlor”) andJPMorgan Mutual Fund India Private Limited (the Trustee), the Scheme has paid or provided for trustee fees payable to the Trustee atan annual rate of 0.05% of the average daily net asset values recorded by the Scheme of the Fund or Rs. one crore per annum,whichever is lower.

6 Custod ian Fees


7 Limi tation on Expenses

The total expenses chargeable to the Scheme are limited to 0.36% (annualised) of the average daily net assets of the Scheme.JPMorgan Asset Management India Private Limited has borne Rs. 649,662 in excess of the above mentioned percentage of the averagedaily net assets to be charged to the Scheme as total expenses for the period.

8 Agg regate App recia tion And Deprecia tion In The Value Of Investments

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

March 31, 2008 (Rupees)

Non Convertible Debentures and Bonds Listed / Awaiting Listing

- Appreciation -

- Depreciation 564,346

Privately Placed Non Convertible Debentures / Bonds

- Appreciation 90,340


9 Agg regate Fair Val ue of Non-Traded/ Priva tely Place d Investments

Aggregate fair value of non traded (including private placed)/thinly traded investments as determined by JPMorgan Asset ManagementIndia Private Limited under the procedures approved is Rs. 3,299,652,001

10 Agg regate Value Of Purchases And Sales Of Investments

The aggregate value of investment securities purchased and sold (including matured) during the period is Rs. 77,147,951,103(excluding accretion of discount of Rs. 144,755,641) and Rs. 73,999,629,602 respectively being 1311.56% (annualised) and 2423.38%(annualised) of the average daily net assets.


The total income (including net profit on sale of investments and net unrealized depreciation in value of investments) and expenditureduring the period is Rs. 265,890,556 and Rs. 11,000,660 being 8.71% (annualised) and 0.36% (annualised) of the average daily netassets.


Miscellaneous income Rs. 2,267,929 comprises of amounts aggregating Rs. 2,101,301 received from other schemes of the Fund onaccount of movement of inter scheme switch in funds from the other schemes calculated for the period on the basis of NSE Mibor andRs. 166,628 received from JPMorgan Asset Management India Private Limited on account of recording of unit capital transactionscalculated as the difference between the net asset value on the date of recording and the transaction date.

13 Discl osure Under Regulation 25(11) Of The Securi ties And Exchange Board Of India (Mutu al Fund s) Regulations, 1996, As Amended


14 Discl osure Under Regu lation 25(8) of the Securi t ies and Exchange Board of Ind ia (Mutu al Fund s ) Regulation , 1996 as amended(SEBI Regu lations) and in accordance wi th Account ing Stand ard 18 on ‘Related Party Discl osures’ iss ued by the Institut e ofChartered Account ants of Ind ia (ICAI)

The Scheme has entered into transactions with certain related parties. The information required in this regard in accordance withAccounting 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 rela tionships during the period


JPMorgan Asset Management (Asia) Inc. * Sponsor of the Fund



Mahindra And Mahindra Financial Services Limited Associate of the Investment Manager

LIC Housing Finance Limited

Finolex Industries Limited Associate of the Trustee of the Schemes ofGTL Infrastructure Limited JPMorgan Mutual FundGlobal Trade Finance Limited

* - There were no transactions during the period.

47

(ii ) Schemes of the Fund , und er common cont rol of the Spon sor during the Period




(iii ) Key Management Personn el and their Relatives du ring th e Period




* - There were no transactions during the period.

(iv ) Transac tions during the periodRupees

Natu re of Transaction Trustee Associate of Invest ment Associate of Schemes under Key Management TotalTrustee Manager Investment Common Control Personnel a nd


Purchase of Investments - - - 410,014,438 17,258,228,916 - 17,668,243,354

Sale of Investments - - - 310,184,769 20,080,748,815 - 20,390,933,584

Subscription of Units (includingswitch in and dividend reinvestment) - 1,925,389,570 10,058,842 500,565,416 - 11,145,511 2,447,159,339

Redemption of Units(including switch out) - 1,929,056,018 10,058,842 300,672,222 - 3,977,469 2,243,764,551

Dividend(Including dividend reinvested) - - 58,842 463,632 - 77 522,551

Investment Manager and Advisory Fees - - 5,533,128 - - - 5,533,128

Trustee Fees and Expenses 134,782 - - - - - 134,782

Reimbursement of Expenses - - 649,662 - - - 649,662

(v) Outstanding as at period endRupees

Nature of Transaction Trustee Associate of Investment A ssociate of Schemes under Key Management TotalTrustee Manager Investment Common Control Personnel a nd


Investment Management andAdvisory Fees Payable - - 2,621,840 - - - 2,621,840

Trustee Fees Payable 19,618 - - - - - 19,618

Units Outstanding As AtPeriod End - - - 200,687,316 - 7,300,653 207,987,969

Other Payables - - - - 40,673 - 40,673

Other Receivables - - 548,730 - - - 548,730

(vi ) Discl osures i n respect of material transactions wi th parties re ferred to in Note 14 (i) in respect of Associa te of Inves tmentManager


Rupees
















48

(vii ) Discl osures i n respect of material transac tions wi th parties re ferred to in Note 14 (i) in respect of Associa te of Trustee


Rupees









(viii ) Details of material transac tions wi th respect to parties re ferred to in Note 14 (ii ) fo r Schemes und er common cont rol of theSponsor.


Rupees









Other Payable


(ix ) Discl osures i n respect of material transactions wi th parties re ferred to in Note 14 (iii ) fo r key ma nagement personn el andtheir rela tives


Rupees






Krishnamurthy Vijayan 77










Place : Mumbai Mr. Nandkumar R SurtiDate : September 29, 2008 CIO - Fixed Income and Fund Manager

JPMorgan JPMorg an JPMorg an JPMorg anInd ia India Smalle r Ind ia India

Equity Fund Comp anies Fund L iquid Fund L iqu id Plus Fund

Period ended Period ended Period ended Period endedMarch 31, 2008 March 31, 2008 March 31, 2008 March 31, 2008

1. NAV per unit (Rs.):

Open----noitpO htworG----noitpO tnemtsevnieR dnediviD yliaD

HighGrowth Option 15.346 10.622 10.4178 10.4461Daily Dividend Reinvestment Option 15.346 10.622 10.0079 10.0089

Low909.9noitpO htworG 6.612 10.0000 10.0000

Daily Dividend Reinvestment Option 9.568 6.612 10.0000 10.0000

EndGrowth Option 10.915 7.263 10.4178 10.4461Daily Dividend Reinvestment Option 10.138 7.263 10.0079 10.0089

2. Closing Assets Under Management (Rs. in Lakhs)92.849,6347.615,8221.212,8350.138,401dnE

Average (AAuM) 99,074.59 41,613.68 26,562.67 58,821.34

3. Gross income as % of %38.8%11.8%52.81-%63.21MuAA

4. Expense Ratio:

%63.0%32.0%69.1%40.2)esiw nalp( MuAA fo % sa esnepxE latoT.ab. Management Fee as % of AAuM %81.0%90.0%19.0%20.1)esiw nalp(

5. Net Income as a percentage %74.8%88.7%12.02-%23.01MuAA fo

6. Portfolio turnover 20.3oitar 0.75 - -

7. Total Dividend per unit distributedduring the year / period (plan wise)

Daily Dividend Reinvestment Option-Individual / HUF 1.000 - 0.31356428 0.37495335Daily Dividend Reinvestment Option-Others 1.000 - 0.31356428 0.34897780

8. Returns:

a. Last One YearANANANANnoitpO/nalP htworG

ANANkramhcneB

b. Since Inception%51.9noitpO/nalP htworG -27.37% 4.18% 4.46%

%65.3%65.3%97.92-%37.11kramhcneB

49

His torical Per Unit Statistics for the period ended March 31, 2008

LIST OF COLLECT ION CENTRES

JPMorgan Asset Management India Priva te Limited

Ahm edabad : 302, Megha House, Near Law Garden, Mithakhali Six Road, Navrangpura, Ahmedabad - 380 006.

Bengaluru : 501, 5th Floor, Prestige Centre Point, 7, Cunningham Road, Bengaluru - 560 052.

Chennai : TV Loganathan Towers, II Floor, No. 95 V M Street, R K Salai, Mylapore, Chennai - 600 004.

Kolkata : Block B, 5th Floor, 22 Camac Street, Kolkata - 700 016.

Mumb ai : Kalpataru Synergy, 3rd Floor, West Wing, Santacruz (East), Mumbai - 400 055.

Delhi : Shangri-la Hotel, Business Suite - 507, 19, Ashoka Road, Connaught Place, New Delhi - 110 001.

Pune : Office No. 301, Nandadeep, Above Odyssey Shop, F C Rd, Shivajinagar, Pune - 411 005.

Deutsche Investor Services Private Limited

Investor Service Centres: The Registrar will be the official point of acceptance for electronic transactions received from specified banks, financialinstitutions, distribution channels, etc. (mobilised on behalf of their clients) with whom the AMC has entered / may enter into specific arrangements forpurchase / sale / switch of Units

Agra : Unit No.13/A, 1st Floor, Kailash Tower, Block No.E 16/8, Sanjay Place, Agra - 282 002. Ahmedabad : M-Square Building, First Floor, SwastikChar Rasta, B/H City Centre, Opp Om Complex, Off CG Road, Ahmedabad - 380 009 Gujarat. Ajmer : No.25, K.C Complex, opposite Subhash Udhyan,Ajmer - 305 001. Amaravati : Shop No.5, 1st Floor, Gulshan Towers, Jaistamb Chowk, Near Pancsheel Theatre, Amravati - 444 601 Amr itsar : FrontPortion, 2nd Floor, 77, Railway Link Road, Amritsar - 143 001. Aur angabad : Alaknanda Complex, Shop no-4, Adalat Rd, Near Baba Petrol Pump,Aurangabad - 431 005. Bangalore : 104, 1st Floor, Prestige Meredian 1 M G Road, Bangalore - 560 001, Karnataka. Bareilly : 320, Akash Floors, CityStation Road, Civil Line, Bareilly - 243 001. Belgaum : Sri Sukh Sagar Shopping Complex, Ground Floor, CTS# 10618/1/2/3, Nehru Nagar, Belgaum -590 010. Bhavnagar : Sterling Point , 2nd floor (220-221), Waghawadi Road, Bhavnagar - 364 002. Bhillai : Shyam Shakuntala Complex, 209, GroundFloor, 2/4, Nehru Parisar, Near Nehru Nagar Rail Crossing, Bhillai - 490 022. Bhop al : Vijay Stambh BG-17, Ground Floor, MP nagar Opp UTI, Bhopal,MP - 462 011. Bhub aneswar : Metro House, Shop No.5, A 410, Vanivihar, Bhubaneshwar - 751 004, Orissa. Calic ut : C 14, C15, 2nd Floor, Sky TowerShopping Mall, Municipal Corporation Door No 5/3283, Situated at Bank Road Junction, Kozhikode, Calicut - 673 001. Chand igarh : SCO 154-155,Sector 17 C, 2nd Floor, Deepak Towers, Chandigarh, (U.T) - 160 017. Chennai : Pasla Foreign Exchange Bldg., Next to Tata Motors, 1st Floor, DoorNo.141, Anna Salai, Chennai - 600 002, Tamil Nadu. Cochin : 3rd Floor, Block B, BAB Towers, Atlantis, M G Road, Ernakulam, Kochi - 682 015, Kerala.Coimbator e : No.424-E, 2nd Floor, Red Rose Towers, D B Road, R S Puram, Coimbatore - 641 002, Tamil Nadu. Cuttack : 1st Floor, Brajraj Bhawan,Link Road, Opposite New LIC Colony, Cuttack - 753012, Orissa. Dehradun : Shop No.25, Ground Floor, Radha Palace Shopping Complex, 78 RajpurRoad, Dehradun - 248001, Uttarakhand. Durg apur : 3 rd Floor, City Plaza-II, City Residency, Burdwan, Durgapur - 713 216. Erod e : No.859, N.S.T.V.Building, 1st Floor, Opp Shivranjani Hotel, Brough Road, Erode - 638 001. Goa : Afran Plaza, 1st Floor, Shop No.F1&F2, Near Don Bosco High School,M.G Road, Panjim, Goa - 403 001. Gorakhpur : Room No 12, First Floor, Mangalam Tower, 13 A, Civil Lines, Golghar, Gorakhpur - 273 001.Guntur : 2nd Floor, Aditya Complex, 6-19-35, 13th Main Road, Arundalpet, Guntur - 522 002, Andhra Pradesh. Gurg aon : Ground Floor, Vatika Artium,Block-B, Sector-53, Gurgaon, Haryana -122 002. Guwahati : Ganapati Enclave, Opposite Bora Service Station, G S Road, Ulubari, Guwahati - 781 007.Gwali or : Ganapati Plaza, 1st Floor, City Centre, Gwalior - 474 011. Hubli : Shop No G-2 , Revankar Comfort, Door No 450/1A, Deshpande Nagar,Hubli - 580 030 Hyderabad : 6-3-1093/UG-3 (A & B), Vintage Boulevard, Raj Bhavan Road, Somajiguda, Hydrebad - 500 082 Indor e : B3, Aru Plaza,582 M.G Road, Opp Hukumchand Ghantaghar, Indore, M.P - 452 001. Jabalpur : Mezzanine Floor, Chandrika Towers, 55, Model Road, Near ShastriBridge, Napier Town, Jabalpur - 482 002, Madhya Pradesh. Jaipur : No.605, Plot No.0-15, Ashok Marg, C-Scheme, Green House, Jaipur - 302 001.Jalla ndh ar : Rachna Towers, 1st Floor, GT Road, Jalandhar - 144 003. Jamnagar : 106, Madhav Complex, P. N. Marg, Opp. D.K.V. College, Jamnagar- 361 004. Jamshedpur : Bharat Business Center, Ground Floor, Ram Mandir Area, Beside Mithiala Motors, Bistupur, Jamshedpur - 831 001, Bihar.Jodhpur : Office No 209, 2nd Floor, Aadeshwar Tower, Chopasni Road, Jodhpur -342 001. Kanpur : Office No.216 & 217, 2nd Floor, Kan Chambers,14/113, Civil Lines, Kanpur - 208 001, Uttar Pradesh. Kolhapur : Shop No.84, Gemstone Rao Bahadur Vichare Complex, 517/2, New Shahupuri, Near ST Stand, Kolhapur - 416 001, Maharashtra. Kolka ta : Lords Building, 7/1, Lord Sinha Road, Block No.GF/D, Ground Floor, Kolkata - 700 071.Lucknow : Sky Hi Chambers, F-1, 1st Floor, Park Road, Lucknow - 226 001, Uttar Pradesh. Ludh iana : Fortune Chambers, S.C.O, 16-17, 4th Floor,Feroze Gandhi Market, Opp Ludhiana Stock Exchange, Ludhiana - 141 001. Madur ai : Plot No 10, Vishnu Plaza, Near P T R Bridge, Shop No 16, GrFloor Reliance Money, Vaigai Colony, 80ft Road, Annanna Nagar, Madurai - 625 020. Mangalore : “Manasa” Towers , 2nd Floor, Kodialbail, M.G Road,Mangalore, Karnataka - 575 003. Moradabad : Shop No 7, Sai Sadan Complex, Ground Floor, Jail Road, Moradabad - 244 001. Mumb ai : ProspectChambers, G 02 B, D N Road, Fort, Mumbai - 400 001, Maharashtra. Mysore : Shop No7, Cellar, Mythri Arcade,Saraswathipuram, Mysore, Karnataka -570 009. Nagpur : Shop No.10, Prathiba Sankul, North Ambazari Road, Nagpur, Maharashtra - 440 010. Nasik : Suyojit Chambers, Ground Floor, G-2,Trimbak Naka, Near CBS, Nasik - 422 002. Nellore : Shop No.1, Ravula Arcade Shopping Complex, GNT Road, Nellore - 524 001. New Delhi : 910/911 A, 9th Floor, Narain Manzil, Barakhamba Road, New Delhi - 110 001. Panipat : N K Towers, 2nd Floor, Near IB College, G.T Road, Panipat,-Hariyana - 132 103. Patiala : 2nd floor, 29, New Leela Bhawan, Patiala -147 001. Patna : Hari Niwas, Shop No.209, 2nd Floor, Dak Bungalow Road,Patna - 800 001. Pune : Shop No.7, Ground Floor, Jalan Corner CTS No.538 & 539, Narayan Peth, N C Kelkar Marg, Pune - 411 030, MaharashtraRajamundr y : 36-7-8, 1st Floor, SBI Complex, Stadium Road, Innespet, Rajamundry, Andhra Pradesh - 533 101. Rajkot : L-1, Puja CommercialComplex, Harihar Chowk, Near GPO, Panchnath Plot, Rajkot - 360 001. Ranchi : Shop No22, AC Market, G.E.L. Church Complex, Main Road, Ranchi -834 001. Rour kela : Triveni Complex, 2nd Floor, Madhusudan Marg, Opp, Hotel Sukh Sagar, Rourkela - 769 001. Salem : VII A, 2nd Floor, DivyaTowers, Fort, Main Road, Shevapet, Salem - 636 001. Sambalpur : Quality Mansion, Ground Floor, Main Road, Nayapara, Gole Bazar, Sambalpur - 768001, Orissa. Silli gur i : Gitanjali Complex, Co-operation Bank, 2nd Floor, Sevoke Road, Opp PCM Tower, Siliguri - 734 001. Surat : Shop No.G12,Ground Floor, Jolly Plaza, Opp Atwagate Police Station, Atwagate, Surat - 395 001, Gujarat. Trichy : Aravindh Plaza, 1st Floor , NO-2, Fort StationRoad, Trichy - 620 002. Trivandrum : 2nd Floor, Annas Arcade, Tc 26/15(80),Opp AG’s Office, Spencer Junction, M G Road, Trivandrum - 695 001.Udaipur : Daulat Chambers, 406, 3rd Floor, 4-D, Sardarpura, Udaipur, Rajasthan - 313 001. Vadod ara : No.301, Gokulesh 2, R C Dutt Road, Alkapuri,Vadodara - 390 005, Gujarat. Valsad : 303 K.B.Mall, Hallar Road, Old Vasant Talkies, Valsad - 396 001. Varanasi : Kuber Chambers, 3rd Floor, Unit 16,Rath Yatra Crossing, Varanasi.- 221 010. Vijaya wada : Door No. 39-1-80, Saptagiri Complex, 1st Floor, M G Road, Labbipet, Vijayawada - 520 010.Vizag : Shop No.2, Ground Floor, Redname Regency, Dwarka Nagar, Vizag - 530 001, Andhra Pradesh. Warangal : Shop No. C-40, 1st Floor, GreenSquare, Opposite Public Garden, Hanamkonda, Warrangal, Andhra Pradesh - 506 001.

The above list is subject to change from time to time. The investors are advised to contract the Investor Service Centre / Office of the AMC for exactlocation and contact numbers of the Collecting Bankers / AMC offices / ISCs.

Annual report Cover - JPMorgan AMC Annual Report

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