A Summer Project Report On

Awareness Regarding Mutual Fund

At

Submitted In the partial fulfillment of the Degree of Master of Business Administration By Chirag Naresh Patel Enrollment No. EIILMU/09/F718 Under the Guidance of: Prof. Nimesh Bhatt International Business School Under the Supervision: Mr. Janardan Vayeda Branch Manager, India Infoline Ltd. Submitted To: International Business School EIILM University Ahmedabad

July, 2010 BATCH: 2009-2011 1

INDEX
Rank
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42.

Particulars Certificate by Guide

Certificate by Mentor Candidates Statement Preface Acknowledgement Executive Summery Objective of Study About Mutual Fund Introduction History of Mutual Fund Organization Of Mutual Fund The way and type to invest in Mutual Fund Regulatory of mutual Fund Scheme Types of Mutual Fund Scheme SEBI Registered Mutual Fund Points to measure M.F Performance Procedure for registering M.F. with SEBI How to reduce risk while investing Growth in assets in Management Advantages of Mutual Fund Disadvantage of Mutual Fund Company Details Snapshot of India Infoline Ltd History Milestones About India Infoline Ltd. Vision statement Management team Contact details Companys structure Unique Approaches Assets under Management NFO Period from 1st June to 3rd July 2010 Invest online Philosophy on Corporate Governance Financial Statement of IIFL Research Methodology Research Methodology Hypothesis Data analysis Summery and Conclusion Findings Suggestion Limitations Conclusion Bibliography Annexure

Page No.
4 5 6 7 8 9 10 11 12 14 17 19 20 21 24 26 27 28 30 31 33 34 35 36 37 39 40 41 44 45 48 49 50 51 53 55 57 58 59 69 83 84 85 86 87 88 89

43. 44.

Questionnaire Different Terminology

89 92

CERTIFICATE BY THE GUIDE

This is to certify that the contents of this report entitled Awareness Regarding Mutual fund by Chirag Naresh Patel (Enrollment No. EIILMU/09/F718) submitted to International Business School for the Award of Master of Business Administration (MBA Semester-II) is original research work carried out by him/her/them under my supervision. This report has not been submitted either partly or fully to any other University or Institute for award of any degree or diploma.

(Prof. Nimesh Bhatt), Professor & Head, International Business School, EIILM University, Ahmedabad. 3

Date: 10 July 2010 Place: Ahmedabad

CERTIFICATE BY THE MENTOR

This is to certify that the contents of this report entitled Awareness Regarding Mutual Fund by Chirag Naresh Patel (Enrollment No. EIILMU/09/F718) submitted to International Business School, Ahmedabad for the Award of Master of Business Administration (MBA Semester-II) is original research work carried out by him/her under my mentoring. I, hereby certify the authenticity of the data and facts mentioned in the report. This report has not been submitted either partly or fully to any other University or Institute for award of any degree or diploma. (Prof. Nimesh Bhatt), Professor & Head, International Business School, EIILM University, Ahmedabad. Date: 10 July 2010 Place: Ahmedabad

CANDIDATES STATEMENT
I hereby declare that the work incorporated in this report entitled Awareness Regarding Mutual Fund in partial fulfillment of the requirements for the award of Master of Business Administration (Sem.- II) is the outcome of original study undertaken by me and it has not been submitted earlier to any other University or Institution for the award of any Degree or Diploma. Date : 10 July 2010 Place : Ahmedabad Chirag Naresh Patel (Enrollment No. EIILMU/09/F718)

PREFACE
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In todays trend of cut-throat competition, Masters of Business Administration (MBA) is sure to have an edge over their counterparts. MBA education brings its students in direct contact with the real corporate world through industrial training. The MBA program provides its students with an in depth study of various managerial activities that are performed in any organization. A detailed analysis of managerial activities conducted in various departments like production, marketing, finance, human resources, export-imports, credit dept, etc. gives the student a conceptual idea of what they are expected to manage , how to manage and how to obtain the maximum output through minimum inputs and how to minimize the wastage of resources. I have undergone my summer training at India Infoline Ltd. It is one of the leading mutual fund companies in the country. I feel great pleasure to present this report work after my training at India Infoline Ltd. that produced to be golden opportunity for me by enriching my knowledge by comparing my theoretical knowledge with the managerial skill and application. Simple language has been used throughout the report. Report is illustrated with figure, charts and diagrams as and when required.

ACKNOWLEDGEMENT
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Expression of feelings by words makes them less significant when it comes to make statement of gratitude

It is with a sense of gratitude that I acknowledge the effort of a whole host of well-wishers who have in some way or the other contributed in their own special ways to the success of this effort. Individual effort alone can never contribute in totality, to the successful completion of any venture. At first, I wish to express my sincere gratitude to Mr. Janardan vayeda sir who has give me lots of support and encourage for this project, who has guide me throughout the project. I would also like to thank other member of the company like Miss. Sweta Sorathiya and other company members. I would also like to thank Prof. Nimesh Bhatt has also help me as a project guide of the college whenever I am in need. How can I forget my Parents who rendered me not only financial support but also a moral support without which I could not have completed my project. I am also thankful to all the persons who help us directly or indirectly.

EXECUTIVE SUMMARY
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The India Info line group, comprising the holding company, India Info line Limited and
its wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging from Equity research, Equities and derivatives trading, Commodities trading, Portfolio management Services, Mutual Funds, Life Insurance, Fixed deposits, Govt. bonds and other small savings instruments to loan products and Investment banking. India Info line also owns and manages the websites www.indiainfoline. Command www.5paisa.com The Company has a network of 976 business locations (branches and sub-brokers) spread across 365 cities and towns. It has more than 800,000 customers. In todays competitive world there are many goods chasing few customers some are trying it expands their size and share of existing market. As a result there are loser and winners. Winners are those who carefully analyze needs identify opportunities and create aloe rich offers for target customer. The objective of the market research to determine the demand and supply and use of the product and competitors study so as to get the total market scenario of the product for analyzing market problem research is needed. A firm can obtained market research in number of ways. It can hire market research firm or it can ask student to design and carry out market research project. These marketing problems and opportunities if entrust to the student of marketing. Especially when they seek the same during the project gives opportunities to apply their theoretical knowledge and managerial knowledge. India infoline.com/5paisa.com is related tosh remarket, it is equity to caused organization tracing its lineage to SSKL, a veteran solution company with over 8 decades of experience in the lead in stock market.

OBJECTIVES OF THE STUDY

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1. 2. 3. 4. 5. 6. 7. 8.

The objective of the research is to study and analyze the awareness level of investors of mutual funds. To measure the satisfaction level of investors regarding mutual funds. An attempt has been made to measure various variables playing in the minds of investors in terms of safety, liquidity, service, returns, and tax saving. To get insight knowledge about mutual funds To know the mutual funds performance levels in the present market To analyze the comparative study between other leading mutual funds in the present market. To know the awareness of mutual funds among different groups of investors. Finding out ways and means to improve on the services by India Infoline Ltd.

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ABOUT MUTUAL FUND

11

INTRODUCTION
What is a Mutual fund?
Mutual fund is an investment company that pools money from shareholders and invests in a variety of securities, such as stocks, bonds and money market instruments. Most open-end Mutual funds stand ready to buy back (redeem) its shares at their current net asset value, which depends on the total market value of the fund's investment portfolio at the time of redemption. Most open-end Mutual funds continuously offer new shares to investors. Also known as an openend investment company, to differentiate it from a closed-end investment company. Mutual funds invest pooled cash of many investors to meet the fund's stated investment objective. Mutual funds stand ready to sell and redeem their shares at any time at the fund's current net asset value: total fund assets divided by shares outstanding.

In Simple Words, Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not 12

move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of Mutual funds are known as unit holders. The profits or losses are shared by the investors in proportion to their investments. The Mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. In India, A Mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public. In Short, a Mutual fund is a common pool of money in to which investors with common investment objective place their contributions that are to be invested in accordance with the stated investment objective of the scheme. The investment manager would invest the money collected from the investor in to assets that are defined/ permitted by the stated objective of the scheme. For example, an equity fund would invest equity and equity related instruments and a debt fund would invest in bonds, debentures, gilts etc. Mutual fund is a suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost

CONCEPT OF THE MUTUAL FUND

A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciations realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. The flow chart below describes broadly the working of a mutual fund:

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HISTORY OF THE MUTUAL FUND INDUSTRY

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the initiative of the Government of India and Reserve Bank. The history of mutual funds in India can be broadly divided into four distinct phases

Phase - 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs.6,700 crores of assets under management.

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Second Phase - 1987-1993 (Entry of Public Sector Funds) 1987 marked the entry of non- UTI, public sector mutual funds set up by public sector banks and Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC). SBI Mutual Fund was the first non- UTI Mutual Fund established in June 1987 followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC established its mutual fund in June 1989 while GIC had set up its mutual fund in December 1990. At the end of 1993, the mutual fund industry had assets under management of Rs.47, 004 crores.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management was way ahead of other mutual funds.

Fourth Phase - since February 2003 In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated 15

into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at the end of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76,000 crores of assets under management and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth. As at the end of September, 2004, there were 29 funds, which manage assets of Rs.153108 crores under 421 schemes. The graph indicates the growth of assets over the years.

ORGANISATION OF MUTUAL FUND

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THE STRUCTURE CONSISTS OF

SPONSOR 17

Sponsor is the person who acting alone or in combination with another body corporate establishes a mutual fund. Sponsor must contribute at least 40% of the net worth of the Investment managed and meet the eligibility criteria prescribed under the Securities and Exchange Board of India (Mutual Fund) Regulations, 1996. The sponsor is not responsible or liable for any loss or shortfall resulting from the operation of the Schemes beyond the initial contribution made by it towards setting up of the Mutual Fund. TRUST The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908. TRUSTEE Trustee is usually a company (corporate body) or a Board of Trustees (body of individuals). The main responsibility of the Trustee is to safeguard the interest of the unit holders and ensure that the AMC functions in the interest of investors and in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions of the Trust Deed and the Offer Documents of the respective Schemes. At least 2/3rd directors of the Trustee are independent directors who are not associated with the Sponsor in any manner. ASSET MANAGEMENT COMPANY (AMC) The AMC is appointed by the Trustee as the Investment Manager of the Mutual Fund. The AMC is required to be approved by the Securities and Exchange Board of India (SEBI) to act as an asset management company of the Mutual Fund. At least 50% of the directors of the AMC are independent directors who are not associated with the Sponsor in any manner. The AMC must have a net worth of at least 10 cores at all times. REGISTRAR AND TRANSFER AGENT The AMC if so authorized by the Trust Deed appoints the Registrar and Transfer Agent to the Mutual Fund. The Registrar processes the application form, redemption requests and dispatches account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records.

THE WAY & TYPE TO INVEST IN MUTUAL FUND

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Mutual funds normally come out with an advertisement in newspapers publishing the date of launch of the new schemes. Investors can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. Forms can be deposited with mutual funds through the agents and distributors who provide such services. Now days, the post offices and banks also distribute the units of mutual funds. However, the investors may please note that the mutual funds schemes being marketed by banks and post offices should not be taken as their own schemes and no assurance of returns is given by them. The only role of banks and post offices is to help in. distribution of mutual funds schemes to the investors. Investors should not be carried away by commission/gifts given by agents/distributors for investing in a particular scheme. On the other hand they must consider the track record of the mutual fund and should take objective decision. ONE TIME INVESTMENT The amount that has to be invested in onetime is known as Onetime Investment. The investor has to pay the whole amount at once. The minimum amount is Rs. 5000 and maximum is as per the investors Choice. This investment is generally preferred for the business man who is able to pay at one time. SYSTEMATIC INVESTMENT PLAN (SIP) The amount that has to be invested through same monthly installment is known as Systematic Investment Plan. The investor has to pay the minimum amount Rs.1000 monthly for all equity and balanced schemes like that for 6months. And Rs.500 monthly for Tax Saver scheme like that for 12 months. The minimum amount that the investor has to invest is Rs6000 and maximum as per their choice. This type of investment is generally preferred for the salaried people.

REGULATORY OF MUTUAL FUND IN INDIA

SEBI 19

The capital market regulates the mutual funds in India. SEBI requires all mutual funds to be registered with them. SEBI issues guidelines for all mutual funds operationsinvestment, accounts, expenses etc. Recently, it has been decided that Money Market Mutual Funds of registered mutual funds will be regulated by SEBI through (Mutual Fund) Regulations 1996. RBI RBI, a supervisor of the Banks owned Mutual Funds-As banks in India come under the regulatory Jurisdiction of RBI, banks owned funds to be under supervision of RBI and SEBI. RBI has supervisory responsibility over all entities that operate in the money markets. MINISTRY OF FINANCE (MOF) Ministry of Finance ultimately supervises both the RBI and the SEBI and plays the role of apex authority for any major disputes over SEBI guidelines. COMPANY LOW BOARD Registrar of companies is called Company Low Board. AMCs of Mutual Funds are companies registered under the companies Act 1956 and therefore answerable to regulatory authorities empowered by the Companies Act. STOCK EXCHANGE Stock Exchanges are Self-regulatory organizations supervised by SEBI. Many closed ended funds of AMCs are listed as stock exchanges and are traded like shares. OFFICE OF THE PUBLIC TRUSTE Mutual Fund being public trust is governed y the Indian Trust Act 1882. The Board of trustee or the Trustees Company is accountable to the office of public trustee, which in turn reports to the Charity commissioner.

TYPES OF MUTUAL FUND SCHEMES

1. BY STRUCTURE 20

1.1. Open Ended Schemes. 1.2. Close Ended Schemes. 1.3. Interval Schemes. 2. BY INVESTMENT OBJECTIVE 2.1. Growth Schemes. 2.2. Income Schemes. 2.3. Balanced Schemes. 3. OTHER SCHEMES 3.1. Tax Saving Schemes. 3.2. Special Schemes. 3.3. Index Schemes. 3.4. Sector Specific Schemes. 1.1 OPEN ENDED SCHEMES

The units offered by these schemes are available for sale and repurchase on any business day at NAV based prices. Hence, the unit capital of the schemes keeps changing each day. Such schemes thus offer very high liquidity to investors and are becoming increasingly popular in India. Please note that an open-ended fund is NOT obliged to keep selling/issuing new units at all times, and may stop issuing further subscription to new investors. On the other hand, an openended fund rarely denies to its investor the facility to redeem existing units. 1.2 CLOSED ENDED SCHEMES

The unit capital of a close-ended product is fixed as it makes a one-time sale of fixed number of units. These schemes are launched with an initial public offer (IPO) with a stated maturity period after which the units are fully redeemed at NAV linked prices. In the interim, investors can buy or sell units on the stock exchanges where they are listed. Unlike open-ended schemes, the unit capital in closed-ended schemes usually remains unchanged. After an initial closed period, the scheme may offer direct repurchase facility to the investors. Closed-ended schemes are usually more illiquid as compared to open-ended schemes and hence trade at a discount to the NAV. This discount tends towards the NAV closer to the maturity date of the scheme. 1.3 INTERVAL SCHEMES 21

These schemes combine the features of open-ended and closed-ended schemes. They may be traded on the stock exchange or may be open for sale or redemption during pre-determined intervals at NAV based prices. 2.1 GROWTH SCHEMES

These schemes, also commonly called Equity Schemes, seek to invest a majority of their funds in equities and a small portion in money market instruments. Such schemes have the potential to deliver superior returns over the long term. However, because they invest in equities, these schemes are exposed to fluctuations in value especially in the short term. 2.2 INCOME SCHEMES

These schemes, also commonly called Debt Schemes, invest in debt securities such as corporate bonds, debentures and government securities. The prices of these schemes tend to be more stable compared with equity schemes and most of the returns to the investors are generated through dividends or steady capital appreciation. These schemes are ideal for conservative investors or those not in a position to take higher equity risks, such as retired individuals. However, as compared to the money market schemes they do have a higher price fluctuation risk and compared to a Gilt fund they have a higher credit risk. 2.3 BALANCED SCHEMES

These schemes are commonly known as Hybrid schemes. These schemes invest in both equities as well as debt. By investing in a mix of this nature, balanced schemes seek to attain the objective of income and moderate capital appreciation and are ideal for investors with a conservative, longterm orientation. 3.1 TAX SAVING SCHEMES Investors are being encouraged to invest in equity markets through Equity Linked Savings Scheme (ELSS) by offering them a tax rebate. Units purchased cannot be assigned / transferred/ pledged / redeemed / switched out until completion of 3 years from the date of allotment of the respective Units. The Scheme is subject to Securities & Exchange Board of India (Mutual Funds) Regulations, 1996 and the notifications issued by the Ministry of Finance (Department of Economic Affairs), Government of India regarding ELSS.

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Subject to such conditions and limitations, as prescribed under Section 88 of the Income-tax Act, 1961.

3.2

INDEX SCHEMES

The primary purpose of an Index is to serve as a measure of the performance of the market as a whole, or a specific sector of the market. An Index also serves as a relevant benchmark to evaluate the performance of mutual funds. Some investors are interested in investing in the market in general rather than investing in any specific fund. Such investors are happy to receive the returns posted by the markets. As it is not practical to invest in each and every stock in the market in proportion to its size, these investors are comfortable investing in a fund that they believe is a good representative of the entire market. Index Funds are launched and managed for such investors. 3.3 SECTOR SPECIFIC SCHEMES.

Sector Specific Schemes generally invests money in some specified sectors for example: Real Estate Specialized real estate funds would invest in real estates directly, or may fund real estate developers or lend to them directly or buy shares of housing finance companies or may even buy their securitized assets.

SEBI REGISTERED MUTUAL FUND

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1. FORTIS Mutual fund 2. Alliance Capital Mutual fund, 3. AIG Global Investment Group Mutual fund 4. Benchmark Mutual fund, 5. Baroda Pioneer Mutual fund 6. Birla Mutual fund 7. Bharti AXA Mutual fund 8. Canara Robeco Mutual fund 9. CRB Mutual fund (Suspended) 10. DBS Chola Mutual fund, 11. Deutsche Mutual fund 12. DSP Blackrock Mutual fund, 13. Edelweiss Mutual fund 14. Escorts Mutual fund, 15. Franklin Templeton Mutual fund 16. Fidelity Mutual fund 17. Goldman Sachs Mutual fund 18. HDFC Mutual fund, 19. HSBC Mutual fund, 20. ICICI Securities Fund, 21. IL & FS Mutual fund, 22. ING Mutual fund, 23. ICICI Prudential Mutual fund 24. IDFC Mutual fund, 25. JM Financial Mutual fund 26. JP Morgan Mutual fund 27. Kotak Mahindra Mutual fund, 29. LIC Mutual fund 31. Morgan Stanley Mutual fund 32. Mirae Asset Mutual fund 33. Principal Mutual fund 34. Quantum Mutual fund, 35. Reliance Mutual fund 36. Religare AEGON Mutual fund 24

37. Sahara Mutual fund, 38. SBI Mutual fund 39. Shriram Mutual fund 40. Sundaram BNP Paribas Mutual fund, 41. Taurus Mutual fund 42. Tata Mutual fund, 43. UTI Mutual fund

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POINTERS TO MEASURE MUTUAL FUND PERFORMANCE

MEASURES STANDARD DEVIATION DESCRIPTION IDEAL RANGE Standard Deviation allows evaluating the volatility of Should be near to its mean the fund. The standard deviation of a fund measures return. this risk by measuring the degree to which the fund BETA fluctuates in relation to its mean return. Beta is a fairly commonly used measure of risk. It Beta > 1 = high risky basically indicates the level of volatility associated with Beta = 1 = Average R-SQUARE the fund as compared to the benchmark. Beta <1 = Low Risky R- square measures the correlation of a funds R-squared values range between movement to that of an index. R-squared describes the 0 and 1, where 0 represents no level of association between the fund's volatility and correlation and 1 represents full ALPHA market risk. correlation. Alpha is the difference between the returns one would Alpha is positive = returns of expect from a fund, given its beta, and the return it stock are better then market actually produces. It also measures the unsystematic returns. risk. Alpha is negative = returns of stock are worst then market. Alpha is zero = returns are same SHARPE RATIO as market. Sharpe Ratio= Fund return in excess of risk free return/ The higher the Sharpe ratio, the Standard deviation of Fund. Sharpe ratios are ideal for better a funds returns relative to comparing funds that have a mixed asset classes. the amount of risk taken.

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WHAT IS THE PROCEDURE FOR REGISTERING A MUTUAL FUND WITH SEBI?

An applicant proposing to sponsor a Mutual fund in India must submit an application in Form A along with a fee of Rs.25, 000. The application is examined and once the sponsor satisfies certain conditions such as being in the financial services business and possessing positive net worth for the last five years, having net profit in three out of the last five years and possessing the general reputation of fairness and integrity in all business transactions, it is required to complete the remaining formalities for setting up a Mutual fund. These include inter alia, executing the trust deed and investment management agreement, setting up a trustee company/board of trustees comprising two- thirds independent trustees, incorporating the asset management company (AMC), contributing to at least 40% of the net worth of the AMC and appointing a custodian. Upon satisfying these conditions, the registration certificate is issued subject to the payment of registration fees of Rs.25.00 lacs for details; see the SEBI (Mutual funds) Regulations, 1996.

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HOW TO REDUCE RISK WHILE INVESTING:

Any kind of investment we make is subject to risk. In fact we get return on our investment purely and solely because at the very beginning we take the risk of parting with our funds, for getting higher value back at a later date. Partition itself is a risk. Well known economist and Nobel Prize recipient William Sharpe tried to segregate the total risk faced in any kind of investment into two parts - systematic (Systemic) risk and unsystematic (Unsystemic) risk. Systematic risk is that risk which exists in the system. Some of the biggest examples of systematic risk are inflation, recession, war, political situation etc. Inflation erodes returns generated from all investments e.g. If return from fixed deposit is 8 per cent and if inflation is 6 per cent then real rate of return from fixed deposit is reduced by 6 per cent. Similarly if returns generated from equity market is 18 per cent and inflation is still 6 per cent then equity returns will be lesser by the rate of inflation. Since inflation exists in the system there is no way one can stay away from the risk of inflation. Economic cycles, war and political situations have effects on all forms of investments. Also these exist in the system and there is no way to stay away from them. It is like learning to walk. Anyone who wants to learn to walk has to first fall; you cannot learn to walk without falling. Similarly anyone who wants to invest has to first face systematic risk; there can never make any kind of investment without systematic risk.

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 Another form of risk is unsystematic risk. This risk does not exist in the system and hence is not applicable to all forms of investment. Unsystematic risk is associated with particular form of investment. Suppose we invest in stock market and the market falls, then only our investment in equity gets affected OR if we have placed a fixed deposit in particular bank and bank goes bankrupt, than we only lose money placed in that bank. While there is no way to keep away from risk, we can always reduce the impact of risk. Diversification helps in reducing the impact of unsystematic risk. If our investment is distributed across various asset classes the impact of unsystematic risk is reduced. If we have placed fixed deposit in several banks, then even if one of the banks goes bankrupt our entire fixed deposit investment is not lost. Similarly if our equity investment is in Tata Motors, HLL, Infosys, adverse news about Infosys will only impact investment in Infosys, all other stocks will not have any impact. To reduce the impact of systematic risk, we should invest regularly. By investing regularly we average out the impact of risk. Mutual fund, as an investment vehicle gives us benefit of both diversification and averaging. Portfolio of mutual funds consists of multiple securities and hence adverse news about single security will have nominal impact on overall portfolio. By systematically investing in mutual fund we get benefit of rupee cost averaging.

Mutual fund as an investment vehicle helps reduce, both, systematic as well as unsystematic risk. 29

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ADVANTAGES OF MUTUAL FUNDS

Professional Management. The major advantage of investing in a mutual fund is that you get a professional money manager to manage your investments for a small fee. You can leave the investment decisions to him and only have to monitor the performance of the fund at regular intervals. Diversification. Considered the essential tool in risk management, mutual funds make it possible for even small investors to diversify their portfolio. A mutual fund can effectively diversify its portfolio because of the large corpus. However, a small investor cannot have a well-diversified portfolio because it calls for large investment. For example, a modest portfolio of 10 bluechip stocks calls for a few a few thousands. Convenient Administration. 31

Mutual funds offer tailor-made solutions like systematic investment plans and systematic withdrawal plans to investors, which is very convenient to investors. Investors also do not have to worry about investment decisions, they do not have to deal with brokerage or depository, etc. for buying or selling of securities. Mutual funds also offer specialized schemes like retirement plans, childrens plans, industry specific schemes, etc. to suit personal preference of investors. These schemes also help small investors with asset allocation of their corpus. It also saves a lot of paper work. Costs Effectiveness A small investor will find that the mutual fund route is a cost-effective method (the AMC fee is normally 2.5%) and it also saves a lot of transaction cost as mutual funds get concession from brokerages. Also, the investor gets the service of a financial professional for a very small fee. If he were to seek a financial advisor's help directly, he will end up paying significantly more for investment advice. Also, he will need to have a sizeable corpus to offer for investment management to be eligible for an investment advisers services. Liquidity. You can liquidate your investments within 3 to 5 working days (mutual funds dispatch redemption cheques speedily and also offer direct credit facility into your bank account i.e. Electronic Clearing Services). Transparency. Mutual funds offer daily NAVs of schemes, which help you to monitor your investments on a regular basis. They also send quarterly newsletters, which give details of the portfolio, performance of schemes against various benchmarks, etc. They are also well regulated and Sebi monitors their actions closely. Tax benefits. You do not have to pay any taxes on dividends issued by mutual funds. You also have the advantage of capital gains taxation. Tax-saving schemes and pension schemes give you the added advantage of benefits under section 88. Affordability Mutual funds allow you to invest small sums. For instance, if you want to buy a portfolio of blue chips of modest size, you should at least have a few lakhs 32

of rupees. A mutual fund gives you the same portfolio for meager investment of Rs.1,000-5,000. A mutual fund can do that because it collects money from many people and it has a large corpus.

DISADVANTAGES OF MUTUAL FUNDS

Professional ManagementDid you notice how we qualified the advantage of professional management with the word "theoretically"? Many investors debate over whether or not the so-called professionals are any better than you or I at picking stocks. Management is by no means infallible, and, even if the fund loses money, the manager still takes his/her cut. We'll talk about this in detail in a later section. Costs Mutual funds don't exist solely to make your life easier--all funds are in it for a profit. The Mutual fund industry is masterful at burying costs under layers of jargon. These costs are so complicated that in this tutorial we have devoted an entire section to the subject. Dilution It's possible to have too much diversification (this is explained in our article entitled "Are You Over-Diversified?"). Because funds have small holdings in so many different companies, high returns from a few investments often don't make much difference on the overall return. Dilution is also the result of a successful fund getting too big. When money pours into funds that have had strong success, the manager often has trouble finding a good investment for all the new money. Taxes When making decisions about your money, fund managers don't consider your personal tax situation. For example, when a fund manager sells a security, a capitalgain tax is triggered, which affects how profitable the individual is from the sale. It might have been more advantageous for the individual to defer the capital gains liability. Equity fundsif selected in the right manner and in the right proportion, have the ability to play an important role in achieving most long-term objectives of investors in different segments. While the selection process becomes much easier if you get advice from professionals, it is equally important to know certain aspects of equity investing yourself to do justice to your hard earned money.

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COMPANY DETAILS

34

SNAPSHOT OF India Infoline Ltd.

Date of Establishment Revenue Market Cap Corporate Address Branches Management Team October 1995 Rs. 2654.1 million (2008-2009) Rs. 5110.71 (April 21 2009) 84, Nariman Bhavan, Nariman Point, Mumbai 400021, Maharashtra, India India Nirmal Jain Founder R Venkataraman-- Co-promoter and Executive Director Sat Pal Khattar- Non Executive Director Nilesh Vikamsey- Independent Director Kranti Sinha - Independent Director Overview India Infoline Limited provides the entire gamut of financial services entailing equity research, equities and derivatives trading, commodities trading, portfolio management services, mutual funds, life insurance, fixed deposits, GoI bonds and investment banking. It is proficient in equities broking, wealth advisory services and portfolio management services. The company is a member of BSE and NSE. It is a depository member of National Securities Depository Limited and Central Depository Securities Ltd. The parent company India Infoline Group also contains India Infoline Media and

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Research Services Limited, India Infoline Commodities Limited, India Infoline Marketing & Services, India Infoline Investment Services Limited and IIFL (Asia) Private Limited

HISTORY
We were founded in 1995 by Mr. Nirmal Jain (Chairman and Managing Director) as an independent business research and information provider. We gradually evolved into a onestop financial services solutions provider. Our strong management team comprises competent and dedicated professionals We are a pan-India financial services organization across 1,361 business locations and a presence in 428 cities. Our global footprint extends across geographies with offices in New York, Singapore and Dubai. We are listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). We offser a wide range of services and products comprising broking (retail and institutional equities and commodities), wealth management, credit and finance, insurance, asset management and investment banking. We are registered with the BSE and the NSE for securities trading, MCX, NCDEX and DGCX for commodities trading, CDSL and NSDL as depository participants. We are registered as a Category I merchant banker and are a SEBI registered portfolio manager. We also received the FII license in IIFL Inc. IIFL Securities Pte Ltd received approval from the Monetary Authority of Singapore to carry out corporate advisory and dealing in securities operations. Two subsidiaries India Infoline Investment Services and Moneyline Credit Limited are registered with RBI as non-deposit taking non-banking financial services companies. India infoline Housing Finance Ltd, the housing finance arm, is registered with the National Housing Bank.

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MILESTONES
1995 Incorporated as an equity research and consulting firm with a client base that included leading FIIs, banks, consulting firms and corporates. 1999 Restructured the business model to embrace the internet; launched

archives.indiainfoline.com mobilised capital from reputed private equity investors. 2000 Commenced the distribution of personal financial products; launched online equity trading; entered life insurance distribution as a corporate agent. Acknowledged by Forbes as Best of the Web and ...must read for investors. 2004 Acquired commodities broking license; launched Portfolio Management Service. 2005 Listed on the Indian stock markets. 2006 Acquired membership of DGCX; launched investment banking services. 2007 Launched a proprietary trading platform; inducted an institutional equities team; formed a Singapore subsidiary; raised over USD 300 mn in the group; launched consumer finance business under the Moneyline brand. 2008 Launched wealth management services under the IIFL Wealth brand; set up India Infoline Private Equity fund; received the Insurance broking license from IRDA; 37

received the venture capital license; received in principle approval to sponsor a mutual fund; received Best broker- India award from Financeasia; Most Improved BrokerageIndia award from Asiamoney.

2009 Received registration for a housing finance company from the National Housing Bank; received Fastest growing Equity Broking House - Large firms in India by Dun & Bradstreet.

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India Infoline Ltd.

India Info Line is a one-stop financial services shop, most respected for quality of its advice, personalized service and cutting-edge technology.

Vision Statement :
Our vision is to be the most respected company in the financial service space. India Info line Group : The India Info line group, comprising the holding company, india info line limited and its wholly-owned subsidiaries, straddle the entire financial services space with offerings ranging from equity research, equities and derivatives trading, commodities trading, portfolio management services, mutual funds, life insurance, fixed deposits, goi bonds and other small savings instruments to loan products and investment banking. India Info line also owns and manages the websites www.indiainfoline.com and www.5paisa.com the company has a network of over 2100 business locations (branches and sub-brokers) spread across more than 450 cities and towns. the group caters to approximately a million customers.

India Infoline Group subsidiaries:

India Infoline Media and Research Services Limited India Infoline Commodities Limited India Infoline Marketing & Services

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India Infoline Investment Services Limited IIFL (Asia) Pte Limited

Our Global Presence: USA, Dubai, Singapore

VISION To become the most respected Company in the financial Service space
Diversified, Addressing all customer segments

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MANAGEMENT TEAM

Mr. Nirmal Jain Chairman & Managing Director India Infoline Ltd.

Nirmal Jain, MBA (IIM, Ahmedabad) and a Chartered and Cost Accountant, founded Indias leading financial services company India Infoline Ltd. in 1995, providing globally acclaimed financial services in equities and commodities broking, life insurance and mutual funds distribution, among others. Mr. Jain began his career in 1989 with Hindustan Levers commodity export business, contributing tremendously to its growth. He was also associated with Inquire-Indian Equity Research, which he co-founded in 1994 to set new standards in equity research in India. Mr. R Venkataraman Executive Director India Infoline Ltd. R Venkataraman, co-promoter and Executive Director of India Infoline Ltd., is a B. Tech (Electronics and Electrical Communications Engineering, IIT Kharagpur) and an MBA (IIM Bangalore). He joined the India Infoline board in July 1999. He previously held 41

senior managerial positions in ICICI Limited, including ICICI Securities Limited, their investment banking joint venture with J P Morgan of USA and with BZW and Taib Capital Corporation Limited. He was also Assistant Vice President with G E Capital Services India Limited in their private equity division, possessing a varied experience of more than 16 years in the financial services sector.

The Board of Directors Apart from Nirmal Jain and R Venkataraman, the Board of Directors of India Infoline Ltd. comprises: Mr Nilesh Vikamsey Independent Director India Infoline Ltd. Mr. Vikamsey, Board member since February 2005 - a practising Chartered Accountant and partner (Khimji Kunverji & Co., Chartered Accountants), a member firm of HLB International, headed the audit department till 1990 and thereafter also handles financial services, consultancy, investigations, mergers and acquisitions, valuations etc; an ICAI study group member for Proposed Accounting Standard 30 on Financial Instruments Recognition and Management, Finance Committee of The Chamber of Tax Consultants (CTC), Law Review, Reforms and Rationalization Committee and Infotainment and Media Committee of Indian Merchants Chamber (IMC) and Insurance Committee and Legal Affairs Committee of Bombay Chamber of Commerce and Industry (BCCI). Mr. Vikamsey is a director of Miloni Consultants Private Limited, HLB Technologies (Mumbai) Private Limited and Chairman of HLB India.

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Mr Sat Pal Khattar Non Executive Director India Infoline Ltd. Mr Sat Pal Khattar, - Board member since April 2001 - Presidential Council of Minority Rights member, Chairman of the Board of Trustee of Singapore Business Federation, is also a life trustee of SINDA, a non profit body, helping the under-privileged Indians in Singapore. He joined the India Infoline board in April 2001. Mr Khattar is a Director of public and private companies in Singapore, India and Hong Kong; Chairman of Guocoland Limited listed in Singapore and its parent Guoco Group Ltd listed in Hong Kong, a leading property company of Singapore, China and Malaysia. Mr Kranti Sinha Independent Director India Infoline Ltd. Mr. Kranti Sinha Board member since January 2005 completed his masters from the Agra University and started his career as a Class I officer with Life Insurance Corporation of India. He served as the Director and Chief Executive of LIC Housing Finance Limited from August 1998 to December 2002 and concurrently as the Managing Director of LICHFL Care Homes (a wholly owned subsidiary of LIC Housing Finance Limited). He retired from the permanent cadre of the Executive Director of LIC; served as the Deputy President of the Governing Council of Insurance Institute of India and as a member of the Governing Council of National Insurance Academy, Pune apart from various other such bodies. Mr. Sinha is also on the Board of Directors of Hindustan Motors Limited, Larsen & Toubro Limited, LICHFL Care Homes Limited, Gremach Infrastructure Equipments and Projects Limited and Cinemax (India) Limited. Mr Arun K. Purvar Independent Director India Infoline Ltd. Mr. A.K. Purvar Board member since March 2008 completed his Masters degree in commerce from Allahabad University in 1966 and a diploma in Business Administration in 1967. Mr. Purwar joined the State Bank of India as a probationary officer in 1968, 43

where he held several important and critical positions in retail, corporate and international banking, covering almost the entire range of commercial banking operations in his illustrious career. He also played a key role in co-coordinating the work for the Bank's entry into the field of insurance. After retiring from the Bank at end May 2006, Mr. Purwar is now working as Member of Board of Governors of IIM-Lucknow, joined IIM Indore as a visiting professor, joined as a Hon.-Professor in NMIMS and he is also a member of Advisory Board for Institute of Indian Economic Studies (IIES), Waseda University, Tokyo, Japan. He has now taken over as Chairman of IndiaVenture Advisors Pvt. Ltd., as well as IL & FS Renewable Energy Limited. He is also working as Independent Director in leading companies in Autoparts, Engineering and Consultancy.

CONTECT DETAILS
Registrar & Transfer Agent Intime Spectrum Registry Ltd, C13 Pannalal Silk Mills compound, LBS Marg,Bhandup West, Mumbai 400078 Tel : 91-22-5555 5454 Fax : 91-22-5555 5353 Email : vishwasa@intimespectrum.com Shareholder Enquiries India Infoline Ltd 75, Nirlon Complex, Off W.E.Highway, Goregaon (E), Mumbai, India - 400 063, Boardline No : (91-22) 4007 7000 Tel: (91-22) 4249 9000 Fax: (91-22) 2685 0451 Website : http://www.indiainfoline.com Email : mail@indiainfoline.com Shareholder Enquiries The Company Secretary, Bldg. No. 75, Nirlon Complex, Off W E Highway, Goregaon(E), Mumbai-400 063 Tel : +(91 22) 6669 3200 Fax: +(91 22) 2272 2419 Email : Investor@indiainfoline.com Email Details Investor Relations ir@indiainfoline.com Investor Grievances customergrievances@indiainfoline.com Shareholder Grievances shareholders@indiainfoline.com

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COMPANY STRUCTURE
India Infoline Limited is listed on both the leading stock exchanges in India, viz. the Stock Exchange, Mumbai (BSE) and the National Stock Exchange (NSE) and is also a member of both the exchanges. It is engaged in the businesses of Equities broking, Wealth Advisory Services and Portfolio Management Services. It offers broking services in the Cash and Derivatives segments of the NSE as well as the Cash segment of the BSE. It is registered with NSDL as well as CDSL as a depository participant, providing a one-stop solution for clients trading in the equities market. It has recently launched its Investment banking and Institutional Broking business.

A SEBI authorized Portfolio Manager; it offers Portfolio Management Services to clients. These services are offered to clients as different schemes, which are based on differing investment strategies made to reflect the varied risk-return preferences of clients. 45

India Infoline Media and Research Services Limited. The content services represent a strong support that drives the broking, commodities, mutual fund and portfolio management services businesses. Revenue generation is through the sale of content to financial and media houses, Indian as well as global. It undertakes equities research which is acknowledged by none other than Forbes as 'Best of the Web' and 'a must read for investors in Asia'. India Infoline's research is available not just over the internet but also on international wire services like Bloomberg (Code: IILL), Thomson First Call and Internet Securities where India Infoline is amongst the most read Indian brokers. India Infoline Commodities Limited. India Infoline Commodities Pvt Limited is engaged in the business of commodities broking. Our experience in securities broking empowered us with the requisite skills and technologies to allow us offer commodities broking as a contra-cyclical alternative to equities broking. We enjoy memberships with the MCX and NCDEX, two leading Indian commodities exchanges, and recently acquired membership of DGCX. We have a multi-channel delivery model, making it among the select few to offer online as well as offline trading facilities. India Infoline Marketing & Services India Infoline Marketing and Services Limited is the holding company of India Infoline Insurance Services Limited and India Infoline Insurance Brokers Limited. (a) India Infoline Insurance Services Limited is a registered Corporate Agent with the Insurance Regulatory and Development Authority (IRDA). It is the largest Corporate Agent for ICICI Prudential Life Insurance Co Limited, which is India's largest private Life Insurance Company. India Infoline was the first corporate agent to get licensed by IRDA in early 2001. (b) India Infoline Insurance Brokers Limited is a newly formed subsidiary which will carry out the business of Insurance broking. We have applied to IRDA for the insurance broking licence and the clearance for the same is awaited. Post the grant of license, we propose to also commence the general insurance distribution business. 46

India Infoline Investment Services Limited Consolidated shareholdings of all the subsidiary companies engaged in loans and financing activities under one subsidiary. Recently, Orient Global, a Singapore-based investment institution invested USD 76.7 million for a 22.5% stake in India Infoline Investment Services. This will help focused expansion and capital raising in the said subsidiaries for various lending businesses like loans against securities, SME financing, distribution of retail loan products, consumer finance business and housing finance business. India Infoline Investment Services Private Limited consists of the following step-down subsidiaries.

(a) India Infoline Distribution Company Limited (distribution of retail loan products) (b) Moneyline Credit Limited (consumer finance) (c) India Infoline Housing Finance Limited (housing finance) IIFL (Asia) Private Limited IIFL (Asia) Private Limited is wholly owned subsidiary which has been incorporated in Singapore to pursue financial sector activities in other Asian markets. Further to obtaining the necessary regulatory approvals, the company has been initially capitalized at 1 million Singapore dollars.

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COMPANYS UNIQUE APPROACHES

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ASSET UNDER MANAGEMENT

Mutual Fund Name

No. of Schemes(Incl Corpus(Rs.Cr) Corpus(Rs.Cr) Net Inc/Dec in Options) 30-Apr-10 111,819 94,703 83,064 79,457 69,532 40,507 39,826 34,912 33,845 25,623 22,051 21,949 14,361 13,829 10,112 31-Mar-10 110,413 88,780 81,018 80,218 62,367 42,304 37,417 34,034 34,787 25,775 21,935 21,491 13,878 12,945 10,477 Corpus 1,407 5,923 2,046 [761] 7,165 [1,797] 2,409 878 [942] [151] 116 458 483 885 [365]

Reliance Mutual Fund 491 HDFC Mutual Fund ICICI Prudential Mutual Fund UTI Mutual Fund Birla Sun Life Mutual Fund LIC Mutual Fund SBI Mutual Fund Franklin Kotak Mutual Fund IDFC Mutual Fund Tata Mutual Fund DSP Sundaram Blackrock BNP Mutual Fund Paribas Mutual Fund Religare Mutual Fund Templeton Mahindra Mutual Fund 437 594 378 496 100 178 276 222 271 409 229 314 288

Deutsche Mutual Fund 245

NFO PERIOD FROM 1ST JUNE TO 30TH JUNE 2010.

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IDFC Mutual Fund has launched a new fund named as IDFC Capital Protection Oriented Fund - Series II, a three year close ended income scheme. The scheme shall mature on 30 June 2013. The New Fund Offer (NFO) price for the scheme is Rs 10 per unit. The new issue is open for subscription from 1 June and closes on 30 June 2010. The investment objective of the scheme is to protect the capital by investing in high quality fixed income securities as the primary objective and generate capital appreciation by investing in equity and equity related instruments as a secondary objective. The scheme offers dividend and growth option. The scheme would allocate up to 16% of assets in equities & equity related securities with high risk profile. It would further allocate 84% to 100% of assets in debt securities & money market instruments (of which up to 30% would be in securitized instruments) with low to medium risk profile. Equity Derivatives (futures and options) may be used in place of cash equities with the condition that the total notional exposure together with the investments in equities will not exceed the allocation of the corpus towards equity investments at any point of time. The minimum investment amount is Rs 5,000 and in multiples of Rs 10 thereafter. The fund seeks to collect a minimum subscription (minimum target) amount of Rs 1 crore under the scheme during the NFO period. Entry and entry load charge shall be nil for the scheme. The Scheme's performance will be benchmarked against CRISIL MIP Blended Index. Ashwin Patni will be the fund manager for the scheme.

INVEST ONLINE
India Infoline has made investing in Mutual funds and primary market so effortless.

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All you have to do is register with us and thats all. No paperwork no queues and No registration charges. If you are 5p customer use your existing login ID and Ledger (fund transfer) password. Indiainfoline offers you a host of mutual fund and IPO choices under one roof; backed by in-depth information and research to help you invest effortlessly. INVEST IN MF Indiainfoline offers you a host of mutual fund choices under one roof, backed by in-depth research and advice from research house and tools configured as investor friendly.Investing in Mutual Funds has never been easier Know more about MF Buying a mutual fund may be the smartest financial decision of your life. But with over 2500 mutual funds to choose from, you can be sure that there are a decent number of sour apples out there. To be safe, take a look at the items mentioned on this list before you invest in any mutual fund. Evaluate MF Invest Wisely! Don't get caught in the trap of chasing performance. Buy a fund because it meets an objective in your portfolio. Let us provide you platform where you can search, research and compare funds across all fund families, asset classes and objectives using this section. Buy & Sell MF Now you are one click away from building your portfolio. This section brings you mutual fund schemes, which you desire to buy.

APPLY IN IPOs You could also invest in Initial Public Offers (IPOs) online without going through the hassles of filling ANY application form/ paperwork. Know more about IPO Get in-depth analyses of new IPOs issues (Initial Public Offerings) which are

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Apply for IPOs Easiest way to bid for IPO. This section brings you IPOs, which you wants in your portfolio. Register Now!

COMPANYS PHYLOSOPHY ON CORPORATE GOVERNANCE

The India Infoline Group is committed to placing the Investor First, by continuously striving to increase the efficiency of the operations as well as the systems and processes for use of corporate resources in such a way so as to maximize the value to the stakeholders. The Group aims at achieving not only the highest possible standards of legal and regulatory compliances, but also of effective

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management.

Committee
Audit Committee Terms of reference & Composition, Name of members and Chairman: The Audit committee comprises Mr Nilesh Vikamsey, Chairman of the Committee, Mr Sat Pal Khattar, Mr Sanjiv Ahuja and Mr Kranti Sinha, three of whom are independent Directors. The Managing Director, the Executive Director along with the Statutory and Internal Auditors are invitees to the Meeting. The Terms of reference of this committee are as under: - To investigate into any matter that may be prescribed under the provisions of Section 292A of The Companies Act, 1956 - Recommendation and removal of External Auditor and fixation of the Audit Fees. - Reviewing with the management the financial statements before submission of the same to the Board. - Overseeing of Companys financial reporting process and disclosure of its financial information. - Reviewing the Adequacy of the Internal Audit Function. Compensation/ Remuneration Committee Terms of reference & Composition, Name of members and Chairman: The Compensation / Remuneration Committee comprises Mr Sanjiv Ahuja, Chairman of the Committee, Mr Nilesh Vikamsey and Mr Kranti Sinha, all of whom are independent Directors. The Terms of reference of this committee are as under: - To fix suitable remuneration package of all the Executive Directors and Non Executive Directors, Senior Employees and officers i.e. Salary, perquisites, bonuses, stock options, pensions etc. - Determination of the fixed component and performance linked incentives alongwith the performance criteria to all employees of the company - Service Contracts, Notice Period, Severance Fees of Directors and employees. - Stock Option details: whether to be issued at discount as well as the period over which to be accrued and over which exercisable. - To conduct discussions with the HR department and form suitable remuneration policies. Share Transfer and Investor Grievance Committee Details of the Members, Compliance Officer, No of Complaints received and pending and pending transfers as on close of the financial year. The committee functions under the Chairmanship of Mr Kranti Sinha, a Non-executive independent Director. The other Members of the committee are Mr Sanjiv Ahuja, Independent Director and Mr R Venkataraman, Executive Director. Ms Komal Parikh, Company Secretary is the Compliance Officer of the Company.

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FINANCIAL STATEMENT OF INDIA INFOLINE LTD.

Balance sheet
(Rs.in Millions)

Particulars SOURCES OF FUNDS + Share Capital Share Warrants & Outstandings

+ Reserves & Surplus

Mar 2009 566.80 136.17 9778.84 10481.81 17.04

Mar 2008 571.03 668.64 9256.60 10496.28 0

Mar 2007 Mar 2006 Mar 2005 501.67 55.17 2340.81 2897.65 446.82 451.01 44.20 1238.34 1733.55 15.01 316.22 0.00 207.05 523.27 13.69

Shareholder's Funds
+ Secured Loans

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+ Unsecured Loans

1.03 18.08 10499.89 0 1436.77 449.45 0 987.32 0 45.13 0 0 8693.12 0 5.61 1035.29 4302.49 0 2405.91 7749.30 5526.75 1486.39 7013.15 736.16 0 38.15 0.00 38.15 10499.89 3.41

1305.68 1305.68 11801.95 0 983.18 350.77 0 632.41 0 4.91 0 0 9156.80 0.00 13.09 3428.13 2143.71 0.00 3112.99 8697.92 5148.54 1567.44 6715.98 1981.94 0 25.89 0.00 25.89 11801.95 0

362.70 809.52 3707.17 0 730.99 243.85 0.00 487.14 0.00 0.00 0.00 0 1714.50 0 0.00 1307.23 950.79 0.00 2197.40 4455.42 2445.20 510.26 2955.45 1499.97 0 5.80 0.25 5.56 3707.17 0

808.85 823.87 2557.42 0 87.48 52.31 0 35.17 0 0 0 0 1002.49 0.00 0 54.88 20.91 0.00 1721.63 1797.42 76.69 202.99 279.68 1517.74 0 2.01 0.00 2.01 2557.42 0

2.00 15.68 538.95 0 44.74 37.61 0 7.13 0 0 0 0 403.09 1.56 0 14.90 20.33 0.00 133.85 169.08 23.88 16.47 40.35 128.73 0 0.00 0.00 0 538.95 0

Total Debts Total Liabilities APPLICATION OF FUNDS : + Loans (Non Current Assets) Gross Block Less: Accumulated Depreciation Less: Impairment of Assets Net Block Lease Adjustment A/c Capital Work in Progress Pre-operative Expenses pending Assets in transit + Investments Market Value of Quoted Investements Current Assets, Loans & Advances + Inventories
+ Sundry Debtors + Cash and Bank + Other Current Assets + Loans and Advances

Total Current Assets Less : Current Liabilities and Provisions + Current Liabilities
+ Provisions

Total Current Liabilities Net Current Assets Miscellaneous Expenses not written off Deferred Tax Assets Deferred Tax Liability Deferred Tax Assets / Liabilities Total Assets Contingent Liabilities

Profit and loss account

(Rs.in Millions)

Particulars No of Months + Operating Income Interest income Net Sales EXPENDITURE : Increase/Decrease in Stock Purchase of Shares / Units Employee Cost + Operating & Establishment Expenses
+ Administrations & Other Expenses

Mar 2009 12 5715.35 0 5715.35 0 0 1409.37 1824.72 590.54 9.90

Mar 2008 12 6575.36 0.00 6575.36 0 0 1325.42 1990.92 597.61 21.31

Mar 2007 12 2828.46 0.00 2828.46 0.00 0.00 539.96 963.39 340.14 20.69

Mar 2006 12 449.12 0.00 449.12 0 0 0.38 7.91 41.68 0.53

Mar 2005 12 213.17 0.00 213.17 0 0 0.66 6.75 17.83 1.31

Provisions and Contigencies

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Less: Pre-operative Expenses Capitalised Total Expenditure Operating Profit (Excl OI) + Other Income Operating Profit
+ Interest

0 3834.52 1880.82 1.01 1881.84 111.47 255.61 1514.76 0 1514.76 456.50 1058.25 2287.40 140.00 3.71 36.51

0 3935.27 2640.09 149.04 2789.14 228.22 194.40 2366.52 -290.44 2076.07 789.20 1286.87 1760.99 60.00 22.54 172.10

0 1864.18 964.28 38.71 1002.99 83.53 123.27 796.19 0.00 796.19 274.97 521.22 604.69 30.00 10.39 56.66

0 50.49 398.63 35.55 434.18 21.97 14.70 397.51 0 397.51 132.81 264.69 265.49 30.00 5.87 37.46

0 26.55 186.62 9.19 195.81 0.43 5.24 190.14 0 190.14 15.40 174.74 0.79 0 5.53 16.55

Depreciation Profit Before Taxation & Exceptional Items Exceptional Income / Expenses Profit Before Tax + Provision for Tax Profits After Tax
+ Appropriations

Equity Dividend % Earnings Per Share Book Value

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RESEARCH METHODOLOGY

Research Methodology
Type of Research Design Source of Data b. Secondary Data: Internet, Magazines, Reference Books, Newspapers. Research Equipment : Questionnaire : Conclusive Research Design : a. Primary Data: Survey Method

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Sampling Technique Convenience Sampling Method. Sample Size Area of Research

: Non-Probability Technique-

: 100 Samples : Ahmadabad, Jamnagar, Bhavnagar

Objectives Sub-objectives

: The main objective of research is to find awareness regarding Mutual fund among earning people

: To find how much people investing in Mutual Fund To find in which Mutual Fund they are investing To find which way or which option people like while Investing in Mutual Fund

Hypotheses-1 Age and awareness regarding Mutual Fund Ho=Age of the people have impact on awareness of Mutual Fund H1=Age of the people have not impact on awareness of Mutual Fund

Case Processing Summary Cases Valid N age * awareness 100 Percent 100.0% Missing N 0 Percent .0% Total N 100 Percent 100.0%

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age * awareness Cross tabulation Awareness yes age 20-30 Count % of Total Std. Residual 30-40 Count % of Total Std. Residual 40-50 Count % of Total Std. Residual 50-above Count % of Total Std. Residual Total Count % of Total 7 7.0% -.4 29 29.0% .0 25 25.0% .6 2 2.0% -.9 63 63.0% No 6 6.0% .5 17 17.0% .0 10 10.0% -.8 4 4.0% 1.2 37 37.0% 100 100.0% 6 6.0% 35 35.0% 46 46.0% Total 13 13.0%

Chi-Square Tests Exact Sig. Asymp. Sig. (2- Exact Sig. (1sided) (2-sided) sided) Point Probability .284 .293 .292 .313 .289 1 .878 .896 .492 .104

Value Pearson Chi-Square Likelihood Ratio Fisher's Exact Test Linear-by-Linear Association N of Valid Cases 3.799 3.727 3.770 .024b 100
a

Df 3 3

a. 3 cells (37.5%) have expected count less than 5. The minimum expected count is 2.22. b. The standardized statistic is -.154.

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Interpretation:- The above chart and diagram shows that awareness of Mutual fund is more in the age between 30 and 40.There are more people who have awareness regarding Mutual Fund from 46 respondents 29 are aware it shows high awareness. People having age above 50 have not much awareness regarding Mutual fund from 6 respondents 4 are not aware and only 2 are aware about Mutual Fund.

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Hypotheses:-2 Occupation and awareness of Mutual Fund Ho= Occupation have impact on awareness of mutual Fund H1= Occupation have not impact on awareness of Mutual Fund
Case Processing Summary Cases Valid N occupation * awareness 100 Percent 100.0% Missing N 0 Percent .0% Total N 100 Percent 100.0%

occupation * awareness Cross tabulation Awareness Yes occupation student Count % of Total Std. Residual business Count % of Total Std. Residual service Count % of Total Std. Residual profession Count % of Total Std. Residual others Count % of Total Std. Residual Total Count % of Total 5 5.0% .3 16 16.0% -.4 18 18.0% -.2 13 13.0% .5 11 11.0% .1 63 63.0% No 2 2.0% -.4 12 12.0% .5 12 12.0% .3 5 5.0% -.6 6 6.0% -.1 37 37.0% 100 100.0% 17 17.0% 18 18.0% 30 30.0% 28 28.0% Total 7 7.0%

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Chi-Square Tests Point Asymp. Sig. (2- Exact Sig. Exact Sig. Probabilit sided) (2-sided) (1-sided) y .841 .836 .639 .848 .846 .866 1 .666 .352 .062

Value Pearson Chi-Square Likelihood Ratio Fisher's Exact Test N of Valid Cases 1.419a 1.447 1.415
b

Df 4 4

Linear-by-Linear Association .220 100

a. 2 cells (20.0%) have expected count less than 5. The minimum expected count is 2.59. b. The standardized statistic is -.469.

Interpretation:-After analyzing all the data can say service people are more aware about Mutual Fund and business person also are more aware among all the despondence. Students are not more aware about Mutual Fund. From 18 Professional 13 are aware and 5 are not aware is shows more awareness in professionals.

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Hypotheses 3:-Education level and awareness of Mutual Fund Ho=Education have impact on awareness of Mutual fund H1=Education have not impact on awareness of Mutual Fund

Case Processing Summary Cases Valid N Education awareness qualification * 100 Percent 100.0% Missing N 0 Percent .0% Total N 100 Percent 100.0%

Education qualification * awareness Cross tabulation awareness yes Education qualification under graduate Count % of Total graduate Count % of Total post graduate Count % of Total other Count % of Total Total Count % of Total 14 14.0% 30 30.0% 19 19.0% 0 .0% 63 63.0% no 9 9.0% 15 15.0% 12 12.0% 1 1.0% 37 37.0% Total 23 23.0% 45 45.0% 31 31.0% 1 1.0% 100 100.0%

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Chi-Square Tests Asymp. Sig. (2Value Pearson Chi-Square Likelihood Ratio 2.046a 2.335 Df 3 3 1 sided) .563 .506 .723

Linear-by-Linear Association .126 N of Valid Cases 100

a. 2 cells (25.0%) have expected count less than 5. The minimum expected count is .37.

Interpretation:-Here we Interpret that Education qualification have much impact on awareness of Mutual Fund out of 45 student 30 are aware and 15 are not aware. Among all the respondents most of the respondents are Graduate level. People who are not graduate have not much awareness regarding Mutual Fund.

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Hypothesis 4:-Occupation and way of invest of Mutual Fund Ho=Occupation have impact on way of investment of Mutual fund H1=Occupation have not an impact on way of investment of Mutual Fund

Case Processing Summary Cases Valid N occupation invest * way of 28 Percent 28.0% Missing N 72 Percent 72.0% Total N 100 Percent 100.0%

occupation * way of invest Cross tabulation Way of invest lump sum occupation student Count % of Total Std. Residual business Count % of Total Std. Residual service Count % of Total Std. Residual profession Count % of Total Std. Residual others Count % of Total Std. Residual Total Count % of Total 1 3.6% -.4 2 7.1% -.8 4 14.3% -.2 6 21.4% 1.7 1 3.6% -.4 14 50.0% s.i.p 2 7.1% .4 5 17.9% .8 5 17.9% .2 0 .0% -1.7 2 7.1% .4 14 50.0% 28 100.0% 3 10.7% 6 21.4% 9 32.1% 7 25.0% Total 3 10.7%

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Chi-Square Tests Asymp. Point Sig. (2- Exact Sig. (2- Exact Sig. Probabilit sided) sided) (1-sided) y .089 .034 .085 .068 .055 1 .146 .199 .099 .046

Value Pearson Chi-Square Likelihood Ratio Fisher's Exact Test Linear-by-Linear Association N of Valid Cases 8.063a 10.437 8.252 2.113b 28

Df 4 4

a. 10 cells (100.0%) have expected count less than 5. The minimum expected count is 1.50. b. The standardized statistic is -1.454

Interpretation:-Above chart and data shows that both the ways of investing into Mutual Fund are as fabulous. People choose lump sum option as much as sip. But we can see that people whose occupation is Profession choose only lump sum way of investing in mutual fund. Business people mostly choose sip as a way of their investment.

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Hypotheses:-5 Annual income of people and type of Mutual Fund Ho=Income of the people have impact on purchase of type of Mutual Fund H1=Income of the people have impact on purchase of type of Mutual Fund

Case Processing Summary Cases Valid N Annual income * type of mutual fund 31 Percent 31.0% Missing N 69 Percent 69.0% Total N 100 Percent 100.0%

Annual income * type of mutual fund Cross tabulation Type of mutual fund TATA Franklin ICICI Reliance Prudential 0 .0% -1.1 4 12.9% 1.9 1 3.2% -.4 0 .0% -.9 5 16.1% 1 3.2% -.3 1 3.2% -.7 3 9.7% 1.0 1 3.2% .0 6 19.4% SBI 2 Others Total 3 7 22.6%

mutual fund Templeton Annual income below 100000 Count 1 0 .0% -1.1 0 .0% -1.3 3 9.7% 1.3 2 6.5% 1.3 5 16.1%

% of Total 3.2% Std. Residual .1 2

6.5% 9.7% .6 1 1.8 2

100000300000

Count

10 32.3%

% of Total 6.5% Std. Residual .6 1

3.2% 6.5% -.7 1 .3 0

300000500000

Count

9 29.0%

% of Total 3.2% Std. Residual -.1 0

3.2% .0% -.6 2 -1.2 0

500000above

Count

5 16.1%

% of Total .0% Std. Residual -.8 4

6.5% .0% 1.0 6 -.9 5

Total

Count

31

% of Total 12.9%

19.4% 16.1% 100.0%

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Chi-Square Tests Asymp. Value Pearson Chi-Square Likelihood Ratio Fisher's Exact Test df sided) Sig. (2- Exact sided) .103 .123 .123 1 .140 .150 .079 .015 Sig. (2- Exact sided) Sig. (1- Point Probability

21.920a 15 .110 26.321 15 .035 18.130

Linear-by-Linear Association 2.174b N of Valid Cases 31

a. 24 cells (100.0%) have expected count less than 5. The minimum expected count is .65. b. The standardized statistic is -1.475.

Interpretation:-From the above data and chart we can analyze choice of the people in purchasing Mutual fund as per their income level. People having annual income of a l lake to 3 lake prefer reliance Mutual Fund. There is different choice of purchasing Mutual Fund.

DATA ANALYSIS
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Age
Cumulative Frequency Valid 20-30 30-40 40-50 50-above Total Missing Total System 13 46 35 6 100 1 101 Percent 12.9 45.5 34.7 5.9 99.0 1.0 100.0 Valid Percent 13.0 46.0 35.0 6.0 100.0 Percent 13.0 59.0 94.0 100.0

Analysis:From all the respondents there are more people who have age between 30-40 and less no of people are having age of less then 50.

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Gender
Cumulative Frequency Valid male female Total Missing Total System 70 30 100 1 101 Percent 69.3 29.7 99.0 1.0 100.0 Valid Percent 70.0 30.0 100.0 Percent 70.0 100.0

Analysis:From the all respondents there are 70 % male and 30% female. It shows that there is more no. of male then the female.

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Occupation
Cumulative Frequency Valid student business service profession others Total Missing Total System 7 28 30 18 17 100 1 101 Percent 6.9 27.7 29.7 17.8 16.8 99.0 1.0 100.0 Valid Percent 7.0 28.0 30.0 18.0 17.0 100.0 Percent 7.0 35.0 65.0 83.0 100.0

Analysis:From all the respondents more respondents are service person and business person. These number is double then the profession and student

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Annual income
Cumulative Frequency Valid below 100000 100000-300000 300000-500000 500000-above Total Missing Total System 9 32 31 9 81 20 101 Percent 8.9 31.7 30.7 8.9 80.2 19.8 100.0 Valid Percent 11.1 39.5 38.3 11.1 100.0 Percent 11.1 50.6 88.9 100.0

Analysis:There are more people who have there annual income within one lakh to five lakh. People having Income of below one lakh and above five lakh are very less.

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Education qualification
Cumulative Frequency Valid under graduate graduate post graduate other Total Missing Total System 23 45 31 1 100 1 101 Percent 22.8 44.6 30.7 1.0 99.0 1.0 100.0 Valid Percent 23.0 45.0 31.0 1.0 100.0 Percent 23.0 68.0 99.0 100.0

Analysis:Above graph shows that there are more people who complete there graduation and under graduate people are less number it shows that now a days education level is increased. 73

Awareness
Cumulative Frequency Valid yes no Total Missing Total System 63 37 100 1 101 Percent 62.4 36.6 99.0 1.0 100.0 Valid Percent 63.0 37.0 100.0 Percent 63.0 100.0

Analysis:Out of all the respondents 63% respondents are aware about Mutual Fund and 37% respondents are not aware about Mutual Fund.

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Source of awareness
Cumulative Frequency Valid broker friend/relative bank T.v/newspaper AMC other Total Missing Total System 10 9 25 12 9 1 66 35 101 Percent 9.9 8.9 24.8 11.9 8.9 1.0 65.3 34.7 100.0 Valid Percent 15.2 13.6 37.9 18.2 13.6 1.5 100.0 Percent 15.2 28.8 66.7 84.8 98.5 100.0

Analysis:From all the respondents most of the respondents are aware about Mutual Fund from the bank and others are aware from the T.V, News paper, Friends and Brokers.

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Investment In M.F
Cumulative Frequency Valid yes no Total Missing Total System 34 66 100 1 101 Percent 33.7 65.3 99.0 1.0 100.0 Valid Percent 34.0 66.0 100.0 Percent 34.0 100.0

Analysis:From all the respondents 63% respondents are aware about Mutual Fund and among all of them only 34% have invest in the Mutual Fund.

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Way of invest
Cumulative Frequency Valid lump sum s.i.p Total Missing Total System 14 14 28 73 101 Percent 13.9 13.9 27.7 72.3 100.0 Valid Percent 50.0 50.0 100.0 Percent 50.0 100.0

Analysis:Above diagram shows that two ways of investing into Mutual Fund like Lump sum and S.I.P are same famous people like Lump Sum investment as well as S.I.P (Systematic Investment Plan). 77

Type of mutual fund

Cumulative Frequency Valid TATA mutual fund Frenklin Templeton Reliance ICICI Prudential SBI Others Total Missing Total System 4 5 5 6 6 8 34 67 101 Percent 4.0 5.0 5.0 5.9 5.9 7.9 33.7 66.3 100.0 Valid Percent 11.8 14.7 14.7 17.6 17.6 23.5 100.0 Percent 11.8 26.5 41.2 58.8 76.5 100.0

Analysis:From above diagram we can say that there is no much difference in preference of purchasing Mutual fund.There is minor difference in purchasing different type of Mutual fund.

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Awareness of tax benefit

Cumulative Frequency Valid yes no Total Missing Total System 41 22 63 38 101 Percent 40.6 21.8 62.4 37.6 100.0 Valid Percent 65.1 34.9 100.0 Percent 65.1 100.0

Analysis:In the above diagram we can see that more people are aware about tax benefit which is given to the purchaser of the Mutual Fund. So tax benefit is more fabulous among the people.

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Option like in M.F

Cumulative Frequency Valid growth dividend Total Missing Total System 19 14 33 68 101 Percent 18.8 13.9 32.7 67.3 100.0 Valid Percent 57.6 42.4 100.0 Percent 57.6 100.0

Analysis:The above analysis shows that growth option is more Preferred then the dividend option among all investors of the Mutual fund.

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Awareness of service in M.F

Cumulative Frequency Valid E-mail alert SMS alert correspondents 24 hrs tall free no. personal assistance Total Missing Total System 6 21 5 11 6 49 52 101 Percent 5.9 20.8 5.0 10.9 5.9 48.5 51.5 100.0 Valid Percent 12.2 42.9 10.2 22.4 12.2 100.0 Percent 12.2 55.1 65.3 87.8 100.0

Analysis:Above diagram shows that more no. of respondents know the SMS alert service which is provided by the Investor of Mutual Fund and less no. of respondents know the service of correspondents.

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Satisfaction level
Cumulative Frequency Valid extremely satisfied satisfied neutral dissatisfied extremely dissatisfied Total Missing Total System 8 11 6 6 3 34 67 101 Percent 7.9 10.9 5.9 5.9 3.0 33.7 66.3 100.0 Valid Percent 23.5 32.4 17.6 17.6 8.8 100.0 Percent 23.5 55.9 73.5 91.2 100.0

Analysis:From the above diagram we can say that mostly people are satisfied and extremely satisfied with Investment Company of Mutual Fund so we can say that Investment Company Play a Good role in Investment of Mutual Fund.

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SUMMERY AND CONCLUSION

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FINDINGS OF THE RESEARCH

Among all the respondents 63% are aware about Mutual Fund and 37% are not aware about Mutual Fund. From all aware respondents onl 34 respondents have invest in Mutual Fund. There are 70% male and 30% female out of all the respondents and more no. of male are aware then the female about Mutual Fund. Among 18 professionals 13 are aware and 5 are not aware about Mutual fund it shows that there is more awareness in professionals. There are 23 respondents who are under graduate among them 14 are aware and 9 are not aware about Mutual Fund. There are 45 respondents who are graduate among them 30 are aware about Mutual Fund and 15 are not aware about Mutual Fund. More respondents have their annual income between 1 lacks to 3 lacks and from them most of the people are prefer Reliance Mutual Fund. From all the respondents 67% respondents have awareness regarding Mutual Fund through Bank and less no. of respondents are aware through broker. 50% respondents are investing in lump sum and 50% are investing in Systematic Investment Plan. 65% respondents are known about Tax benefit and 35% are not aware about tax benefit. 58% respondents like Growth Option and 42% respondents like Dividend Option. From all the service provided by company SMS alert is more known by respondents which is 55%. Among all the respondents 33% are satisfied with their investment in Mutual Fund and 24% are extremely satisfied with their investment. Only 8% are extremely dissatisfied with their investment.

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SUGESSIONS
After seeing the whole Data analysis and findings my suggestions for the industry are shown as below. The company should give the knowledge regarding Mutual Fund through various sources like more advertisement, TV programmes etc. about what it is? How it works? What is its benefit for us with its advertisement or in programmes. Because many people have heard about it but dont know what it is? The company should also attract the low Income people by showing them the benefits of the liquidity funds for the short Term to attract them. As per survey Bank creates higher awareness so the Mutual Fund companies should more collaborate with the Banks. The company should also attract the customer through different schemes who having knowledge about the Mutual Funds but not investing in Mutual Funds. The company should also make aware the people about the AMFI exam and should motivate them to be financial adviser to get more business. The company should give information regarding Tax benefit to Invest into Mutual Fund. The company should organize seminar to give information about Mutual Fund and should distribute brochures having detail of schemes of Mutual Fund.

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LIMITATION OF THE RESEARCH

This research reflects on individual customer in Ahemdabad only. So findings and suggestions given on the basis of this research cannot be extrapolated to the entire population. Sample size is 100 which is very small that is not enough to study the awareness of consumers of the country. Respondents are not sincere and care full to fill up the questionnaire so we cannot find right solution. As sampling technique is convenient sampling so it may result in personal bias. So perfect result cannot be achieved. The study might also consist of the respondents bias answer. It take much time to go in different areas and fill up questionnaire so the timings are also limited to make the Project. To create hypothesis and make cross tabulation is little bit confusing technique so it may be a limitation. In India people are not much care full and educated regarding Investment plan so to do this type of research is little hard.

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CONCLUSION
After making the whole report I am concluding that this project measures the awareness of Mutual Funds and its service. As Mutual Funds having good options and schemes, so we can grow it with creating the awareness among the people. It is also good for those who want to make their future in it. For that the only thing you need is to give time to your money to grow, they will surely give good returns and the other thing is the knowledge of the all product and schemes. As there is lesser no. of people investing in the Mutual Fund in comparison of the other instruments of the investment like L.I.C, post, savings a/c etc. So there is a good chance of its growing. Even Mutual Fund is also having the product as substitute of it. So the industry can get the benefit of it. The industry cans aware more investors to invest in Mutual Fund. They can do these through seminars, advertisement etc. They can also increase their sales by collaborating with many banks. They can also make more advisors by giving them more commission.

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BIBLIOGRAPHY
Web sites
www.indiainfoline.com www.amfindia.com www.moneycontrol.com www.google.com www.wikipedia.com www.sharemaketbasics.com www.sharemarket.com

Books: David F, Swenson. 2005. Unconventional Success. A fundamental Approach to Personal Investment Free Press 416 D.C. Anjaria. Dhaivat Anjaria. 2001 AMFIs Mutual Fund Testing Program.

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ANEXURE
Awareness about Mutual Fund QUESTIONNAIRE Dear Respondents, We the students of MBA semester-II studying at International Business School, EIILM University, Ahmedabad, are conducting a survey about Awareness of Mutual Fund. This project is a part of our MBA curriculum and we would like to have your co operation and full support to complete it so we would like you to provide us with your valuable views and opinions. ___________________________________________________________________________ General information 1. Gender : Male 2. Age: 20-30 40-50 3. Occupation : Student Service Others (specify) ______________ 4. Annual income of family Below 100000 300000-500000 100000-300000 500000 & above business profession 30-40 50-Above Female

5. Education Qualification 89

Under Graduate Post Graduate Research Questions

Graduate Other _______(specify)

6. Are you aware about Mutual Fund ? Yes No 7. From which source you come to know about Mutual Fund ? Broker Bank AMC (Asset Mgt. Company) Friend/Relative T.V./News Paper Others_______(specify)

8. Have you ever invest in Mutual Fund of any company? Yes No

9. Are you aware about the different ways of investing into Mutual Fund? Yes No

10. If yes, which way you like the most ? Lump sum S.I.P

11. Out of the following in which Mutual Fund you have invested? TATA Mutual Fund Reliance SBI Other Franklin Templeton ICICI Prudential

12. Are you aware about different tax benefit of investing into Mutual Fund? Yes No

13. Do you know about different option of investment in Mutual Fund? Yes If yes, which do you like most? Growth Dividend 90 No

14. Out of following which service you are aware which are provided after investing in Mutual Fund? E-mail Alert SMS Alert Correspondents 24 hr Tall Free no. Personal Assistance 15. To how much extent are you satisfied with the service offered by your investment company regarding Mutual Fund? Extremely Satisfied Satisfied Neutral Dissatisfied Extremely dissatisfied THANK YOU

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DIFFERENT TERMINOLOGY
AMC The AMC is the corporate entity, which markets and manager and manages a mutual fund scheme and in return receives a management fee from the fund corpus. SEBI specifies that an AMC must be separate entity the trust that manages it. NAV It is the value of unit of a Mutual Fund scheme and represents its true worth. NAV is arrived at by dividing total value of all investment made under the scheme by number of units of the scheme. NAV is critical yardstick of the funds performance. UNITS Units in a mutual fund scheme are similar to shares of a joint company. These are always in denominations of Rs. 10 each the sum total of all the units constitutes corpus of mutual fund. SPONSORS Sponsor of a mutual fund are those who establish the mutual fund trust and the AMC they constitute the shareholders of the AMC and receive dividends on profits made by the AMC. SEBI rules stipulate that mutual fund trust as well as the AMC must maintain an arms length relationship with the sponsors to avoid any conflict to interests, which may affect the unit holders. INCOME FUND These Funds invest largely in fixed income securities like bonds and debentures. Such funds earn returns more regularly than a growth fund but level of returns over longer periods normally lag behind those offered by growth funds while returns in such funds may be regular, their scale may fluctuate depending upon the prevalent interest rates and credit quality of the debt securities.

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GROWTH FUNDS Growth funds predominantly invest in stock market securities and carry risks larger than income funds. Since stock markets travel through a natural cycle of boom and bursts one should normally stay invested inequity funds for a longer times to earn higher returns. Equity funds may earn higher but they also carry larger risks. For risk taking investor equity are best suited. BALANCED FUNDS A balanced fund is the mixture of income fund and growth fund invested partly in equity to achieve a trade-of between risk and return. CLOSE ENDED In a close-ended fund an investor is allowed to subscribe only during the period of the initial offer. Close-ended funds mature after a specified period. OPEN ENDED FUNDS Those funds in which investor can invest & withdraw whenever they wish, after the closing of initial offer. Withdrawals are allowed at NAV minus a back end load. LOCK IN PERIOD Time period during which investor can neither redeem nor they transfer their holdings to others. Lock in period is imposed to allow fund manager to deploy money for an adequate period of time to earn a reasonable return premature withdrawals may destabilize the fund & are not beneficial to the interests of investors. MANAGEMENT FEES An AMC that mangers & markets a mutual fund scheme is entitled to a management fee@ 1% to 25% of the total funds managed, it could be charged to the scheme irrespective of the performance of the scheme. REDEMPTION Disbursement of unit capital on the maturity of that particular scheme to all its existing unit holders.

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MARKET PRICE The price at which units of mutual funds are quoted in stock exchange where they are listed. REGISTRAR Organization appointed by an AMC to the schemes it is registered, monitored, and regulated by SEBI, it provides required services like system capabilities back up, accepts and processes investors applications in informs AMC about amounts received/disbursed statements. CUSTODAIN Banking organization that keeps in safe custody all the securities & other instruments belonging to the fund to insure smooth inflow & outflow of securities. It is also approved regulated and registered with SEBI. EXIT LOAD Value of deduction from NAV on the date when one choose to withdraw from a fund, load is imposed because withdrawals carry transaction cost to AMC it can not be more than 6% of NAV of corpus as prescribed by SEBI many schemes offer redemption facility without exit load. ENTRY LOAD Charge paid by unit holder when he invests an amount in the scheme. Mutual funds incur many expenses during an issue, which are charged to the scheme. Such load is called entry load. LIQUIDITY Ability of investors to change its unit into cash within minimum time as and when he needs money. for subscription/ purchase/ redemption it also handles communications with investors, perform data entry services and dispatches account

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TRANSPARENCY Basic feature of mutual funds is transparency, their functioning is very efficient, well monitored & transparent working of AMC is regulated by SEBI it is audited weekly, it has to work under strict guidelines issued by SEBI, and its NAV is calculated and published daily so that there is no chance of any default in the working of Mutual Funds.

95