The Comprehensive Study of Reliance Mutual Funds Essay Example

MUTUAL FUND (A RELIANCE CAPITAL ASSET MANAGEMENT LTD. ) RELIANCE CAPITAL operates in various financial products and services like, Mutual Fund, Insurance, etc. The evaluation of financial planning has been increased through decades, which is best seen in customer rise. Now a day’s investment of saving has assumed great importance.

According to the study of the markets, it is being observed that markets are doing well in Mutual fund.In near future a proper financial planning is required to invest money in all type of financial product because there is good potential in market to invest. In this project the great emphasis is given to the investor’s mind in respect to investment in Mutual Fund . The needs and wants of the client is taken into consideration. I hope RELIANCE CAPITAL COMAPNY, Pune will recognize this as well as take more references from this project report. The main objective of this project is to know the Awareness of Mutual Fund among investors and also to know the investing pattern of people in different Financial Project.

IT sector has been given more emphasis for the study of the project because it is the only sector where all type of Age group, Income class and different level of people are represented. After analyzing the feedback the conclusion has been made that the Indian financial market is having lots of potential customer the only thing is to give a proper guidance to the prospective customers. 1. INTRODUCTION 1.

1 Mutual Fund Mutual fund is a mechanism for pooling the investment, made by the investors, in stock market, securities, shares and debentures as disclosed in offer document and issuing units to

the investors.Units are issued to the investors in accordance with quantum of money invested by them. Investors of Mutual funds are known as Unit Holders. As investments are spread across a wide cross-section of industries and sectors, the risk are reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time.

The profits or losses are shared by 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.A mutual fund is required to be registered with Securities and Exchanges Board of India (SEBI) which regulates securities markets before it can collect funds from the public. ONE CAN MAKE MONEY FROM MUTUAL FUND IN THREE WAYS:- ? Income is earned from dividends and interest on bonds. A fund pays out nearly all income it receives over the year to fund owners in the form of a distribution. ? If the fund sell securities that have increased in price, the fund have a capital gain most fund also pass on this gain to investor in a distribution.

If fund holding increases in price but are not sold by the fund manager, the fund shares increase in price. One can sell then this mutual fund shares the profit. 1. 2 Net Asset Value Following are the regulatory requirements and accounting definitions laid down by SEBI: NAV = Net Asset of the Scheme / Number of Units Outstanding = MVL+ REC+ AI+ Asset – AE – Pay – Lia No .

of Units Outstanding as at the NAV date

MVL: Market value of Investment REC: Receivables AI: Other Accrued Income Asset: Other Assets (Dividend yet to be received)AE: Accrued Expenses Pay: Other Payables Lia: Other Liabilities (Custodian and Management Fees) Fund’s NAV is affected by: • Purchase or Sale of Investors Securities. • Valuation of all Investment Securities. • Other Assets and Liabilities. • Units Sold or Redeemed. 1.

3 Classification of Mutual Fund • Open Ended Funds: These funds have units available for sale and repurchase at all time. An investor can buy or redeem the units at price based on NAV per Unit. • Close Ended Funds: These funds don’t have units available for sale and repurchase at all time.It allows only one-time sale of a fixed number of units. However, to provide liquidity to investors many close-ended funds get listed on a Stock Exchange(s).

• Load Funds: Fund Manager made charges to the investors to cover distribution/ sales/marketing expenses. These charges are called “Loads”. If load amount is charged over a period of time, it is called a “Deferred Load”. Some funds charge different amount of load to the investors depending on number of years the investors have stayed with funds.Such charges are called “Contingent Deferred Sale Charge”. • No-Load Funds: Funds which make no charges or load for sales expenses are called as “No Load Funds”.

1. 4 TYPES OF MUTUAL FUNDS : - Mutual Funds have specific investment objectives such as growth of capital, safety of principal current income or tax exempt income, one can select one fund or any number of different funds to help one meets ones specific goals. In general mutual fund fall under 3 general

categories : - ? Equity fund invest in shares of common stocks. Fixed income funds invest in government or corporate securities which offer fixed rate of returns. ? Balanced fund invest in a combination of both stocks and bonds.

AGGRESSIVE GROWTH FUNDS :- These funds seek to provide maximum growth of capital with secondary emphasis on dividend or interest income. They invest in common stocks with a high potential for rapid growth and capital appreciation. Aggressive growth funds are suitable for those investors who can afford to assume the risk of potential loss in value of their investment in the hope of achieving substantial and rapid gains.They are not suitable for investors who must conserve their principal or who must maximize their current income. GROWTH FUNDS:- Like aggressive growth funds, growth fund generally invests in stocks for growth rather than income. They are considered more conservative in their approach because they usually invest in established companies to achieve long-term growth.

Growth fund provides low current income but the investor principal is more stable then it would be in an aggressive growth fund. While the growth potential may be less over the short term, many growth funds have superior long-term performance records.These funds are suitable for growth oriented investors but not investors who are unable to assume risk or who are dependent on maximizing current income from there investments. GROWTH AND INCOME FUNDS:- Growth and income funds seek long-term growth of capital as well as current income. The investments strategies use to reach these goals vary among funds.

Growth and income funds have low to moderate stability of principal and moderate potential for current income and

growth. They are suitable for investors who can assume some risk to achieve growth of capital but want to maintain a moderate level of current income.FIXED INCOME FUNDS:- The goal of fixed income fund is to provide high current income consistent with the level of capital. Growth of capital is of secondary importance. Fixed income funds offer a higher level of current income than money market funds, but a lower stability of principal. Fixed income funds are suitable for investors who want to maximize current income and who can assume a degree of capital risk in order to do so.

EQUITY FUNDS:- Funds that invest in stocks represent the largest category of mutual fund.Generally the investment objective of this class of fund is long-term capital growth with some income. There are however many type of equity funds. BALANCED FUNDS:- The Balanced funds aims to provide both growth and income.

These funds invest in both shares and fixed income securities in the proportion indicated in their offer documents. It is an idea for investors who are looking for the combinations of income and moderate growth. MONEY MARKET FUNDS/ LIQUID FUNDS:- For the cautious investors these funds provide a very high stability of principal while seeking a moderate to high current income.They invest in highly liquid; virtually risk free, short-term debt securities of agencies of the Indian government, banks and corporation and treasury bills. Because of their short-term investments, money market mutual funds are able to keep a virtually constant unit price; only the yield fluctuates. Money market funds are suitable for those investors who want high stability of principal and current income with immediate liquidity.

SPECIALITY

/ SECTOR FUNDS:- These funds invest in securities of a specific industry or sector of the economy such as health care, technology, leisure, utilities or precious metals.The funds enable investor to diversify holding among many companies within an industry, a more conservative approach than investing directly in one particular company. Sector funds offer a opportunity for sharp capital gains in cases where the fund’s industry is “in favor” but also entail the risk of capital losses when the industry is out of favor. While sectors funds restrict holdings to a particular industry, other specialty funds such as index funds gives investors a broadly diversified portfolio and attempt to mirror the performance of various market averages. 1.

5 Advantages of Mutual funds Diversified portfolio of investments: As the investments are made in various stocks of different companies, Professional Management: Fund Managers and his/her team of highly qualified professional looks at all perspectives before committing to an investment decision. This sort of specialist knowledge is available to the small retail investor through the MF route. • Market Linked Return: Many schemes offered by mutual funds help investors to gain return better than the market. • Diversification of Risk: Diversification reduces the risk of exposure to one or two shares or debentures or other instruments.

Reduction in Transaction Cost: A direct investors bears all costs of investing such as brokerage or custody of securities. Investing via Mutual Fund help investors to reduce the cost as larger volumes are involved . • Liquidity: An MF investor can invest and disinvest at will, irrespective of market conditions. In case of shares or bonds it’s very difficult to sell them unless

and until a buyer is there.

Mutual Funds give the option of liquidity. The units of an open ended scheme can be redeemed at any working day. Convenience and Flexibility: Various options of Systematic Investment Plan, Systematic Withdrawal Plan and Systematic Transfer Plan are designed for the convenience of the investors. 1. 6 Disadvantages of Mutual Fund No Control over Costs: A Mutual Fund Investor has to pay management fees, fund distribution cost to the Mutual Fund.

This cost is not incurred in direct investing. But this cost is less than the cost of direct investing by the investors. • No Tailor-made Portfolios: Investors investing in Mutual Fund gives the rights to Fund Manager to build the portfolio of shares, bonds and other securities.While investing directly, investors can build there own portfolio However, today Mutual Funds are offering families of schemes. Investors can choose from different investment plans c construct a portfolio of his choice. • Managing a Portfolio of Funds: Due to presence of large number of funds availability in the market, investor needs some advice to select a fund to achieve his objective.

1. 7 MUTUAL FUND INDUSTRY IN INDIA [pic] 1. 8 Growth of the Mutual Fund Industry in India • 1963: Unit Trust of India was established by an Act of Parliament. • 1964: First scheme launched by UTI - Unit Scheme 1964(US 64). 1978: UTI de-linked from the RBI and IDBI took over.

• 1987: SBI Mutual Fund was the first Public Sector Fund (November) Canbank Mutual Fund (December) UTI had Rs. 6, 700 crores of AUM • 1989: Punjab National Bank Mutual Fund ( Augest ) Indian Bank Mutual

Fund (November) LIC Mutual Fund • 1990: Bank of India (June) GIC Mutual Fund • 1992: Bank of Baroda Mutual Fund (October). • 1993: Total Rs. 47, 004 as AUM. Kothari Pioneer- First Private Sector Mutual Fund (July) SEBI (Mutual Fund) Regulations • 1996: Revised SEBI (Mutual Fund) Regulations • 2003: Mutual FundsTotal assets: Rs.

1, 21, 805 crores. The Unit Trust of India: Rs. 44, 541 crores of AUM UTI bifurcated into two separate entities The Specified Undertaking of UTI: Rs. 29, 835 crores of AUM The UTI Mutual Fund Ltd • 2004: Mutual Funds Total Asset: Rs. 153108 crores Schemes: 421.

• 2005: Indian mutual fund industry has Rs. 199200 crores 1. 9 HOW LONG TO KEEP INVESTMENT TO GET MAXIMUM RETURNS:- Technically open-ended funds you can withdraw your investments even within a week, but to get desired returns positive time frame is required are: Funds |Time Period | |Equity Funds |3 Years (plus) | |Balanced Funds |18 months to 3 Years | |MIP’s |1 Year (plus) | |Income Funds |6 months to 1 Year | |Liquid Funds |few days to 6 months | 1. 0 WHAT RETURNS CAN I EXPECT IF I KEEP MY MONEY FOR SUGGESTED TIME FRAMES:- | Funds |Returns | | | | |Sector funds |22% to 25% p. a | |Balance funds |15% to 18% p.

a | |MIP’s Pension Plans |12% to 15% p. | |Income Funds |10% to 12% p. a | |Liquid Funds |7% to 9% p. a | The above-mentioned returns in the table are indicative and not assured.

All investments in MUTUAL FUNDS are securities and are subject to market risk and the

NAVs of the schemes may go up and down depending upon the factors and forces affecting the security market including the fluctuations in the internal rates . The past performance of the MUTUAL FUNDS is not indicative of future performance. 1. 11 THE RISK RETURN GRAPHS FOR VARIOUS FUNDS:- [pic]The above Graph shows the Risk and Returns generated by different Funds. Liquid Funds are less Risky and also generate less Returns where as Sector Funds are more Risky but generate more Returns by the example of above two Funds it is clear that Risk and Returns are directly proportional to each other.

Other Funds like Equity Funds, Balanced Funds and Income Funds are also gives the same percentage of Returns as the Risk involved. 1. 12 ASSOCIATION OF MUTUAL FUNDS IN INDIA:- With the increase in mutual fund players in India, a need for mutual fund association in India was generated to function as a non-profit organization. Association of Mutual Funds in India (AMFI) was incorporated on 22nd August 1995.AMFI is an apex body of all Asset Management Companies (AMC), which has been registered with SEBI. Till date all the AMCs are that have launched mutual fund schemes are its members.

It functions under the supervision and guidelines of its Board of Directors. Association of Mutual Funds India has brought down the Indian Mutual Fund Industry to a professional and healthy market with ethical lines enhancing and maintaining standards. It follows the principle of both protecting and promoting the interests of mutual funds as well as their unit holder. 1. 13 The objectives of Association of Mutual Funds in India:- The Association of Mutual Funds

of India works with 30 registered AMCs of the country.

It has certain defined objectives, which juxtaposes the guidelines of its Board of Directors. The objectives are as follows: ? This mutual fund association of India maintains high professional and ethical standards in all areas of operation of the industry. ? It also recommends and promotes the top class business practices and code of conduct which is followed by members and related people engaged in the activities of mutual Fund and asset management. The agencies that are by any means connected or involved In the field of capital markets and financial services also involved in this code of conduct Of the association.

? AMFI interacts with SEBI and works according to SEBIs guidelines in the mutual fund Industry. Association of Mutual Fund in India do represent the Government of India, the Reserve Bank of India and other related bodies on matters relating to the Mutual Fund Industry. ? It develops a team of well qualified and trained Agent distributors. It implements a programme of training and certification for all intermediaries and other engaged in the mutual fund industry.

? AMFI undertakes all India awareness programmed for investor’s in order to promote Proper understanding of the concepts and working of mutual funds. ? At last but not the least association of mutual fund of India also disseminate Information’s on Mutual Fund Industry and undertakes studies and research either directly or in association with other bodies. 1. 14 FUTURE OF MUTUAL FUND IN INDIA:-By December 2004, Indian mutual fund industry reached Rs 1,50,537 crore. It is estimated that by 2010 March-end, the total assets of all scheduled commercial

banks should be Rs 40,90,000 crore. The annual composite rate of growth is expected 13.

4% during the rest of the decade. In the last 5 years we have seen annual growth rate of 9%. According to the current growth rate, by year 2010 the asset will be double. Some facts for the growth of mutual funds in India:- ? 100% growth in the last 6 years. ? Number of foreign AMC's are in the queue to enter the Indian markets like Fidelity Investments, US based, with over US$1trillion assets under management worldwide.

? Our saving rate is over 23%, highest in the world.Only channelizing these savings in mutual funds sector is required. ? We have approximately 29 mutual funds which is much less than US having more than 800. There is a big scope for expansion. ? 'B' and 'C' class cities are growing rapidly. Today most of the mutual funds are concentrating on the 'A' class cities.

Soon they will find scope in the growing cities. ? Mutual fund can penetrate rural like the Indian insurance industry with simple and Limited products. ? SEBI allowing the MF's to launch commodity mutual funds. ? Emphasis on better corporate governance. ? Trying to curb the late trading practices.

? Introduction of Financial Planners who can provide need based advice. 1. 5 REGULATORY ASPECT :- Schemes of mutual funds:- ? The Asset management company shall launch no schemes unless the trustees approve such scheme and a copy of the offer has been filed with the Board. ? Every mutual fund shall along with the offer documents of each scheme pay filing fees.

? The offer document

shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure non maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor. A close-ended scheme shall be fully redeemed at the end of the maturity period. Unless a majority of the unit holders otherwise decide for its rollover by passing a resolution”. ?The mutual fund and asset management company shall be liable to refund the application money to the applicants:- ? If the mutual fund fails to receive the minimum subscription amount referred to in clause (i) of sub- regulation. ? If the moneys received from the applicants for units are in excess of subscription as referred to in clause (ii) of sub-regulation.

o The asset management company shall issue to the applicant whose ? application has been accepted, unit certificates or a statement of accounts ? specifying the number of units allotted to the applicant as soon as possible ? ut not later than six weeks from the date of closure of the initial ? subscription list and or from the date of receipt of the request from the unit ? Holders in any open ended scheme. Rules Regarding Advertisement:- ? The offer document and advertisement materials shall not be misleading or contain any statement or opinion, which are incorrect or false. Investment objectives and valuation policies:- ? The price at which the units may be subscribed or sold the price at which such unit may at any time be repurchased by the mutual fund shall be made available to the investors. ? General Obligation:-

• Every asset management company for each scheme shall keep and maintain roper book of accounts, records and document, for each scheme so as to explain its transaction and to disclose at any point of time the financial position of each scheme and in particular give a true and fair • view of the state of affairs of the fund and intimate to the board the place where such books of accounts, records and documents are maintained. • The financial year for all the scheme shall end as of March 31 of each year.

Every mutual fund or the asset management company shall prepare in respect of each financial year an annual report and annual statement of accounts of the schemes and the fund as specified in Eleventh Schedule. • Every mutual fund shall have the annual statement of accounts audited by an auditor who is not in any way associated with the auditor of the asset management comp Procedure for Action In Case Of Default:- On and from the date of the suspension of the certificate or the approval, as the case may be, the mutual fund, trustees or asset management company, during the period of suspension and shall be subject to the direction of the Board with regard to any records, documents, or securities that may be in its custody or control relating to its activities as mutual funds, trustees or the asset management company. Restrictions on Investments: ? A mutual fund scheme shall not invest more than 15% of its NAV in debt instrument issued by a single issuer, which are rated not below investment grade by a credit rating agency authorize to

carry out such activity under the act. Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of Asset Management Company. ?A mutual fund Scheme shall not invest more than 10% of its NAV in unrated debt instrument issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the Board of Trustees and the Board of Asset management. ? No mutual funds under all its schemes should own more than 10% of any company’s paid up capital carrying voting rights.

? Such transfers are done at the prevailing market price for quoted instrument on spot basis. ? The securities so transferred shall be in conformity with the investment objectives of the scheme to which such transfer has been made. A scheme may invest in another scheme under the same asset management company or any other mutual fund without charging any fees, provided that aggregated intercourse inter scheme investment made by all schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the net asset value of the mutual fund. The initial issue expenses in respect of any scheme may not exceed 6% of the funds raised under that scheme. ? Every mutual fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relative securities and in all cases of sale, deliver the securities and shall in no case put itself in a position whereby it has

to make short sale or carry forward transaction or engage in Badla finance.

Every mutual fund shall get the securities purchased or transferred in the name of the mutual fund on account of the concerned scheme, wherever investments are intended to be of long-term nature. ?Pending deployment of funds of a scheme a mutual fund can invest the funds of the scheme in short term deposits of scheduled commercial banks. ? No mutual fund scheme shall make any investment in ; o Any unlisted security of an associate or group company of the sponsor or o Any security issued by way of private placement by an associate or group company of the sponsor. The listed securities of group companies of the sponsor which is in excess of 30% of the net assets (of all the schemes of a mutual fund) No mutual fund scheme shall invest more than 105 of its NAV in the equity shares or equity related instrument of any company. Provided that, the limit of 10 percent shall not be applicable for investments in index fund or sector or industry specific schemes.

? A Mutual fund scheme shall not invest more than 5% of its NAV in the equity shares or equity related investments in case of open-ended schemes and 10 % of its NAV in case of close ended schemes. 1. 16 STRUCTURE OF MUTUAL FUND IN INDIA:- The Indian mutual fund industry is dominated by the Unit Trust of India which has a total corpus of Rs. 700bn collected from more than 20 million investors. The UTI has many funds schemes in all categories i. e.

quity , balanced ,

income etc with some being open ended and some being close ended . The unit schemes 1964 commonly referred to as US 64 , which is a Balanced fund is a biggest schemes with a corpus of about Rs. 200 billion UTI was floated by financial institution and is governed by a special act of parliament . Most of its investors believe that UTI is government owned and controlled which while legally incorrect, is true for all practical purposes. The second largest category of mutual funds is the ones floated by Nationalize Banks.

Canbank Asset Management floated by Canera Bank and SBI Funds Management floated by State Bank of India are the largest of it.GIC AMC floated by General Insurance Corporation and Jeevan Bema Sahayog AMC floated by LIC are some of the other prominent ones. The aggregate corpus of funds managed by this category of AMCs is about 150bn. The third largest category of mutual fund is the ones floated by the private sector and by foreign Asset Management Company . The largest of these are Prudential ICICI AMC and Birla Sunlife AMC.

The aggregate corpus of asset managed by this category of AMCs is in excess of Rs. 250bn. Some of AMCs operating currently are:- |NAME OF AMC | OWNERSHIP | |Alliance capital asset management (I)Pvt.Ltd |Private foreign | | |Private Indian | |Birla Sunlife Asset Management Company ltd.

| | |Bank of Baroda Asset management Company LTD |Bank | |Bank of India Asset Management Company Ltd |Bank | |Canbank Investment Management Services Ltd |Bank | |Cholamandalam Cazenove Asset Management Company Ltd. Private foreign | |Dundee Asset Management Company Ltd |Private foreign |

|DSP Merrill Lynch ASSET Management Company Ltd |Private foreign | |Escorts Asset management ltd |Private Indian | |First India Asset Management Ltd |Private Indian | |GIC Asset Management Company Ltd. |Institution | |IDBI Investment Management Company Ltd |Institution | |Indfund Management Ltd |Bank | |ING Investment Asset Management Company Pvt. Ltd |Private foreign | |J M Capital Management limited |Private Indian | |Jardine Fleming Asset Management ltd Private foreign | |Kotak Mahindra Asset Management Company |Private Indian | |Kothari Pioneer Asset Management Company |Private Indian | |Morgan Stanley Asset Management Company Pvt Ltd |Private foreign | |Punjab National Bank Asset Management Company Ltd |Bank | |Reliance Mutual FundCompany |Private Indian | |State Bank of India Funds Management ltd. | |Bank | |Shriram Asset Management Company Ltd. | |Private Indian | |Sun F and C Asset Management Company Ltd.

| |Private foreign | |Sundaram Newton Asset Management Company ltd | |Private foreign | |Tara Asset Management Company Ltd. |Private Indian | |Credit Capital Asset Management Company Ltd | |Private Indian | |Templeton Asset Management Company Ltd | |Private foreign | |Unit Trust Of India | |Institution | 2. COMPANY PROFILE:- COMPANY OVERVIEW: Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Average Assets Under Management (AAUM) of Rs. 1,08,332 CRORES and an investor base of over 70.

87 Lacs. (AAUM and investor count as on June 30, 2009) Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio of products to meet varying investor equirements and has presence in 118 cities across the

country. Reliance Mutual Fund constantly endeavors to launch innovative products and customer service initiatives to increase value to investors. "Reliance Mutual Fund schemes are managed by Reliance Mutual FundLimited. , a subsidiary of Reliance Capital Limited, which holds 93.

37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders. " Reliance Capital Ltd. is one of India’s leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital Ltd. as interests in asset management, life and general insurance, private equity and proprietary investments, and other financial services.

VISION OF THE COMPANY: To be a globally respected wealth creator with an emphasis on customer care and a culture of good corporate governance. MISSION OF THE COMPANY To create and nurture a world-class, high performance environment aimed at delighting our customers. HISTORY Reliance Mutual FundLimited (RCAM), a company registered under the Companies Act, 1956 was appointed to act as the Investment Manager of Reliance Mutual Fund. Reliance Mutual FundLimited (RCAM) was approved as the Asset Management Company for the Mutual Fund by SEBI vide their letter no IIMARP/1264/95 dated June 30, 1995.The Mutual Fund has entered into an Investment Management Agreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996. Pursuant to this IMA, RCAM is authorized to act as Investment Manager of Reliance Mutual Fund.

The networth of the Asset Management Company including preference shares as on September 30, 2007 is Rs. 152. 02 crores. Reliance Mutual Fund

has launched thirty-five Schemes till date, namely : "Reliance Mutual Fund schemes are managed by Reliance Mutual FundLimited.

, a subsidiary of Reliance Capital Limited, which holds 93. 37% of the paid-up capital of RCAM, the balance paid up capital being held by minority shareholders. "Reliance Mutual FundLimited (RCAM) was approved as the Asset Management Company for the Mutual Fund by SEBI vide their letter no IIMARP/1264/95 dated June 30, 1995. The Mutual Fund has entered into an Investment Management Agreement (IMA) with RCAM dated May 12, 1995 and was amended on August 12, 1997 in line with SEBI (Mutual Funds) Regulations, 1996.

Pursuant to this IMA, RCAM is authorised to act as Investment Manager of Reliance Mutual Fund. The networth of the Asset Management Company as on March 31, 2008 is Rs 709. 39 crores. YEAR WISE MILESTONES OF RELIANCE MUTUAL FUND Reliance Growth Fund (September 1995) Reliance Income Fund (December 1997)Reliance Medium Term Fund (August 2000) Reliance Diversified Power Sector Fund (March 2004) Reliance Index Fund (February 2005) Reliance Tax Saver (ELSS) Fund (July 2005) Reliance Equity Linked Saving Fund - Series I (December 2007) Reliance Infrastructure Fund (May 2009) RELIANCE MUTUAL FUND COMPETITIVE ADVANTAGES Reliance Mutual Fund – At a Glance • Reliance Mutual Fund (RMF) is one of India’s leading Mutual Funds, with Assets Under Management (AUM) of Rs. 1,08,332 crore (AUM as on 30th June 2009) and an investor base of over 70.

87 Lacs. • Investor base of over 3. 38 million as on March 31, 2007 • Rapid growth in Assets Under Management (AUM), 87. % growth in AUM year on year. AUM of over Rs.

46,306 crore

($10. 62 billion) as on March 30, 2007 from Rs. 24,669 crore ($5. 53 billion) as on March 31, 2006.

• Accelerated growth in investor base – 66. 89% growth in investor base year on year. Over 3. 38 million investors as on March 31, 2007 from over 2. 02 million investors as on March 31, 2006.

• Reliance Mutual Fund has over 10 years of extensive market experience, over 26 schemes combined with a strong performance track record. • Reliance Equity Fund NFO (6th Feb -7th March 2006), the largest ever collection of Rs. 5,759 crore ($1. 29 billion) in the history of the Indian Mutual Fund industry. Footprint in over 100 cities in India • Wide network of 130 collection points• Wide portfolio of 26 well-rounded products to meet varying investor requirements. • Reliance Mutual Fund is amongst the few mutual funds in the industry to offer Subscription, Redemption and Switch through Online Transactions.

• Lipper Fund Award India 2007 : o Reliance Gilt Securities Fund-Long Term Plan-Growth was declared the best fund over 3 years in the Bond INR Government category, out of 52 eligible schemes. o Reliance Growth Fund-Growth Plan was declared the best fund over 5 years in the Equity India category, out of 81 eligible schemes. • Lipper Fund Award Gulf 2007 : Reliance Banking Fund-Growth Plan-Growth Option was declared the best fund over 3 years in Equity Sector Banks and Other Financials o Reliance Growth Fund-Growth Plan was declared the best fund over 3 years in the Equity India category o Reliance Growth Fund-Growth Plan was declared the best fund over 5 years in the Equity India category

o Reliance Income Fund-Growth Plan-Growth Option was declared the best fund over 5 years in Bond Indian Rupee – General category o Reliance Gilt Securities Fund-Long Term Plan-Growth was declared the best fund over 3 years in the Bond INR Government category o Reliance Short Term Fund-Growth Plan was declared the best fund over 3 years in Bond Indian Rupee o • CNBC TV18 - CRISIL Mutual Fund of the Year Awards 2006 : oReliance Gilt Securities Fund - Long Term Plan was awarded CNBC TV18 - CRISIL Mutual Fund of the Year Awards 2006, in the Open End Long Term Gilt Category o Reliance Short Term Fund was awarded CNBC TV18 - CRISIL Mutual Fund of the Year Awards 2006, in the Open End Debt Short Term Category • ICRA Mutual Funds Awards 2007 : o Reliance Short Term Fund has been ranked ICRA MFR 1 by ICRA Mutual Funds Awards 2007 in the category Open Ended Debt – Short Term for its 1 year performance till December 31, 2006. The rank indicates performance within the top 10% of the stated category. o Reliance Gilt Securities Fund - Long Term Retail Plan has been ranked ICRA MFR 1 by ICRA Mutual Funds Awards 2007 in the category Open Ended Gilt - Long Term for its 3 year performance till December 31, 2006. The rank indicates performance within the top 10% of the stated category.

Reliance Liquidity Fund has been ranked ICRA MFR 1 by ICRA Mutual Funds Awards 2007 in the category Open Ended Liquid Scheme for its 1 year performance till December 31, 2006. The rank indicates performance within the top 10% of

the stated category. • The first mutual fund in India to offer instant cash withdrawal facility on investments. Reliance Mutual Fund offers the Reliance Any Time Money (ATM) Card with select schemes.

The card is a boon for retail investors as it enables them to withdraw their investment any time, anywhere at over 1 million VISA-enabled ATMs across the world. • Reliance Mutual Fund is amongst the few mutual funds with a 24X7 Call Centre facility OBJECTS OF THE COMPANY The main objects as contained in our Memorandum of Association are: 1.To engage or undertake software and internet based services, data processing, IT enabled services, software development services, selling advertisement space on the site, web consulting and related services including web designing and web maintenance, software product development and marketing, software supply services, computer consultancy services, e-commerce of all types including electronic financial intermediation business and e-broking, market research, business and management consultancy. 2.

To undertake, conduct, study, carry on, help, promote any kind of research, probe, investigation, survey, developmental work on economy, industries. corporates, business houses, agricultural and mineral, financial institutions, foreign financial institutions, capital market on matters related to investment decisions primary equity market, secondary equity market, debentures, bond, ventures, capital funding proposals, competitive analysis, preparation of corporate/industry profile etc. and trade/invest in researched securities.