India Infoline (Awarness About the Mutual Fund)

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 Particulars Page No.

1. Certificate by Guide 4

2. Certificate by Mentor 5

3. Candidates Statement 6

4. Preface 7

5. Acknowledgement 8

6. Executive Summery 9

7. Objective of Study 10

About Mutual Fund 11

8. Introduction 12

9. History of Mutual Fund 14

10. Organization Of Mutual Fund 17

11. The way and type to invest in Mutual Fund 19

12. Regulatory of mutual Fund Scheme 20

13. Types of Mutual Fund Scheme 21

14. SEBI Registered Mutual Fund 24

15. Points to measure M.F Performance 26

16. Procedure for registering M.F. with SEBI 27

17. How to reduce risk while investing 28

18. Growth in assets in Management 30

19. Advantages of Mutual Fund 31

20. Disadvantage of Mutual Fund 33

Company Details 34

21. Snapshot of “India Infoline Ltd” 35

22. History 36

23. Milestones 37

24. About India Infoline Ltd. 39

25. Vision statement 40

26. Management team 41

27. Contact details 44

28. Company’s structure 45

29. Unique Approaches 48

30. Assets under Management 49

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31. NFO Period from 1st June to 3rd July 2010 50

32. Invest online 51

33. Philosophy on Corporate Governance 53

34. Financial Statement of IIFL 55

Research Methodology 57

35. Research Methodology 58

36. Hypothesis 59

37. Data analysis 69

Summery and Conclusion 83

38. Findings 84

39. Suggestion 85

40. Limitations 86

41. Conclusion 87

42. Bibliography 88

Annexure 89

43. Questionnaire 89

44. Different Terminology 92

3

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.

Date: 10 July 2010

Place: Ahmedabad

4

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

5

CANDIDATE’S 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)

6

PREFACE

In today’s 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.

7

ACKNOWLEDGEMENT

“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.

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EXECUTIVE SUMMARY

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 today’s 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.

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OBJECTIVES OF THE STUDY

1. The objective of the research is to study and analyze the awareness level of investors of

mutual funds.

2. To measure the satisfaction level of investors regarding mutual funds.

3. An attempt has been made to measure various variable’s playing in the minds of investors in

terms of safety, liquidity, service, returns, and tax saving.

4. To get insight knowledge about mutual funds

5. To know the mutual funds performance levels in the present market

6. To analyze the comparative study between other leading mutual funds in the present market.

7. To know the awareness of mutual funds among different groups of investors.

8. Finding out ways and means to improve on the services by India Infoline Ltd.

10

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 open-

end 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

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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

16

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

18

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 investor’s 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 operations-

investment, 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

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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 open-

ended 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, long-

term 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

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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

25

POINTERS TO MEASURE MUTUAL FUND PERFORMANCE

MEASURES DESCRIPTION IDEAL RANGE

STANDARD

DEVIATION

Standard Deviation allows evaluating the volatility of

the fund. The standard deviation of a fund measures

this risk by measuring the degree to which the fund

fluctuates in relation to its mean return.

Should be near to it’s mean

return.

BETA Beta is a fairly commonly used measure of risk. It

basically indicates the level of volatility associated with

the fund as compared to the benchmark.

Beta > 1 = high risky

Beta = 1 = Average

Beta <1 = Low Risky

R-SQUARE R- square measures the correlation of a fund’s

movement to that of an index. R-squared describes the

level of association between the fund's volatility and

market risk.

R-squared values range between

0 and 1, where 0 represents no

correlation and 1 represents full

correlation.

ALPHA Alpha is the difference between the returns one would

expect from a fund, given its beta, and the return it

actually produces. It also measures the unsystematic

risk.

Alpha is positive = returns of

stock are better then market

returns.

Alpha is negative = returns of

stock are worst then market.

Alpha is zero = returns are same

as market.

SHARPE

RATIO

Sharpe Ratio= Fund return in excess of risk free return/

Standard deviation of Fund. Sharpe ratios are ideal for

comparing funds that have a mixed asset classes.

The higher the Sharpe ratio, the

better a funds returns relative to

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.

27

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.

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.

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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

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.

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,

31

children’s 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 adviser’s 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

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

32

Professional Management- Did 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 capital-gain 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 funds- if 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.

33

COMPANY DETAILS

SNAPSHOT OF “India Infoline Ltd.”

34

Date of Establishment October 1995

Revenue Rs. 2654.1 million (2008-2009)

Market Cap Rs. 5110.71 (April 21 2009)

Corporate Address 84, Nariman Bhavan, Nariman Point, Mumbai -

400021, Maharashtra, India

Branches India

Management Team 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

Research Services Limited, India Infoline Commodities

Limited, India Infoline Marketing & Services, India

Infoline Investment Services Limited and IIFL (Asia)

Private Limited

HISTORY

35

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 one-

stop 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.

36

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

37

http://archives.indiainfoline.com/

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;

received the venture capital license; received in principle approval to sponsor a mutual

fund; received ‘Best broker- India’ award from Financeasia; ‘Most Improved Brokerage-

India’ 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.

38

“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:

39

http://www.5paisa.com/

http://www.indiainfoline.com/

India Infoline Media and Research Services Limited

India Infoline Commodities Limited

India Infoline Marketing & Services

India Infoline Investment Services Limited

IIFL (Asia) Pte Limited

Our Global Presence:

USA, Dubai, Singapore

VISIONTo become the most respected

Company in the financialService space

Diversified, Addressing all customer segments

40

MANAGEMENT TEAM

Mr. Nirmal Jain

Chairman & Managing Director

India Infoline Ltd.

Nirmal Jain, MBA (IIM, Ahmedabad) and a Chartered and Cost Accountant, founded

India’s 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 Lever’s 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.

41

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

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.

42

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.

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


India Infoline Ltd.

43

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


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,

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.

44

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 : [email protected]

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


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 Details

Investor Relations

[email protected]

Investor Grievances

[email protected]

Shareholder Grievances

[email protected]

45

mailto:[email protected]







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.

46

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

47

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.

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

48

at 1 million Singapore dollars.

COMPANY’S UNIQUE APPROACHES

49

ASSET UNDER MANAGEMENT

50

Mutual Fund NameNo. of Schemes(Incl

Options)

Corpus(Rs.Cr

)

30-Apr-10

Corpus(Rs.Cr

)

31-Mar-10

Net Inc/Dec in

Corpus

Reliance Mutual Fund 491 111,819 110,413 1,407

HDFC Mutual Fund 437 94,703 88,780 5,923

ICICI Prudential

Mutual Fund 594 83,064 81,018 2,046

UTI Mutual Fund 378 79,457 80,218 [761]

Birla Sun Life Mutual

Fund 496 69,532 62,367 7,165

LIC Mutual Fund 100 40,507 42,304 [1,797]

SBI Mutual Fund 178 39,826 37,417 2,409

Franklin Templeton

Mutual Fund 276 34,912 34,034 878

Kotak Mahindra

Mutual Fund 222 33,845 34,787 [942]

IDFC Mutual Fund 271 25,623 25,775 [151]

Tata Mutual Fund 409 22,051 21,935 116

DSP Blackrock

Mutual Fund 229 21,949 21,491 458

Sundaram BNP

Paribas Mutual Fund 314 14,361 13,878 483

Religare Mutual Fund 288 13,829 12,945 885

Deutsche Mutual

Fund 245 10,112 10,477 [365]

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

51

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.

52

INVEST ONLINE

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

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.

53

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

about to hit the market and analysis on these recent IPO listings, prospectus/offer

documents, and IPO reports are few of the features, which help you, keep on top

of the IPO markets.

Apply for IPOs

Easiest way to bid for IPO. This section brings you IPOs, which you wants in

your portfolio.

Register Now!

54

http://www.indiainfoline.com/MutualFunds/LearningCenter/Default.aspx

COMPANY’S 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

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 Company’s financial

reporting process and disclosure of its financial information. - Reviewing the Adequacy of the Internal

Audit Function.

55

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.

56

FINANCIAL STATEMENT OF INDIA INFOLINE LTD.

Balance sheet

(Rs.in Millions)

Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005

SOURCES OF FUNDS + Share Capital 566.80 571.03 501.67 451.01 316.22

Share Warrants & Outstandings 136.17 668.64 55.17 44.20 0.00 + Reserves & Surplus 9778.84 9256.60 2340.81 1238.34 207.05

Shareholder's Funds 10481.81 10496.28 2897.65 1733.55 523.27 + Secured Loans 17.04 0 446.82 15.01 13.69

+ Unsecured Loans 1.03 1305.68 362.70 808.85 2.00

Total Debts 18.08 1305.68 809.52 823.87 15.68

Total Liabilities 10499.89 11801.95 3707.17 2557.42 538.95

APPLICATION OF FUNDS : + Loans (Non Current Assets) 0 0 0 0 0

Gross Block 1436.77 983.18 730.99 87.48 44.74

Less: Accumulated Depreciation 449.45 350.77 243.85 52.31 37.61

Less: Impairment of Assets 0 0 0.00 0 0

Net Block 987.32 632.41 487.14 35.17 7.13

Lease Adjustment A/c 0 0 0.00 0 0

Capital Work in Progress 45.13 4.91 0.00 0 0

Pre-operative Expenses pending 0 0 0.00 0 0

Assets in transit 0 0 0 0 0 + Investments 8693.12 9156.80 1714.50 1002.49 403.09

Market Value of Quoted Investements 0 0.00 0 0.00 1.56

Current Assets, Loans & Advances + Inventories 5.61 13.09 0.00 0 0

+ Sundry Debtors 1035.29 3428.13 1307.23 54.88 14.90

+ Cash and Bank 4302.49 2143.71 950.79 20.91 20.33

57

+ Other Current Assets 0 0.00 0.00 0.00 0.00

+ Loans and Advances 2405.91 3112.99 2197.40 1721.63 133.85

Total Current Assets 7749.30 8697.92 4455.42 1797.42 169.08

Less : Current Liabilities and Provisions + Current Liabilities 5526.75 5148.54 2445.20 76.69 23.88

+ Provisions 1486.39 1567.44 510.26 202.99 16.47

Total Current Liabilities 7013.15 6715.98 2955.45 279.68 40.35

Net Current Assets 736.16 1981.94 1499.97 1517.74 128.73

Miscellaneous Expenses not written off 0 0 0 0 0

Deferred Tax Assets 38.15 25.89 5.80 2.01 0.00

Deferred Tax Liability 0.00 0.00 0.25 0.00 0.00

Deferred Tax Assets / Liabilities 38.15 25.89 5.56 2.01 0

Total Assets 10499.89 11801.95 3707.17 2557.42 538.95

Contingent Liabilities 3.41 0 0 0 0

Profit and loss account

(Rs.in Millions)

Particulars Mar 2009 Mar 2008 Mar 2007 Mar 2006 Mar 2005

No of Months 12 12 12 12 12 + Operating Income 5715.35 6575.36 2828.46 449.12 213.17

Interest income 0 0.00 0.00 0.00 0.00

Net Sales 5715.35 6575.36 2828.46 449.12 213.17

EXPENDITURE :

Increase/Decrease in Stock 0 0 0.00 0 0

Purchase of Shares / Units 0 0 0.00 0 0

Employee Cost 1409.37 1325.42 539.96 0.38 0.66 + Operating & Establishment Expenses 1824.72 1990.92 963.39 7.91 6.75

+ Administrations & Other Expenses 590.54 597.61 340.14 41.68 17.83

Provisions and Contigencies 9.90 21.31 20.69 0.53 1.31

Less: Pre-operative Expenses Capitalised 0 0 0 0 0

Total Expenditure 3834.52 3935.27 1864.18 50.49 26.55

Operating Profit (Excl OI) 1880.82 2640.09 964.28 398.63 186.62 + Other Income 1.01 149.04 38.71 35.55 9.19

Operating Profit 1881.84 2789.14 1002.99 434.18 195.81 + Interest 111.47 228.22 83.53 21.97 0.43

Depreciation 255.61 194.40 123.27 14.70 5.24

Profit Before Taxation & Exceptional Items 1514.76 2366.52 796.19 397.51 190.14

Exceptional Income / Expenses 0 -290.44 0.00 0 0

Profit Before Tax 1514.76 2076.07 796.19 397.51 190.14 + Provision for Tax 456.50 789.20 274.97 132.81 15.40

Profits After Tax 1058.25 1286.87 521.22 264.69 174.74 + Appropriations 2287.40 1760.99 604.69 265.49 0.79

Equity Dividend % 140.00 60.00 30.00 30.00 0

Earnings Per Share 3.71 22.54 10.39 5.87 5.53

Book Value 36.51 172.10 56.66 37.46 16.55

58

RESEARCH

METHODOLOGY

59

Research Methodology

Type of Research Design : Conclusive Research Design

Source of Data : a. Primary Data: Survey Method

b. Secondary Data: Internet,

Magazines, Reference Books,

Newspapers.

Research Equipment : Questionnaire

Sampling Technique : Non-Probability Technique-

Convenience Sampling Method.

Sample Size : 100 Samples

60

Area of Research : Ahmadabad, Jamnagar, Bhavnagar

Objectives : The main objective of research is to find awareness

regarding Mutual fund among earning people

Sub-objectives

: 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 Missing Total

N Percent N Percent N Percent

age * awareness 100 100.0% 0 .0% 100 100.0%

61

age * awareness Cross tabulation

Awareness

Totalyes No

age 20-30 Count 7 6 13

% of Total 7.0% 6.0% 13.0%

Std. Residual -.4 .5

30-40 Count 29 17 46

% of Total 29.0% 17.0% 46.0%

Std. Residual .0 .0

40-50 Count 25 10 35

% of Total 25.0% 10.0% 35.0%

Std. Residual .6 -.8

50-above Count 2 4 6

% of Total 2.0% 4.0% 6.0%

Std. Residual -.9 1.2

Total Count 63 37 100

% of Total 63.0% 37.0% 100.0%

Chi-Square Tests

Value Df

Asymp. Sig. (2-

sided)

Exact Sig.

(2-sided)

Exact

Sig.

(1-

sided) Point Probability

Pearson Chi-Square 3.799a 3 .284 .292

Likelihood Ratio 3.727 3 .293 .313

Fisher's Exact Test 3.770 .289

Linear-by-Linear

Association.024b 1 .878 .896 .492 .104

N of Valid Cases 100

a. 3 cells (37.5%) have expected count less than 5. The minimum expected count is

2.22.

b. The standardized statistic is -.154.

62

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.

63

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


Cases

Valid Missing Total


occupation * awareness 100 100.0% 0 .0% 100 100.0%

occupation * awareness Cross tabulation

Awareness

TotalYes No

occupation student Count 5 2 7

% of Total 5.0% 2.0% 7.0%


business Count 16 12 28

% of Total 16.0% 12.0% 28.0%


service Count 18 12 30

% of Total 18.0% 12.0% 30.0%


profession Count 13 5 18

% of Total 13.0% 5.0% 18.0%


others Count 11 6 17

% of Total 11.0% 6.0% 17.0%



% of Total 63.0% 37.0% 100.0%

64

Chi-Square Tests

Value Df

Asymp. Sig. (2-

sided)

Exact Sig.

(2-sided)

Exact Sig.

(1-sided)

Point

Probabilit

y




Linear-by-Linear Association .220b 1 .639 .666 .352 .062


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.

65

Hypotheses 3:-Education level and awareness of Mutual Fund

Ho=Education have impact on awareness of Mutual fundH1=Education have not impact on awareness of Mutual Fund


Cases

Valid Missing Total


Education qualification *

awareness100 100.0% 0 .0% 100 100.0%

Education qualification * awareness Cross tabulation

awareness

Totalyes no

Education qualification under graduate Count 14 9 23

% of Total 14.0% 9.0% 23.0%

graduate Count 30 15 45

% of Total 30.0% 15.0% 45.0%

post graduate Count 19 12 31

% of Total 19.0% 12.0% 31.0%

other Count 0 1 1

% of Total .0% 1.0% 1.0%


% of Total 63.0% 37.0% 100.0%

66

Chi-Square Tests

Value Df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 2.046a 3 .563

Likelihood Ratio 2.335 3 .506

Linear-by-Linear Association .126 1 .723


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.

67

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


Cases

Valid Missing Total


occupation * way of

invest28 28.0% 72 72.0% 100 100.0%

occupation * way of invest Cross tabulation

Way of invest

Totallump sum s.i.p

occupation student Count 1 2 3

% of Total 3.6% 7.1% 10.7%


business Count 2 5 7

% of Total 7.1% 17.9% 25.0%


service Count 4 5 9

% of Total 14.3% 17.9% 32.1%


profession Count 6 0 6

% of Total 21.4% .0% 21.4%

Std. Residual 1.7 -1.7

others Count 1 2 3

% of Total 3.6% 7.1% 10.7%



% of Total 50.0% 50.0% 100.0%

68

Chi-Square Tests

Value Df

Asymp.

Sig. (2-

sided)

Exact Sig. (2-

sided)

Exact Sig.

(1-sided)

Point

Probabilit

y




Linear-by-Linear

Association2.113b 1 .146 .199 .099 .046

N of Valid Cases 28

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.

69

Hypotheses:-5 Annual income of people and type of Mutual Fund

Ho=Income of the people have impact on purchase of type of Mutual FundH1=Income of the people have impact on purchase of type of Mutual Fund


Cases

Valid Missing Total


Annual income * type of

mutual fund31 31.0% 69 69.0% 100 100.0%

Annual income * type of mutual fund Cross tabulation

Type of mutual fund

Total

TATA

mutual fund

Franklin

Templeton Reliance

ICICI

Prudential SBI Others

Annual

income

below

100000

Count 1 0 0 1 2 3 7

% of Total 3.2% .0% .0% 3.2% 6.5% 9.7% 22.6%

Std.

Residual.1 -1.1 -1.1 -.3 .6 1.8

100000-

300000

Count 2 0 4 1 1 2 10

% of Total 6.5% .0% 12.9% 3.2% 3.2% 6.5% 32.3%

Std.

Residual.6 -1.3 1.9 -.7 -.7 .3

300000-

500000

Count 1 3 1 3 1 0 9

% of Total 3.2% 9.7% 3.2% 9.7% 3.2% .0% 29.0%

Std.

Residual-.1 1.3 -.4 1.0 -.6 -1.2

500000-

above

Count 0 2 0 1 2 0 5

% of Total .0% 6.5% .0% 3.2% 6.5% .0% 16.1%

Std.

Residual-.8 1.3 -.9 .0 1.0 -.9

Total Count 4 5 5 6 6 5 31

% of Total 12.9% 16.1% 16.1% 19.4% 19.4% 16.1% 100.0%

70

Chi-Square Tests

Value df

Asymp. Sig. (2-

sided)

Exact Sig. (2-

sided)

Exact Sig. (1-

sided)

Point

Probability




Linear-by-Linear Association 2.174b 1 .140 .150 .079 .015

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.

71

DATA ANALYSIS

Age

Frequency Percent Valid Percent

Cumulative

Percent

Valid 20-30 13 12.9 13.0 13.0

30-40 46 45.5 46.0 59.0

40-50 35 34.7 35.0 94.0

50-above 6 5.9 6.0 100.0

Total 100 99.0 100.0

Missing System 1 1.0

Total 101 100.0

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.

72

Gender


Cumulative

Percent

Valid male 70 69.3 70.0 70.0

female 30 29.7 30.0 100.0

Total 100 99.0 100.0


Total 101 100.0

Analysis:-

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

of male then the female.

73

Occupation


Cumulative

Percent

Valid student 7 6.9 7.0 7.0

business 28 27.7 28.0 35.0

service 30 29.7 30.0 65.0

profession 18 17.8 18.0 83.0

others 17 16.8 17.0 100.0

Total 100 99.0 100.0


Total 101 100.0

Analysis:-

From all the respondents more respondents are service person and business person. These

number is double then the profession and student

74

Annual income


Cumulative

Percent

Valid below 100000 9 8.9 11.1 11.1

100000-300000 32 31.7 39.5 50.6

300000-500000 31 30.7 38.3 88.9

500000-above 9 8.9 11.1 100.0

Total 81 80.2 100.0


Total 101 100.0

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.

75

Education qualification


Cumulative

Percent

Valid under graduate 23 22.8 23.0 23.0

graduate 45 44.6 45.0 68.0

post graduate 31 30.7 31.0 99.0

other 1 1.0 1.0 100.0

Total 100 99.0 100.0


Total 101 100.0

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.

76

Awareness


Cumulative

Percent

Valid yes 63 62.4 63.0 63.0

no 37 36.6 37.0 100.0

Total 100 99.0 100.0


Total 101 100.0

Analysis:-Out of all the respondents 63% respondents are aware about Mutual Fund and 37%

respondents are not aware about Mutual Fund.

77

Source of awareness


Cumulative

Percent

Valid broker 10 9.9 15.2 15.2

friend/relative 9 8.9 13.6 28.8

bank 25 24.8 37.9 66.7

T.v/newspaper 12 11.9 18.2 84.8

AMC 9 8.9 13.6 98.5

other 1 1.0 1.5 100.0

Total 66 65.3 100.0


Total 101 100.0

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.

78

Investment In M.F


Cumulative

Percent

Valid yes 34 33.7 34.0 34.0

no 66 65.3 66.0 100.0

Total 100 99.0 100.0


Total 101 100.0

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.

79

Way of invest


Cumulative

Percent

Valid lump sum 14 13.9 50.0 50.0

s.i.p 14 13.9 50.0 100.0

Total 28 27.7 100.0


Total 101 100.0

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).

80

Type of mutual fund


Cumulative

Percent

Valid TATA mutual fund 4 4.0 11.8 11.8

Frenklin Templeton 5 5.0 14.7 26.5

Reliance 5 5.0 14.7 41.2

ICICI Prudential 6 5.9 17.6 58.8

SBI 6 5.9 17.6 76.5

Others 8 7.9 23.5 100.0

Total 34 33.7 100.0


Total 101 100.0

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.

81

Awareness of tax benefit


Cumulative

Percent

Valid yes 41 40.6 65.1 65.1

no 22 21.8 34.9 100.0

Total 63 62.4 100.0


Total 101 100.0

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.

82

Option like in M.F


Cumulative

Percent

Valid growth 19 18.8 57.6 57.6

dividend 14 13.9 42.4 100.0

Total 33 32.7 100.0


Total 101 100.0

Analysis:-

The above analysis shows that growth option is more Preferred then the dividend option

among all investors of the Mutual fund.

83

Awareness of service in M.F


Cumulative

Percent

Valid E-mail alert 6 5.9 12.2 12.2

SMS alert 21 20.8 42.9 55.1

correspondents 5 5.0 10.2 65.3

24 hrs tall free no. 11 10.9 22.4 87.8

personal assistance 6 5.9 12.2 100.0

Total 49 48.5 100.0


Total 101 100.0

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.

84

Satisfaction level


Cumulative

Percent

Valid extremely satisfied 8 7.9 23.5 23.5

satisfied 11 10.9 32.4 55.9

neutral 6 5.9 17.6 73.5

dissatisfied 6 5.9 17.6 91.2

extremely dissatisfied 3 3.0 8.8 100.0

Total 34 33.7 100.0


Total 101 100.0

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.

85

SUMMERY AND

CONCLUSION

86

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.

87

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 don’t 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.

88

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.

89

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.

90

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 AMFI’s Mutual Fund Testing Program.

91

http://www.moneycontrol.com/

http://www.amfindia.com/


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 Female

2. Age:

20-30 30-40

40-50 50-Above

3. Occupation :

Student business

Service profession

Others (specify) ______________

4. Annual income of family

Below 100000 100000-300000

300000-500000 500000 & above

5. Education Qualification

Under Graduate Graduate

92

Post Graduate Other _______(specify) Research Questions

6. Are you aware about “Mutual Fund” ?

Yes No7. From which source you come to know about Mutual Fund ?

Broker Friend/Relative

Bank T.V./News Paper

AMC (Asset Mgt. Company) 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 Franklin Templeton

Reliance ICICI Prudential

SBI Other

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 No

If yes, which do you like most?

Growth Dividend

14. Out of following which service you are aware which are provided after investing in Mutual Fund?

E-mail Alert SMS Alert

93

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……

94

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.

95

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 for subscription/ purchase/ redemption it also handles

communications with investors, perform data entry services and dispatches account

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.

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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.

98

India Infoline (Awarness About the Mutual Fund)

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