Reliance Mutual Fund

INTRODUCTION

The Reliance group – one of India’s largest business houses with revenues of Rs. 990
billion ($22.6 billion) that is equal to 3.5 percent of the country’s gross domestic product
was split into two.

The group – which claims to contribute nearly 10 per cent of the country’s indirect tax
revenues and over six percent of India’s exports – was divided between Mukesh Ambani
and his younger brother Anil on June 18, 2005.

The group’s activities span exploration, production, refining and marketing of oil and
natural gas, petrochemicals, textiles, financial services, insurance, power and telecom.
The family also has interests in advertising agency and life sciences.

Reliance Mutual Fund (RMF) is one of India leading Mutual Funds, with Average Assets
Under Management (AAUM) of Rs. 90,938 Crores (AAUM for Mar 08 ) and an investor
base of over 66.87Lakhs.

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

requirements and has presence in 115 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 Capital Asset

Management Limited., 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. has interests in asset management, life and general insurance,
private equity and proprietary investments, stock broking and other financial services.
Reliance Mutual fund has largest AUM in India. Reliance capital asset Management is
no. 1 AMC in India but the picture is not the same in Chhattisgarh. In Chhattisgarh they
are no. 2 AMC. Management of Reliance mutual fund wants to expand its feet in
Chhattisgarh, before taking any step they want to understand market & investor and
distributor behavior of SMEs, so they may plan accordingly to capture Chhattisgarh
Market. In this research we have to analyze why, how, where, when & how much an
investor invest & according to it, we have to make profile of investors. In this report I
have endeavored to understand the factors affecting Investment behavior of an investor in
Chhattisgarh. This behavioral study consists of how any investor invests in CG. What
factor they consider, why these factors they consider, where do they invest, how do they
invest, purpose behind investment, size of investment, timing of investment & duration of
investment. This study gave us basis to profile investors.

ASSETS UNDER MANAGEMENT

AUM for the Month Mar 2008

Average AUM Excluding Fund of Funds 9093794.02 Crs.
Average AUM Fund of Funds 0

COMPANY PROFILE
VISION STATEMENT

To be a globally respected wealth creator, with an emphasis on customer care and a

culture of good corporate governance

MISION STATEMENT

To create and nurture a world-class, high performance environment aimed at delighting

their customers.

CORPORATE GOVERNANCE

CORPORATE GOVERNANCE POLICY

Reliance Capital Asset Management Ltd. has a vision of being a leading player in the
Mutual Fund business and has achieved significant success and visibility in the market.
However, an imperative part of growth and visibility is adherence to Good Conduct in the
marketplace. At Reliance Capital Asset Management Ltd., the implementation and
observance of ethical processes and policies has helped us in standing up to the scrutiny
of our domestic and international investors.

MANAGEMENT
The management at Reliance Capital Asset Management Ltd. is committed to good
Corporate Governance, which includes transparency and timely dissemination of
information to its investors and unit holders. The Board of Directors of RCAM is a
professional body, including well-experienced and knowledgeable Independent
Members. Regular Audit Committee meetings are conducted to review the operations and
performance of the company.

EMPLOYEES
Reliance Capital Asset Management Ltd. has at present, a code of conduct for all its
officers. It has a clearly defined prohibition on insider trading policy and regulations. The
management believes in the principles of propriety and utmost care is taken while
handling public money, making proper and adequate disclosures.

All personnel at Reliance Capital Asset Management Ltd are made aware of their rights,
obligations and duties as part of the Dealing Policy laid down in terms of SEBI
guidelines. They are taken through a well-designed HR program, conducted to impart
work ethics, the Code of Conduct, information security, Internet and e-mail usage and a
host of other issues.

One of the core objectives of Reliance Capital Asset Management Ltd. is to identify
issues considered sensitive by global corporate standards, and implement
policies/guidelines in conformity with the best practices as an ongoing process. Reliance
Capital Asset Management Ltd. gives top priority to compliance in true letter and spirit,
fully understanding its fiduciary responsibilities.
SPONSORS

Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management
Limited., 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.”, the
sponsor. Reliance Mutual Fund (RMF) has been sponsored by Reliance Capital Ltd
(RCL). The promoter of RCL is AAA Enterprises Private Limited. Reliance Capital
Limited is a Non Banking Finance Company. Reliance Capital Limited is one of the India
leading and fastest growing financial services companies, and ranks among the top three
private sector financial services and banking companies, in terms of net worth.

Reliance Capital has interests in asset management and mutual funds, life and non-life
insurance, private equity and proprietary investments, stock broking and other activities
in the financial services sector. The net worth of RCL is Rs. 5,161.23 crores as on March
31, 2007.

GIVEN BELOW IS A SUMMARY OF RCL’S FINANCIALS

Particulars
2006-07 2005-06 2004-05 2003-04
(Rs. in crores)
Total Income 883.86 652.02 295.69 356.79
Profit Before Tax 733.18 550.61 111.21 105.79
Profit After Tax 646.18 537.61 105.81 105.79
Reserves & Surplus 4915.07 3849.58 1310.08 1271.84
Net Worth 5161.23 4122.46 1437.92 1399.81
Earnings per Share28.39 29.74 8.31 8.31
(Rs.)
(Basic (Basic (Basic+ Diluted) (Basic +
+Diluted) +Diluted) Diluted)
Book Value per Share210.12 112.95 112.95 109.96
(Rs.)
Dividend (%) 35% 30% 30% 29%
Paid up Equity Capital 246.16 223.40 127.84 127.84

Reliance Capital Ltd. has contributed Rupees One Lac as the initial contribution to the
corpus for the setting up of the Mutual Fund. Reliance Capital Ltd. is responsible for
discharging its functions and responsibilities towards the Fund in accordance with the
Securities and Exchange Board of India (SEBI) Regulations.

The Sponsor is not responsible or liable for any loss resulting from the operation of the
Scheme beyond the contribution of an amount of Rupees one Lac made by them towards
the initial corpus for setting up the Fund and such other accretions and additions to the
corpus.

THE AMC

RELIANCE CAPITAL ASSET MANAGEMENT COMPANY

Reliance Capital Asset Management Limited (RCAM), a company registered under the
Companies Act, 1956 was appointed to act as the Investment Manager of Reliance
Mutual Fund.

Reliance Capital Asset Management Limited (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
net worth of the Asset Management Company including preference shares as on
September 30, 2007 is Rs.152.02 crores.

“Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management
Limited., 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 Asset Management Limited (RCAM) was approved as the Asset
Management Company for the Mutual Fund by SEBI by 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 net worth of
the Asset Management Company including preference shares as on March 31, 2005 is
Rs.113.59 crores.

MUTUAL FUNDS ASSET UNDER MANAGEMENT: TOP 10 COMPANIES LIST

Mutual Fund Assets Under Management (Rs. cr.)

March-
February-
Change %Change
   08
08

Reliance Mutual Fund 93,532 90,938 -2,594 -2.77

ICICI Prudential Mutual Fund 59,278 54,322 -4,956 -8.36

UTI Mutual Fund 52,465 48,983 -3,482 -6.64

HDFC Mutual Fund 46,292 44,773 -1,519 -3.28

Birla Sun Life Mutual Fund 34,704 35,906 1,202 3.46

SBI Mutual Fund 29,493 29,179 -314 -1.06

Franklin Templeton Mutual Fund 29,902 26,842 -3,059 -10.23

Tata Mutual Fund 20,205 19,679 -526 -2.60

Kotak Mahindra Mutual Fund 20,968 18,071 -2,897 -13.82

DSP Merrill Lynch Mutual Fund 19,139 16,675 -2,463 -12.87

SCHEMES

1. A. EQUITY/GROWTH SCHEMES The aim of growth funds is to provide capital

appreciation over the medium to long- term. Such schemes normally invest a
major part of their corpus in equities. Such funds have comparatively high risks.
These schemes provide different options to the investors like dividend option,
capital appreciation, etc. and the investors may choose an option depending on
their preferences. The investors must indicate the option in the application form.
The mutual funds also allow the investors to change the options at a later date.
Growth schemes are good for investors having a long-term outlook seeking
appreciation over a period of time.

1. B. DEBT/INCOME SCHEMES The aim of income funds is to provide regular

and steady income to investors. Such schemes generally invest in fixed income
securities such as bonds, corporate debentures, Government securities and money
market instruments. Such funds are less risky compared to equity schemes. These
funds are not affected because of fluctuations in equity markets. However,
opportunities of capital appreciation are also limited in such funds. The NAVs of
such funds are affected because of change in interest rates in the country. If the
interest rates fall, NAVs of such funds are likely to increase in the short run and
vice versa. However, long term investors may not bother about these fluctuations.

1. C. SECTOR SPECIFIC SCHEMESThese are the funds/schemes which invest in

the securities of only those sectors or industries as specified in the offer
documents. E.g. Pharmaceuticals, Software, Fast Moving Consumer Goods
(FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the
performance of the respective sectors/industries. While these funds may give
higher returns, they are more risky compared to diversified funds. Investors need
to keep a watch on the performance of those sectors/industries and must exit at an
appropriate time. They may also seek advice of an expert.

PRODUCTS

FOLLOWING ARE SOME OF THE SCHEMES LAUNCHED BY RELIANCE

MUTUAL FUND:

Reliance Growth Fund Reliance Vision Fund

(September 1995) (September 1995)

Reliance Income Fund Reliance Liquid Fund

(December 1997) (March 1998)

Reliance Medium Term Fund Reliance Short Term Fund
(August 2000) (December 2002)
Reliance Gilt Securities Fund Reliance Banking Fund

(July 2003) (May 2003)

Reliance Monthly Income Plan Reliance Diversified Power Sector Fund

(December 2003) (March 2004)

Reliance Pharma Fund Reliance Floating Rate Fund

( May 2004) (August 2004)

Reliance Media & Entertainment Fund Reliance NRI Equity Fund

(September 2004) (October 2004)

Reliance NRI Income Fund Reliance Index Fund

(October 2004) (February 2005)

Reliance Equity Opportunities Fund Reliance Regular Savings Fund

(February 2005) (May 2005)

Reliance Liquidity Fund Reliance Tax Saver (ELSS) Fund

(June 2005) (July 2005)

Reliance Fixed Tenor Fund Reliance Equity Fund

(November 2005) (February 2006)

Reliance Fixed Horizon Fund I Reliance Fixed Horizon Fund

(August 2006) (April 2006)

Reliance Fixed Horizon Fund III Reliance Fixed Horizon Fund II

(March 2007) (November 2006)

Reliance Liquid Plus Fund Reliance Long Term Equity Fund

(March 2007) (November 2006)

Reliance Long Term Equity Fund Reliance Interval Fund

(Nov 2006) (March 2007)

Reliance Fixed Horizon Fund – IV Reliance Fixed Horizon Fund – V

(August 2007) (September 2007)

INVESTMENT OBJECTIVES

a) RELIANCE MONTHLY INCOME PLAN

It aims to generate regular income in order to make regular dividend payments to unit
holders and the secondary objective is growth of capital.

b) RELIANCE INCOME FUND

It aims to generate optimal returns consistent with moderate levels of risk. This income
may be complemented by capital appreciation of the portfolio. Accordingly, investments
shall predominantly be made in Debt and Money Market Instruments.

c) RELIANCE MEDIUM TERM FUND

It aims to generate regular income in order to make regular dividend payments to unit
holders and the secondary objective is growth of capital.

d) RELIANCE LIQUID FUND

It aims to generate optimal returns consistent with moderate levels of risk and high
liquidity. Accordingly, investments shall predominantly be made in Debt and Money
Market Instruments.

e) RELIANCE LIQUIDITY FUND

It aims to generate optimal returns consistent with moderate levels of risk and high
liquidity. Accordingly, investments shall predominantly be made in Debt and Money
Market Instruments.

f) RELIANCE SHORT TERM FUND

It aims to generate stable returns for investors with a short term investment horizon by
investing in fixed income securities of a short term maturity.

g) RELIANCE GILT SECURITIES FUND

It aims to generate optimal credit risk free returns by investing in a portfolio of securities
issued and guaranteed by the Central Government and State Governments

h) RELIANCE FLOATING RATE FUND

It aims to generate regular income through investment in a portfolio comprising

substantially of Floating Rate Debt Securities (including floating rate securitized debt and
Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate
returns).

i) RELIANCE REGULAR SAVINGS FUND DEBT OPTION

The primary investment objective of this plan is to generate optimal returns consistent
with moderate level of risk. This income may be complemented by capital appreciation of
the portfolio. Accordingly investments shall predominantly be made in Debt & Money
Market Instruments.

j) RELIANCE REGULAR SAVINGS FUND EQUITY OPTION

The primary investment objective is to seek capital appreciation and or consistent returns
by actively investing in equity / equity related securities.

k) RELIANCE REGULAR SAVINGS FUND HYBRID OPTION

The primary investment objective is to generate consistent return by investing a major

portion in debt & money market securities and a small portion in equity & equity related
instruments.

l) RELIANCE GROWTH FUND

It aims to achieve long term growth of capital by investment in equity and equity related
securities through a research based investment approach.

m) RELIANCE VISION FUND

It aims to achieve long term growth of capital by investment in equity and equity related
securities through a research based investment approach.

n) RELIANCE EQUITY OPPORTUNITIES FUND

It aims to generate capital appreciation & provide long term growth opportunities by
investing in a portfolio constituted of equity securities & equity related securities.

• o) RELIANCE BANKING FUND

It aims to generate continuous returns by actively investing in equity / equity related or

fixed income securities of banks.

p) RELIANCE DIVERSIFIED POWER SECTOR FUND

It seek to generate consistent returns by investing in equity / equity related or fixed

income securities of Power and other associated companies.

q) RELIANCE PHARMA FUND

It aims generate consistent returns by investing in equity / equity related or fixed income
securities of Pharma and other associated companies.
r) RELIANCE MEDIA & ENTERTAINMENT FUND

It aims to generate consistent returns by investing in equity / equity related or fixed

income securities of media & entertainment and other associated companies.

s) RELIANCE INDEX FUND-SENSEX PLAN

It aims to replicate the composition of the Sensex, with a view to endeavor to generate
returns, which could approximately be the same as that of Sensex.

t) RELIANCE INDEX FUND-NIFTY PLAN

It aims to replicate the composition of the Nifty, with a view to endeavor to generate
returns, which could approximately be the same as that of Nifty.

u) RELIANCE NRI EQUITY FUND AIMS

It to generate optimal returns by investing in equity and equity related instruments

primarily drawn from the Companies in the BSE 200 Index.

v) RELIANCE EQUITY FUND

The primary investment objective of the scheme is to seek to generate capital

appreciation & provide long-term growth opportunities by investing in a portfolio
constituted of equity & equity related securities of top 100 companies by market
capitalization & of companies which are available in the derivatives segment from time
to time and the secondary objective is to generate consistent returns by investing in debt
and money market securities.

w) THE MUTUAL FUND

ABOUT RELIANCE MUTUAL FUND

Reliance Mutual Fund (RMF) has been established as a trust under the Indian Trusts Act,
1882 with Reliance Capital Limited (RCL), as the Settler /Sponsor and Reliance Capital
Trustee Co. Limited (RCTCL), as the Trustee.

RMF has been registered with the Securities & Exchange Board of India (SEBI) vide
registration number MF/022/95/1 dated June 30, 1995. The name of Reliance Capital
Mutual Fund has been changed to Reliance Mutual Fund effective 11th. March 2004 vide
SEBI’s letter no. IMD / PSP / 4958 / 2004 date 11th. March 2004. Reliance Mutual Fund
was formed to launch various schemes under which units are issued to the Public with a
view to contribute to the capital market and to provide investors the opportunities to
make investments in diversified securities.

MAIN OBJECTIVE OF THE TRUST

To carry on the activity of a Mutual Fund as may be permitted at law and formulate and
devise various collective Schemes of savings and investments for people in India and
abroad and also ensure liquidity of investments for the Unit holders;

To deploy Funds thus raised so as to help the Unit holders earn reasonable returns on
their savings and

To take such steps as may be necessary from time to time to realize the effects without
any limitation.

SOCIAL RESPONSIBILITIES

“Organizations, like individuals, depend for their survival, sustenance and growth on
the support and goodwill of the communities of which they are an integral part, and must
pay back this generosity in every way they can.”This ethical standpoint, derived from
the vision of the founder, lies at the heart of the CSR philosophy of the Reliance Group.

While they strongly believe that their primary obligation or duty as corporate entities is to
their shareholders – they are just as mindful of the fact that this imperative does not
exist in isolation; it is part of a much larger compact which they have with their entire
body of stakeholders: From employees, customers and vendors to business partners, eco-
system, local communities, and society at large.

They evaluate and assess each critical business decision or choice from the point of view
of diverse stakeholder interest, driven by the need to minimize risk and to pro-actively
address long-term social, economic and environmental costs and concerns. For them,
being socially responsible is not an occasional act of charity or that one-time token
financial contribution to the local school, hospital or environmental NGO. It is an
ongoing year-round commitment, which is integrated into the very core of their business
objectives and strategy.

Because they believe that there is no contradiction between doing well and doing right.
Indeed, “doing right is a necessary condition for doing well”.

THE MANAGEMENT TEAM

Board of Directors
Mr. Amitabh Chaturvedi
Mr. Kanu Doshi
Mr. Manu Chadha
Mr. Sushil Tripathi
Management Team
CEO
Mr. Vikrant Gugnani
Deputy CEO
Mr. Sundeep Sikka
 Head Equity Investments
Mr. Madhusudan Kela
Head Fixed Income
Mr. Amitabh Mohanty
Equity Fund Managers
Mr. Sunil B. Singhania Mr. Ashwani Kumar
Mr. Shailesh Raj Bhan Mr. Shiv Chanani
Mr. Omprakash S. Kuckian
Debt Fund Managers
Mr. Amit Tripathi Ms. Anju Chhajer
Mr. Arpit Malaviya
Commodities
Head of Commodities Mr Vikram Dhawan
Head Of Departments
Marketing Communication Mr Rajat Johri
Finance and Accounts Mr. Sanjay Wadhwa
Human Resource Development Mr. Rajesh Derhgawen
Information Technology Mr. Vinay Nigudkar
Legal & Compliance Mr. Balkrishna Kini
Operations & Settlement Ms. Geeta Chandran
R&T Operations & Investor Relations Mr. Milind Nesarikar
Risk Management Mr. Lav Chaturvedi
Sales & Distribution Mr Himanshu Vyapak
Zonal Heads
Northern Zone Head Mr. Aashwin Dugal
Western Zone Head Mr. Sanjiv Gudal
Southern Zone Head Mr. Gurbir Chopra
Eastern Zone Head Mr. Gopal Khaitan

CUSTOMER MOTIVATION PLAN

a)Â Â Â Â Â OBJECTIVES

Area wise Identifying Potential Prospective distributors, which leads to increase the
business.

b)Â Â Â The Prospects

The Starting point is every one who might conceivably buy the product that is called
suspects and from these the company determines the most likely prospects which it hopes
to convert into first time customers then repeat customers and then clients.

Following figure shows the main steps of attracting and keeping customers.
•