ING Savings Trust

ING TERM PORTFOLIO
An open-ended bond Scheme

Sponsor				Investment Manager
ING GROUP N.V. Strawinskylaan 2631, Amsterdam, P.O. Box 810, 1000 Amsterdam, The Netherlands.				ING ING Investment Management (India) Pvt. Ltd. No. 17, Lincoln Lodge Altamount Road, Mumbai – 400 036 .

The Offer Document of ING Term Portfolio has been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, (hereinafter referred to as the "Regulations") as amended till date and filed with Securities and Exchange Board of India (SEBI). The Units being offered for public subscription have not been approved or disapproved by SEBI nor has SEBI certified the accuracy or adequacy of the Offer Document.

The Offer Document describes in detail the Scheme’s objectives, investment policies, risks, sales load, fees and other information necessary for an investor to make an informed investment decision in the Scheme described herein. Please read it carefully prior to making an investment decision and retain the Offer Document for future reference. The Offer Document shall remain effective till a material change occurs and material changes shall be filed with SEBI and, circulated to Unitholders or may be publicly notified by advertisements in newspapers subject to the Regulations.

Investing in Mutual Funds involves certain risks and considerations associated generally with making investments in securities. The value of the Scheme’s investments may be affected generally by factors affecting capital markets, such as price and volume, volatility in the capital markets, interest rates, currency exchange rates, changes in policies of the Government, taxation laws or any other appropriate authority policies and other political and economic developments. Consequently, there can be no assurance that the Scheme offered in this Offer Document would achieve the stated investment objectives. The NAV of the Units of the Scheme may fluctuate and can go up or down. Past performance of the Schemes managed by the Sponsors or their affiliates or the Asset Management Company is not necessarily indicative of the future performance of the Scheme.

Investors are advised to study this Offer Document carefully in its entirety and consult their financial, legal, tax and other advisors before they invest in the Scheme to determine possible legal, tax, financial or other considerations of subscribing to or disposing units before making a decision to invest in units of this Scheme. Investors are advised to retain this Offer Document for future reference.

Neither this Offer Document nor the Units have been registered in any jurisdiction. The distribution of this Offer Document in certain jurisdictions may be restricted to registration requirements and accordingly, persons who come into possession of this Offer Document are requested to inform themselves about and to observe any such restrictions.

The ING Savings Trust (the "Mutual Fund" or the "Fund") or the ING Investment Management (India) Private Ltd. (the "AMC"), have not authorized any person to give any information or make any representations not stated or inconsistent with the information incorporated in this Offer Document, in connection with the issue of Units under the Scheme. Investors are advised not to arrive at any investment decisions for Units under this Scheme on any information or representations not contained herein or inconsistent with the information incorporated in the Offer Document .

In the Offer Document, all references to "NLG" are to Netherlands Guilders, "Dollars" to United States Dollars, "Euros" to Euros and "Rs." are to Indian Rupees.

This Offer Document is dated 24.08.2001

2. DEFINITIONS

1. Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved.
2. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets.
3. Past Performance of the Sponsors/AMC/Mutual Fund or their affiliates is not necessarily indicative of the future performance of the Scheme.
4. The Sponsors are not responsible or liable for any loss resulting from the operation of the Scheme beyond the initial contribution of Rs.1 lakh made by them towards setting up the Fund.
5. ING Term Portfolio is the name of the Scheme and is not in any manner indicative of the quality of the Scheme, its future prospects or returns.
6. The NAV may be affected by the changes in the interest rates prevailing for fixed income securities, volumes of trading, and market related factors.
7. The NAV may be affected by settlement periods and transfer procedures.
8. In the event of receipt of an inordinately large number of redemption requests or of restructuring of any of the Plans portfolio there may be delays in the redemption of Units.
9. The value of the Scheme’s investments may be affected generally by factors affecting securities markets, such as price and volume volatility in the capital markets, interest rates, currency exchange rates, changes in policies of the Government, taxation laws or any other appropriate authority policies and other political and economic developments. Consequently, the NAV of the Units of the Scheme may fluctuate and can rise or fall.
10. Subject to the Regulations, the Sponsor or its affiliates or its subsidiaries, the AMC and the Board of Trustees may invest either directly or indirectly in the Scheme. These entities may acquire a substantial portion of the Scheme units and collectively constitute a major investor in the Scheme. Accordingly, redemption of Units by these entities may have an adverse impact on the Units of the Scheme because the timing of such redemption may impact the ability of other Unit holders to redeem their units.
11. Unitholders of the Scheme are not being offered any guarantee/assured returns.

1. Since the Scheme will be investing mainly in fixed-income (debt) securities, it will be subject to risks associated with such investments. These are:

-price risk

-issuer risk.

Price risk is the risk that the values of the securities may be affected by changes in interest rates, which can be caused by economic and or political reasons or by government action.

Issuer risk is the risk that the issuer of the security defaults on payments of interest and/or repayment of principal.

2. Investment decisions made by the AMC may not always be profitable.
3. The tax benefits available under the Scheme are as available under the present taxation laws and are subject to relevant conditions. The information given is included for general purposes only and is based on advice that the AMC has received regarding the law and the practice that is currently in force. Unitholders should be aware that the relevant fiscal rules and their interpretation might change. As is the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of investment in the Scheme will endure indefinitely. In view of the individual nature of tax consequences, Unitholders are advised to consult their own tax advisors.
4. Interest Rate Risk: As with all debt securities, changes in interest rates may affect the Plans’ NAV as the prices of securities generally increase as interest rates decline and generally decrease as interest rates rise. Prices of long term securities generally fluctuate more in response to interest rate changes than do short term securities. Indian debt markets can be volatile leading to the possibility of price movements up or down in fixed income securities and thereby to possible movements in the NAV. This is likely to affect the value of the Scheme’s holdings and thus the value of the Scheme’s Units.
5. Liquidity or Marketability Risk: This refers to the ease with which a security can be sold at or near to its valuation yield-to-maturity (YTM). The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by a dealer. Liquidity risk is characteristic of the Indian fixed income market.
6. Credit Risk: Credit risk or default risk refers to the risk that an issuer of a fixed income security may default (i.e. will e unable to make timely principal and interest payments on the security). Because of this risk corporate debentures are sold at a yield above those offered on Government Securities which are sovereign obligations and free of credit risk. Normally, the value of a fixed income security will fluctuate depending upon the changes in the perceived level of credit risk as well any actual event of default. The greater the credit risk, the greater the yield required for someone to be compensated for the increased risk.
7. Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities in the Plans are reinvested. The additional income from reinvestment is the "interest on interest" component. The risk is that the rate at which interim cash flows can be reinvested may be lower than that originally assumed.
8. Investment decisions made by the AMC may not always be profitable

It is confirmed that:

1. The draft Offer Document forwarded to SEBI is in accordance with SEBI (Mutual Funds) Regulations, 1996 and the guidelines and directives issued by SEBI from time to time.
2. All legal requirements connected with the launching of the Scheme and also the guidelines, instructions, etc. issued by the Government of India and any other competent authority in this behalf, have been duly complied with.
3. The disclosures made in the Offer Document are true, fair and adequate to enable the investors to make a well-informed decision regarding investment in the proposed Scheme.
4. According to the information given to us, Standard Chartered Bank, the Custodian is registered with SEBI and till date such registration is valid.

Date : August 24^th , 2001 Signature :

Place : Mumbai. Name : S.D.Nayyar

Managing Director

Note: The Due Diligence Certificate as stated above was submitted to SEBI on August 27^th , 2001

The Fund, however, reserves the right to introduce an entry (sales) or an exit load or a combination thereof with prospective effect, subject to the condition that the repurchase (i.e. redemption) price is not lower than 93% of the NAV and the sale price is not higher than 107% of the NAV as per the SEBI Regulations.

Any change to the load/fee structure will be made as per the Regulations and will require prior approval of the Trustees and will be applicable prospectively.

1. The addendum detailing the changes may be attached to offer documents and abridged offer documents. The addendum may be circulated to all the distributors/brokers so that the same can be attached to all offer documents and abridged offer documents already in stock. The addendum may be sent alongwith the newsletter sent to the unitholders immediately after the changes.
2. Arrangements may be made to display the changes/modifications in the offer document in the form of a notice in all the investor service centres and distributors/brokers office.
3. The introduction of the exit load/ CDSC alongwith the details may be stamped in the acknowledgement slip issued to the investors on submission of the application form and may also be disclosed in the statement of accounts issued after the introduction of such load/CDSC.

In case of the no-load scheme, mentioned in this Offer Document, where additional management fee is charged by the AMC, the CDSC in excess of the actual expenditure of the AMC towards selling and distribution, if any, shall be credited to the respective Scheme, whenever felt appropriate by the AMC .

All loads including CDSC shall be credited to the Scheme. Such loads may be maintained in a separate account and may be utilised towards meeting the selling and distribution expenses. Any surplus in this account may be credited to the Scheme, whenever felt appropriate by the AMC.

(i) For the present Scheme:

2. For past Schemes:

The Initial Issue Expenses of ING Income Portfolio and ING Treasury Portfolio were borne by the AMC. Accordingly, no expenses were incurred by the Schemes.

The total annual recurring expenses, including investment management fees that can be charged to the Scheme shall be subject to a limit of 2.25 % of average Net Assets per annum or as amended by SEBI from time to time. These are estimated as follows:

(% Per annum of average weekly net assets)

*The R & T charges are only an indicative percentage and not a flat rate at which such costs would be charged to the Scheme. Actual R & T costs incurred will be debited to the Scheme, which may be higher than the costs of outsourcing.

The annual expense estimates shown above are based on a corpus size of the minimum targeted amount of the Scheme. Investors should note that the information provided are estimates made on a best effort basis and the expense categories may vary once the Scheme is in operation. The above expenses are subject to change and may vary.

The purpose of the above table is to assist the Investor in understanding the various costs and expenses than an Investor under each Plan will bear. The annual expense estimates shown above are based on a corpus size of the minimum targeted amount of the Scheme.

As per the Regulations, for schemes launched on a no-load basis, the AMC shall be entitled to collect an additional management fee not exceeding 1% of the weekly average net assets outstanding in each financial year. At present, the AMC does not propose to charge any additional management fee for the No-load Scheme mentioned in this Offer Document. The AMC reserves the right to charge such additional management fees, for the no-load Scheme, till the initial issue expenses incurred under the Schemes are recovered or as may be permitted from time to time under the Regulations. However, as per the Regulations, the total recurring expenses that can be charged to any of the Schemes in this Offer Document shall be subject to the applicable guidelines. As per the Regulations, the total annual recurring expenses, including investment management fees (together with additional management fee, wherever applicable ), that can be charged to the Schemes shall be subject to limits of:

(% Per annum of average weekly net assets)

In accordance with the Regulations, the investment management fee is included within the annual recurring expenses stated herein and charged to the Scheme and is subject to the following limits: On the first Rs.100 crore of the average weekly assets 1.25% and 1% of the excess amount over Rs.100 crore, where net assets so calculated exceed Rs.100 crore.

The ongoing fees and expenses of the Scheme will be payable monthly in arrears.

ING Balanced Portfolio : 5.60

ING Savings Trust, ("the Mutual Fund" or "the Fund"), a mutual fund, has been constituted as a Trust on October 8, 1998 in accordance with the provisions of the Indian Trusts Act, 1882 (2 of 1882). The Mutual Fund was registered with SEBI on February 11, 1999 under Registration Code MF//040/99/5.

The Fund has been set up for the purpose of providing mutual fund investment opportunities to the various classes of investors.

The ING Group, through its wholly owned subsidiary, Nationale Nederlanden Interfinance B.V., is the Sponsor of the Mutual Fund. The Sponsor acted as Settlor to the Deed of the Trust between itself and the Board of Trustees.

The ING Group is a global financial institution of Dutch origin, which is active in the fields of banking, insurance and asset management. It has a presence in more than 65 countries, with over 100,000 employees. ING Group is placed within the top 20 global asset managers. Within Europe and ranks 7^th with respect to assets under management. It is one of Europe’s largest financial institutions in terms of market capitalization and is one of the world’s largest providers of integrated financial services to private, corporate and institutional clients through a variety of distribution channels, giving them the freedom to choose the option which best suits their individual needs.

ING Group comprises a broad spectrum of prominent companies working closely with the customer. Many of them operate under their own brand names. ING’s strategy, which sets clear objectives, seeks to achieve stable growth while maintaining healthy profitability. The Groups’ financial strength, its broad range of products and services, the wide diversity of its profit sources and the good spread of risks form the basis for ING’s continuity and growth potential. In all its operations, ING strikes a careful balance between the interest of its customers, its shareholders and its employees. It is conscious of its responsibilities in a changing society. Responsiveness to the need of its customers, entrepreneurship, professionalism, teamwork and integrity are paramount in all ING’s activities.

ING Group’s insurance companies are among the leading players in the individual pensions and life insurance markets in several countries. ING’s international operations in the field of investment banking and asset management are expanding rapidly. The Group has gained a reputation around the world as a leader in emerging markets banking. It also plays a key role in international trade and commodity financing.

ING Investment Management is one of the largest asset managers in the Netherlands and is a market leader in the field of asset management on behalf of institutional clients such as pension funds. Working from its strong position in its home market, ING is expanding its international asset management services on behalf of institutional investors. The Group is also addressing the opportunities in the market for asset management services for private investors. ING Investment Management is ING’s largest investment management unit for institutional, insurance high net worth and retail customers. ING Investment Management has more than 1100 staff in 25 countries around the world.

The ING Group established its presence in India in 1992, when it opened a Representative Office of the ING Bank. It opened its first branch in Mumbai in 1994. At present, ING Bank has two branches in India viz. at Mumbai and Delhi. ING Bank offers to its clients a range of Corporate, Treasury and Private Banking Services.

ING Group has promoted ING Investment Management (India) Private Limited as a company incorporated in India for the purpose of carrying on Asset Management activities. The Group has a 75% holding in this company.

(source : www.inggroup.com and www.ingim.com)

Given below is a brief summary of ING Group’s financials:

Source : www.inggroup.com and www.ingim.com

The Board of Trustees of the Mutual Fund is responsible for supervising the functioning of the Mutual Fund. The Board of Trustees meets at least once every quarter. The Board of Trustees discharges the supervisory role of the Trustee by having continuous feedback from the AMC on matters of importance and a review of the Mutual Fund’s operations at the Board of Trustees meetings. The Board of the Trustees of ING Savings Trust has been meeting regularly to evaluate the performance of the Schemes floated and ensure that all the regulatory requirements are complied with. . During the year 2000, the Board met four times. At these meetings the Trustees are updated on compliance issues and other developments. The Trustees may amend, only with the prior approval of SEBI, the Initial Offer of the Units, the terms of the Scheme and the terms of the Mutual Fund from time to time. Any amendment made will be in conformity with SEBI Regulations and any such amendments will be binding on all Unitholders of the Scheme.

The Board of Trustees presently comprises the following (* Associate; # Independent)

Pursuant to the Trust Deed constituting the Mutual Fund and in terms of SEBI Regulations the Trustees have several rights and obligations including the following:

1. The Trustees and the AMC shall with prior approval of SEBI enter into an Investment Management Agreement ("IMA").
2. The IMA shall contain such clauses as are mentioned in the Fourth Schedule of the SEBI Regulations and other such clauses as are necessary for the purpose of making investments.
3. The Trustees have a right to obtain from the AMC such information as is considered necessary by the Trustees.
4. The Trustees shall ensure before the launch of any scheme that the AMC has the following :

1. Systems in place for its back office, dealing room and accounting;
2. Appointed all key personnel including fund manager(s) for the scheme(s) and submitted their bio-data which shall contain the educational qualifications, past experience in the securities market to the Trustees within 15 days of their appointment;
3. Appointed auditors to audit its accounts;
4. Appointed a compliance officer to comply with regulatory requirement and to redress investor grievances;
5. Appointed Registrar and Transfer Agent and laid down parameters for their supervision;
6. Prepared a compliance manual and designed internal control mechanisms including internal audit systems; and
7. Specified norms for empanelment of brokers and marketing agents.

1. The Trustees shall ensure that the AMC has been diligent in empanelling the brokers, in monitoring securities transactions with brokers and avoiding undue concentration of business with any broker.
2. The Trustees shall ensure that the AMC has not given any undue or unfair advantage to any associate or dealt with any of the associates of the AMC in any manner detrimental to interest of Unitholders.
3. The Trustees shall ensure that the transactions entered into by the AMC are in accordance with the SEBI Regulations and the Scheme.
4. The Trustees shall ensure that the AMC has been managing the Mutual Fund schemes independently of other activities and have taken adequate steps to ensure that the interest of investors of one Scheme are not compromised with those of any other scheme or of other activities of the AMC.
5. The Trustees shall ensure that all the activities of the AMC are in accordance with the provisions of SEBI Regulations.
6. Where the Trustees have reason to believe that the conduct of the business of the Mutual Fund is not in accordance with SEBI Regulations and the Scheme, they shall forthwith take such remedial steps as are necessary by them and shall immediately inform SEBI of the violation and the action taken by them.
7. Each trustee shall file the details of his transactions of dealing in securities with the Mutual Fund on a quarterly basis.
8. The Trustees shall be accountable for, and be the Custodian of the funds and property of the respective Schemes and shall hold the same in trust for the benefit of the Unitholders in accordance with the Regulations and the provisions of the Trust Deed.

15. The Trustees shall obtain the consent of the Unitholders of the Scheme :

1. When the Trustees are required to do so by SEBI in the interest of the Unitholders;
2. Upon the request of three-fourths of the Unitholders of any Scheme under the Mutual Fund;
3. If a majority of the Trustees decide to wind up the Scheme or prematurely redeem the Units;

15. The trustees shall ensure that no change in the Fundamental Attributes of any scheme or the trust or fees and expenses payable or any other change which would modify the scheme and affect the interest of unitholders, shall be carried out unless, -

1. a written communication about the proposed change is sent to each unitholder and an advertisement is given in one English daily newspaper having nationwide circulation as well as in a newspaper published in the language of the region where the Head Office of the mutual fund is situated; and
2. the unitholders are given an option to exit at the prevailing Net Asset Value without any exit load

15. The Trustees shall call for the details of transactions in securities by the key personnel of the AMC in his own name or on behalf of the AMC and shall report to SEBI, as and when required.
16. The Trustees shall quarterly review all transactions carried out among the Mutual Fund, AMC and its associates.

24. The Trustees shall furnish to SEBI on a half yearly basis the following:

1. A report on the activities of the Mutual Fund;
2. A certificate stating that the Trustees have satisfied themselves that there have been no instances of self dealing or front running by any of the Trustees, directors and key personnel of the AMC; and
3. A certificate to the effect that the AMC has been managing the Schemes independently of any other activities and in case any activities of the nature referred to in regulation 24(2) of the SEBI Regulations have been undertaken by the AMC and has taken adequate steps to ensure that the interest of the Unitholders are protected.

27. Trustees shall exercise due diligence as under:

A. General Due Diligence :

1. The Trustees shall be discerning in the appointment of the directors on the Board of the asset Management Company.
2. Trustees shall review the desirability of continuance of the asset management company if substantial irregularities are observed in any of the schemes and shall not allow the asset management company to float new schemes.
3. Trustees shall ensure that the trust property is properly protected, held and administered by proper persons and by a proper number of such persons.
4. Trustees shall ensure that all service providers are holding appropriate registrations from the Board or concerned regulatory authority.
5. Trustees shall arrange for test checks of service contracts.
6. Trustees shall immediately report to Board of any special developments in the mutual fund.

2. Specific Due Diligence:

The Trustees shall:

1. obtain internal audit reports at regular intervals from independent auditors

appointed by the Trustees.

2. obtain compliance certificates at regular intervals from the asset management company.
3. hold meeting of Trustees more frequently.
4. Consider the reports of the independent auditor and compliance reports of asset management company at the meetings of Trustees for appropriate action.
5. maintain records of the decisions of the Trustees at their meetings and of the minutes of the meetings.
6. prescribe and adhere to a code of ethics by the Trustees, asset management company and its personnel.
7. Communicate in writing to the Asset Management Company of the deficiencies and checking on the rectification of deficiencies.

1. the Investment Management Agreement and the compensation paid under the agreement.
2. service contracts with affiliates – whether the asset management company has charged higher fees than outside contractors for the same service.
3. selection of the asset management company’s independent directors.
4. securities transactions involving affiliates to the extent such transactions are permitted.
5. selecting and nominating individuals to fill independent directors vacancies.
6. code of ethics must be designed to prevent fraudulent, deceptive or manipulative practices by insiders in connection with personal securities transactions.
7. the reasonableness of fees paid to sponsors, asset management company and any others for services provided.
8. principal underwriting contracts and their renewals.
9. any service contract with the associates of the asset management company

Pursuant to the Deed of Trust constituting the Mutual Fund, the Mutual Fund is authorised to pay each Trustee a fee of Rs.5000 (Rupees Five Thousand only) per meeting of the Board of Trustees and to reimburse all out of pocket expenses for attending the meetings together with any other expenses incurred by them for attending to the business of the Mutual Fund.

An open-ended scheme offering several investment plans with maturity of three months to eighteen months, investing in a portfolio of government securities or highly rated corporate bonds maturing close to the maturity of the respective Plans so as to generate returns comparable with alternative fixed-income instruments of similar maturity. The Plans of the scheme shall be fully redeemed at the end of their respective Maturity Periods.

The objective is to invest in very low risk debt securities with maturity coinciding closely with the maturity of the respective Plans, so as to minimise the impact of price fluctuation of such securities on the values of the Plans at maturity. However there can be no assurance that the investment objective of the Plans will be realised. The Plans do not guarantee/indicate any returns.

Consistent with the objective of the Scheme and subject to Regulations, the corpus of the Scheme will be invested in any of (but not exclusively) the following securities.

• Securities issued/guaranteed by the Central and State Governments, including but not limited to coupon bearing bonds, zero coupon bonds and treasury bills,
• Obligations of Banks (both public and private sector) and Development Financial Institutions like Coupon bearing Bonds, Zero Coupon Bonds and Short Term Debts;
• Debt obligations of domestic government agencies and statutory bodies, which may or may not carry a Central/State Government guarantee;
• High investment grade corporate debt of both public and private sector undertakings;
• Money Market instruments permitted by SEBI/RBI;
• Certificates of Deposits(CDs)
• Commercial Paper (CPs)
• The non-convertible part of convertible securities;
• Any other fixed income securities and instruments as permitted by the Regulations from time to time.

The securities mentioned above may be listed, unlisted, privately placed, secured, unsecured, rated or unrated. The securities may be acquired through Initial Public Offerings (IPOs), secondary market operations, private placement, rights offers or negotiated deals.

Under normal circumstances the asset allocation under the Scheme will be as follows:

Subject to Regulations, the asset allocation pattern indicated above may change from time to time, keeping in view market conditions, opportunities and political & economic factors. It must be clearly understood that the percentages stated above are only indicative and not absolute and that they can vary substantially depending upon the perception of the AMC, the intention being at all times to seek to protect the interests of the Unitholders. Such changes in the investment pattern will be for short term and defensive considerations.

Being an open ended Scheme, the Units of the Scheme will not be listed on any stock exchange. The Trustee may, at ist sole discretion, cause the Units under the Scheme to be listed on one or more Stock Exchanges. Notification of the same will be made through Customer Service Centres of the AMC and as may be required by the respective Stock Exchanges.

Consistent with the investment objective of the Scheme, the AMC aims to identify securities which offer superior levels of yield at lower level of risks. The AMC will be guided by the ratings of Rating Agencies such as CRISIL, ICRA, Duff & Phelps and CARE. In addition, the investment team of the AMC will carry out an internal credit evaluation of securities in which investment is proposed. The investment team of the AMC will continuously monitor the macro-economic environment including the political and economic factors, money supply in the system, Government borrowing programme and demand and supply of debt instruments, among others, affecting the liquidity and interest rates. .

The Scheme may invest in other schemes managed by the AMC or in the schemes of any other Mutual Fund, provided such investment is in conformity with the investment objectives of the Scheme and the prevailing Regulations. The AMC, however, will not charge any investment management fees for such investments.

A bulk of the debt market consists of Government Securities. Other instruments available currently include Corporate Debentures, Bonds issued by Financial Institutions, Commercial Paper, Certificates of Deposits and Securitized debt. Securities in the Debt market typically vary based on their tenure and rating. Typically, Government Securities have tenures from one year to twenty years whereas the maturity periods of the Corporate debt varies from one year to ten years. Securities may be both listed and unlisted but this does not impact liquidity of the instruments. Most of the transactions in the debt market are conducted over telephone and are entered on principal to principal basis. The yields, liquidity on various securities, currently, are as under.

ING Term Portfolio does not have any special internal restrictions on debt investments, besides those laid down by SEBI (MF) Regulations.

The fund does not set absolute targets for buying / selling debt instruments. However, on a quarterly basis the portfolio is critically reviewed to assess the rise / fall in the instruments and a decision to book profits / cut losses is taken based on prevalent market conditions and changing business environment.

The debt fund manager undertakes the following investment process for identifying instruments for investments.

Investment in fixed income securities can be broadly segregated into 3 categories

• Call & Notice Money Operations (Fund specific)
• Investment in securities in the Secondary and Primary Markets (rated by a rating agency) (Scheme specific)
• Investment in Securities (Not rated by a rating agency) in the Primary market (Scheme specific)

Step 1. Using fundamental macro economic factors and bond market indicators, decide the attractiveness of bonds. Typically the outcome translates into a target duration for the portfolio, which, is established in relation to our view of the market as well as the portfolio duration of peer group, against which generally markets evaluate our performance.

Step 2. Select a portfolio of securities whose weighted duration meets the target duration and which would typically be government paper.

Step 3. Credit is introduced to the portfolio based on ascertaining the appropriate price for a non-government security, given its risk premium (yield spread) relative to government paper.

Step 4. Portfolio construction is conducted on the basis of the desired level of credit exposure, based on top-down economic analysis and assessment of corporate credit risk.

The investment team will present at each investment committee meeting, details on all trades done along with reasons for the same.

At the quarterly meeting of the AMC board and Trustees, the board members and trustees are provided with a written presentation of the schemes performance vis-a-vis a select group of similar other schemes in the industry. At these meetings the Chief Investment Officer (CIO) makes a detailed presentation about the following aspects:

• Developments in the debt markets in the last quarter
• Investment activities of the fund and detailed rationale for the funds investment decisions
• Comparison of the scheme performance vis-a-vis its selected peer group

The AMC may invest in the Scheme from time to time. As per SEBI Regulations such investments are perm