INITIAL OFFER PERIOD : ----------2001 to -------2001
 
 

EARLIEST CLOSING DATE DURING THE INITIAL OFFER PERIOD : ----------2001

SUBSEQUENT SALES will commence after 10 days from the close of initial offer (i.e. from-----------2001)
 
 

ISSUE PRICE: Rs.10/- per unit during the initial offer period and subsequently at the Net Asset Value (NAV) related price.
 
 

This Offer Document aims to set forth concisely the information regarding the scheme, which a prospective investor ought to know before investing. It is advised that this document should be retained for future reference.

The Scheme particulars of LICMF LIQUID FUND have been prepared in accordance with Securities & Exchange Board of India (Mutual Funds) Regulations 1996, as amended till date and filed with SEBI.The Units being offered for public subscription have not been approved/disapproved by the SEBI nor has SEBI certified on the accuracy or adequacy of the offer document.

This offer document will remain effective till a ‘material change’ (other than a change in Fundamental Attributes and within the purview of the offer document) occurs and thereafter the changes shall be filed with SEBI and circulated to the unitholders along with the quarterly/half-yearly-reports.

AMC - ASSET MANAGEMENT COMPANY

IMA - INVESTMENT MANAGEMENT AGREEMENT

JBSAMC - JEEVAN BIMA SAHAYOG ASSET MANAGEMENT COMPANY LIMITED

LIC - LIFE INSURANCE CORPORATION OF INDIA

LICMF - LIC MUTUAL FUND

NAV - NET ASSET VALUE

SEBI - SECURITIES AND EXCHANGE BOARD OF INDIA

INDIA ACT, 1934.

TRUSTEES - TRUSTEES OF LIC MUTUAL FUND

BUSINESS DAY - ANY DAY OTHER THAN A SATURDAY, A SUNDAY OR A DAY ON WHICH

BANKS AT THE RESPECTIVE CENTRES ARE NOT REQUIRED OR OBLIGATED

BY LAW OR EXECUTIVE ORDER TO REMAIN CLOSED.

CDSC - CONTINGENT DEFERRED SALES CHARGE.

OCB - AN OVERSEAS CORPORATE BODY,PARTNERSHIP FIRM OR AN ASSOCIATION OF

PERSONS OR A TRUST OWNED DIRECTLY OR INDIRECTLY TO AN EXTENT OF

ATLEAST 60% BY INDIVIDUALS OF INDIAN ORIGIN RESIDENT OUTSIDE INDIA.

FII - FOREIGN INSTITUTIONAL INVESTORS REGISTERED WITH SEBI

SWITCH - SALE OF UNIT IN ONE SCHEME /PLAN AGAINST PURCHASE OF A UNIT IN

ANOTHER
 
 

• OBJECTIVE: An open ended scheme which seeks to generate reasonable returns with low risk and high liquidity through judicious mix of investment in money market instruments and quality debt instruments.

• NO LOAD: The scheme is launched on no load basis, that is initial issue expenses will be borne by JBS AMC Ltd. Thus the scheme would open at par.

• ENTRY/EXIT LOAD: There is no entry load. Exit load for repurchase within 5 business Days of investment is 0.25%. No exit load for repurchases after 5 days of investments.

• LIQUIDITY: On an ongoing basis units for sale and repurchases will be available on all business days after the 10 days from the closure of initial offer period.

• REDEMPTION CHEQUES ISSUED: Within 1 Business day

• CUT OFF TIME: 10.30 a.m. for high value cheques and 1 p.m. for non-high value cheques.

• CHOICE OF PLANS: (A) Dividend and Dividend Reinvestment plans (B) Growth plan.

• FLEXIBILITY: Unit holders will have the flexibility to switch among the schemes and options offered by the LICMF.

• TRANSPARENCY: Disclosure of NAV on a daily basis at the end of each business day. Periodical disclosure of portfolio as well as publication of yearly and half-yearly accounts.

• TAX BENEFITS: The income distributed by the scheme will be exempt from income tax u/s 10 (33) of IT Act in the hands of investors. Capital Gains Tax Benefits u/s 48 and 112 of the Income Tax Act, 1961 are available.

• Eligible for investments by resident individuals, banks, Financial Institutions, bodies Corporate, trusts as well as non-resident individual investors, FIIs and OCBs subject to the necessary approvals.

Investors are advised to read the offer document carefully before investing.

D.1 STANDARD RISK FACTORS:

• Mutual funds and securities are subject to market risks and there is no assurance and no guarantee that the objectives of the mutual fund will be achieved.
• The NAV of the units issued under the scheme may go up or down depending on the factors and forces affecting capital markets.
• Past performance of the Sponsor/AMC/Mutual fund does not indicate the future performance of the schemes of the Mutual Fund.
• LICMF LIQUID FUND is the name of the scheme and does not in any manner indicate either the quality of the scheme or its future prospects and returns.
• The sponsor is not liable for any loss resulting from the operation of the scheme beyond the initial contribution made by it for an amount of rupees 2 Crores towards setting up of the Mutual Fund.
• Investors in the scheme are not being offered any assured /guaranteed returns.

• The scheme is an open-ended scheme. It is not proposed to be listed on any stock exchange at present but available for repurchase and redemption not later than 10 days after the close of the initial offer period on all business days (except book closure if any).
• The value in the investments is bound to change with changes in the factors affecting capital markets viz. changes in interest rates, exchange rates, price and volume fluctuations in debt markets, taxation, govt. policies, and other economic and political developments.
• The scheme may also use various derivatives and hedging products from time to time, as would be available and permitted by SEBI, in an attempt to protect the value of the portfolio and enhance unitholders interest. In case the scheme utilises any derivatives under the regulations, the scheme may, in certain situations, be exposed to price risks.
• Liquidity of scheme’s investment is inherently restricted by trading volumes and settlement periods. The inability to sell the money market or debt securities held in the scheme’s portfolio due to the absence of a well developed and liquid secondary market for such securities may result, at times in losses to the scheme, in case of subsequent decline in the value of such securities.

• No person is authorised to give any information or to make any representation not consistent with this offer document in connection with the initial offer and/or issue of units of LICMF LIQUID FUND.
• Any information or representation contained herein this document must not be relied upon as having been authorised by the Mutual fund or the Investment manager.
• All the points mentioned in the Standard Observations have been included in this Offer Document.
• This offer document contains no deviations from, and neither have any subjective interpretations been applied to, the provisions of any regulations. All contents in this offer document have been checked and are factually correct.

It is confirmed that:

I. The draft offer document forwarded to SEBI is in accordance with the SEBI (MF) Regulations, 1996 and the guidelines and directives issued by SEBI from time to time.

II. All legal requirements connected with the launching of the scheme as also the guidelines, instructions, etc. issued by the government and any other competent authority in this behalf, have been duly complied with.

III. 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.

IV. All intermediaries named in the offer document are registered with SEBI and till date such registration is valid.
 
 
 
 

Date : ________________2001

Place : Mumbai
 
 
 
 

Signature:
 
 
 
 

Name: Ponpandian P.

Compliance Officer

Jeevan Bima Sahayog Asset Mgmt. Co. Ltd.

Investment Managers to

LIC Mutual Fund
 
 
 
 

Note: The Due Diligence Certificate as given above was submitted to Securities and Exchange Board of India on ..........

The expense structure of the Scheme, the different fees and their percentage an investor is likely to bear on purchase or sale of units of the Scheme directly or indirectly are as follows:

F.1 EXPENSES OF THE SCHEME

a) UNITHOLDER TRANSACTION EXPENSES

i. Sales Load on purchases

ii. Sales Load on conversion of dividend into units

iii. Contingent Deferred Sales Charge (CDSC) based on period of Holding

iv. Repurchase \ Redemption Load

The Scheme is a NO LOAD Scheme. As the Scheme is being launched as a NO LOAD Scheme the Trustees have a right to charge the Scheme with an additional management fee of upto 1% of the weekly net assets value in each financial year. The Trustees have a right to charge the Unit Holders with a CDSC (see note below) on redemption based on the period for which the units under the Scheme are held on a prospective basis. The Trustees have also the right to introduce a Load / Fee for any or all of the items described in (i) to (iv) above. Initial issue expenses are borne by the AMC and therefore CDSC / Exit load or any combination thereof when introduced will be retained by the AMC to meet the expenses of the Scheme and any excess over the expenditure towards selling and distribution will be credited to the scheme.

Sales / Entry Load on purchases

There is no entry load payable for units purchased at present

Repurchase / Redemption / Exit Load .

There is an exit load of 0.25% for repurchases within five business days of investment at present.

CDSC(Contingent deferred sales charge)

The CDSC is a charge permitted under the Regulations by the AMC to the Unit Holders for redemption based on the period of holding, for a NO LOAD Scheme. It is intended to enable the AMC to recover the promotional and distribution expenses of the Scheme incurred by it which otherwise the Unit Holder might have to bear. If the Trustees decide to charge the Unit Holders with the cost of promotion and distribution based on period of holding, CDSC will be charged accordingly on a prospective basis. As per regulation 52(5) of the SEBI (MF) Regulations 1996 the AMC may be entitled to levy the CDSC for redemption during the first 4 years after purchase, not exceeding 4% of the redemption proceeds during the first year, 3% in the second year, 2% in the third year and 1% in the fourth year.

The Fund reserves the right to, revise, and review the entry /exit load described above from time to time within the permissible limits prescribed by SEBI. The revised load will be applicable to the units holders prospectively.

*Any load / fee charged will be within the admissible limits under the Regulations in force at that time.

*All loads including CDSC for each scheme shall be maintained in a separate account and may be utilised by the AMC towards meeting the selling and distribution expenses.

*The addendum detailing the changes in load structure may be attached to offer documents and abridged offer documents. The addendum detailing the changes may be circulated to all 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 to the unitholders immediately after the changes.

*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.

*The introduction of the exit load /CDSC alongwith the details may be stamped in the acknowledge-

ment slip issued to the investors on submission of the stamped application form and may also be

disclosed in the statement of accounts issued after the introduction of such load/CDSC.

F.2 INITIAL ISSUE EXPENSES

(i) PRESENT SCHEME

This scheme is launched on a "No load" basis. The Scheme is open for initial subscription from -------- to--------. Initial issue expenses of the scheme will not be charged to the scheme but will be entirely borne by the AMC. Therefore for every Rs.100 contributed by the investor,Rs.100 will be available for the Scheme for investment.

For Units purchased after the Initial offer period, entry and /or exit loads may be imposed as decided by the AMC.

(ii) PAST SCHEMES

The Fund has launched only one open-ended scheme viz. LICMF Children’s Fund during last two years. The estimated Initial issue expenses for the schemes are as follows:
 

EXPENSE HEAD	(AS A % OF TARGET MOBILISATION)
Commission to Agents/Brokers	2.00
Registrars fees	0.25
Bankers fees/ Legal fees	0.10
Advertising expenses	3.00
Marketing and Distribution costs	0.40
Miscellaneous	0.25
TOTAL	6.00

The above estimates are subject to change as per actuals .However the amount to be charged to the Scheme will be limited to 2% of the amount mobilised under LICMF Children’s Fund during the initial offer period. Expenses beyond 2 % of the fund mobilised during initial offer will be borne by the asset management company.

F.3 ANNUAL SCHEME RECURRING EXPENSES : (as a % of average weekly net assets)

The following are the estimated recurring expenses as percentage of average weekly net assets.
 

EXPENSES	%
AMC Fees Additional Management fees	1.00%
Custodian Fees	0.10%
Cost pertaining to issuance of Statement of account/ Certificate/Warrants, other servicing cost etc./Registrar Fees	0.10%
Fees & Expenses of Trustees, Audit Fees, Brokerage & Transaction Cost, Cost related to Investor communications, cost of statutory advertisements & Marketing & Selling expenses including agents commission.	0.30%
Total	1.50%

The purpose of the above table is to assist the investor in understanding the various costs and expenses that he will bear directly or indirectly. As the scheme is launched as a no load scheme the AMC is entitled to charge additional management fees as prescribed under the Regulations. At present the scheme has not been charged any additional management fee. However if the AMC decides to charge the scheme with additional management fees at a later date, then such a fee shall be chargeable only till the actual initial issue expenses borne by the AMC subject to the maximum limit of 6% of the initial mobilization are recovered by the AMC.

The total annual recurring scheme expenses is estimated at 1.50% of the average weekly net assets and the total expenses of the scheme excluding issue or redemption expenses whether initially borne by the mutual fund or by the AMC, but including the management and advisory fees (together with additional management fee, if levied) shall not exceed Statutory limits on the total annual recurring expenses of the scheme as prescribed under Regulation 52(6) of the SEBI Regulations:
 

First 100 crores on net assets	Next 300 crores	Next 300 crores	Balance
2.25%	2.00%	1.75%	1.50%

The initial issue expenses incurred under the Scheme, shall be subject to a maximum of 6% of the fund mobilization during the Initial Offer Period of the Scheme.

These estimates have been made in good faith as per the information available to the Investment Manager and are subject to change inter se.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

F.3 CONDENSED FINANCIAL INFORMATION

The following is the condensed financial information for schemes launched by LICMF during the last three fiscal years.

1. BRIEF PARTICULARS OF THE OPEN-ENDED SCHEMES OF THE FUND AVAILABLE FOR SUBSCRIPTION :
 

		SCHEME
FEATURES	LICMF CHILDREN’S FUND	LICMF BOND FUND	LICMF GSEC FUND	LICMF TAXPLAN
NATURE	Open ended	Open ended	Open ended	Open ended
TYPE	Debt	Debt	Debt	Equity
OPTION	Growth	Dividend/Growth	Dividend/Growth	Dividend/Growth
LAUNCH DATE	26th September 2001	26th march 1999	15th November 1999	1st January 1997 Open ended w.e.f . 17th April 2000
OBJECTIVE	To generate long term capital appreciation through a judicious mix of relatively low risk research based investments.	To generate attractive returns for our investors by investing in quality debt securities and money market  instruments.	To generate steady and consistent returns for our investors by timing the govt. securities market	To provide capital growth along with tax rebate and relief through prudent investments in the stock markets.
MIN INVESTMENT	Rs. 5000/- and thereafter in multiples of Rs. 500/-	Rs. 5000/- and thereafter in multiples of Rs. 500/-	Rs. 10000/- and thereafter in multiples of Rs. 1000/-.	Rs. 500 and thereafter in multiples of Rs. 100.
FUND MANAGER	Mr. J.S.Zala	Mr. J.S.Zala	Mr. J.S.Zala	Mr. J.S.Zala
NOMINATION	Available	Available	Available	Available
TAX BENEFITS	Capital gains tax benefits u/s 48  and 112 of the IT Act of 1961.	Capital gains tax benefits u/s 48  and 112 of the IT Act of 1961.	Capital gains tax benefits u/s 48 and 112 of the IT Act of 1961	Rebate u/s 88@20% on investment upto Rs. 10000/- Capital gains benefits u/s 48 7 112 of the IT act of 1961.
LIQUIDITY	Redemption facility available on an Ongoing basis on any business day.	Redemption facility available on an Ongoing basis on any business day.	Redemption facility available on an ongoing basis on any business day	Initial lock in of 3 years and thereafter redemption on an ongoing basis on any business day.
ENTRY LOAD	1%	Nil	Nil	2 %
EXIT LOAD	3% if repurchase is within 3 years from the date of investment.1.5% if repurchase is after 3 years from the date of investment but before the unit holder completes 18 years of age.No exit load where the unitholder has completed 18 years of age and where the repurchase is after 3 years from the date of investment	0.50% if repurchase is w/n 6 months of investments for amounts less than or equal to Rs. 50 lakhs. 0.25% if repurchase is w/n 3 months of investments for amounts greater than Rs. 50 lakhs. at present	0.3% if exit within 6 months	Nil

		SCHEME NAME
FEATURES	DHANA SAMRIDDHI	DHANASAHAYOG	DHANVIKAS (1)
NATURE	Open Ended	Open ended	Open ended
TYPE	Equity	Balanced	Equity
OPTION	Growth	Dividend/Dividend reinvestment/Growth	Growth
DATE OF LAUNCH	01.01.97 Open ended w.e.f 01.09.99	01.01.91 open	open ended w.e.f. 16.04.1998
TYPE OF SCHEME	Pure Growth Scheme	Income and Growth Scheme	Pure Growth Scheme
MIN. INVESTMENT	RS 5000/-	Rs.1000 for Individuals & Rs.10000 for Institutions	Rs. 2000
NOMINATION	Available	Available	Available
TAX BENEFITS (U/S)	48, 112, of the IT Act	48, 112, of the IT Act	48, 112, of the IT Act
LIQUIDITY	No lock-in-period	No lock-in-period	No lock-in-period

HISTORICAL PER UNIT STATISTICS :
 

HISTORICAL PER UNIT STATISTICS	LICMF BOND		LICMF GOVT. SECURITIES		DHANASAMRIDDHI
	2000-01	1999-00	2000-01	1999-00	2000-01	1999-00	1998-99
Date of allotment	8/5/1999		29/11/1999		1/9/1994
Open ended w.e.f.					1/9/1999
NAV at the beginning of the year					4.72	3.94	4.21
Dividend option	10.471	10.00	10.2771	10.00
Growth option	11.455	10.00	10.5553	10.00
Net Income	0.73	0.53	1.12	0.48	-2.73	1.34	-0.28
Income Distribution/Dividends	0.02	0.18	0.07	0.21	-	-	-
Transfer to reserves (if any)	0.04	0.16	0.03	0.20	-0.06	-0.92	-0.36
NAV at the end of the year					2.10	4.94	3.94
Dividend Option	10.26	10.56	10.14	10.21
Growth Option	12.72	11.27	11.48	10.53
Annualized returns (%)	13.69	12.70	10.79	5.30	-21.10	-11.87	-18.40
Net Assets at the end of period (Rs.lac)	56177.11	18020.99	8256.95	7613.91	454.79	1175. 91	1311. 67
Ratio of Recurring expenses to net Assets (Annualized)	2.21	2.28	1.28	0.32	2.48	2.48	1.92
N.A.V as on 26/11//2001					2.00
Dividend	10.562			10.8145
Growth	14.146			13.0926
Returns since inception %	14.53			14.45	-31.34

 
 
 
 
 
 
 
 
 
 
 
 

HISTORICAL PER UNIT STATISTICS	DHANVIKAS			LICMF TAX PLAN
	2000-01	1999-00	1998-99	2000-01	1999-00	1998-99
Date of allotment	15/4/1993			1/4/1997
Open ended w.e.f.	16/4/1998			17/4/2000
NAV at the beginning of the year	10.77	8.58	8.11	15.08	10.88	10.33
Monthly Option
Cumulative Option
Net Income	-3.97	2.24	0.47	-6.00	6.11	-0.54
Income Distribution/Dividends	-	-	-	-	-	-
Transfer to reserves (if any)	0.04	0.11	-1.07	0.17	-	-0.01
NAV at the end of the year	5.70	10.09	8.58	7.00	15.91	10.88
Annualized return (%)	-6.81	0.13	-2.54	-8.53	16.74	4.31
Net Assets at the end of period (Rs.lac)	3532.31	5987.44	7327.2	123.91	426. 90	291.81
Ratio of Recurring expenses to net Assets (Annualised)	1.95	1. 84	2. 31	2.50	1.61	1.84
NAV as on 26/11/2001	5.62			7.10
Returns since inception %	-11.20			-31.53

 

 

	DHANAVARSHA (12)			DHANAVARSHA (13)
HISTORICAL PER UNIT STATISTICS	2000-01	1999-00	1998-99	2000-01	1999-00	1998-99
Date of allotment	1/6/1998			1/10/1998
NAV at the beginning of the year
Monthly Option	10.08	10.04	10.00	10.26	9.96	10.00
Cumulative Option	11.91	11.16	10.00	11.64	10.62	10.00
Net Income per unit	1.28	1.74	1.20	1.39	2.20	0.69
Income Distribution/Dividends	0.08	1.12	0.38	0.06	0.80	0.23
Transfer to reserves (if any)	0.03	0.27	0.81	0.07	0.59	0.51
NAV at the end of the year
Monthly Option	10.05	10.31	10.04	10.07	10.67	9.96
Cumulative Option	13.98	12.84	11.16	13.59	12.67	10.62
Annualized return (%)	11.76	14.61	11.60	13.21	17.11	6.20
Net Assets at the end of year (Rs.lac)	13945.76	15386.34	18389.14	15377.80	16810.50	17396.10
Ratio of Recurring expenses to net assets (Annualized)	1.36	1.40	0.21	1.33	1.36	0.74
NAV as on 26/11//2001
Monthly	10.09			10.22
Cumulative	14.73			14.66
Returns since inception %	11.74			12.93

 

Borrowings by LIC Mutual Fund

LIC Mutual Fund has not borrowed any funds during the last fiscal.
 
 

G. CONSTITUTION OF THE MUTUAL FUND

G.1 INFORMATION ABOUT THE SPONSOR

Life Insurance Corporation of India (LIC), the sponsor of LIC Mutual Fund is one amongst the largest insurance companies in the world, serving over 10 crore policy holders and managing a Fund of

over Rs.154000 crores. There are very few organisations in India, which manage funds of this size. LIC is not responsible or liable for any loss or shortfall resulting from the operations of any scheme of the Mutual Fund beyond the initial contribution of Rs. 2 crores towards setting up of corpus.

Activities of the sponsor and its financial performance for the last three fiscal years:

LIC of India, incorporated in 1956 under the LIC Act is in the principal business of providing life insurance. The brief financial position of LIC, is as under:
 

Particulars	For financial years (Rs.in crores)
	1999-2000	1998-99	1997-98
TOTAL INCOME	44729.61	36352.59	30732.60
TOTAL OUTGO (INCLUDING TAXES, TRANSFER TO RESERVES & 5% OF VALUATION SURPLUS PAID TO CENTRAL GOVT)	18101.94	14796.42	12659.67
EXCESS OF INCOME OVER OUTGO ADDED TO FUND	26627.67	21556.17	18072.93
FUND AT THE END OF THE YEAR	154043.73	127389.06	105832.89
CAPITAL PROVIDED BY CENTRAL GOVT.	5.00	5.00	5.00

 

G.2 INFORMATION ABOUT THE TRUSTEE

LIC Mutual Fund was set up as a separate Trust by the Life Insurance Corporation of India having its central office at Yogakshema, Jeevan Bima Marg, Mumbai 400 021. The Trust deed dt.20.04.89 was modified through a deed of modification as mentioned in schedule III of SEBI (Mutual Fund) Regulations 1996. The Trust Deed will not be modified without the prior approval of SEBI and unitholders approval will be obtained where it affects the interest of the unitholders. LIC has made an initial contribution of Rs.2 crores towards Trust Fund and has appointed a Board of Trustees to supervise the activities of the Fund. The Board of Trustees have entrusted the work of management of the Fund to Jeevan Bima Sahayog Asset Management Company Ltd., which is a company promoted by Life Insurance Corporation of India with an authorised capital of Rs.25 crores. Further details regarding the set up are furnished in the following paragraphs:

LIC Mutual Fund has mobilised around Rs. 3760 crores (cumulative as on 30.10.2001) from over 16.50 lakh investors during 12 years of operations by successfully launching 33 schemes of various types. The day to day operations of JBS AMC Ltd., the investment manager to LIC MF, are looked after by senior officials on deputation from LIC of India, which has experience of handling and investing large funds for over 45 years.

Objective of LIC Mutual Fund:

The basic objective of LIC Mutual Fund is to mobilise savings from investors who are spread in various parts of the country and have no easy access to the capital market, with a view to providing them a vehicle for investment of their funds to ensure safety, security, easy liquidity and reasonably good returns. LIC Mutual Fund has launched 33 different schemes catering to various needs of the investors. The condensed financial information pertaining to schemes launched in past 3 fiscal years has been provided above.

Board Of Trustees:

A Board of Trustees comprising of the following eminent persons whose principal occupations and current directorships are as under administers the Trust:

DIRECTORSHIP OF TRUSTEES
 

Name, Present Occupation and Address	Current Directorships
Shri N.C. Sharma – Chairman  Address : A 3, Jeevan Jyot, Setalwad Lane, Napean Sea Road, Mumbai-400 006.	Managing Director LIC of India LIC Housing Finance Ltd. Director Jenson & Nicholson (I) Ltd.  Mukund Ltd. Alternate Director Ken India Assurance Co. Ltd
2) Shri V.N. Nadkarni,  Address : 12, "Jayashree",  75,Worli Sea Face,  Mumbai 400 025	Chairman Vajra Granites Ltd. Clariant (India )Ltd. Director 1.Rallis India Ltd.  2.Indo Gulf Fertilisers & Chemicals Corp.Ltd. 3. RPG Telecom Ltd. 4.Bakelite Hylam Ltd. 5.Arlem Breweries Ltd.  6.Borosil Glass Works Ltd. 7.D.C.L. Polyster Ltd. 8. Monotona Exports Ltd.  9.Dewan Housing Development Finance Corpn. Ltd.  10.Invol Medical (I) Ltd. 11. Amar Remedies Ltd. Alternate Director Schrader Duncan Ltd.
3) Shri S.C. Anand Address : R-4/7, Raj Nagar,  Ghaziabad - 201 002 U.P.	Director  1. Hope Textiles Ltd.
4) Shri N.C. Singhal Address: C 45, Mayfair Garden, Little Gibbs Road, Mumbai-400 006	Chairman Samalpatti Power Co. Pvt. Ltd. Director 1.Cholamandalam Inv. & Finance Co.Ltd 2.Devki Devi Hospitals Ltd. 3.Tolani Bulk Carriers Ltd. 4.Shapoorji Pallonji Finance Ltd.  5.Deepak Fertilisers & Petrochemicals  Corporation Limited 6.Atcom Technologies Ltd. 7. Max India Ltd. 8.Ambit Corporate Finance Pvt. Ltd. 9.Sarat Chatterjee &Co.(VSP) Pvt. Ltd. 10.The Shipping Corporation of India Ltd. 11.Kothari Pioneer AMC Ltd. 12.Max NewYork Life Insurance Co.Ltd.
5) Shri N. Ramamurthi Address : Vaibhav, Plot no.26,  LIC Officers Colony, Sikh Village,  Secunderabad - 500 009.	Nominee Director 1. The Baroda Rayon Corporation Ltd. 2. Madura Coats Ltd

 

Substantiative Provisons of Trust Deed:

As per the Trust Deed and Deed of Modification, thereof, the Board of Trustees shall discharge the following:

a. A Trustee in carrying out his responsibilities as Member of the Board of Trustees of LIC Mutual Fund shall maintain an arms length relationship with other companies, or institutions or financial intermediaries or any Body Corporate with which he may be associated.

b. A member of the Board of Trustees shall not participate in the meetings of the Board or in any decision making process for any investment in which he may be interested.

c. All members of the Board of Trustees shall furnish to the SEBI, the interest which they may have in any other company or institution or financial intermediary or any corporate by virtue of their position as Directors, partners or with which they may be associated in any other capacity.

d. The Trustees shall take into their custody or under their control all the capital property of the various schemes of LIC Mutual Fund and shall hold it in trust for the unitholders.

e. It shall be the duty of the Trustees to act in the best interest of the unit holders and shall provide or cause to provide information to unitholders and SEBI as may be specified by SEBI.

f. The Trustees shall take reasonable care to ensure that the funds under the various schemes floated and managed by the Asset Management Company are in accordance with the Trust Deed and the guidelines issued by SEBI.

g. The Trustees shall supervise the collection of any income due to be paid to the scheme and claiming of any repayment of tax and holding of any income received in trust for the holder’s in accordance with the Trust Deed and guidelines issued by SEBI.

h. The Trustees shall explicitly forbid the acquisition of any asset out of the trust property, which involves the assumption of any liability, which is unlimited or results in encumbrance of the trust property in any way.

i. The trustees shall have the power to dismiss the AMC under the specific events only with the approval of SEBI in accordance with the Regulations.

j. All Unitholders will have beneficial interest in the trust property to the extent of individual holding I respective schemes only.

k. No amendment to the Trust Deed shall be carried out without the prior approval of Unitholders and the Board, provided however, that in case a Board of Trustees is converted into a Trustee Company such a conversion shall not require the approval of Unitholders.

Functions and responsibilities of the Trustees:

The Board of Trustees shall discharge the functions and responsibilities as per the Trust Deed and Deed of Modification as mentioned in Schedule III of SEBI (MF) Regulations, 1996 and as per SEBI (Mutual Funds) Regulations 1996 as may be amended from time to time.

The Trustees monitor and supervise the activities of the AMC and the Mutual Fund through review of quarterly and periodical reports, compliance’s furnished to SEBI with regard to the SEBI (Mutual Fund) Regulations, 1996. The Trustees continuously review the investor complaints received and their redressal by the AMC. The Trustees obtain from the AMC necessary information as and when required to ensure that the activities of the Fund and the AMC are as per provisions of SEBI (Mutual Fund) Regulations, 1996 and the Trust Deed.

The Trustees of LIC Mutual Fund have held 6 meetings in the financial year 2000 - 2001.

Under SEBI (Mutual Fund) Regulations, 1996, the Trustees have the following duties and obligations:

1. To enter into an investment management agreement with the asset management company with prior approval of the SEBI.
2. To ensure that the investment management agreement contains such clauses as are mentioned in the Fourth Schedule of SEBI (Mutual Fund) Regulations, 1996 and such other clauses as are necessary for the purpose of making investment.
3. To ensure before the launch of any scheme that the asset management company has: -

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 with the trustees, within 15 days of their appointment;

Appointed auditors to audit its accounts, and ensured that the auditor for the Mutual Fund is different from the auditor of the AMC;

Appointed compliance officer to comply with regulatory requirements and to redress investor grievances;

Appointed registrars and laid down parameters for their supervision;

Appointed Custodians and laid down the parameters for supervision of their activities;

Prepared compliance manual and designed internal control mechanisms including internal audit systems;

Specified norms for empanelment of brokers and marketing agents.

D. To ensure that the asset Management Company has been diligent in empanelling the brokers, in monitoring securities transactions with brokers and avoiding undue concentration of business with any broker.

E. To ensure that the asset management company has not given any undue or unfair advantage to any associates or dealt with any of the associates of the asset management company in any manner detrimental to interest of the Unit holders.

F. To ensure that the transactions entered into by the asset management company are in accordance with SEBI (Mutual Fund) Regulations, 1996 and the scheme.

G. To ensure that the asset management company 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 is not being compromised with those of any other scheme or of other activities of the asset management company.

H. To ensure that all the activities of the asset management company are in accordance with the provisions of SEBI (Mutual Fund) Regulations, 1996.

I. Where the trustees have reason to believe that the conduct of business of the mutual fund is not in accordance with SEBI (Mutual Fund) Regulations, 1996 and the scheme they shall forthwith take such remedial steps as are necessary by them and shall immediately inform the SEBI of the violation and the action taken by them.

J. To file the details of his/her holdings in securities on a quarterly basis with the trust.

K. To be accountable for, and be the custodian of, the funds and property of the respective schemes and to hold the same in trust for the benefit of the unit holders in accordance with SEBI (Mutual Fund) Regulations, 1996 and the provisions of trust deed.

L. To take steps to ensure that the transactions of the mutual fund are in accordance with the provisions of the trust deed.

M. To be responsible for the calculation of any income due to be paid to the mutual fund and also of any income received in the mutual fund for the holders of the units of any scheme in accordance with SEBI (Mutual Fund) Regulations, 1996 and the trust deed.

N. To obtain the consent of the Unit holders :-

Whenever required to do so by the SEBI in the interest of the Unit holders; or

Whenever required to do so on the requisition made by three-fourths of the Unit holders of any scheme; OR

When the majority of the trustees decide to wind up or prematurely redeem the units; or

Whenever any modification of the fundamental attributes of the scheme, or the trust deed or the fees and expenses payable or any other modification by the Trustees is proposed it shall be made bearing in mind that the interest of the Unit holders is not affected and no change in any of the above shall be carried out unless –

-A written communication about the change is sent to each unit holder 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

-The unit holders are given an option to exit at prevailing NAV without any exit load.

Explanation: For the purposes of this clause "fundamental attributes" mean the type of a scheme, the investment objectives and terms of issue.

O. To call for the details of the transactions in securities by the key personnel of the asset management companies in his own name or on behalf of the asset management company and shall report to the SEBI, as and when required.

P. To make a quarterly review of all transactions carried out between the mutual fund, asset Management Company and its associates.

Q. To quarterly review the networth of the asset management company and in case of any shortfall, ensure that the asset management company make up for the shortfall as per clause (f) of sub-regulation (1) of regulation 21 of SEBI (Mutual Fund) Regulations, 1996.

R. To periodically review all service contracts, such as custody arrangements, transfer agency of the securities and satisfy itself that such contracts are executed in the interest of the Unit holders.

S. To ensure that there is no conflict of interest between the manner of deployment of its networth by the asset management company and the interest of the Unit holders.

T. To periodically review the investor complaints received and the redressal of the same by the asset management company.

U. To abide by the Code of Conduct as specified in the Fifth Schedule of SEBI (Mutual Fund) Regulations, 1996.

V. To furnish to the SEBI on half yearly basis, -

a) A report on the activities of the mutual fund;

b) 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 asset management company;

c) A certificate to the effect that the asset management company has been managing the schemes independently of any other activities and in case any activities of the nature referred to in sub-regulation (2) of the regulation 24 of SEBI (Mutual Fund) Regulations, 1996 have been undertaken by the asset management company, it has taken adequate steps to ensure that the interest of the Unit holders are protected.

The independent Trustees shall give their comment on the report received from the AMC regarding the investment by Mutual Fund in the securities of group Company(s) of the sponsor.

Trustee fees:

In accordance with the Trust Deed constituting the Mutual Fund, and the Deed of Modification the Trustee is entitled to receive in addition to the reimbursement of all costs, charges and expenses a fee not exceeding 0.01% of the weekly / daily average net assets or a sum of 25 lakhs per annum whichever is higher subject to regulations.

Certificate of registration :

In accordance with the Regulation 9 of the Securities & Exchange Board of India Regulations, the LIC Mutual Fund has obtained a Certificate of Registration from SEBI on 9/5/94 vide Registration Code No.MF/012/94/5.

G.3 INFORMATION ABOUT THE ASSET MANAGEMENT COMPANY (AMC)

In terms of Securities & Exchange Board of India (Mutual Fund) Regulations, an Asset Management Company called the Jeevan Bima Sahayog Asset Management Company Ltd. with an authorised capital of Rs.25 crores has been appointed, as approved by the Securities & Exchange Board of India, to manage the affairs and operate the schemes of LIC Mutual Fund. Promoted by LIC, the JBSAMC was incorporated in April 1994 and has since been managing the schemes of LICMF.

AMC Board:

The Board of Directors of the Jeevan Bima Sahayog Asset Management Company Ltd consists of the following:
 

Name Present Occupation and Address	Current Directorships
Shri A.Ramamurthy – Chairman Address : 11,Jeevan Anand Dr. Rajabali Patel Lane , Opp. Breach Candy Hospital, Mumbai-400 026	Managing Director  LIC of India Director LIC(Intl.) E.C.Bahrain The Tinplate Co. of India Ltd. Larsen & Toubro Ltd. Asea Brown Boveri Ltd.
2) Shri R. Subramanian  Address : New no.6 (Old no.36) Krishnaswamy Avenue, Luz  Mylapore, Chennai - 600 004	Director 1. Technology Information Engineering Services (P) Ltd. 2. S S B Industries Ltd. VST Tillers & Tractors Ltd. BILT Paper Holdings Ltd.(UTI Nominee) DSQ Information Technologies Ltd.
3) Shri C.R. Thakore  Address : Mrudul,8 Jeevan Prakash  Society, St. Xaviers High  School Road,PO Navajivan,Ahmedabad  380014	NIL
4) Shri D.M. Sukthankar Address : No. 5, "Priya", A.G.Khan Marg, Worli, Sea Face,  Mumbai - 400 025	Director 1. HDFC Ltd. 2. HDFC Developers Ltd. 3. Tata Housing Development  Co. Ltd. 4. Phoenix Township Ltd. 5. ANZ Grindlays Trustee  Co.Pvt.Ltd. 6. Indoco Remedies Ltd.
5) Shri R.M. Honavar  Address : "Lakshmi Kamal",  20, Chintamani Co-op. Hsg. Society,  Karve Nagar, Pune – 411 052	Member of Governing Body Indian School of Political Economy
6) Shri Ajit M. Sharan Address : Flat No. 2C Hudco Place, Andrews Gang, New Delhi- 110049	Director New India Assurance Co. Ltd. United India Insurance Co. Ltd.
Shri Kranti Sinha Address : 14, Belvedere Court, M.K.Marg,  Churchgate, Mumbai – 400020	Director & Chief Executive  LIC Housing Finance Ltd. Managing Director & Chief Executive 1. LIC HFL Care Homes Ltd. Nominee Director Hindustan Motors Ltd. Uniflex Cables Ltd.
Shri.M.R.Murali–Chief Executive Address: 14, "Oval View",6th floor M.K. Road, Churchgate Mumbai-400 020	Director AMFI Tidel Park Ltd.

 

AMC Fees :

In accordance with the Investment Management Agreement and the SEBI regulations the AMC is entitled to receive investment management and advisory fee at the rate of 1.25%, per annum of the weekly average net assets outstanding in an accounting year, for net assets upto Rs. 100 crores, and at the rate of 1% per annum of the weekly average net assets outstanding in an accounting year, for net assets above Rs. 100 crores.

Duties and obligations of AMC:

The Investment Management Agreement was entered into by the JBSAMC on 22.04.94.

Under the SEBI (Mutual Funds) Regulations, 1996, the Asset Management Company has the following obligations:

1. To take all reasonable steps and exercise due diligence to ensure that the investment of funds pertaining to any scheme is not contrary to the provisions of SEBI (Mutual Fund) Regulations, 1996 and the trust deed.

2. To exercise due diligence and care in all its investment decisions as would be exercised by other persons engaged in the same business.

3. To be responsible for the acts of commissions or omissions by its employees or the persons whose services the Asset Management Company has procured.

4. To submit to the trustees quarterly reports of each year on its activities and the compliance with SEBI (Mutual Fund) Regulations, 1996.

5. The trustees at the request of the asset Management Company may terminate the assignment of the asset Management Company at any time:

Provided that such termination shall become effective only after the trustees have accepted the termination of assignment and communicated their decision in writing to the asset Management Company.

6. Notwithstanding anything contained in any contract or agreement or termination, the asset management company or its directors or other officers shall not be absolved of liability to the mutual fund for their acts of commissions or omissions, while holding such position or office.

7. The SEBI (MF) Regulations 1996 specify that, the AMC,

a) Shall not through any broker associated with the sponsor, purchase or sell securities, which is average of 5% or more of the aggregate purchases and sale of securities made by the mutual fund in all its schemes.

Provided that for the purpose of this sub-regulation, aggregate purchase and sale of securities shall exclude sale and distribution of units issued by the mutual fund.

Provided further that the aforesaid limit of 5% shall apply for a block of three months.

b) Shall not purchase or sell securities through any broker (other than a broker referred to in clause (a)) which is average of 5 % or more of the aggregate purchases and sale of securities made by the mutual fund in all its schemes, unless JBS AMC has recorded in writing the justification for exceeding the limit of 5% and reports of all such investments are sent to the trustees on a quarterly basis.

Provided that the aforesaid limit shall apply for a block of three months.

c) Shall submit a quarterly report to the trustees giving details and adequate justification about the purchase and sale of the securities of the group companies of the sponsor or JBS AMC as the case maybe, by the mutual fund during the said quarter.

8. Not to utilize the services of the sponsor or any of its associates, employees or their relatives, for the purpose of any securities transaction and distribution and sale of securities:

Provided that the Asset Management Company may utilize such services if disclosure to that effect is made to the unit holders and the brokerage or commission paid is also disclosed in the half yearly annual accounts of the mutual fund.

9. To file with the trustees the details of transactions in securities by the key personnel of the asset management company in their own name or on behalf of the asset management company and to also report to the SEBI, as and when required by the SEBI.

10. In case the asset management company enters into any securities transactions with any of its associates, a report to that effect to be sent immediately to the trustees.

11. In case any company has invested more than 5 percent of the net asset value of a scheme, the investment made by that scheme or by any other scheme of the same mutual fund in that company or its subsidiaries to be brought to the notice of the trustees by the asset management company and to be disclosed in the half yearly and annual accounts of the respective schemes with justification for such investment. Provided that the latter investment has been made within 1 year of the date of the former investment calculated on either side.

12. To file with the trustees and the SEBI -

a) Detailed bio-data of all its directors along with their interest in other companies within fifteen days of their appointment; and

b) Any change in the interests of the directors every six months.

13. To file with the trustees a statement of holdings in securities of the directors of the asset management company with the dates of acquisition of such securities at the end of each financial year.

14. Not to appoint any person as key personnel who has been found guilty of any economic offense or involved in violation of securities laws.

15. To appoint registrars and share transfer agents who are registered with the SEBI.

Provided if the work relating to the transfer of units, repurchase/ redemption etc is processed in-house, the charges at competitive market rates may be debited to the scheme and for rates higher than the competitive market rates, prior approval of the trustees shall be obtained and reasons of charging higher rates shall be disclosed in the annual accounts.

16. To abide by the Code of Conduct as specified in the Fifth Schedule.

KEY PERSONNEL:

The day to day operations of the AMC are looked after by experienced and qualified professionals, consisting of senior officials on deputation from Life Insurance Corporation of India as well as directly recruited officials of the AMC.
 

NAME	AGE	POSITION	QUALIFICATION	EXPERIENCE
Mr. M.R.Murali	58	CEO	B.Sc ACA	Senior Divisional. Manager, Kozhikode - 1 yr.& MDO-I – 2 yrs Secretary (Mktg.) Central office-2 yrs, RM (Est. & Office Services) Delhi Zonal office- 2 yrs. at the LIC of India, Chief Vigilance Officer- 2 yrs GIC
Mr.J.S.Zala	59	GM -Finance	B.Com ACA	Mktg Mgr – 2 yrs., Mgr.(Pension & Group Services)- 1 yr Ahmedabad DO, Senior Divisional manager- 4 yrs Rajkot DO, Secretary(investment)- 1 yr, Chief (Investment ) – 3 yrs Corporate office at the LIC of India
Mr. M.K.Santhanam	54	Jt. GM –Mktg.	B.Com ACA	SBM-2 yrs,  Mgr. (F &A)- 1 yr, Madras DO, Mktg. Mgr. –3 yrs CalcuttaDO, Sr.Div.Mgr.- 3 yrs Madurai & Coimbatore –1 yr DOs at the LIC of India.
Ms. M. Meenakshi	52	Dy. Gen. Mgr.-Finance	B.A. FIII	AO ,–4 yrs (Investments) Corporate office, Asst. Secretary-6 yrs (Investments) Corporate office Mgr.(P&IR) Pune DO – 3 months, Faculty member ZTC Pune –6 months at the LIC of India
Mr. V.Udayshankar	42	Dy. Gen. Mgr.-Mktg Services	B.Sc	Administrative Officer (LICHFL)-4 years, Mgr..(Claims,Data Processing)-2 yrs. Guwahati DO- at the LIC of India. AGM Admn.. JBSAMC- 3 yrs.  AGM Mktg. JBSAMC- 1 yr.
Mr.P. Ponpandian	42	CS	M.Com , ACA, ACS	Asst. Administrative Officer (Finance & Accounts)-4 years Vellore, at the LIC of India, Dy.Mgr. LICHFL Madurai,- 5 yrs Asst. Secretary (Pension & Group Services) Corporate office-2 yrs at the LIC of India, AGM (Accounts) – 5 months JBSAMC

CUSTODIANS

LIC Mutual Fund has appointed Stock Holding Corporation of India situated at Mittal Court, `B' Wing, Nariman Point, Mumbai 400 021, having SEBI Regulation no. IN/CUS/011 as the custodian for the scheme as per the custodian agreement with them, signed on 22/4/94. The LIC Mutual Fund has, however, been using the services of the same custodian for its earlier schemes also.

Functions and Responsibilities of Custodians:

The custodian is required to take delivery of all properties belonging to the Mutual Fund schemes and hold them in custody and separately from the assets of the custodian and their other clients. The custodian will make efforts to have the properties of the Fund registered in the name of the Fund and will deliver them only as per the instructions of the AMC and on receipt of the consideration.

The custodian shall collect, receive and deposit in the account or accounts of the Fund with the bank, income, dividends, interest, rights and other payments of whatever kind with respect to the securities and other assets and items of a like nature of the Fund held by or to the order of the custodian and shall execute such ownership and other confirmations as are necessary.

The Board of Trustees of LIC Mutual Fund shall have the right to change the Custodians if at any point of time it is observed that the service of the appointed Custodians is not upto the mark.

REGISTRARS AND TRANSFER AGENTS

Presently, all the activities such as processing of applications, issuance of statement of account/unit certificate, servicing, transfers, repurchases and other such activities are proposed to be carried out by the AMC itself. The AMC may charge the scheme for these activities at competitive rates. The Trustees may at a later stage, if felt necessary, appoint a Registrar and Transfer agent.

The Board of Trustees of LIC Mutual Fund shall have the right to change the Registrars and Transfer agent if at any point of time it is observed that the service of the appointed Registrar and Transfer agent is not upto the mark.

AUDITORS

M/s. B. K. Khare & Co.,

Chartered Accountants,

706/708, Sharda Chambers,

New Marine Lines, Mumbai - 400 020

The Board of Trustees of LIC Mutual Fund shall review the appointment of Auditors after every two years or at such time as may be deemed fit in the opinion of the Board.
 
 
 
 
 
 
 
 
 
 

BANKERS

Presently, the application with Cheque/DD under the Scheme shall be accepted at authorized centres of AMC. However, AMC at a later date may authorise one or more bank/s to act as collecting banks for the scheme.

Investment by LIC Mutual Fund

There are no investments by the schemes of LIC Mutual Fund in securities issued by companies associated with or belonging to sponsor group and underwriting obligations undertaken by the schemes relating to issues of associate companies during the last three years directly.

LIC Mutual Fund’s Policy for investing in group companies: LICMF LIQUID FUND shall not invest in any unlisted securities of the group/associate company of the sponsor and in any privately placed security issued by associate or group company of the sponsor. LIC Mutual Fund will also ensure that its aggregate investment in the listed securities of the group companies of the sponsor shall not exceed 25% of the aggregate net assets of all schemes of the Fund.

LIC Mutual Fund has not utilised the services of associate companies for purchase or sale of securities.

The AMC may subject to SEBI Guidelines, utilise the services of the associate companies for the following:

• Purchase and Sale of securities
• Marketing ,Sale and Distribution of the units of the schemes of LIC Mutual Fund

The AMC shall ensure that the trail fee/brokerage paid to the affiliate brokers for the sale and distribution of the units is at the same rates offered to the distributors.

Subject to the regulations from time to time the sponsors, the mutual funds managed by them, their affiliates/associates and the AMC may acquire substantial portion of the scheme’s units and collectively constitute a majority investor in the Scheme.

Investments by all Schemes of LIC Mutual Fund:

(i) The aggregate market value of investments in group companies by all the schemes of LIC Mutual Fund as on 26/11/2001, is furnished below:

Name of the Group Company - LIC Housing Finance Ltd.

Market value of Investment 114.27/- lacs

(ii) The aggregate net asset value of all the schemes of LIC Mutual Fund as on 26/11/2001 is Rs.225969.3 lacs

(iii) The Investment in the securities of the sponsor and its associate companies constitute 0.05% of the total net asset of all schemes of LIC Mutual Fund.

(iv) At present the LICMF LIQUID FUND has no proposal to invest in the securities of any group companies of the sponsor. The scheme may however consider investment in future, in any of the present or future group companies of the sponsor purely on investment consideration, subject to prudential norms.

v) No schemes of LIC Mutual Fund has invested more than 25% of its net asset value in any of the group companies of sponsor or AMC.

vi) Names of the associate companies of the sponsor or AMC -

(i) LIC Housing Finance Ltd.

(ii) LIC International (E.C), Bahrain

(iii) Any other company that may be floated in future.

The LIC Mutual Fund may have dealings, transactions or use the services of the above companies for marketing and distributing the scheme. The commission if any, that may be paid to them will be purely on commercial consideration and as approved by the Board of Trustees.
 
 

The administration and management of the scheme will be by Jeevan Bima Sahayog Asset Management Company, which is incorporated and authorised for business by SEBI in accordance with scheme objectives, Trust Deed and Investment Management Agreement.

I.1 Fundamental attributes:

The fundamental attributes of the scheme shall include,

(1) The nature of the scheme, viz., Open Ended Liquid Fund.

(2) Investment objectives, Investment pattern and

(3) Other terms of the scheme, viz., provision for repurchase/ redemption, fees, and expenses.

Any modification of the fundamental attributes of the Scheme, or the trust or the fees and expenses payable or any other modification by the Trustees shall be made bearing in mind that the interest of the unit holders is not affected and no change in any of the above shall be carried out unless –

• A written communication about the proposed change is sent to each unit holder and an advertisement is given in an 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
• The unit holders are given an option to exit at prevailing NAV without any exit load.

Investment objective of the scheme is to generate reasonable returns with low risk and high liquidity through judicious mix of investment in money market instruments and quality debt instruments.

I.3 RISK PROFILE & INVESTMENT PATTERN

Risk profile and special consideration

The scheme under the normal circumstances, proposes to invest 100%of the corpus in debt and money market securities (see table below) The Scheme will have the flexibility to invest in all debt and money market instruments. The scheme may also hold cash from time to time.

Debt Markets

Prices of all fixed income instruments carry the risks associated with interest rate fluctuations. The prices of fixed income securities go up when interest rates fall and vice versa. The price movement is also dependent on the maturity of the instrument. Normally, longer maturity instruments will move up and down more in relation to interest rate movements than shorter maturity instruments.

Some fixed income instruments may also carry a credit risk i.e. the risk associated with the inability of the Issuer to meet interest and principal payments on its debt obligations and market perception of the Issuer’s creditworthiness.

There is also a reinvestment risk with fixed income securities which arises on the funds inability to invest available funds in a desired manner immediately due to non availability of appropriate debt instruments.

Others

The value of investment in financial assets denominated in foreign currencies and domiciled outside India could be adversely affected by fluctuations in interest rates, exchange rates, exchange controls, and political stability and investment restrictions overseas.

It must be noted here that trading volumes, settlement periods and transfer procedures may affect the liquidity of the instruments.

As the liquidity of the scheme may be restricted the time taken for the redemption of Units may be significant in the event of an excessively large number of redemptions or a restructuring of the portfolio of the scheme. In view of such a possibility the Trustee has the right in its sole discretion to limit the number of redemptions.

Risk control

The overall portfolio structuring will be aimed at controlling risk at low levels. The risk would also be minimised through broad diversification of portfolio within the framework of the investment objectives of the scheme.

Investment Pattern / Asset allocation:

The Scheme proposes to invest in a mix of money market and debt instruments with the aim of generating reasonable returns commensurate with low risk and high liquidity.

The Fund proposes to continuously monitor the potential for debt to arrive at a moderate asset allocation between the security classes.

Investment focus

Under the normal market conditions about 80 % of corpus will be invested in money market instruments.

Money market securities include treasury bills, commercial papers, call and notice money, fixed deposits with scheduled commercial banks, certificate of deposits, securtised debts, bills of exchange/promissory notes, Govt. securities with maturity of one year or less, and other money market securities as may be permitted by RBI/SEBI from time to time.

Under the normal circumstances about 20% of the scheme corpus will be invested in debts securities. Debt securities include govt. securities with maturity of more than one year ,securitised debt ,mortgage backed securities corporate debentures and bonds.

Investments will be made in securities of longer or shorter maturities.However given the emphasis of the scheme the bias is likely to be more towards debt securities of shorter maturities.

The Fund may also invest in overseas securities with the approval of RBI/SEBI, subject to such guidelines as may be issued by RBI/SEBI provided that such investments are permitted by RBI/SEBI under dedicated liquid funds, and the securities are investment grade.

Investment pattern:
 

TYPE OF SECURITY	Aprox allocation (% of corpus)	RISK PROFILE
Money market securities  Debt securities (Including securitised Debt)	80-100 %     0-20 %	Low     Low to medium

 

The AMC may retain the option to alter the asset allocation for a short-term period on

defensive consideration. This scheme is not a money market Mutual Fund Scheme.

Changes in investment pattern:

Depending upon the market conditions, market oppor