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PROFILE OF COMPANY

1.Name of Company: “PENINSULAR CAPITAL MARKTE LTD.”

2.Registered Office: S.T.Reddiar & Sons Building, Veekshanam Road, Ernakulam, Cochin-682035

3. Bord of Director: Mr. T.S.Anantharaman - The Chairman Mr. Akshay Agarawal - The Managing Director

4. Bankers: ICICI Bank HDFC Bank UTI Bank

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MANAGEMENT TEAM

NAME DESIGNATION

Mr. HARIHARAN COMPANY PRESIDENT Mr. Joseph Lukose Manager – Administration Smt. Girija Devi Manager – Operations Mr. Sojan Chacko Manager – Finance & Delivery Mr. V.P Menon Manager – Marketing Mr. SanalKumar N Manager – Public Relation Training Mr. Girish Kumar K.S Manager - Commodities Mr. Deepak Dharmadev Manager - Systems Mr. Harishankar Asst. Manager - DP

MISSION:Our mission is to offer clients the best combination of advanced

trading software with high technology , low costs and low margin

requirements, efficient and secure back office fund administration, and a

broad array of products with high profit potential.

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CAREERS:We are rapidly expanding our business horizon and look forward for

young and energetic candidate willing to pursue their career in financial

service sector. We provide a foundation for building a professional career

and a place for people to achieve and grow. We have openings in various

departments viz. Marketing, Depository, Back Office, Surveillance and

Trading. While we emphasize on efficiency and effectiveness, we do not

compromise on basic values like Honesty, Integrity and Truthfulness and is

deeply rooted in our philosophy that balances personal perspectives and

organizational growth. In general we look forward to strengthen our

manpower resource in following categories.

1. Branch Manager The incumbent should at least be a Graduate and have

minimum 3 to 5 years experience with finance intermediary company and

also willing to work any where in India. NCFM qualified persons are

preferred.

2. Asst. Manager The incumbent should at least be a Graduate and have

minimum 2 to 3 years experience with finance intermediary company and

also willing to work any where in India. NCFM qualified persons are

preferred and capable to handle work in any of the departments viz

depository, trading, surveillance ,finance & accounts and marketing.

3. Dealer (Equity and Commodity ) The incumbent should at least be a

Graduate and also cleared NCFM certification .Minimum 1 to 3 years

experience with a share broking company .

4. Marketing Executives Fresh MBA or Graduates with 1 to 2 years experience in

marketing financial products / services .

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History of Mutual fund

When three Boston securities executives pooled their money together

in 1924 to create the first mutual fund, they had no idea how popular mutual

funds would become.

The idea of pooling money together for investing purposes started in

Europe in the mid-1800s. The first pooled fund in the U.S. was created in

1893 for the faculty and staff of Harvard University. On March 21st, 1924

the first official mutual fund was born. It was called the Massachusetts

investors trust.

After one year, the Massachusetts investors trust grew from $50000 in

assets in 1924 to $392000 in assets (with around 200 shareholders). In

contrast, there are over 10000 mutual funds in the U.S. today totaling around

$7 trillion (with approximately 83 million individual investors) according to

the investment company institute.

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Introduction of Mutual fund

A Mutual Fund is a trust that pools the savings of a number of

investors who share a common financial goal. The money thus collected is

invested by the fund manager in different types of securities depending upon

the objective of the scheme. These could range from shares to debentures to

money market instruments. The income earned through these investments

and the capital appreciation realized by the scheme are shared by its unit

holders in proportion to the number of units owned by them (pro rata). Thus

a Mutual Fund is the most suitable investment for the common man as it

offers an opportunity to invest in a diversified, professionally managed

portfolio at a relatively low cost. Anybody with an investible surplus of as

little as a few thousand rupees can invest in Mutual Funds. Each Mutual

Fund scheme has a defined investment objective and strategy.

A mutual fund is the ideal investment vehicle for today’s complex and

modern financial scenario. Markets for equity shares, bonds and other fixed

income instruments, real estate, derivatives and other assets have become

mature and information driven. Price changes in these assets are driven by

global events occurring in faraway places. A typical individual is unlikely to

have the knowledge, skills, inclination and time to keep track of events,

understand their implications and act speedily. An individual also finds it

difficult to keep track of ownership of his assets, investments, brokerage

dues and bank transactions etc.

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A mutual fund is the answer to all these situations. It appoints

professionally qualified and experienced staff that manages each of these

functions on a full time basis. The large pool of money collected in the fund

allows it to hire such staff at a very low cost to each investor. In effect, the

mutual fund vehicle exploits economies of scale in all three areas - research,

investments and transaction processing. While the concept of individuals

coming together to invest money collectively is not new, the mutual fund in

its present form is a 20th century phenomenon. In fact, mutual funds gained

popularity only after the Second World War. Globally, there are thousands

of firms offering tens of thousands of mutual funds with different investment

objectives. Today, mutual funds collectively manage almost as much as or

more money as compared to banks.

A draft offer document is to be prepared at the time of launching the

fund. Typically, it pre specifies the investment objectives of the fund, the

risk associated, the costs involved in the process and the broad rules for

entry into and exit from the fund and other areas of operation. In India, as in

most countries, these sponsors need approval from a regulator, SEBI

(Securities exchange Board of India) in our case. SEBI looks at track records

of the sponsor and its financial strength in granting approval to the fund for

commencing operations.

A sponsor then hires an asset management company to invest the

funds according to the investment objective. It also hires another entity to be

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the custodian of the assets of the fund and perhaps a third one to handle

registry work for the unit holders (subscribers) of the fund.

In the Indian context, the sponsors promote the Asset Management

Company also, in which it holds a majority stake. In many cases a sponsor

can hold a 100% stake in the Asset Management Company (AMC). E.g.

Birla Global Finance is the sponsor of the Birla Sun Life Asset Management

Company Ltd., which has floated different mutual funds schemes and also

acts as an asset manager for the funds collected under the scheme.

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What is Mutual Fund?

Invest / Pool Profit/Loss Their money from Portfolio Of investments

Investing a Profit/Loss Number of from individual

Stocks/Bonds Of investments

A Mutual Fund is a common pool of money in to which investors with

common investment objective place their contributions that are to be

invested in accordance with the stated investment objective of the scheme.

The investment manager would invest the money collected from the investor

in to assets that are defined/ permitted by the stated objective of the scheme.

For example, an equity fund would invest equity and equity related

instruments and a debt fund would invest in bonds, debentures, gilts etc.

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Investors

Mutual Fund Co. (Pool of money)

Market(Fluctuates)

Benefits of Mutual Funds:-

Affordability:

A mutual fund invests in a portfolio of assets, i.e. bonds, shares, etc.

depending upon the investment objective of the scheme. An investor can buy

in to a portfolio of equities, which would otherwise be extremely expensive.

Each unit holder thus gets an exposure to such portfolios with an investment

as modest as Rs.500/-. This amount today would get you less than quarter of

an Infosys share! Thus it would be affordable for an investor to build a

portfolio of investments through a mutual fund rather than investing directly

in the stock market.

Diversification:-

The nuclear weapon in your arsenal for your fight against Risk. It

simply means that you must spread your investment across different

securities (stocks, bonds, money market instruments, real estate, fixed

deposits etc.) and different sectors (auto, textile, information technology

etc.). This kind of a diversification may add to the stability of your returns,

for example during one period of time equities might underperform but

bonds and money market instruments might do well enough to offset the

effect of a slump in the equity markets. Similarly the information technology

sector might be faring poorly but the auto and textile sectors might do well

and may protect your principal investment as well as help you meet your

return objectives.

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Variety

Mutual funds offer a tremendous variety of schemes. This variety is

beneficial in two ways: first, it offers different types of schemes to investors

with different needs and risk appetites; secondly, it offers an opportunity to

an investor to invest sums across a variety of schemes, both debt and equity.

For example, an investor can invest his money in a Growth Fund (equity

scheme) and Income Fund (debt scheme) depending on his risk appetite and

thus create a balanced portfolio easily or simply just buy a Balanced

Scheme.

Professional Management:-

Qualified investment professionals who seek to maximize returns and

minimize risk monitor investor's money. When you buy in to a mutual fund,

you are handing your money to an investment professional that has

experience in making investment decisions. It is the Fund Manager's job to

(a) find the best securities for the fund, given the fund's stated investment

objectives; and (b) keep track of investments and changes in market

conditions and adjust the mix of the portfolio, as and when required.

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Tax Benefits

Any income distributed after March 31, 2002 will be subject to tax in

the assessment of all Unit holders. However, as a measure of concession to

Unit holders of open-ended equity-oriented funds, income distributions for

the year ending March 31, 2003, will be taxed at a confessional rate of

10.5%.

In case of Individuals and Hindu Undivided Families a deduction upto

Rs. 9,000 from the Total Income will be admissible in respect of income

from investments specified in Section 80L, including income from Units of

the Mutual Fund. Units of the schemes are not subject to Wealth-Tax and

Gift-Tax.

Regulations:-

Securities Exchange Board of India (“SEBI”), the mutual funds

regulator has clearly defined rules, which govern mutual funds. These rules

relate to the formation, administration and management of mutual funds and

also prescribe disclosure and accounting requirements. Such a high level of

regulation seeks to protect the interest of investors.

Structure of Mutual Fund

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Sponsor:

Sponsor is the person who acting alone or in combination with

another body corporate establishes a mutual fund. Sponsor must contribute

at least 40% of the networth of the Investment Managed and meet the

eligibility criteria prescribed under the Securities and Exchange Board of

India (Mutual Funds) Regulations, 1996.The Sponsor is not responsible or

liable for any loss or shortfall resulting from the operation of the Schemes

beyond the initial contribution made by it towards setting up of the Mutual

Fund.

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SEBI

AMC

Fund Manager

Mutual Fund

Schemes

Investor

SponsorTrustee

Operations

Market/Sales Market/Sales

Distributor

Trust:

The Sponsor constitutes the Mutual Fund as a trust in accordance with

the provisions of the Indian Trusts Act, 1882. The trust deed is registered

under the Indian Registration Act, 1908.

Trustee:-

Trustee is usually a company (corporate body) or a Board of Trustees

(body of individuals). The main responsibility of the Trustee is to safeguard

the interest of the unit holders and inter alia ensure that the AMC functions

in the interest of investors and in accordance with the Securities and

Exchange Board of India (Mutual Funds) Regulations, 1996, the provisions

of the Trust Deed and the Offer Documents of the respective Schemes. At

least 2/3rd directors of the Trustee are independent directors who are not

associated with the Sponsor in any manner.

Asset Management Company (AMC):-

The Trustee as the Investment Manager of the Mutual Fund appoints

the AMC. The AMC is required to be approved by the Securities and

Exchange Board of India (SEBI) to act as an asset management company of

the Mutual Fund. At least 50% of the directors of the AMC are independent

directors who are not associated with the Sponsor in any manner. The AMC

must have a networth of at least 10 crore at all times.

Registrar and Transfer Agent: -

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The AMC if so authorized by the Trust Deed appoints the Registrar

and Transfer Agent to the Mutual Fund. The Registrar processes the

application form, redemption requests and dispatches account statements to

the unit holders. The Registrar and Transfer agent also handles

communications with investors and updates investor records.

Types of Mutual funds

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In the investment market, one can find a variety of investors with

different needs, objectives and risk taking capacities.

MUTUAL FUND

On the basis of On the basis of Execution and yield and investment Operation pattern

Close- Open - Income Growth Balance Ended Ended Fund Fund Fund

Specialized Money Taxation Fund Market Fund

Mutual Fund schemes can broadly be classified into many types as given below:

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Close-ended Funds:-

The unit capital of a close-ended product is fixed as it makes a one-

time sale of fixed number of units. These schemes are launched with an

initial public offer (IPO) with a stated maturity period after which the units

are fully redeemed at NAV linked prices. In the interim, investors can buy or

sell units on the stock exchanges where they are listed. Unlike open-ended

schemes, the unit capital in closed-ended schemes usually remains

unchanged. After an initial closed period, the scheme may offer direct

repurchase facility to the investors. Closed-ended schemes are usually more

illiquid as compared to open-ended schemes and hence trade at a discount to

the NAV. This discount tends towards the NAV closer to the maturity date

of the scheme.

Features : - The main features of the close-ended funds are:

The period and/or the target amount of the fund are definite and fixed

beforehand.

Once the period is over and/or the target is reached, the door is closed for

the investors. They cannot purchase any more units.

These units are publicly traded through stock exchange and generally,

there is no repurchase facility by the fund.

The main objective of this fund is capital appreciation.

The whole fund is available for the entire duration of the scheme and

there will not be any redemption demands before its maturity.

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At the time of redemption, the entire investment pertaining to a closed-

end scheme is liquidated and the proceeds are distributed among the unit

holders.

Open-ended Funds:-

An open-end fund is one that is available for subscription all through

the year. These do not have a fixed maturity. Investors can conveniently buy

and sell units at Net Asset Value ("NAV") related prices. The key feature of

open-end schemes is liquidity.

Features : - The main features of the Open-ended funds are:

There is complete flexibility with regard to one's investment or

disinvestment.

These units are not publicly traded but the Fund is ready to repurchase

them and resell them at any time.

The investor is offered install liquidity in the sense that the unit can be

sold on any working day to the Fund.

The main objective of this fund is income generation. The inventors

get dividend, right or bonuses as rewards for their investment.

Generally, the listed prices are close to their Net Asset Value. The

Fund fixes a different price for their purchases and sales.

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On The Basis Of Income

Income Funds:-

The aim of income funds is to provide regular and steady income to

investors. Such schemes generally invest in fixed income securities such as

bonds, corporate debentures and Government securities. Income Funds are

ideal for capital stability and regular income.

Features : - The main features of the Income funds are:

The investor is assured of regular income at periodic intervals, says

Half- yearly or years and so on.

The main objective of this type fund is to declare regular dividends

and not capital appreciation.

The pattern of investment is oriented towards high and fixed income

yielding securities like debentures, bonds etc.

This is best suited to the old and retired people who may not have any

regular income.

It concerns itself with short run gains only.

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Growth Funds:-

The aim of growth funds is to provide capital appreciation over the

medium to long- term. Such schemes normally invest a majority of their

corpus in equities. It has been proven that returns from stocks, have

outperformed most other kind of investments held over the long term.

Growth schemes are ideal for investors having a long-term outlook seeking

growth over a period of time.

Features : - The main features of the Growth funds are:

The Growth oriented fund aims at meeting the investors' need

for capital appreciation.

The Investment strategy therefore, conforms to the Fund

objective by investing the fund predominantly on equities with

high growth potential.

The Fund tries to get capital appreciation by taking much risk

and investing on risk bearing equities and high growth equity

shares.

The Fund may declare dividend, but its principal objective is

only capital appreciation.

This is best suited to salaried and business people who have

high risk bearing capacity and ability to defer liquidity. They

can accumulate wealth for future needs.

Balance Funds:-

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The aim of balanced funds is to provide both growth and regular

income. Such schemes periodically distribute a part of their earning and

invest both in equities and fixed income securities in the proportion

indicated in their offer documents. In a rising stock market, the NAV of

these schemes may not normally keep pace, or fall equally when the market

falls. These are ideal for investors looking for a combination of income and

moderate growth.

Specialised Funds:-

Index schemes:-

The primary purpose of an Index is to serve as a measure of the

performance of the market as a whole, or a specific sector of the market. An

Index also serves as a relevant benchmark to evaluate the performance of

mutual funds. Some investors are interested in investing in the market in

general rather than investing in any specific fund. Such investors are happy

to receive the returns posted by the markets. As it is not practical to invest in

each and every stock in the market in proportion to its size, these investors

are comfortable investing in a fund that they believe is a good representative

of the entire market. Index Funds are launched and managed for such

investors. An example to such a fund is the HDFC Index Fund.

Tax Saving schemes:

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Investors (individuals and Hindu Undivided Families “HUFs”) are

being encouraged to invest in equity markets through Equity Linked Savings

Scheme (“ELSS”) by offering them a tax rebate. Units purchased cannot be

assigned / transferred/ pledged / redeemed / switched – out until completion

of 3 years from the date of allotment of the respective Units.

Money Market Funds:

The aim of money market funds is to provide easy liquidity,

preservation of capital and moderate income. These schemes generally

invest in safer short-term instruments such as treasury bills, certificates of

deposit, commercial paper and inter-bank call money. Returns on these

schemes may fluctuate depending upon the interest rates prevailing in the

market. These are ideal for corporate and individual investors as a means to

park their surplus funds for short periods.

Load Funds

A Load Fund is one that charges a commission for entry or exit. That

is, each time you buy or sell units in the fund, a commission will be payable.

Typically entry and exit loads range from 1% to 2%. It could be worth

paying the load, if the fund has a good performance history.

No-Load Funds

A No-Load Fund is one that does not charge a commission for entry

or exit. That is, no commission is payable on purchase or sale of units in the

fund. The advantage of a no load fund is that the entire corpus is put to

work.

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Prudential plc is a leading international financial services group

providing retail financial products and services and fund management to

many millions of customers worldwide. As a group Prudential plc has, as of

December 31, 2004, over GBP187 billion of funds under management, more

than 16 million customers and over 22,500 employees worldwide.

Securities and Exchange Board of India, vide its letter no.

MFD/PM/567/02 dated June 4, 2002, has accorded its approval in

recognizing ICICI Bank Ltd. as a co-sponsor consequent to the merger of

ICICI Ltd. with ICICI Bank Ltd.

ICICI Bank is India's second-largest bank with total assets of about

Rs.1,67,659 crore at March 31, 2005 and profit after tax of Rs. 2,005 crore

for the year ended March 31, 2005 (Rs. 1,637 crore in fiscal 2004). ICICI

Bank has a network of about 560 branches and extension counters and over

1,900 ATMs. ICICI Bank offers a wide range of banking products and

financial services to corporate and retail customers through a variety of

delivery channels and through its specialised subsidiaries and affiliates in the

areas of investment banking, life and non-life insurance, venture capital and

asset management. ICICI Bank set up its international banking group in

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fiscal 2002 to cater to the cross-border needs of clients and leverage on its

domestic banking strengths to offer products internationally. ICICI Bank

currently has subsidiaries in the United Kingdom, Canada and Russia,

branches in Singapore and Bahrain and representative offices in the United

States, China, United Arab Emirates, Bangladesh and South Africa. (Source:

Overview at www.icicibank.com).

ICICI Bank was originally promoted in 1994 by ICICI Limited, an

Indian financial institution, and was its wholly-owned subsidiary.

Prudential ICICI Asset Management Company, (49%:51%) a joint

venture between Prudential Plc, UK's leading insurance company and ICICI

Bank Ltd, India's premier financial institution.

The joint venture was formed with the key objective of providing the

Indian investor mutual fund products to suit a variety of investment needs.

The AMC has already launched a range of products to suit different risk and

maturity profiles.

Prudential ICICI Asset Management Company Limited has a networth

of about Rs. 80.14 crore (1 crore = 10 million) as of March 31, 2004. Both

Prudential and ICICI Bank Ltd have a strategic long-term commitment to the

rapidly expanding financial services sector in India.

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PruICICI will conduct its business with

Honesty and trustworthiness in all interactions.

A pioneering spirit and excellence in action.

Collaboration and teamwork.

An understanding of customer needs and the desire to satisfy them.

The highest service standards.

A consistently above average performance.

The Prudential ICICI AMC Board comprises reputed people from the

finance industry both from India and abroad.

Mr. K. V. Kamath - Chairman

Mr. Mark Norbom

Mr. Ajay Srinivasan

Ms. Shikha Sharma

Ms. Kalpana Morparia

Mr. K. S. Mehta

Mr. Dadi Engineer

Mr. B. R. Gupta

Mr. Pradip P. Shah

Dr. (Mrs.) Swati A Piramal

Mr, Pankaj Razdan – Managing Director

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Mr. E.B.Desai - Chairman

Mr. D.J. Balaji Rao

Mr. Nagesh Pinge

Mr. S.P. Subhedar

Mr.M.S.Parthasarathy

Pankaj Razdan - Managing Director

Nilesh Shah - Chief Investment Officer

Vasant Sanzigiri - Sr. Vice President & Head Human Resources

Kalyan Parasath - Vice President Information Technology

Ranganath Athreya - Sr. VP – Legal, Compliance & C.S

Ashok Suvarna - Vice President - Operation

B Ramakrishna - Chief Financial Officer

Prudential ICICI offer employees an ideal environment to progress

their careers and enhance their skills. At Prudential ICICI, each person is

given a great deal of independence and responsibility to manage their

assignments and make their contributions count.

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We strive to provide our people with a professional work environment

and a culture of respect, openness and trust. We seek to reward our people

commensurate with their contributions at a competitive standard compared

to the industry. Our managers in PruICICI are measured on how they build

an environment that engenders meritocracy and rewards contribution. Our

salary plus bonus compensation framework provides each person a means of

substantially benefiting through performance related pay.

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Equity funds seek to provide maximum growth of capital with

secondary emphasis on dividend or interest income. They invest in common

stocks with a high potential for rapid growth and capital appreciation. An

equity fund gives an exposure to the stock market. The fund would have

long-term growth potential but provide low current income. They are not

suitable for investors who are risk averse and are focused on maximizing

current income or conserving principal.

The funds offered under this category are the Prudential ICICI Growth

Plan,

Prudential ICICI FMCG Fund,

Prudential ICICI Technology Fund,

Prudential ICICI Tax Plan,

Prudential ICICI Index Fund,

Prudential ICICI Power,

Prudential ICICI Dynamic Plan,

Prudential ICICI Discovery Plan,

Prudential ICICI Emerging S.T.A.R. Fund,

Prudential ICICI Infrastructure Fund and

Prudential ICICI Services Industries Fund.

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The overriding objective of the AMC in managing its investments is

to produce a consistently above average long-term performance.

The AMC believes in a bottom-up approach to stock picking. This

means that the focus is on the fundamental quality of companies as opposed

to a focus on favoured sectors and market movements.

The AMC will follow a structured investment process in order to

identify the best stocks for inclusion in the portfolio. This would involve

consistently examining all stocks under an internally developed research

framework. A stock would be considered or inclusion in the portfolio when

the valuation does not adequately capture its underlying fundamental value

in the AMC's opinion based on the above factors.

The AMC's portfolio management style is conducive to a low

portfolio turnover rate. However, the AMC will take advantage of the

opportunities that present themselves from time to time because of

inefficiencies of the securities markets. The AMC will endevour to balance

the increased cost on account of higher portfolio turnover with the benefits

derived therefrom.

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Balanced funds are more evenly invested in equities and income

securities. Balanced and equity-income funds are suitable for conservative

investors who want high current yield with some growth. If you seek to

generate long-term capital appreciation and current income, an investment in

the balanced fund would be ideal. It gives you an exposure to the stock

market without the entire risk of the stock market.

The funds offered under this category are the Prudential ICICI

Balanced Fund,

Prudential ICICI Child Care Plan and

Prudential ICICI Blended Plan.

The AMC proposes to invest in a mix of equities and fixed income

securities with the aim of generating capital appreciation, while at the same

time minimizing the volatility inherent in pure equity schemes. With this

aim, the AMC would allocate the assets between equity and fixed income

instruments within the limits laid down for each scheme.

The goal of fixed income funds is to provide high current income

consistent with the preservation of capital. Growth of capital is of secondary

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importance. These funds invest in corporate bonds or government securities

that have a fixed rate of return. The funds are suitable for investors who

want to maximize current income and who do not wish to assume a high

degree of capital risk in order to do so.Since bond prices fluctuate with

changing interest rates, there is some principal risk involved despite the

fund's conservative nature.

The funds offered under this category are the

Prudential ICICI Income Plan,

the Prudential ICICI Gilt-Treasury Fund,

The Prudential ICICI Gilt-Investment Fund,

Prudential ICICI Liquid plan,

Prudential ICICI Fixed Maturity Plan,

Prudential ICICI Short Term Plan,

Prudential ICICI Long Term Plan,

Prudential ICICI Sweep Plan,

Prudential ICICI Income Multiplier Fund,

Prudential ICICI Monthly Income Plan,

Prudential ICICI Flexible Income Plan,

Prudential ICICI Gilt Fund PF Option,

Prudential ICICI Long Term Floating Rate Plan and Prudential ICICI Floating Rate Plan.

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The AMC aims to identify securities, which offer superior levels of

yield at lower levels of risks. With the aim of controlling risks, rigorous in-

depth credit evaluation of the securities proposed to be invested in will be

carried out by the investment team of the AMC. The credit evaluation

includes a study of the operating environment of the company, the past track

record as well as the future prospects of the issuer, the short as well as

longer term financial health of the issuer.Rated debt instruments in which

the Scheme invests will be of investment grade as rated by a credit rating

agency. In case a debt instrument is not rated, specific approval of the Board

of the AMC will be obtained for such an investment.

In addition, the investment team of the AMC studies the macro economic

conditions, including the politico-economic environment and factors

affecting liquidity and interest rates. The AMC would use this analysis to

attempt to predict the likely direction of interest rates and position the

portfolio appropriately to take advantage of the same.

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INTRODUCTION

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UTI Mutual Fund is managed by UTI Asset Management Company

Private Limited (Estb: Jan 14, 2003) who has been appointed by the UTI

Trustee Company Private Limited for managing the schemes of UTI Mutual

Fund and the schemes transferred / migrated from UTI Mutual Fund.

The UTI Asset Management Company has its registered office at :

UTI Tower, Gn Block, Bandra - Kurla Complex, Bandra (East), Mumbai -

400 051 will provide professionally managed back office support for all

business services of UTI Mutual Fund (excluding fund management) in

accordance with the provisions of the Investment Management Agreement,

the Trust Deed, the SEBI (Mutual Funds) Regulations and the objectives of

the schemes. State-of-the-art systems and communications are in place to

ensure a seamless flow across the various activities undertaken by UTI

AMC.

UTI AMC is a registered portfolio manager under the SEBI (Portfolio

Managers) Regulations, 1993 on February 3 2004, for undertaking portfolio

management services and also acts as the manager and marketer to offshore

funds through its 100 % subsidiary, UTI International Limited, registered in

Guernsey, Channel Islands.

UTI Mutual Fund has come into existence with effect from 1st

February 2003. UTI Asset Management Company presently manages a

corpus of over Rs.20000 Crore.

UTI Mutual Fund has a track record of managing a variety of schemes

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catering to the needs of every class of citizenry. It has a nationwide network

consisting 56 UTI Financial Centres (UFCs) and representative offices in

Dubai and London. With a view to reach to common investors at district

level, 11 satellite offices have also been opened in select towns and districts.

It has a well-qualified, professional fund management team, who have been

highly empowered to manage funds with greater efficiency and

accountability in the sole interest of unit holders. The fund managers are also

ably supported with a strong in-house equity research department. To ensure

better management of funds, a risk management department is also in

operation.

It has reset and upgraded transparency standards for the mutual funds

industry. All the branches, UFCs and registrar offices are connected on a

robust IT network to ensure cost-effective quick and efficient service. All

these have evolved UTI Mutual Fund to position as a dynamic, responsive,

restructured, efficient, and transparent and SEBI compliant entity.

SPONSORS

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Three leading public sector banks – Bank of Baroda (BOB), Punjab

National Bank (PNB) and State Bank of India (SBI) and Life Insurance

Corporation of India (LIC), the largest public financial investment institution

and life insurer in India have entered into an agreement with the

Government of India as Sponsors of the UTI Mutual Fund.

Bank of Baroda

Life Insurance Corporation of India

Punjab National Bank

State Bank of India

TrusteeUTI Trustee Company Private Limited a company incorporated under

The Companies Act, 1956 will be the Trustee of transferred/migrated

schemes are the first and sole trustee of the Mutual Fund under the Trust

Deed dated December 9, 2002 executed between the Sponsors and the

Trustee Company (the Trustee).

Registered office:

UTI Tower,

Gn Block, BAndara –Kurla Complex,

Bandara(East),

Maumbai -400 051.

Board of Directors

38

Shri Janki Ballabh 

Prof P G Apte

Shri I D Agarwal

Shri S P Oswal

Asset Management

UTI Asset Management Company Private Limited is a company

incorporated under The Companies Act, 1956.

Registered office: UTI Tower, Gn Block, Bandra - Kurla Complex,

Bandra (East), Mumbai - 400 051.

UTI Asset Management Company Private Limited has been

appointed as the Asset Management Company of the UTI Mutual Fund by

the Trustee in terms of Investment Management Agreement dated December

9, 2002 executed between UTI Trustee Company Private Limited and UTI

Asset Management Company Private Limited. The AMC was approved by

SEBI to act as the asset management company for UTI Mutual Fund vide

their letter no.MF/BC/PKN/03 dated January 14, 2003. Out of the AMC's

total paid-up capital of Rs.10 crore, 25% is held by each of the Sponsors.

The AMC apart from managing the schemes of UTI Mutual Fund will also

manage the schemes transferred/migrated from UTI MF, in accordance with

the provisions of the Investment Management Agreement, the Trust Deed,

the SEBI (Mutual Funds) Regulations and the objectives of the schemes.

UTI AMC will be entering into a service agreement with the

Administrator of the Specified Undertaking of The Unit Trust of India to

39

provide back office support for business processes excluding fund

management.

UTI AMC has been registered as a portfolio manager under the SEBI

(Portfolio Managers) Regulations, 1993 on February 3 2004, for undertaking

portfolio management services. The registration code is PM/INP 000000860.

UTI International Ltd., a 100 % subsidiary of UTI AMC, registered in

Guernsey, Channel Islands, acts as manager to offshore funds and markets

these offshore funds abroad.

Systems are in place to ensure that bank and securities accounts are

segregated and there is no conflict of interest between the various activities

undertaken by UTI AMC.

UTI AMC is not undertaking any other business activities other than

that mentioned above.

FUND MANAGERS

A.K.SHIDHAR

SANJAY RAMDAS DONGRE

GAUTAMI DESAI

AMANDEEP CHOPRA

SWATI KULKARNI

SANJEEV BHASIN

SIDDHARTH DEMBI

UTI Mutual Fund

Investment Philosophy

40

UTI Mutual Fund’s investment philosophy is to deliver consistent and

stable returns in the medium to long term with a fairly lower volatility of

fund returns compared to the broad market. It believes in having a balanced

and well-diversified portfolio for all the funds and a rigorous inhouse

research based approach to all its investments. It is committed to adopt and

maintain good fund management practices and a process based investment

management.

UTI Mutual Fund follows an investment approach of giving as equal

an importance to asset allocation and sectoral allocation, as is given to

security selection while managing any fund. It combines top-down and

bottom-up approaches to enable the portfolios/funds to adapt to different

market conditions so as to prevent missing an investment opportunity. In

terms of its funds performance, UTI Mutual Fund aims to consistently

remain in the top quartile vis-à-vis the funds in the peer group. Mumbai 1st

Feb 2003

Registrars:

Computer Age Management Services Pvt Ltd.(CAMS)

Datamatics Financial Software & services Limited

Karvy Computershare Pvt. Ltd.

UTI Technology Services Ltd.

Custodians:

Stock Holding Corporation of India Limited

Citibank NA

HDFC Bank Limited

Liquid Funds Category

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An open-ended pure debt liquid plan, seeking to provide highest

possible current income, by investing in a divesified portfolio of short-term

money market securities.

To generate regular income through investment in a portfolio

comprising substantially of floating rate debt / money market instruments

and fixed rate debt / money market instruments.

The scheme seeks to generate steady & reasonable income with low

risk & high level of liquidity from a portfolio of money market securities &

high quality debt.

It aims to generate reasonable return commensurate with objective of

Low risk and high degree of liquidity.

Income Funds Category

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An open-end Gilt-Fund with the objective to invest only in Central

Government securities including call money, treasury bills and repos of

varying maturities with a view to generate credit risk free return...

An open-end Gilt-Fund with the objective to invest only in Central

Government securities including call money, treasury bills and repos of

varying maturities with a view to generate credit risk free return...

To generate credit risk-free return through investments in sovereign

securities issued by the Central and / or a State Government. LTP

To generate credit risk-free return through investments in sovereign

securities issued by the Central and / or a State Government. STP

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It aims to generate attractive returns consistent with capital

preservation and liquidity..

It aims to generate attractive returns consistent with capital

preservation and liquidity.

To generate regular income through investment in a portfolio

comprising substantially of floating rate debt / money market instruments

and fixed rate debt / money market instruments.

An open ended debt oriented fund with 100% investment in Debt/G-

sec. Investment can be made in the name of the children upto the age of 15

years..

The scheme seeks to generate steady & reasonable income with low

risk & high level of liquidity from a portfolio of money market securities &

high quality debt.

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An open-ended debt oriented fund investing a minimum of 90% in

Debt and G-Sec and a maximum of 10% in equity instruments. The fund

aims to distribute income periodically. Best suited to the investors...

Open-end 100% pure debt fund, which invests in rated corporate debt

papers and government securities with relatively low risk and easy liquidity.

Asset Allocation Funds Category

The UTI- Variable Investment Scheme is an open-ended scheme with

dynamic allocation between equity and debt classes.

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Index Funds Category

UTI MIF is an open-ended passive fund with the primary investment

objective to invest in securities of companies comprising the BSE sensex in

the same weightage as these companies have in BSE sensex...

To provide returns that closely correspond to the returns of stocks as

represented by BSE Sensex under Sensex Plan and S&P CNX Nifty Index

under Nifty Plan subject to tracking error...

To provide returns that closely correspond to the returns of stocks as

represented by BSE Sensex under Sensex Plan and S&P CNX Nifty Index

under Nifty Plan subject to tracking error.

An open-ended equity fund with the objective to invest in select

stocks of the BSE Sensex and the S & P CNX Nifty. The fund does not

replicate any of the indices but aims to attain performance better than the

performance of the indices.

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UTI NIF is an open-ended passive fund with the objective to invest in

securities of companies comprising of the S&P CNX Nifty in the same

weightage as they have in S&P CNX Nifty...

The objective of the scheme is to provide investment returns that,

before expenses, closely correspond to the performance and yield of the

basket of securities underlying the S&P CNX NIFTY Index.

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Balanced Funds Category

An open-ended balance fund investing between 40% to 60% in

equality related securities and the balance in debt (fixed income securities)

with a view to generate regular income together with capital appreciation.

An Open-ended balance fund. The scheme aims at providing income

distribution/ cumulation of income and capital appreciation over a long term

from a prudent portfolio mix of equity and fixed income securities.

An open-ended scheme with a minimum 70% investment in Debt/G-

Sec and a maximum 30% investment in equity. The fund is designed to

provide an enabler to adult female persons in pooling their own savings and/

or gifts into an investment vehicle so as to get periodic cash flow near to the

time of any chosen festival/ occasion or to allow income/ gains redeployed

in the scheme and repurchase units partially or fully as and when desired.

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An open-ended debt oriented fund with investment in Debt/G-Sec of

minimum 60% and a maximum of 40% in Equity. Investment can be made

in the name of the children upto the age of 15 years so as to provide them,

after they attain the age of 18 years, a means to receive scholarship to meet

the cost of higher education and/or to help them in setting up a profession,

practice or business or enabling them to set up a home or finance the cost of

other social obligation.

This is an open-end income oriented scheme. The scheme aims at

catering to the investment needs of charitable, religious, educational trusts

and similar institutions to provide them an investment vehicle to avail of tax

exemption and also to have regular income.

An open-ended balanced fund with an objective of investing not more

than 40% of the funds in equity and equity related instruments and balance

in debt and money market instruments with low to medium risk

profile. Investment by an individual in the scheme is eligible for exemption

under section 88 of the IT Act 1961. In addition the scheme also offers Life

Insurance and Accident Insurance cover.

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An open-ended balanced fund with a maximum equity allocation of

40% and the balance in debt. This ensures to provide pension to investors

particularly self-employed persons after they attain age of 58 years, in the

form of periodical cash flow upto the extent of repurchase value of their

holding through systematic withdrawal plan.

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Equity Funds Category

An open-ended equity fund investing a minimum of 80% in equity

and equity related instruments. It aims at enabling members to avail tax

rebate under Section 88 of the IT Act and provide them with the benefits of

growth.

The scheme primarily aims at securing for the investors capital

appreciation by investing the funds of the scheme in equity shares of

companies with good growth prospects.

An open-end equity fund aiming to provide benefit of capital

appreciation and income distribution through investment in equity.

An open-ended equity fund with an objective of long-term capital

appreciation through investments in equities and equity related instruments,

convertible debentures, derivatives in India and also in overseas markets.

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Capital appreciation by primarily investing in equity and equity

related instruments.

This scheme seeks to generate capital appreciation and/or income

distribution by investing the funds of the scheme in equity shares and equity-

related instruments.

Mastergain is open-ended equity scheme with an objective of

investing at least 80% of its funds in equity and equity related instrument

with medium to high risk profile and upto 20% in debt and money market

instruments with low to medium risk profile.

To seek capital appreciation through opportunities arising out of listed

growth and undervalued stocks.

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An open-ended fund which invests exclusively in the equities of the

Petro Sector companies. One of the Growth Sectors Funds aiming to provide

growth of capital over a period of time as well as to make income

distribution from investment in stocks of Petro Sector.

An open-ended fund which exclusively invests in the equities of the

Pharma & Healthcare sector companies. This fund is one of the growth

sector funds aiming to invest in companies engaged in business of

manufacturing and marketing of bulk drug, formulations and healthcare

products and services.

 An open-ended fund which invests exclusively in the equities of the

Software Sector companies. One of the growth sectors funds aiming to

invest in equity shares of companies belonging to information technology

sector to provide returns to investors through capital growth as well as

through regular income distribution.

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An open-ended equity fund with the objective to provide Capital

appreciation through investments in the stocks of the companies engaged in

the automobile and auto-ancillary industry.

An open-ended equity fund with the objective to provide capital

appreciation through investments in the stocks of the companies/institutions

engaged in the banking and financial services activities.

An open-ended equity fund for investment in equity shares,

convertible & non-convertible debentures and other capital and money

market instruments with a provision to invest upto 50% of its corpus in

PSU’s equities and equity related products. The fund aims to provide unit

holders capital appreciation & income distribution.

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An open-ended equity fund investing in stocks which are currently

under valued to their future earning potential and carry medium risk profile

to provide 'Capital Appreciation'.

An open-ended equity fund with the objective to invest predominantly

in the equity shares of multinational companies in diverse sectors such as

FMCG, Pharmaceutical, Engineering etc.

An open-ended debt oriented fund investing a minimum of 90% of its

exclusively in the equities of companies having strong products or corporate

brands to provide investors benefits of capital appreciation.

 An open-ended fund which invests in the equities of the Services

Sector companies of the country. One of the growth sector funds aiming to

provide growth of capital over a period of time as well as to make income

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distribution by investing the funds in stocks of companies engaged in service

sector such as banking, finance, insurance, etc.

An open-ended equity fund with the objective to provide capital

appreciation through investment in companies from the universe of top 50

companies in terms of market capitalization.

An open-ended equity fund with the objective to provide 'Capital

appreciation' by investing primarily in mid cap stocks.

An open-ended equity fund with the objective to provide Capital

appreciation through investing in the stocks of the companies engaged in the

sectors like Metals, Building materials, oil and gas, power, chemicals,

engineering etc. The fund will invest in the stocks of the companies which

form part of Basic Industries.

An open-ended equity fund with the objective to provide Capital

appreciation through investing in the stocks of the companies where the

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State/Central Govt owns the majority of the holding or management control

is vested with State/Central Govt.

 

Capital appreciation by investing in listed companies that are / have

potential to emerge as global players in their respective sectors.

UTI Dividend Yield Fund is an open-ended equity orientedscheme,

which endeavours to provide medium to long termcapital gains and/or

dividend distribution by investing predominantly in equity and equity related

instruments thatoffer a high dividend yield.

This scheme seeks to generate capital appreciation and/or income

distribution by investing the funds of the scheme in stocks that are "Leaders"

in their respective industries/sectors/sub-sector.

The fund aims to provide long-term capital appreciation/dividend

distribution through investments in listed equities and equity-related

57

instruments. The Fund's investment policies are based on insights from

behavioral finance.

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59

Comparison UTI Equity Fund & PruICICI Technology Fund

  UTI Equity – Growth Fund Prudential ICICI Technology Fund Growth

Type of Scheme Open Ended Open EndedNature of Scheme Equity EquityInception Date Apr 20, 1992  Jan 28, 2000 Face Value(Rs/Unit) 10 10Fund Size (Rs. in crores) 1595.1165  on Feb 28, 2006 128.8023  on Feb 28, 2006Increase/Decrease since  Jan 31, 2006 (Rs. in crores) 34.335 -9.422Minimum Investment (Rs) 2000 5000Purchase Redemptions Daily DailyNAV Calculation Daily Daily

Entry Load

Less then 2.5 Crore 2.25% 2.5 Crore to 20 Crore 0.5%. More then 0%.

Less then 5 Crore 2.25% More Then 5 Crore 0%.

Exit Load 0% Exit Load is 0%.

Top 10 Holdings as on   Feb 28, 2006  

UTI Equity – Growth Fund  Prudential ICICI Technology Fund Growth  

Company per % Company per %Grasim Industries Ltd 5.87 Subex Systems Ltd 12.52ITC Ltd 5.69 Deccan Chronicle Holdings 12.25Bharati Tele - Ventures 5.56 Satyam Computer 5.63Satyam Computer Services 5.42 Mastek Ltd 5.47Shoppers Stop Ltd 5.2 Infosys Technologies Ltd 4.9Nestle India Ltd 5.14 TCS 4.47UTI Bank Ltd 5.13 HCL Technologies 4.13Punjab National Bank 5.06 Visual Soft Technologies 3.8TVS Motor Company 5.06 Tulip IT Services Ltd. 3.79IVRCL Infrastructure 5.04 Aztec Software 3.79

NAV ON 16

FEBRUARYUTI Equity Fund – Growth 30.84Prudential ICICI Technology Fund – Growth 10.99

60

Fund Allocation

3.75

1.96

96.25

98.04

0% 20% 40% 60% 80% 100%

Pru ICICI

UTI

Money Market

Equity

61

Comparison UTI Balanced Fund & PruICICI Balanced

FundTop 10 Holdings

UTI Balanced Fund – Growth   Prudential ICICI Balanced – GrowthICICI BANK LTD. 8.88 Bharat Forge Ltd 7.11IDFC 4.45 Madras Cements Ltd 5.82Reliance Industries Ltd 2.66 Balmer Lawrie 5.16Punjab National Bank 2.65 Ultratech Cemco Ltd. 4.62Asian Paints Limited 2.28 Grasim Industries Ltd 4.18ITC Ltd 2.28 Wyeth Laboratories Ltd 4.06Bharat Heavy Electricals Ltd 2.26 Reliance Industries Ltd 3.75NALCO 2.21 GOI 3.54ACC Ltd. 2.18 Citifinancial Consumer Fin. 3.51Dabur India Ltd 2.17 State Bank of India 2.69

Top 10 HoldingsUTI Balanced Fund – Growth   Prudential ICICI Balanced – GrowthICICI BANK LTD. 8.88 Bharat Forge Ltd 7.11IDFC 4.45 Madras Cements Ltd 5.82Reliance Industries Ltd 2.66 Balmer Lawrie 5.16Punjab National Bank 2.65 Ultratech Cemco Ltd. 4.62Asian Paints Limited 2.28 Grasim Industries Ltd 4.18ITC Ltd 2.28 Wyeth Laboratories Ltd 4.06Bharat Heavy Electricals Ltd 2.26 Reliance Industries Ltd 3.75NALCO 2.21 GOI 3.54ACC Ltd. 2.18 Citifinancial Consumer Fin. 3.51Dabur India Ltd 2.17 State Bank of India 2.69

NAV ON 16

FEBRUARY

UTI Balanced Fund - Growth 50.1Prudential ICICI Balanced - Growth 29.79

62

Fund Allocation

12.45

5.01

19.45

29.72

68.1

65.27

0% 20% 40% 60% 80% 100%

Pru ICICI

UTI

Money Market

Debt

Equity

63

Comparison UTI Retirement Benefit Plan & Purl ICICI Income Fund

Growth  UTI Retirement Benefit

PlanPrudential ICICI Income Fund Growth

Type of Scheme Open Ended Open EndedNature of Scheme Debt DebtInception Date Dec 26, 1994  Jun 19, 1998 Face Value(Rs/Unit) 10 10Fund Size (Rs. in crores) 436.6538  278.8337  on Feb 28, 2006Increase/Decrease since  Jan 31, 2006  2.278

-4.282

Minimum Investment (Rs) 10000 5000Purchase Redemptions Monthly DailyNAV Calculation Weekly DailyEntry Load Entry Load is 1.5%. Entry Load is 0%.Exit Load Less then 1 Year

5%. 1 Year to 3 Year 3%. After 3 Year 1%.

Less then 1 Mil., 05% More than 1 Mil., 00%

Top 10 HoldingsUTI Retirement Benefit Plan   Prudential ICICI Income Fund GrowthCompany Per % Company Per %GOI 5.45 GOI 14.56Reliance Industries Ltd 4.25 State Bank of India 10.86Hongkong & Shanghai Banking Corpo. 3.94 Indian Oil Corporation Ltd 8.74Asahi India Safety Glass Ltd 3.62 GOI 7.29Hindalco Industries Ltd 3.47 Industrial Dev. Bank Of India 6.85State Bank of India 3.45 Associated Cement Co. Ltd 3.58GOI 3.44 GOI 3.55Balmer Lawrie & Company Ltd 3.23 Grasim Industries Ltd 2.09Madras Cements Ltd 2.82 GOI 1.72Bharat Forge Ltd 2.43 Ultra Tech Cement 1.05

NAV ON 16

FEBRUARYUTI Retirement Benefit Plan 19.2384

Prudential ICICI Income Fund Growth 20.3376

Fund Allocation

64

0

35.82 41.64

60.31 39.69

22.54

0% 20% 40% 60% 80% 100%

Prul ICICI

UTI

Equity

Debt

Money Market

65

66

Finding In compassion to MFs people are more interested in

investing in other instruments like bank deposits, post office

saving schemes, PPF, NSC, LIC etc.

Now days because of higher growth of Indian capital market

peoples are little bit aware about MF.

People with more good income are not investing in MFs

because these do not know the concept of MF properly and

more area thinks that MFs now a day's are becoming risky due

to unstable equity market.

People are investing their money for regular income in post

office, Bank Deposits and there sources but they don't invest in

Mutual fund.

67

68

Suggestions Considering the above findings the suggestion is: -

Due to lack or less awareness of people about MFS they are

not investing in it. Hence, it is necessary to educate them by

arranging some educational seminar be on MFS to show them

how to invest in MFS? What is the liquidity? What is the risk

covered in MFS?

Most of people know only UTI MFs only. Hence, it is necessary

to increase advertisement effort for private MFs & public MFs.

They are have to increase their awareness advertisement

campaign as they do in cash of bonds and fixed deposits so

that manned awareness of MFs increase and inventory can

think before investity in bon do or fixed deposits or equity

shares.

69

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BIBLIOGRAPHY

NO. NAME OF BOOK EDITION AUTHOR

1 Investment Management 4th V.A.Avadhani

2 Security Analysis and

Portfolio Management

10th V.K.Bhalla

3 Investment Management - Preeti Singh

4 Investment Management - V.Gangadhar

Wed Site: -

www.prulicici.com

www.utimf.com

www.peninsularonline.com

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