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This Statement of Additional Information (SAI) contains details of JPMorgan Mutual Fund, its constitution, and certain tax,legal and general information. It is incorporated by reference in the Scheme Information Document (“SID”) and is legally apart of the Scheme Information Document. Words capitalised but not defined in this SAI shall have the meaning attributed tothem in the SID.

This SAI is dated August 14, 2008.

STATEMENT OF ADDITIONAL INFORMATION (SAI)

Sponsor:

Trustee:

Asset Management Company:

JPMorgan Asset Management (Asia) Inc.

JPMorgan Mutual Fund India Private Limited

JPMorgan Asset Management India Private Limited

Correspondence Office: 21/F Chater House, 8 Connaught Place Central, Hong Kong

Registered Office: Kalpataru Synergy, 3rd Floor, West Wing, Santacruz - East, Mumbai - 400 055.

Registered Office: Kalpataru Synergy, 3rd Floor, West Wing, Santacruz - East, Mumbai - 400 055.

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Cover IV

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JPMorgan Mutual Fund


JPMorgan Mutual Fund (SAI)

TABLE OF CONTENTSSection Table of contents Page No.

I. INFORMATION ABOUT SPONSOR, AMC AND TRUSTEE COMPANIES ............................................... 2

A. Constitution of the Mutual Fund ............................................................................................... 2

B. Sponsor ..................................................................................................................................... 2

C. The Trustee ................................................................................................................................ 2

D. Asset Management Company ................................................................................................... 7

E. Service providers ........................................................................................................................ 14

F. Condensed financial information (CFI) ....................................................................................... 15

II. HOW TO APPLY? ............................................................................................................................ 16

III. RIGHTS OF UNITHOLDERS OF THE SCHEME(S) ................................................................................ 16

IV. INVESTMENT VALUATION NORMS FOR SECURITIES AND OTHER ASSETS ........................................ 17

V. ACCOUNTING POLICIES ................................................................................................................. 19

VI. TAX & LEGAL & GENERAL INFORMATION ....................................................................................... 20

A. Taxation on investing in Mutual Funds ....................................................................................... 20

B. Legal Information ...................................................................................................................... 23

C. General Information .................................................................................................................. 27



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I. INFORMATION ABOUT SPONSOR, AMCAND TRUSTEE COMPANIES

A. CONSTITUTION OF THE MUTUAL FUNDJPMorgan Mutual Fund (the “Mutual Fund”) has been constitutedas a trust on 4th December 2006 in accordance with the provisionsof the Indian Trusts Act, 1882 (2 of 1882) with JPMorgan AssetManagement (Asia) Inc., as the Sponsor and JPMorgan MutualFund India Private Limited as the Trustee (the “Trustee”). The TrustDeed has been registered under the Indian Registration Act, 1908.The Mutual Fund was registered with the Securities and ExchangeBoard of India (“SEBI”) on 8th February 2007 under registrationcode MF/053/07/01.

B. SPONSORThe Mutual Fund is sponsored by JPMorgan Asset Management(Asia) Inc. (the “Sponsor”). The Sponsor is the settlor of the MutualFund trust. The Sponsor has entrusted a sum of Rs.1,00,000 (RupeesOne Lakh only) to the Trustee (as defined herein) as the initialcontribution towards the corpus of the Mutual Fund.

The Sponsor is a wholly owned indirect subsidiary of JPMorganChase & Co. and a part of the JPMorgan Chase group (“JPMorganChase” or the “Group”). JPMorgan Chase is among the world’sleading global financial services firms.

The Sponsor serves as the holding company for many Asian assetmanagement businesses of the Group and its principal activity isto undertake asset management business through operatingsubsidiaries established for this purpose in the Asia Pacific region.

The Sponsor holds 75% of the paid up equity capital of JPMorganAsset Management India Private Limited (the Asset ManagementCompany - “AMC”). The balance 25% is held by J.P. Morgan IndiaPrivate Limited which has its principal place of business in Mumbai,India.

J.P. Morgan India Private Limited is a SEBI registered merchantbanker, underwriter, a trading member of the capital marketsegments of the BSE and the NSE and trading-cum-clearing memberof the derivatives segments of the BSE and the NSE.

Financial Performance of the Sponsor (past three years):

Particulars (year 2007 (USD) 2006 (USD) 2005 (USD)ended December 31)

Net Worth 1,984,583 1,827,460 1,746,956

Total Income 550,912 385,952 325,627

Profit after tax 141,733 87,542 78,607

Assets Under Management NA NA NA(if applicable)

C. THE TRUSTEEJPMorgan Mutual Fund India Private Limited, through its Board ofDirectors, shall discharge its obligations as trustee of the MutualFund. The Trustee ensures that the transactions entered into bythe AMC are in accordance with the SEBI (Mutual Fund) Regulations,1996 (the “Regulations”), and will also review the activities carriedon by the AMC.

Details of Trustee Directors:

Name Age/Qualification Brief Experience

Mr. Jagadish Salunkhe 69 Mr. Salunkhe has extensive experience of working in the insurance8 Gulmohar, industry spanning over forty years. He joined Life InsuranceNear LIC, Off SV Road, Academic qualifications: Corporation of India in year 1960 and rose to the position ofVile Parle (West), B.Com., Chairman in January 1994 having worked in wide ranging areasMumbai – 400 056. such as Actuarial, Marketing, Group Schemes Business, Human

Fellowship of the Institute Resources Development and General Management.Consultant of Actuaries, London

In addition to the above he had been actively involved with theFellow of the Actuarial following organizations:Society of India n Asset Management Company of LIC Mutual Fund - Chairman

(1994 – 1997)n Housing Finance Company of Life Insurance Corporation of

India - Chairman. (1994 – 1997)

He had been the Chairman of the Governing Council of NationalInsurance Academy for over two years as well as member of theExecutive Committees of the Insurance Institute of India andActuarial Society of India.

Mr. Salunkhe had been a member of the Boards of several largefinancial organisations like Unit Trust of India, General InsuranceCorporation of India, Industrial Credit and Investment Corporationof India and UTI Bank. He had also been on the Board of severallarge Indian Enterprises such as Tata Chemicals, Larsen & Toubro,Ashok Leyland, and Mahindra & Mahindra.

He has international experience of work in the South East Asianregion, having worked as an appointed actuary for eight years inleading Malaysian insurance companies. He had also been closelyassociated with the activities of the Life Insurance Association ofMalaysia having been on several committees.

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Mr. PGR Prasad 62 Mr. Prasad retired as Managing Director and Chief Executive ofSreevalsom, SBI Mutual Fund in December 2005, a post he had held for 3Lal Bhag Road, Academic qualifications: years.DPI Junction, Thycaud, B.Sc. (Mechanical Engineering)Thiruvananthapuram – 695 014 Prior to that, he had held several senior posts in the bankingKerala Certified Associate of the Indian industry, including:

Institute of Bankers (C.A.I.I.B.)Service n Managing Director & Chief Executive of INMB Bank Limited,

Chartered Financial Analyst (CFA), Nigeria, a subsidiary of SBIn Dy. General Manager (Corporate Finance) at SBI Capital

Institute of Chartered Financial Markets LimitedAnalysts of India

Other Directorships

MAPE-ADMISI Securities Private Ltd.V-Guard Industries Ltd.

Dr. Dharmendra Bhandari 51 Dr. Bhandari retired as an Associate Professor of Accountancy atPilani Bhavan, M.I. Road, the University of Rajasthan, Jaipur.Jaipur – 302 001 Academic qualifications: Dr. Bhandari’s thesis was on the topic “Taxation of Non-Residents

Ph. D., FCA. in India”.

Chartered Accountant He is a partner in Anjali Subhash & Associates., CharteredAccountants.

Dr. Bhandari has spent several years in the financial services sectorand was:

n on deputation with Reserve Bank of India as Officer on SpecialDuty with the Department of Supervision in 1994-95;

n on deputation as Consultant to the Joint ParliamentaryCommittee (JPC) constituted to enquire into Irregularities inBanking and Securities Transactions, 1992; and

n Member, State Planning Commission, Government ofRajasthan, 2000-2004.

Dr. Bhandari was a director of three nationalized banks from 1989onwards and involved in the supervision of banks, compliancewith central bank regulatory guidelines, sanction of high valueloans, policy matters, etc., and Chairman of Audit Committee ofBank of Maharashtra and Bank of Baroda.

Dr. Bhandari as Officer on Special Duty with Reserve Bank ofIndia, was associated with the working of the Department ofSupervision which conducts operational supervision of banks inIndia including overseas operations of Indian banks and foreignbank branches and representative offices in India; and setting upmarket intelligence for surveillance and monitoring of the bankingsystem in the country.

Dr. Bhandari as a Consultant to the Joint ParliamentaryCommittee (JPC), worked closely with the parliamentarycommittee to investigate one of the largest bank scam in Indiaand for suggesting ways and means to strengthen the bankingand financial system in the country.

Dr. Bhandari as a member of the Central Council of the Instituteof Chartered Accountants of India was associated withformulating accounting standards and policies.

In addition, Dr. Bhandari has written several papers and lecturedextensively.

Other Directorships

Bank of BarodaHarmony for Silvers Foundation (a section 25 company)




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Mr. N. Balasubramanian 61 Mr. Balasubramanian retired as Chairman & Managing DirectorFlat No. 71, of Small Industries Development Bank of India (‘SIDBI’) inBelmonte Tower, Academic qualifications: September 2006. He was Deputy Managing Director of SIDBIMoghul Lane, Mahim (West), M.Sc. (Agri.) and Post-Graduate for the period 2003-04.Mumbai – 400 060. Programme in Management

from IIM, Ahmedabad. Prior to that he worked with Bank of Baroda where he held severalConsultant senior positions.

Other Directorships

ICICI Venture Funds Management Company LimitedGTL Infrastructure LimitedJBF Industries LimitedManagement Development Institute (MDI), GurgaonBrick Work Ratings P. Ltd.Credit Markets Services Ltd.

Mr. M. G. Bhide 69 Mr. Bhide retired as Chairman & Managing Director of Bank ofA/5, Bageshree, India.Shankar Ghanekar Marg, Academic qualifications:Prabhadevi, M.A. and C.A.I.I.B Prior to that he held the position of the Managing Director andMumbai – 400 025. Group Executive (National Banking) of the State Bank of India.

Consultant He has been conferred a Hon. Fellowship of the National Instituteof Bank Management.

He is currently a director of several large and reputed companies.

Other Directorships

Finolex Industries LimitedMahindra Shubhalabh Services LimitedMahindra & Mahindra Financial Services LimitedIndian Oiltanking LimitedAsset Reconstruction Company (India) LimitedGlobal Trade Finance LimitedJPMorgan Securities India Private Limited

Functions and responsibilitiesThe Trustee shall manage, or cause to be managed, the MutualFund in accordance with all applicable laws, and for that purposethe Trustee may on behalf of the relevant schemes of the MutualFund, from time to time, inter alia:-

n float one or more schemes for the issue of units to besubscribed by the public, class of public, or specified persons,whether singly or otherwise; to lay down policies forinvestments and frame such rules and regulations for the issue,repurchase, and redemption of, and distribution of incomeon, units; and modify or alter the said rules and regulationsas the Trustee may in its absolute discretion deem fit, theduration of each scheme being such as may be decided fromtime to time by the Trustee;

n if required by the provisions of a scheme, cause units to belisted on one or more recognised stock exchanges as permittedby SEBI and as may be deemed fit by the Trustee Company;

n apply for and obtain tax benefits for the relevant scheme;

n apply for and obtain from the applicable regulatory agenciesall approvals and consents necessary in relation to investmentsmade or proposed to be made by the relevant scheme;

n if required, appoint a Chief Executive for the Mutual Fund tomanage the day to day affairs of the Mutual Fund. The Trusteemay delegate such of its powers to the Chief Executive as itmay deem fit and as may be permitted by the Regulations;

n appoint, employ or otherwise engage persons, officers,executives or employees, on a full time or part time basis,including retaining the services of consultants, experts oradvisers on retainership or other basis;

n make, amend or alter rules or bye-laws for the general androutine administration of the affairs of the Mutual Fund andfor any other matters incidental to or ancillary to theattainment of the objectives of the relevant scheme;

n acquire, hold, lend, borrow, manage, trade, convert or disposeof shares, debentures (convertible or non-convertible), bonds,instruments, obligations, warrants, notes, money marketpapers, debt instruments, derivatives in a recognised stockexchange and other stocks and securities of all kinds issuedby any company or body corporate or any local authority inIndia or by the Government of India, or by any body corporateor any local authority or by the government of any countryoutside India in accordance with the provisions of theRegulations and/or as may be allowed by SEBI from time totime and/or as permitted pursuant to other applicable laws;

n enter into agency or distribution arrangements with banks orother distributors in or outside India;

n enter into underwriting agreements authorizing the MutualFund to carry on the activites of an underwriter in the mannerset out in the Regulations;

n do any other kind of business connected with mobilization ofsavings and investments including such other business whichmay be allowed under the applicable laws;

n accept contributions, grants and donations to the account ofthe relevant scheme;

n collect, and receive profits and interest for the account of therelevant scheme and shall be responsible for supervising thecollection of any income due to be paid to the relevant scheme,and also for claiming refunds of income tax and other tax


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and holding the income received on any investment pertainingto the relevant scheme in trust for the benefit of the unitholders of such scheme in accordance with the Regulationsand these presents;

n distribute dividend and income of the relevant scheme as andwhen the same may become due and payable;

n pay and be entitled to be reimbursed out of the trust propertyfor all costs, charges, expenses and outgoings of, andincidental to, the administration of the Mutual Fund, themanagement and maintenance of the trust property, theprotection or support of any interest in or of the Mutual Fundor of any unit holder, and all expenses incurred for the samein accordance with the Regulations, including remunerationof the Trustee, expenses incurred for the preparation anddistribution of notices, reports, printing, postage, maintenanceof accounts and records, register of unit holders, all groundrent and other rents, rates, taxes, outgoings and cost of repairsof any properties forming part of the trust property, or relatingto the relevant Scheme, and premiums for insurance, incometax and surcharge (if any). All expenses incurred by the Trusteeshall be a first charge upon the trust property for such expensestogether with the interest accrued thereon;

n pay out of the trust property all wages, salaries remunerationor fees as may be considered appropriate by the Trustee tothe persons employed or engaged for their services by theTrustee, including the fees of the auditors of the Mutual Fund;

n pay out or retain in the trust property the income, afterdeducting all expenses, interest and dividends;

n give receipts or discharges for any moneys, securities or othermovable properties payable, transferable or deliverable to theMutual Fund by reason of or in the exercise of any trust orpower;

n borrow monies to meet the temporary liquidity needs of therelevant scheme for the purposes of repurchase or redemptionof units, or payment of interest or dividend to unit holders;provided that the aggregate of such borrowings shall notexceed 20% of the net asset value of the relevant scheme (orfor such other purposes and at such higher or lowerpercentage as may be stipulated under the Regulations) andshall not exceed a period of 6 months (or such period as maybe permitted by the Regulations);

n lend or borrow securities in accordance with the guidelinesissued by the SEBI from to time;

n appoint auditors for the Mutual Fund who shall be differentfrom the auditors of the Asset Management Company andto remove existing auditors and appoint others in their placefrom time to time;

n appoint bankers for the Mutual Fund and be entitled to beallowed to pay such reasonable charges, expenses, interestand commission to them;

n generally do all such matters and things as may promote theMutual Fund or as may be incidental to or consequential uponthe discharge of its functions and the exercise and enforcementof all or any of the Trustee’s powers and rights under the TrustDeed;

n keep, or cause to be kept, such records as are necessary forthe purpose of enabling the Trustee and the AMC (as thecase may be) to comply with the provisions set out herein orany other documents, including the regulations made by theregulatory agencies for the time being in force; and shallestablish to the reasonable satisfaction of the auditors of theMutual Fund and the regulatory agencies that such complianceby the Trustee or the AMC (as the case may be) has beenachieved; and

n have power to acquire, hold, develop, deal with and disposeof any movable or immovable property either on ownership,rental or any other basis whatsoever, let or sublet the samewith or without charging any compensation, fee or rent asthe Trustee may in its absolute discretion deem fit.

The Trustee shall exercise due diligence as under:General Due Diligence:n The Trustee shall be discerning in the appointment of the

directors on the Board of the AMC.

n The Trustee shall review the desirability or continuance of theAMC if substantial irregularities are observed in any of theschemes and shall not allow the AMC to float new schemes.

n The Trustee shall ensure that the trust property is properlyprotected, held and administered by proper persons and by aproper number of such persons.

n The Trustee shall ensure that all the service providers areholding appropriate registrations from SEBI or other concernedregulatory authority.

n The Trustee shall arrange for test checks of service contracts.

n The Trustee shall immediately report to SEBI any specialdevelopments in the Mutual Fund.

Specific Due Diligence:The Trustee shall -n obtain internal audit reports at regular intervals from

independent auditors appointed by the Trustee.

n obtain compliance certificates at regular intervals from theAMC.

n hold meetings once in two calendar months and at least sixsuch meetings shall be held in every year.

n consider the reports of the independent auditor andcompliance reports of the AMC at the meetings of Trusteefor appropriate action.

n maintain records of the decisions taken at its meetings and ofthe minutes of the meetings.

n prescribe and adhere to its code of ethics and ensure that theAMC and its personnel also adhere to such code of ethics.

n communicate in writing to the AMC any deficiencies and checkon the rectification of deficiencies by the AMC.

The independent directors of the Trustee shall pay specific attentionto the following, as may be applicable, namely:-

n the Investment Management Agreement dated December 6,2006 and the compensation paid under such agreement;

n service contracts with affiliates and as to whether the AMChas charged higher fees than outside contractors for the sameservices;

n selection of the AMC’s independent directors;

n securities transactions involving affiliates to the extent suchtransactions are permitted by the SEBI regulations in thisregard;

n selecting and nominating individuals to fill independentdirectors’ vacancies;

n the code of ethics designed to prevent fraudulent, deceptiveor manipulative practices by insiders in connection withpersonal securities transactions;

n the reasonableness of fees paid to the Sponsor, the AMC andothers for services provided by them, as the case may be;

n principal underwriting contracts and renewals; and

n any service contract with the associates of the AMC.



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Note on activities:The Trustee shall be administered by its Board of Directors of notless than 4 (four) directors as constituted under the articles ofassociation of the Trustee. At least two-thirds of the Board ofDirectors of the Trustee (or such number as SEBI may specify fromtime to time) are independent persons and are not be associatedwith the Settlor or its associates in any manner.

The Trustee was incorporated on November 29, 2006. Sinceincorporation, the Board of Directors has held 18 meetings.

Systems for monitoring the activities of the AMC are described inthe paragraph below.

Summary of substantive provisions of Trust DeedIn accordance with the SEBI Regulations and the Trust Deed, theTrustee is required to fulfil several duties and obligations, includingthe following:

n The Trustee shall take into its custody, or under its control,and shall deal with as it may deem appropriate, all the trustproperty, and hold it in trust for the unit holders of eachrelevant scheme.

n The Trustee shall stand possessed of the assets of each schemeupon trust exclusively for the unit holders of that scheme.

n The Trustee shall take reasonable care to ensure that theschemes floated by and managed by the AMC are managedin accordance with the Trust Deed and Regulations.

n The Trustee shall be impartial and shall not execute the trustherein for the advantage of one scheme at the expense ofany other scheme, or for the advantage of one unit holder orone class of unit holders at the expense of another unit holderor another class of unit holders. The Trustee shall segregatethe assets of each scheme and maintain clear and accurateaccounts of the trust property in respect of each scheme.

n The Trustee shall provide or cause to be provided informationto the unit holders of each relevant scheme and to SEBI, asmay be specified by SEBI.

n The Trustee shall act in the interest of the unit holders.

n The Trustee shall ensure that changes in the fundamentalattributes of any scheme; or fees and expenses payable byany scheme; or any other change which would modify anyscheme and affect the interest of unit holders of that scheme,shall be carried out in compliance with the Regulations.

n The Trustee shall comply with, and cause the AMC and allother service providers of the Mutual Fund, to comply with,the applicable provisions in the Regulations and ensurecompliance in that regard, to ensure that the interest of theunit holders is protected.

n The Trustee shall be accountable for the trust property of therespective schemes.

n The Trustee shall take steps to ensure that the affairs of theMutual Fund are conducted in accordance with the provisionsof the Trust Deed and shall abide by the Code of Conduct asmay be specified in the Regulations.

n The Trustee shall be responsible for the calculation of anyincome due to be paid or received by the Mutual Fund inaccordance with the Regulations and the Trust Deed.

n The Trustee shall enter into, or procure the Mutual Fund orthe AMC to enter into, agreements with one or moreregistered participants and depositories and make all necessaryarrangements for dematerialisation of such securities as arespecified by SEBI from time to time to enable settlement of all

transactions through one or more registered participants ordepositories.

n The Trustee shall compute and carry out, or cause to becomputed or carried out, the valuation of investments of theMutual Fund and publish the same in accordance with thevaluation norms as presently specified in the Eighth Scheduleto the Regulations.

n The Trustee shall ensure that no sale of units of each schemeshall be made either by the Trustee or by the AMC unlessaccompanied by documents which contain full disclosure ofthe required information to enable the prospective investorsto make an informed investment decision relating to therelevant scheme.

n The Trustee shall procure that all necessary statements inrespect of the income and the assets of the Mutual Fund areprepared in the manner required by the Regulations and shallmake or cause to be made all reports, publications, noticesand filings with respect to the Mutual Fund as required by theRegulations.

n The Trustee shall have internal controls to ensure that (i) incomedue to the Mutual Fund is properly accounted for;(ii) distributions from the Mutual Fund are properly made.

n The Trustee shall approve the change in controlling interestof the AMC after exercising due diligence and in the mannerset out in the Regulations.

n The Trustee shall comply with, and shall ensure that the MutualFund complies with, such reporting requirements, disclosuresor submit such documents as are stipulated in the Regulationsor as may be required by SEBI.

n The Trustee shall acquaint itself with the nature of the assetsof the Mutual Fund and shall transfer or procure the transferof the trust property to itself to hold on trust for the MutualFund and shall cause the trust property to be held in a securestate.

n The Trustee shall be responsible for the maintenance anddefence of the trust property in legal and other proceedingsand shall take such other steps as may be reasonably requiredfor the preservation of the trust property and for the assertionor protection of the title thereto.

n The Trustee shall ensure that all application forms, salesliterature or other printed matter issued to prospectiveinvestors or advertisements or announcements relating to theMutual Fund, comply with the provisions of the Regulationsas presently contained in the Sixth Schedule to the Regulations;and shall be submitted to SEBI within 7 days from the date ofissue or as required under the Regulations.

n The Trustee shall supply a copy of the Trust Deed, or an extractthereof to any person, upon payment of such fees as may beprescribed by the Trustee. A copy of the Trust Deed shall bekept open for public inspection in the principal office of theMutual Fund at all times during business hours on all BusinessDays.

n The Trustee shall provide the unit holders of the relevantscheme with an annual report on the activities of the schemein which the unit holders have invested and shall make suchother disclosures to them as are essential in order to keepthem informed about anything that may have an adversebearing on the investments.

n The Trustee, in carrying out its responsibilities under the TrustDeed, shall maintain an arms length relationship with otherpersons with which it may be associated.

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The Trustee shall ensure before the launch of any scheme that theAMC possesses / has done the following:

n Established systems in place for its back office, dealing roomand accounting;

n Appointed all key personnel including fund manager(s) forthe scheme(s) and submitted their bio-data which shall containthe educational qualifications and past experience in thesecurities market, and be satisfied with the number of keypersonnel considering the size of the Mutual Fund and theproposed scheme, to SEBI within 15 days of their appointment;

n Appointed auditors to audit its accounts;

n Appointed a compliance officer to comply with regulatoryrequirement and to redress investor grievances;

n Appointed a registrar and transfer agent for the Mutual Fundand laid down parameters for its supervision;

n Prepared a compliance manual which is updated by reflectingall the provisions of regulations and guidelines issued by SEBIfrom time to time and designed internal control mechanismsincluding internal audit systems; and

n Specified norms for empanelment of brokers and marketingagents.

Amendments to Trust DeedThe Settlor and the Trustee shall after prior approval of SEBI andthe unit holders’ approval, unless SEBI expressly waives therequirement to obtain such approval from the unit holders, beentitled by a deed supplemental to the Trust Deed to modify, alter

or add to the provisions of the Trust Deed in such manner and tosuch extent as it may consider expedient in the interest of and forthe purpose of the Mutual Fund.

Trusteeship feesThe Trustee shall during the term of the Mutual Fund, and whetheror not the Mutual Fund shall be in course of administration by orunder the order or direction of any competent court or regulatoryauthorities, be paid annually out of the Mutual Fund a fee notexceeding Rs 1,00,00,000 (Rupees One Crore Only) as may beagreed between the Settlor and the Trustee from time to time,which rate of remuneration may be reviewed by the Settlor andthe Trustee every three years. The aforesaid remuneration is inaddition to all costs, charges and expenses incurred in or inconnection with the administration and execution of the MutualFund.

D. ASSET MANAGEMENT COMPANYThe AMC is a private limited company incorporated under theCompanies Act, 1956 on September 20, 2006, having its registeredoffice at Kalpataru Synergy, 3rd Floor, West Wing, Santacruz - East,Mumbai - 400 055. The AMC has so been appointed as the assetmanagement company of the Mutual Fund by the Trustee and theAMC and the Trustee have executed the Investment ManagementAgreement (the "IMA") dated December 6, 2006 setting out thefunctions, duties and obligations of the AMC in relation to theMutual Fund.

Currently, the AMC is engaged to manage funds forJPMorgan Mutual Fund only. Any other business activity bythe AMC shall be conducted as per regulation 24 of theRegulations.

Details of AMC Directors:


Mr. K. G. Vassal 64 As a former Executive Director of Unit Trust of India, Mr. Vassal3/C, Kalpatru Estate, held various senior management positions as Chief of PersonnelFlat No. 12, 1st Floor, Academic qualifications: & Administration, and several roles in operations, systems,Jogeshwari - Commerce and Law graduate information technology, research & planning, internal audit,Vikhroli Link Road, with professional qualifications compliance, board section and with UTI’s India PSU Fund andOpp. Fantasy Land, in management, labour India Access Fund.Andheri (E), laws and banking.Mumbai - 400 093. He was Chief Vigilance Officer in UTI and Chairman of UTI

International, Guernsey (UK).Company Director

He was also a director & advisor of UTI Institute of Capital Markets.

Other directorshipsE-Square Leisure Private Limited

Mr. Dhananjay Mungale 55 Between 1978 and 1999 Mr. Mungale worked in the financial10 A Ameya Apartments, services sector with DSP Financial Consultants Limited, Bank ofNear Kirti College, Academic qualifications: America and DSP Merrill Lynch Limited.Prabhadevi, Chartered AccountantMumbai 400 028. Law graduate He also served as a member of the Board and Managing

Committee of DSP Merrill Lynch Asset Management (India)Independent Consultant Limited.

Mr. Dhananjay Mungale is an advisor to select corporate groupsand companies in India and Europe. He is on the Board of variouspublic and private Indian corporations.

Other directorships

Mahindra & Mahindra Financial Services LimitedLIC Housing Finance Ltd.Tamilnadu Petroproducts Ltd.Camlin Limited



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Chowgule Steamship LimitedCaprihans India LimitedIndoco Remedies LimitedSouth India Corporation (Agencies) Limited [name changed toSICAL Logistics Limited]I2IT Private LimitedSnowcem Paints Private LimitedNational Organic Chemicals Industries LimitedMentor Technologies Private LimitedInestor Advisors Private LimitedXCEL Telecom Pvt. Ltd.

Mr. A. P. Kurian 74 Mr. Kurian is the Executive Chairman of the Association of Mutual9, Friendship, 23rd Road, Funds in India, a post he has held since July 1998.TPS III, Bandra (West), Academic qualifications:Mumbai – 400 050. Masters degree in Economics & Mr. Kurian retired as Executive Trustee of the erstwhile Unit Trust

Statistics from Kerala University. of India (‘UTI’).Executive Chairman,Association of Mutual Funds Mr. Kurian has over 4 decades of experience in finance andin India (‘AMFI’) financial services, having worked in the Reserve Bank of India

and UTI.

Other directorshipsGeojit Financial Services LimitedNational Stock Exchange of India LimitedMuthoot Capital Services LimitedGranules India LimitedHaribhakti MRI Corporate Services Private LimitedMuthot Fincorp Limited

Mr. T. P. Ostwal 53 Mr. Ostwal is a Senior Partner of M/S Ostwal, Desai & Kothari, a103-104 Falcon’s Crest chartered accountancy firm. He is also Senior Partner of M/S T.P.GD Ambekar Marg, Parel Academic qualifications: Ostwal & Associates.Mumbai – 400 012 Institute of Chartered Accountants

of India and a Commerce graduate Mr. Ostwal is the Trustee Chairman of the International FiscalChartered Accountant Association, a non-profit making association.

Mr. Ostwal was a member of the Expert Committee set up bythe Central Board for Direct Taxes for framing transfer pricingregulations in India.

Other directorships

WTI Advanced Technologies LimitedChaturvedi & Shah Consulting Private LimitedKingstone Properties Private LimitedDelsoft Consultancy Pvt. Ltd.

Mr. Krishnamurthy Vijayan 45 Mr. Vijayan has had a long career in the mutual fund industry.502, Raheja Residency,Sector – 14, Vashi, Academic qualifications: He started his career with UTI in 1986 where he spent 10 years.Navi Mumbai B.Com. He then joined Jardine Fleming Asset Management India Private

M.A. Limited where he spent 5 years in marketing, operations andChief Executive Officer compliance before joining JM Financial Asset Management PrivateJPMorgan Asset Management Limited as the Chief Executive Officer. Mr. Vijayan rejoined theIndia Private Limited firm after the five year hiatus.

Other directorshipsNone


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Mr. Anthony J Morgan 41 Mr. Morgan is the Chief Operating Officer of JPMorgan Asset40 Coronation Road West, Management, South Asia.#01-03 Astrid Meadows, Academic qualifications:Singapore - 269258 Bachelor of Legal Studies, He was admitted as a Solicitor of the Supreme Court of New

Macquarie University South Wales and the High Court of Australia in 1991 and 1992,Chief Operating Officer Master of Laws, University of Sydney respectively. He spent his entire professional career in the financialJPMorgan Asset Master of Taxation, services sector in the functional areas of legal, regulatoryManagement – South Asia University of Sydney compliance, risk management, finance, product development andJF Asset Management Master of Business Administration, business management. His professional career has included roles(Singapore) Limited University of London in Australia, Hong Kong and Singapore with additional

management responsibility for businesses in India, Pakistan andThailand.

Other directorships

JF Asset Management (Singapore) LimitedJF Capital Partners LimitedJF Capital Partners (Holdings) LimitedJF India Management LimitedBlue Duck Design Private LimitedLeg Before Wicket Pty. Limited

Investment Management Agreement (“IMA”)In accordance with the Regulations, the Trust Deed and the IMA,the AMC has several duties and obligations, including the following:

1) During the term of its appointment, the AMC shall, subjectto the overall policy and supervision of the Trustee, beresponsible for floating the schemes of the Mutual Fund andshall have the power, authorization and right to exerciseinvestment management functions in relation to the MutualFund and the schemes of the Mutual Fund framed from timeto time including making investments of the funds raised underthe schemes of the Mutual Fund, in accordance with theprovisions of the relevant offer document for each scheme,the Trust Deed and the Laws.

2) Without prejudice to the generality of the foregoing, the AMCshall in relation to managing the Mutual Fund and the schemesof the Mutual Fund:

a) ensure that no scheme is launched by it unless the schemeis approved by the Trustee Company and a copy of thescheme information document is filed with SEBI; providedthat in the event SEBI requires the AMC to carry outmodifications to the scheme information document, thenthe AMC shall ensure that the same shall have beencarried out;

b) manage the investment and re-investment of theinvestments with a view to achieving the investmentobjectives and policies of each scheme as set forth in therelevant scheme information document; and shallendeavour to ensure that all investment decisions aremade in the interests of the unit holders;

c) invest funds raised under the schemes in accordance withthe provisions of the relevant scheme informationdocument, the Trust Deed and the laws and in particularshall ensure that the investments are made subject tosuch restrictions and limitations prescribed by theRegulations and as presently contained in the Trust Deedand Seventh Schedule to the Regulations and in any eventexcept as otherwise provided in the Regulations, shallnot advance any loans or guarantees for any purpose.Subject to the AMC’s duties and obligations set outabove, the investment objectives and policies of eachscheme, the Trust Deed and the laws, the AMC shallalso have the authority, power and right to:

i) make investments, on a full discretionary basis forthe account of and in the name of the relevantscheme;

ii) issue orders and instructions with respect to theacquisition, conversion and disposal of investments;

iii) purchase (or otherwise acquire), sell (or otherwisedispose of), hold, convert and invest in investments,effect transactions on behalf of and for the accountof the relevant scheme in connection with any suchpurchase, acquisition, sale or disposal or theprotection of any investments. All investments whichare intended to be of long term nature are to beregistered in the name and for the account of therelevant scheme, the Mutual Fund and/or theTrustee;

iv) borrow monies to meet the temporary liquidityneeds of the relevant scheme for the purposes ofrepurchase or redemption of units, or payment ofinterest or dividend to unit holders; provided thatthe aggregate of such borrowings shall not exceed20% of the net asset value of the relevant scheme(or for such other purposes and at such higher orlower percentage as may be stipulated under theRegulations) and shall not exceed a period of 6months (or such period as may be permitted by theRegulations); and

v) lend or borrow securities in accordance with theguidelines issued of SEBI from time to time;

d) maintain all accounts and records required by law toenable a complete and accurate view to be formed ofthe assets, liabilities, income and expenditures of theMutual Fund, and of all transactions effected by the AMCfor the account of the Mutual Fund;

e) in addition to obtaining such information as may beprescribed by the regulatory authorities, provide suchinformation on a periodic basis, to the Trustee as isconsidered necessary, and as and when required, by theTrustee, in its absolute discretion;

f) submit a report to the Trustee on a periodic basis asagreed upon with the Trustee and otherwise as requestedby the Trustee on its activities hereunder. The AMC shallfurther submit a quarterly (or at such intervals as may be




10


required by the Trustee or SEBI) report on the operationsof the schemes to the Trustee and such other informationas may be required by the Trustee to ensure that theAMC is in compliance with the provisions of the TrustDeed and the Regulations;

g) evaluate investment opportunities for possible investmentby the Mutual Fund on behalf of a scheme;

h) issue and administer instructions to the Custodian (asdefined hereinbelow) and the Mutual Fund’s stockbrokersand distributors;

i) keep or cause to be kept on behalf of the Mutual Fundat the AMC’s head office and/or at such other place(s) asmay be required by the laws or as may be provided underthe Trust Deed, such books, accounts, records andstatements as may be necessary to give a complete andaccurate record of the assets, liabilities, income andexpenditures of the Mutual Fund, and all transactionscarried out by it on behalf of the Mutual Fund; and shallpermit the Settlor, Trustee, and their respective employeesand auditors to inspect all such books, records andstatements at all reasonable times;

j) prepare reports on the investments and the relevantIndian securities market for inclusion in documents tobe issued in relation to the Mutual Fund or each schemeas and when requested for by the Trustee Company;

k) carry out credit assessments of issuers, debtors orguarantors (if any) in respect of the investments andproposed investments;

l) prepare reports on the investments and the relevantIndian securities market for inclusion in documents tobe issued in relation to the Mutual Fund or each schemeas and when requested for by the Trustee;

m) appoint, with respect to itself, auditors who shall bedifferent from the auditors of the Mutual Fund;

n) calculate the net asset value of each scheme as per theRegulations and to disclose to the unit holders at suchintervals as may be specified by the Trustee and SEBI, thebasis of calculating the repurchase prices and net assetvalue of the schemes;

o) make investments in securities for the purpose of hedgingor otherwise, provided however, that the AMC shall underno circumstances be obliged to hedge the securities.

3) During the term of its appointment, the AMC shall:

a) at all times act in the best interest of the Mutual Fundand at all times comply with the terms and conditions ofits approval by SEBI as per the Regulations;

b) not, without the prior approval of the Trustee and SEBI,undertake any other business activity other than activitiesspecified under sub-regulation (2) of regulation 24 ofthe Regulations, management of the Mutual Fund andother activities such as financial services consultancy,exchange of research and analysis on commercial basis,as long as these activities are not in conflict with theinvestment management activity hereunder;

c) be prohibited from taking up any activity in contraventionof the Regulations;

d) cause the Custodian to segregate the assets pertainingto each scheme held by the Custodian;

e) at all times comply with the terms and conditions of itsapproval by SEBI as per the Regulations;

f) not appoint any person as a key personnel who has beenfound guilty of any economic offence or involved inviolation of any relevant securities laws;

g) appoint on behalf of the Mutual Fund only thoseregistrars and transfer agents who are registered withSEBI;

h) enter into all contracts and agreements and such otherundertakings as may, in the opinion of the AMC, benecessary or advisable or incidental to the carrying outof the objectives of the IMA including but not limited toderivative agreements and agreements with registereddepository participants and depositories;

i) open and operate separate bank accounts with banks inthe name and on behalf of each scheme;

j) calculate the fees payable in respect of the services ofthe Trustee, AMC and the Custodian and arrangepayment of such fees and other payments due to them;

k) apply to the applicable regulatory agencies for, and obtainfrom such regulatory agencies, all necessary approvals,confirmations or consents, including approvals in relationto investments made or proposed to be made, launchingof a scheme, taxation status of the Mutual Fund and/orthe schemes and all tax and other payments which maybe due to or by the Mutual Fund and/or the schemesfrom time to time in respect of the relevant investments;and in connection therewith the AMC shall have and ishereby granted the authority to disclose to any suchcompetent regulatory agencies such information in itspossession regarding the Mutual Fund and/or the relevantscheme or its affairs as may be necessary or required;

l) provide an option to the unit holders to nominate, inaccordance with the Regulations and in the formprescribed thereunder, a person in whom the unit willvest in the event of the death of the unit holders;

m) provide the Trustee with the calculation of any incomedue to be paid to, or received by, the Mutual Fund and/or the relevant scheme, in accordance with theRegulations and the Trust Deed;

n) cause to be published within one month from the closeof each half year, i.e. March 31 and September 30,(or asspecified by SEBI) its unaudited financial results and thoseof the Mutual Fund in one English daily newspaper ofnational circulation in India and, if different to the Englishlanguage, in a newspaper published in the language ofthe region where the Head Office of the Mutual Fund issituated, and the same shall contain the details asspecified in the Twelfth Schedule to the Regulations andsuch other details as are necessary for the purpose ofproviding a true and fair view of the operations of theMutual Fund;

o) unless otherwise required under the Regulations, shallcause the annual accounts of the Mutual Fund to beaudited by such auditors as the Trustee, may appoint forthe purpose. The AMC may, in its discretion, determineout of what parts of the assets, or the income thereof,the cost of such audit shall be defrayed, and may makesuch apportionments of such costs as it thinks desirable.Copies of the accounts shall be delivered to the Settlorand to such other persons as may be required by or underany directions or guidelines of SEBI after the same shallhave been prepared;

p) not acquire any of the assets out of any scheme propertywhich involves the assumption of any liability which isunlimited or which may result in encumbrance of theTrust Property in any way unless permitted by the relevantregulatory agencies or relevant laws;

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q) be diligent in the selection of brokers and monitor thetransactions to ensure that there is no undueconcentration of business with any one broker;

r) ensure that no loss, damage or expense incurred by theAMC or officers of the AMC or any person delegated bythe AMC is met out of the trust property, except asprovided in the IMA;

s) ensure that no scheme information document, keyinformation memorandum, abridged half yearly andannual financial reports are issued or published withoutthe prior written approval of the Trustee or contain anystatement extraneous to the Trust Deed or schemeinformation document or scheme particulars approvedby the Trustee and SEBI;

t) follow such accounting policies and standards as arepresently contained in the Ninth Schedule to theRegulations;

u) meet such reporting requirements, make such disclosuresor submit such documents as may be required under theRegulations;

v) abide by the Code of Conduct as laid down in theRegulations, as contained in the Fifth Schedule to theRegulations;

w) forward copies of all such notices, instruction or othercommunication and documents issued in respect of theMutual Fund to the Trustee.

4) In addition to the powers of the AMC set out elsewhere inthe IMA or provided by any applicable laws, the AMC shallhave the following powers:-

a) it may instruct any professional advisers or other expertsto provide advice in connection with the investmentmanagement services;

b) it may take any action necessary for it to comply withapplicable laws or the Regulations or otherwise act inaccordance with the requirements or requests of anyrelevant regulatory agencies (including, withoutlimitation, providing any information relating to theTrustee, the Mutual Fund, the unit holders or the trustproperty);

c) it is entitled to rely and act upon (a) any communicationor document believed by it to be genuine; (b) anycommunication or document signed or purported to besigned by any person on behalf of another person andwhose signature the AMC is for the time being authorisedby that other person to accept; (c) any opinion, advice orinformation (in whatever form) from any professionaladviser (including but not limited to lawyers, accountants,auditors, valuers, brokers, auctioneers) or other expertsinstructed by the Trustee or the AMC in connection withthe Mutual Fund, and shall not be responsible for anyloss occasioned by so acting; or (d) the establishedpractice and rulings of any market (and of its committeesand officials) on which any dealing in any investment orother property is from time to time effected indetermining what shall constitute a good delivery andany similar matters and such practice and rulings shallbe conclusive and binding upon all persons under theTrust Deed;

d) it may exercise absolute discretion in relation to theperformance of all the trusts, powers, authorities anddiscretions vested in it;

e) it is entitled to require the authentication or verificationof any signature on any document required to be signedin connection with the Mutual Fund;

f) it is entitled to accept as sufficient evidence of the valueof any asset of the Trust Property or investments or thecost price or sale price of any such asset or of any marketquotation (a) a certificate by any professional person,firm or association qualified in the opinion of the Trusteeand/or the AMC to provide such a certificate or (b) suchvalue or price as may be quoted by a statistical serviceconsidered by the AMC to be reputable.

Procedure and recording of investment decisionsAll investment decisions, relating to the scheme(s), will beundertaken by the AMC in accordance with the Regulations andthe investment objectives specified in the respective schemeinformation documents.

The AMC has set up an Investment Committee which inter aliacomprises the Chief Executive Officer, the Chief Operating Officer,the Chief Investment Officer–Fixed Income of the AMC, the fundmanager of all the schemes of the Mutual Fund, the Head – RiskManagement and the Compliance Officer of the AMC. TheInvestment Committee determines the investment policy andphilosophy with regard to different classes, sectors andcounterparties. The Investment Committee provides guidance andmonitors portfolios; it does not take investment decisions. TheInvestment Committee reviews the portfolio on a regular basis toensure compliance with regulations. The Investment Committeemonitors the portfolio on a daily basis and periodically reviews it totrack illiquid assets and take corrective action. The InvestmentCommittee researches and reviews issuers with regard to credit risk.

However, the fund manager will have the right to make allinvestment decisions.

All investment decisions taken by the AMC in relation to the corpusof the scheme(s) of the Mutual Fund shall be recorded.

With regard to investments in equity instruments, individual securitywise reasons shall be recorded by the fund manager at the time ofplacing individual orders on the dealing desk. A detailed reportwill be made before taking any decision to invest in a company forthe first time. Performance of the scheme(s) will periodically betabled before the Boards of the AMC and the Trustee respectively.Performance of the schemes of the Mutual Fund vis-à-visbenchmark indices would be monitored by the Board of Directorsof the Trustee and the AMC periodically. Further, the Board ofDirectors of the Trustee and the AMC will also review theperformance of the Scheme in the light of performance of themutual fund industry as published from time to time by independentresearch agencies and financial newspapers and journals.

UnderwritingThe schemes launched by the Mutual Fund may underwritesecurities of other issuers in accordance with SEBI guidelines inthat regard, as amended from time to time.

Accrual of expenses and incomeAll expenses and income accrued up to the valuation date shall beconsidered for calculation of NAV. For this purpose, while majorexpenses like management fees and other periodic expenses wouldbe accrued on a day–to-day basis, minor expenses and income willbe accrued periodically, provided the non-accrual does not affectthe NAV calculations by more than 1%.

Recording of changesAny changes in securities and in the number of units will be recordedin the books not later than the first valuation date following thedate of transaction. If this is not possible, given the frequency ofNAV disclosure, the recording may be delayed up to a period of



12


seven days following the date of the transaction, provided that asa result of such non-recording, the NAV calculations shall not beaffected by more than 1%.

In case the NAV of a scheme differs by more than 1%, due to non-recording of the transactions, the investors or the scheme as thecase may be, shall be paid the difference in amount as follows:

(a) If the investors are allotted units at a price higher thanthe NAV or are given a price lower than the NAV at thetime of sale of their units, they shall be paid the differencein amount by the scheme.

(b) If the investors are charged a lower NAV at the time ofpurchase of their units or are given a higher NAV at thetime of sale of their Units, the AMC shall pay thedifference in amount to the scheme(s). The AMC mayrecover the difference from the said investors.

The valuation guidelines outlined above are within the parametersof the Regulations and are subject to changes from time to timeby the AMC and / or the Trustee. However, such changes shall bein conformity with the Regulations.

Information on Key Personnel:

Name/Designation Age/Qualification Brief Experience

Krishnamurthy Vijayan Age: 46 years Krishnamurthy Vijayan has had a long career in the mutual fundWhole-time industry.Director & Chief B.Com. and M.A..Executive Officer Total Experience - 21 years He started his career with UTI in 1986 where he spent 10 years.

He then joined Jardine Fleming Asset Management India PrivateLimited where he spent 5 years in marketing, operations andcompliance before joining JM Financial Asset Management PrivateLimited as the Chief Executive Officer, a post he held tillOctober 2005.

Anutosh Bose Age: 38 years Anutosh Bose has over 15 years of experience in the mutualChief Operating Officer fund industry, spanning investor services, investment accounts,

B.Sc. (Hons.), technology and operations.CAIIB (UTI-exam),PGDMSM, PGDCA, He started his mutual fund career with UTI in 1993. He was givenOracle Financials and ‘Best Employee Award ‘in 1994. He has successfully implementedMBA (Finance) from JBIMS, various projects on investor relations, fund accounts, operationsMumbai University. and technology. He worked with the AMC for over two years inTotal Experience – 15 years operations support and technology infrastructure.

Prior to joining UTI, his work experience included automation ofmarketing, distribution and operations of various pharma andretail consumer goods units, working as a freelancer andconsultant.

Nandkumar R. Surti Age: 38 years Nandkumar has about 18 years of experience in the financialChief Investment Officer, services sector in India.Fixed Income Graduate CWA.

Total Experience – 18 years He was the fund manager for GIC Asset Management CompanyLtd. for two years from 1992 to 1994. He then worked as theHead–Fixed Income with JM Financial Asset Management PrivateLimited for more than 11 years from December 1994 to February2006. Thereafter, he joined Lotus India Asset ManagementCompany Ltd. and worked for a period of around seven months.He joined the AMC in November 2006 as Chief Investment Officer– Fixed Income.

Harshad Patwardhan Age: 38 years Harshad has around 14 years experience in the equities markets.Fund Manager, Equity

B.Tech (IIT), MBA (IIM) Prior to joining JPMorgan Asset Management he worked for twoand a CFA qualification years with Deutsche Equities India Private Limited as a seniorTotal Experience -14 years research analyst and has extensive experience with several foreign

brokerage houses covering a variety of sectors.

Amit Gadgil Age: 32 years Amit has about six years of experience in the accounting andAssociate Fund financial services sector.Manager, Equity M.Com., ACA, PGDM

(IIM Ahmedabad). Prior to joining the AMC, he worked for seven months withTotal Experience – 6 years Hansberger Global Investors as a research analyst and with

Deutsche Equities India Private Limited as a banking, insuranceand cement analyst. In addition, he has worked on research andanalysis of US companies and UK telecom companies in his earlierjobs. Amit did a summer internship with JPMorgan Chase, NewYork, where he was engaged in research of US apparel stocks.

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Amit started his career in the auditing and business services areasduring his tenures with Price Waterhouse Coopers and AFFerguson.

Namdev Chougule Age: 31 years Namdev has worked in the financial services sector for over 6Assistant Fund years as a dealer, analyst and fund manager for several leadingManager – Fixed B.E. (Elect), MMS (Finance) mutual funds and banks.Income Dealing and Financial Risk Managers (FRM)

examination conducted by the Prior to joining the AMC, Namdev worked for a year as FundGlobal Association of Manager – Fixed Income with Lotus India Asset ManagementRisk Professionals Company Private Limited and around 6 months as an Analyst –Total Experience – 7 years Fixed Income with JM Financial Asset Management Company

Limited.

Karan Sikka Age: 28 years Karan has worked with Principal Asset Management CompanyDealer Private Limited, ICICI Bank Limited and J.P. Morgan Services India

Chartered Accountant and Private Limited. He joined the Group in December 2004.a Commerce graduateTotal Experience – 5 years

Mayur Dharamshi Age: 35 years Mayur has been with the Group since 1996. Mayur has extensiveDealer exposure in the areas of Equity Settlements, Finance and

Commerce Graduate from Accounts, prior to his moving into the Asset Management team,the Mumbai University where he was a part of the AMC operations team before movingTotal Experience – 13 years into equity dealing.

Ravi Ratanpal Age: 28 years Ravi has been with the Group since 2004.Dealer

Commerce Graduate from Ravi has experience in debt capital markets research. Prior to histhe Mumbai University and moving into the AMC team, he was part of Investment BankingMBA (Finance) Research.Total Experience – 4 years

Yash Kumar Age: 31 years Yash has worked with various leading organizations like theHead, Compliance Securities and Exchange Board of India, Reliance Capital Asset& Monitoring B. Com. (Hons.) from Delhi Management Limited and National Commodity & Derivatives

University, MBA from Exchange Limited.Indraprastha University, Delhi,L.L.B. from University of Delhi,and Post Graduate Diploma inEnterprise Risk Managementfrom ICFAITotal Experience – 7 years

Prabal Nag Age: 41 years Prabal heads the sales and marketing functions leading andHead: Sales & Distribution mentoring a team spread around the country.

B.A., LL.B., MBA (University ofConnecticut), USA Prior to joining the AMC, Prabal was Head of Sales & MarketingTotal Experience – 15 years with JM Financial Asset Management Private Limited, an

organisation he worked at for 12 years.

Thrivikram K. Iyer Age: 36 years Thrivikram has around 12 years combined experience in the areasHead - Risk Management of risk management, consultancy and accounting.

B. Com. degree from theUniversity of Mumbai, Prior to joining the AMC, he worked with ICICI Prudential AssetChartered Accountant and Management Company as Associate Vice President handling Riska Certified Management Management for a period close to 2 years. Prior to that he workedAccountant. with Ocwen Financial Solutions Private Limited (subsidiary ofTotal Experience – 12 years Ocwen Financial Corporation) as Global Risk Manager where he

gained extensive experience and was involved in theimplementation of the requirements of Sarbanes Oxley Act.

He started his career with Elder Pharmaceuticals Limited andsubsequently worked with Credit Lyonnais Bank and later SynergySoftware Systems in Dubai (U.A.E) where he was involved in re-engineering processes and providing consultancy in theimplementation of industry specific solutions.




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Farrokh Bharucha Age: 51 years Farrokh Bharucha has been with the Group since 1995 in theCompany Secretary Secretarial & Legal function. In December 2005, he passed theand Legal Liaison Bachelor of General Law AMFI Certification Test on Mutual Funds with distinction (90%).

(‘BGL’), CA and CSTotal Experience – 25 years Farrokh’s experience in the compliance, legal and company

secretarial fields extends over 25 years, including seven years inthe field of mutual funds.

Arindam Ghosh Age: 36 years Arindam Ghosh has had a long career in the financial servicesHead - Business industry.Development Bachelors Degree in Commerce

and M.B.A. He started his career with Paterson & Co. in 1995 where he spentTotal Experience – 10 years 4 years. He then joined ICICI Capital Services Limited where he

spent 1 year in sales and distribution of investment products(products launched by ICICI Bank and other 3rd parties). He thenjoined HDFC Asset Management Company Limited where hespent more than 4 years and was responsible for the sales anddistribution function in Mumbai before joining Fidelity FundManagement Private Limited where he was responsible for thesales & distribution function across West and East India, a posthe held till September 2006.

Pradeep Rajasekharan Age: 34 years; Pradeep heads the marketing and communication function. HeHead: Marketing & has over 8 years of experience in the marketing communicationsCommunication Bachelors Degree in Commerce space with long stints at agencies like Lintas and Hanmer MS&L,

and M.B.A. handling clients in the corporate & financial services space.Total experience: 12 years Pradeep holds a Bachelors Degree in Commerce and is an M.B.A.

The AMC currently has 7 personnel in the fund management department, including dealers and 1 personnel in the research department.


E. SERVICE PROVIDERSCustodianDeutsche Bank AG, Mumbai Branch has been appointed as thecustodian of the Scheme (the “Custodian”). The Custodian isregistered with SEBI under the SEBI (Custodians of Securities),Regulations, 1996, vide registration number IN/CUS/003 dated 20March, 1998.

Address: Sir Hazarimal Somani Marg, Fort, Mumbai – 400 001

Transfer agentDeutsche Investor Services Private Limited (the “Registrar”) hasbeen appointed to act as registrar and transfer agent to the Schemein accordance with the Registrar and Transfer Agent Agreementdated 20th February, 2007.

The registered office of the Registrar and Transfer Agent is:Nicholas Piramal Tower, Peninsula Corporate Park,Ganpat Rao Kadam Marg, Lower Parel,Mumbai – 400 013.

The operations / correspondence office of the Registrar andTransfer Agent is:Phase 1, Tower 1, 2nd Floor, Logitech Park,M. V. Road, Sakinaka, Andheri (E),Mumbai – 400 072.

The Board of Directors of the Trustee and the Board of AMC aresatisfied that the Registrar can provide the services required andhas adequate facilities and systems capabilities to dischargeresponsibilities with regard to processing of applications anddespatching unit certificates / account statements to unit holderswithin the time limit prescribed in the Regulations and also hassufficient capacity to redress investor complaints.

The Registrar is registered with SEBI under the SEBI (Registrar andTransfer Agents) Regulations, 1993 vide registration no.INR000004017 dated 9th October, 2006.

Statutory auditorStatutory Auditors to the SchemePrice Waterhouse,252, Vir Savarkar Marg, Shivaji Park, Dadar, Mumbai – 400 028.Legal counselUdwadia & Udeshi,Elphinstone House, 1st Floor, 17, Murzban Road,Fort, Mumbai – 400 001.

Fund AccountantDeutsche Bank AG, Mumbai Branch has been appointed as thefund administrator (the “Fund Administrator”) for the Scheme(s)launched by the Mutual Fund. The Fund Administrator providesfund accounting, NAV calculation, expense administration andother related services in accordance with the Fund AdministrationAgreement dated February 20, 2007 between the AMC and theFund Administrator.

Address: Sir Hazarimal Somani Marg, Fort, Mumbai – 400 001

The Fund Administrator is entitled to remuneration for its servicesin accordance with the terms of the Fund Administration Agreementand such remuneration will be borne by the AMC and not by theunit holders. The AMC has the right to change the FundAdministrator in certain circumstances.

Collecting BankersCollection banks may be appointed by the AMC from time to time.Applications for the NFO will also be accepted at DesignatedCollection Centres. For details of Collecting banks, please refer tothe SID of the scheme.

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F. CONDENSED FINANCIAL INFORMATION (CFI)for all the schemes launched by MF during the last three fiscal years (excluding redeemed schemes):

Historical Per JPMORGAN JPMORGAN JPMORGAN JPMORGAN JPMORGANUnit Statistics INDIA EQUITY INDIA LIQUID INDIA LIQUID INDIA SMALLER INDIA ACTIVE

FUND FUND PLUS FUND COMPANIES FUND BOND FUND

June 14, 2007 to April 01, 2008 to Sep 21, 2007 to April 01, 2008 to Sep 21, 2007 to April 01, 2008 to Dec 26, 2007 to April 01, 2008 to June 27, 2008 toMar 31, 2008 July 31, 2008 Mar 31, 2008 July 31, 2008 Mar 31, 2008 July 31, 2008 Mar 31, 2008 July 31, 2008 July 31, 2008

Date of Allotment 14-Jun-2007 21-Sep-2007 21-Sep-2007 26-Dec-2007 27-Jun-2008

Nav at the beginning of theyear / Date of Allotment:

Growth 10.000 10.915 10.0000 10.4178 10.0000 10.4461 10.000 7.263 -

Dividend 10.000 10.138 10.0000 10.0079 10.0000 10.0089 10.000 7.263 -

Dividend Weekly - - - - - 10.0000 - - -

Retail Growth - - - - - - - - 10.0000

Retail Dividend - - - - - - - - 10.0000

Institutional Growth - - - - - - - - 10.0000

Institutional Dividend - - - - - - - - 10.0000

Dividend:

Dividend -Individual / HUF 1.000 - 0.30828639 0.21439551 0.37495335 0.24632016 - - -

Dividend -Others 1.000 - 0.30828639 0.21439551 0.34897780 0.22925591 - - -

Dividend - Weekly -Individual / HUF - - - 0.03478580 - 0.05768583 - - -

Dividend - Weekly - Others - - - 0.03478580 - 0.05368952 - - -

Dividend - Forthnightly -Individual / HUF - - - - - 0.05547936 - - -

Dividend - Fouthnightly - Others - - - - - 0.05163593 - - -

Dividend - Monthly -Individual / HUF - - - 0.01738701 - 0.04480039 - - -

Dividend - Monthly - Others 0.01738701 - 0.04169676 - - -

Retail Dividend - - - - - - - - -

Institutional Dividend - - - - - - - - -

NAV at the end of theyear / period (Rs.)

Growth 10.915 9.694 10.4178 10.7108 10.4461 10.7491 7.263 6.187 -

Dividend 10.138 9.005 10.0079 10.0079 10.0089 10.0089 7.263 6.187 -

Dividend Weekly - - - 10.0099 - 10.0099 - - -

Dividend Monthly - - - 10.0199 - 10.0198 - - -

Dividend Forthnightly - - - - - 10.0124 - - -

Retail Growth - - - - - - - - 10.0871

Retail Dividend - - - - - - - - 10.0871

Institutional Growth - - - - - - - - 10.0951

Institutional Dividend - - - - - - - - 10.0951

Absolute Returns(Since Inception)

Growth 9.15% -2.70% 4.18% 7.11% 4.46% 7.49% -27.37% -38.13% 0.87%

Institutional Growth - - - - - - - - 0.95%

Benchmark Returns(Since Inception) 11.73% 1.00% 3.56% 6.11% 3.56% 6.11% -29.79% -37.70% -0.29%

Net Assets end of theyear / period (Rs. In Crores) 1,044.99 871.80 322.77 90.26 331.54 1,211.73 382.12 312.69 444.65

Ratio of Recurring Expensesto Average Daily NetAssets (%) (Annualised)

Regular Plan 2.04% 2.06% 0.23% 0.25% 0.36% 0.30% 1.96% 2.26% 1.80%

Institutional Plan - - - - - - - - 1.00%

Benchmark BSE-200 Index CRISIL Liquid Fund CRISIL Liquid Fund CNX - Mid Cap CRISIL CompositeIndex Index Index Bond Fund Index



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II. HOW TO APPLY?Application Forms / Transaction Slips for the Purchase of units ofthe Scheme(s) launched by the Mutual Fund will be available atthe ISCs / distributors. Application Forms / Transaction Slips filledup and duly signed by the investor or all joint investors (as the casemay be) should be submitted along with the cheque /draft / otherpayment instruments and supporting documents to a DesignatedCollection Centre.

Additional Purchases and Redemptions may be communicatedthrough facsimile instructions (“Facsimile Instructions”) and theAMC shall not require other written confirmation in respect ofsuch Facsimile Instructions. Such Facsimile Instructions are solelyfor the convenience, and are at the risk, of the unit holder and theAMC is authorised to act on any Facsimile Instruction which theAMC in its sole discretion believes is transmitted from the unitholder. In case of JPMorgan India Smaller Companies Fund, onlyredemptions can be accepted on Fax.

The AMC shall exercise due care in carrying out its internalverification procedures but shall not be liable for acting in goodfaith on Facsimile Instructions which are transmitted fromunauthorised persons, which shall be binding on the unit holderwhether made with or without his authority, knowledge or consent.

Applications should be made in adherence to the minimum amountrequirements as mentioned in the scheme information documentof the respective schemes.

It is mandatory for every applicant to provide the name of thebank, branch, address, account type and number as per SEBIrequirements and any Application Form / Transaction Slip withoutthese details will be treated as incomplete. Such incompleteapplications will be rejected. The Registrar / AMC may ask theinvestor to provide a blank cancelled cheque or its photocopy forthe purpose of verifying the bank account number.

In order to strengthen the Know Your Client (“KYC”) norms andidentify every participant in the securities market with theirrespective Permanent Account Number (“PAN”), thereby ensuringa sound audit trail for all transactions, SEBI has mandated thatPAN will be the sole identification number for all participantstransacting in the securities market, irrespective of the amount oftransaction.

Accordingly, it is mandatory for investors to provide their PAN alongwith a self-attested (if required) copy of the investor’s PAN card.

If the investment is being made on behalf of a minor, the PAN ofthe minor’s father or mother or the guardian, who represents theminor, should be provided.

For all applications the applicant, or in the case of application injoint names, each of the applicants, should mention his / her PANallotted under the Income Tax Act, 1961 and also submit aphotocopy of the PAN card(s) or a communication from the incometax authority indicating allotment of PAN (“PAN Communication”)along with the application for the purpose of verification of thenumber.

Applications received without PAN/PAN card copy will be rejected.

In accordance with the regulatory guidelines, the PAN card copyneeds to be verified with the original.

An application should be complete in all respects before it issubmitted.

It will be treated as incomplete and rejected if:

n the PAN is not mentioned;

n the PAN is mentioned but not supported by a photocopy ofthe PAN card or PAN Communication;

n any other information or documents as may be required bythe AMC or the Trustee have not been submitted togetherwith the Application Form / Transaction Slips.

In order to protect investors from fraud, it is advised that theApplication Form number / folio number and name of the firstinvestor should be written at the back of the cheque / draft, beforebeing handed over to any courier / messenger / distributor / ISC.

In order to protect investors from fraudulent encashment ofcheques, the Regulations require that cheques for Redemption ofunits specify the name of the unit holder and the bank name andaccount number where payments are to be credited. Hence, allapplicants for purchase of units /redemption of units must providea bank name, bank account number, branch address, and accounttype in the Application Form.

III. RIGHTS OF UNITHOLDERS OF THESCHEME(S)

1. Unit holders of the scheme(s) launched by the Mutual Fundhave a proportionate right in the beneficial ownership of theassets of the scheme.

2. When the Mutual Fund declares a dividend under a scheme,the dividend warrants shall be despatched within 30 days ofthe declaration of the dividend. An account statementreflecting the new or additional subscription as well asRedemption / Switch of Units shall be despatched to the Unitholder within 10 business days of the specified redemptiondate, provided however, if a Unit holder so desires the MutualFund shall issue a unit certificate (non- transferable) within30 days of the receipt of request for the certificate.

3. The Mutual Fund shall dispatch Redemption proceeds within10 Business Days of receiving the Redemption request.

4. The Trustee is bound to make such disclosures to the unitholders as are essential in order to keep the unit holdersinformed about any information known to the Trustee whichmay have a material adverse bearing on their investments.

5. The appointment of the AMC for the Mutual Fund can beterminated by a majority of the Directors of the Board ofDirectors of the Trustee or by 75% of the unit holders of thescheme(s) launched by the Mutual Fund.

6. 75% of the unit holders of a scheme can pass a resolution towind-up the scheme.

7. The Trustee shall obtain the consent of the unit holders:

n whenever required to do so by SEBI, in the interest ofthe unit holders.

n whenever required to do so if a requisition is made bythree- fourths of the unit holders of the scheme.

n when the Trustee decides to wind up a scheme orprematurely redeem the units.

8. The Trustee shall ensure that no change in the fundamentalattributes of any scheme or the trust or fees and expensespayable or any other change which would modify the schemeand affects the interest of unit holders, shall be carried outunless:

(i) a written communication about the proposed change issent to each unit holder and an advertisement is given inone English daily newspaper having nationwidecirculation as well as in a newspaper published in thelanguage of the region where the Head Office of theMutual Fund is located; and

(ii) the unit holders are given an option to exit at theprevailing Net Asset Value without any exit load.

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9. In specific circumstances, where the approval of unit holdersis sought on any matter, the same shall be obtained by wayof a postal ballot or such other means as may be approved bySEBI.

Voting rights and seeking approval of the Unit HoldersSubject to the provisions of the Regulations as amended from timeto time, the consent of the unit holders shall be obtained, entirelyat the option of the Trustee, either at a meeting of the unit holdersor through postal ballot. Only one unit holder in respect of eachfolio or account representing a holding shall vote and he shall haveone vote in respect of each resolution to be passed.

IV. INVESTMENT VALUATION NORMS FORSECURITIES AND OTHER ASSETS

Valuation of assetsThe NAV of the units of a scheme of the Mutual Fund will becomputed by dividing the net assets of the scheme by the numberof units outstanding on the Valuation Date. For the definition of“Valuation Date” please refer to Scheme Information Documentsof the relevant schemes.

All schemes shall value their investments according to the valuationnorms, as specified in the Eighth Schedule to the Regulations, orsuch norms as may be prescribed by SEBI from time to time.

The broad valuation norms pertaining to the schemes of the MutualFund are detailed below.

1. Traded securities(a) Traded securities are valued at the last quoted closing price

on the NSE. If a particular security is not listed on the NSE, itis valued at the last quoted closing price on the stock exchangewhere it is principally traded (“another stock exchange”).

(b) When on a particular Valuation Day, a security listed on theNSE has not been traded on the NSE, the value at which it hasbeen traded on another stock exchange is used.

(c) When an equity security is not traded on any stock exchangeon a particular valuation date, the value at which it was tradedon the selected stock exchange or any other stock exchange,as the case may be, on the earliest previous day may be usedprovided such date is not more than 30 days prior to thevaluation date.

(d) All Government bonds are to be valued at the prices providedat www.crisil.com on a daily basis.

2. Thinly-traded securities / non-traded securities / unlistedsecurities

(a) Thinly-traded securitiesWhen trading in an equity / equity-related security (such asconvertible debentures, equity warrants, etc.) in a month is lessthan Rs 5 Lakh and the total volume is less than 50,000 equityshares, it shall be considered as a thinly-traded security and valuedaccordingly. In order to determine whether a security is thinly tradedor not, the volumes traded in all recognized stock exchanges inIndia may be taken into account.

Where a stock exchange identifies “thinly-traded” securities byapplying the above parameters for the preceding calendar monthand publishes/provides the required information along with thedaily quotations, the same can be used by the Mutual Fund.

If the equity shares are not listed on the stock exchanges whichprovide such information, then it will be obligatory on the part ofthe Mutual Fund to make its own analysis in line with the abovecriteria to check whether such securities are thinly traded whichwould then be valued accordingly.

In case trading in an equity security is suspended up to 30 days,then the last traded price would be considered for valuation of

that security. If an equity security is suspended for more than 30days, then the AMC/Trustee will decide the valuation norms to befollowed and such norms would be documented and recorded.

(b) Non-traded securitiesWhen a security (other than debt and Government securities) isnot traded on any stock exchange for a period of 30 days prior tothe valuation date, the security is treated as a non-traded security.This is per SEBI circulars dated 18 September 2000, 28 March 2001and 20 February 2002.

Non-traded equity securities shall be valued “in good faith” by theAMC on the basis of the valuation principles laid down below whichhave been approved by the Board of the AMC. The followingmethods shall be periodically reviewed by the Trustee and reportedupon by the auditors as “fair and reasonable” in their reports ofthe annual accounts of the Mutual Fund.

Based on the latest available balance sheet, net worth shall becalculated as follows:

n Net worth per share = [share capital + reserves (excludingrevaluation reserves) - miscellaneous expenditure and debitbalance in profit and loss account] divided by the number ofpaid-up shares.

n Average capitalisation rate (P/E ratio) for the industry basedupon either BSE or NSE data (which should be followedconsistently and changes, if any, noted with proper justificationthereof) shall be taken and discounted by 75% i.e. only 25%of the industry average P/E shall be taken as capitalisationrate (P/E ratio). Earnings per share of the latest audited annualaccounts will be considered for this purpose.

n The value as per the net worth value per share and the capitalearning value calculated as above shall be averaged and furtherdiscounted by 10% for illiquidity so as to arrive at the fairvalue per share.

n In case the earnings per share (EPS) is negative, EPS value forthat year shall be taken as zero for arriving at capitalisedearning.

n In case the latest balance sheet of the company is not availablewithin nine months from the close of the year, unless theaccounting year is changed, the shares of such companiesshall be valued at zero.

n In case an individual security accounts for more than 5%of the total assets of a scheme, an independent valuershall be appointed for the valuation of the said security.To determine if a security accounts for more than 5% ofthe total assets of the Scheme, it should be valued bythe procedure above and the proportion which it bearsto the total net assets of the Scheme to which it belongswould be compared on the valuation date. Equityinstruments shall generally be valued on the basis ofcapitalization of earnings solely or in combination withthe net asset value, using for the purposes ofcapitalization, the price to earning ratios of comparabletraded securities and with an appropriate discount forlower liquidity.

n Debt instruments shall generally be valued on a yield tomaturity basis, the capitalization factor being determinedfor comparable traded securities and with an appropriatediscount for lower liquidity.

n Investments in call money, bills purchased underrediscounting scheme and short-term deposits withbanks shall be valued at cost plus accrual; other moneymarket instruments shall be valued at the yield at whichthey are currently traded. For this purpose, non-tradedinstruments, i.e. instruments not traded for a period ofseven days, will be valued at cost plus interest accrued



18


till the beginning of the day plus the difference betweenthe redemption value and the cost spread uniformly overthe remaining maturity period of the instruments.

n Government securities will be valued at yield to maturitybased on the prevailing market rate.

(c) Unlisted securitiesUnlisted equity shares of a company shall be valued “in good faith”on the basis of the valuation principles laid down below:

(i) Based on the latest available audited balance sheet, net worthshall be calculated as lower of (a) and (b) below:

(a) Net worth per share = [share capital plus free reserves(excluding revaluation reserves) minus miscellaneousexpenditure not written off or deferred revenueexpenditure, intangible assets and accumulated losses]divided by the number of paid-up shares.

(b) After taking into account the outstanding warrants andoptions, net worth per share shall again be calculatedand shall be = [share capital plus consideration on exerciseof option/warrants received/receivable by the companyplus free reserves (excluding revaluation reserves) minusmiscellaneous expenditure not written off or deferredrevenue expenditure, intangible assets and accumulatedlosses] divided by {the number of paid-up shares plusnumber of shares that would be obtained on conversion/exercise of outstanding warrants and options}.

The lower of (a) and (b) above shall be used for calculationof net worth per share and for further calculation in (iii)below.

(ii) Average capitalisation rate (P/E ratio) for the industry basedupon either BSE or NSE data (which should be followedconsistently and changes, if any, noted with proper justificationthereof) shall be taken and discounted by 75%, i.e. only 25%of the industry average P/E shall be taken as capitalisationrate (P/E ratio). EPS of the latest audited annual accounts willbe considered for this purpose.

(iii) The value as per the net worth value per share and the capitalearning value calculated as above shall be averaged and furtherdiscounted by 15% for illiquidity so as to arrive at the fairvalue per share.

The above methodology for valuation shall be subject to thefollowing conditions:

i. All calculations as aforesaid shall be based on auditedaccounts.

ii. In case the latest balance sheet of the company is notavailable within nine months from the close of the year,unless the accounting year is changed, the shares of suchcompanies shall be valued at zero.

iii. If the net worth of the company is negative, the sharewould be marked down to zero.

iv. In case the EPS is negative, EPS value for that year shallbe taken as zero for arriving at capitalised earning.

v. In case an individual security accounts for more than 5%of the total assets of a scheme, an independent valuershall be appointed for the valuation of the said security.To determine if a security accounts for more than 5% ofthe total assets of the scheme, it should be valued inaccordance with the procedure as mentioned above onthe date of valuation.

At the discretion of the AMC and with the approval of theTrustee, an unlisted equity share may be valued at a pricelower than the value derived using the aforesaid methodology.

(iv) While investments in call money, bills purchased underrediscounting plan and short-term deposits with banks shallbe valued at cost plus accrual, other money market instrumentsshall be valued at the yield at which they are currently traded.For this purpose, non-traded instruments, that is, instrumentsnot traded for a period of seven days, will be valued at costplus interest accrued till the beginning of the valuation dateplus the difference between the redemption value and thecost spread uniformly over the remaining maturity period ofthe instruments.

(v) Valuation of bonds and convertible debenturesThe non-convertible and convertible components ofconvertible debentures and bonds shall be valued separately.The non-convertible component should be valued on the samebasis as would be applicable to a debt instrument. Theconvertible component should be valued on the same basisas would be applicable to an equity instrument. If, afterconversion, the resultant equity instrument would be tradedpari passu with an existing instrument which is traded, thevalue of the latter instrument can be adopted after anappropriate discount for the non-tradability of the instrumentduring the period preceding the conversion. While valuingsuch instruments, whether the conversion is optional shouldalso be factored in.

(vi) Valuation of instruments bought on ‘repo’ basisWhere an instrument has been bought on a ‘repo’ basis, theinstrument shall be valued at the resale price after deductionof applicable interest upto the date of resale. Where aninstrument has been sold on a ‘repo’ basis, adjustment shallbe made for the difference between the repurchase price (afterdeduction of applicable interest up to the date of repurchase)and the value of the instrument. If the repurchase price exceedsthe value of the instrument, the depreciation shall be providedfor, and if the repurchase price is lower than the value of theinstrument, credit shall be taken for the appreciation.

(vii) Valuation of warrantsIn respect of warrants to subscribe for shares attached toinstruments, the warrants may be valued at the value of theshare which would be obtained on exercise of the warrant asreduced by the amount which would be payable on exerciseof the warrant. A discount similar to the discount to bedetermined in respect of convertible debentures (as referredto in sub paragraph (v) above) shall be deducted to accountfor the period, which must elapse before the warrant can beexercised.

(viii) Valuation of rights entitlementa. Until they are traded, the value of “rights” shares shall

be calculated as:Vr = n ÷ m x (Pex - Pof)WhereVr = value of rightsn = no. of rights offeredm = no. of original shares heldPex = ex-rights pricePof = rights offer price

b. Where the rights are not treated pari passu with theexisting shares, suitable adjustments shall be made tothe value of the rights. Where it is decided not tosubscribe for the rights but to renounce them andrenunciations are being traded, the rights can be valuedat the renunciation value.

(d) Illiquid securities(i) Aggregate value of “illiquid securities” of a scheme, which

are defined as non-traded, thinly-traded and unlisted equityshares, shall not exceed 15% of the total assets of such scheme

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and any illiquid securities held above 15% of the total assetsshall be assigned zero value.

(ii) The Mutual Fund shall disclose as on 31 March and 30September of each year the scheme-wise total illiquid securitiesin value and percentage of the net assets while makingdisclosures of half-yearly portfolios to unit holders. In the listof investments, an asterisk mark shall also be given against allsuch investments which are recognised as illiquid securities.

(iii) The Mutual Fund shall not be allowed to transfer illiquidsecurities among its schemes.

(iv) In respect of closed ended funds, for the purposes of valuationof illiquid securities, the limits of 15% and 20% applicable toopen-ended funds should be increased to 20% and 25%respectively.

(e) Non-Performing Assets (NPAs)Valuation of non-performing assets (debt securities) will bedone in accordance with “SEBI Guidelines for Identificationand Provisioning for NPAs” issued vide circular dated 18September 2000 (as modified), which will form part of thevaluation policy of the Scheme.

An asset shall be classified as ‘non-performing’ if the interestand / or principal amount have not been received or remainedoutstanding for one quarter from the day such income /instalment has fallen due.

The Mutual Fund shall make security wise disclosures of NPAson a half yearly basis along with the half-yearly portfoliodisclosure.

The total amount of provisions made against the NPAs shallbe disclosed in addition to the total quantum of NPAs andtheir proportion of the assets of the Scheme. In the list ofinvestments, an asterisk mark shall be given against suchinvestments which are recognised as NPAs. Where the dateof redemption of an investment has lapsed, the amount notredeemed shall be shown as ‘Sundry Debtors’ and notinvestment, provided that where an investment is redeemableby installments that will be shown as an investment until allinstallments have become overdue.

(f) Underlying Schemes (investment in case of fund of fundsscheme)In respect of schemes which will invest predominantly inunderlying scheme(s), the latest available per unit NAV of therespective underlying scheme(s) as at the close of the relevantvaluation date will be taken into account for computing thevalue of investments of such schemes.

(g) Foreign Exchange conversionOn the valuation date, all assets and liabilities in foreign currencywill be valued in Indian Rupees at the RBI reference rate as atthe close of banking hours on that day in India. The NAV soarrived at on that basis shall be applied to redemptions receivedup to 3.00 p.m. on a Business Day. The Trustee reserves theright to change the source for determining the exchange rateat a future date after recording the reason for such change.

(h) Money Market Securitiesa. The money market securities with maturity up to 182

days are valued on the basis of amortization (cost plusaccrued interest till the beginning of the day plus thedifference between the redemption value and the costspread uniformly over the remaining maturity period ofthe instruments). In case of a money market security withmaturity greater than 182 days at the time of purchase,the valuation price as prescribed by SEBI (reduced by thecost and the accrual) till date of valuation would betreated as appreciation or depreciation over and abovethe amortization taken day on day.

b. Investments in call money, bills purchased underrediscounting scheme and short term deposits with banksshall be valued at cost plus accrual; other money marketinstruments shall be valued at the yield at which theyare traded. For this purpose, instruments not traded fora period of seven days will either be valued at cost plusinterest accrued till the beginning of the day plus thedifference between the redemption value and the costspread uniformly over the remaining maturity period ofthe instruments or valued on the basis recommended bythe AMC, which will be reviewed by the Trusteeperiodically.

(i) Derivativesa. The traded derivatives shall be valued at market price in

conformity with the stipulations of sub clauses (i) to (v)of clause 1 of the Eighth Schedule to the Regulations, asamended from time to time and the guidelines issuedthereunder.

b. The valuation of untraded derivatives shall be performedin accordance with the valuation method for untradedinvestments prescribed in sub clauses (i) and (ii) of clause2 of the Eighth Schedule to the Regulations as amendedfrom time to time and guidelines issued thereunder.

V. ACCOUNTING POLICIESIn accordance with the Regulations, the AMC will follow theaccounting policies and standards detailed below.

1. The AMC shall keep and maintain proper books of accounts,records and documents, for each scheme of the Mutual Fundso as to explain its transactions and to disclose at any point oftime the financial position of any scheme and, in particular,to give a true and fair view of the state of affairs of suchscheme.

2. For the purposes of the financial statements, the Mutual Fundshall mark all investments to market and carry investments inthe balance sheet at market value. However, since theunrealised gain arising out of appreciation on investmentscannot be distributed, provision shall be made for exclusionof this item when arriving at distributable income.

3. Dividend income earned by all schemes shall be recognisedon the date on which the share is quoted on an ex-dividendbasis, not on the date on which the dividend is declared. Forinvestments which are not quoted on the stock exchange,dividend income shall be recognised on the date of declaration.

4. In respect of all interest-bearing investments, income shall beaccrued on a day to day basis as it is earned. Therefore, whensuch investments are purchased, interest paid for the periodfrom the last interest due date up to the date of purchaseshall not be treated as a cost of purchase but shall be debitedto an interest recoverable account. Similarly, interest receivedat the time of sale for the period from the last interest duedate up to the date of sale shall not be treated as an additionto sale value but shall be credited to an interest recoverableaccount.

5. In determining the holding cost of investments and the gainsor loss on sale of investments, the “average cost” methodshall be followed.

6. Transactions for purchase or sale of investments shall berecognised as of the trade date and not as of the settlementdate, so that the effect of all investments traded during afinancial year are recorded and reflected in the financialstatements for that year. Where investment transactions takeplace outside the stock market (for example, acquisitionsthrough private placement or purchases or sales through



20


private treaty), the transaction shall be recorded, in the eventof a purchase, as of the date on which the scheme obtains anenforceable obligation to pay the price, or, in the event of asale, when the scheme obtains an enforceable right to collectthe proceeds of sale or an enforceable obligation to deliverthe instruments sold.

7. Bonus shares to which a scheme becomes entitled shall berecognised only when the original shares to which the bonusentitlement accrues are traded on the stock exchange on anex-bonus basis. Similarly, rights entitlements shall berecognised only when the original shares on which the rightsentitlement accrues are traded on the stock exchange on anex-rights basis.

8. Where income receivable on investments has accrued but hasnot been received for the period as specified in the SEBIguidelines for identification and provisioning for NPAs,provision shall be made by debiting to the revenue accountthe income so accrued in the manner specified in the SEBIguidelines for identification and provisioning for NPAs. Insofaras provision for the principal amount is concerned, the sameshall be provided as specified in the aforesaid guidelines.

9. When units are sold, the difference between the sale priceand the face value of the unit, if positive, shall be credited toreserves and if negative, shall be debited to reserves, the facevalue being credited to the capital account. Similarly, whenunits are repurchased, the difference between the purchaseprice and face value of the unit, if positive, shall be debited toreserves and, if negative, shall be credited to reserves, theface value being debited to the capital account.

When units are sold, an appropriate part of the sale proceedsshall be credited to an equalisation account, and when unitsare repurchased an appropriate amount shall be debited toan equalisation account. The net balance on this account shallbe credited or debited to the revenue account. The balanceon the equalisation account debited or credited to the revenueaccount shall not decrease or increase the net income of ascheme but shall only be an adjustment to the distributablesurplus. It shall therefore be reflected in the revenue accountonly after the net income of that scheme is determined.

10. The cost of investments acquired or purchased shall includesecurities transaction tax, brokerage, stamp charges and anycharge customarily included in the broker’s bought note. Inrespect of privately placed debt instruments, any front-enddiscount offered shall be reduced from the cost of theinvestment.

The accounting policies and standards outlined above are consistentwith the current Regulations and are subject to changes madefrom time to time by the AMC and/or Trustee. However, suchchanges must be in conformity with the Regulations.

VI. TAX & LEGAL & GENERAL INFORMATION

A. TAXATION ON INVESTING IN MUTUAL FUNDSProspective unit holders should inform themselves of and take theirown advice on the taxes applicable to the subscription, holdingand redemption of units, and any distribution (each, a "RelevantEvent") under the laws of the place of their operations, domicile,residence, citizenship and/or incorporation. Neither the Fund norany of the parties listed in the Sections I of this Statement ofAdditional Information gives or makes any warranty and/orrepresentation as to the tax consequences in relation to any RelevantEvent (or combination of Relevant Events), takes any responsibilityfor any tax consequences in relation to any Relevant Event (orcombination of Relevant Events) and each of the Fund and suchparties expressly disclaims any liability whatsoever for any taxconsequences in relation to any Relevant Event (or combination ofRelevant Events) and/or for any loss howsoever arising (whether

directly or indirectly) from any Relevant Event (or combination ofRelevant Events). Dividends, interest income, gains on the disposalof investments and other income received by the Fund on itsinvestments in some jurisdictions may be liable to the impositionof income tax, irrecoverable withholding tax or other tax.

The following paragraphs are based on Law and practice currentlyin force as well as known future tax changes at the date of thisStatement of Additional Information and are subject to changes incontent and interpretation. They are intended as a general guideonly and do not necessarily describe the tax consequences for alltypes of investors in the Fund and no reliance, therefore, shouldbe placed upon them.

Income-taxThe income-tax rates indicated below are as per the Finance Act,2008.

A. FOR UNIT HOLDERS(i) Securities Transaction Tax (‘STT’)At the time of sale of units of an equity oriented fund to the MutualFund (ie redemption / repurchase of units by the fund), the UnitHolder is required to pay a STT of 0.25 per cent on the value of thesale, which will be collected by the Mutual Fund and depositedinto Government treasury. Where such units are purchased orsold on a recognised stock exchange in India, Unit Holders wouldbe required to pay STT at the rates mentioned in Table D below.

(ii) Tax on Capital GainsOn units of Equity Oriented Funds:Long-term Capital GainsUnder section 2(29A) of the Income-tax Act, 1961 ('Act'), units ofa mutual fund held as capital assets are treated as long-term capitalassets if they are held for a period of more than twelve monthspreceding the date of transfer. The additional (bonus) units issuedunder any option under the Scheme and held as capital assetswould be treated as a long-term capital assets if held for a periodof more than 12 months from the date when such additional unitswere allotted.

As per section 10(38) of the Act, long-term capital gains arisingfrom the sale of a unit of an equity oriented fund is exempt fromtax where such sale attracts STT. For this purpose, 'an equityoriented fund' has been defined as a scheme of a Mutual Fundwhere the investible funds are invested in equity shares of domesticcompanies to the extent of more than 65 per cent of the totalproceeds of such fund. The percentage of equity shareholding ofthe fund shall be computed with reference to the annual averageof the monthly averages of the opening and closing figures.

Short-term Capital GainsUnder section 2(42A) of the Act, units of a mutual fund held ascapital assets for a period of 12 months or less preceding the dateof their transfer are regarded as short-term capital assets.

As per section 111A of the Act, short-term capital gains arisingfrom the sale of a unit of an equity oriented fund to the MutualFund and chargeable to STT, is taxable at the rate of 15 per cent.

The said tax rate would be increased by a surcharge of:

(a) 10 per cent - in case of individual / HUF / AOP and BOI, wherethe total income exceeds Rs 1,000,000

(b) 10 per cent - in case of firms / domestic corporate Unit Holders,where the total income exceeds Rs 10,000,000

(c) 2.5 per cent - in case of foreign corporate Unit Holders, wherethe total income exceeds Rs 10,000,000

(d) Nil - in case of local authority and co-operative societies

Further, an additional surcharge of 3 per cent by way of educationcess would be charged on amount of tax inclusive of surcharge forall Unit Holders.

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However, in case of resident individuals and HUFs, where the totalincome as reduced by the short-term capital gains, is below thebasic exemption limit (Rs 225,000 in case of resident individuals ofan age of 65 years or more, Rs 180,000 in case of women residentin India below 65 years of age and Rs 150,000 in case of otherindividuals and HUF), the short-term capital gains will be reducedto the extent of the shortfall and only the balance short-term capitalgains will be subjected to the 15 per cent tax rate.

For the purpose of computing the eligible deduction under section80C of the Act, the total income of the assessee shall be reducedby the income earned in the nature of short-term capital gains.

In case of non-resident Unit Holders eligible for availing tax treatybenefits, please refer to para (vii) below.

Units of funds other than equity oriented funds:Long-term Capital GainsLong-term capital gains earned on transfer of units of funds otherthan equity oriented funds, will be chargeable to tax at the rate of20 per cent under the provisions section 112 of the Act. However,where the tax payable on such long-term capital gains, exceeds 10per cent of the amount of capital gains computed before indexation,such excess tax shall not be payable by the Unit Holder. In the caseof FIIs and specified overseas financial organizations, such longterm capital gains are chargeable to tax at the rate of 10 per centwithout the benefit of indexation.

In case of resident individuals and HUFs, where the total income asreduced by long-term capital gains, is below the basic exemptionlimit, the long-term capital gains will be reduced to the extent of theshortfall and only the balance long-term capital gains will be subjectedto the 20 per cent tax or the 10 per cent tax as the case may be.

The aforementioned tax rates would be increased by a surcharge of:






For the purpose of computing the eligible deduction under section80C of the Act, the total income of the assessee shall be reducedby the income earned in the nature of long-term capital gains.

In case of non-resident Unit Holders eligible for availing tax treatybenefits, please refer to paragraph (vii) below.

Short-term Capital GainsShort-term capital gains earned on the transfer of units of fundsother than equity oriented funds is added to the total income ofthe assessee and taxed at the following tax rates:

Table A

Individual / HUF Where total income for a tax year Nil(April to March) is less than orequal to Rs 1,50,000*(the basic exemption limit)

Where such total income is more 10% of the amount by whichthan Rs 1,50,000* but is less than the total income exceedsor equal to Rs 3,00,000 Rs 1,50,000*

Where such total income is more Rs 1,50,000 plus 20% of thethan Rs 3,00,000* but is less than amount by which the totalor equal to Rs 5,00,000 income exceeds Rs 3,00,000*

Where such total income is more Rs 55,000 plus 30% of thethan Rs 5,00,000 amount by which the total

income exceeds Rs 5,00,000

Co-operative Society Where total income for a tax year 10% of the total income(April to March) is less than orequal to Rs 10,000

Where such total income is more Rs 1,000 plus 20% of thethan Rs 10,000 but is less than or amount by which the totalequal to Rs 20,000 income exceeds Rs 10,000

Where the total income exceeds Rs 3,000 plus 30% of theRs 20,000 amount by which the total

income exceeds Rs 20,000

Domestic Corporate / Partnership 30%firm / Local authority/ FIIs /Specified Overseas FinancialOrganisations/ NRI

AOP/ BOI 30% or such higher rate of tax applicable to theindividual members of the AOP / BOI

Foreign Corporates 40%

* In case of women resident in India below 65 years of age, thebasic exemption limit is Rs 180,000. Income between Rs 180,000and Rs 300,000 will be taxable at the rate of 10 per cent.

In case of resident individuals of an age of 65 years or more, thebasic exemption limit is Rs 225,000. Income between Rs 225,000and Rs 300,000 will be taxable at the rate of 10 per cent.







In case of non-resident Unit Holders eligible for availing tax treatybenefits, please refer to para (vii) below.

(iii) Tax on Business IncomeUnder section 28 of the Act, profit arising on transfer of units of amutual fund which are held as stock in trade or trading asset, istaxed under the head 'Profits and Gains of Business or Profession'.Such profit is added to the total income of the assessee and taxedat the rates mentioned in Table A above.


(iv) Deduction from total incomeNo deduction would be allowed for STT while calculating capitalgains. However, where the units are treated as stock in trade andthe profits arising from the sale of units are taxed under the head'Profits and Gains of Business or Profession', the STT paid by theUnit Holder can be claimed as a deduction from such business profits.

(v) Deduction from total incomeIn terms of the provisions of section 80C of the Act, an individualor a HUF is entitled to claim a deduction in respect of the amountof subscription made to any units of any Mutual Fund referred toin section 10(23D), being a fund formulated in accordance with



22


the Equity Linked Savings Scheme, 2005 notified by the CentralGovernment in the Official Gazette vide notification no. SO 1563(E)dated November 3, 2005. The aggregate amount deductible undersection 80C in respect of subscription to the units of the MutualFund (including the amount of dividend reinvested), being an equitylinked savings scheme and other prescribed investments is restrictedto Rs 100,000.

(vi) Tax Deduction at SourceTable B

TDS Rates under the Act

Residents FIIs NRIs / Other foreignentities (excluding FIIs)

Short-term Non-equity NIL NIL 30 per cent for foreigncapital gains oriented fund non-corporates

40 per cent for foreigncorporate entities

Equity oriented NIL NIL 15 per centFund

Long-term Non-equity NIL NIL 10 per cent for specifiedcapital gains oriented fund overseas financial

organisations20 per cent for otherforeign entities

Equity oriented NIL NIL NILFund

Business Non-equity and NIL 30 per cent for 30 per cent for foreignincome equity oriented non-corporate FIIs non-corporates

mutual fund 40 per cent for 40 per cent for foreigncorporate FIIs corporate entities


(a) 10 per cent - in case of foreign non-corporate Unit Holders,where the total income exceeds Rs 1,000,000

(b) 2.5 per cent - in case of foreign corporate Unit Holders, wherethe total income exceeds Rs 10,000,000

Further, an additional surcharge of 3 per cent by way of educationcess would be charged on the amount of tax inclusive of surchargefor all Unit Holders.


(vii) Tax treatyIn the case of a non-resident Unit Holder who is resident of a countrywith which India has signed a Double Taxation AvoidanceAgreement (DTAA), which is in force, income tax is payable at therate provided in the Act or at the rate provided in the suchagreement, whichever is more beneficial to such non resident UnitHolder.

Further, where the rate of tax prescribed under the relevant DTAAis lower than that prescribed under the Act, tax would be withheldat such lower rate.

However, in order to obtain the benefit of the lower rate underthe DTAA, the Unit Holder would be required to provide a certificatefrom his Assessing Officer stating the eligibility of the investor toclaim such benefit.

(viii) Tax on Income distributed by the Mutual FundUnder the provisions of section 10(35) of the Act, income receivedin respect of units of a mutual fund specified under section 10(23D)of the Act will be exempt from income tax in the hands of all unitholders.

In view of the exemption of income in the hands of the unit holders,no tax needs to be deducted at source from such distribution bythe Fund on or after April 1, 2003, under the provisions of sections194K and 196A of the Act.

Dividend strippingUnder the provisions of section 94(7) of the Act, where a personbuys any units within a period of three months before the recorddate, sells such units within nine months after such date and theincome distributed on such units is exempt from tax, the loss onsuch sale to the extent of the income distributed on units shall beignored while computing the income chargeable to tax.

Bonus strippingUnder the provisions of section 94(8) of the Act , where a personbuys units (original units) within a period of three months beforethe record date, receives bonus units on such original units, andthen sells (all or part of) the original units within a period of ninemonths from the record date and continues to hold the bonusunits, then the loss incurred on the original units shall be ignoredwhile computing the income chargeable to tax but shall be deemedto be the cost of acquisition of the bonus units.

(ix) Switching between optionsAs stated in Section VIB., switching from one option to anotheroption will be effected by way of Redemption of units of the relevantoption and reinvestment of the redemption proceeds in the otheroption selected by the Unit Holder. Hence switching will attractthe same implications as applicable on transfer of such units.

(x) Exemptions from long-term capital gainsAs per the provisions of section 54EC of the Act, taxable long-term capital gains [including gains arising on transfer of a long-term capital asset being units not otherwise exempt under section10(38) of the Act] are exempt from tax to the extent such capitalgains are invested, within a period of six months of such transfer,in acquiring bonds redeemable after 3 years and issued on or afterApril 1, 2007 by the National Highways Authority of India and bythe Rural Electrification Corporation Limited. A ceiling of Rs50,00,000 applies in respect of investment in such bonds in anyfinancial year.

If the said bonds are transferred within a period of 3 years fromthe date of their acquisition, the amount of capital gains exemptedearlier would become chargeable to tax as long-term capital gainsin the year in which the bonds are transferred.

As per the provisions of Sec 54F of the Act in the case of anindividual or a HUF, specified taxable long-term capital gains[including gains arising on transfer of a long-term capital assetbeing units not otherwise exempt under section 10(38) of the Act]are not chargeable to tax if the entire net consideration receivedon such transfer is invested within the prescribed period in aresidential house. If part of such net consideration is invested withinthe prescribed period in a residential house, then proportionateexemption is available.

(xi) Set-off and carry forward of lossesAccording to the provisions of the Act, the capital loss resultingfrom sale of units would be available for set off against other capitalgains made by the investor and would reduce the tax liability ofthe investor to that extent. However, losses on transfer of unitsheld as long term capital assets would be allowed to be set-offonly against gains from transfer of long-term capital assets. Wheresuch losses arising from sale of units held as capital asset cannotbe wholly set-off, the amount of losses not set-off can be carriedforward for a period of eight years. However, when the long termgains arising on transfer of units are not subject to tax then thelong-term losses from such units would not be allowed to be setoff or carried forward.

Under the Act, a loss resulting from the transfer of units held asstock in trade or trading asset would be available for set off againstincome under any other head other than income under the head'Salaries'. Where such loss cannot be wholly set-off in accordancewith the provisions of the Act, the amount remaining to be set-offcan be carried forward for a period of eight years and set-off againstincome under the head 'Profits and Gains of Business or Profession'.

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(xii) Minimum Alternate TaxUnder the Act, long-term capital gains arising on sale of units ofan equity oriented fund and exempt under the provisions of section10(38) of the Act, would not be excluded from the book profitswhile calculating profits chargeable to minimum alternate tax.

B. TAX BENEFITS / CONSEQUENCES TO THE MUTUAL FUND:JPMorgan Mutual Fund is a Mutual Fund registered with theSecurities and Exchange Board of India and its entire income isexempt from tax under the provisions of section 10(23D) of theAct. The Mutual Fund will receive all Indian sourced income withoutany deduction of tax at source under the provisions of section196(iv) of the Act.

Where the Fund receives any income from investments made inoverseas jurisdictions, the same may be subject to withholding tax(or any other tax) in the relevant jurisdiction from which the incomeis received. As the Fund is exempted from its entire income(including foreign income) in India, credit / refund in respect ofsuch foreign taxes withheld / paid by the fund will not be available.

Income distribution, if any, made by a Mutual Fund, will attractdistribution tax under section 115R of the Act at the rates listedbelow:

Table C

Sr. Type of Mutual Fund Income distributed to Rate of distribution taxNo.

(i) Equity oriented mutual fund Any person Nil

(ii) Money market mutual fund Any person 25 per centor liquid mutual fund

(iii) Mutual fund other than Individual or HUF 12.5 per cent

(i) and (ii) above Any person other than 20 per centIndividual or HUF

The aforementioned rates would be increased by a surcharge of10 per cent and an additional surcharge by way of education cessat the rate of 3 per cent on the amount of distribution tax inclusiveof surcharge.

For this purpose, a 'Money market mutual fund' has been definedto mean a money market mutual fund as defined in sub-clause (p)of clause 2 of the Securities and Exchange Board of India (MutualFunds) Regulations, 1996. Further, a 'Liquid fund' has been definedto mean a scheme or plan of a mutual fund which is classified bythe Securities and Exchange Board of India as a liquid fund inaccordance with the guidelines issued by it in this behalf under theSecurities and Exchange Board of India Act, 1992 or regulationsmade thereunder.

Under the Act, as and when the Mutual Fund purchases and sellsequity shares/units/derivates, it would be required to pay the STTapplicable on such purchases / sales to the concerned RecognisedStock Exchange. The rates of STT have been listed below.

Table D

Transaction Rate of STT Payable by

Purchase of an equity share in a company / unit of 0.125% Purchaseran equity-oriented fund where the transaction isentered into in a recognised stock exchange andthe contract is settled by actual delivery ortransfer of shares / units.

Sale of an equity share in a company / unit of an 0.125% Sellerequity-oriented fund where the transaction isentered into in a recognised stock exchange andthe contract is settled by actual delivery ortransfer of shares / units.

Sale of an equity share in a company / unit of an 0.025% Sellerequity-oriented fund where the transaction isentered into in a recognised stock exchange andthe contract is settled otherwise than by actualdelivery or transfer of shares / units.

Sale of an option in securities (STT will be payable 0.017 per cent Selleron the option premium)

Sale of an option in securities where the option is 0.125 per cent Purchaserexercised (STT will be payable on the settlement price)

Sale of a future in securities 0.017 per cent Seller

Sale of units of an equity oriented fund to the 0.25 per cent SellerMutual Fund

C. OTHER BENEFITS:(i) Wealth-tax: Units of a scheme of a Mutual Fund are not

treated as assets as defined under section 2(ea) of the Wealth-tax Act, 1957 and thereof would not be liable to wealth-tax.

(ii) Gift-tax: The Gift-tax Act, 1958 has ceased to apply to giftsmade on or after October 1, 1998. Gifts of units purchasedin a scheme of the Mutual Fund would therefore, be exemptfrom gift-tax.

(iii) Investments in Units of the Mutual Fund will rank as an eligibleform of investment under section 11(5) of the Act read withRule 17C of the Income-tax Rules, 1962, for religious andcharitable trusts.

EACH INVESTOR IS ADVISED TO CONSULT HIS OR HER OWNTAX CONSULTANT WITH RESPECT TO THE SPECIFIC TAXIMPLICATIONS ARISING OUT OF HIS OR HER PARTICIPATIONIN THE SCHEME.

B. LEGAL INFORMATIONNomination facilityA unit holder can, at the time an application is made or subsequentlyby writing to the AMC / Registrar, request a nomination form inorder to nominate any one/ more person(s) (maximum three) toreceive the units upon his death, subject to the completion of certainnecessary formalities e.g. providing proof of the death of the unitholder, signature of the nominee, furnishing proof of guardianshipif the nominee is a minor and the execution of an indemnity bondor such other documents as may be required from the nominee infavour of and to the satisfaction of the AMC / Registrar. Theinvestors/unit holders are requested to note that in case of multiplenominees, the “Share / Ratio” of nomination has to be clearlyspecified in the nomination form/ request letter. If the “Share /Ratio” of nomination is not explicitly stated, then the nominationshall be treated at “Equal Share/Ratio”.

In cases of joint unit holders, all joint unit holders must sign thenomination form.

Only the following categories of Indian residents can be nominated:(a) individuals; (b) minors through parent / legal guardian (whosename and address must be provided); (c) religious or charitabletrusts; and (d) central government, state government, a localauthority or any person designated by virtue of his office.

A nomination in respect of units will be treated as rescinded uponthe Redemption of all the units. Cancellation of a nomination canbe made only by the unit holders who made the original nominationand must be notified in writing. On receipt of a valid cancellation,the nomination shall be treated as rescinded and the Mutual Fund/ AMC / Trustee shall not be under any obligation to transfer theunits in favour of the nominee.

The transfer of units / payment to the nominee of the Redemptionproceeds shall be valid and effective against any valid demand madeupon the Mutual Fund / AMC / Trustee and shall discharge theMutual Fund /AMC / Trustee of all liability towards the estate of



24


the deceased unit holder and his legal heir, personal representativeor other successors.

The Mutual Fund, the AMC and the Trustee are entitled to beindemnified from the deceased unit holder’s estate against anyliabilities whatsoever that any of them may suffer or incur inconnection with a nomination.

Nomination rules as specified by SEBI are as follows:

(a) The nomination can be made only by individuals applyingfor / holding units on their own behalf singly or jointly. Non-individuals including a society, trust, body corporate,partnership firm, karta of Hindu Undivided Family (HUF), holderof Power Of Attorney (POA) cannot nominate. If the units areheld jointly, all joint holders must sign the nomination form.

(b) A minor can be nominated and in that event, the name andaddress of the parent / guardian of the minor nominee shallbe provided by the unit holder.

Nomination can also be in favour of the Central Government,State Government, a local authority, any person designed byvirtue of his office or a religious or charitable trust.

(c) The nominee shall not be a trust (other than a religious orcharitable trust), society, body corporate, partnership firm,karta of HUF or a POA holder. A non-resident Indian can be anominee subject to the exchange control laws in force fromtime to time.

(d) Nomination in respect of the units stands rescinded upon thetransfer or Redemption of all the units.

(e) Transfer of units in favour of a nominee shall be valid dischargeby the Mutual Fund / AMC / Trustee / Registrar against thelegal heir.

(f) The cancellation of nomination can be made only by thoseindividuals who hold units on their own behalf singly or jointlyand who made the original nomination.

(g) On cancellation of the nomination, the nomination shall standrescinded and the Mutual Fund / AMC / Trustee shall not beunder any obligation to transfer the units in favour of thenominee.

Anti Money Laundering: The Sponsor and its parent company,JPMorgan Chase & Co. are committed to complying with allapplicable anti-money laundering laws and regulations in all oftheir operations. In India, the Prevention of Money Laundering Act,2002 (PMLA) and the rules under it have been notified. Further,SEBI has also issued guidelines on anti-money laundering whichare required to be followed by the intermediaries. The Sponsorand JPMorgan Chase recognize the value and importance ofcreating a business environment that strongly discourages moneylaunderers from using the Sponsor or JPMorgan Chase in pursuanceof such activities. To that end, certain policies have been adoptedby the AMC.

Know Your Customer (KYC): The need to “Know Your Customer”is vital for the prevention of money laundering. The AMC mayseek information or obtain and retain documentation used toestablish identity. It may re-verify identity and obtain any missingor additional information for this purpose.

With effect from February 1, 2008, any person investing (whethernew or additional purchase) Rs. 50,000/- or more in mutual fundsis required to comply with the Know Your Client (KYC) norms underthe PMLA (“KYC Compliance”).

In order to make data capture and document submission easy andconvenient for the investors, the mutual fund industry hascollectively entrusted the responsibility of collection of documentsrelating to identity and address of the investor(s) to an independentagency (presently, “CDSL Ventures Limited”) which will act ascentral record keeping agency (‘Central Agency’). As a token ofhaving verified the identity and address of the investors(s) and forefficient retrieval of records, the Central Agency will issue a KYC

acknowledgment Letter (previously known as Mutual FundIdentification Number – MIN Letter) (“KYC Acknowledgement”)to each investor who submits an application and prescribeddocuments to the Central Agency.

Investors are required to attach the copy of KYC Acknowledgementalong with the application at the time of making investment forthe first time in every mutual fund. In respect of any subsequentinvestments in the same mutual fund, it is not necessary to attacha copy of the KYC Acknowledgement. The investors who wish toobtain a KYC Acknowledgement are required to submit acompleted application form (“KYC Form”) for KYC Compliancealong with all the prescribed documents listed in the KYC Form, atany of the Points of Service (‘POS’). The KYC Form is available onthe AMC’s website (www.jpmorganmf.com) and at the AMFIwebsite (www.amfiindia.com). POS are the designated centresappointed by the Central Agency for receiving KYC applicationforms, processing data and providing customers with evidence ofKYC Compliance. A list of POSs (including their locations) is availableat www.amfiindia.com. On submission of the application,documents and information to the satisfaction of the POS, theCentral Agency will scrutinise the information and documentssubmitted by the investor, and confirm the KYC Compliance byway of a KYC Acknowledgment. However, the Central Agencymay cancel the evidence of KYC compliance within 15 workingdays from the date of allotment of provisional certification in caseof any deficiency in the document/information. Intimation oncancellation of KYC Compliance certificate will be dispatched bythe Central Agency to the investor immediately. No communicationwill be sent to the investor if the KYC Compliance certificate asallotted is confirmed.

The KYC Compliance certificate will be validated with the recordsof the Central Agency before allotting units. Applications forsubscriptions of value of Rs.50,000/- and above without a validKYC Compliance can be rejected by the AMC / Registrar.

In the event of any Application Form being subsequently rejectedfor lack of information / deficiency / insufficiency of mandatorydocumentation, the investment transaction may be cancelled andthe amount may be redeemed at Applicable NAV, subject topayment of Exit Load, wherever applicable. Such Redemptionproceeds may be despatched within a maximum period of 21 daysfrom the date of acceptance of the application. The decision ofthe AMC/ Registrar/ CDSL Ventures Ltd. in this regard will beconsidered final.

All investors (both individual and non-individual) can apply for KYCCompliance. However, applicants should note that minors cannotapply for KYC Compliance and any investment in the name ofminors should be made along with a guardian, who should obtaina KYC Compliance certificate for the purpose of investing with theMutual Fund. Applicants / unit holders intending to apply for units /currently holding units and operating their scheme folios througha POA must ensure that the issuer of the POA and the holder ofthe POA mention their respective KYC Compliance certificates atthe time of investment above the threshold. POA holders are notpermitted to apply for KYC Compliance certificate on behalf ofthe issuer of the POA. Separate procedures are prescribed forchange in name, address and other KYC Compliance related details,should the applicant desire to change such information. The POSwill offer the services of effecting such changes. Further details onKYC Compliance can be sought on the AMC’swebsite(www.jpmorganmf.com) and at the AMFI website(www.amfiindia.com).

The AMC, under powers delegated by the Trustee, shall haveabsolute discretion to reject any application, prevent furthertransactions by a unit holder, delay processing redemption as perapplicable laws or regulations if:

(i) after due diligence, the investor / unit holder / a person makingthe payment on behalf of the investor does not fulfil therequirements of “Know Your Customer” norms as determined

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by the AMC or the AMC believes that the transaction issuspicious in nature as regards money laundering;

(ii) the AMC determines in its sole discretion that the applicationdoes not or may not comply with any applicable laws orregulations.

In this regard the AMC reserves the right to reject any applicationand effect a mandatory Redemption of units allotted at any timeprior to the expiry of 30 Business Days from the date of theapplication.

If the payment for purchase of units is made by a third party (e.g.a power of attorney holder, a financing agency, a relative, etc.),the unit holder may be required to give details of such transactionso as to satisfy the AMC of the source and/or considerationunderlying the transaction.

Investor Protection: The schemes of the Mutual Fund are designedto support long-term investment and active trading is discouraged.Short term or excessive trading into and out of a scheme mayaffect its performance by disrupting portfolio managementstrategies and by increasing expenses. The Mutual Fund, the AMC,or the Trustee may refuse to accept applications for purchase,especially where transactions are deemed disruptive, particularlyfrom market timers or investors who, in the Mutual Fund’s / AMC’sor the Trustee’ opinion, have a pattern of short term or excessivetrading or whose trading has been or may be disruptive for suchscheme. If, in the opinion of the AMC, a unit holder is indulging inshort term or excessive trading as above, the AMC shall, underpowers delegated by the Trustee, have absolute discretion to rejectany application, prevent further transaction by the unit holder orredeem the units held by the unit holder at any time prior to theexpiry of 30 Business Days from the date of the application.

Investor informationThe AMC may share investors’ personal information with thefollowing third parties:

n Sponsor or its associates, Trustee, Registrar, banks and / orauthorised external third parties who are involved intransaction processing, despatch, etc. of a scheme;

n Distributors or sub-brokers through whom applications ofinvestors are received for a scheme; or

n Any other persons for compliance with any legal or regulatoryrequirements or to verify the identity of investors forcompliance with anti-money laundering requirements.

Account statements or financial information pertaining to theinvestor, if sent over the internet to the unit holder, distributors orany other entity as indicated above, will be sent only through asecure means and / or through electronic mail.

SwitchingInvestors can switch between different options under a scheme, atthe applicable NAV. All valid applications for switch-out shall betreated as a Redemption and for switch-in as a Purchase with therespective applicable NAVs of the option. As per the current loadstructure, no entry or exit load will be charged for intra-schemeswitching. However, the AMC may change the loads prospectivelyas indicated in the relevant Scheme Information Document.

Note: For tax implications on switching please see Section VI - Taxtreatment of investments in mutual funds.

Lien on units for loanIn conformity with the guidelines and notifications issued by SEBI /Government of India / any other regulatory agencies from time totime, as applicable, units under a scheme may be offered as securityby way of a lien / charge in favour of scheduled banks, financialinstitutions, non-banking finance companies, or any other body.The Registrar will note and record the lien against such units. Astandard form for this purpose is available on request from theRegistrar.

The unit holder will not be able to redeem / switch units under lienuntil the lien holder provides written authorisation to the AMC /Mutual Fund that the lien is discharged. As long as units are underlien, the lien holder will have complete authority to exercise thelien, thereby redeeming such units and receiving payment proceeds.In such instance, the unit holder will be informed by the Registrarthrough an account statement. In no case will the units betransferred from the unit holder to a lien holder. Dividends declaredon units under lien will be paid / re-invested to the credit of theunit holder and not the lien holder.

Folio numberUnless otherwise requested by the unit holder, a single folio numbermay be assigned if an investor invests in different schemes of theMutual Fund, and a consolidated account statement will then beprovided for investments in all the schemes.

Fractional UnitsSince a request for Purchase or Redemption is generally made inrupee amounts and not in terms of a fixed number of units of theschemes of the Mutual Fund, an investor may be left with fractionalunits. Fractional units will be computed and accounted for up tothree decimal places for each scheme. However, fractional unitswill in no way affect the investor’s ability to redeem the units, eitherin part or in full, standing to the unit holder’s credit.

DIVIDENDS AND DISTRIBUTIONThe Trustee may decide to distribute by way of dividend, the surplusby way of realised profit, dividends and interest, net of losses,expenses and taxes, if any, to unit holders in the dividend optionof the schemes of the Mutual Fund if such surplus is available andadequate for distribution in the opinion of the Trustee. The Trustee’sdecision with regard to availability and adequacy, rate, timing andfrequency of the distribution shall be final. The dividend will bedue to only those unit holders whose names appear in the registerof unit holders in the dividend option of the scheme, whereapplicable, on the record date which will be announced in advance.The unit holders shall have the option of receiving the dividend orreinvesting the same. The dividend shall be reinvested at theapplicable NAV of the immediately following Business Day.

The AMC shall despatch to the unit holders the dividend warrantswithin 30 days of the date of declaration of dividend. The dividenddistribution procedure shall be in accordance with the Regulations.

BORROWINGS BY THE MUTUAL FUNDUnder the Regulations, the Mutual Fund is allowed to borrow tomeet the temporary liquidity needs of a scheme for the purpose ofrepurchase, Redemption of units or payment of interest or dividendto the unit holders. Further, as per Regulations, the Fund shall notborrow more than 20% of the net assets of such scheme and theduration of such borrowing shall not exceed a period of six months.

The Mutual Fund may enter into necessary arrangements withbanks / financial institutions for borrowing purposes, either directlyor through the AMC, as permitted by the Regulations. The schememay bear the interest charged on such borrowings.

REDEMPTION OR REPURCHASEThe unit holder has the option to request for Redemption either inan amount of rupees or in number of units.

Units can be redeemed (i.e. sold back to the Mutual Fund) at theRedemption Price during the Ongoing Offer Period. If an investorhas purchased units of a scheme on more than one Business Day,the units will be redeemed on a first-in-first-out basis. If multiplePurchases are made on the same day, the Purchase appearingearliest in the account statement will be redeemed first.

Payment of proceeds1. Resident InvestorsRedemption proceeds will be paid by cheques, marked “A/c Payee



26


only” and drawn in the name of the sole holder / first-named holder(as determined by the records of the Registrar).

The Mutual Fund will endeavour to despatch the redemptionproceeds not beyond 10 Business Days from the date of redemption. Ifthe payment is not made within the period stipulated in the Regulations,the unit holder shall be paid interest @15% per annum for the delayedperiod and the interest cost shall be borne by the AMC.

The bank name and bank account number, as specified in the Registrar’srecords, will be mentioned in the cheque issued in favour of the unitholder. The cheque will be payable at par at all the cities having InvestorService Centres (ISCs). If the unit holder resides in any other city, he will bepaid by a demand draft payable at the city of his residence and the demanddraft charges shall be borne by the AMC. The proceeds may be paid byway of direct credit / EFT / SEFT / RTGS / wire transfer / any other mannerthrough which the investor’s bank account specified in the Registrar’srecords may be credited with the redemption proceeds.

Note: The Trustee, at its discretion at a later date, may choose to alter oradd other modes of payment.

The Redemption proceeds will be sent by courier or (if the addressee cityis not serviced by courier) by registered post. The despatch for the purposeof delivery through the courier / postal department, as the case may be,shall be treated as delivery to the investor. The AMC / Registrar are notresponsible for any delayed delivery or non-delivery or any consequencesthereof, if the despatch has been made correctly as stated in this paragraph.

2. Non-Resident Indian InvestorsFor NRIs, Redemption proceeds will be remitted depending upon thesource of investment as follows:

(a) Repatriation BasisWhen units have been purchased through remittance in foreignexchange from abroad or by cheque / draft issued from proceeds ofthe unit holder’s FCNR deposit or from funds held in the unit holder’sNon Resident (External) Rupee (NRE) account kept in India, theproceeds can be remitted to the unit holder in foreign currency (anyexchange rate fluctuation will be borne by the unit holder). Theproceeds can also be sent to his Indian address for crediting to hisNRE / FCNR / Non-Resident (Ordinary) account (NRO), if desired bythe unit holder.

(b) Non-Repatriation BasisWhen units have been purchased from funds held in the unit holder’sNon-resident (Ordinary) account, the proceeds will be sent to theunit holder’s Indian address for crediting to the unit holder’s Non-resident (Ordinary) account.

For FIIs, the designated branch of the authorised dealer may allowremittance of net sale / maturity proceeds (after payment of taxes)or credit the amount to the foreign currency account or Non-residentRupee account (NRR) of the FII maintained in accordance with theapproval granted to it by the RBI.

The Mutual Fund will not be liable for any delays or for any loss onaccount of any exchange fluctuations, while converting the rupee amountin foreign exchange in the case of transactions with NRIs / FIIs.

The Mutual Fund may make other arrangements for effecting paymentof redemption proceeds in the future.

Transfer of unitsThe Mutual Fund will offer and redeem the units on a continuous basisafter the NFO Period. If a person becomes a unit holder in any of theschemes consequent to operation of law, the Mutual Fund will, subjectto production of satisfactory evidence that the transferee is otherwiseeligible to hold the units, effect the transfer. Similarly, in cases of transferstaking place consequent to death or insolvency, the transferee’s namewill be recorded in the register of the Mutual Fund by the Registrar subjectto production of satisfactory evidence and the transferee being eligible tohold the units. In all such cases, if the transferee is not eligible to hold the

units, the units will be redeemed and the proceeds will be disbursed tothe transferee if such transferee is entitled to the same.

Transmission of unitsIf units are held in a single name by the unit holder, units shall be transmittedin favour of the nominee where the unit holder has appointed a nomineeupon production of the death certificate or any other documents to thesatisfaction of the AMC / Registrar. If the unit holder has not appointed anominee or in cases where the nominee dies before the unit holder, theunits shall be transmitted in favour of or as otherwise directed by the unitholder’s personal representative(s) on production of the death certificateand / or any other documents to the satisfaction of the AMC / Registrar.If units are held by more than one registered unit holder, then upon thedeath of one of the unit holders, the units shall be transmitted in favourof the remaining unit holder(s) (in the order in which the names appear inthe register of unit holders with the Registrar) on production of a deathcertificate and / or any other documents to the satisfaction of the AMC /Registrar and in favour of the nominee only upon death of all the unitholders.

Any person who becomes entitled to a unit as a consequence of thedeath or bankruptcy of any sole unit holder or of the survivor of joint unitholders shall not be entitled to receive notices of or to attend or vote atany meeting of unit holders until such person is registered as the unitholder of such unit. If any person is entitled to be registered as the unitholder or to transfer any unit in accordance with the provisions of theScheme Information Document, the Trustee may retain any moneyspayable in respect of such unit on trust until such person is registered asthe unit holder of, or has transferred, the relevant unit.

Duration of the SchemeThe duration of a scheme is perpetual except in case it is close endedscheme. However, in accordance with the Regulations, a scheme may bewound up, after repaying the amount due to the unit holders:

(a) on the happening of any event which, in the opinion of the Trustee,requires a scheme to be wound up; or

(b) if 75% of the unit holders of a scheme pass a resolution that thescheme be wound up; or

(c) if SEBI so directs in the interests of unit holders; or

(d) in case of non-fulfilment of conditions prescribed in SEBI circular no.SEBI/IMD/CIR No. 10/22701/03 dated December 12, 2003 andamendments thereto from time to time.

If a scheme is so wound up, the Trustee shall give notice of thecircumstances leading to the winding up of such scheme:

(a) to SEBI; and

(b) in two daily newspapers having a circulation all over India, and in avernacular newspaper with circulation in Mumbai.

On and from the date of the publication of notice of winding up, theTrustee or the AMC, as the case may be, shall:

(a) cease to carry on any business activities in respect of the scheme sowound up;

(b) cease to create or cancel units in the scheme; and

(c) cease to issue or redeem units in the scheme.

Procedure and manner of winding-upThe Trustee shall call a meeting of the unit holders to approve, by simplemajority of the unit holders present and voting at the meeting, a resolutionauthorising the Trustee or any other person to take steps for winding upof any scheme launched by the Mutual Fund.

The Trustee, or other person authorised as above, shall dispose of theassets of a scheme in the best interest of unit holders of such scheme. Theproceeds of sale shall be first utilised towards discharge of such liabilitiesas are due and payable under the scheme, and after meeting the expensesconnected with winding-up, the balance shall be paid to the unit holdersin proportion to their respective interests in the assets of the scheme, ason the date when the decision for winding-up was taken.

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On completion of winding-up, the Trustee shall forward to SEBI and theunit holders a report on winding up, detailing the circumstances leadingto the winding up, the steps taken for disposal of the assets of the Schemebefore winding up, net assets available for distribution to unit holdersand a certificate from the auditors of the Mutual Fund.

Notwithstanding anything contained hereinabove, the provisions of theRegulations in respect of disclosures of half-yearly reports and annualreports shall continue to be applicable until winding-up is completed orthe scheme ceases to exist.

After receipt of the Trustee’s report referred to above, and if SEBI is satisfiedthat all measures for winding-up of a scheme have been complied with,such scheme shall cease to exist.

Unclaimed Redemptions and dividendsAs per circular no. MFD/CIR/9/120/2000, dated November 24, 2000 issuedby SEBI, the unclaimed redemption and dividend amounts shall bedeployed by the Mutual Fund in money market and other permittedinstruments. The investment management fee charged by the AMC formanaging such unclaimed amounts shall not exceed 50 basis points. Thecircular also specifies that investors who claim these amounts during aperiod of three years from the due date shall be paid at the prevailingNAV. Thus, after a period of three years, this amount can be transferredto a pool account and the investors can claim the said amounts at theNAV prevailing at the end of the third year. In terms of the circular, theonus is on the AMC to make a continuous effort to remind investorsthrough letters to take their unclaimed amounts. The details of suchunclaimed amounts shall be disclosed in the annual report sent to theunit holders.

Suspension of Purchase and Redemption of units/determinationof NAVSubject to the approval of the Board of the AMC and of the Trustee, andsubject also to necessary communication of the circumstances andjustification of the same to SEBI, the determination of the NAV, andconsequently of the purchase, redemption and switching of units, maybe temporarily suspended in any of the conditions described below:

1. When one or more stock exchanges or markets which provide thebasis of valuation for a substantial portion of the assets of a schemeis closed otherwise than for ordinary holidays.

2. When, as a result of political, economic, social or monetary eventsor any other circumstances outside the control of the Trustee and/orthe AMC, the disposal of the assets of a scheme is not considered,in the AMC’s sole discretion to be reasonably practicable or mightotherwise be detrimental to the interests of the unit holders.

3. In the event of breakdown in the means of communication usedfor the valuation of investments of a scheme, so that the value ofthe securities of such a scheme cannot be accurately or reliablyarrived at.

4. If, in the sole opinion of the AMC, extreme volatility of marketscauses or might cause, prejudice to the interests of the unit holdersof a scheme.

5. In case of natural calamities, war, strikes, civil commotions, riots,and bandhs.

6. In case of any other event of force majeure or disaster that, in theopinion of the AMC, affects the normal functioning of the MutualFund and/or the AMC and/or the Registrar.

7. If so directed by SEBI.

In any of the above eventualities, the time limits for processing requestsfor purchase and redemption of units will not be applicable. All types ofPurchase and Redemption of units will be processed on the basis of theimmediately next applicable NAV after the resumption of dealings in units.

The Mutual Fund / Trustee / AMC also reserve the right, at their solediscretion, to withdraw sale of and/or repurchase and/or switching ofunits in a scheme, temporarily or indefinitely, if in the opinion of theAMC, increasing the scheme’s size further may prove detrimental to theexisting unit holders of such scheme. However, the suspension of sale /repurchase / switching shall be made with the approval of the Trustee. Inthis event, an application to purchase units is not binding on, and may berejected by, the Trustee, the AMC and/or their respective agents.

C. GENERAL INFORMATIONUnderwritingThe schemes may underwrite securities of other issuers in accordancewith SEBI guidelines in that regard.

Inter-scheme transfer of investments:Transfers of investments from one scheme to another scheme in theMutual Fund shall be allowed only if:

(a) such transfers are done at the prevailing market price for quotedinstruments on spot basis.Explanation : “spot basis” shall have same meaning as specified bya stock exchange for spot transactions.

(b) the securities so transferred shall be in conformity with the investmentobjective of the scheme to which such transfer has been made.

Associate TransactionsThe AMC may, from time to time, for the purpose of conducting itsnormal business use the services of its associates. If at any time associatetransactions are made, they will be done on pure commercial considerationfor the benefit of the Mutual Fund. As per current Regulations noinvestment will be made in any unlisted security of an associate or of acompany belonging to the Group and in any security issued by way ofprivate placement by an associate or group company of the Sponsor.Further, no investment will be made in listed securities of the groupcompany of the Sponsor, which is in excess of 25% of the net assets of ascheme of the Mutual Fund. Investment in group companies will be doneonly in the interest of the Mutual Fund and as per the Regulations.

Should the Mutual Fund enter into any transaction with / throughassociates / companies belonging to the Group/ AMC, it shall do so aspermitted by the Regulations and will disclose details of such investmentsor transactions in the manner required by the Regulations.

The Mutual Fund had paid the following brokerage to the associate companies of the AMC.

April 1, 2007- March 31, 2008Name of the Entity Scheme Amount PaidJPMorgan India Private Limited JPMorgan India Equity Fund 3818405.402

JPMorgan India Private Limited JPMorgan India Smaller Companies Fund 1982565.334

April 1, 2008- July 31, 2008Name of the Entity Scheme Amount Paid

JPMorgan India Private Limited JPMorgan India Equity Fund 1,364,543.94

JPMorgan India Private Limited JPMorgan India Smaller Companies Fund 472,065.83



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Commission paid to the associate distributorsName of the Entity Period Scheme Amount Paid

Geojit Financial Services Ltd. April 1, 2007 - March 31, 2008 JPMorgan India Equity Fund 346949.93

Geojit Financial Services Ltd. April 1, 2007 - March 31, 2008 JPMorgan India Smaller 207902.14Companies Fund

Mahindra and Mahindra April 1, 2007 - March 31, 2008 JPMorgan India Equity Fund 41814.48Financial Services

Mahindra and Mahindra April 1, 2007- March 31,2008 JPMorgan India Smaller 14160.68Financial Services Companies Fund

Name of the Entity Period Scheme Amount Paid

Geojit Financial Services Ltd. April 1, 2008 - July 31, 2008 JPMorgan India Equity Fund 39,809.30

Geojit Financial Services Ltd. April 1, 2008 - July 31, 2008 JPMorgan India Smaller 32,177.11Companies Fund

Mahindra and Mahindra April 1, 2008 - July 31, 2008 JPMorgan India Equity Fund 3,426.51Financial Services

Mahindra and Mahindra April 1, 2008 - July 31, 2008 JPMorgan India Smaller 698.41Financial Services Companies Fund

Subscription by schemes (excluding secondary marketpurchases) in the issues lead managed by the associatecompany:

Name of issuer Instrument Name of scheme Amount Rs. lakhs

Reliance Power Limited Equity shares JPMISCF 242.82

Reliance Power Limited Equity shares JPMIEF 607.05

The Sponsor had settled the Trust by entrusting the sum ofRs 1,00,000/- (rupees one lakh only) to the Trustee as the initialcontribution towards the corpus of the Mutual Fund.

Any investments by the Sponsor, the Trustee and their associatesor affiliates in the Scheme or any transactions by such entities withthe Fund would be in accordance with the Regulations.

The AMC may, from time to time, however, for purposes ofproviding certain services, utilise the services of the Sponsor orother associate companies or affiliates, established or to beestablished at a later date, that are in a position to provide therequisite services to the AMC. The Fund / AMC shall conduct itsbusiness with the aforesaid companies (including their employeesor relatives) on commercial terms and on an arms-length basis andat the then prevailing market prices to the extent permitted underthe Regulations after an evaluation of the competitiveness of thepricing offered by the associate companies and services to beprovided by them.

The AMC, on behalf of the Mutual Fund, will in compliance withits policy for investing in Group companies, before investing in thesecurities of such companies, evaluate such investments includingcompetitiveness of the pricing offered by the associate companiesand services to be provided by them, the criteria for the evaluationbeing the same as is applied to other similar investments madeunder by a scheme. All such investments shall be made inaccordance with Regulations.

Omnibus clauseSubject to the Regulations permitting:

If an investor does not fulfil any anti money launderingrequirements, or if the AMC believes that the transaction issuspicious in nature as regards money laundering, the AMC reservesthe right to reject the application and/or inform the regulatoryauthorities.

Besides the AMC, the Trustee or the Sponsor may also absorbexpenditures in addition to the limits laid down under Regulation52 of the Regulations.

Further, any amendment / clarification and guidelines including inthe form of notes or circulars issued from time to time by SEBI forthe operation and management of the Mutual Fund shall beapplicable.

The AMC confirms that there are no deviations from the Regulationsand no subjective interpretations have been applied to theprovisions of the Regulations.

Documents Available for Inspection

The following documents will be available for inspection at theoffice of the Mutual Fund Kalpataru Synergy, 3rd Floor, West Wing,Santacruz - East, Mumbai - 400 055 during business hours on anyday (excluding Saturdays, Sundays and public holidays):n Memorandum and Articles of Association of the AMCn Investment Management Agreementn Trust Deed and amendments thereto, if anyn Mutual Fund Registration Certificaten Agreement between the Mutual Fund and the Custodiann Agreement with the Registrar and Share Transfer Agentn Consent of Auditors to act in the said capacityn Consent of Legal Advisors to act in the said capacityn Securities and Exchange Board of India (Mutual Funds)

Regulations, 1996 and amendments from time to time thereton Indian Trusts Act, 1882.

Investor Grievances Redressal Mechanism

Investor complaints till July 31, 2008:

Period Complaints Complaints ComplaintsReceived Redressed Pending

June 14, 2007 – 4347 4347 NilMarch 31, 2008

April 1, 2008 – 343 343 NilJuly 31, 2008

The investor complaints received by the Mutual Fund are redressedby the investor relations officer of the AMC and the Registrar. Thecompliance officer regularly reviews the redressal of complaintsfor assessing the quality and timeliness of the redressal.

Notwithstanding anything contained in this Statement ofAdditional Information, the provisions of the SEBI (MutualFunds) Regulations, 1996 and the guidelines thereunder shallbe applicable.

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INVESTOR SERVICE CENTRES

JPMorgan Asset Management India Private Limited :Ahmedabad : 302, Megha House, Near Law Garden, Mithakhali Six Road, Navrangpura, Ahmedabad - 380 006. Bengaluru : 501,5th Floor, Prestige Centre Point, 7, Cunningham Road, Bengaluru - 560 052. Chennai : T V Loganathan Towers, 2nd Floor, No. 95,V. M. Street, R.K. Salai, Mylapore, Chennai - 600 004. Kolkata : 22 Camac Street, Block B, 5th Floor, Kolkata-700016. Mumbai : KalpataruSynergy, 3rd Floor, West Wing, Santacruz - East, Mumbai - 400 055. Delhi : Shangri-la Hotel, Business Suite-507, 19, Ashoka Road,Connaught Place, New Delhi-110 001. Pune : Office No. 301, Nandadeep, Above Odyssey Shop, F.C. Rd., Shivajinagar, Pune-411 005.

Deutsche Investor Services Private Limited : Investor Service Centres : The Registrar will be the official point of acceptance forelectronic transactions received from specified banks, financial institutions, distribution channels, etc (mobilised on behalf of their clients)with whom the AMC has entered / may enter into specific arrangements for purchase / sale / switch of Units.Agra : Unit No.13/A, 1st Floor, Kailash Tower, Block No. E 16/8, Sanjay Place, Agra - 282 002. Ahmedabad : M-Square Building, FirstFloor, Swastik Char Rasta, B/H City Centre, Opp. Om Complex, Off C.G. Road, Ahmedabad - 380 009. Ajmer : Shop No.25,K. C. Complex, Opposite Subhash Udhyan Hospital Road, Ajmer - 305 001. Amravati : Shop No. 5, 1st Floor, Gulshan Towers, JaistambTower, Near Pancsheel Theatre, Amravati - 444 601. Aurangabad : Shop No. 4, Alakhnanda Complex, Adalat Road, Near Baba PetrolPump, Aurangabad - 431 005. Bangalore : 104, Prestige Meridiann - 1, No. -29, M. G. Road, Bangalore - 560 001. Bareilly : 320, AkashFloors, City Station Road, Civil Line, Bareilly - 243 001. Bhavnagar : Sterling Point, 2nd Floor (220-221), Waghawadi Road, Bhavnagar -364 002. Bhilai : Shyam Shakuntala Complex", 209, Ground Floor, 2/4 Nehru Parisar, Near Nehru Nagar Rail Crossing, Bhilai - 490 022.Bhubaneswar : Metro House, Shop No. 5, A 410, Vanivihar, Bhubaneshwar - 751 004. Calicut : C 14, C15, 2nd Floor, Sky TowerShopping Mall, Municipal Corporation Door No. 5/3283, Situated at Bank Road Junction, Kozhikode, Calicut - 673 001.Chandigarh : SCO 154-155, Sector 17 C, 2nd Floor, Deepak Tower, Chandigarh - 160 017. Chennai : No. 141, Old No. 193, 1st Floor,Pasla Foreign Exchange Building, Next To Tata Motors, Anna Salai, Chennai - 600 002. Cochin : 3rd Floor, B - Block , BAB Towers, Atlantis,M. G. Road, Cochin - 682 015. Coimbatore : No. 424 - E, 2nd Floor, Red Rose Towers, R. S. Puram, Coimbatore - 641 002. Cuttack :C/o Handloom House, 1st Floor, Badambadi Link Road, Brajraj, Opposite LIC Colony, Cuttack - 753 012. Dehradun : Shop No. 25, GroundFloor, Radha Palace Shopping Complex, 78 Rajpur Road, Dehradun - 248 001. Durgapur : 3rd Floor, City Plaza II, Near City Centre BusStand, Durgapur - 713 216. Erode : Property No. 859, NSTV Complex, Brough Road, Shivranjan Hotel, 1st Floor, Erode - 638 001. Goa(Panjim) : F-1 &F-2, Alfaran Plaza, 1st Floor, M. G. Road, Panjim, Goa - 403 001. Gorakhpur : Room No. 12, First Floor, Mangalam Tower,13 A, Civil Lines,Golghar, Gorakhpur - 273 001. Guntur : 2nd Floor, Aditya Complex, Door No. 6-19-35, 13th Main Road, Arundalpet, Guntur - 522 002.Gurgaon : Ground Floor, Vatika Atrium, Block B, Sector 53, Gurgaon - 122 001. Guwahati : Ganapati Enclave, Ulubari, G S Road, GroundFloor, Guwahati - 781 007. Gwalior : Ganapati Plaza, Plot No. 40, Citi Center, Gwalior - 474 011. Hubli : Shop No. G-2, Ground Floor,Revankar Comfort, Door No. 450/1A, Deshpande Nagar, Hubli - 580 030. Hyderabad : 6-3 - 1093/UG - 3 (A&B), Vintage Boulvward, RajBhavan Road, Somajiguda, Hyderabad - 500 082. Indore : B-3, Aru Plaza, 582, M.G. Road, Opp. Hukumchand Ghantaghar,Indore - 452 001. Jabalpur : 55, Mezzanine Floor, Chandrika Towers, Model Road, Near Shastri Bridge, Napier Town, Jabalpur - 482 002.Jaipur : Plot No. 15, No. 605, 6th Floor, Green House, Ashok Marg, C-Scheme, Jaipur - 302 001. Jamnagar : 106, Madhav Complex,P. N. Marg, Opp. D.K.V. College, Jamnagar 361 004. Jamshedpur : Bharat Business Center, Ram Mandir Area, Beside Mithiala Motors,Bistupur, Jamshedpur - 831 001. Jodhpur : Office No. 209, 2nd Floor, Aadeshwar Tower, Chopasni Road, Jodhpur - 342 001Kanpur : Office No. 216 & 217, 2nd Floor, Kan Chambers, 14/113. Civil Lines, Kanpur - 208 001. Kolhapur : 517/2, Shop No. 84,Gemstone Rai Bahadur Vichare Complex, New Sahupuri, Near S T Stand, Kolhapur - 416 001. Kolkata : Lords Building, 7/1 Lord SinhaRoad, Block No. GF/D, Ground Floor, Kolkata - 700 071. Lucknow : SkyHi Chambers, F-1, 1st Floor, Park Road, Lucknow - 226 001.Ludhiana : Fortune Chambers, S.C.O, 16-17, 4th Floor, Feroze Ghandi Market, Opp. Stock Exchange, Ludhiana - 141 001.Madurai : Plot No. 10, Vishnu Plaza, Near PTR Bridge, 2nd Floor, Shop No. 16, Ground Floor, Reliance Money, Vaigai Colony, 80 Ft. Road,Anna Nagar, Madurai - 625 020. Mangalore : 2nd Floor “Manasa Towers”, M. G. Road, Kodailbail, Mangalore - 575 003. Moradabad :Sai Sadan Complex, Shop No. 7, Ground Floor, Jail Road, Near Head P.O., Moradabad - 244 001. Mumbai : Prospect Chambers, G 02 B,Shop No. 315, Opp.Thomas Cook / HSBC Bank, D.N. Road, Fort, Mumbai - 400 001. Mysore : Shop No. 7, Mythri Arcade No. 2766, NewKantharaja URS Road, Saraswathi Puram, Mysore - 570 009. Nagpur : Shop No.10, Prathiba Sankul, North Ambazari Road, Dharam Peth,Next to Alankar Theatre, Nagpur - 440 010. Nasik : Suyojit Chambers, G-2, Trimbak Naka, Near New CBS, Nasik - 422 002. Nellore : ShopNo. 1, Ravula Arcade Shopping Complex, GNT Road, Nellore - 524 001. New Delhi : 910 & 911, 9th Floor, Narayan Manzil, BarakambaRoad, New Delhi - 110 001. Panipat : N K Towers, 2nd Floor, Near IB College, G. T. Road, Panipat -132 103. Patiala : 2nd Floor, 29, NewLeela Bhawan, Patiala. Patna : 209, 2nd Floor, Hari Niwas Complex, Dak Bungalow Road, Patna - 800 001. Pune : Shop No.7, GroundFloor, Jalan Corner, N C Kelkar Marg, C.T.S. No. 538 & 539, Narayan Peth, Pune - 411 030. Rajkot : L - 1 Puja Commercial Complex,Harihar Chowk, Near GPO Sadar Bazar, Panchnath Plot, Rajkot - 360 001. Ranchi : AC Market, Shop No. 22, Ground Floor, Gel ChurchComplex, Main Road, Ranchi - 834 001. Rourkela : Triveni Complex, 2nd Floor, Madhusudan Marg, Opp. Hotel Sukh Sagar,Rourkela - 769 001. Salem : Divya Towers, VIIA, 2nd Floor, Next to Bank of Maharashtra, 4th Main, Shevapet, Salem - 636 001.Sambalpur : Quality Mansion, Ground Floor, Main Road, Below SBI Evening Branch, Nayapara, Gole Bazar, Sambalpur - 768 001.Siliguri : Gitanjali Complex, Co-operation Bank, Gr. Floor, Sevoke Road, Siliguri - 734 001. Surat : Shop No. G -12, Ground Floor, JollyPlaza, Opp. Athwa Gate Police Station, Athwa Gate, Surat - 395 001. Trichy : Aravindh Plaza, 1st Floor, No.-2, Fort Station Road,Trichy - 620 002. Trivandrum : TC 26/15 (16) 2nd Floor, Anna's Aracade, Spencer's Junction, Trivandrum - 695 001. Vadodara : No. 301,3rd Floor, Gokulesh - 2, Opposite Ivory Terrace, Sampatrao Colony, R C Dutt Road, Alkapuri, Vadodara - 390 005. Valsad : 303 K.B.Mall,Hallar Road, Valsad - 396 001. Varanasi : Kuber Chambers, 3rd Floor, Rath Yatra Crossing, B C Towers, Varanasi - 221 010.Vijayawada : Door No. 39-1-88, Saptagiri Complex, 1st Floor, M. G. Road, Labbipet, Vijayawada - 520 010. Vizag : Shop No. 2, GroundFloor, 2nd Line Redname Regency, Dwarka Nagar, Vizag - 530 001. Warangal : Green Square Plaza, No. 5-9-116,117,121,122, OppositePublic Garden, Hanamkonda, Warangal Division, Warangal - 506 001.

The above list is subject to change from time to time. The investors are advised to contact the Investor Service Centre / office of the AMCfor exact location and contact numbers of the Collecting Bankers / AMC offices / ISCs.

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