Main Project 2

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Summer Internship Project report

ON

Study of Mutual Fund Schemes at

THE DEVI!"#M T#"! V$#P#%I V$#V#S#I SE%VI&E

&O'OPE%#TIVE SO&IET$ "TD(

Su)mitted in partial fulfillment of re*uirement of +achelor of

+usiness #dministration ,+(+(#- .eneral

++# / Semester + ,Mornin0-

+atch 1231'123/

Su)mitted to4 Su)mitted )y4

Dr( Niti Sa5ena #desh %amesh

#ssociate Professor 26237323831

9#.#NN#TH INTE%N#TION#" M#N#.EMENT S&HOO"

#"#9I

1



DE&"#%#TION

I hereby declare that the present study of MUTUAL FUND SCHEMES of THE

DEVIULAM TALU V!A"A#I V!AVASAI SE#VICE C$%$"E#ATIVE S$CIET!

LTD& Is based on 'y or()(nal research *or+ for the fulf(ll'ent of the cont(nuous

e,aluat(on of the assess'ent of t*o 'onths su''er (nternsh(p pro)ra'-

.ACHEL$# $F .USINESS ADMINIST#ATI$N Class of /01/% /012 &The report

has been done by 'e under the )u(dance of Mr& Madhu+u'ar 3Internal )u(de4 And Dr& N(t( Sa5ena 3Faculty 6u(de4 the research presented (n th(s study has not

been sub'(tted (n full or part (n th(s or any other un(,ers(ty of the a*ard of any

de)ree or d(plo'a&

"lace7 erala

Date7

2



#&NO:"ED.MENT

My S(ncere Than+s and My Deep Sense of 6rat(tude to the Author(t(es of The

De,(+ula' Talu+ Vyapar( Vya,asa( Co%operat(,e Soc(ety Ltd& for )(,(n) 'e th(s

$pportun(ty to Study the F(r'8s Mutual Fund Sche'e and carry out th(s "ro9ect

at The De,(+ula' Talu+ Vyapar( Vya,asa( Co%operat(,e Soc(ety Ltd& I% 21:&

I than+ 'y pro9ect )u(de Mr& Madhu u'ar and all the staff at The De,(+ula'

Talu+ Vyapar( Vya,asa( Co%operat(,e Soc(ety Ltd& for the(r constant support and

)u(dance (n carry(n) out 'y pro9ect successfully&

I *ould l(+e to e5press 'y s(ncere than+s to Dr( Niti Sa5ena for her helpful hand

(n the co'plet(on of 'y pro9ect&

Adesh #a'esh

Date%

3



4



&ONTENTS

&H#PTE%NO(

DES&%IPTIONS P#.E NO(

E;E&!TIVE S!MM#%$ <

I

INT%OD!&TION 32

O+9E&TIVES 3=

"ITE%#T!%E %EVIE: 3<

II&OMP#N$ P%OFI"E =1

%ESE#%&H METHODO"O.$ <1

IIID#T# #N#"$SIS #ND

INTE%P%ET#TIONS</

FINDIN.S S!..ESTIONS #ND

&ON&"!SION8>

+I+"IO.%#PH$ >6

5



"ist of ta)les

S( no "ist of ta)les Pa0e no(

Table 1&1Mutual fund

sche'es/:

Table /&1#ece(pts and

pay'ent state'ent;<

Table /&/ .alance sheet 2=

"ist of fi0ures

S( no "ist of fi0ures Pa0e no(

F() 1&1#(s+ h(erarchy of

'utual funds/>

6



E;E&!TIVE S!MM#%$

De,(+ula' Talu+ Vyapar( Vya,as( Ser,(ce Co%operat(,e Soc(ety Ltd& No I%21: Ad('aly ha,e been re)(stered on =?0>?1<<: and co''enced funct(on(n)

on /?11?1<<: *(th the area of operat(on cons(st(n) of De,(+ula' Talu+ *(th

the follo*(n) ob9ect(,e&

7



3a4 To encoura)e thr(ft- self help and co%operat(,e

a'on) 'e'bers3b4 To accept depos(ts fro' 'e'bers to be ut(l(@ed

for loans to 'e'bers for .us(ness De,elop'ent&

3c4 Start(n) Mutual Fund Sche'es to 'e'bers&3d4 The do(n) of such other bus(ness and th(n)s for

the benef(t of 'e'bers

Share &apital

Author(@ed Share Cap(tal of the Soc(ety shall be 20-00-000 of *h(ch 20&000

A%Class shares of IN# 100 each 2-00-000 of *h(ch /0-000 .%Class Shares

of IN# /2 each and 2-00-000 of *h(ch 200 C%Class shares of IN# 1-000

each& The total share cap(tal (s B0-00-000&

The pa(d up share cap(tal of the soc(ety (s IN# ;B-;1->>2 of *h(ch IN#

;2-00-000 for A class shares a'on) ;2000 shares and IN# 1-;1->>2 for .

class shares a'on) 2B>1 shares& A class 'e'bersh(p (s allo*ed only for

'erchants& . class 'e'bersh(p (s allotted for those *ho 9o(n (n Mutual Fund

Sche'e- 6old Loan and ,ar(ous types of Depos(ts&

#cceptance of Deposits from mem)ers

In order to (ncrease the hab(t of thr(ft and sa,(n)s the soc(ety (ntroduced

'any depos(t sche'es for (ts 'e'bers and non 'e'bers& Sa,(n)s .an+

Account- F(5ed Depos(ts- "()'y Depos(ts and Ho'e Sa,(n)s Depos(ts etc&

are the 'a9or depos(t sche'es& The depos(t pos(t(on of the soc(ety as

on=1?0=?/01; (s IN# 1B-=<-=>-=<2&;0?%

Mana0ement and staff

The 'ana)e'ent affa(rs of the soc(ety ,ested (n the .oard of D(rectors& $ur

D(rector board cons(sts of 11 'e'bers 3Se,en 6eneral- one SC?ST- three

o'an4& The tenure of the co''(ttee (s 2 years& The present co''(ttee

too+ char)e on 1=?0<?/01=& There are t*enty f(,e staffs *or+(n) (n the

8



soc(ety- of *h(ch 10 are per'anent staff- 1; co''(ss(on a)ents and 1 da(ly

*a)es&

"oan Schemes

Soc(ety "ro,(de loan to 'e'bers (n d(fferent sche'es l(+e .us(ness

De,elop'ent Loan 3.DLS4- Short Ter' Loan 3STL4- "ersonal Loan3 "LS4

and 6old Loan 36L4& Soc(ety also pro,(des Secured Loan 3SL4 and Mutual

Fund Sche'e Loans 3MFSL4 to (ts depos(tors and 'e'bers& #epay'ent of

.DLS loans are throu)h da(ly collect(on& The loan outstand(n) of the soc(ety

as on =1?0=?/01; (s IN# 1<-=<-0:-BB0?%

Mutual Fund Schemes

$ne of the ('portant sche'es of the soc(ety (s Mutual Fund Sche'es of

*h(ch there are <0 nu'bers of MFS and the sala for that (s IN#

1-10-00-000?%

#udit

Aud(t of accounts of the soc(ety (s co'pleted up to /01/%1=& e had

d(str(buted /2 d(,(dends to 'e'bers for the last 1B years&

+ranch

Soc(ety has started an e5tens(on counter at Munnar on 1B?0>?/00B *h(ch (s

*or+(n) s'oothly IN# 1-0;-:;-/=;?% depos(ts fro' d(fferent sche'es and

loans outstand(n) as on =1?0=?/01; (s IN# /-;;->=-:;>?% of *h(ch o,erdue (sn(l& The branch (s runn(n) 2 nu'bers of Mutual Fund Sche'es ha,(n) sala of

2 La+hs& The e5tens(on counter (s enhanced as branch (n /010 'arch&

Financial position of the society

9



The soc(ety has a ,ery sound f(nanc(al pos(t(on to 'eet (ts lend(n) needs IN#

/-//-<<-2;=?% (n,ested (n D(str(ct Co%operat(,e .an+ 3IDC.4 as flu(d resource

and also sanct(oned an o,erdraft fac(l(ty / core fro' D(str(ct Co%operat(,e

.an+&

It (s re'ar+able that the soc(ety funct(ons on (ts o*n funds on )ood prof(t

fro' the start(n) (tself& The soc(ety renders )ood ser,(ces to (ts 'e'bers by

'a+(n) t('ely f(nanc(n) ass(stance to (ts 'e'bers for the(r ,ar(ous needs&

Moreo,er the soc(ety protects the econo'y of (ts 'e'bers by a,o(d(n) the(r

approach *(th 'oney lenders and pa*n bro+ers for the(r f(nanc(al

reu(re'ents and sa,es the(r f(nanc(al pos(t(on&

&H#PTE% 3INT%OD!&TION TO THE TOPI&

10



A Mutual Fund (s a trust that pools the sa,(n)s of a nu'ber of (n,estors

*ho share a co''on f(nanc(al )oal& The 'oney thus collected (s then

(n,ested (n cap(tal 'ar+et (nstru'ents share as shares- debentures and

other secur(t(es& The (nco'e earned throu)h those (n,est'ents and the

cap(tal apprec(at(ons real(@ed are shared by (ts un(t holders (n proport(ons

to the nu'ber of un(ts o*ned by the'& Thus a Mutual Fund (s the 'ost

su(table (n,est'ent for the co''on 'an as (t offers an opportun(ty to

(n,est (n a d(,ers(f(ed- profess(onally 'ana)ed bas+et of secur(t(es at a

relat(,ely lo* cost&

The pro9ect (dea (s to pro9ect 'utual funds as the better a,enue for

(n,est'ent& Mutual fund (s product(,e pac+a)e for a lay%(n,estor *(th

l('(ted f(nances& Mutual fund (s a ,ery old pract(ce (n U&S& and (t has

'ade a recent entry (nto Ind(a& Co''on 'an (n Ind(a st(ll f(nds .an+8 as

a safe door for (n,est'ent& Th(s sho*s that 'utual funds ha,e not )a(ned

a stron) foot%hold (n h(s l(fe&

The pro9ect creates an a*areness that the 'utual fund (s *orthy

(n,est'ent pract(ce& The ,ar(ous sche'es of 'utual funds pro,(de the

(n,estor *(th a *(de ran)e of (n,est'ent opt(ons accord(n) to h(s r(s+%

bear(n) capac(t(es and (nterest& .es(des- they also )(,e a handy return to

the (n,estor& The pro9ect analyses ,ar(ous sche'es of 'utual fund by

ta+(n) d(fferent 'utual funds (n Ind(a are also cons(dered&

11



O+9E&TIVES

NEED OF THE ST!D$

The study bas(cally 'ade to educate the (n,estors about Mutual Funds&

Analy@e the ,ar(ous sche'es to h()hl()ht the r(s+ and return of d(,ers(ty

of (n,est'ent that 'utual funds offer& Thus- throu)h the study one *ould

understand ho* a co''on 'an could fru(tfully con,ert a p(ttance (nto

)reat penny by *(sely (n,est(n) (nto the r()ht sche'e accord(n) to h(s

r(s+% ta+(n) ab(l(t(es&

A s'all (n,estor (s the one *ho (s able to correctly plan G dec(de (n *h(ch

prof(table G safe (nstru'ent to (n,est& To loc+ up one8s hard earned

'oney (n a sa,(n)s ban+8s account (s not enou)h to counter the 'onster

of (nflat(on& Us(n) s('ple concepts of d(,ers(f(cat(on- po*er of co'pound

12



(nterest- stable returns G l('(ted e5posure to eu(ty (n,est'ent- one can

'a5('(@e h(s returns on (n,est'ents G 'ult(ply one8s sa,(n)s&

In,est'ent (s a ser(ous propos(t(on one has to loo+ (nto ,ar(ous factors

before dec(d(n) on the (nstru'ents (n *h(ch to (n,est& To sa,e (s notenou)h& $ne 'ust (n,est *(sely G )et 'a5('u' returns& $ne 'ust plan

(n,est'ent (n such a *ay that h(s (n,est'ent ob9ect(,es are sat(sf(ed& A

sound (n,est'ent (s one *h(ch )(,es the (n,estor reasonable returns *(th

a proper prof(table 'ana)e'ent

Th(s report )(,es the deta(ls about ,ar(ous (n,est'ent ob9ect(,es des(red

by an (n,estor- deta(ls about the concept G *or+(n) of 'utual fund&

O+9E&TIVES OF THE ST!D$

To understand the concept of Mutual Funds&

To study the d(fferent Sectoral Mutual Funds (n Ind(a&

To analyse the perfor'ance of d(fferent sectoral 'utual funds&

To (dent(fy the best Sectoral Mutual Funds to (n,est (n Ind(a&

To su))est the best 'utual funds for (n,estors&

S&OPE OF THE ST!D$

No* a days- there (s a lot of scope for the 'utual funds& The F(nanc(al

'ana)ers ha,e to dec(de *hether to (n,est (n the Shares- bonds-

debentures- real estate- )old and other Co''od(t(es to )et the 'a5('u'

benef(ts for funds& The f(nanc(al 'ana)ers should also reduce the r(s+

13



fro' the In,est'ents& The scope of the study (s conf(r'ed to the sectoral

funds a,a(lable (n Ind(an 'utual funds&

"ITE%#T!%E %EVIE:

14



Mutual Funds4 #n o?er?ie@

A Mutual Fund (s a trust that pools the sa,(n)s of a nu'ber of (n,estors

*ho share a co''on f(nanc(al )oal& The 'oney thus collected (s (n,ested

by the fund 'ana)er (n d(fferent types of secur(t(es depend(n) upon the

ob9ect(,e of the sche'e& These could ran)e fro' shares to debentures to

'oney 'ar+et (nstru'ents& The (nco'e earnedthrou)h these (n,est'ents and the cap(tal apprec(at(ons real(@ed by the

sche'e are shared by (ts un(t holders (n proport(on to the nu'ber of un(ts

o*ned by the' 3pro rata4& Thus a Mutual Fund (s the 'ost su(table

(n,est'ent for the co''on 'an as (t offers an opportun(ty to (n,est (n a

d(,ers(f(ed- profess(onally 'ana)ed portfol(o at a relat(,ely lo* cost&

Anybody *(th an (n,est(ble surplus of as l(ttle as a fe* thousandrupees can (n,est (n Mutual Funds& Each Mutual Fund sche'e has a

def(ned (n,est'ent ob9ect(,e and strate)y& A 'utual fund (s the (deal (n,est'ent ,eh(cle for today8s co'ple5 and

'odern f(nanc(al scenar(o& Mar+ets for eu(ty shares- bonds and other

f(5ed (nco'e (nstru'ents- real estate- der(,at(,es and other assets ha,e

beco'e 'ature and (nfor'at(on dr(,en& "r(ce chan)es (n these assets

are dr(,en by )lobal e,ents occurr(n) (n fara*ay places& A typ(cal

(nd(,(dual (s unl(+ely to ha,e the +no*led)e- s+(lls- (ncl(nat(on and t('e to

+eep trac+ of e,ents- understand the(r ('pl(cat(ons and act speed(ly& An

(nd(,(dual also f(nds (t d(ff(cult to +eep trac+ of o*nersh(p of h(s assets-

(n,est'ents- bro+era)e dues and ban+ transact(ons etc&

A 'utual fund (s the ans*er to all these s(tuat(ons& It appo(nts

profess(onally ual(f(ed and e5per(enced staff that 'ana)es each of these

funct(ons on a full t('e bas(s& The lar)e pool of 'oney collected (n the

fund allo*s (t to h(re such staff at a ,ery lo* cost to each (n,estor& In

effect- the 'utual fund ,eh(cle e5plo(ts econo'(es of scale (n all three

areas % research- (n,est'ents and transact(on process(n)& h(le the

15



concept of (nd(,(duals co'(n) to)ether to (n,est 'oney collect(,ely (s not

ne*- the 'utual fund (n (ts present for' (s a /0th century pheno'enon&In fact- 'utual funds )a(ned popular(ty only after the Second orld ar&

6lobally- there are thousands of f(r's offer(n) tens of thousands of

'utual funds *(th d(fferent (n,est'ent ob9ect(,es& Today- 'utual funds

collect(,ely 'ana)e al'ost as 'uch as or 'ore 'oney as co'pared to

ban+s&

A draft offer docu'ent (s to be prepared at the t('e of launch(n) the fund&

Typ(cally- (t pre spec(f(es the (n,est'ent ob9ect(,es of the fund- the r(s+

assoc(ated- the costs (n,ol,ed (n the process and the broad rules for

entry (nto and e5(t fro' the fund and other areas of operat(on& In Ind(a- as

(n 'ost countr(es- these sponsors need appro,al fro' a re)ulator- SE.I

3Secur(t(es e5chan)e .oard of Ind(a4 (n our case& SE.I loo+s attrac+ records of the sponsor and (ts f(nanc(al stren)th (n )rant(n) appro,al

to the fund for co''enc(n) operat(ons& A sponsor then h(res an asset 'ana)e'ent co'pany to (n,est the funds

accord(n) to the (n,est'ent ob9ect(,e& It also h(res another ent(ty to be

the custod(an of the assets of the fund and perhaps a th(rd one to handle

re)(stry *or+ for the un(t holders 3subscr(bers4 of the fund&

In the Ind(an conte5t- the sponsors pro'ote the Asset Mana)e'entCo'pany also- (n *h(ch (t holds a 'a9or(ty sta+e& In 'any cases a

sponsor can hold a 100 sta+e (n the Asset Mana)e'ent Co'pany

3AMC4& E&)& .(rla 6lobal F(nance (s the sponsor of the .(rla Sun L(fe

Asset Mana)e'ent Co'pany Ltd&- *h(ch has floated d(fferent 'utualfunds sche'es and also acts as an asset 'ana)er for the funds collected

under the sche'es

H(story of Mutual Fund (n Ind(a7The 'utual fund (ndustry (n Ind(a started (n 1<B= *(th the for'at(on of

Un(t Trust of Ind(a- at the (n(t(at(,e of the 6o,ern'ent of Ind(a and

#eser,e .an+& The h(story of 'utual funds (n Ind(a can be broadly

d(,(ded (nto four d(st(nct phases

16



F(rst "hase 1<B;%:>Un(t Trust of Ind(a 3UTI4 *as establ(shed on 1<B= by an Act of "arl(a'ent&

It *as set up by the #eser,e .an+ of Ind(a and funct(oned under the

#e)ulatory and ad'(n(strat(,e control of the #eser,e .an+ of Ind(a& In1<>: UTI *as de%l(n+ed fro' the #.I and the Industr(al De,elop'ent

.an+ of Ind(a 3ID.I4 too+ o,er the re)ulatory and ad'(n(strat(,e control (n

place of #.I& The f(rst sche'e launched by UTI *as Un(t Sche'e 1<B;&

At the end of 1<:: UTI had #s&B->00 crores of assets under 'ana)e'ent

Second "hase 1<:>%1<<= 3Entry of "ubl(c Sector Funds41<:> 'ar+ed the entry of non% UTI- publ(c sector 'utual funds set up by

publ(c sector ban+s and L(fe Insurance Corporat(on of Ind(a 3LIC4 and

6eneral Insurance Corporat(on of Ind(a 36IC4& S.I Mutual Fund *as the

f(rst non% UTI Mutual Fund establ(shed (n June 1<:> follo*ed by Canban+

Mutual Fund 3Dec :>4- "un9ab Nat(onal .an+ Mutual Fund 3Au) :<4-

Ind(an .an+ Mutual Fund 3No, :<4- .an+ of Ind(a 3Jun <04- .an+ of

.aroda Mutual Fund 3$ct </4& LIC establ(shed (ts 'utual fund (n June1<:< *h(le 6IC had set up (ts 'utual fund (n Dece'ber 1<<0&

At the end of 1<<=- the 'utual fund (ndustry had assets under

'ana)e'ent of #s&;>-00; crores&

Th(rd "hase 1<<=%/00= 3Entry of "r(,ate Sector Funds4(th the entry of pr(,ate sector funds (n 1<<=- a ne* era started (n the

Ind(an 'utual fund (ndustry- )(,(n) the Ind(an (n,estors a *(der cho(ce of

fund fa'(l(es& Also- 1<<= *as the year (n *h(ch the f(rst Mutual Fund

#e)ulat(ons ca'e (nto be(n)- under *h(ch all 'utual funds- e5cept UTI

*ere to be re)(stered and )o,erned& The erst*h(le othar( <"(oneer 3no*

'er)ed *(th Fran+l(n Te'pleton4 *as the f(rst pr(,ate sector 'utual fundre)(stered (n July 1<<=& The 1<<= SE.I 3Mutual Fund4 #e)ulat(ons *ere

subst(tuted by a 'ore co'prehens(,e and re,(sed Mutual Fund

#e)ulat(ons (n 1<<B& The (ndustry no* funct(ons under the SE.I 3Mutual

Fund4 #e)ulat(ons 1<<B& The nu'ber of 'utual fund houses *ent on

(ncreas(n)- *(th 'any fore()n 'utual funds sett(n) up funds (n Ind(a and

17



also the (ndustry has *(tnessed se,eral 'er)ers and acu(s(t(ons& As at

the end of January /00=- there *ere == 'utual funds *(th totalassets of #s& 1-/1-:02 crores& The Un(t Trust of Ind(a *(th #s&;;-2;1

crores of assets under 'ana)e'ent *as *ay ahead of other 'utual

funds&

Fourth "hase s(nce February /00=In February /00=- follo*(n) the repeal of the Un(t Trust of Ind(a Act 1<B=

UTI *as b(furcated (nto t*o separate ent(t(es& $ne (s the Spec(f(ed

Underta+(n) of the Un(t Trust of Ind(a *(th assets under 'ana)e'ent of

#s&/<-:=2 crores as at the end of January /00=- represent(n) broadly-

the assets of US B; sche'e- assured return and certa(n other sche'es&

The Spec(f(ed Underta+(n) of Un(t Trust of Ind(a- funct(on(n) under anad'(n(strator and under the rules fra'ed by 6o,ern'ent of Ind(a and

does not co'e under the pur,(e* of the Mutual Fund #e)ulat(ons&The second (s the UTI Mutual Fund Ltd- sponsored by S.I- "N.- .$.

and LIC& It (s re)(stered *(th SE.I and funct(ons under the Mutual Fund

#e)ulat(ons& (th the b(furcat(on of the erst*h(le UTI *h(ch had (n March

/000 'ore than #s&>B-000 crores of assets under 'ana)e'ent and *(th

the sett(n) up of a UTI Mutual Fund- confor'(n) to the SE.I Mutual Fund

#e)ulat(ons- and *(th recent 'er)ers ta+(n) place a'on) d(fferentpr(,ate sector funds- the 'utual fund (ndustry has entered (ts current

phase of consol(dat(on and )ro*th& As at the end of March- /00B- there

*ere /< funds&

Future Scenar(oThe asset base *(ll cont(nue to )ro* at an annual rate of about =0 to =2

o,er the ne5t fe* years as (n,estor8s sh(ft the(r assets fro' ban+s and

other trad(t(onal a,enues& So'e of the older publ(c and pr(,ate sector

players *(ll e(ther close shop or be ta+en o,er&

$ut of ten publ(c sector players f(,e *(ll sell out- close do*n or 'er)e

*(th stron)er players (n three to four years& In the pr(,ate sector th(s trend

has already Started *(th t*o 'er)ers and one ta+eo,er& Here too so'e

of the' *(ll do*n the(r shutters (n the near future to co'e&

18



.ut th(s does not 'ean there (s no roo' for other players& The 'ar+et *(ll

*(tness a flurry of ne* players enter(n) the arena& There *(ll be a lar)e

nu'ber of offers fro' ,ar(ous asset 'ana)e'ent co'pan(es (n the t('e

to co'e& So'e b() na'es l(+e F(del(ty- "r(nc(pal- $ld Mutual etc& are

loo+(n) at Ind(an 'ar+et ser(ously& $ne ('portant reason for (t (s that 'ost

'a9or players already ha,e presence here and hencethese b() na'es *ould hardly l(+e to )et left beh(nd&

The 'utual fund (ndustry (s a*a(t(n) the (ntroduct(on of der(,at(,es (n

Ind(a as th(s *ould enable (t to hed)e (ts r(s+ and th(s (n turn *ould be

reflected (n (ts Net Asset Value 3NAV4&

SE.I (s *or+(n) out the nor's for enabl(n) the e5(st(n) 'utual fund

sche'es to trade (n der(,at(,es& I'portantly- 'any 'ar+et players ha,e

called on the #e)ulator to (n(t(ate the process (''ed(ately- so that the

'utual funds can ('ple'ent the chan)es that are reu(red to trade (n

Der(,at(,es&

%ecent trends in mutual fund industry

The 'ost ('portant trend (n the 'utual fund (ndustry (s the a))ress(,ee5pans(on of the fore()n o*ned 'utual fund co'pan(es and the decl(ne

of the co'pan(es floated by nat(onal(@ed ban+s and s'aller pr(,ate sector players&

Many nat(onal(@ed ban+s )ot (nto the 'utual fund bus(ness (n the early

n(net(es and )ot off to a )ood start due to the stoc+ 'ar+et boo'

pre,a(l(n) then& These ban+s d(d not really understand the 'utual fund

bus(ness and they 9ust ,(e*ed (t as another +(nd of ban+(n) act(,(ty&

Fe* h(red spec(al(@ed staff and )enerally chose to transfer staff fro' the

parent or)an(@at(ons& The perfor'ance of 'ost of the sche'es floated by

these funds *as not )ood& So'e sche'es had offered )uaranteed

19



returns and the(r parent or)an(@at(ons had to ba(l out these AMCs by

pay(n) lar)e a'ounts of 'oney as the d(fference bet*eenthe )uaranteed and actual returns&

The ser,(ce le,els *ere also ,ery bad& Most of these AMCs ha,e not

been able to reta(n staff- float ne* sche'es etc& and (t (s doubtful

*hether- barr(n) a fe* e5cept(ons- they ha,e ser(ous plans of cont(nu(n)

the act(,(ty (n a 'a9or *ay& The e5per(ence of so'e of the AMCs floated by pr(,ate sector Ind(an co'pan(es *as also ,ery

s('(lar& They u(c+ly real(@ed that the AMC bus(ness (s a bus(ness- *h(ch

'a+es 'oney (n the lon) ter' and reu(res deep%poc+eted support (n the

(nter'ed(ate years& So'e ha,e sold out to fore()n o*ned co'pan(es-

so'e ha,e 'er)ed *(th others and there (s )eneral restructur(n) )o(n)on&

Types of Mutual Funds

Mutual fund sche'es 'ay be class(f(ed on the bas(s of (ts structure and

(ts (n,est'ent ob9ect(,e&

.y Structure7

$pen%ended Funds An open%end fund (s one that (s a,a(lable for subscr(pt(on all throu)h the

year& These do not ha,e a f(5ed 'atur(ty& In,estors can con,en(ently buy

and sell un(ts at Net Asset Value 3KNAVK4 related pr(ces& The +ey feature

of open%end sche'es (s l(u(d(ty&

Closed%ended Funds A closed%end fund has a st(pulated 'atur(ty per(od *h(ch )enerally

ran)(n) fro' = to 12 years& The fund (s open for subscr(pt(on only dur(n)

a spec(f(ed per(od& In,estors can (n,est (n the sche'e at the t('e of the

(n(t(al publ(c (ssue and thereafter they can buy or sell the un(ts of the

sche'e on the stoc+ e5chan)es *here they are l(sted& In order to pro,(de

an e5(t route to the (n,estors- so'e close%ended funds )(,e a opt(on of

sell(n) bac+ the un(ts to the Mutual Fund throu)h per(od(c repurchase at

20



NAV related pr(ces& SE.I #e)ulat(ons st(pulate that at least one of the

t*o e5(t routes (s pro,(ded to the (n,estor&

Inter,al FundsInter,al funds co'b(ne the features of open%ended and close%ended

sche'es& They are open for sale or rede'pt(on dur(n) pre%deter'(ned

(nter,als at NAV related pr(ces&

+y In?estment O)jecti?e4'

.ro@th Funds

The a(' of )ro*th funds (s to pro,(de cap(tal apprec(at(on o,er the 'ed(u' to

lon)%ter'& Such sche'es nor'ally (n,est a 'a9or(ty of the(r corpus (n eu(t(es& It

has been pro,en that returns fro' stoc+s- ha,e outperfor'ed 'ost other +(nd of

(n,est'ents held o,er the lon) ter'& 6ro*th sche'es are (deal for (n,estors

ha,(n) a lon)%ter' outloo+ see+(n) )ro*th o,er a per(od of t('e&

Income Funds

The a(' of (nco'e funds (s to pro,(de re)ular and steady (nco'e to (n,estors&

Such sche'es )enerally (n,est (n f(5ed (nco'e secur(t(es such as bonds-

corporate debentures and 6o,ern'ent secur(t(es& Inco'e Funds are (deal for

cap(tal stab(l(ty and re)ular (nco'e&

+alanced Funds

The a(' of balanced funds (s to pro,(de both )ro*th and re)ular (nco'e& Such

sche'es per(od(cally d(str(bute a part of the(r earn(n) and (n,est both (n eu(t(es

21



and f(5ed (nco'e secur(t(es (n the proport(on (nd(cated (n the(r offer docu'ents& In

a r(s(n) stoc+ 'ar+et- the NAV of these sche'es 'ay not nor'ally +eep pace- or

fall eually *hen the 'ar+et falls& These are (deal for (n,estors loo+(n) for a

co'b(nat(on of (nco'e and 'oderate )ro*th&

Money MarAet Funds

The a(' of 'oney 'ar+et funds (s to pro,(de easy l(u(d(ty- preser,at(on of

cap(tal and 'oderate (nco'e& These sche'es )enerally (n,est (n safer short%

ter' (nstru'ents such as treasury b(lls- cert(f(cates of depos(t- co''erc(al paper

and (nter%ban+ call 'oney& #eturns on these sche'es 'ay fluctuate depend(n)

upon the (nterest rates pre,a(l(n) (n the 'ar+et& These are (deal for Corporate

and (nd(,(dual (n,estors as a 'eans to par+ the(r surplus funds for short per(od&

"oad Funds

A Load Fund (s one that char)es a co''(ss(on for entry or e5(t& That (s- each

t('e you buy or sell un(ts (n the fund- a co''(ss(on *(ll be payable& Typ(cally

entry and e5(t loads ran)e fro' 1 to /& It could be *orth pay(n) the load- (f

the fund has a )ood perfor'ance h(story&

No'"oad Funds

A No%Load Fund (s one that does not char)e a co''(ss(on for entry or e5(t& That

(s- no co''(ss(on (s payable on purchase or sale of un(ts (n the fund& The

ad,anta)e of a no load fund (s that the ent(re corpus (s put to *or+&

22



Other Schemes4'

Ta5 Sa?in0 Schemes

These sche'es offer ta5 rebates to the (n,estors under spec(f(c pro,(s(ons of the

Ind(an Inco'e Ta5 la*s as the 6o,ern'ent offers ta5 (ncent(,es for (n,est'ent (n

spec(f(ed a,enues& In,est'ents 'ade (n Eu(ty L(n+ed Sa,(n)s Sche'es 3ELSS4

and "ens(on Sche'es are allo*ed as deduct(on u?s :: of the Inco'e Ta5 Act- 1<B1&

The Act also pro,(des opportun(t(es to (n,estors to sa,e cap(tal )a(ns u?s 2;EA and

2;E. by (n,est(n) (n Mutual Funds- pro,(ded the cap(tal asset has been sold pr(or to

Apr(l 1- /000 and the a'ount (s (n,ested before Septe'ber =0- /000&

Special Schemes

• Industry Specific Schemes

Industry Spec(f(c Sche'es (n,est only (n the (ndustr(es spec(f(ed (n the offer

docu'ent& The (n,est'ent of these funds (s l('(ted to spec(f(c (ndustr(es l(+e

InfoTech- FMC6- and "har'aceut(cals etc&

• Inde5 Schemes

Inde5 Funds atte'pt to repl(cate the perfor'ance of a part(cular (nde5 such as

the .SE Sense5 or the NSE 20

• Sectoral Schemes

Sectoral Funds are those- *h(ch (n,est e5clus(,ely (n a spec(f(ed (ndustry or a )roup of

(ndustr(es or ,ar(ous se)'ents such as A 6roup shares or (n(t(al publ(c offer(n)s&

23



• &ommodities Funds

Co''od(t(es funds spec(al(@e (n (n,est(n) (n d(fferent co''od(t(es d(rectly or

throu)h co''od(t(es future contracts& Spec(al(@ed funds 'ay (n,est (n a s(n)leco''od(ty or a co''od(ty )roup such as ed(ble o(l or ra(ns- *h(le d(,ers(f(ed

co''od(ty funds *(ll spread the(r assets o,er 'any co''od(t(es

F() 1&1 #(s+ h(erarchy of 'utual funds

24



25



Table 1&1 Mutual fund sche'es



+enefits of Mutual Fund in?estment

1& "rofess(onal Mana)e'ent7

Mutual Funds pro,(de the ser,(ces of e5per(enced and s+(lled profess(onals-

bac+ed by a ded(cated (n,est'ent research tea' that analyses the perfor'ance

and prospects of co'pan(es and selects su(table (n,est'ents to ach(e,e the

ob9ect(,es of the sche'e&

/& D(,ers(f(cat(on7

Mutual Funds (n,est (n a nu'ber of co'pan(es across a broad cross%sect(on of

Industr(es and sectors& Th(s d(,ers(f(cat(on reduces the r(s+ because seldo' do

all stoc+s decl(ne at the sa'e t('e and (n the sa'e proport(on& !ou ach(e,e th(s

d(,ers(f(cat(on throu)h a Mutual Fund *(th far less 'oney than you can do on

your o*n&

=& Con,en(ent Ad'(n(strat(on7

In,est(n) (n a Mutual Fund reduces paper*or+ and helps you a,o(d 'any

proble's such as bad del(,er(es- delayed pay'ents and follo* up *(th bro+ers

and co'pan(es& Mutual Funds sa,e your t('e and 'a+e (n,est(n) easy and

con,en(ent&;& #eturn "otent(al7

1< $,er a 'ed(u' to lon)%ter'- Mutual Funds ha,e the potent(al to pro,(de a

h()her return as they (n,est (n a d(,ers(f(ed bas+et of selected secur(t(es&

2& Lo* Costs7

Mutual Funds are a relat(,ely less e5pens(,e *ay to (n,est co'pared to d(rectly

(n,est(n) (n the cap(tal 'ar+ets because the benef(ts of scale (n bro+era)e-

custod(al and other fees translate (nto lo*er costs for (n,estors&

B& L(u(d(ty7

In open%end sche'es- the (n,estor )ets the 'oney bac+ pro'ptly at net asset

,alue related pr(ces fro' the Mutual Fund& In closed%end sche'es- the un(ts can

be sold on a stoc+ e5chan)e at the pre,a(l(n) 'ar+et pr(ce or the (n,estor can

a,a(l of the fac(l(ty of d(rect repurchase at NAV related pr(ces by the Mutual Fund&



>& Transparency7

In,estors )et re)ular (nfor'at(on on the ,alue of your (n,est'ent (n add(t(on to

d(sclosure on the spec(f(c (n,est'ents 'ade by the sche'e- the proport(on

(n,ested (n each class of assets and the fund 'ana)ers (n,est'ent strate)y and

outloo+&

:& Fle5(b(l(ty7

Throu)h features such as re)ular (n,est'ent plans- re)ular *(thdra*al plans

and d(,(dend re(n,est'ent plans- one can syste'at(cally (n,est or *(thdra* funds

accord(n) to your needs and con,en(ence&

<& Affordab(l(ty7

In,estors (nd(,(dually 'ay lac+ suff(c(ent funds to (n,est (n h()h%)rade stoc+s& A

'utual fund because of (ts lar)e corpus allo*s e,en a s'all (n,estor to ta+e the

benef(t of (ts (n,est'ent strate)y 10&ell #e)ulated7

All Mutual Funds are re)(stered *(th SE.I and they funct(on *(th(n the

pro,(s(ons of str(ct re)ulat(ons des()ned to protect the (nterests of (n,estors& The

operat(ons of Mutual Funds are re)ularly 'on(tored by SE.I

"imitation of Mutual Fund In?estment

3( No &ontrol O?er &ost4

An In,estor (n 'utual fund has no control o,er the o,erall costs of (n,est(n)&

He pays an (n,est'ent 'ana)e'ent fee 3*h(ch (s a percenta)e of h(s

(n,est'ents4 as lon) as he re'a(ns (n,ested (n fund- *hether the fund ,alue

(s r(s(n) or decl(n(n)& He also has to pay fund d(str(but(on costs- *h(ch he

*ould not (ncur (n d(rect (n,est(n)&



1( No Tailor'Made Portfolios4

In,est(n) throu)h 'utual funds 'eans dele)at(on of the dec(s(on of portfol(o

co'pos(t(on to the fund 'ana)ers& The ,ery h()h net *orth (nd(,(duals or

lar)e corporate (n,estors 'ay f(nd th(s to be a constra(nt (n ach(e,(n) the(r

ob9ect(,es&

=( Mana0in0 # Portfolio Of Funds4

A,a(lab(l(ty of lar)e no& of funds can actually 'ean too 'uch cho(ce for the

(n,estors& He 'ay a)a(n need ad,(ce on ho* to select a fund to ach(e,e h(s

ob9ect(,es&

AMFI has ta+en (n(t(at(,e (n th(s re)ard by start(n) a tra(n(n) and cert(f(cat(on

pro)ra' for prospect(,e Mutual Fund Ad,(sors& SE.I has 'ade th(s

cert(f(cat(on co'pulsory for e,ery 'utual fund ad,(sor (nterested (n sell(n)

'utual fund&

7( Ta5es4

Dur(n) a typ(cal year- 'ost act(,ely 'ana)ed 'utual funds sell any*here

fro' /0 to >0 percent of the secur(t(es (n the(r portfol(os& If your fund 'a+es a

prof(t on (ts sales- you *(ll pay ta5es on the (nco'e you rece(,e- e,en (f you

re(n,est the 'oney you 'ade&

/( &ost of &hurn4

The portfol(o of fund does not re'a(n constant& The e5tent to *h(ch theportfol(o chan)es (s a funct(on of the style of the (nd(,(dual fund 'ana)er (&e&

*hether he (s a buy and hold type of 'ana)er or one *ho a))ress(,ely

churns the fund& It (s also dependent on the ,olat(l(ty of the fund s(@e (&e&

*hether the fund constantly rece(,es fresh subscr(pt(ons and rede'pt(ons&



&H#PTE% 1

&OMP#N$ P%OFI"E

C$%$"E#ATIVE S$CIETIES- "#INCI"LES- T!"ES $F S$CIETIES AND

THE #E6IST#AT#I$N $F THE S$CIETIES&



INT%OD!&TION

Co%operat(,e 'o,e'ent (n our country shall not only stay but also )ro* (n

t('es to co'e& In sp(te of the dra*bac+s e5per(enced (n the *or+(n) andad'(n(strat(on of the co%operat(,e soc(et(es- they ha,e pos(t(,ely contr(buted

to the )ro*th and de,elop'ent of the nat(onal econo'y& "ro'ot(on of thr(ft-

self%help and 'utual a(d are the funda'ental pr(nc(ples of co%operat(on& The

or(entat(ons of co''erc(al or)an(@at(on and co%operat(,e or)an(@at(ons are

bas(cally d(fferent& In a co''erc(al or)an(@at(on- earn(n) and 'a5('(@(n) the

prof(ts (s the sole 'ot(,e *hereas (n a co%operat(,e or)an(@at(on prof(t

cannot be the sole 'ot(,e& The pr('e ob9ect(,es- (n add(t(on to the three

funda'entals of co%operat(on 'ent(oned abo,e are to 'a+e a,a(lable the

)oods and ser,(ces (n reu(red uant(ty- of better ual(ty and at a reasonable

pr(ce to (ts 'e'bers& It does not 'ean that a Co%operat(,e Soc(ety (s a

char(table or)an(@at(on& It should- therefore- conduct (tself (n a bus(ness- l(+e

'anner (n atta(n(n) (ts ob9ect(,es eff(c(ently&

.roadly spea+(n) there are three sectors operat(n) (n the Un(on of Ind(a&

1& "U.LIC SECT$# *here(n the State (&e& The Un(on of Ind(a and the

respect(,e State 6o,ern'ent underta+e de,elop'ents pro9ects *h(ch are

*holly o*ned by e(ther the Central 6o,ern'ent or the State 6o,ern'ent&

/& "#IVATE SECT$# *h(ch (s a sector *here pr(,ate enterpr(ses are

per'(tted (n certa(n f(elds of econo'(c act(,(t(es&

=& C$%$"E#ATIVE SECT$# *h(ch (s beaut(fully blended (n bet*een a

publ(c sector and the pr(,ate sector& It has benef(ts of both the sectors and

d(sad,anta)es of ne(ther of the'&



P%IN&IP"ES OF &O'OPE%#TIVE SE&TO%

1& LE6AL STATUS 7 A co%operat(,e Soc(ety (s a body corporate re)(stered

under the appl(cable state Act *(th perpetual success(on ha,(n) a co''on

seal& It can acu(re- hold and d(spose of propert(es- enter (nto contracts and(t can sue and (t can be sued&

/& V$LUNTA#! ASS$CIATI$N 7 Co%operat(,e Soc(ety (s essent(ally an

or)an(@at(on or an assoc(at(on of persons *ho ha,e co'e to)ether for the

co''on purpose of econo'(c de,elop'ent or for 'utual help&

=& SELF HEL" AND MUTUAL HEL" 7 The Co%operat(,e soc(et(es off(ce

bearers?e5ecut(,e co''(ttee (s elected as per de'ocrat(c elect(on

procedure& The Co%operat(,e Soc(ety funct(on under the pr(nc(ple of self help

and 'utual help *h(ch 'eans each *(ll help for the'sel,es and all *(ll help

others&

;& DEM$C#ATIC C$NT#$LS 7 The Control of a Co%operat(,e enterpr(se

(n not (n the hands of cap(tal(sts *ho can corner the share cap(tal and control

the (nterest (n any underta+(n) *h(ch *ould be a pr(,ate underta+(n)&

2& EUALIT! 7 In co%operat(,e Sector- the pr(nc(ple of $ne 'an one Vote

(s pro,(ded (n the statute so as to ensure that the cap(tal does not do'(nate

the ad'(n(strat(on of co%operat(,e Soc(ety&

B& $"EN MEM.E#SHI" 7 Any person can apply for the 'e'bersh(p of the

Soc(ety *(thout any d(scr('(nat(on& The 'e'bersh(p (s open for all&

>& S$CIAL A""#$ACH ? N$ "#$FIT M$TIVE 7 As the Soc(ety (s *or+(n)

on de'ocrat(c pr(nc(ple and the off(ce bearers of the Soc(ety *(ll be

funct(on(n) l(+e a trustees for the better 'ana)e'ent of the soc(ety and there



(s no separate benef(ts to the e5ecut(,e co''(ttee 'e'bers& Ser,(ce (s the

'a(n 'otto and the prof(t (s not the 'a(n concern (n co%operat(,e soc(et(es&

:& "#$FITS AND #ETU#NS T$ THE MEM.E#S 7 Co%operat(,e Soc(ety (s

an assoc(at(on of 'e'bers and certa(n percenta)e prof(ts earned by the

soc(ety- as dec(ded (n the 'eet(n) of the 6eneral body *(ll be d(str(buted (n

the for' of d(,(dend to the 'e'bers&

<& LIMITED INTE#EST $N SHA#ES 7 Irrespect(,e of the sharehold(n)-

each 'e'ber has only one ,ote (n the dec(s(on%'a+(n) (n the 6eneral body

'eet(n) or at the t('e of elect(on of the co''(ttee for 'ana)e'ent& The

shares are not traded (n the stoc+ e5chan)e&

The State Co%op& Act also prescr(bes the 'a5('u' a'ount- *h(ch a 'e'ber

can hold as a share cap(tal (n any soc(ety&

Under M&C&S& Act- 1<B0 as per Sect(on /: other than 6o,ern'ent or other

soc(ety- shall not hold 'ore than 1?2 of the total cap(tal or (nterest (n shares

or e5ceed(n) #s& /0-000?% *h(ch the State 6o,ern'ent po*er to chan)e by

*ay of not(f(cat(on&

10& "E#S$NAL "A#TICI"ATI$N 7 The shareholders ha,e to personally

attend the 'eet(n) or for ,ot(n)& They are not allo*ed to appo(nt pro5(es for

attend(n) the )eneral body or for ,ot(n) (n the resolut(on to be passed&

11& EDUCATI$NS AND C$%$"E#ATI$N 7 E,ery soc(ety has to contr(bute

to*ards the educat(on fund 'a(nta(ned and loo+ed after by the d(str(ct co%

operat(,e educat(on .oard as per the not(f(cat(on (ssued fro' t('e to t('e for

educat(n) the 'e'bers or the off(ce bearers of the Soc(ety&



1/& C$%$"E#ATI$N AM$N6ST C$%$"& INSTITUTI$NS 7 The funds

)enerated or 'ob(l(@ed throu)h the co%operat(,e soc(et(es ha,e to be

depos(ted? (n,ested (n the Co%operat(,e Sector only&

#&T B %!"ES #PP"I&#+"E

A Co%operat(,e Soc(ety funct(ons as per the pro,(s(ons of

1& Co%operat(,e Soc(et(es Act under *h(ch the sa'e (s re)(stered&

/& Co%operat(,e Soc(et(es rules 'ade there under

=& .ye%la*s appro,ed by the re)(strar at the t('e of re)(strat(on and

a'end'ents 'ade fro' t('e to t('e and appro,ed by the re)(strar&;& Not(f(cat(on and $rders

1& Co%operat(,e Soc(et(es Act

e ha,e a nu'ber of Co%operat(,e Soc(et(es Acts funct(onal (n d(fferent

states l(+e % Maharastra Co%operat(,e Soc(et(es Act- 1<B0- % "ond(cherry

Co%operat(,e Soc(et(es Act- 1<>/- % arnata+a Co%operat(,e Soc(et(es Act-

1<2<- % Delh( Co%operat(,e Soc(et(es Act- 1<>/- % erala Co%operat(,e

Soc(et(es Act etc& hen the area of operat(on (s restr(cted to one state- the

State Co%operat(,e Act G #ules- under *h(ch the soc(ety (s re)(stered *(ll be

appl(cable&

In a part(cular state- (f Co%operat(,e Act and #ules (s not enacted- the Central

Act *h(ch (s +no*n as The Co%operat(,e Act- 1<1/ and (ts rules *(ll be

appl(cable&

hen the area of operat(on of Soc(ety (s spread (n t*o or 'ore states& The

Mult(%State Co%operat(,e Soc(et(es Act- /00/ and (ts rules shall be appl(cable&

/& Co%operat(,e Soc(et(es #ules A set of rules (s also fra'ed under the

respect(,e State Co%operat(,e Act for procedural aspects&



=& .ye%la*s Each soc(ety also re)(stered *(th the bye%la*s for (nternal

'ana)e'ent of the soc(et(es duly appro,ed by the re)(strar at the t('e of

re)(strat(on of the soc(ety& The bye%la*s of a soc(ety const(tute a contract

bet*een a 'e'ber and the soc(ety and (t pro,(de for the 'ana)e'ent of the

soc(ety& The bye%la*s are fra'ed *(th(n the pro,(s(ons of the Act and the

rules 'ade there under&

.ye%la*s (nclude the ob9ects of the soc(ety and co'pletely def(ne and restr(ct

the soc(ety8s act(,(t(es- but the r()hts and l(ab(l(t(es of 'e'bers are

deter'(ned by the Act and #ules and not by the bye%la*s as such& ;&

Not(f(cat(on and $rders (ssued fro' t('e to t('e by the 6o,ern'ent- or any

other Author(ty as prescr(bed under the Act- #ules there under&

T$PES OF SO&IETIES

A Soc(ety (s cate)or(@ed on the bas(s of (ts ob9ects& There are ,ar(ous types

of soc(et(es that can be for'ed under the Act under *h(ch (t (s re)(stered7

Under Maharashtra Co%operat(,e Soc(et(es Act- 1<B0 follo*(n) types of

Soc(et(es can be re)(stered 7

1& A)r(cultural Mar+et(n) Soc(ety7 As per sect(on /314 a)r(cultural 'ar+et(n)

Soc(etyO 'eans a soc(ety % 3a4 The ob9ect of *h(ch (s the 'ar+et(n) of

a)r(cultural produce and the supply of ('ple'ents and other reu(s(tes for

a)r(cultural product(on- and 3b4 Not less than three%fourths of the 'e'bers of

*h(ch are a)r(cultur(sts- or soc(et(es for'ed by a)r(cultur(sts&

/& Consu'er Soc(ety As per Sect(on /3<4 Consu'er8s Soc(ety 'eans a

soc(ety- the ob9ect of *h(ch (s % 3a4The procure'ent- product(on or

process(n)- and d(str(but(on of )oods to- or the perfor'ance of other ser,(ces

for- (ts 'e'bers as also other custo'ers- and 3b4 the d(str(but(on a'on) (ts

'e'bers and custo'ers- (n the proport(on- prescr(bed by rules or by the

bye%la*s of the soc(ety- of the prof(ts accru(n) fro' such procure'ent-

product(on or process(n)- and d(str(but(on&



=& Co%operat(,e .an+ As per sect(on /3104 Co%operat(,e ban+ 'eans a

soc(ety *h(ch (s do(n) bus(ness of ban+(n) as def(ned (n clause 3b4 of sub%

sect(on 314 of sect(on 2 of the .an+(n) Co'pan(es Act- 1<;< and (ncludes

any soc(ety *h(ch (s funct(on(n) or (s to funct(on as 3an A)r(culture and #ural

De,elop'ent .an+4 under Chapter PI&

;& Central .an+ As per sect(on /3B4- Central .an+ 'eans a co%operat(,e

ban+- the ob9ects of *h(ch (nclude the creat(on of funds to be loaned to other

soc(et(es but does not (nclude the urban co%operat(,e ban+&

2& Crop "rotect(on Soc(ety As per sect(on /310%A4- Crop "rotect(on Soc(etyO

'eans a soc(ety the ob9ect of *h(ch (s protect(on of the crops- structures-

'ach(nery- a)r(cultural ('ple'ents and other eu(p'ent such as those used

for pu'p(n) *ater on the land&

B& Far'(n) Soc(ety As per sect(on /31/4-OFar'(n) Soc(etyO 'eans a soc(ety

(n *h(ch- the ob9ect of (ncreas(n) a)r(cultural product(on- e'ploy'ent and

(nco'e and the better ut(l(@at(on of resources- lands are brou)ht to)ether

9o(ntly cult(,ated by all the 'e'bers- such lands 3a4 be(n) o*ned or leased to

the 'e'bers 3or so'e of the'4- or 3b4 co'(n) (n possess(on of the soc(ety (n

any other 'anner *hatsoe,er&

>& 6eneral Soc(ety As per sect(on /3124-O6eneral Soc(etyO 'eans a soc(ety

not fall(n) (n any of the classes of soc(et(es def(ned by the other clauses of

th(s sect(on&

:& Hous(n) Soc(ety As per sect(on /31B4-OHous(n) soc(etyO 'eans a soc(ety-

the ob9ect of *h(ch (s to pro,(de (ts 'e'bers *(th open plots for hous(n)-



d*ell(n) houses or flats or (f open plots- the d*ell(n) houses or flats are

already acu(red- to pro,(de (ts 'e'bers co''on a'en(t(es and ser,(ces&

<& Federal Soc(ety As per sect(on /31=4-OFederal soc(etyO- 'eans a soc(ety%

3a4 not less than f(,e 'e'bers of *h(ch are the'sel,es soc(et(es- and 3b4 (n

*h(ch the ,ot(n) r()hts are so re)ulated that the 'e'bers *ho are soc(et(es

ha,e not less than four%f(fths of the total nu'ber of ,otes (n the )eneral

'eet(n) of such soc(ety

10& Irr()at(on Soc(ety As per sect(on /31B%A4-OL(ft Irr()at(on Soc(etyO 'eans a

soc(ety- the ob9ect of *h(ch (s to pro,(de *ater supply- by 'ot(,e po*er or

other*(se to (ts 'e'bers- for (rr()at(on and other*(se&

11& "rocess Soc(ety As per sect(on /3//4-O"rocess(n) soc(etyO 'eans a

soc(ety- the ob9ect of *h(ch (s the process(n) of )oods&

1/& "roducers Soc(ety As per sect(on /3/=4-O"roducers Soc(etyO 'eans a

soc(ety- the ob9ect of *h(ch (s product(on and d(sposal of )oods or the

collect(,e d(sposal of labour of the 'e'bers thereof&

1=& #esource Soc(ety As per sect(on /3/24-O#esource Soc(etyO 'eans a

soc(ety- the ob9ect of *h(ch (s obta(n(n) for (ts 'e'bers of cred(t- )oods or

ser,(ces reu(red by the'&

1;& Ape5 Soc(ety As per sect(on /3/4 of M&C&S& Act- Ape5 Soc(ety 'eans a

soc(ety- % 3a4 the area of operat(on of *h(ch e5tends to the *hole of the State

of Maharashtra 3b4 the 'a(n ob9ect of *h(ch (s to re'ote the pr(nc(pal ob9ects

of the soc(et(es aff(l(ated to (t as Me'bers and to pro,(de for the fac(l(t(es and

ser,(ces to the' and 3c4 *h(ch has been class(f(ed as an ape5 soc(ety by the

#e)(strars



P%OVISIONS FO% %E.IST%#TION OF &O'OPE%#TIVE

SO&IETIESThere are d(fferent types of Co%operat(,e Soc(et(es- *h(ch can be re)(stered

under the Maharashtra Co% operat(,e Soc(et(es Act- *h(ch *ere e5pla(ned

earl(er&

In all these types of soc(et(es- the procedure to be follo*ed for for'ulat(on of

re)(strat(on proposals sl()htly d(ffers& The reu(re'ents (n respect of each

type of co%operat(,e soc(ety8s needs to be properly understood by e,ery

pro'oter- or the profess(onal char)ed *(th the respons(b(l(ty of )ett(n) thesoc(ety re)(stered 3ch(ef pro'oter4&

P%OVISIONS !NDE% THE M(&(S( #&TC 36<2

Sect(ons = to 11of the Act- pro,(de for re)(strat(on of Soc(et(es and the

cond(t(ons for the sa'e& Sect(on ; pro,(des for a nature of an or)an(@at(on-

*h(ch can be re)(stered as a Soc(ety& Sect(on B lays do*n the cond(t(ons for

re)(strat(on of the Soc(ety& Sect(on : pro,(des for appl(cat(on for re)(strat(onbye%la*s and the re)(strat(on fees& Sect(on < pro,(des for t('e bound

re)(strat(on of the Soc(ety and the bye%la*s&

SO&IETIESC :HI&H M#$ +E %E.ISTE%ED

As per sect(on ;- a soc(ety- *h(ch has as (ts ob9ects the pro'ot(on of the

econo'(c (nterests or )eneral *elfare of (ts 'e'bers or of the publ(c- (n

accordance *(th co%operat(,e pr(nc(ples or a soc(ety establ(shed *(th the



ob9ect of fac(l(tat(n) the operat(ons of any such soc(ety- 'ay be re)(stered

under th(s Act7

"ro,(ded that- no soc(ety shall be re)(stered (f (t (s l(+ely to be econo'(cally

unsound- or the re)(strat(on of *h(ch 'ay ha,e an ad,erse effect on

de,elop'ent of the co%operat(,e 'o,e'ent- or the re)(strat(on of *h(ch 'ay

be contrary to the pol(cy d(rect(,es- *h(ch the State 6o,ern'ent 'ay- fro'

t('e to t('e- (ssue&

#E6IST#ATI$N ITH LIMITED $# UNLIMITED LAI.ILIT!

As per sect(on 2- a Soc(ety 'ay be re)(stered *(th l('(ted or unl('(ted

l(ab(l(ty&

As per sect(on /Q/:R soc(ety *(th l('(ted l(ab(l(tyO 'eans a soc(ety ha,(n) the

l(ab(l(ty of (ts 'e'bers l('(ted by (ts bye%la*s

As per sect(on /Q/<R soc(ety *(th unl('(ted l(ab(l(tyO 'eans a soc(ety- the

'e'bers of *h(ch are- (n the e,ent of (ts be(n) *ound up- 9o(ntly and

se,erally l(able for and (n respect of (ts obl()at(ons and to contr(bute to any

def(c(ency (n the assets of the soc(ety

C$NDITI$NS $F #E6IST#ATI$N

As per sect(on B314 No soc(ety- other than a federal soc(ety- shall be

re)(stered under th(s Act- unless (t cons(sts of at least ten persons Qor such

h()her nu'ber of persons as the #e)(strar 'ay- ha,(n) re)ard to the ob9ects

and econo'(c ,(ab(l(ty of a soc(ety and de,elop'ent of the co%operat(,e

'o,e'ent- deter'(ne fro' t('e to t('e for a class of soc(et(esR3each of such

persons be(n) a 'e'ber of a d(fferent fa'(ly4- *ho are ual(f(ed to be

'e'bers under th(s Act- and *ho res(de (n the area of operat(on of soc(ety 7

Q"ro,(ded that- a l(ft (rr()at(on soc(ety cons(st(n) of less than ten but of f(,e or

'ore such persons 'ay be re)(stered under th(s Act&R 3/4 No soc(ety *(th a



l('(ted l(ab(l(ty shall be re)(stered- unless all persons for'(n) the soc(ety

res(de (n the sa'e to*n or ,(lla)e- or (n the sa'e )roup of ,(lla)es&

Q3/%A4 No crop protect(on soc(ety shall be re)(stered- unless the #e)(strar (s

sat(sf(ed- after such (nu(ry as he th(n+s necessary- that a draft of the

proposal 'ade by the soc(ety for protect(n) crops- structures- 'ach(nery

a)r(cultural ('ple'ents and other eu(p'ent such as those used for

pu'p(n) *ater on the land- *as duly publ(shed for (n,(t(n) all o*ners of land

l(+ely to be affected by the proposal and all other persons l(+ely to be

(nterested (n the sa(d lands to 9o(n the proposal or to send the(r ob9ect(ons or

su))est(ons and that the ob9ect(ons and su))est(ons rece(,ed - (f any- ha,e

been duly cons(dered by the soc(ety and that the o*ners (n possess(on of not

less than BB percent (n the a))re)ate of lands (ncluded (n the proposal ha,e

)(,en the(r consent(n) *r(t(n) to the 'a+(n) of the proposal and that the

proposal 'ade (s feas(ble& For th(s purpose- the soc(ety shall sub'(t to the

#e)(strar7

3a4 a plan sho*(n) the area co,ered by the proposal and the surround(n)

land as sho*n (n the 'ap or 'aps of the ,(lla)e or ,(lla)es affected

3b4 an e5tract fro' the record of r()hts duly cert(f(ed sho*(n) the na'es of

the o*ners of lands and the areas of the lands (ncluded (n the proposal

3c4 State'ents of such of the o*ners of the lands as consented to the

'a+(n) of the proposal s()ned by o*ners before t*o *(tnesses

3d4 a deta(led est('ate of the cost of ('ple'ent(n) the proposal

3e4 a deta(led state'ent sho*(n) ho* the cost (s proposed to be 'et&

hen such soc(ety (s re)(stered- the cost of ('ple'ent(n) the proposal shall

be 'et *holly or (n part by contr(but(on to be le,(ed by the soc(ety fro' each

o*ner of the land (ncluded (n the proposal- (nclud(n) any such o*ner *ho



'ay ha,e refused to beco'e a 'e'ber of the soc(ety& The o*ner of e,ery

land (ncluded (n the proposal shall also be pr('ar(ly l(able for the pay'ent of

the contr(but(on l(able fro' t('e to t('e (n respect of such landR&

3=4 No federal soc(ety shall be re)(stered unless (t has at least f(,e soc(et(es

as (ts 'e'bers&

3;4 Noth(n) (n th(s Act shall be dee'ed to affect the re)(strat(on of any

soc(ety 'ade before the co''ence'ent of th(s Act&

324 The *ord l('(tedO or unl('(tedO shall be the last *ord (n the na'e of

e,ery soc(ety *(th l('(ted or unl('(ted l(ab(l(ty- as the case 'ay be *h(ch (s

re)(stered or dee'ed to be re)(stered under th(s Act&

E5planat(on7 For the purpose of th(s sect(on and sect(on :- the e5press(on

'e'ber of fa'(lyO 'eans *(fe- husband- father- 'other- Qson- or un'arr(ed

dau)hterR

PO:E% TO E;EMPT SO&IETIES O% &"#SS OF SO&IETIES

F%OM &ONDITIONS #S TO %E.IST%#TION

As per sect(on >- not*(thstand(n) anyth(n) conta(ned (n th(s Act- the State

6o,ern'ent 'ay- by )eneral or spec(al order- e5e'pt any soc(ety or class of

soc(et(es fro' any of the reu(re'ents of th(s Act as to re)(strat(on- sub9ect to

such cond(t(ons 3(f any4 as (t 'ay ('pose&

A""LICATI$N F$# #E6IST#ATI$N

As per sect(on :314 For the purpose of re)(strat(on- an appl(cat(on shall be

'ade to the #e)(strar (n the prescr(bed for' and shall be acco'pan(ed by



four cop(es of the proposed bye%la*s of the soc(ety and such re)(strat(on fee

as 'ay prescr(bed (n th(s behalf& D(fferent re)(strat(on fees 'ay be

prescr(bed for d(fferent class of soc(et(es- re)ard be(n) had to the ser,(ce

(n,ol,ed (n process(n) an appl(cat(on for re)(strat(on& The person by *ho'-

or on *hose behalf- such appl(cat(on (s 'ade- shall furn(sh such (nfor'at(on

(n re)ard to the soc(ety- as the #e)(strar 'ay reu(re&

3/4 The appl(cat(on 'ay be s()ned% a4 (n case of a soc(ety other than a

federal soc(ety by at least ten persons 3each of such person be(n) a 'e'ber

of d(fferent fa'(ly4- *ho are ual(f(ed under th(s Act- and- b4 (n the case of a

federal soc(ety- by at least f(,e soc(et(es&

No s()nature to any appl(cat(on on behalf of a soc(ety shall be ,al(d- unless

the person s()n(n) (s a 'e'ber of the co''(ttee of such a soc(ety and (s

author(@ed by the co''(ttee by resolut(on to s()n on (ts behalf the

appl(cat(on for re)(strat(on of the soc(ety and (ts bye%la*s and a copy of such

resolut(on (s appended to the appl(cat(on&

#E6IST#ATI$N

As per sect(on <314 If the #e)(strar (s sat(sf(ed that a proposed soc(ety has

co'pl(ed *(th the pro,(s(ons of th(s Act and the #ules- Qor any other la* for

the t('e be(n) (n force- or pol(cy d(rect(,es (ssued by the State 6o,ern'ent

under sect(on ;R- and that (ts proposed bye%la*s are not contrary to th(s Act

or to the rules- he Qshall- *(th(n t*o 'onthsR- fro' the date of rece(pt of

appl(cat(on re)(ster the soc(ety and (ts bye%la*s&

3/4 here there (s a fa(lure on the part of the #e)(strar to d(spose off such

appl(cat(on *(th(n the per(od aforesa(d- the #e)(strar shall- *(th(n a per(od off(fteen days fro' the date of e5p(rat(on of that per(od refer the appl(cat(on to

the ne5t h()her off(cer and *here the #e)(strar (s h('self the re)(ster(n)

off(cer- to the State 6o,ern'ent- *ho are *h(chas the case 'ay be- shall

d(spose of the appl(cat(on *(th(n t*o 'onths fro' the date of (ts rece(pt and

on the fa(lure of such h()her off(cer or the State 6o,ern'ent- as the case



'ay be- to d(spose of the appl(cat(on *(th(n that per(od- the soc(ety and (ts

bye%la*s shall be dee'ed to ha,e been re)(stered&Qand thereafter the

#e)(strar shall (ssue a cert(f(cate of re)(strat(on under h(s seal and s()nature

*(th(n a per(od of f(fteen days&

3=4 here the re)(strar refuses to re)(ster a proposed soc(ety- he shall

forth*(th co''un(cate h(s dec(s(on- *(th reasons therefore- to the person

'a+(n) the appl(cat(on and (f there be 'ore than one to the person *ho has

s()ned f(rst there(n&

3;4 The #e)(strar shall 'a(nta(n a re)(strar of all soc(et(es re)(stered or

dee'ed to be re)(stered- under the Act&

P%O&ED!%E FO% %E.IST%#TION OF &O'OPE%#TIVE

SO&IETIES

The procedure for re)(strat(on of soc(ety can be e5pla(ned as the follo*(n)

steps71& A""$INTMENT $F CHIEF "#$M$TE#

The f(rst step to re)(ster a Soc(ety (s that '(n('u' 10 adult (nd(,(duals fro'

(ndependent fa'(l(es des(r(n) to for' a Soc(ety should )ather and hold a

'eet(n) to

3a4 Select a pro,(s(onal co''(ttee and elect a Ch(ef "ro'oter for for'at(on

of a soc(ety and 3b4 select a na'e for such Soc(ety *(th three alternat(,es

and to pass appropr(ate resolut(ons (n that behalf& c4 To collect the entrance

fee and share cap(tal fro' the prospect(,e 'e'bers& d4 To open the .an+

account (n the na'e of ch(ef pro'oter e4 To dec(de about area of operat(on

of the Soc(ety and f4 To dec(de about the re)(stered off(ce of the Soc(ety )4

To author(@e ch(ef pro'oter to sub'(t the proposal for re)(strat(on and to do

any other th(n) to )et the soc(ety re)(stered&



/& NAME #ESE#VATI$N

The second step *ould be to apply to the re)(strat(on author(ty 3#A4 for

reser,at(on of na'e for the soc(ety and obta(n letter fro' the #A (n that

connect(on& The resolut(ons passed at the pro'oters 'eet(n) as abo,e

should acco'pany such appl(cat(on for reser,at(on of na'e as aforesa(d&

The letter reser,(n) the na'e of the soc(ety shall be ,al(d for = 'onths& The

,al(d(ty of the na'e (s nor'ally e5tended on an appl(cat(on for 1 or / further

ter's of = 'onths each&

=& .AN ACC$UNT AND DE"$SITS

The th(rd step *ould be to 3a4 open a ban+ account (n the na'e of the

proposed Soc(ety as per the #A8s d(rect(ons (n that behalf that shall conta(n

(n the letter reser,(n) the na'e and 3b4 depos(t there(n the entrance fee

share 'oney and the a'ount reco,ered for prel('(nary e5penses fro' the

pro'oters and obta(n the cert(f(cate fro' such ban+ (n respect of such

depos(ts& Nor'ally the d(rect(ons of the #A are to open account *(th a

pro5('ate branch of the D(str(ct Central Co%operat(,e .an+ or any

Maharashtra State Co%operat(,e .an+ or any other urban Co%operat(,e ban+&

;& #E6IST#ATI$N FEE

The fourth step (s to depos(t the re)(strat(on fee *(th the #eser,e .an+ of

Ind(a and to obta(n the rece(pted challan (n that behalf& The re)(strat(on fee

for Hous(n) Soc(ety (s #s&/-200?% and for )eneral Soc(ety (s #s&1/20?%&

2& #E6IST#ATI$N "#$"$SAL The f(fth and f(nal step (s to prepare and to

sub'(t to #A the proposal for re)(strat(on of the soc(ety& Under #ule ; of

Maharashtra Co%operat(,e Soc(et(es #ules the ch(ef pro'oter should sub'(t

the follo*(n) docu'ents for re)(strat(on



a4 Appl(cat(on for re)(strat(on % For' A An appl(cat(on for re)(strat(on of a

soc(ety should be 'ade (n for'& The spec('en of For' A& The appl(cat(on for

re)(strat(on (n uadrupl(cate should be s()ned by at least B0 of the

pro'oter8s 'e'bers and Ch(ef "ro'oter should attest the(r s()natures& b4

Four cop(es of the proposed bye%la*s of the soc(ety c4 A l(st of pro'oter8s

'e'bers- such as the na'e a)e occupat(on current res(dent(al a address of

the pro'oter 'e'ber the cost of share a'ount etc& d4 A cert(f(cate fro' the

.an+ or .an+s stat(n) the cred(t balance there(n (n fa,our of the proposed

soc(ety e4 A sche'e sho*(n) the deta(ls e5pla(n(n) ho* the *or+(n) of the

soc(ety *(ll be econo'(cally sound and *here the sche'e en,(sa)es the

hold(n) of (''o,able property by the soc(ety- the descr(pt(on of such

property proposed to be purchased- acu(red or transferred to the soc(ety f4

Such other docu'ents as 'ay be spec(f(ed (n the 'odel bye%la*s- (f any-

fra'ed by the #e)(strar )4 The re)(strat(on fees at the appl(cable rates- h4

$ther docu'ents l(+e aff(da,(t- (nde'n(ty bonds- copy of rat(on cards- publ(c

not(ce (n ne*spaper etc&- as 'ay appl(cable for d(fferent types of soc(ety as

per the not(f(cat(on (ssued fro' t('e to t('e&

B& #E6IST#ATI$N "#$CEDU#E As per rule

2Q1R $n rece(pt of an appl(cat(on under #ule ; the #e)(strar shall enter

part(culars of the appl(cat(on (n the re)(ster of appl(cat(on to be 'a(nta(ned (n

For' .8 )(,e a ser(al nu'ber to the appl(cat(on and (ssue a rece(pt (n

ac+no*led)e'ent thereof&

2Q/R The #e)(strar 'ay )(,e necessary opportun(ty to the pro'oters to

'od(fy the proposed bye%la*s before f(nally re)(ster(n) the soc(ety or

re9ect(n) the appl(cat(on for re)(strat(on of the soc(ety&

2Q=R $n re)(ster(n) a soc(ety and (ts bye%la*s under sub%sect(on 314 of

sect(on < the #e)(strar shall as soon as 'ay be- not(fy the re)(strat(on of the

soc(ety (n the $ff(c(al 6a@ette and )rant to the soc(ety a cert(f(cate the

#e)(strat(on nu'ber of the soc(ety- and the date of (ts re)(strat(on& The



re)(strar shall also furn(sh the soc(ety *(th a cert(f(ed copy of the bye%la*s

appro,ed and re)(stered by h('&

>& #EFUSAL $F #E6IST#ATI$N

here any soc(ety does not furn(sh the (nfor'at(on (n re)ard to the soc(ety

as reu(red by the #e)(strar or fulf(ll any of the cond(t(ons la(d do*n (n the

Act or these #ules- Not(f(cat(on or orders- the #e)(strar 'ay refuse to

re)(ster that soc(ety&

:& A""EALS

Under sect(on 12/ an appeal a)a(nst an order or dec(s(ons of re)(strat(on of

soc(ety- refusal of re)(strat(on of soc(ety shall l(e

3a4 If 'ade or sanct(oned or appro,ed by the #e)(strar- or the Add(t(onal

or Jo(nt #e)(strar on *ho' po*ers of the #e)(strar are conferred- to

the State 6o,ern'ent& 3b4 If 'ade or sanct(oned by any person other

than the #e)(strar- or the Add(t(onal or Jo(nt #e)(strar on *ho' the

po*ers of the #e)(strar are conferred to the #e)(strar& Ult('ately a

re'edy of r(t "et(t(on under Art(cle //B or //> of the Const(tut(on of

Ind(a (s al*ays a,a(lable e,en to a Co%operat(,e soc(ety or a person

a))r(e,ed (n an e5traord(nary c(rcu'stance& h(ch 'eans (f the

dec(s(on of State )o,ern'ent on the appeal 'ade by the a))r(e,ed

party (s not acceptable a r(t "et(t(on can be f(lled (n the H()h Court

and then Supre'e Court

Table /&1 #ece(pts and "ay'ent State'ent

DEVIKULAM TALUK VYAPARI VYAVASAI SERVICE CO-OP. SOCIETY LTD NO I

518

ADIMALY



RECIPTS AND DISBURSMENTS STATEMENT 2013-2014

DISBURSMENTS AMOUNT

SHARE

A CLASS 12300.00 12300.00

DEPOSITS

FIXED DEPOSITS 96606034.00

SAVING BANK 262206603.5

0

CURRENT AC :=<;1B&00

PIG!" DEPOSITS 89480858.00

#O!E SAVINGS 10791702.00

RECURING DEPOSITS 225800.00

PIG!" DEPOSITS$A 2839295.00

SOUB#AG"A DEPOSIT SC#E!E 90000.00

SOUB#AG"A PIG!" DEPOSIT 2916400.00465996108.5

0

BORROIN!S

IDCB SGO 1%2 70021950.00 "0021950.00

LOANS TO MEMBERS

BDLS LOAN &A 42539500.00

BDLS LOAN &B 53287000.00

BDLS LOAN &C 24440000.00

BDLS LOAN &D 30740000.00

S#ORT TER! LOAN 96049000.00

PERSONAL LOAN 823000.00

GOLD LOAN110081073.0

0

SECURED LOAN 11;/0000&00

!FS LOAN 28074500.00

39"4540"3.0

0

INTEREST PAID

BORRO'INGS 759335.00

DEPOSITS 9564424.00 10323"59.00

ESTABLISHMENT

SALAR" 2048787.00BONUS 67200.00

E!PLO"EES 'F CONTRIBUTION 12400.00

PF CONTRIBUTION 204559.00

!EDICAL ALLO'ANCE 14800.00

SALAR" ARREAR 1311.00

DA ARREAR 130400.00



LEAVE SALAR" 144290.00 2623"4".00

CONTI!ENCIES

BANK C#ARGE 1309.50

OFFICE EXPENSES 197046.00

PRINTING AND STATIONAR" /1B//0&00

POSTAGE 2731.00

S'EEPING C#ARGE 71100.00

ELETRICIT" C#ARGE 92838.00

APPRISER C#ARGE 77917.00

ADVERTISE!ENT 76160.00

DONATION 22285.00

#ONARARIU! 40000.00

GOLD INSURANCE 85855.00

SITTING FEES 32400.00

TRAVELING ALLO'ANCE 54686.00!ISCELLANEOUS EXPENSES 75035.00

INTEREST REBATE 265558.00

REGISTRATION FEES 100.00

REPAIRS AND !AINTANANCE(CO!PUTER) 76708.00

GENERAL BOD" EXPENSES 259718.00

!FS CO!!ISSION REBATE 473000.00

AUDIT COST 18320.00

RENT 1560000.00

INT. COLLECTION AGENTS SECURIT" 8998.00

DEPOSIT !OBILISATION EXPENSES 10765.00

IT AUDIT EXPENSES 39326.00

INT. FRO! LOAN RETURN 696350.00

TELEP#ONE C#ARGES 19512.00

NE'S PAPPER 10611.00

CLERICAL ASSISTANT C#ARGES 118500.00

!FS CO!!ISSION PAID TO GOVT 283750.00

LEGAL AND PROFFETIONAL C#ARGES 45300.00

PROFESSIONAL TAX 2500.00

FESTIVAL ALLO'ANCE 42250.00

AFFILIATION FEE 3600.00

INTEREST PAID ON STAFF SECURIT" 1102.00

SOUB#AG"A DEPOSIT BONUS 78000.00

PD COLLECTION EXPENSES 1912540.00

!PD COLLECTION EXPENSES 496929.00

#SD COLLECTION EXPENSES 114087.00

AGENTS GENERAL INSURANCE 21825.00



CO$OPERATIVE TRAINING 7900.00 "612831.50

#I$ED ASSETS

LAND AND BUILDINGS 7108530.00

FURNITURE 217750.00 "326280.00

BANK A%C

ASCB 1203 56982929.00

IDCB CURRENT AC S 24 24998289.00

IDCB SB S 160 8114195.00

IDCB !UNNAR EVENING 2660000.00

IDCB ADI!ALI EVENING S 1 21409062.00

UBI CURRENT AC NO 14008 3201823.00

!UNNAR SCB AC 17297 1/>B//B0&00

130128558.0

0

INVESTMENT A%C

FD AT IDCB !ANKULA! 1493528.00

FD AT IDCB ADI!AL" 3000000.00

FD AT ADI!AL" EVENING 10>=/<0>&00

CC AT IDCB ADI!AL" STAFF SECURIT" 10000&00

FD AT IDCB !UNNAR EVENING BRANC# /000000&00

FD AT IDCB KUNC#IT#ANN" 1/00000&00

FD AT IDCB RA*AKU!AR" 1:00000&00

FD AT TREASUR" ADI!AL" ;00000&00

FD AT IDCB RA*AKKADU 1/10>10&00FD AT !UNNAR SCB 236544.00

FD AT IDCDS LTD PAINAV 400000.00 22483689.00

OTHER INVESTMENT

RF INVESTED AT DCB 1328908.00

PF DEPOSITED IN IDCB 194323.00 1523231.00

OTHER LIABILITIES

UNDIVIDED NET PROFIT 1<10B1/2&00 19106125.00

STA## SECURITY DEPOSIT

STAFF SECURIT" DEPOSIT 0.00

ADVANCE DUE TO

ADVANCE DUE TO LAND 567000.00

!FS DUE TO

RENT ADVANCE

E!PLO"EES P F CONTRIBUTION DEPOSIT

INTEREST EXCESS PAID

SALAR" EXCESS PAID



PROVIDENT FUND ADVANCE 175000.00

AT! AC 5288200.00

#EAD OFFICE TO BRANC# ></>:0:&00

LAND PURC#ASE ADVANCE ==/2000&00 1"283008.00

ADVANCE DUE BY

!FS REBATE 25228892.50

!FS PRI+E A!OUNT147719710.0

0

!FS AUCTION DEDUCTION 34125060.00

!FS PIG!" DEPOSITS107757067.0

0

BDLS DEPOSITS123144593.0

0

!FS SETTLE!ENT 852250.00

'ELLFARE FUND AT DCB 18240.00

!FS ADVANCE 499310.00

!FS FORE!AN PRI+E (BID) 6550000.00

COLLECTION AGENTS SECURIT" 20000.00

RD SUSPENSE 406.00

TENDER FEE 2000.00

SOUB#AG#"A DEPOSIT SUSPENSE 54800.00

ELECTION NO!INATION FEE 4000.00

LOAN RISK FUND 270441.00

GROUP PERSONAL ACCIDENT INSURANCE SC#E!E 3000.00

E!PLO"EES P F CONTRIBUTION 158987.00

INCO!E TAX 99479.00

LIC POLIC" PRE!IU! 106414.00

LIC POLIC" PRE!IU! SUSPENSE 106414.00

BRANC# TO #EAD OFFICE >=0>00:&00

4540280"1.5

0

DIVIDEND

DIVIDEND PAID 1061530.00 1061530.00

EDUCATION #UND

EDUCATION FUND ;0000&00 40000.00

TOTAL

160"025261.

50

CL.CASH BALANCE 1958324.00

!RAND TOTAL 1608983585.50

Table /&/ .alance Sheet



DEVIKULAM TALUK VYAPARI VYAVASAI SERVICE CO-OPERATIVE

SOCIETY LTD NO I 518 ADIMALY

BALANCE SHEET AS ON 31%03%2014

LIABILITIES ASSETS

S#ARE CAPITAL

4641775.0

0 CAS# IN #AND

1958324.0

0

DEPOSITS163937395

.40 CAS# AT BANKS22497196.

35

BORRO'INGS20170595.

00 INVEST!ENT AC22218039.

00

STAFF PF DEPOSIT1326800.0

0STAFF SECURIT" INDCB 81504.00

STAFF SECURIT"DEPOSIT 81504.00 RF INVESTED IN DCB

5980945.00

FORE!AN PRI+E !FS6156500.0

0 PF DEPOSITED IN DCB 955830.00

COLLECTION AGENTSSECURIT" 129000.00

LOANS ANDADVANCES

193908660.00

!FS REBATE3094862.5

0!UTUAL FUNDSC#E!E DUE TO

115400000.00

!FS ADVANCE 10982.50E,UIP!ENTS ANDFURNITURE

3725639.98

RESERVE FUND13970916.

00 LIBRAR" BOOKS 6400.00PROFETIONALEDUCATION FUND 955306.00 DCB S#ARE 2000.00

!E!BERS RELIEF FUND

13692258.

00 S#ARE SPCS 1000.00

DIVIDEND1069395.0

0S#ARE CO$OPERATIVECOLLEGE 5000.00

OT#ER LIABILITIES 477699.50 DUE TO SOCIET"2030312.0

0SECURIT" GOLDAPRISER 5000.00 BUILDING SECURIT"

1000000.00

RESERVE FOR !FSOVERDUE

6683500.00 LAND AND BUILDINGS

7108530.00

DEPRECIATION FUND2499806.0

0INTERESTRECEVABLES

13438205.00

RESERVE FOR BD -DOUTFUL DEPT

3321136.00 AT! AC 243000.00

RESERVE FORGRATIVIT" 642178.00RESERVE INTERESTOVERDUE

6240852.00

BAD DEPT RESERVE2146462.0

0



!FS SETTLE!ENT 108250.00

DUE B" SOCIET" 50887.00

INTEREST PA"ABLE7516209.0

0LIC PRE!IU! 9011.00

INCO!E TAX 72000.00UN DIVIDED NETPROFIT

20568998.00

TOTAL

3"423140

9.33 TOTAL

39068058

5.33

PRO#IT DURIN! THE

YEAR

164491"6

.00

!RAND

TOTAL

39068058

5.33

!RAND TOTAL

39068058

5.33

OPE%#TION #ND &OND!&T OF DEPOSIT #&&O!NTS

&!%%ENT #&&O!NT&#SH #&&O!NTS#VIN.S +#N #&

1& 6eneral 6u(del(nes7

• All appl(cat(ons should be sat(sfactor(ly (ntroduced to the

.an+s&

• "art(culars of the account open(n) for's s()ned be

const(tuents are clearly recorded at the head of the led)er

accounts duly authent(cated and the for' and other docu'ent

such as spec('en s()nature card- etc& relat(,e to the open(n) of

the accounts are ser(ally nu'bered and syste'at(cally f(led&

Such ser(al nu'bers of the open(n) for'- spec('ens (s

recorded (n the led)ers duly authent(cated&

• All spec('en s()natures- recorded or spec('en s()nature

cards- should be attested by the Mana)er *(th h(s fulls()nature&

• The spec('en s()nature recorded or spec('en s()nature cards

should be attested by the 'ana)er *(th h(s full s()nature&



• The spec('en s()nature cards should be +ept arran)ed (n

alphabet(cal order (n a cab(net- under the loc+ and +ey

author(@ed off(c(al&

• hen an account (s closed- the spec('en s()nature card

should be 'ar+ed Account closed on and attached to the

relat(,e account open(n) for's and +ept *(th the closed

account 'a(nta(ned date *(se&

• At the close of bus(ness each day the loc+ed spec('en

s()nature cards cab(net should be lod)ed (n the stron)

roo'?safe&

• Vernacular s()nature should be attested by an author(@ed

off(c(al&

/& Cheue boo+ (ssue7

• The custody and (ssue of cheue boo+s should be under the

d(rect char)e of the Mana)er? Accountant

• The f(rst and last ser(al nu'bers (n each cheue boo+ *(ll be

entered (n the cheue boo+ re)(ster- *(th separate open(n) for

each deno'(nat(on such as 100-20-/2 etc& under the (n(t(als of

the off(cer hold(n) custody

• hen a cheue boo+ (s (ssued- the na'e of the const(tuent

and the date of (ssue *(ll be entered (n the cheue boo+

re)(ster and authent(cated by the author(@ed off(c(al (n char)e&

The s()nature of rec(p(ent *(ll be ta+en (n the S()nature of

rec(p(ent8s colu'n (n the re)(ster& All cheue boo+s to send by

post 'ust be d(spatched by re)(stered post&

• "art(culars of cheue boo+ (ssued should be recorded (n the

led)er head(n)s under authent(cat(on&

•

A cheue boo+ should ord(nar(ly be (ssued a)a(nst anappl(cat(on- s()ned by the const(tuent on the .an+ers

reu(s(t(ons sl(p fro' the current cheue boo+&

• hen a cheue boo+ (s (ssued to a const(tuent8s 'essa)er- the

const(tuent 'ust be ad,(sed d(rect and h(s ac+no*led)'ent

should be obta(ned&



• $bta(ned unused cheue boo+ for's *hen an account (s

closed or transferred to another .ranch of the .an+&

• A bro+en cheue boo+ re)(ster (s to be 'a(nta(ned to enter the

nu'ber of unused cheue for's& The off(cer (n *hose custody

such cheue for's +ept should personally destroy the

reu(s(t(on sl(p&

=& "ass boo+s

• The pass boo+s *(ll sho* the nu'ber of depos(tors account-

h(s na'e and address&

• The depos(tors should be ad,(sed to present the pass boo+ for

all *(thdra*als other than those by cheues&• In case of *(thdra*als by cheues- the pass boo+s should be

presented *(th(n a *ee+ fro' the date of *(thdra*al- to 'a+e

the entr(es upto date&

• The ban+ *(ll not be respons(ble for any entr(es not

authent(cated under (n(t(als of (ts author(@ed off(c(als&

• Depos(tors should be reuested to +eep the(r pass boo+ and

cheue boo+ (n a place of safety& The ban+ *(ll not be

respons(ble for any loss or fraudulent *(thdra*al out of the

loss of pass boo+? cheue boo+ to the depos(tors ne)lect&

• E,ery chan)e of address should be (nt('ated (''ed(ately to

the ban+ and pass boo+ sent for correct(ons&

;& State'ents of accounts7

• E,ery current and cash cred(t account const(tuent *(ll be

furn(shed *(th a state'ent of account 'onthly and 'ore

freuently (f the const(tuent so des(res& For the sa+e of

con,en(ence the state'ent of account *(ll be +ept (n loose leaf

cone b(nders&



• hen pass boo+ (n l(eu of state'ents are (ssued to the

const(tuents- at the(r spec(al reuests the fact should be

entered (n the led)er&

• State'ents of accounts 'ust be d(spatched not later than the

2th of the succeed(n) 'onth- duly authent(cated by the

state'ent *r(ters?led)er +eeper and the super,(s(n) off(c(al

after due ,er(f(cat(on and after record(n) the led)er *(th the

letters S8 and date of (ssue a)a(nst the correspond(n) balance

(n the state'ents- *(th (n(t(als&

• The da(ly- *ee+ly and fort%n()htly state'ents should be

d(spatched on the follo*(n) *or+(n) day&

• Su''at(ons need not be )(,en (n the state'ents&

Net balance (n current accountsO 'a(nta(ned by a Co%operat(,e .an+ (n the

#eser,e .an+ of Ind(a- State .an+ of Ind(a- State Assoc(ated .an+ and

Nat(onal(@ed .an+s- any balances or depos(ts 'a(nta(ned by the Central

Cooperat(,e .an+s *(th the State Cooperat(,e .an+ of the State concerned

and any balances or depos(ts 'a(nta(ned by a "r('ary Cooperat(,e .an+ (n

the Central Cooperat(,e .an+ concerned or *(th the State Cooperat(,e .an+

of the State concerned shall be el()(ble for be(n) co'puted as l(u(d assets

under th(s sect(on&

The 'onthly return shall (nd(cate the pos(t(on as on alternate Fr(days dur(n)

a 'onth and *(ll sho* the statutory l(u(d assets based on the de'and and

t('e l(ab(l(t(es as on the last Fr(day of the second proceed(n) fort n()ht&

The reser,e ban+ (s e'po*ered to call for a da(ly return fro' any

cooperat(,e ban+ (n the for' and 'anner the #eser,e .an+ 'ay spec(fy&

The ,aluat(on of unencu'bered appro,ed secur(t(esO shall be (n accordance

*(th the 'ethod of ,aluat(on *h(ch the reser,e ban+ of Ind(a 'ay spec(fy&



The reser,e ban+ (s e'po*ered to ('pose penal (nterest on cooperat(,e

ban+s *h(ch default (n the 'a(ntenance of statutory l(u(d(ty rat(o&

Sect(on /;A

Th(s ne* sect(on e'po*ers the reser,e ban+ *(thout pre9ud(ce to the

pro,(s(ons of sect(on 2=- to e5e'pt by (ssue of not(f(cat(on (n the off(c(al

)a@ette any cooperat(,e ban+ or class of cooperat(,e ban+s *(th reference to

all or any of the off(ces of such ban+ or ban+s or *(th reference to the *hole

or any part of the assets l(ab(l(t(es of such cooperat(,e ban+ or ban+s fro'

the appl(cat(on of *hole or any part of the pro,(s(ons of sect(on 1: or sect(on

/; for such per(od and sub9ect to such cond(t(ons as 'ay *e spec(f(ed (n

such not(f(cat(on&

Sect(on /< and =0

E,ery ban+ (s reu(red to prepare (ts prof(t and loss account sheet (n the

prescr(bed for' and to sub'(t (t to the reser,e ban+ dually aud(ted and

s()ned by the pr(nc(ple off(cer of the ban+ and at least = d(rectors& The

balance sheet (s also reu(red to publ(sh (n one of the local ne*spaper&

These are to be co'pl(ed *(th before =1st dec of the year or e5tended t('e

as 'aybe allo*ed by the reser,e ban+ of Ind(a&

Sect(on =2 and =2A

Sect(on =2 e'po*ers the reser,e ban+ to (nspect cooperat(,e ban+s by (ts

off(cers and supply to the cooperat(,e ban+s so (nspected a copy of (ts

report& In case of pr('ary cooperat(,e ban+s- the reser,e ban+ 'ay author(@e

the state cooperat(,e ban+ of state concerned to carry out the (nspect(on on

behalf of the reser,e ban+& Sect(on =2A e'po*ers that reser,e ban+ to (ssueD(rectors to cooperat(,e ban+s (n )eneral and to any cooperat(,e ban+ on

part(cular re)ard(n) any aspect of the *or+(n) of the cooperat(,e ban+s?

ban+ concerned& h(le sect(on /1 referred to earl(er confers po*ers to (ssue

d(rect(ons (n re)ard(n) to ad,ance by Cooperat(,e .ans- Sect(on =2A co,ers

11 aspects of the funct(ons of Cooperat(,e .an+s and these t*o sect(ons



to)ether )(,e po*ers to the #eser,e .an+ to (ssue d(rect(ons on all 'atters

concern(n) the operat(ons cooperat(,e ban+s (n part(cular- or all Cooperat(,e

.an+s- or a )roup of cooperat(,e .an+s- (n )eneral& In add(t(ons to

conduct(n) re)ular (nspect(on under (s Sect(on the #eser,e .an+ (s also

e'po*ered to carry (s Sect(on the #eser,e .an+ (s also e'po*ered to carry

scrut(ny of the affa(rs of the cooperat(,e ban+ at any t('e (t (s cons(dered

necessary to do so&

NA.A#D has also been statutor(ly e'po*ered to carry the (nspect(on of the

Cooperat(,e .an+s&

Sect(on 1B

The #eser,e .an+ e'po*ered to depute- (n case (t (s cons(dered essent(al

to do so- for the reor)an(@at(on or e5pans(on of cooperat(,e cred(t on sound

l(nes- one or 'ore of (ts off(cers to *atch the proceed(n)s at any 'eet(n) of

.oard of D(rectors of any cooperat(,e ban+ or any other body const(tuted by

(t and reu(res such ban+ to )(,e an opportun(ty to the off(cers so deputed to

be heard at such 'eet(n)& Also the #eser,e ban+ 'ay appo(nt one or 'ore

of (ts off(cers to obser,e the 'anner (n *h(ch the affa(rs of the cooperat(,e

ban+ or (ts off(ces or branches are be(n) conducted- reu(r(n) such off(cers to

'a+e a report thereon&

Sect(on ;2

Under th(s sect(on- the #eser,e .an+ can reco''end to the Central

6o,ern'ent to order a 'orator(u' (n respect of a Cooperat(,e .an+& The

po*er to (ssue such a 'orator(u' ho*e,er rests *(th Central 6o,ern'ent&

Sect(on ;2!

Th(s sect(on e'po*ers the Central 6o,ern'ent to 'a+e rules- (n

consultat(on *(th the #eser,e .an+- spec(fy(n) the per(ods for *h(ch a



Cooperat(,e .an+ shall preser,e (ts boo+s- accounts another docu'ents and

+eep *(th (tself d(fferent (nstru'ents pa(d by (t&

Sect(on ;2

Th(s sect(on enables the cooperat(,e .an+s to return at the reuest of the

consu'er a pa(d (nstru'ent before the prescr(bed per(od of preser,at(on

only after 'a+(n) and +eep(n) (ts possess(on a true copy thereof 'ade by

'echan(cal process or other process *h(ch (n (tself ensures the accuracy of

the copy& The .an+ (s also ent(tled to reco,er fro' the custo'er the cost of

'a+(n) such cop(es of the (nstru'ents&

Sect(on ;2A

Th(s sect(on enables depos(tors of a .an+ to no'(nate one person to *ho'

(n the e,ent of the death of the sole depos(tor or the deaths of all depos(tors-

the a'ount of depos(t 'ay be returned by the .an+& In pursuance of the

pro,(s(ons of th(s sect(on- the Cooperat(,e .an+s #ules 1<:2 ha,e been

fra'ed and the no'(nat(on for's (n respect of depos(ts- safe custody-

loc+ers ha,e been prescr(bed&

Sect(on ;2.

Th(s sect(on )(,es protect(on to a cooperat(,e ban+ (n respect of cla('s 'ade

by persons other than persons (n *hose na'es a depos(t (s held *(th (t&

Ho*e,er (f a not(ce ?order (s (ssued by a court of co'petent Jur(sd(ct(on then

the .an+ should ta+e due not(ce of (t&

Sect(on ;2C

Th(s sect(on enables a cooperat(,e ban+ to return the art(cles +ept by a

person *(th (t (n safe custody to h(s no'(nee (n the e,ent of h(s death

.les Sect(on ;2D



Th(s sect(on )(,en protect(on to a cooperat(,e ban+ (n respect of any cla(' to

any art(cle 'ade by any person other than the person *ho placed the art(cle

(n safe custody *(th (t&

Sect(on;2E

Th(s sect(on enables an (nd(,(dual loc+er holder to no'(nate one person to

*ho' (n the e,ent of h(s death the cooperat(,e ban+ 'ay )(,e access to the

loc+er and l(berty and to re'o,e contents of the loc+er&

Sect(on ;2F

Th(s sect(on )(,es protect(on to a cooperat(,e ban+ (n respect of cla('s fro'

persons other than the h(rers of the loc+er&

Sect(on ;B

In th(s sect(on- the ,ar(ous penalt(es that 'ay be ('posed on cooperat(,e

ban+s for non%co'pl(ance *(th the ,ar(ous pro,(s(ons of the .&#& Act ha,e

been spec(f(ed&

Sect(on ;>A

Under th(s sect(on the reser,e ban+ (s e'po*ered to ('pose penalt(es on

any ban+ for contra,ent(on and defaults of the nature referred to (n sub%

sect(on3=4and3;4or sect(on ;B of the act-(b(d-*(thout recourse to the court of

la*& An enu(ry (s to be conducted and (s reasonable opportun(ty of be(n)

heard should be )(,en to the ban+& The procedure for conduct(n) the enu(ry

(s la(d do*n (n rule 11 of the ban+(n) re)ulat(on rules 1<<B&the procedure

st(pulates the appo(nt'ent of an enu(ry off(cer by the reser,e ban+ for

hold(n) the enu(ry& The enu(ry off(cer (s reu(red to send a state'ent )(,(n)

suff(c(ent part(culars of the contra,ent(on or default of the nature referred to

(n sub sect(on 3=4 or sub sect(on 3;4 of sect(on ;B of the act and to )(,e =0

days8 t('e for send(n) the reply& The enu(ry off(cer shall f(5 a date for



conduct(n) the enu(ry *h(ch should be on a day to day bas(s& The ban+ (s

ent(tled to be represented at the enu(ry by (ts author(@ed representat(,e *ho

'ay be a D(rector of $ff(cer but not by a le)al pract(oner& The procedure also

pro,(de for cross e5a'(nat(on of the *(tness both by the representat(,e of

#eser,e .an+ or of the Cooperat(,e .an+& After co'plet(on of enu(ry they

sa(d $ff(cer shall record h(s f(nd(n)s and sub'(t the ent(re record to the

#eser,e .an+&



%ESE#%&H METHODO"O.$

In the present pro9ect *or+ the data has been collected fro' a,a(lable source that (s secondary

data l(+e *ebs(tes- Ne*spapers and 'a)a@(nes& The sa'ple s(@e ta+en (s of > d(fferent sectora

funds

Samplin0 Desi0nSa'pl(n) 'ethod use (s non probab(l(st(c 9ud)'ental sa'pl(n)& The Mutual Fund Sche'e for

study ha,e been selected based on follo*(n) = cr(ter(a1 Type of the sche'e $pen%ended Sectoral Funds3)ro*th4/ M(n('u' Assets Under M)'t& #s& 200 Crore



= Incept(on Date "r(or to 1st Apr(l- /010

6ro*th opt(on for the ent(re selected sche'e has been cons(dered&

%esearch Desi0n

1& .ench'ar+ Inde57 For th(s study the 20 shares 'ar+et (nde5 SG" CNP NIFT! h

been used as the 'ar+et (nde5&

/& "er(od of study7 "er(od of study has been ta+en as /'onths& =& #(s+ Free #ate $f #eturn7 #(s+ free rate of return refers to that'(n('u' return on an (n,est'ent that has no r(s+ of los(n) the (n,est'ent o,er *h(ch (t (s

earned& For th(s purpose of th(s study r(s+ free rate of return (s represented by <1 days Treasur

b(ll&

"IMIT#TIONS

1& The analys(s (s based on h(stor(cal data and thus (nd(cates the past perfor'ance *h(ch 'ay

not al*ays be (nd(cat(,e of the future perfor'ance&

/& D(fferent sche'es cons(der d(fferent 'ar+et (nd(ces as the(r bench'ar+s- but for the purpos

of un(for'(ty (n the study all sche'es ha,e to be co'pared a)a(nst sa'e bench'ar+ (nde5&



=& Sharpe rat(o 3(n (ts s('plest for's4 that the relat(onsh(p bet*een r(s+ and return (s l(near and

re'a(n l(near throu)hout (ts ent(re ran)e& Var(ous research *or+s conducted (n th(s re)ard sho

that the relat(onsh(p (s not as s('ple as Cap(tal Mar+et theory *ould su))est& Th(s (s an (nhere

*ea+ness of cap(tal Asset "r(c(n) Model&

;& The t('e per(od cons(dered by the study (s only three years a lar)er per(od could ha,e

ensured co,era)e of a full 'ar+et cycle- thus )(,(n) a 'ore real p(cture of the perfor'ance of t

sche'es&

D#T# #N#"$SIS B INTE%P%ET#TIONS



• Sectoral Mutual Funds Cons(dered7%

1& Auto Sector % UTI Transportat(on and Lo)(st(cs Fund

/& .an+(n) Sector % UTI .an+(n) Sector Fund

=& FMC6 Sector % Fran+l(n FMC6 Fund

;& Infrastructure Sector % Tata Infrastructure Fund

2& "o*er Sector % #el(ance D(,ers(f(ed "o*er Sector Fund

B& Ser,(ce Sector % "rudent(al ICICI Ser,(ces Industr(es Fund

>& Technolo)y Sector % Fran+l(n Infotech Fund



1& #uto Sector4'

!TI Transportation and "o0istics Fund

Scheme Snapshot

&IO4 A Shr(dhar &ate0ory4 Eu(ty

Fund Mana0er4 Anoop .has+ar Su)'&ate0ory4 Sectoral%Auto

Phone4 <1 // 2B>: BBBB ? 2B2>:/10 Type4 $pen

Fa54 <1 // /B2/ ;</1 Min( In?estment,%s-4 2000

@e)site4 ***&ut('f&co' Total #ssets,%s(Mn-4 >1<&:

%e0istrars4 UTI Technolo)y Ser,(ces

L('(ted

"aunch Date4 0<%MA#%0;

Scheme O)jecti?e4

The sche'e a('s to pro,(de to (n,estors )ro*th of cap(tal o,er a per(od of

t('e as *ell as to 'a+e per(od(cal d(str(but(on of (nco'e fro' (n,est'ent (n

stoc+s of respect(,e sectors of the Ind(an econo'y&

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=ANOBHASK_FM

http://www.myiris.com/mutual/scheme/www.utimf.com/



http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=ANOBHASK_FM



=& FM&. Sector4'

FranAlin FM&. Fund

Scheme Snapshot

&IO4 Santosh a'ath &ate0ory4 Eu(ty

Fund Mana0er4 An(l "rabhudas Su)'&ate0ory4 Sectoral%FMC6

Type4 $pen

Min( In?estment,%s-4 2000

Phone4 <1 // 2B=/ 2:/0

Total #ssets,%s(Mn-4 ;:2&;/

Fa54 <1 // //:1 0</=

%e0istrars4 Fran+l(n Te'pleton Asset Mana)e'ent

:e)site4 http7??***&te'pleton(nd(a&co' 3Ind(a4 ",t& Ltd&

"aunch Date4 12%MA#%<<

Scheme O)jecti?e4

See+s to pro,(de lon) ter' cap(tal apprec(at(on by (n,est(n) pr('ar(ly (n

shares of co'pan(es operat(n) (n the FMC6 (ndustry&

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=ANILPRA_FM

http://www.templetonindia.com/

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=ANILPRA_FM




Asset Allocation

Eu(ty Shares <B&1=

Call And $ther

Assets /&:;

Corporate Debt ?

.onds 1&0=

As on =0%N$V%10

Top 5 holdings As on 30-NOV-10

Nestle Ind(a L('(ted 1;&<>

I T C L('(ted 11&/>

As(an "a(nts L('(ted <&/2

"(d(l(te Industr(es

L('(ted B&;:

Mar(co L('(ted B&0:

http://www.myiris.com/shares/company/snapShotShow.php?icode=NESINDIA

http://www.myiris.com/shares/company/snapShotShow.php?icode=ITC

http://www.myiris.com/shares/company/snapShotShow.php?icode=ASIPAIIA

http://www.myiris.com/shares/company/snapShotShow.php?icode=PIDINDUS


http://www.myiris.com/shares/company/snapShotShow.php?icode=MARINDUS

http://www.myiris.com/shares/company/snapShotShow.php?icode=NESINDIA

http://www.myiris.com/shares/company/snapShotShow.php?icode=ITC

http://www.myiris.com/shares/company/snapShotShow.php?icode=ASIPAIIA



http://www.myiris.com/shares/company/snapShotShow.php?icode=MARINDUS



;& Infrastructure Sector

Tata Infrastructure Fund

Scheme Snapshot

&IO4 Ved "ra+ash Chatur,ed( &ate0ory4 Eu(ty

Fund Mana0er4 M Venu)opal Su)'&ate0ory4 Sectoral%Infrastructure

Type4 $pen


Phone4 <1 // 2B202/00 ? /21 ? /2/

Total #ssets,%s(Mn-4 1:<>/&<=

Fa54<1 // 2B=1 21<;

%e0istrars4 Co'puter A)e Mana)e'ent Ser,(ces

@e)site4 http7??***&tata'utualfund&co' ",t&Ltd&

"aunch Date4 /2%N$V%0;

Scheme O)jecti?e4

The (n,est'ent ob9ect(,e of the Sche'e (s to pro,(de (nco'e d(str(but(on and ? or

'ed(u' to lon) ter' cap(tal )a(ns by (n,est(n) predo'(nantly (n eu(ty?eu(ty

related (nstru'ent of the co'pan(es (n the (nfrastructure sect

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=MVENGOP_FM

http://www.tatamutualfund.com/

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=MVENGOP_FM

http://www.tatamutualfund.com/



Asset Allocation

Eu(ty Shares <2&//

Cash And $ther

Assets ;&>:

As on =0%N$V%10


I C I C I .an+ L('(ted ;&<>

Cro'pton 6rea,es

L('(ted ;&><

Cash And $ther

Assets ;&>:

$(l G Natural 6as Corporat(on L('(ted ;&>0

H D F C .an+

L('(ted ;&2:

http://www.myiris.com/shares/company/snapShotShow.php?icode=ICICIBCO

http://www.myiris.com/shares/company/snapShotShow.php?icode=CROGREAV


http://www.myiris.com/shares/company/snapShotShow.php?icode=OILNATGC

http://www.myiris.com/shares/company/snapShotShow.php?icode=HDFCBANK





http://www.myiris.com/shares/company/snapShotShow.php?icode=OILNATGC





2& Po@er Sector4'

%eliance Di?ersified Po@er Sector Fund

Scheme Snapshot

&IO4 #a9a)opal &ate0ory4 Eu(ty

Fund Mana0er4 Sun(l S(n)han(a Su)'&ate0ory4 Sectoral%"o*er

Type4 $pen


Phone4 <1 // =0<< ;B00 Total #ssets,%s(Mn-4 20/11&/

Fa54 <1 // =0;1 ;:<< %e0istrars4 ar,y Co'putershare "r(,ate

L('(ted

@e)site4 http7??***&rel(ance'utual&co'? "aunch Date4 /<%MA#%0;

Scheme O)jecti?e4

The pr('ary (n,est'ent ob9ect(,e of the sche'e (s to see+ to )enerate cont(nous

returns by act(,ely (n,est(n) (n eu(ty and eu(ty related or f(5ed (nco'e

secur(t(es of "o*er and other assoc(ated co'pan(es

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=SUNBSING_FM

http://www.reliancemutual.com/

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=SUNBSING_FM

http://www.reliancemutual.com/



Asset Allocation

Eu(ty Shares

Der(,at(,es-Cash And $ther #ece(,ables

As on =0%N$V%10

94.65

2&=2


$ther Eu(t(es :&==

Cu''(ns Ind(a

L('(ted B&=/

Torrent "o*er

L('(ted 2&<<

I C I C I .an+

L('(ted 2&;:

Cash And $ther Assets And Der(,at(,es 2&=2

http://www.myiris.com/shares/company/snapShotShow.php?icode=KIRCUMMI


http://www.myiris.com/shares/company/snapShotShow.php?icode=TORPOWER












B& Technolo0y Sector4'

FranAlin Infotech Fund

Scheme Snapshot

&IO4 Santosh a'ath &ate0ory4 Eu(ty

Fund Mana0er4 Anand #adha+r(shnan- Mural( !erra'

Su)'&ate0ory4 Sectoral%TMT

Type4 $pen


Phone4 <1 // 2B=/ 2:/0

Total #ssets,%s(Mn-4 1;0=&2

Fa54 <1 // //:1 0</=

%e0istrars4 Fran+l(n Te'pleton Asset Mana)e'ent

@e)site4 http7??***&te'pleton(nd(a&co' 3Ind(a4 ",t& Ltd&

"aunch Date4 //%JUL%<:

Scheme O)jecti?e4 See+s to pro,(de lon) ter' cap(tal apprec(at(on by (n,est(n)

pr('ar(ly (n Infor'at(on Technolo)y (ndustry&

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=ANRAMUYE_FM







Asset Allocation

Eu(ty Shares <B&=:

$ther Current Assets =&B/

Unl(sted Eu(t(es 0&00

As on =0%N$V%10


Infosys Technolo)(es

L('(ted 2/&12

Tata Consultancy Ser,(ces

L('(ted /2&=/

(pro L('(ted <&;:

Cash And $ther Assets =&B/

$racle F(nanc(al Ser,(ces Soft*are L('(ted =&2B

http://www.myiris.com/shares/company/snapShotShow.php?icode=INFTECHN


http://www.myiris.com/shares/company/snapShotShow.php?icode=TATCONSE


http://www.myiris.com/shares/company/snapShotShow.php?icode=WIPRO

http://www.myiris.com/shares/company/snapShotShow.php?icode=CITINFTI





http://www.myiris.com/shares/company/snapShotShow.php?icode=WIPRO

http://www.myiris.com/shares/company/snapShotShow.php?icode=CITINFTI



>& Ser?ice Sector4'

Prudential I&I&I Ser?ices Industries Fund

Scheme Snapshot

&IO4 N(lesh Shah &ate0ory4 Eu(ty

Fund Mana0er4 San9ay "are+h Su)'&ate0ory4 Sectoral%Ser,(ces

Type4 $pen


Phone4 <1 // //B><BB2 ? //B><B>B? //B<><:<

Total #ssets,%s(Mn-4 /:0/&;

Fa54<1 // //B=0;1<

%e0istrars4 Co'puter A)e Mana)e'ent Ser,(ces

@e)site4 http7??***&(c(c(prua'c&co' ",t&Ltd&

"aunch Date4 1=%$CT%02

Scheme O)jecti?e4 to )enerate cap(tal apprec(at(on and (nco'e d(str(but(on to

un(t holders by (n,est(n) predo'(nantly (n eu(ty?eu(ty related secur(t(es of the

co'pan(es belon)(n) to the ser,(ce (ndustry and balance (n debt secur(t(es and

'oney 'ar+et (nstru'ents (nclud(n) call 'oney&

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=SANPAR_FM

http://www.icicipruamc.com/

http://www.myiris.com/mutual/Fund_manager/index.php?fm_code=SANPAR_FM

http://www.icicipruamc.com/



Asset Allocation

Eu(ty Shares <2&:0

Futures /&=>

Debt And Cash And

$ther Assets 1&:/

As on =0%N$V%10


Infosys Technolo)(es

L('(ted >&B;

H D F C .an+ L('(ted >&=>

Hous(n) De,elop'ent F(nance Corporat(on L('(ted B&00

Ja(pra+ash Assoc(ates

L('(ted 2&:<

.hart( A(rtel L('(ted 2&>/




http://www.myiris.com/shares/company/snapShotShow.php?icode=HOUDEVFC

http://www.myiris.com/shares/company/snapShotShow.php?icode=JAYREWCE


http://www.myiris.com/shares/company/snapShotShow.php?icode=BHATELEE




http://www.myiris.com/shares/company/snapShotShow.php?icode=HOUDEVFC



http://www.myiris.com/shares/company/snapShotShow.php?icode=BHATELEE



FINDIN.SC S!..ESTIONS B &ON&"!SION



FINDIN.S

%ate of %eturn4 A'on) the funds selected- UTI .an+(n) Sector fund has

)(,en the 'a5('u' rate of returns 3=<4 (n the last one year follo*ed by Fran+l(n

FMC6 3==4& #el(ance D(,ers(f(ed "o*er Sector fund *(th a return of 3>&24

stood last (n the table&

A'on) the funds selected- #el(ance D(,ers(f(ed "o*er has )(,en the 'a5('u'

rate of returns 3=>4 (n the last f(,e years follo*ed by Tata Infrastructure 3/;4&

UTI Transportat(on and Lo)(st(cs *(th a return of 31B&<:4 stood last (n the table&

Total %isA ,Standard De?iation-

UTI .an+(n) Sector fund has the 'a5('u' standard de,(at(on of B&</

*h(le Fran+l(n FMC6 has the least standard de,(at(on of /&<B

Systematic %isA ,+eta- and &o ' relation

UTI .an+(n) Sector fund has the 'a5('u' .eta of 1&0: *h(le UTI Transportat(on

and Lo)(st(cs has the least .eta of 0&22&

UTI .an+(n) Sector fund has the 'a5('u' co%relat(on of 1&0> *h(le Fran+l(n

FMC6 has the least #%Suared of 0&B2

Treynor B Sharpe %atio4

UTI .an+(n) Sector Fund has the 'a5('u' Treynor rat(o of %0&1< *h(le #el(ance

D(,ers(f(ed fund has the least Treynor rat(o of %0&:2&

Fran+l(n Infotech has the least Sharpe #at(o of %0&12 *h(le ICICI "rudent(al

Ser,(ces has the 'a5('u' sharp rat(o of 0&01



S!..ESTIONS B &ON&"!SIONS

1& .an+(n) and FMC6 sectors ha,e fared *ell (n the last one year and

(t (s su))ested to (n,est (n these sectors&

/& It (s ad,(sed to be +eep a*ay fro' (nfrastructure funds espec(ally

#el(ance Infrastructure fund&

=& FMC6 has the least r(s+ and .an+(n) has the h()hest r(s+ a'on)

the sectors& It (s better to a,o(d .an+(n) funds for people *ho *ant

to a,o(d the r(s+&

;& In,estors *ho e5pect slo* and steady returns are ad,(sed to for

FMC6 sector&

2& UTI .an+(n) Sector has a beta of )reater than 1 3(&e 'ar+et beta4&

Th(s ('pl(es that .an+(n) Sector has a h()her r(s+ co'pared to the

'ar+et portfol(o&

B& FMC6- Ser,(ces- Transportat(on and Lo)(st(cs sector has the least

beta and (n,estors can (n,est (n these funds



#NNE;!%E ' I

TE%MINO"O.$

Mutual Fund7 An (n,est'ent tool that pools (n (n,est'ents 'ade by people and that

corpus (s profess(onally 'ana)ed by further (n,est(n) as per the type of fund that8s

be(n) operated& The (ntent(on (s to float 'oney (n the 'ar+et by o*n(n) assets

co'ponents of 'any co'pan(es at the sa'e 'eet(n) the assurances 'ade to

(n,estors& There (s no obl()at(on *hatsoe,er for assured returns&

N#V' A cu'ulat(,e 'ar+et ,alue of total assets co'ponent of (ts l(ab(l(t(es& It8s

actually the 'easure of *hat each shareholder *ould acu(re (f the assets of the

co'pany are l(u(dated&

No'"oad funds % there (s no co''(ss(on co'ponent present to enter and e5(t of

the fund o*nersh(p& It8s a full (n,ol,e'ent of the corpus&

E"SS % Eu(ty l(n+ed sa,(n)s sche'e (s a sche'e *(th a ta5 rebate allo*ed as

per the Sec :: (n the Ind(an (nco'e ta5 act- 1<B1&It pro,(des the (n,estors *(th

the opportun(ty to sa,e )a(ns on cap(tal throu)h (n,est'ents 'ade (n MFs&

Inde5 Funds % An (nterest(n) sche'e that tr(es to repl(cate the beha,(or of the

part(cular stoc+ (nde5- that (s of (nterest& The portfol(o of the fund *ould 'a9orlycons(st of eu(t(es l(sted (n that (nde5&

Sector Funds % An MF sche'e that has (ts portfol(o chart of co'pan(es that belon)

to a certa(n sector- say $(l& Th(s (s a h()h%r(s+ fund- as the perfor'ance of that sector

*ould d(rectly reflect (n the funds NAV& So- here *e are *(th the d(,erse 'ar+et of

Mutual Funds& Each one cla('(n) the(r US"& h(le MFs certa(nly are N$T the safest-

but they are relat(,ely 'ore safe than the d(rect (n,ol,e'ent (n the eu(ty 'ar+et-

)(,en that fact that 'a9or(ty of the (n,estors are e(ther (ll%(nfor'ed or not (nfor'ed

about the *ay the 'ar+ets 'o,e& So *hat e5actly 'a+es MFs the r()ht +(nd of

fund 'ana)e'ent tool- espy (n a country l(+e Ind(a A country l(+e Ind(a or for

that 'atter any de,elop(n) country has so'e bas(c proble's *h(ch pre,ent the

(nfor'at(on to be a,a(lable freely and that too (n an access(ble fash(on&



(th so 'any potent(al (n,estors (n Ind(a- MFs can )o a lon) *ay (n

)ett(n) establ(shed- plus *(th added set of alternat(,es *(th(n the MF sche'es

each has a sche'e ready for the spec(f(c needs& Just to ha,e a better

perspect(,e- there are ,ar(ous opt(ons a,a(lable (n the for' of Eu(ty fund- Debt

funds- .alance funds and co'ponents l(+e Money 'ar+et funds- Inde5 funds and

the l(+es of (t& Let8s ta+e a pee+ at the ('portant ones&

E*uity Funds7 The H()h r(s+ % H()h return sche'e (n,ests (n the eu(ty 'ar+ets- the

r(s+ (n,ol,ed (s co'parat(,ely h()her than but not as h()h as that of the sector funds

that focus (n,est'ents on spec(f(c sectors& .ut the h()her the r(s+ co'ponent- the

h()her (s the return rate& Ho*e,er- there (s a ,ar(ant (n th(s type of eu(ty based

sche'e called the ELSS or the Eu(ty L(n+ed Sa,(n)s Sche'es- the offer a ta5

rebate under Sec :: of I%T act- but the (n,est'ent needs to be loc+ed for at least =

years Su(table for r(s+ ta+ers &The proble' (s that (t reacts faster to the 'ar+et

fluctuat(ons- as the NAV *ould beha,e the *ay 'ar+et beha,es& All(ance AMC (s

supposed to ha,e a )ood eu(ty fund e5pert(se&

De)t Funds7 Debt funds (n,est (n the debt co'ponent or the f(5ed (nco'e 'odels&

So the return (s al'ost certa(n and the r(s+ (s lo*& Ho*e,er- the returns are also

co'bat(,ely lo* co'pared to the pr(nc(ple a'ount& In,est'ents (n these +(nds of

funds ran)e fro' 6o,t&Secur(t(es to corporate bonds& If you are loo+(n) for short%

ter' safe (n,est'ent opt(ons then the l(u(d funds (n the cate)ory (s the ans*er for

you& Se,eral alternat(,es th(s cate)ory (s no* a,a(lable l(+e the (nco'e fund- )ro*th

fund or any lon)%ter' ch(ldcare fund and the l(+es of (t& More d(,erse Debt funds are-

'ore the chances of substant(al returns&

+alance funds % Th(s type of funds are part eu(ty and part debt funds& The

pattern (n,est'ent (n balance funds (s usually pre%deter'(ned& !ou ha,e open%

ended and closed%ended balance funds- *here the funds can be traded (n an

open ended case 9ust l(+e eu(t(es but based on the Net Asset Value 3NAV4& The

closed%ended funds are loc+ed and cannot bet traded&



:hen to say 0ood)ye to your Mutual FundG

There are so'e profess(onals *ho tal+ of *hen to e5(t fro' 'utual funds l(+e

other tal+ of *hen to (n,est (n 'utual funds& "eople *ho *ant to (n,est )et 'ore

than the f(5ed depos(t earn(n) 3r(s+ free rate4- preferred opt(on (s 'utual funds& It

(s ('portant to base the dec(s(on on relati?e performance and not absolute

perfor'ance& hen one fund (s do*n 2 *h(le other funds or the 'ar+et (n

)eneral are up 10- (t (s ,ery te'pt(n) to s*(tch o,er to *hat (s Khot&K Chas(n)

"erfor'ance (s the best *ay to shoot oneself (n the foot as *e 9ust d(scussed

abo,e&

hen study(n) relati?e performance- one should loo+ at h(s fund and co'pare

(t to (ts peers& Ho*e,er- co'par(sons should be dra*n bet*een parallels and so

eu(ty funds cannot and should not be co'pared *(th debt funds& hen

choos(n) a bench'ar+- one 'ust select funds (n the sa'e cate)ory& If one8s fund

*as do*n / and the a,era)e eu(ty fund *as do*n ;- then there (s no )ood

enou)h reason to sell (t& $ne should co'pare the returns posted by h(s fund *(th

that of the peers across ,ar(ous hor(@ons such as 1%year- =%year and abo,e& A

short%ter' ,(e* can often lead to co''(tt(n) hara%+(r(- as (t doesn8t present thefull p(cture& If (t has underperfor'ed the a,era)e of (ts peers (n all cases- then (t

sure (s one of the better reasons to e5(t fro' the fund&

# chan0e in life sta0e

In,est'ents are done *(th a certa(n ob9ect(,e (n '(nd and l(fe sta)es are often

a deter'(n(n) factor of *hat a person needs& A youn) 'an can afford to ta+e

'ore r(s+s than a person near(n) h(s ret(re'ent can& In such cases- (t pays to

*(thdra* 'oney fro' the eu(ty (n,est'ents 'ade earl(er and put the' (n

safer- 'ore conser,at(,e debt funds that offer stable returns *(thout

co'pro'(s(n) on r(s+& So a chan)e (n l(fe sta)es *ould be one such reason to

cons(der s*(tch(n) (nto a fund that 'atches *(th one8s needs& As one nears



ret(re'ent- one '()ht *ant to cons(der 'ore conser,at(,e funds& If one )ets

'arr(ed- one '()ht need to co'pro'(se one8s r(s+ tolerance and des(red

returns *(th that of the spouse& Th(s could tr())er off the need to e5(t&

# major chan0e in any )asic attri)ute of the fund

hen the fund chan)es any bas(c attr(bute as 'ent(oned by (t (n (ts offer

docu'ents- the (n,estors ha,e a cho(ce of )ett(n) out of (t& E,en SE.I has

pro,(ded for an e5(t route be(n) 'ade a,a(lable to the (n,estors& Chan)es l(+e a

chan)e (n Asset Mana)e'ent Co'pany or (n (n,est'ent style of fund or chan)e

of structure say fro' closed%end to open%end etc& are )ood enou)h reasons for

an (n,estor to cons(der s*(tch(n) or e5(t(n) fro' (t as they are certa(nly l(+ely to

affect the fund (n a 'a9or *ay&

Fund doesnt comply @ith its o)jecti?e

$ne of the ('portant para'eters (n the select(on of the fund (s al()n'ent of the

r(s+ prof(les of the (n,estor and fund& The ob9ect(,e of the fund says a lot about

ho* the fund plans to (n,est& If the ob9ect(,e (s not be(n) co'pl(ed *(th- (t (s oneof the e5(t po(nts *orth cons(der(n)& For e5a'ple- the three funds d(scussed

abo,e- All(ance Eu(ty- .(rla Ad,anta)e and IN6 6ro*th all cla(' to be

d(,ers(f(ed eu(ty funds yet they had hu)e e5posures to select ICE sector scr(pts

that not only added ,olat(l(ty than (s e5pected out of d(,ers(f(ed funds but also (n

a *ay- *ent a)a(nst the(r stated ob9ect(,e&

The Funds E5pense %atio %ises

A s'all r(se (n an e5pense rat(o (s not a b() deal- ho*e,er a s()n(f(cant r(se can

result (n substant(al reduct(on of y(elds and so (t *ould be better to e5(t the fund&

In the case of bond funds or 'oney 'ar+et funds- (t (s h()hly unl(+ely that the

fund can (ncrease (ts returns enou)h to 9ust(fy an (ncrease (n the funds

e5penses&



The Fund Mana0er has chan0ed

a s('ple chan)e of fund 'ana)ers- (n (tself- (s not enou)h reason to sell a fund

on a short%ter' bas(s& If (t (s a pass(,ely 'ana)ed fund 3(nde5 fund4- then one

has l(ttle to no reason to *orry& Ho*e,er- (f (t (s an act(,ely 'ana)ed fund- then

has to +eep the eyes open on the ne* 'ana)er& $bser,(n) the styles- stoc+

p(c+(n) and r(s+s underta+en by the ne* 'ana)er (s ('portant for (t d(scloses a

lot about ho* the fund '()ht fare (n the future& If sat(sf(ed- one *(ll ha,e no

reason to co'pla(n later but the process needs t('e and so an (n,estor has to

obser,e the fund 'ana)er for so'e t('e before one ta+es a dec(s(on&

Enou0h has )een earned

Ho*e,er- noth(n) (s as ('portant as to re(n the horses (n t('e& The pr('ary

pr(nc(ple beh(nd safety of (n,est'ent (s to ta+e r(s+s that can be tolerated& The

pr(nc(ple also (s spec(f(c on the e5pectat(ons that the (n,estor 'ust ha,e fro'

any (n,est'ent& Just as (t (s ('portant to set real(st(c tar)ets that one hopes toach(e,e fro' the (n,est'ent- (t (s also ('portant to e5(t *hen tar)et as e5pected

has been ach(e,ed (rrespect(,e of the fact that (t '()ht be )enerat(n) better

returns (n a short%ter'&

The abo,e l(st (s certa(nly not e5haust(,e and (nd(,(duals *(ll ha,e other

better reasons to u(t as *ell& It8s 9ust that 'ost don8t +no* *hen to apply thou)ht

and so these *ould co'e (n handy&



TIPS FO% M!T!#" F!ND INVESTO%S4 ,S!..ESTIONS-

These are the fe* e5act as re)ards (n,est'ent (n MF8s ta+en fro' the boo+ *(th

Mar+et(n) for the <08sO )(,en by the all Street&

1& Chec+ your letter of offer of funds prospectus to )uard yoursel,es a)a(nst any

h(dden fees&

/& Ensue that the funds trac+ record (s the sa'e as that of the current

'ana)e'ent

=& A,o(d MF8s that char)e e5(t fees at he bac+ end door 3fee s char)ed by MF

fro' the un(t holders at he t('e to rede'pt(on of the un(ts&4

;& .uy the funds *(th no sale char)ed loads&3a load (s a char)e by the fund

*hen (n,estor buys (t (s called the entry load or *hen he sells (s called the e5(t

load&4

2& If the char)e (t8s hea,y by the M F to d(scoura)e the (n,estors fro' ta+(n)

short pos(t(ons (n the funds un(ts because too 'any (n,estors sell the(r un(ts

at a t('e then the fund has to sell (ts hold(n)s to 'eet the obl()at(ons that

y(eld (nto ,(tal of the f(nes o,erall return& Most short funds l(+e )u(lt funds

3these are the funds the (n,est only (n )o,ern'ent secur(t(es and treasuryb(lls thus the (n,estors ha,e an opportun(t(es to buy r(s+ free secur(t(es4&

These funds y(eld a better return than a 'oney 'ar+et fund& It (s )ood for the

(n,estors *ho des(re safety of pr(nc(pal a'ount4& Money 'ar+et funds 3these

funds (n ,(e*s (n 'oney 'ar+et (nstru'ents such as treasury b(lls- )o,t&

bonds- cert(f(cates of ban+ depos(ts- co''erc(al depos(ts4& They char)e no

loads- ho*e,er loads are l('(ted by SE.I to >&

B& Chec+ fund8s perfor'ance (n bear as *ell a the bull 'ar+et&

>& 6uard fund r(s+ by chec+(n) (ts portfol(o for d(,ers(f(cat(on ,olat(l(ty&



E$ STEPS FO% FIN#N&I#" P"#NNIN.

INS!%E $O!%SE"F +EFO%E $O! INVEST

Insurance (s the pre%reu(s(te of all (n,est'ents the 'a(n purpose of (nsurance (s to

protect your current l(fe style after ret(re'ent& It acts as a sh(eld a)a(nst all type of

f(nanc(al r(s+s& In,estor has to real(@e that (nsurance (s 'ore for safe )uard(n)

a)a(nst r(s+ faced (n l(fe rather than be(n) an (n,est'ent for prof(t&

&HOOSE SIMP"E INVESTMENT

$ur da(ly l(fe (s full of co'pl(cat(ons the day%to%day )r(nd lea,es us *(th l(ttle

ener)y to +eep trac+ of our f(nanc(al (n,est'ents& That (s copy an (n,estor should

choose s('ple G co'pl(cated (nstru'ents&

!TI"IJE THE PO:E% OF &OMPO!NDIN.

Co'pound(n) 'eans pay'ent of (nterest on accu'ulated (nterest& Thus 'oney

earned by you *or+s hard G earns 'ore 'oney for you& Th(s ('pl(es that not only

the pr(nc(pal earns (nco'e for you but (nterest )enerated by you also earns

(nco'e& $ne ('portant factor (s the t('e per(od& Lon)er the t('e h()her the

benef(t



INVEST IN INT%!MENTS TH#T EEP $O! #HE#D OF INF"#TION

That s(lently creeps up fro' beh(nd G starts eat(n) your hard earned sa,(n)s

e,en before you real(@e the s(tuat(on& An (n,estor should loo+ at the real return

3the rate of return '(nus the rate of (nflat(on4 *h(le cons(der(n) an (n,est'ent& He

should (n,est (n (nstru'ents- *h(ch pro,(de prof(table%post%(nflat(on returns&

%ED!&E T#; ON $O!% INVESTMENT

There are t*o real(t(es (n the l(fe& $ne (s death G the other (s ta5& It (s ad,(sable

that (n,est'ents should be so planned that least poss(ble ta5 *ould be reu(red

to be pa(d& S'art 'o,e for the (n,estor (s to sa,e e,ery rupee fro' ta5 'an&

.O FO% ST#+"E B %E#"ISTI& %ET!%NS

Stab(l(ty of returns (s 'ore ('portant that (ncreased prof(t& Usually these are

assoc(ated *(th h()h ,olat(le (n,est'ent opt(ons l(+e eu(t(es G e,en *(th

)o,ern'ent secur(t(es or )(lts as they also run h()h 'ar+et r(s+& The assetallocat(on (s su))ested accord(n) to the r(s+ prof(le of an (n,estor& So (n,est (n the

best opt(on G )et the 'a5('u' returns&



+I+"IO.%#PH$

Co%operat(,e Soc(et(es La*s "&N& Mohannan 3Ad,ocate4

1<th ed(t(on and 1;th ed(t(on

Cooperat(,e .an+(n) (n Ind(a% S Na+(rran

***&a'f((nd(a&co'

Jay Ha'b(d)e- Dyna'(c Sy''etry7 The 6ree+ Vase- Ne* Ha,en CT

!ale Un(,ers(ty "ress- 1</0

(ll(a' L(d*ell- r(t(na Holden- J(ll .utler- Un(,ersal "r(nc(ples of Des()n

A Cross%D(sc(pl(nary #eference- 6loucester MA7 #oc+port "ubl(shers-

/00=

KThe 6olden #at(oK& The MacTutor H(story of Mathe'at(cs arch(,e&

#etr(e,ed on /00>%0<%1:&

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