ABN AMRO MUTUAL FUND

OFFER DOCUMENT

OFFER OF UNITS OF

Offer of Units at Rs. 10 each plus applicable entry load during the New Fund Offer Period, and at NAV based prices thereafter

This Offer Document sets forth concisely the information about the Scheme that a prospective investor ought to know before investing. This Offer Document should be retained for future reference. The particulars of the Scheme has been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended till date, and filed with the Securities and Exchange Board of India, and the Units being offered for the public subscription have not been approved or disapproved by the Securities and Exchange Board of India nor has the Securities and Exchange Board of India certified the accuracy or adequacy of this Offer Document.

 This Offer Document will remain effective till a 'material change' (other than a change in Fundamental Attributes and within the purview of this Offer Document) occurs and thereafter the changes shall be filed with Securities and Exchange Board of India and circulated to the Unitholders or as may be publicly notified by advertisements in the newspapers subject to applicable regulations. Investors may also like to ascertain about any further changes after the date of this Offer Document from the Mutual Fund / it's Investor Service Centres / distributors.

This Offer Document is dated ________________, 2007

	www.assetmanagement.abnamro.co.in.

 

TABLE OF CONTENTS

IMPORTANT NOTICE

Investing in mutual fund schemes involves certain risks and considerations associated generally with making investments in securities. The value of the Scheme’s investments may be affected generally by factors affecting financial markets, such as price and volume, volatility in interest rates, currency exchange rates, changes in regulatory and administrative policies of the Government or any other appropriate authority (including tax laws) or other political and economic developments. Consequently, there can be no assurance that the Scheme offered in this Offer Document would achieve the stated objectives. The NAV of the Units of the Scheme may fluctuate and can go up or down. Past performance of the schemes managed by the Sponsors or their affiliates or the Asset Management Company is not indicative of the future performance of the Scheme nor will the performance of the Scheme, following the commencement of the operations, be indicative of the Scheme’s future performance.

Prospective investors are advised to review this Offer Document carefully and in its entirety and consult their legal, tax and financial advisors to determine possible legal, tax and financial or any other consequences of subscribing to, purchasing or holding Units under the Scheme, before making an application to subscribe or purchase the Units.

The ABN AMRO Mutual Fund (the Fund) and the ABN AMRO Asset Management Company Limited (the AMC), have not authorized any person to give any information or make any representations, either oral or written, not stated in this Offer Document in connection with issue of Units under the Scheme. Prospective investors are accordingly advised not to rely upon any information or representations not incorporated in this Offer Document. Any subscription, purchase or sale made by any person on the basis of statements or representations which are not contained in this Offer Document or which are inconsistent with the information contained herein shall be solely at the risk of the investor.

Unitholders / investors are requested to read and understand the Offer Document, Key Information Memorandum and risk factors furnished with the scheme in which they seek to make investments or in which they have invested. Unitholders / Investors are urged not to rely upon or be mislead by any oral promises or statements made by the distributors / intermediaries of the Mutual Fund and it is brought to the special attention of investors that the AMC / Mutual Fund will not be liable for mis-statement or communication by agents / distributors which are not previously expressly authorized / approved by the AMC / Mutual Fund.

The AMC, Trust and the Mutual Fund shall not be responsible for any claims made by the Unitholders / Investors based on such oral promises made by the distributors / intermediaries.

STANDARD RISK FACTORS

·      Mutual Funds and securities investments are subject to market risks and there can be no assurance or guarantee that the Scheme objectives will be achieved.

·      As with any investment in securities, the NAV of Units issued under the Scheme may go up or down depending on the various factors and forces affecting the capital markets. The various factors which impact the value of the Scheme’s investments include, but are not limited to, fluctuations in the equity and bond markets, fluctuations in interest rates, prevailing political and economic environment, changes in government policy, factors specific to the issuer of the securities, tax laws, liquidity of the underlying instruments, settlement periods, trading volumes etc.

·      Past performance of the Sponsors and its affiliates / Mutual Fund / AMC does not indicate the future performance of the Scheme of the Mutual Fund.

·      ABN AMRO China Equity Fund is the name of the Scheme and does not in any manner indicate either the quality of the Scheme or its future prospects and returns.

·      The Sponsor is not liable or responsible for any loss or shortfall resulting from the operations of the Scheme.

·      Investors should study this Offer Document carefully in its entirety before investing and retain the Offer Document for future references.

·      Unitholders in the Scheme are not being offered any guaranteed / assured returns.

SCHEME SPECIFIC RISK FACTORS AND SPECIAL CONSIDERATIONS

Equity or Equity related Securities:

·      The scheme intends to invest primarily in Chinese equity and equity related instruments. Thus risks applicable to equity investments and overseas investments are applicable to the scheme.

·      Since the Fund intends to invest primarily in China, there is a country risk including events such as introduction of extraordinary exchange controls, economic deterioration, bi-lateral conflict leading to immobilization of the overseas financial assets, political uncertainty, prevailing laws and policy matters including prevalent tax laws of the respective jurisdiction for execution of trades or otherwise applicable for investments in China and the jurisdiction through which settlement of such transactions will take place

·      Concentration risk: As the portfolio will primarily invest in stocks of China, the portfolio shall be exposed to the political, economic and social risks with respect to said country and the country of settlement, if applicable. However, such investment is always subject to concentration risk.

·      Equity instruments by nature are volatile and prone to price fluctuations on a daily basis due to both macro and micro factors. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of these investments. Different segments of financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances. The inability of the Scheme to make intended securities’ purchases due to settlement problems could cause the Scheme to miss certain investment opportunities.

·      To the extent the assets of the scheme are invested in overseas financial assets, there may be risks associated with currency movements, restrictions on repatriation and transaction procedures in overseas market. Further, the repatriation of capital to India may also be hampered by changes in regulations or political circumstances as well as the application to it of other restrictions on investment. In addition, country risks would include events such as introduction of extraordinary exchange controls, economic deterioration, bi-lateral conflict leading to immobilization of the overseas financial assets and the prevalent tax laws of the respective jurisdiction for execution of trades or otherwise.

·      As the Fund will invest in securities which are denominated in foreign currencies (e.g. US Dollars, HK Dollars), fluctuations in the exchange rates of these foreign currencies may have an impact on the income and value of the fund. The investment manager in India may hedge the currency risk based on his view on the forex markets.

·      As the portfolio may invest in stocks in multiple currencies, the portfolio shall be exposed to the political, economic and social risks with respect to each country.

·      The fund will be exposed to settlement risk, as different countries have different settlement periods.

·      Investors in the scheme may be subject to additional disclosure requirements in overseas jurisdictions as beneficial owners of the scheme’s assets.

·      The Scheme may also use various derivative products (including currency hedges) from time to time, as would be available and permitted by SEBI and RBI, in an attempt to protect the value of the portfolio and enhance Unitholders’ interest.

·      Investments in equity and equity related securities involve a degree of risks and investors should not invest in the Scheme unless they can afford to take the risk of losing their investment.

·      As the Scheme is proposing to invest a part of its net assets in foreign securities, the liquidation of such securities shall be subjected to the liquidity / settlement issues of the County of investment/ settlement. Non-business days of Country of investment/ settlement may impact the liquidity of the scheme investments.

·      It may be noted that if rupee appreciates, it will lead to reduction in yield to investor.

Potential Risks of investment in China

Ø      Global monetary tightening

Global monetary tightening will reduce the global liquidity, which in turn will impact the capital flows into emerging markets like China.

Ø      Sharp reduction in US GDP growth

As China has large current account surplus with US due to large amount of goods & services exports, the reduction in US GDP growth will impact the growth of economies of China. This in turn will negatively impact the capital markets.

Ø      Heightened geo-political tensions

Heightened geo -political tensions will increase political tensions among various countries, which could impact the global GDP growth. This will impact the growth of China as it is playing a significant role in Global GDP growth. This in turn will influence Chinese Markets.

Ø      Continuation of rising oil and commodity prices

As China is one of the large consumers of commodities across the Globe, the rising oil prices and commodity prices will hurt the economic growth which may further impact the Chinese markets.

Ø      Corporate margin pressure and rising labour costs in China

The rising labour costs will reduce corporate profits, which in turn impact the earnings reported by companies thus influence the stock prices.

Ø      Downside surprises in the external demand from the United States in particular, is another key risk to China since United States is the largest trading partner of China.

Ø      Chinese Government may adopt some monetary policy tightening measures like rise the reserve requirements and official interest rates increase.

Ø      External pressures (Political pressure from United States) might influence the currency movement upwards, which in turn, could hurt external sector and might slow down economic growth.

Debt Instruments:

Subject to the stated investment objective, the Scheme proposes to invest in debt and related instruments.

·      Price-Risk or Interest Rate Risk: As with all debt securities, changes in interest rates may affect the NAV of the Scheme as the prices of securities increase as interest rates decline and decrease as interest rates rise. Prices of long term securities generally fluctuate more in response to interest rate changes than do short-term securities. Indian debt markets can be volatile leading to the possibility of price movements up or down in fixed income securities and thereby to possible movements in the NAV. In the case of floating rate instruments, an additional risk could be due to the change in the spreads of floating rate instruments. If the spreads on floating rate papers rise, then there could be a price loss on these instruments. Secondly in the case of fixed rate instruments that have been swapped for floating rates, any adverse movement in the fixed rate yields vis-à-vis swap rates could result in losses. However, floating rate debt instruments, which have periodical interest rate, reset, carry a lower interest rate risk as compared to fixed rate debt instruments. In a falling interest rate scenario the returns on floating rate debt instruments may not be better than those on fixed rate debt instruments.

·      Liquidity or Marketability Risk: This refers to the ease with which a security can be sold at or near to its valuation yield-to-maturity (YTM). The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by a dealer. Liquidity risk is today characteristic of the Indian fixed income market.

·      Credit Risk: Credit risk or default risk refers to the risk that an issuer of a fixed income security may default (i.e. will be unable to make timely principal and interest payments on the security). Because of this risk, corporate debentures are sold at a yield above those offered on Government Securities, which are sovereign obligations. Normally, the value of a fixed income security will fluctuate depending upon the changes in the perceived level of credit risk as well as any actual event of default. The greater the credit risk, the greater the yield required for someone to be compensated for the increased risk.

·      Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities in the Scheme are reinvested. The additional income from reinvestment is the “interest on interest” component. The risk is that the rate at which interim cash flows can be reinvested may be lower than that originally assumed.

·      The floating rate segment of the domestic debt market is not very developed. Currently, majority of the issuance of floating rate papers is linked to NSE MIBOR. As the floating rate segment develops further, more benchmark rates for floating papers may be available in future. The fewer number of benchmark rates could result in limited diversification of the benchmark risk.

Different types of securities in which the scheme would invest as given in the Offer Document carry different levels and types of risk. Accordingly the scheme’s risk may increase or decrease depending upon its investment pattern.

E.g. corporate bonds carry a higher amount of risk than Government Securities. Further even among corporate bonds, bonds which are AAA rated are comparatively less risky than bonds which are AA rated.

·      Investments in money market instruments would involve a moderate credit risk i.e. risk of an issuer's liability to meet the principal payments. Additionally, money market securities, while fairly liquid, lack a well-developed secondary market, which may restrict the selling ability of the Scheme and may lead to the Scheme incurring losses till the security is finally sold.

·      Money market instruments may also be subject to price volatility due to factors such as changes in interest rates, general level of market liquidity and market perception of credit worthiness of the issuer of such instruments. The AMC endeavours to manage such risk by the use of inhouse credit analysis.

·      The NAV of the Scheme's Units, to the extent that the Scheme is invested in money market instruments, will be affected by the changes in the level of interest rates. When interest rates in the market rise, the value of a portfolio of money market instruments can be expected to decline.

·      Risk associated with Securitised Debt:

Scheme may invest in domestic securitized debt such as asset backed securities (ABS) or mortgage backed securities (MBS). Asset Backed Securities (ABS) are securitized debts where the underlying assets are receivables arising from automobile loans, personal loans, loans against consumer durables, etc. Mortgage backed securities (MBS) are securitized debts where the underlying assets are receivables arising from loans backed by mortgage of residential / commercial properties. ABS/MBS instruments reflect the undivided interest in the underlying pool of assets and do not represent the obligation of the issuer of ABS/MBS or the originator of the underlying receivables. The ABS/MBS holders have a limited recourse to the extent of credit enhancement provided. If the delinquencies and credit losses in the underlying pool exceed the credit enhancement provided, ABS/MBS holders will suffer credit losses. ABS/MBS are also normally exposed to a higher level of reinvestment risk as compared to the normal corporate or sovereign debt. Following are some of the types of loans that are amortised :

·      Auto Loans (cars / commercial vehicles /two vehicles)

·      Residential Mortgages or Housing Loans

·      Consumer Durable Loans

·      Personal Loans and Credit Cards

The main risks pertaining to each of the asset classes above are described below:

Auto Loans (cars / commercial vehicles /two vehicles)

·      The underlying assets (cars etc) are susceptible to depreciation in value whereas the loans are given at high loan to value ratios. Thus, after a few months, the value of asset becomes lower than the loan outstanding. The borrowers, therefore, may sometimes tend to default on loans and allow the vehicle to be repossessed.

·      These loans are also subject to model risk. ie if a particular automobile model does not become popular, loans given for financing that model have a much higher likelihood of turning bad. In such cases, loss on sale of repossession vehicles is higher than usual.

·      Commercial vehicle loans are susceptible to the cyclicality in the economy. In a downturn in economy, freight rates drop leading to higher defaults in commercial vehicle loans. Further, the second hand prices of these vehicles also decline in such economic environment.

Housing Loans

·      Housing loans in India have shown very low default rates historically. However, in recent years, loans have been given at high loan to value ratios and to a much younger borrower classes. The loans have not yet gone through the full economic cycle and have not yet seen a period of declining property prices. Thus the performance of these housing loans is yet to be tested and it need not conform to the historical experience of low default rates.

Consumer Durable Loans

·      The underlying security for such loans is easily transferable without the bank’s knowledge and hence repossession is difficult.

·      The underlying security for such loans is also susceptible to quick depreciation in value. This gives the borrowers a high incentive to default.

Personal Loans and Credit Cards

·      These are unsecured loans. In case of a default, the bank has no security to fall back on.

·      The lender has no control over how the borrower has used the borrowed money.

Further, all the above categories of loans have the following common risks:

·      All the above loans are retail, relatively small value loans. There is a possibility that the borrower takes different loans using the same income proof and thus the income is not sufficient to meet the debt service obligations of all these loans.

·      In India, there is no ready database available regarding past credit record of borrowers. Thus, loans may be given to borrowers with poor credit record.

In retail loans, the risks due to frauds are high.

·      Derivatives Risk

The Scheme may also use various derivative and hedging products from time to time, as would be available and permitted by SEBI, in an attempt to protect the value of the portfolio

As and when the Scheme(s) deals in the derivatives market there are risk factors and issues concerning the use of derivatives that investors should understand. Derivative products are specialised instruments that require investment techniques and risk analysis different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument but also of the derivative itself. Derivatives require the maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and the ability to forecast price or interest rate movements correctly. There is the possibility that a loss may be sustained by the portfolio as a result of the failure of another party (usually referred to as the "counter party") to comply with the terms of the derivatives contract. Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. Thus, derivatives are highly leveraged instruments. Even a small price movement in the underlying instrument could have a large impact on their value. Also, the market for derivative instruments is nascent in India.

Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor. Execution of such strategies depends upon the ability of the fund manager to identify such opportunities. Identification and execution of the strategies to be pursued by the fund manager involve uncertainty and decision of fund manager may not always be profitable. No assurance can be given that the fund manager will be able to identify or execute such strategies.

The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments.

Securitised Debt: Securitised debt papers carry credit risk of the Obligors and are dependent on the servicing of the PTC / Contributions etc. However these are offset suitably by appropriate pool selection as well as credit enhancements specified by Rating Agencies. In cases where the underlying facilities are linked to benchmark rates, the Securitised debt papers may be adversely impacted by adverse movements in benchmark rates. However this risk is mitigated to an extent by appropriate credit enhancement specified by rating agencies. Securitised debt papers also carry the risks of prepayment by the obligors. In case of prepayments of securities debt papers, it may result in reduced actual duration as compared to the expected duration of the paper at the time of purchase, which may adversely impact the portfolio yield. These papers also carry risk associated with the collection agent who is responsible for collection of receivables and depositing them. The Investment teams evaluate the risks associated with such investments before making an investment decision.

The underlying assets in the case of investment in Securitised debt could be mortgages or other assets like credit card receivables, automobile / vehicle / personal / commercial / corporate loans and any other receivables / loans / debt.

The risks associated with the underlying assets can be described as under:

Credit card receivables are unsecured. Automobile / vehicle loan receivables are usually secured by the underlying automobile / vehicle and sometimes by a guarantor. Mortgages are secured by the underlying property. Personal loans are usually unsecured. Corporate loans could be unsecured or secured by a charge on fixed assets / receivables of the company or a letter of comfort from the parent company or a guarantee from a bank / financial institution. As a rule of thumb, underlying assets which are secured by a physical asset / guarantor are perceived to be less risky than those which are unsecured. By virtue of this, the risk and therefore the yield in descending order of magnitude would be credit card receivables, personal loans, vehicle /automobile loans, mortgages and corporate loans assuming the same rating.

·      ADRs / GDRs : It is the AMC’s belief that investment in ADRs / GDRs offers new investment and portfolio diversification opportunities into multi-market and multi-currency products. However, such investments also entail additional risks. Such investment opportunities may be pursued by the AMC provided they are considered appropriate in terms of the overall investment objectives of the Scheme. Since the Scheme would invest only partially in ADRs / GDRs, there may not be readily available and widely accepted benchmarks to measure performance of the Scheme. To manage risks associated with foreign currency and interest rate exposure, the Fund may use derivatives for efficient portfolio management including hedging and in accordance with conditions as may be stipulated by SEBI / RBI from time to time.

·      Offshore Investments : Will be made subject to any / all approvals, conditions thereof as may be stipulated by SEBI/RBI and provided such investments do not result in expenses to the Fund in excess of the ceiling on expenses prescribed by and consistent with costs and expenses attendant to international investing. The Fund may, where necessary, appoint other intermediaries of repute as advisors, custodian/sub-custodians etc. for managing and administering such investments. The appointment of such intermediaries shall be in accordance with the applicable requirements of SEBI and within the permissible ceiling of expenses. The fees and expenses would illustratively include, besides the investment management fees, custody fees and costs, fees of appointed advisors and sub-managers, transaction costs and overseas regulatory costs

To the extent that the assets of the Scheme will be invested in ADRs/GDRs denominated in foreign currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by changes in the value of certain Foreign currencies relative to the Indian Rupee. The repatriation of capital to India may also be hampered by changes in regulations concerning exchange controls or political circumstances as well as the application to it of other restrictions on investment.

Special Considerations

·      Suspicious Transaction Reporting: If after due diligence, the AMC believes that the transaction is suspicious in nature as regards money laundering, the AMC shall report any suspicious transactions to competent authorities under the PMLA and rules / guidelines issued thereunder by SEBI and RBI, furnish any such information in connection therewith to such authorities and take any other actions as may be required for the purposes of fulfilling its obligations under the PMLA without obtaining the prior approval of the investor / Unit Holder / a person making the payment on behalf of the investor.

·      As per SEBI circular dated December 12, 2003 and June 14, 2005 ref SEBI / IMD / CIR No.10 / 22701 /03 and SEBI/IMD/CIR/No.1/42529/05 respectively and AMFI Communication having ref. no. 35/MEM-COR/55/04-05 dated December 31, 2004, each scheme and individual plan(s) under the schemes should have a minimum of 20 investors and no single investor should count for more than 25% of the corpus of such Scheme/Plan. In case of non-fulfilment with former condition in a three months time period or the end of succeeding calendar quarter, whichever is earlier from the close of the New Fund Offer (NFO) of the Scheme or on an ongoing basis for each calendar quarter, the Schemes/plans shall be wound up by following the guidelines prescribed by SEBI and the Investor’s units would be redeemed at applicable NAV.

As per SEBI circular dated June 14, 2005 ref. no. SEBI/IMD/CIR No.1/42529/05, determining the breach of the 25 % limit by an Investor, the average net assets of the scheme would be calculated daily and any breach of the 25% holding limit by an investor would be determined. At the end of the quarter, the average of daily holding by each such investor is computed to determine whether that investor has breached the 25 % limit over the quarter. If there is a breach of limit by any investor over the quarter, a rebalancing period of one month would be allowed and thereafter the investor who is in breach of the rule shall be given 15 days notice to redeem his exposure over the 25 % limit. Failure on the part of the said investor to redeem his exposure over the 25 % limit within the aforesaid 15 days would lead to automatic redemption by the Mutual Fund on the applicable Net Asset Value on the 15th day of the notice period.

Further, the aforesaid SEBI circulars would be applicable at the Portfolio level.

·      It may be noted that the Scheme would be predominately investing in the Chinese Equities & Equity related securities and not in Domestic Companies; hence it does not fall in the purview of definition of “Equity Oriented Fund” of Income Tax Act. Therefore, Investors will not be entitled for the tax benefits of Equity Oriented Fund, as for taxation purpose; the Scheme will be treated as a Debt Scheme.

·      The tax benefits described in this Offer Document are as available under the prevailing taxation laws. Investors / Unit Holders should be aware that the relevant fiscal rules or their interpretation may change. As is the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of an investment in the Scheme will endure indefinitely. In view of the individual nature of tax consequences, each Unit Holder is advised to consult his / her / their own professional tax advisor.

From time to time and subject to the Regulations, funds managed by the affiliates / associates of the Sponsor may invest either directly or indirectly in the Scheme. The funds managed by these affiliates / associates may acquire a substantial portion of the Scheme's Units and collectively constitute a major investment in the Scheme. Accordingly, Redemption of Units held by such funds may have an adverse impact on the value of the Units of the Scheme because of the timing of any such Redemption and may affect the ability of other Unit Holders to redeem their respective Units.

DEFINITIONS

In this Offer Document, the following words and expressions shall have the meaning specified herein, unless the context otherwise requires:

Interpretation

For all purposes of this Offer Document, except as otherwise expressly provided or unless the context otherwise requires:

·      All references to the masculine shall include the feminine and all references, to the singular shall include the plural and vice-versa.

·      All references to "Euros" refer to the currency of some Member States of the European Union, "dollars" or "$" refer to United States Dollars, “HKD” refers to Hong Kong Dollars and "Re" / "Rs" refers to Indian Rupee(s). A "crore" means "ten million" and a "lakh" means a "hundred thousand".

Words and Expressions used and not defined in this Offer Document shall have the same meaning as in the SEBI Regulations.

DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY

A Due Diligence Certificate duly signed by the Head - Compliance & Risk Management of ABN AMRO Asset Management (India) Limited has been submitted to SEBI on December 5, 2007, which reads as follows.

It is confirmed that:

(i)           The draft Offer Document forwarded to SEBI is in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 and the guidelines and directives issued by SEBI from time to time.

(ii)          All legal requirements connected with the launching of the Scheme as also the guidelines, instructions, etc. issued by the Government of India and any other competent authority in this behalf, have been duly complied with.

(iii)        The disclosures made in this Offer Document are true, fair and adequate to enable the investors to make a well-informed decision regarding investments in the proposed Scheme.

(iv)        The intermediaries named in this Offer Document are registered with SEBI and till date such registrations are valid.

Place :         Mumbai                                     Signed          :         sd / -

Date   :         December 5, 2007                       Name  :         Abhaya Joglekar

Designation : Head - Compliance & Risk Management

SECTION I

SUMMARY OF THE SCHEME - ABN AMRO China Equity Fund -An Open-Ended Equity Scheme investing in Chinese Equities with no assured returns

CONSTITUTION OF THE MUTUAL FUND

THE MUTUAL FUND

ABN AMRO Mutual Fund has been constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882, by the Sponsor, as per the terms of the Trust Deed dated April 15, 2004. The Trust Deed has been registered under the Indian Registration Act, 1908. The Mutual Fund has been registered with SEBI, vide. Registration No. MF/049/04/01 dated May 27, 2004.

The office of the Mutual Fund is at 101, 10^th Floor, Sakhar Bhavan, Nariman Point, Mumbai 400 021.

The Mutual Fund has been formed with the purpose of pooling capital from the public for collective investment in securities / any other property for the purpose of providing facilities for participation by persons as beneficiaries in such properties / investments and in the profits / income arising therefrom beyond this contribution.

THE SPONSOR

Consequent to receipt of no-objection letter received from SEBI (its letter no. IMD/SB/46021/05 dated August 4, 2005), the controlling interest in the AMC was transferred from ABN AMRO Bank N.V. to ABN AMRO Asset Management (Asia) Limited ("AAAM Asia") with effect from October 31, 2005.

AAAM Asia holds 75% of the paid-up equity share capital of the AMC. In view of the same details of AAAM Asia are being provided hereunder

Given below is a brief summary of AAAM Asia's financials in the last three years as on December 31:

Notes:

(1)          Free Reserves are Other Reserves of the Sponsor and do not include Share premium account, Revaluation reserves and Other Reserves prescribed by law.

(2)          Net-worth means aggregate of Equity Capital and all Reserves of the Sponsor.

AAAM Asia was incorporated in Hong Kong on 29 October 1991 and is licensed with the Securities and Futures Commission to conduct Type 1 (dealing in securities), Type 4 (advising on securities), Type 5 (advising on futures contracts) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance.

AAAM Asia is a wholly owned subsidiary of ABN AMRO Holding N.V., incorporated in the Netherlands.  AAAM Asia specializes in the Asian markets for both investment funds' advisory and discretionary mandates. It also promotes ABN AMRO's global products in the Asian region to both institutional investors and private clients.  AAAM Asia is the Asian asset management centre for ABN AMRO's global asset management business.

ABN AMRO Bank N.V. in 2004 had contributed an amount of Rs. 1,00,000 (Rupees One Lakh Only) to the corpus of the Mutual Fund. AAAM Asia is not liable or responsible for any loss or shortfall resulting from the operations of the Schemes.

THE TRUSTEE

ABN AMRO Trustee (India) Private Limited, a company incorporated under the Companies Act, 1956, on November 4, 2003, is appointed as the Trustee to the Mutual Fund vide the Trust Deed dated April 15, 2004. ABN AMRO Trustee (India) Private Limited is a subsidiary of ABN AMRO Asset Management (Asia) Limited.

The registered office of the Trustee is situated at 101, 10^th Floor, Sakhar Bhavan, Nariman Point, Mumbai 400 021.