Offer Document

 

AIG India Equity Fund

 

An Open ended equity scheme

 

 

Presented by AIG Global Investment Group Mutual Fund

 

Issue of Units at Rs 10 per unit for cash at par plus applicable entry load during the New Fund Offer and at applicable NAV plus applicable entry load thereafter.

 

New Fund Offer:

 

Opens on:

 

Closes on:

 

Ongoing Offer opens on or before:

 

 

 

This offer document contains information necessary for an investor to make an informed investment decision in the scheme described herein. Investors should read the offer document carefully prior to making an investment decision and retain the offer document for future reference. Investors may note that this offer document remains effective until a material change occurs. Material changes shall be filed with the Securities and Exchange Board of India (SEBI) and circulated to all unit holders or maybe publicly notified by advertisements in the newspapers subject to applicable regulations. Investors may also obtain further changes after the date of this offer document from the mutual fund/ its investor service centers or distributors.

 

The particulars of the scheme under this offer document, have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended till date, and filed with the SEBI, and the units being offered for public subscription have neither been approved or disapproved by SEBI nor has SEBI certified the accuracy and adequacy of the offer document.

 

This offer document is dated as of February 15, 2007

 

 

 

Sponsor: AIG Capital Corporation

 

Office:  Corporation Services Center, 2711 Centerville Road, Suite 400, Wilmington Delaware, USA 19808

 

Trustee: AIG Trustee Company (India) Private Limited

 

Registered Office: FCH House, Ground Floor, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai - 400 013

 

Asset Management Company: AIG Global Asset Management Company (India) Private Limited.

 

Registered Office: FCH House, Ground Floor, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai - 400 013

 

Registrar and Transfer Agent: Computer Age Management Services Private Limited

 

Registered Office: A & B, Lakshmi Bhavan, 609, Anna Salai, Chennai – 600 006

 

Custodian: Citibank N.A.

 

Address: Ramnord House, 77, Dr. Annie Besant Road, Mumbai 400 018

 

 

Auditors to the Fund: S. R. Batliboi & Co.

 

Address: 6^th Floor, Express Towers, Nariman Point, Mumbai – 400 021

 

Legal Advisors: Amarchand & Mangaldas & Suresh A. Shroff & Co.

 

Address: 5^th Floor, Peninsula Chambers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400 013

 

 

 

 

 

 

 

 

 

Table of Contents

 

I.          Highlights ...................................................................................................... 7

 

II.        Definitions  and Abbreviations ……...........................................................11

 

A.        Definitions …………………………………………………………………..11

B.         Abbreviations ……………………………………………………………….18

C.        Interpretation ..................................................................................................19

 

III        Risk Factors and Special Considerations....................................................19

 

A.        Standard Risk Factors .................................................................................... 19

 

Scheme specific Risk Factors ......................................................................... 20

 

B.         Risk Factors associated with Derivatives………………………………….…21

 

C.        Risk factors associated with Scrip Lending .....................................................22

 

D.        Risk Factors associated with Overseas Investment……… …………………..23

 

E.         Special considerations ..................................................................................... 24

 

IV.       Constitution of the Fund ............................................................................... 27

 

A.        The Fund .......................................................................................................... 27

 

B.         The Sponsor ..................................................................................................... 27

 

C.        The Trustee Company (The Trustee) ................................................................ 30

 

I.          Directors of the Trustee ................................................................................... 30

II.         Summary of the Substantive Provisions of the Trust Deed………..………….32

III.       Trustees - Fees and Expenses............................................................................ 39

IV.       Trustee - Supervisory Role................................................................................ 39

 

D.        The Asset Management Company ................................................................... 39

 

I.          Constitution ...................................................................................................... 39

II.         Board of Directors of the AMC ........................................................................ 40

 

III.       Duties and Responsibilities of the AMC and the material

provisions of the Investment Management Agreement………………………..44

 

Investment Management Fees ............................................................................ 45

 

Shareholding Pattern of the AMC .................................................................... 45

 

IV.       Key Employees of the AMC and their relevant experience ............................. 46

 

V.        Fund Manager ................................................................................................... 48

 

VI.       Compliance Officer ........................................................................................... 48

 

VII.      Investors Relations Officer ................................................................................ 48

 

E.         The Registrar and Transfer Agent ...................................................................... 48

 

F.         The Custodian .................................................................................................... 49

 

G.        The Fund Accountant ......................................................................................... 49

 

H.        The Auditors ................................................................. ………………………..50

 

I.          The Collection Banks .......................................................................................... 50

 

V Investment Objectives, Investment Strategy,

Investment Pattern and Risk Profile and Limitation

of the Scheme ................................................................................................................. 50

 

A.        AIG India Equity Fund......................................................................................... 50

 

B.         Investment in Overseas Financial Assets…………………………………….….54

 

C.        Investments in Derivatives…………………………….…………………………55

 

D.        Fundamental Attributes ....................................................................................... 61

 

E.         Borrowing Powers ............................................................................................... 62

 

F.         Investment in the Scheme by the AMC,

Sponsor or their affiliates .................................................................................... 62

 

G.        Procedure and Recording of Investment Decisions……………………………..62

 

H.        Portfolio Turnover .............................................................................................. 63

 

I.          Investment Restrictions ....................................................................................... 63

 

J.          Investment of Subscription Money ...................................................................... 66

 

K.        Computation of Net Asset Value ......................................................................... 66

 

L.         Accrual of expenses and income ......................................................................... 76

 

M.        Pricing of Units………………………………………………………………….77

 

N.        Recording of changes ......................................................................................... 77

 

O.        Calculation of NAV ............................................................................................ 77

 

P.         Accounting Policies and Standards ..................................................................... 78

 

VI.       Load, Fees and Expenses ................................................................................. 81

 

A.        Load Structure of the Scheme ............................................................................ 81

 

B.         Fees and Expenses of the Scheme ..................................................................... 83

 

C.        New Fund Offer Expenses of Existing/ Past Schemes………………………….86

 

D.        Condensed Financial Information ...................................................................... 86

 

E.         Borrowing by the Mutual Fund ......................................................................... 86

 

VII.     Units and the Offer ......................................................................................... 86

 

A.        Units on Offer during the New Fund Offer (NFO) ........................................... 86

 

B.         Units on Offer – General Information .............................................................. 87

 

C.        Purchase of Units .............................................................................................. 89

 

D.        Note on Anti-Money Laundering, Know-Your-Customer and Investor Protection ....................................................... ……………………………………………99

 

E.         Investors’ Personal Information ..................................................................... 101

 

F.         Facilities offered to the investors under the Scheme………………………….101

 

G.        Redemption of Units ........................................................................................108

 

H.        Suspension of Purchase and Redemption of Units ………………………….. 112

 

I.          Right to Limit Redemptions .............................................................................. 113

 

VIII.    Unit holders’ Rights and Services ................................................................ 113

 

A.        Unit holders’ Rights ............................................................................................113

 

B.         Voting Rights of the Unit holders ...................................................................... 114

 

C.        Account Statements and Unit Certificates …………………………................. 115

 

D.        NAV Information .............................................................................................. 115

 

E.         Disclosure of Information under the Regulations .............................................. 115

 

F.         Duration of the Scheme ......................................................................................116

 

G.        Procedure and Manner of Winding up .............................................................. 116

 

H.        Services to the unit holders ................................................................................117

 

IX.       Tax Benefits of investing in the Scheme ....................................................... 120

 

X.        Other Matters .................................................................................................. 126

 

A.        Transaction with Sponsor/Associates ................................................................ 126

 

B.         Policy on Offshore Investments by the Scheme…………………………….….126

 

C.        Dividends and Distributions .............................................................................. 127

 

D.        Inter-Scheme Transfers ..................................................................................... 128

 

E.         Disclosure under Regulation 25 (11) ................................................................ 128

 

F.         General Information .......................................................................................... 128

I. Highlights

 

Sponsor	AIG Capital Corporation
Name of the Scheme	AIG India Equity Fund.
Structure	An open ended equity scheme with two plans: Regular Plan Institutional Plan   Both Plans will have a common portfolio. However, the returns under each Plan are expected to vary having regard to specified expense ratio under the relevant Plan.   The Scheme does not assure or guarantee any returns.
Investment Objective	The investment objective of the Scheme is to generate long-term capital appreciation from a diversified portfolio of predominantly equity and equity-related securities including equity derivatives.   However there can be no assurance that the investment objective of the scheme will be realized, as actual market movements may be at variance with anticipated trends.
Indicative Asset Allocation	Under normal circumstances, it is anticipated that the asset allocation shall be as follows:   Instrument Range of Allocation (% of net assets) Risk Profile Equity and equity related securities 80% to 100% High Debt & money market securities/instruments/funds 0% to 20% Low to Medium   The fund would remain fully  invested upto 95% in equity and equity related securities and will have only 5% in short term debt and money market instruments to meet short term liquidity requirements of the scheme.   The above Asset Allocation Pattern is only indicative. The investment manager may, in line with the investment objectives of the Scheme, alter the above pattern for a short term period, of upto 90 days, and on defensive considerations, the intention at all times being to protect the interests of the Unit Holders.
Benchmark for performance  comparison	BSE-100 index.
Purchase Price for New Fund Offer (NFO)	Rs.10/- per Unit for cash at par plus applicable Entry Load.   E.g. For purchases attracting an Entry Load (2.25%), the Purchase Price = Rs. 10.225/-.   For purchases not attracting Entry Load, the Purchase Price = Rs. 10/-.
Purchase/ Redemption Price during Ongoing Offer	During the Ongoing Offer period, the price for Purchases and Redemptions will be based on Applicable NAVs subject to applicable Entry and Exit Loads/ CDSC respectively.
Options available under each Plan	The Scheme offers Growth option and Dividend option. The Dividend option offers Dividend Payout and Dividend Reinvestment facilities.
Minimum Application Amount & Minimum Additional Application Amount	Regular Plan   For all first time purchases, the application must be for a minimum amount of Rs. 5,000/–. For all subsequent purchases, the application must be for a minimum amount of Rs. 5,000/–.   In the case of purchases through SIP and STP, the minimum installment amount shall be Rs. 1,000/-.   The minimum amount in case of inter/ intra scheme switches shall be Rs. 1,000/-   Institutional Plan   For all first time purchases, the application must be for a minimum amount of Rs. 5 crore. For all subsequent purchases, the application must be for a minimum amount of Rs. 5 lakh.
Minimum Amount / Units for Redemption	The minimum amount for redemption must be Rs. 1000/- or account  balance whichever is less.
Expenses	The entry load charged will be used to incur the expenses during New Fund Offer. Expenses in excess of the limit prescribed under the Regulations shall be borne by the AMC.
Applicable NAV	For all purchase, redemption and switch transactions - For valid applications accepted:   Upto 3:00 PM (cut-off time) on a Business Day - the NAV of such Business Day.   After 3:00 PM (cut-off time) on Business Day, the NAV of the following Business Day.   The above will be applicable only for cheques / drafts / payment instruments payable locally in the city in which ISC is located.
Liquidity	The Scheme will offer Units for Purchase and Redemption at NAV related prices on every Business Day on an ongoing basis, commencing not later than 30 days from the closure of the NFO Period. The Mutual Fund will endeavor to dispatch the Redemption proceeds within 3 Business Days but not later than 10 business days from the acceptance of the Redemption request.
Transparency	The AMC will calculate and disclose the first NAV(s) of the Scheme within a period of 30 days from the closure of the NFO Period. Subsequently, the NAVs will be calculated and disclosed on every Business Day. The AMC shall update the NAVs on the website of the Fund – www.aiggig.co.in and of the Association of Mutual Funds in India - AMFI (www.amfiindia.com).   The AMC will disclose details of the portfolio of the Scheme every 6 months by either sending a complete statement to all the Unit Holders or by publishing such statement, by way of advertisement, in two daily newspapers. The same shall also be displayed on the website of the fund.
Load Structure	Particular Purchase Purchase through SIP/ STP (Applicable only in Regular Plan)   Regular Plan Institutional Plan   Entry Load (Applicable during New Fund Offer and Ongoing Offer)   Where the purchase amount is less than Rs. 5 crore – 2.25% of the Applicable NAV.   Where the purchase amount is Rs. 5 crore and above – Nil.   By an FOF (irrespective of the amount of Purchase) - Nil.   As a result of Dividend Re-investment - Nil.     Nil 1.25% of the Applicable NAV.     Exit Load (Applicable during New Fund Offer and Ongoing Offer)   For investments less than Rs. 5 crores - 1.00% of the Applicable NAV if redeemed within 1 year from the date of allotment.   For investments of Rs. 5 crores and above - 0.50% of the Applicable NAV if redeemed within 6 months from the date of allotment.   0.50% of the Applicable NAV if redeemed within 6 months from the date of allotment. If the units are redeemed within 2 years from the date of allotment – 1.00% of the Applicable NAV.   If the units are held for 2 years or more from the date of allotment – Nil.

 

II. Definitions and Abbreviations

 

A. Definitions

 

In this Offer Document the following terms will have the meanings indicated there against unless the context suggests otherwise:

 

AIG Capital Corporation / AIGCC	The Sponsor of the AIG Global Investment Group Mutual Fund.
Applicable NAV	For applications for Purchases / Redemptions /Switches (along with a local cheque or demand draft payable at par at the place where the application is received), accepted during the Ongoing Offer Period at the Designated Collection Centres of the Fund on a Business Day up to the Cut-off time of the Scheme, the NAV of that day; and   For applications for Purchases / Redemptions /Switches (along with a local cheque or demand draft payable at par at the place where the application is received) accepted during the Ongoing Offer Period at the Designated Collection Centres of the Fund on a Business Day after the Cut-off time of the Scheme, the NAV of the next Business Day.
Application Form / Key Information Memorandum	A form to be used by an investor to open a folio and/ or Purchase Units in the Scheme.
Asset Management Company / AMC / Investment Manager	AIG Global Asset Management Company (India) Private Limited, an asset management company set up under the Companies Act 1956, having its registered office at FCH House, Ground Floor, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai 400 013 and authorised by SEBI to act as the Asset Management Company / Investment Manager to the schemes of the Fund.
Business Day	A day not being:   (1) A Saturday or Sunday;   (2) A day on which both Bombay Stock Exchange and the National Stock Exchange of India Limited are closed, whether or not the banks in Mumbai are open;   (3) A day on which Purchase and Redemption of Units is suspended or a book closure period is announced by the Trustee / AMC;   (4) A day on which normal business cannot be transacted due to storms, floods, bandhs, strikes or such other events as the AMC may specify from time to time;   (5) A day on which banks in Mumbai or Reserve Bank of India (RBI) is closed; or   (6) A day on which there is no RBI clearing or settlement of securities.   Provided that the days when the banks in any location where the AMC’s Investor Service Centres are located are closed due to a local holiday, such days will be treated as non Business Days at such centres for the purposes of accepting fresh subscriptions. However, if the Investor Service Centre in such locations is open on such local holidays, then redemption and switch requests will be accepted at those centres, provided it is a Business Day for the Scheme on an overall basis.   Notwithstanding the above, the AMC reserves the right to change the definition of Business Day and to declare any day as a Business Day or otherwise at any or all ISCs.
Contingent Deferred Sales Charge / CDSC	A charge to the Unit Holder upon exiting (by way of Redemption) based on the period of holding of Units. The Regulations provide that a CDSC may be charged only for a no-Load Scheme and only for the first four years after the Purchase and caps the percentage of NAV that can be charged in each year.
Custodian	Citibank, N.A, Mumbai registered under the SEBI (Custodian of Securities) Regulations, 1996, or any other custodian who is approved by the Trustee.
Cut-off time	Cut off timing, in relation to an investor making an application to a mutual fund for purchase or sale of units, shall mean the outer limits of timings within a particular day as prescribed by SEBI which are relevant for determination of the NAV that is to be applied for the transaction.
Collection Bank(s)	The bank(s) with which the AMC has entered into/may enter into an agreement, from time to time, to enable investors to deposit their applications for Units during the NFO.
Designated Collection Centres	During the NFO: ISCs and branches of Collection Bank(s) designated by the AMC where the applications shall be received.   During Ongoing Offer: ISCs designated by the AMC where the applications shall be received.   The names and addresses of the Designated Collection Centres are mentioned in the Application Form.
Entry Load	A Load charged to an investor on Purchase of Units based on the amount of investment or any other criteria decided by the AMC.
Exit Load	A Load (other than CDSC) charged to the Unit Holder on exiting (by way of Redemption) based on period of holding, amount of investment or any other criteria decided by the AMC.
Foreign Institutional Investors / FII	An entity registered with SEBI under the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995 as amended from time to time.
Fund of Funds / FOF	A mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds.

 

Fund	AIG Global Investment Group Mutual Fund, a Trust settled by AIG Capital Corporation and registered with SEBI under the Regulations, vide Registration No. MF/054/07/02 dated February 9, 2007.
Investment Management Agreement / IMA	The agreement dated December 15, 2006 entered into between AIG Trustee Company (India) Private Limited and the AIG Global Asset Management Company (India) Private Limited, as amended from time to time.
Investor Service Centre / ISC	Official points of acceptance of transaction / service requests from investors. These will be designated by the AMC from time to time.
Net Asset Value / NAV	Net Asset Value of the Units of the Scheme (including options thereunder) calculated in the manner provided in this Offer Document or as may be prescribed by the Regulations from time to time.
New Fund Offer / NFO	The offer for Purchase of Units at the inception of the Scheme, available to the investors during the NFO Period.
New Fund Offer Period / NFO Period	The period being ________, to ________ subject to extension, if any.
Non Resident Indian / NRI	A person resident outside India who is a citizen of India or is a person of Indian origin as per the meaning assigned to the term under the Foreign Exchange Management (Investment in Firm or Proprietary Concern in India) Regulations, 2000.
Offer Document	This document issued by AIG Global Investment Group Mutual Fund offering Units of AIG India Equity Fund for subscription. Any modifications to the Offer Document will be made by way of an addendum which will be attached to Offer Document. On issuance of an addendum, the Offer Document will be deemed to be updated by the addendum.
Ongoing Offer	Offer of Units under the Scheme when it becomes open ended after the closure of the New Fund Offer Period.
Ongoing Offer Period	The period during which the Ongoing Offer for subscription to the Units of the Scheme is made.
Person of Indian Origin	'Person of Indian Origin' means a citizen of any country other than Bangladesh or Pakistan, if (a) he at any time held an Indian passport; or (b) he or either of his parents or any of his grand parents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or (c) the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b).
Purchase / Subscription	Purchase of / Subscription to Units by an investor from the Fund.
Purchase Price	The price (being Applicable NAV plus Entry Load) at which the Units can be purchased and calculated in the manner provided in this Offer Document.
Registrar	Computer Age Management Services Private Limited ("CAMS"), appointed as the registrar and transfer agent for the Scheme, or any other registrar that may be appointed by the AMC.
Redemption	Repurchase of Units by the Fund from a Unit Holder.
Redemption Price	The price (being Applicable NAV minus Exit Load / CDSC) at which the Units can be redeemed and calculated in the manner provided in this Offer Document.
Scheme	AIG India Equity Fund, an open ended equity scheme.
SEBI Regulations / Regulations	Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended from time to time, including by way of circulars or notifications issued by SEBI and the Government of India.
Sponsor	AIGCC, being the Settlor of AIG Global Investment Group Mutual Fund.

 

Switch	Sale of a unit in one Scheme/ Plan/Option against purchase of a unit in another Scheme/ Plan/ Option.
Systematic Investment Plan / SIP	A plan enabling investors to save and invest in the Scheme on a monthly or quarterly basis by submitting post-dated cheques/payment instructions.
Systematic Transfer Plan / STP	A plan enabling Unit Holders to transfer sums on a weekly/ fortnightly / monthly basis from the Scheme to other schemes launched by the Fund from time to time by giving a single instruction.
Systematic Withdrawal Plan / SWP	A plan enabling Unit Holders to withdraw amounts from the Scheme on a monthly or quarterly basis by giving a single instruction.
Transaction Slip	A form meant to be used by Unit Holders seeking additional Purchase or Redemption of Units in the Scheme, change in bank account details, switch-in or switch-out and such other facilities offered by the AMC and mentioned in Transaction Slips.
Trustee / Trustee Company	AIG Trustee Company (India) Private Limited, a company set up under the Companies Act 1956 and appointed as the Trustee to AIG Global Investment Group Mutual Fund.
Trust Deed	The Trust Deed dated December 15, 2006 executed by and between the Sponsor and the Trustee establishing the AIG Global Investment Group Mutual Fund, as amended from time to time.
Trust Fund	Amounts settled / contributed by the Sponsor towards the corpus of the AIG Global Investment Group Mutual Fund and additions/accretions thereto.
Unit	The interest of an investor, which consists of one undivided share in the net assets of the Scheme.
Unit Holder	A person holding Units of the Scheme of AIG Global Investment Group Mutual Fund offered under this Offer Document.
Valuation Day	Business Day.

 

B. Abbreviations

 

In this Offer Document, the following abbreviations have been used:

 

ADR	American Depository Receipt
AIGCC	AIG Capital Corporation, the Sponsor of the AIG Global Investment Group Mutual Fund
AIGCI	AIG Capital India Private Limited
AMC	AIG Global Asset Management Company (India) Private Limited
AMFI	Association of Mutual Funds in India
AOP	Association of Persons
BOI	Body of Individuals
BSE	Bombay Stock Exchange Limited
CDSC	Contingent Deferred Sales Charge
ECS	Electronic Clearing System
EFT	Electronic Funds Transfer
ETF	Exchange Traded Fund
FII	Foreign Institutional Investor
FOF	Fund of Funds
GDR	Global Depository Receipt
HUF	Hindu Undivided Family
IMA	Investment Management Agreement
ISC	Investor Service Centre
NAV	Net Asset Value
NFO	New Fund Offer
NRI	Non-Resident Indian
NSE	National Stock Exchange of India Limited
PIO	Persons of Indian Origin
POA	Power of Attorney
RBI	Reserve Bank of India
RTGS	Real Time Gross Settlement
SEBI	Securities and Exchange Board of India established under the SEBI Act, 1992
SEBI Act	Securities and Exchange Board of India Act, 1992
SEFT	Special Electronic Funds Transfer
SIP	Systematic Investment Plan
STP	Systematic Transfer Plan
SWP	Systematic Withdrawal Plan

 

 

 

 

C. Interpretation

 

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

 

• The terms defined in this Offer Document shall include the plural as well as the singular.
• Pronouns having a masculine or feminine gender shall be deemed to include the other.
• All references to "US$" refer to United States Dollars and "Rs." refer to Indian Rupees. A "Crore" means "ten million" and a "Lakh" means a "hundred thousand".
• References to times of day (i.e. a.m. or p.m.) are to Mumbai (India) times and references to a day are to a calendar day including non-Business Day.

 

III. Risk Factors and Special Considerations

 

A. Standard Risk Factors

 

• Mutual funds, like securities investments, are subject to market risks and there is no guarantee against loss in the Scheme or that the Scheme's objectives will be achieved.

 

• As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on various factors and forces affecting the securities markets.

 

• Past performance of the Sponsor or mutual funds managed by the Sponsor or its affiliates does not indicate the future performance of the Scheme.

 

• Investors in the Scheme are not being offered a guaranteed or assured rate of return. The Scheme does not guarantee or assure any dividend and also does not guarantee or assure that it will make any dividend distribution, though it has every intention to make the same. All dividend distributions are subject to the investment performance of the Scheme.

 

• AIG India Equity Fund is the name of the Scheme and does not, in any manner, indicate the quality of the Scheme, its future prospects or returns.

 

• The Scheme and individual Plan(s) with a separate portfolio, if any, under the Scheme shall have a minimum of 20 investors and no single investor shall account for more than 25% of the corpus of the Scheme/Plan(s). However, if such a situation arises during the NFO of the Scheme, in accordance with the SEBI Regulations, the Scheme will endeavour to ensure that within a three months time period or the end of the succeeding calendar quarter from the close of the NFO of the Scheme, whichever is earlier, the Scheme complies with these two conditions failing which the provisions of Regulation 39 (2) (c) of the Regulations would become applicable automatically without any reference from SEBI and accordingly the Scheme / Plan(s) shall be wound up and the units would be redeemed at applicable NAV. The two conditions mentioned above shall also be complied within each subsequent calendar quarter thereafter, on an average basis, as specified by SEBI.SEBI has provided further clarifications with respect to 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 will be 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 Fund on the applicable Net Asset Value on the 15th day of the notice period. The Scheme shall adhere to the requirements prescribed by SEBI from time to time in this regard.

 

 

Scheme Specific Risk Factors

 

• The AMC has no previous experience in managing a mutual fund in India and the Scheme being offered in this Offer Document is the initial Scheme being launched under its management.

 

• The value of the Scheme’s investments may be affected by factors affecting the securities markets such as price and volume volatility in the capital markets, interest rates, currency exchange rates, changes in law/policies of the Government, taxation laws and political, economic or other developments which may have an adverse bearing on individual securities, a specific sector or all sectors. Consequently, the NAV of the Units of the Scheme may be affected.

 

• Equity securities and equity related securities are volatile and prone to price fluctuations on a daily basis. The liquidity of investments made in the Scheme may be restricted by trading volumes and settlement periods. Settlement 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. Similarly, the inability to sell securities held in the Scheme's portfolio may result, at times, in potential losses to the Scheme, should there be a subsequent decline in the value of securities held in the Scheme's portfolio.

 

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

 

• The liquidity and valuation of the Scheme's investments due to its holdings of unlisted securities may be affected if they have to be sold prior to the target date of disinvestment.

 

• Investments in money market instruments involve a moderate credit risk i.e. risk of an issuer's ability 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 NAV of the Scheme’s Units, to the extent that the Scheme is invested in fixed income securities, will be affected by changes in the general level of interest rates. When interest rates decline, the value of a portfolio of fixed income securities can be expected to rise. Conversely, when interest rates rise, the value of a portfolio of fixed income securities can be expected to decline.

 

• 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.

 

• The liquidity of the scheme is inherently restricted by trading volumes in securities in which it invest.

 

• Securities which are not quoted on the stock exchanges are inherently illiquid in nature and carry a larger liquidity risk in comparison with securities that are listed on the exchanges or offer other exit options to the investors, including put options. The AMC may choose to invest in unlisted securities that offer attractive yields within the regulatory limit. This may however increase the risk of the portfolio.

 

• Investment decisions made by the Investment Manager may not always be profitable.

 

B.  Risk Factors Associated with Derivatives

 

Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor. Even a small price movement in the underlying security could have a large impact on their value. Execution of investment 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.

 

The AMC may use various derivative products, as permitted by SEBI and the RBI from time to time, in an attempt to protect the value of the portfolio and enhance Unit holder’s interest/value of the Scheme. As and when the Scheme trades in the derivatives market, there are risk factors and issues concerning the use of derivatives that investors should understand. Derivative products are specialized instruments that require investment techniques and risk analyses 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. The Scheme bears a risk that it may not be able to correctly forecast future market trends or the value of assets, indices or other financial or economic factors in establishing derivative positions for the Scheme. Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate in line with underlying assets, rates and indices. Also, the market for derivative instruments is relatively nascent in India and does not have the volumes which may be seen in other developed markets, which may result in volatility to the values.

 

C. Risk Factors Associated with Scrip Lending

 

• The risks in lending portfolio securities, as with other extensions of credit, consist of the failure of another party, in this case, the approved intermediary, to comply with the terms of agreement entered into between the lender of securities i.e. the Scheme and the approved intermediary. Such failure to comply can result in the possible loss of rights in the collateral put up by the borrower of the securities, the inability of the approved intermediary to return the securities deposited by the lender and the possible loss of any corporate benefits accruing to the lender from the securities deposited with the approved intermediary. The Fund may not be able to sell such lent securities and this can lead to temporary illiquidity.

 

D. Risk Factors Associated with Overseas Investment

 

• Subject to necessary approvals and within the investment objectives of the Scheme, the Scheme may invest in overseas markets which carry risks related to fluctuations in the foreign exchange rates, the nature of the securities market of the country, repatriation of capital due to exchange controls and political circumstances.

 

• It is the AMC’s belief that investment in foreign securities 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 foreign securities, 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 under the Regulations or by RBI from time to time. The Scheme does not propose to invest in foreign securities except for ADRs/GDRs of Indian Companies.

 

• Overseas investments will be made subject to any/all approvals, conditions thereof as may be stipulated under the Regulations or by RBI and provided such investments do not result in expenses to the Scheme 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 ceilings 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 securities 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.

 

 

 

 

 

E. Special Considerations

 

• The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond the initial contribution of an amount of Rs.1,00,000/- (Rupees One Lakh) collectively made by it towards setting up the Fund or such other accretions and additions to the initial corpus set up by the Sponsor.

 

• Neither this Offer Document nor the Units have been registered in any jurisdiction. The distribution of this Offer Document in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this Offer Document are required to inform themselves about, and to observe, any such restrictions. No person receiving a copy of this Offer Document or any accompanying application form in such jurisdiction may treat this Offer Document or such application form as constituting an invitation to them to subscribe for Units, nor should they in any event use any such application form, unless in the relevant jurisdiction such an invitation could lawfully be made to them and such application form could lawfully be used without compliance of any registration or other legal requirements.

 

• Prospective investors should review / study this Offer Document carefully and in its entirety and shall not construe the contents hereof or regard the summaries contained herein as advice relating to legal, taxation, or financial / investment matters and are advised to consult their own professional advisor(s) as to the legal, tax, financial or any other requirements or restrictions relating to the subscription, gifting, acquisition, holding, disposal (by way of sale, switch or Redemption or conversion into money) of Units and to the treatment of income (if any), capitalisation, capital gains, any distribution, and other tax consequences relevant to their subscription, acquisition, holding, capitalisation, disposal (by way of sale, transfer, switch or conversion into money) of Units within their jurisdiction of nationality, residence, incorporation, domicile etc. or under the laws of any jurisdiction to which they or any managed funds to be used to Purchase / gift Units are subject and also to determine possible legal, tax, financial or other consequences of subscribing / gifting, purchasing or holding Units before making an application for Units.

 

• AIG Global Investment Group Mutual Fund / the AMC have not authorised 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 advised not to rely upon any information or representations not incorporated in this Offer Document as the same have not been authorised by the Fund or the AMC. 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.

 

 

• 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.

 

• As the liquidity of the Scheme's investments may sometimes be restricted by trading volumes, settlement periods and transfer procedures, the time taken by the Scheme for Redemption of Units may be significant in the event of an inordinately large number of Redemption requests or of a restructuring of the Scheme's portfolio. In view of this, the Trustee has the right, in its sole discretion, to limit redemptions (including suspend redemptions) under certain circumstances - please refer to the paragraph "Right to Limit Redemptions" in Chapter VII.

 

• The AIG group is committed to complying with all applicable anti-money laundering laws in jurisdictions that it operates in and recognizes the importance of “Know Your Customer” requirements. The Fund, the AMC and the Trustee shall comply with the Prevention of Money Laundering Act, 2002 and the rules/regulations prescribed thereunder (please refer to the paragraph “Important Note on Anti-Money Laundering, Know-Your-Customer and Investor Protection” in Chapter VII of this Offer Document). Consequently, the AMC, under powers delegated by the Trustee, shall have absolute discretion to reject any application, prevent further transactions by a Unit Holder, if after due diligence, the investor / Unit Holder / a person making the payment on behalf of the investor does not fulfill the requirements of the “Know Your Customer” or the AMC believes that the transaction is suspicious in nature as regards money laundering. In this behalf the AMC reserves the right to reject any application and effect a mandatory Redemption of Units allotted. If the payment for Purchase of Units are made by a third party (e.g. a Power of Attorney Holder, a Financing agency, a relative, etc.), the Unit Holder may be required to give such details of such transaction so as to satisfy the AMC of the source and / or consideration underlying the transaction.

 

o       Investor Protection: The Scheme is designed to support longer-term investment and active trading is discouraged. Short term or excessive trading into and out of the Scheme may affect its performance by disrupting portfolio management strategies and by increasing expenses. The Fund may refuse to accept applications for Purchase, especially where transactions are deemed disruptive, particularly from market timers or investors who, in their opinion, have a pattern of short term or excessive trading or whose trading has been or may be disruptive for the Scheme.

 

 

o       If in the opinion of the AMC, a Unit Holder is indulging in short term or excessive trading as above, it shall, under powers delegated by the Trustee, have absolute discretion to reject any application, prevent further transaction by the Unit Holder or redeem the Units held by the Unit Holder.

 

Investors are urged to study the terms of the Offer carefully before investing in the Scheme and to retain this Offer Document for future reference.

 

DUE DILIGENCE CERTIFICATE

 

It is confirmed that:

 

1. The draft Offer Document forwarded to SEBI is in accordance with the SEBI (Mutual Funds) Regulations, 1996 and the guidelines and directives issued by SEBI from time to time.
2. All legal requirements connected with the launching of the Scheme and also the guidelines, instructions, etc. issued by the Government of India and any other competent authority in this behalf, have been duly complied with.
3. The disclosures made in the Offer Document are true, fair and adequate to enable the investors to make a well informed decision regarding investment in the proposed Scheme.
4. All the intermediaries named in the Offer Document are registered with SEBI and till date such registration is valid.

 

For AIG Global Asset Management Company (India) Private Limited

 

 

 

 

 

Date     : February 15, 2007                  Signature          : Sd/-

Place    : Mumbai                                  Name               : Sonal Barot                                                                                                                Designation:        Head-Compliance & Company Secretary

 

 

 

Note: The aforesaid Due Diligence Certificate dated February 15, 2007 was submitted to the Securities and Exchange Board of India on_____________.

IV. Constitution of the Fund

 

A.     The Fund

 

The AIG Global Investment Group Mutual Fund has been constituted as a Trust in accordance with the provisions of the Indian Trusts Act, 1882 (2 of 1882) vide a Trust Deed dated December 15, 2006. The Fund was registered with SEBI vide registration number MF/054/07/02 dated February 9, 2007.

 

The office of the Mutual Fund is at FCH House, Ground Floor, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai 400 013, India.

 

The objective of the Fund is to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities.

 

B. The Sponsor

 

The sponsor of the AIG Global Investment Group Mutual Fund is AIG Capital Corporation (AIGCC), a company incorporated under the laws of Delaware, United States of America, having its registered office at Corporation Services Center, 2711 Centerville Road, Suite 400, Wilmington Delaware, USA 19808 and its principal office at 70 Pine Street, 17th Floor, New York, New York, USA 10270. 

 

AIGCC is 100% owned by American International Group, Inc. (“AIG”), which was also incorporated in the State of Delaware, on June 9, 1967, as a successor to a business that was initially started in 1919 in Shanghai, China.  AIG is a holding company which, through its subsidiaries, is engaged in a broad range of insurance and insurance-related activities in the United States and abroad.  AIG’s primary activities include both general insurance and life insurance and retirement services operations.  Other significant activities include financial services and asset management.  AIG’s common stock is listed in the U.S. on the New York Stock Exchange as well as the stock exchanges in London, Paris, Switzerland and Tokyo.

 

AIGCC was incorporated mainly to consolidate all the non-insurance financial services businesses of AIG under one company. Many of AIGCC’s direct and indirect subsidiaries are companies engaged in asset management, consumer finance and other non-banking finance activities.  These companies are located in the United States and around the world, including the United Kingdom, Ireland, Japan, Hong Kong, Thailand, Brazil and Canada, among other locations. The financial statements of the direct and indirect subsidiaries of AIGCC are consolidated in the audited consolidated financial statements of AIG.

 

 

AIG Global Investment Group and the Sponsor.

 

AIGGIG comprises a group of international companies that provides asset management products and services to clients around the world. AIG is the parent company of the AIGGIG member companies.

 

AIGGIG is headquartered in New York and has a total of 44 investment offices employing over 1,800 employees as of 30 September 2006. Each of its member companies has the capability to provide investment services to clients worldwide. Additionally, the extensive network and resources of the AIG companies, which operate in 130 countries and jurisdictions, complement AIGGIG’s network.

 

AIGGIG offers a wide range of investment capabilities divided into five major groups – Equity, Fixed Income, Real Estate, Private Equity, Hedge funds and Other Alternate asset classes. AIGGIG managed approximately USD 638.10 billion in assets as of 30 September 2006. There are 44 offices operating in regional centers in North America, Europe, South America, Africa and Asia and employing over 1,800 persons.

 

Given below is a brief summary of the Sponsor's (AIG Capital Corporation) unaudited financial information:

(Amount in US $)

Description	December 31, 2005	December 31, 2004	December 31, 2003
Total Revenue	5,220,443,214	4,272,145,824	3,614,069,179
Profit Before Tax	1,232,972,091	1,066,859,207	678,287,992	a*
Profit After Tax	844,735,872	752,287,008	417,267,428	a*
Free Reserves	5,648,728,104	4,754,478,496	4,351,287,660
Net Worth	2,030,592,085	1,568,805,940	1,443,135,231
Earnings per Share (Rs.)	52,836	47,742	33,714	b*
Book Value per Share (Rs.)	564,874	475,449	435,130
Dividend (%)	-	-	1,442
Paid Up Capital (Equity)	2,356,728,045	1,884,876,761	1,859,805,741

 

Share Capital Suspense	-	-	-	c*
Paid Up Capital (Preference)	5,000	5,000	5,000

 

 

a* This amount represents income before equity in earnings(loss) of affiliated companies, minority interest and cumulative effect of accounting change.

 

b* Earnings per Share is calculated as follows: Net Income divided by Number of Shares - Common Stock. All common stock is owned by AIG, Inc.

 

c* There is no additional amount subscribed but not issued.  As such subscribed capital and issued capital are the same.

(Amount in US $)

	December 31, 2005	December 31, 2004	December 31, 2003
Profit Before Tax	1,232,972,091	1,066,859,207	678,287,992
Taxes	388,236,219	314,572,199	261,020,564
Profit After Taxes	844,735,872	752,287,008	417,267,428
Equity in Earnings(loss) of Affiliated Companies	28,012,158	87,699,575	74,925,481
Minority Interest	344,383,479	362,566,361	155,052,774
Income from Continuing Operations	528,364,551	477,420,222	337,140,135
Cumulative Effect of Accounting Change	-	-	8,642,075
Net Income	528,364,551	477,420,222	328,498,060

           

Note: Please note that the information for AIGCC for 2006 is not available at this time.

C. The Trustee Company (The Trustee)

 

AIG Trustee Company (India) Private Limited (the “Trustee”), a company incorporated under the Companies Act, 1956 on October 30, 2006 vide registration number U 93090 MH 2006 PTC 165286, has been appointed as the Trustee to the AIG Global Investment Group Mutual Fund vide Trust Deed dated December 15, 2006.

 

The Registered Office of the Trustee is situated at FCH House, Ground Floor, Peninsula Corporate Park, G. K. Marg, Lower Parel, Mumbai 400 013.

 

I. Directors of the Trustee

 

The directors of the Trustee are:

 

Names, addresses and occupations of the directors	Other Directorships of the directors
*Mr. Sunil Mehta Sorrento, Flat No. 6, Mount Pleasant Road, Malabar Hill, Mumbai 400 006, India,   Occupation: Service	Tata AIG Life Insurance Company Limited Tata AIG General Insurance Company Limited AIG Systems Solutions Private Limited AIG Capital India Private Limited Kendall Holdings Limited RMZ Properties Private Limited Vivek Hire Purchase and Leasing Limited
Mr. N. Rangachary Bungalow No.8, Minister’s Bungalow, Kundanbagh, Begumpet, Hyderabad, India,   Occupation: Retired Government Servant	Central Warehousing Cold Chain Private Limited Tamilnadu Petro Products Limited Max India Limited Roots Multi Clean Limited
Mr. Sunil Behari Mathur A-20, Geetanjali Enclave (Ground Floor), New Delhi 110 017, India   Occupation: ­­­­­­­­­­­­­­­­­Advisor	Havells India Limited ITC Limited Grasim Industries Limited EID Parry (I) Limited UTI Bank Limited IL&FS Limited HousingDevelopment Improvement India Limited Indian Railway Catering & Tourism Corporation Limited UTI Technology Services Limited UTI Infrastructure & Services Limited National Stock Exchange Limited National Collateral Management Services Limited Munich Re India Services Private Limited EMD Locomotive Technologies Private Limited Administrator of the Specified Undertaking of the Unit Trust of India National Investment Fund SASF, IDBI Management Development Institute, Gurgaon Indian Institute of Capital Markets IDFC Trustee Co. Limited Universal Sompo General Insurance Company Limited
Mr. Amal Ganguli J-6/7, DLF Phase-II, Gurgaon – 122 002, India   Occupation: ­­­­­­­­­­­­­­­­­ Chartered Accountant	Flextronics Software Systems Limited Hughes Communications India Limited Tube Investments of India Limited HCL Technologies Limited Samtel Colour Limited New Delhi Television Limited Videsh Sanchar Nigam Limited ML Infomap Private Limited Century Textiles and Industries Limited AVTEC Limited ICRA Limited Maruti Udyog Limited

 

* Mr. Sunil Mehta is a director associated with the Sponsor.

 

 

Mr. Sunil Mehta graduated from University of Delhi with Honours in Bachelor of Commerce. He is a Fellow Member from the Institute of Chartered Accountants of India.  He is an alumnus of The Wharton School of Management, University of Pennsylvania, where he completed the Advanced Management Program (AMP).

 

Mr. N. Rangachary is a member of the three professional bodies established in India, namely: (i) The Institute of Chartered Accountants of India; (ii) The Institute of Cost and Works Accountants of India; and (iii) The Institute of Company Secretaries' of India. He is an Honorary Fellow of the Actuarial Society of India. He joined the Indian Revenue Service in 1960 and retired as the Chairman of the Central Board of Direct Taxes in July, 1996. On 1st August, 1996, he took over as the first Chairman of the Insurance Regulatory and Development Authority and on its conversion into a statutory body in April, 2000, became its first Chairman and retired on 9th June, 2003. Presently, he is an advisor to the Finance Department of Government of Andhra Pradesh. He is also an advisor to various other organisations engaged in trade, commerce and profession.

 

Mr. Sunil Behari Mathur - The Government of India has appointed Mr. Mathur as the ‘Administrator’ of the Specified Undertaking of the Unit Trust of India (SUUTI).

A qualified Chartered Accountant and Cost Accountant, Mr. Mathur retired from Life Insurance Corporation of India (LIC) in October 2004 as its Chairman, having joined the organization as the direct recruit in 1967. Mr. Mathur took charge as Chairman of LIC at a time when the Insurance Sector had just opened up. He has a successful track record of introducing new products in the Insurance Sector in a competitive environment.

 

Mr. Amal Ganguli - Mr. Amal Ganguli was educated at St Joseph's College, North Point, Darjeeling and is a Fellow of the Institute of Chartered Accountants in England & Wales. He is an alumnus of the International Management Institute, Geneva and a Member of the New Delhi Chapter of Institute of Internal Auditors, Florida.

 

Mr. Ganguli was a manager at Price Waterhouse London/Calcutta between 1963 and 1969. In 1969, he was made partner Price Waterhouse/PricewaterhouseCoopers India and handled various assignments (including Partner in charge, New Delhi office 1973-1996 and Chairman and Senior Partner -1996-2003) till he retired in 2003. His areas of expertise include audit, investigations, mergers and acquisitions, tax and international tax. His clients companies include reputed names such as the Thapar Group, the Birla Group, the DCM Group, IBM, Gillette, Alcatel, the HCL Group, World Bank, SmithKline Beecham, Carrier, Hewlett Packard, Corning and several others.

 

II. Summary of the Substantive Provisions of the Trust Deed

 

Pursuant to the Trust Deed dated December 15, 2006 constituting the Fund and in terms of the SEBI Regulations, the rights and obligations of the Trustee, inter alia, are as under:

 

1.      The Trustee Company has exclusive ownership of the assets of the Schemes of the Fund (Trust Property) and holds the same in trust and for the benefit of the Unit Holders.

 

2.      The Trustee shall ensure that:

 

(a)    the liability of a particular scheme of the Fund shall be met out of the assets of the same scheme and shall in no way attach to or become a liability of any other scheme of the Fund; and

 

(b)   proper and separate accounts and records are maintained for each of the schemes of the Fund.

 

3.      The Trustee Company has the authority to appoint one or more bodies corporate to act as an asset management company and to enter into an investment management agreement with them to float, promote and operate schemes of the Fund approved by the Trustee and SEBI and to manage the funds mobilised under various schemes of the Fund in accordance with the provisions of the Trust Deed and the Regulations and subject to supervision of the Trustee.

 

4.      The Trustee Company is responsible for the management of the Fund and for providing information to the Unit Holders, the Sponsor, SEBI, and any other regulatory body and to ensure compliance by the Mutual Fund /AMC of all statutory formalities.

 

5.      The Trustee Company, through the AMC is, inter alia, empowered and entitled to:

 

(i)         frame one or more Schemes for the issue of Units and frame such rules and regulations for the issue as it may in its absolute discretion deem fit;

 

(ii)        acquire, hold, manage, trade, lend and dispose of stocks and securities of all kinds, subject to RBI approval;

 

(iii)       acquire or enter into or deal in any derivative, option, hedging, swap or other contract of a similar nature, repurchase agreement transactions and to enter into securities lending and borrowing transactions, underwriting and sub underwriting contracts and placings;

 

(iv)       calculate the offer, repurchase and Redemption prices of Units including inter alia the allowance to be made in computing these prices for contingent liabilities;

 

(v)        keep the capital and moneys of the Fund in call or repurchase options or deposit with banks or other financial institutions or companies or any other financial instruments as may be permitted under the Regulations;

 

(vi)       enter into agency arrangements with one or more persons for the purposes of mobilizing collections for various schemes of the Fund and displaying the advertisements and other marketing materials;

 

(vii)      enter into agreements or arrangements including agreements/arrangements by way of tie-ups, collaborations, joint ventures with mutual funds, asset management companies, financial institutions, investment companies, banks and other institutions;

 

(viii)      do any other kind of business connected with mobilisation of savings and investments;

 

(ix)       accept contributions, grants, and donations;

 

(x)        collect, get in and receive the profit, interest, dividend and income of the Trust Property from time to time as and when the same becomes due and receivable;

 

(xi)       pay all costs, charges, expenses and outgoings of and incidental to the administration and execution of the Trust and the management and maintenance of the Trust Property and incurred for the same in accordance with and subject to the limits under the Regulations as may be stipulated from time to time;

 

(xii)      appoint brokers, sub-brokers, agents, custodial agents, registrars, share transfer agents for the purpose of purchase and sale of securities, investment under the schemes of the Fund and to pay their charges;

 

(xiii)      appoint and engage advocates, solicitors, valuers, chartered accountants, credit rating agencies, and other such advisers and experts for the purpose of the Scheme and to pay their remuneration and charges;

 

(xiv)     do all such acts, deeds and things and exercise such powers and sign and execute all such documents, Unit Certificates, transfer forms, declarations, affidavits, indemnities as it may in its absolute discretion deem fit;

 

(xv)      open one or more bank accounts, securities account/s with RBI and other banks (if permitted) and operate the same;

 

(xvi)     deal with all matters arising from the Fund/AMC, on the one hand and Unit Holders on the other, and to settle disputes, if any, with Unit Holders;

 

(xvii)         generally to exercise all such powers as it may be required to be exercised under the Regulations for the time being in force and do all such matters and things as may promote the Fund or as may be incidental to or consequential upon the discharge of its functions and the exercise and enforcement of all or any of the powers and rights under the Trust Deed;

 

(xviii)        pay out of the income of the Trust Property after deducting all expenses the interest and dividend in accordance with the scheme and the Offer Document applicable to each scheme of the Fund;

 

(xix)           conduct spot checks on the Asset Management Company at such frequency and in such manner as it may deem fit to ensure compliance with the provisions of the Regulations including but not limited to provisions governing pricing of units, payments into and out of the Trust Property, proper accounting of the income of the Trust and charging of expenses as permitted;

 

(xviii)        subject to the provisions of the Regulations and the Trust Deed, exercise all powers and rights of a trustee under the Indian Trusts Act, 1882 to achieve the objects of this Trust and protect the interests of the Unit Holders;

 

(xix)           invest in real estate or immovable property of any nature or to acquire any right, title and interest in immovable property of any nature;

 

(xx)            subscribe to any bonds or debenture or securities issued by institutions or bodies engaged in housing finance;

 

(xxi)           set up or constitute or manage or advise any offshore fund or scheme and to contribute to any corpus in respect thereof or subscribe to any scheme framed by such offshore fund and to do all acts, deeds, matters and things incidental thereto including operating accounts abroad, entering into an agency agreement with a bank incorporated outside India;