IDFC Mutual Fund

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IDFC Mutual Fund

  1. 1. IDFC Mutual Fund STATEMENT OF ADDITIONAL INFORMATION (SAI) Sponsor : Infrastructure Development Finance Company Limited (IDFC) Investment Manager : IDFC Asset Management Company Private Limited Trustee : IDFC AMC Trustee Company Private Limited This Statement of Additional Information (SAI) contains details of IDFC Mutual Fund (IDFCMF), its constitution, and certain tax, legal and general information. It is incorporated by reference (is legally a part of the Scheme Information Documents of IDFC Mutual Fund). This SAI is dated July 25, 2008 IDFC Asset Management Company Pvt. Ltd.
  2. 2. STATEMENT OF ADDITIONAL INFORMARION (SAI) 1 I. INFORMATION ABOUT SPONSOR, AMC AND TRUSTEE COMPANIES A. Constitution of the Mutual Fund shareholders included the Government of India - 20%, foreign investors (including Khazanah National, IFC, CDC, IDFC Mutual Fund is sponsored by Infrastructure Morgan Stanley, Goldman Sachs and Citigroup among Development Finance Company Limited (IDFC). The sponsor others) - 49% and public / others 31%. As on December 31, is the settler of the Mutual Fund Trust. The sponsor has 2007 IDFC had an asset base of over USD 6.5 billion, net entrusted a sum of Rs. 30,000 to the Trustees as its worth of USD 1.4 billion and a market capitalization of USD contribution towards the corpus of the Mutual Fund. 7.5 billion. IDFC is a leading diversified financial institution providing a Financial Performance of the Sponsor (past three years) wide range of financing products and fee-based services with infrastructure as its focus area. IDFC’s key businesses include (in Rs. crores) : project finance, investment banking, asset management, Particulars 31.03.08 31.03.07 31.03.06 principal investments and advisory services. IDFC also works Net Worth 5454.38 2882.03 2544.19 closely with government entities and regulators in India to Total Income 2532.42 1505.74 1002.36 advise and assist in formulating policy and regulatory Profit after tax 669.17 462.87 375.64 frameworks that support private investment and public- Assets Under Management 2545 2671 2551 private partnerships in infrastructure development. (under its private equity business) B. Sponsor C. The Trustee IDFC Mutual Fund is sponsored by Infrastructure ANZ Trustee Company Private Limited, a company registered Development Finance Company Limited (IDFC). The sponsor under the Companies Act, 1956, was established by Australia is the settler of the Mutual Fund Trust. The sponsor has and New Zealand Banking Group (ANZ) and had been entrusted a sum of Rs. 30,000 to the Trustees as its appointed as the Trustee of ANZ Grindlays Mutual Fund vide contribution towards the corpus of the Mutual Fund. Trust Deed dated December 29, 1999, as amended from time IDFC is a leading diversified financial institution providing a to time. ANZ sold the mutual fund business to Standard wide range of financing products and fee-based services with Chartered Bank (SCB) in 2001, pursuant to which SCB held infrastructure as its focus area. IDFC’s key businesses include 100% stake in the equity share capital of the Trustee Company. project finance, investment banking, asset management, SCB agreed to sell the business to Infrastructure Development principal investments and advisory services. IDFC also works Finance Company Limited (IDFC) in 2008. Pursuant to the closely with government entities and regulators in India to transaction, IDFC/ its nominees hold 100% of the shares of advise and assist in formulating policy and regulatory the Trustee Company. The company has now been renamed frameworks that support private investment and public- as IDFC AMC Trustee Company Private Limited. It shall through private partnerships in infrastructure development. its Board of Directors discharge its obligation as Trustee of IDFC was established in 1997 as a private sector enterprise IDFC Mutual Fund. The Trustee ensures that the transactions by a consortium of public and private investors and operates entered into by the AMC are in accordance with the SEBI as a professionally managed commercial entity. IDFC listed Regulations and will also review the activities carried on by its equity shares in India pursuant to an initial public offering the AMC. in August 2005. As at December 31, 2007, IDFC’s Details of Trustee Directors : Name Age/Qualification Brief Experience Mr.Vikram 42 Years / Chartered He is a C.A and M. B. A. from the Wharton School of the University of Pennsylvania. Limaye* Accountant and MBA He is the Executive Director of Infrastructure Development Finance Company Limited (Wharton School of (IDFC). He was the director of Credit Suisse First Boston, USA and worked with University of Pennsylvania them for a period of 8 Years. Prior to this he was a Senior Associate with Ernst & Young, Oman for a period of 3 years. He had been with Citibank, as Assistant Manager. He had also worked with Arthur Andersen & Co., Mumbai as the Senior Associate for a period of 4 years. Other Directorships : 1. IDFC Trustee Company Limited 2. IDFC Investment Advisors Limited
  3. 3. 2 STATEMENT OF ADDITIONAL INFORMARION (SAI) Name Age/Qualification Brief Experience 3. IDFC Private Equity Company Limited 4. IDFC Project Equity Company Limited 5. IDFC Capital Company Limited 6. IDFC PPP Trusteeship Company Limited 7. IDFC Projects Limited 8. IDFC-SSKI Securities Limited 9. IDFC-SSKI Private Limited 10. Asset Reconstruction Company (India) Limited 11. Sharekhan Limited 12. Human Value Developers Private Limited 13. E-Clerx Services Limited Mr. Jamsheed 77 Years / M.A, In his career as an I A S officer, he held various important positions including that Kanga LLB, Masters in of Managing Director, Maharashtra State Agro Industries Development Corporation Public Administration and Maharashtra State Tourism Development Corporation, Joint Secretary, Finance (MPA), Harvard, USA Department, Maharashtra State, Joint Secretary (Projects & Finance), Department Retired IAS Officer of Atomic Energy, Secretary to Government of Maharashtra, Municipal Commissioner, Bombay Municipal Corporation, Chairman and Managing Director, Export Credit Guarantee Corporation of India in the rank of Secretary to Government of India. After retirement, he had been the Vice-Chairman and Managing Director of Tata Housing Development Co. Limited and now is a Senior Corporate Advisor to Tata Housing Development Co. Limited from April 1997. He is also a Consultant to Forbes Gokak Limited. Other Directorships : 1. Forbes Campbell Holdings Limited 2. The Associated Building Company Limited Mr. Dattatraya 76 Years / M.Com, In his career spanning over 34 years till 1990 as an IAS Officer, he had held very M. Sukthankar Retired IAS Officer important portfolios in the Govt. of Maharashtra including that of Secretary, Education Department, Secretary, Industries Dept, Metropolitan Commissioner, Municipal Commissioner, Greater Bombay, and finally as Chief Secretary to the Govt. of Maharashtra. He was also the Secretary, Ministry of Urban Development, Govt. of India for two years Other Directorships : 1. Housing Development Finance Corporation Limited 2. Tata Housing Development Co. Limited 3. Phoenix Township Limited 4. Indoco Remedies Limited 5. HDFC Developers Limited 6. Sangit Mahabharati, Mumbai-Vice Chairman 7. The Society for Recycling of Waste of Recoverable Disposal (REWARD), Mumbai- Board of Trustees/Management 8. The Electoral Trust, Mumbai- Board of Trustees/Management Mr. U 66 Years / Cost He was formerly the Chairman and Managing Director of Bharat Petroleum Sundararajan Accountant Corporation Limited for around 9 years. Other Directorships : 1. IDFC Trustee Company Limited 2. Gujarat State Petronet Limited 3. Shipping Corporation Of India Limited 4. Ennore Port Limited 5. Bharat Oman Refineries Ltd * - Associate Director
  4. 4. STATEMENT OF ADDITIONAL INFORMARION (SAI) 3 Rights, Obligations, Responsibilities and Duties of the Trustee 7. The Trustee is required to ensure that all the activities of the under the Trust Deed and the Regulations: AMC are in accordance with the provisions of the Regulations. Pursuant to the Trust Deed dated December 29, 1999 (as amended 8. Where the Trustee has reason to believe that the conduct of from time to time) constituting the Mutual Fund and in terms of the business of the Fund is not in accordance with these the Regulations, the rights, obligations, responsibilities and Regulations and the Scheme it is required to take such duties of the Trustee are as follows : remedial steps as are necessary by it and to immediately inform SEBI of the violation and the action taken by it. 1. The Trustee shall have a right to obtain from the AMC such information as is considered necessary by it. 9. Each Director of the Trustee is required to file with the Trust the details of his transactions of dealings in securities on a 2. The Trustee shall ensure before the launch of any Scheme quarterly basis. that the Asset Management Company has : 10. The Trustee is accountable for and is required to be the a. Systems in place for its back office, dealing room and custodian of the Fund’s property of the respective Scheme accounting; and to hold the same in trust for the benefit of the Unitholders b. Appointed all key personnel including fund manager(s) in accordance with the Regulations and the provisions of the for the Scheme(s) and that the trustees are satisfied with Trust Deed. the adequacy of number of key personnel considering 11. The Trustee is required to take steps to ensure that the the size of the mutual fund and the proposed Scheme; transactions of the Fund are in accordance with the provisions c. Appointed auditors to audit the accounts of the of the Trust Deed. Schemes; 12. The Trustee is responsible for the calculation of any income d. Appointed a compliance officer who shall be responsible due to be paid to the Fund and also of any income received in for monitoring the compliance of the act, rules and the Mutual Fund for the holders of the Units of any Scheme regulations, notification, Guidelines, instructions etc. in accordance with the Regulations and the Trust Deed. issued by the Board or the Central Government and for 13. The Trustee is required to obtain the consent of the redressal of investors grievances. Unitholders of a Scheme : e. Appointed registrars and laid down parameters for their a. When the Trustee is required to do so by SEBI in the supervision and periodical inspections; interest of the Unitholders of that Scheme, or f. Prepared a compliance manual which is updated by b. Upon a requisition made by three-fourths of the including all the provisions of regulations and guidelines Unitholders of any Scheme under the Fund for that issued by SEBI from time to time and designed internal Scheme, or control mechanisms including internal audit systems commensurate with the size of the mutual fund; c. If a majority of the Trustees decide to wind up the Scheme g. Specified norms for empanelment of brokers and or prematurely redeem the Units. marketing agents. 14. The Trustee is required to ensure that no change in the 3. The Trustee shall ensure that the AMC has been diligent in fundamental attributes of any Scheme or the trust or fees empanelling the brokers, in monitoring securities transactions and expenses payable or any other change which would with brokers and avoiding undue concentration of business modify the Scheme and affect the interest of Unitholders, with any broker. shall be carried out unless, 4. The Trustee is required to ensure that the AMC has not given a. a written communication about the proposed change is any undue or unfair advantage to any associate or dealt with sent to each Unitholder and an advertisement is given in any of the associates of the AMC in any manner detrimental one English daily newspaper having nationwide to the interests of the Unitholders. circulation as well as in a newspaper published in the language of the region where the head office of the 5. The Trustee is required to ensure that the transactions entered mutual fund is situated; and into by the AMC are in accordance with the Regulations and the Scheme. b. the Unitholders are given an option to exit at the prevailing net asset value without any exit load. 6. The Trustee is required to ensure that the AMC has been managing the Scheme (s) independently of other activities 15. The Trustee is required to call for the details of transactions and has taken adequate steps to ensure that the interest of in securities by the directors and key personnel of the AMC investors of one Scheme are not compromised with those of in their own names or on behalf of the AMC and report the any other Scheme or of other activities of the AMC. same to SEBI as and when called for.
  5. 5. 4 STATEMENT OF ADDITIONAL INFORMARION (SAI) 16. The Trustee is required to review quarterly, all transactions Schemes. carried out between the Fund, the AMC and its associates. 27. The Trustee shall ensure that all service providers are holding 17. The Trustee is required to review quarterly, the net worth of appropriate registrations from SEBI or the concerned the AMC and in case of any shortfall ensure that the AMC regulatory authority. makes up for the shortfall as per clause (f) of sub regulation (1) of Regulation 21 of the Regulations. 28. The Trustee shall arrange for test checks of service contracts. 18. The Trustee is required to periodically review all service 29. The Trustee shall immediately report to SEBI of any special contracts such as custody arrangements and transfer agency, developments in the mutual fund. and satisfy itself that such contracts are executed in the Specific Due Diligence: interest of the Unitholders. 30. The Trustee shall : 19. The Trustee is required to ensure that there is no conflict of interest between the manner of deployment of its net worth a. Obtain internal / concurrent audit reports at regular by the AMC and the interest of the Unitholders. intervals from independent auditors appointed by the Trustee. 20. The Trustee is required to periodically review the investor complaints received and the redressal of the same by the b. Obtain compliance certificates at regular intervals from AMC. the AMC. 21. The Trustee is required to abide by the Code of Conduct as c. Hold meeting of Trustees more frequently and at least specified in the Fifth Schedule of the Regulations. six such meetings shall be held in every year. 22. No amendment to the trust deed shall be carried out without d. Consider the reports of the independent auditor and the prior approval of SEBI and unitholders approval would compliance reports of the AMC at the meetings of the be obtained where it affects the interest of the unitholders. Trustee for appropriate action. 23. The Trustee has to furnish to SEBI on a half yearly basis: e. Maintain records of the decisions of the Trustees at their a. a report on the activities of the Fund; meetings and of the minutes of the meetings. b. a certificate stating that the Trustees have satisfied f. Prescribe and adhere to the code of ethics by the Trustees, themselves that there have been no instances of self AMC and its personnel. dealing or front running by any of the directors of the g. Communicate in writing to the AMC of the deficiencies Trustee Company, directors and key personnel of the and checking on the rectification of deficiencies. AMC; Notwithstanding anything contained in sub- regulations c. a certificate to the effect that the AMC has been (1) to (25), the trustees shall not be held liable for acts managing the Schemes independently of any other done in good faith if they have exercised adequate due activities and in case any activities of the nature referred diligence honestly. to in Regulations 24, sub regulation (2) of the 31. The independent directors of the Trustee or AMC shall pay Regulations have been undertaken, the AMC has taken specific attention to the following, as may be applicable, adequate steps to ensure that the interest of the namely: Unitholders is protected. a. The Investment Management Agreement and the 24. The independent Directors of the Trustee are required to give compensation paid under the agreement. their comments on the report received from the AMC regarding the investments by the Mutual Fund in the securities b. Service contracts with affiliates; whether the AMC has of the group companies of the Sponsors. charged higher fees than most contractors for the same services. General Due Diligence: c. Selection of the AMC’s independent Directors. 25. The Trustee shall be discerning in the appointment of the directors of the Asset Management Company. d. Securities transactions involving affiliates to the extent such transactions are permitted. 26. The Trustee shall review the desirability of continuance of the AMC if substantial irregularities are observed in any of the e. Selecting and nominating individuals to fill independent Schemes and shall not allow the AMC to float any new directors’ vacancies.
  6. 6. STATEMENT OF ADDITIONAL INFORMARION (SAI) 5 f. Ensure that the Code of Ethics is designed to prevent D. Asset Management Company fraudulent, deceptive or manipulative practices by insiders IDFC Asset Management Company Private Limited, a company in connection with personal securities transactions. incorporated under the Companies Act, 1956 on May 27th g. Ensure the reasonableness of fees paid to Sponsor, the 2008, having its Registered Office at 90, M G Road, Fort, AMC and any others for services provided. Mumbai 400 001. is the Asset Management Company of IDFC Mutual Fund._It had been appointed as the investment h. Review principal underwriting contracts and their manager of the Mutual Fund vide a deed of variation to the renewals. Investment Management Agreement, dated May 30th 2008. i. Review any service contract with the associates of the The Company originally known as ANZ Grindlays Asset AMC. Management Company Private Limited, was established by Australia and New Zealand Banking Group (ANZ), and had Notwithstanding anything contained in the Regulations, the been appointed by the Trustee to act as the Investment Trustee and its Directors shall not be held liable for acts done Manager of the ANZ Grindlays Mutual Fund vide the in good faith if they have exercised adequate due diligence Investment Management Agreement dated January 3, 2000. honestly. Consequent to sale of business by ANZ to Standard Chartered Supervisory role of the Trustee Bank (SCB) in 2001, 75% stake in the equity share capital of the AMC and 100% stake in the Preference Share Capital of From April 1, 2007 till date, nine meetings of the Directors of the AMC had been transferred to SCB. IDFC acquired the the Trustee were held. The Trustee’s supervisory role is equity and preference shares held by SCB in the Asset discharged interalia by reviewing the activities of the Asset Management Company Private Limited (AMC) on May 30th Management Company through perusal of the Half-Yearly 2008. IDFC also acquired the equity shares held by minority and Annual Accounts of the Fund and the Bi-monthly, shareholders in the AMC. Quarterly and Half-Yearly compliance reports. Further, the Shareholding pattern of the AMC : Audit Committee of the Trustee has been set up which reviews Shareholder Percentage reports being submitted by the Concurrent Auditors of the IDFC / persons / entities nominated by IDFC 100 Fund Details of the AMC Directors : Name Age/Qualification Brief Experience Dr. Rajiv 51 Years / B.A.(Hons) with He is the Managing Director and Chief Executive Officer of Infrastructure Lall* Politics, Philosophy, Development Finance Company Limited (IDFC), the sponsor of IDFC Mutual Economics from Oxford Fund. He is also the Chairman of the Board of Directors of IDFC Asset University, UK. Ph. D. with Management Company Private Limited. Prior to IDFC, he was a partner at Economics from University Warburg Pincus. Prior to which he was with Morgan Stanley Asia Limited, Hong of Columbia, USA. Kong as Executive Director. He had also been with the World Bank, Washington DC for a period of 8 Years, as Senior Economist for China. Other Directorships : 1. Infrastructure Development Finance Company Limited 2. IDFC Trustee Company Pvt. Ltd. 3. IDFC Private Equity Company Limited 4. IDFC Capital Company Limited 5. IDFC Projects Limited 6. IDFC-SSKI Securities Limited 7. IDFC-SSKI Private Limited 8. Securities Trading Corporation of India Limited 9. National Securities Depository Limited 10. National Stock Exchange of India Limited 11. Spandana Sphoorty Finance Limited
  7. 7. 6 STATEMENT OF ADDITIONAL INFORMARION (SAI) Details of the AMC Directors : (Contd.) Name Age/Qualification Brief Experience Dr. R H. 71 Years / M.A, He completed his M.A., Ph.D. (Economics) from the University of Bombay. He is Patil Ph. D. (Economics) presently the Chairman of Clearing Corporation of India Limited and Clearcorp Dealing Systems (India) Ltd. He was formerly the Managing Director of National Stock Exchange of India Limited for over 7 years. During his career spanning more than 35 years, he has been closely associated with the financial sector in various capacities and particularly with the capital market. Other Directorships : 1. National Stock Exchange of India Limited 2. NSDL Database Management Ltd (NDML) 3. National Securities Clearing Corporation Limited 4. National Securities Depository Limited 5. Corp Bank Securities Ltd. 6. NSE IT Limited 7. SBI Capital Markets Limited 8. Clearing Corporation of India Limited 9 Clearing Corp Dealing Systems (India) Ltd. 10. Axis Bank (erstwhile UTI Bank Ltd) 11. L & T Infrastructure Finance Co. Ltd. 12. Tata Power Trading Company Ltd. 13. Axis Private Equity Limited Mr. Pradip 72 Years / B.A, He was the Chairman of Thomas Cook (India) Limited and was responsible for Madhavji B.Com, LLB. enhancing its position externally, through further strengthening the company’s relationships with business partners, trade bodies and associates. He had been with Thomas Cook since 1977 and had held senior positions as Managing Director in 1979, Deputy Chairman & Managing Director in 1982, Executive Chairman in 1993 and was the Chairman since 1995. Prior to this he was with Dena Bank for over 18 years. 1. Kishco Cutlery Limited 2. United Phosphorus Limited 3. Parmananddas Jivandas Hindu Gymkhana – Trustee 4. Travel Corporation of India (TCI) 5. Australia New Zealand Business Association In India Mrs. Bakul 70 Years / B.Sc. She is a Chartered Secretary from the Chartered Institute of Company Secretaries, Patel (Microbiology & U.K. She was the Sheriff of Mumbai from 1992 – 1993. She is a Member of Chemistry), Zonal Advisory Board, Western Zone, Life Insurance Corporation of India and Master of Social Work, Western Regional Advisory Committee, Industrial Development Bank of India. (Tata Institute of Social Sciences, Bombay), She was a member on the Indian Advisory Board, Standard Chartered Grindlays Chartered Secretary, Bank Limited and the Chairperson of Maharashtra State Financial Corporation Chartered Institute from 1992 to 1995. of Companies Secretary, U.K. Other Directorships : 1. Neo Indcom Consultancy Pvt. Limited 2. Bay Petroplast Pvt. Limited 3. M/s. Merchant Media Pvt. Limited 4. Dynamic Advertising & Research Team Pvt. Limited 5. Vinyl Processors & Co.
  8. 8. STATEMENT OF ADDITIONAL INFORMARION (SAI) 7 Details of the AMC Directors : (Contd.) Name Age/Qualification Brief Experience Mr. Naval BA (Mathematics) - He is the Managing Director of IDFC Asset Management Company Private Limited. Bir Kumar Bombay University, Prior to this he was Director & Head Originations of Global Capital Markets for PGDM – IIM Calcutta ANZ Investment Bank. In this role he handled debt and equity capital market transactions for a number of leading Indian corporates and was successful in improving the Bank’s position in the domestic capital markets. He joined the Bank in 1990 in the Merchant Banking Division and was appointed Head of the Merchant Bank for West India in 1994 and subsequently Head of the Investment Bank for West India in 1996. In these roles he has worked on a cross- section of investment banking products such as: Infrastructure financing, Corporate finance, Cross-border debt financing and Domestic capital market transactions. He worked briefly with Colgate Palmolive (India) Limited as a Brand Manager prior to joining Standard Chartered Grindlays Bank.He is a rank holder in Mathematics from Bombay University and holds an MBA from the Indian Institute of Management, Calcutta. Other Directorships : 1. Association of Mutual Fund of India Duties and obligations of AMC : maintenance of the Trust property, Custodian and/or any other entities entitled for the benefit of the Fund, audit fee, The Regulations and the Investment Management Agreement management fee and other fees; shall govern the duties and responsibilities of the AMC. The AMC, k. to provide or cause to provide information to SEBI and the in the course of managing the affairs of the Mutual Fund, has the Unitholders as may be specified by SEBI; to generally do all power, inter-alia: acts, deeds, matters and things, which are necessary for any a. to invest in, acquire, hold, manage or dispose of all or any object, purpose or in relation to the IDFC Mutual Fund in any manner or in relation to any Scheme of the IDFC Mutual securities and to deal with, engage in and carry out all other Fund. functions and to transact all business pertaining to the Fund; Obligations of the AMC, as specified in the SEBI (Mutual Funds) b. to keep the moneys belonging to the Trust with scheduled Regulations 1996 are as under : banks and Custodians as it may deem fit; (1) The asset management company shall take all reasonable c. to issue, sell and purchase Units under any Scheme; steps and exercise due diligence to ensure that the investment d. to repurchase the Units that are offered for repurchase and of funds pertaining to any scheme is not contrary to the hold, reissue or cancel them; provisions of these regulations and the trust deed. e. to formulate strategies, lay down policies for deployment of (2) The asset management company shall exercise due diligence funds under various Schemes and set limits collectively or and care in all its investment decisions as would be exercised separately for privately placed debentures, unquoted debt by other persons engaged in the same business. instruments, securitised debts and other forms of variable securities which are to form part of the investments of the (3) The asset management company shall be responsible for the Trust Funds; acts of commissions or omissions by its employees or the persons whose services have been procured by the asset f. to arrange for investments, deposits or other deployment as well as disinvestments or refund out of the Trust Funds as per management company. the set strategies and policies; (4) The asset management company shall submit to the trustees g. to make and give receipts, releases and other discharges for quarterly reports of each year on its activities and the money payable to the Trust and for the claims and demands compliance with these regulations of the Trust; h. to get the Units under any Scheme listed on any one or more (5) The trustees at the request of the asset management company stock exchanges in India or abroad; may terminate the assignment of the asset management company at any time: i. to open one or more bank accounts for the purposes of the Fund, to deposit and withdraw money and fully operate the Provided that such termination shall become effective only same; after the trustees have accepted the termination of j. to pay for all costs, charges and expenses, incidental to the assignment and communicated their decision in writing to administration of the Trust and the management and the asset management company.
  9. 9. 8 STATEMENT OF ADDITIONAL INFORMARION (SAI) (6) Notwithstanding anything contained in any contract or behalf of the asset management company and shall also agreement or termination, the asset management company report to the Board, as and when required by the Board. or its directors or other officers shall not be absolved of liability to the mutual fund for their acts of commission or omissions, (10) In case the asset management company enters into any while holding such position or office securities transactions with any of its associates a report to (7) (a) An asset management company shall not through any that effect shall be sent to the trustees at its next meeting broker associated with the sponsor, purchase or sell (11) In case any company has invested more than 5 per cent of the securities, which is average of 5% or more of the aggregate purchases and sale of securities made by the net asset value of a scheme, the investment made by that mutual fund in all its schemes. scheme or by any other scheme of the same mutual fund in Provided that for the purpose of this sub-regulation, that company or its subsidiaries shall be brought to the notice aggregate purchase and sale of securities shall exclude of the trustees by the asset management company and be sale and distribution of units issued by the mutual fund. disclosed in the half yearly and annual accounts of the Provided further that the aforesaid limit of 5% shall apply respective schemes with justification for such investment for a block of any three months. provided the latter investment has been made within one (b) An asset management company shall not purchase or year of the date of the former investment calculated on either sell securities through any broker [other than a broker side. referred to in clause (a) of sub-regulation (7)] which is average of 5% or more of the aggregate purchases and (12) The asset management company shall file with the trustees sale of securities made by the mutual fund in all its and the Board - schemes, unless the asset management company has recorded in writing the justification for exceeding the (a) detailed bio-data of all its directors alongwith their limit of 5% and reports of all such investments are sent interest in other companies within fifteen days of their to the trustees on a quarterly basis. appointment; and Provided that the aforesaid limit shall apply for a block (b) any change in the interests of directors every six months. of three months. (c) a quarterly report to the trustees giving details and (8) An asset management company shall not utilise the services of the sponsor or any of its associates, employees or their adequate justification about the purchase and sale of relatives, for the purpose of any securities transaction and the securities of the group companies of the sponsor or distribution and sale of securities: the asset management company as the case may be, by Provided that an asset management company may utilise such the mutual fund during the said quarter. services if disclosure to that effect is made to the unit holders (13) Each director of the Asset Management Company shall file and the brokerage or commission paid is also disclosed in the half yearly annual accounts of the mutual fund. the details of his transactions of dealing in securities with the trustees on a quarterly basis in accordance with guidelines Provided further that the mutual funds shall disclose at the time of declaring half-yearly and yearly results; issued by the Board. • any underwriting obligations undertaken by the schemes (14) The asset management company shall not appoint any person of the mutual funds with respect to issue of securities as key personnel who has been found guilty of any economic associate companies, offence or involved in violation of securities laws. • devolvement, if any, (15) The asset management company shall appoint registrars and • subscription by the schemes in the issues lead managed share transfer agents who are registered with the Board. by associate companies • subscription to any issue of equity or debt on private Provided if the work relating to the transfer of units is placement basis where the sponsor or its associate processed in-house, the charges at competitive market rates companies have acted as arranger or manager]. may be debited to the scheme and for rates higher than the (9) The asset management company shall file with the trustees competitive market rates, prior approval of the trustees shall the details of transactions in securities by the key personnel be obtained and reasons for charging higher rates shall be of the asset management company in their own name or on disclosed in the annual accounts.
  10. 10. STATEMENT OF ADDITIONAL INFORMARION (SAI) 9 (16) The asset management company shall abide by the Code of Conduct as specified in the Fifth Schedule. Information on Key Personnel : Name Age/Qualification Brief Experience Mr. Naval 43 Years / PGDM – IIM He is the Managing Director of IDFC Asset Management Company Private Limited. Bir Kumar Calcutta, BA - Mathematics He has over 15 years of experience in Capital Markets. Managing (Bombay University) Prior to this he was Director and Head Originations of Global Capital Markets for Director ANZ Investment Bank. In this role he has handled debt and equity capital market transactions for a number of leading Indian corporates and was successful in improving the Bank’s position in the domestic capital markets from 193 to number 6. He joined the Bank in 1990 in the Merchant Banking Division and was appointed Head of the Merchant Bank for West India in 1994 and subsequently Head of the Investment Bank for West India in 1996. In these roles he has worked on a cross- section of investment banking products such as: Infrastructure financing, Corporate finance, Cross-border debt financing and Domestic capital market transactions. He worked briefly with Colgate Palmolive (India) Limited as a Brand Manager prior to joining Standard Chartered Grindlays Bank. Mr. Rajiv 41 Years / B.Com, ACA He has 14 years’ experience in fixed income markets. He has worked in treasury of Anand HSBC for 4 years and Standard Chartered Grindlays Bank for 3 years. In last Head assignment, was part of the bank’s Treasury team managing balance sheet Investments portfolios like SLR, daily funding as well as the foreign currency loan /deposit book. It was in this job that he was exposed to the cutting edge techniques of interest rate and liquidity risk management. It is this experience that he brings to managing investments in a manner that will meet the stated investment philosophy of each scheme. Mr. Debashis 44 Years / He has over 16 years experience in Capital Market Operations. He was Senior Roy M.Sc, MBA Manager, Projects & Domestic Custody for Standard Chartered Bank. In this role, Head he handled a special project team to provide comprehensive one stop services to Operations domestic mutual funds. He joined the Standard Chartered Grindlays Bank in 1995 in Custodial Services and was later appointed as Head of Custody in 2001. Prior to joining the bank he worked for ICICI Limited and SHCIL Mr. Gopal 34 Years, / ACA, He has over 11 years experience in compliance, operations, finance, legal, audit, Menon LLB (Hons), B.Com consultancy & secretarial functions. In his last assignment with HSBC Asset Compliance Management (India) Pvt. Ltd he was designated as Manager – Compliance & Legal Officer and for 2 years. (2003-2005). Prior to this he was with Zurich Asset Management Risk Manager Company Private Limited as Manager Compliance for 2 years.(2001-2003). He practiced as a Chartered Accountant during 2000-2001. He was also employed with JM Capital Management Company Private Limited as Manager (1999-2000) where he was involved in Compliance, Operations and Finance. He had worked with M/s N.M Raiji & Co, CAs for a period of two years (1997-1999) Mr. Emron 39 Years / B.Com, ACA. He has over 12 years’ experience in capital markets. Previously he was with ANZ Samuel Grindlays Bank (now Standard Chartered Grindlays Bank) in Treasury- Sales for two Head Sales years Mr. Praveen 38 Years / B.E. He has over 10 years of experience in Customer Service & Marketing. In his last Bhatt (Instrumentation) assignments, he was designated as the Head of Strategic Marketing at Head & Master of www.iinvestor.com (Part of Outlook Publications) and was a key player in the Customer Management development of the site www.iinvestor.com (March 2000 – June 2001). Prior to Servicing & studies (M.M.S.). that he worked at Zurich India AMC Pvt Ltd. & was involved in Marketing & Marketing Communication (February 1998- March 2000).
  11. 11. 10 STATEMENT OF ADDITIONAL INFORMARION (SAI) Information on Key Personnel : (Contd.,) Name Age/Qualification Brief Experience Mr. Ashwin 30 Years / B.E, He has over six years of experience in Wealth Management, Structured Finance, Patni PGDM – IIM Calcutta Credit and Market Groups and Business Consulting. In his last assignment he was Fund designated as Product Manager, Investment Services for Wealth Management Manager Function of Standard Chartered Bank (January 2005-November 2007). Prior to this he was working as Manager, Syndication for ICICI Bank (February 2003 – January 2005). He has also worked with Accenture India Pvt Ltd as Ananlyst (June 2001 – January 2003). Mr. Ajay 37 Years / B.E (Mechanical), He has over 9 years of experience in Funds Management. In his last assignment he Bodke Masters in Financial was designated as Senior Fund Manager (Equity), SBI Funds Management Pvt Ltd Senior Management and MBA (June 1995 – March 2004) Fund Manager Ms. Punam 33 Years / B.Sc- She has over 8 years experience in research, co-ordinating details on products and Sharma Non Medical, markets for the sales team. In the last assignment with Kotak Mahindra Asset Vice President MBA - Finance Management Company she was responsible for setting up of the research desk, working on reports on products and markets and developing databases Mr. Kenneth 38 Years / Graduate He has around 15 years experience in Equity Research & fund management. In his Andrade (B.Com) last assignment has was designated as Fund Manager (Equity) with Kotak Mahindra Senior Fund Asset Management Company Limited (July 2002- Sept.2005), managed equity Manager portfolios. SSKI Investor Services (March 1999- July 2001)& (Jan 2002 –July 2002) was involved in Portfolio advisory –Retail Broking Services, Nimbus Communications-(July 2001-Jan 2002) was involved in Broadcasting – Content Development, LKP Shares & Stock Brokers Pvt. Ltd (January 1998- March 1999) was a Analyst -Equity Research, Meghraj Financial Services (July 1996-July 1998) was a Portfolio Manager. Mr. Arjun 38 Years / MBA, He has over 10 years of experience in Fund Management, trading & research in Parthasarathy MA Economics Fixed Income, Equities & Derivatives. In his last assignment with Sundaram BNP Senior Fund Paribas Asset Management Company Limited, he was designated as the Head – Manager – Portfolio Management Services (April 2007 – May 2008). Prior to that he worked at Fixed Income Patco Investments & Consultancy Services Private Limited and was designated as Portfolio Manager (June 2006- March 2007). He worked at Citigroup as Fixed Income Trader (August 2002 – September 2005) & before that was employed at IDBI Bank as Fixed Income Trader (March2001 – July 2002). From September 1999 till February 2001 he worked at Cholamandalam Cazenove Asset Management Company Limited and was designated as the Fund Manager. Prior to that he worked at Cholamandalam Securities Limited as Equity Research Analyst (January 1998 – August 1999). Mr. Bhawin 28 Years / MBA He has over 4 years of experience in Credit Risk Analysis, etc. In his last assignment Shah – Finance with DBS Singapore he was responsible for Credit Risk Analysis (February 2007 – Credit Analyst June 2008). Prior to that he worked at Reliance Mutual Fund and was responsible for Credit Risk Analysis (June 2006 – February 2007). Before that he worked for CARE Ratings and was responsible for Credit Risk Analysis (May 2004 – June 2006) Mr. Sunil 35 Years / B.A. He has around 12 years of experience in equity trading. In his last assignment he Nair was designated as Equity – Dealer in Birla Sunlife AMC Ltd. (1995 – 2005). Prior to Equity Dealer which he was employed with Insec Shares & Stock (1994 - 1995) and has around eleven years of experience in equity trading.
  12. 12. STATEMENT OF ADDITIONAL INFORMARION (SAI) 11 Information on Key Personnel : (Contd.,) Name Age/Qualification Brief Experience Chintan 30 Years / PGMBA He has over 7 years of experience in Capital Markets. In his last assignments with Mehta (Finance), B.Com. DBS Cholamandalam Mutual Fund, he was Fund Manager & Dealer for fixed income Associate Fund (From October 2004 – March 2008). Prior to that he worked at Sahara India Financial Manager Corporation Limited as Dealer- Treasury and was involved in dealing and investment management in fixed income market (From June 2001 – October 2004). He had worked with LKP Securities Limited as Dealer and was involved in dealing and over the counter broking in the fixed income market. Age: 30 years. No of staff involved in equity research : 1 No of persons involved in fund management (not including dealers and analysts) : 6 E. Service providers Custodian Deutsche Bank AG Kodak House, 222 D N Road, Fort, Mumbai – 400 001 SEBI Registration Number – IN/CUS/003 dated March 20, 1998. Registrar & Transfer agent Computer Age Management Services Pvt. Limited, A & B Lakshmi Bhawan, 609, Anna Salai, Chennai – 600 006 (CAMS). The Registrar is registered with SEBI under registration No: INR000002813 dated July 22, 1995. As Registrar to the Scheme, CAMS will interalia handle communications with investors, perform data entry services and despatch Account Statements. The Board of Directors of the AMC and the Trustee have satisfied themselves that the Registrar can provide the service required and has adequate facilities to discharge responsibilities with regard to processing of applications and dispatching unit certificates to unitholders within the time limit prescribed in the Regulations and also has sufficient capacity to handle investor complaints. Statutory Auditor BSR & Co., Chartered Accountants KPMG House, 448 Senapati Bapat Marg, Lower Parel, Mumbai – 400 013. Legal counsel Based on the matter involved, the AMC reserves the right to appoint appropriate legal counsel. Fund Accountant Fund Accounting is presently carried out by the Fund Accounting team of IDFC Asset Management Company Private Limited Collecting Bankers The collecting bankers of various schemes of IDFC Mutual Fund include : (1) Standard Chartered Bank (SEBI registration no. INBI0000885) 90 M. G. Road, Fort, Mumbai – 400 001. (2) HDFC Bank (SEBI registration no. INBI00000063) Sandoz House, Dr Annie Besant Road, Worli, Mumbai - 400018. (3) HSBC Bank (SEBI registration no. INBI00000027) 52/60, M.G. Road, Fort, Mumbai – 400 001 The AMC reserves the right to appoint other qualified banks as collecting bankers from time to time.
  13. 13. 12 STATEMENT OF ADDITIONAL INFORMARION (SAI) C. CONDENSED FINANCIAL INFORMATION The informatiom provided below scheme wise for all scheme launched by IDFC Mutual Fund during the last three fiscal years (excluding redeemed schemes) for each of the last three fiscal years. IDFC IDFC IDFC Classic Equity Fund Premier Equity Fund Imperial Equity Fund (IDFC-CEF) (IDFC-PEF) (IDFC-IEF) Historical per Unit Statistics Date of Allotment August 10, 2005 September 28, 2005 March 16, 2006 March March March March March March March March March 31, 2006 31, 2007 31, 2008 31, 2006 31, 2007 31, 2008 31, 2006 31, 2007 31, 2008 (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) NAV at the beginning of the year /period (Plan - A) Growth Option ^10.0000 14.2200 14.8926 ^10.0000 12.8300 13.0343 ^10.0000 10.6300 11.3996 Dividend Option ^10.0000 14.2200 13.1758 ^10.0000 12.8300 13.0374 ^10.0000 10.6300 11.4374 (Plan - B) Growth Option - - - - - - - - - Dividend Option - - - - - - - - - Net Income per unit *2.5984 4.9261 3.3965 *0.3225 2.6482 3.1239 *0.0723 *1.7859 6.9345 Dividend per unit : Plan A 8/22/2006 - 1.5000 - - - - - - - 2/19/2007 - - - - - - - - - 3/20/2007 - - - - - - - - - 4/20/2007 - - - - - - - - - 5/25/2007 - - - - - - - - - 5/28/2007 - - 1.5000 - - - - - - 9/3/2007 - - - - - - - - - 10/22/2007 - - 1.5000 - - - - - - 2/11/2008 - - - - - - - - - 3/7/2008 - - - - - - - - - Plan B 2/19/2007 - - - - - - - - - 3/20/2007 - - - - - - - - - 4/20/2007 - - - - - - - - - 5/25/2007 - - - - - - - - - 9/3/2007 - - - - - - - - - 2/11/2008 - 3/7/2008 - Transfer to reserves (if any) - - - - - - - - NAV at the end of the year / period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (Plan - A) Growth Option 14.2200 14.8926 18.7882 12.8300 13.0343 20.0355 10.6300 11.3996 14.6361 Dividend Option 14.2200 13.1758 13.5980 12.8300 13.0374 20.0335 10.6300 11.4374 14.6361 (Plan - B) Growth Option - - - - - - - - - Dividend Option - - - - - - - - - Absolute return - - - - - - - - - Returns during the half year (absolute) 27.08% 7.12% -8.33% - 15.02% 1.81% - 3.43% -3.47% Bench mark performance (Absolute) 28.65% 4.10% -8.80% 28.65% 4.10% -8.80% - 4.10% -8.80% Returns since inception (Absolute) for schemes which 42.20% - - 28.30% - - 6.30% - - have not completed 1 year Bench mark performance (Absolute) for schemes which 43.05% - - 28.85% - - 3.77% - - have not completed 1 year CAGR (since inception) - 27.47% 26.94% - 19.29% 31.94% - 13.41% 20.49% Bench mark performance in case of schemes in - 32.02% 28.91% - 26.31% 25.37% - 13.79% 18.70% existence for more than 1 year - Since Inception CAGR – (last 1 year) - 4.73% 26.08% - 1.59% 53.52% - 7.24% 28.30% Bench mark performance Last 1 year CAGR - 10.23% 24.06% - 10.23% 24.06% - 10.23% 24.06% CAGR - (Last 2 Years) - - 14.92% - - 16.93% - - 17.31% Bench mark performance Last 2 year CAGR - - 16.93% - - 14.16% - - 16.93% Net Assets end of period (Rs. Crs.) 788.29 369.84 366.77 309.94 218.75 582.63 449.34 210.56 139.80 Ratio of Recurring Expenses to net assets - Plan A 2.08% 2.24% 2.30% 1.86% 2.38% 2.24% 0.10% 2.30% 1.98% Ratio of Recurring Expenses to net assets - Plan B - - - - - - - - - ^ For the schemes launched during the period, the NAV at the beginning of the period is considered as Rs. 10/- per unit. * Net Income per unit arrived does not include deferred revenue expenditure which is being ammortised.
  14. 14. STATEMENT OF ADDITIONAL INFORMARION (SAI) 13 Condensed Financial Information for the period ended March 31, 2008 (Contd.) IDFC IDFC IDFC Enterprise Equity Fund Tax Saver (ELSS) Fund Arbitrage Fund (IDFC-EEF) (IDFC-TS (ELSS) F) (IDFC-AF) Historical per Unit Statistics (Contd.) Date of Allotment June 9, 2006 March 15, 2007 December 21, 2006 March March March March March March 31, 2007 31, 2008 31, 2007 31, 2008 31, 2007 31, 2008 (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) NAV at the beginning of the year /period (Plan - A) Growth Option 10.7918 11.2454 ^10.0000 10.0549 ^10.0000 10.3327 Dividend Option 10.7918 11.2454 ^10.0000 10.0549 ^10.0000 10.1913 (Plan - B) Growth Option - - - - ^10.0000 10.3471 Dividend Option - - - - ^10.0000 10.2069 Net Income per unit *0.8353 3.4436 *0.0479 1.0726 1.1710 1.3655 Dividend per unit: Plan A 8/22/2006 - - - - - - 2/19/2007 - - - - 0.0400 - 3/20/2007 - - - - 0.1000 - 4/20/2007 - - - - - 0.1000 5/25/2007 - - - - - 0.1000 5/28/2007 - - - - - - 9/3/2007 - - - - - 0.1500 10/22/2007 - - - - - - 2/11/2008 - - - - - 0.0750 3/7/2008 - - - - - 0.1000 Plan B 2/19/2007 - - - - 0.0400 - 3/20/2007 - - - - 0.1000 - 4/20/2007 - - - - - 0.1000 5/25/2007 - - - - - 0.1000 9/3/2007 - - - - - 0.1500 2/11/2008 - - - - - 0.0750 3/7/2008 - - - - - 0.1000 Transfer to reserves (if any) - - - - - - NAV at the end of the year/period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (Plan - A) Growth Option 11.2454 13.8086 10.0549 12.0621 10.3327 11.1911 Dividend Option 11.2454 13.8074 10.0549 12.0619 10.1913 10.4894 (Plan - B) Growth Option - - - - 10.3471 11.2626 Dividend Option - - - - 10.2069 10.5605 Absolute return - - - - - - Returns during the half year (absolute) 4.20% -4.29% - -4.05% - 4.30% Bench mark performance (Absolute) 4.10% -6.98% - -8.80% - 3.45% Returns since inception (Absolute) for schemes which 12.45% - 0.55% - 3.33% - have not completed 1 year Bench mark performance (Absolute) for schemes which 31.42% - 4.01% - 1.91% - have not completed 1 year CAGR ( since inception) - 19.51% - 19.62% - 9.21% Bench mark performance in case of schemes in existence for - 31.03% - 27.65% - 7.44% more than 1 year - Since Inception CAGR –(last 1 year) - 22.72% - 19.90% - 8.28% Bench mark performance Last 1 year CAGR - 24.06% - 24.06% - 7.52% CAGR –(last 2 years) - - - - - - Bench mark performance Last 2 years CAGR - - - - - - Net Assets end of period (Rs. Crs.) 1447.92 1307.22 59.94 71.91 442.10 911.85 Ratio of Recurring Expenses to net assets - Plan A 1.89% 1.91% 2.42% 2.34% 1.54% 1.67% Ratio of Recurring Expenses to net assets - Plan B - - - - 0.99% 1.18% ^ For the schemes launched during the period, the NAV at the beginning of the period is considered as Rs. 10/- per unit. * Net Income per unit arrived does not include deferred revenue expenditure which is being ammortised.
  15. 15. 14 STATEMENT OF ADDITIONAL INFORMARION (SAI) Condensed Financial Information for the period ended March 31, 2008 (Contd.) IDFC IDFC IDFC Small & Midcap Fixed Maturity Tristar Series- I Equity Fund Arbitrage Fund - Series I (IDFC-TS-I) (IDFC-SMEF) (IDFC-FMAF-SI) Historical per Unit Statistics (Contd.) Date of Allotment March 7, 2008 December 14, 2007 January 12, 2006 March March March March March 31, 2008 31, 2008 31, 2006 31, 2007 31, 2008 (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) NAV at the beginning of the year /period (Plan - A) Growth Option ^10.0000 ^10.0000 ^10.0000 10.4803 10.7794 Dividend Option ^10.0000 ^10.0000 ^10.0000 10.4803 10.7794 (Plan - B) Growth Option - ^10.0000 - - - Dividend Option - ^10.0000 - - - Net Income per unit -0.0539 1.9391 *0.3195 *0.7971 1.8546 Dividend per unit: Plan A 8/22/2006 - - - - - 2/19/2007 - - - - - 3/20/2007 - - - - - 4/20/2007 - - - - - 5/25/2007 - - - - - 5/28/2007 - - - - - 9/3/2007 - - - - - 10/22/2007 - - - - - 2/11/2008 - - - - - 3/7/2008 - - - - - Plan B - - 2/19/2007 - - - - - 3/20/2007 - - - - - 4/20/2007 - - - - - 5/25/2007 - - - - - 9/3/2007 - - - - - 2/11/2008 - - - - - 3/7/2008 - - - - - Transfer to reserves (if any) NAV at the end of the year/period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (Plan - A) Growth Option 9.7571 10.2650 10.4803 10.7794 11.8017 Dividend Option 9.7571 10.2651 10.4803 10.7794 11.8017 (Plan - B) Growth Option - 10.2650 - - - Dividend Option - 10.2650 - - - Absolute return - - Returns during the half year (absolute) - - - 2.12% 1.27% Bench mark performance (Absolute) - - - 0.95% 3.79% Returns since inception (Absolute) for schemes which have -2.43% 2.65% 4.80% - - not completed 1 year Bench mark performance (Absolute) for schemes which have -2.80% 2.12% -0.40% - - not completed 1 year CAGR (since inception) - - - 6.38% 7.76% Bench mark performance in case of schemes in existence for more - - - 2.72% 5.17% than 1 year - Since Inception CAGR – (last 1 year) - - - 2.86% 9.46% Bench mark performance Last 1 year CAGR - - - 3.73% 8.23% CAGR –(last 2 years) - - - - 6.11% Bench mark performance Last 2 years CAGR - - - - 5.95% Net Assets end of period (Rs. Crs.) 251.44 61.70 19.30 19.67 15.85 Ratio of Recurring Expenses to net assets - Plan A 2.29% 0.64% 0.98% 0.95% 0.96% Ratio of Recurring Expenses to net assets - Plan B - 0.64% - - - ^ For the schemes launched during the period, the NAV at the beginning of the period is considered as Rs. 10/- per unit. * Net Income per unit arrived does not include deferred revenue expenditure which is being ammortised.

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