A

SUMMER TRAINING RESEARCH PROJECT REPORT ON

“INVESTMENT PATTERN OF DEFENCE EMPLOYEES”

SUBMITTED TO:

GAUTAM BUDDH TECHNICAL UNIVERSITY, LUCKNOW

FOR PARTIAL FULFILLMENT OF THE REQUIREMENT OF

MASTER OF BUSINESS ADMINISTRATION

(MBA – 2012-2014)

UNDER THE SUPERVISION OF:

MR: PRADIP AGARWAL BRANCH HEAD, LUCKNOW

SUBMITTED BY:

ADITI SINGH MBA FIRST YEAR

ROLL NO:

SCIENCE AND TECHNOLOGY ENTERPRENEURS’ PARK

HARCOURT BUTLER TECHNOLOGICAL INSTITUTE, NAWABGANJ,

KANPUR-208002

ACKNOWLEDGEMENT

The project in its present form and state would not have been possible if it had not

been under the able guidance and support of Mrs. Reetu Singh, whom I always looked

up to, when faced with any difficulty and have disturbed her at all times and hours.

I would also like to thank our trainer Mr. Pradip Agarwal, who provided me with all the

skills and training required to do our project. I am also thankful to Mrs. Meenakshi

Kakaji, who provided me with references required for collection of data.

No research would be successful, without the active involvement of the respondents

and we take this opportunity to thank our various respondents for having patiently filled

our response sheet.Last but not least, I feel indebted to all those persons and

organization that have provided help directly or indirectly in successful

completion of this study.

DECLARATION

I Aditi Singh, student of Masters of Business Administrations studies in STEP-HBTI,

Kanpur, declare that the work done and the project report titled “INVESTMENT

PATTERN OF DEFENCE EMPLOYEES” is original work carried out by me. All

references, made to any published material in this report, have been duly

acknowledged.

This report is not been submitted to any university/Academic Institution for the award of

any degree or diploma.

I solemnly declare that I am singularly responsible for any infringement on the

intellectual Property on this report.

PLACE: LUCKNOW

DATE:

Introduction

Rationale for study

Investment is a commitment of a person’s funds to derive future income in the form of

interest, dividend, premium, pension benefits or appreciations in the value of their

capital purchasing for share, debenture, post office savings certificates, insurance

policies are all investment are all investments in the financial sense. Such investment

generates financial assets.

In the economic sense, investment means the need additions to the economies capital

stock which consists of goods and services that are used in the production of other

goods and services. Investment in the sense implies the formation of new and

productive capital in the form of constructions, plant and machinery, inventories, etc.

such investments generate physical assets.

The two types of investments are, however, related and dependent. The money

invested in the financial investments are ultimately converted into physical assets. Thus

all investments are ultimately converted into physical assets. Thus, all investments

results in the acquisition of some assets either financial or physical.

Objective of the study

Research objective

Every project is started with keeping in mind specific objective. Without any objective

researcher are not able to reach his goals and result. The following points reflect the

core of the objective which also directly focuses on the scope of the project work

undertaken.

The primary objective is to study the investment pattern of the defense

employees.

To find priority for investments like returns, risk, safety, liquidity, maturity of

investment.

To compare different investments avenues available for the employees

To help them selecting the appropriate investment avenue for assets allocations

according to needs.

To find the strengths and weakness of different avenues.

To analyses investment pattern through data interpretation.

Scope of the study

This study is limited to Lucknow city only

This study not includes other avenues such as diamonds retail textile and

agricultural business.

The scope of the study is limited to different selecting investment avenues.

This study is limited to comparison of different investment avenues available to

middle class and lower class family

Industry Profile

Introduction

The income that a person receives may be used for purchasing goods and services that

he currently requires or it may be saved for purchasing goods and services that he may

require in the future. In other words, income can be what is spent for current

consumption abstains from present consumption abstains from present consumption for

a future use. The persons saving part of their income try to find a temporary repository

for their savings until they are required to finance their future expenditure. This results in

investment.

Meaning of Investment

Investment is an activity that is engaged in by people who have saving, i.e. investments

are made of savings, or in other words, people invest their savings. But all savers are

not investors. Investment is an activity which is different from savings. Let us see what

is meant by investment.

It may mean things to many persons. If one person has advance money to another, he

may consider his loan as an investment. He expects to get back the money, along with

interest at future date. Another person may have purchase 1 kilogram of gold for the

purpose of price appreciation and may consider it as an investment. Yet another person

may purchase an insurance plan for the various benefits it promises in future. That is his

investment.

In all these cases it can be seen that investment involves employment of funds with the

aim of achieving additional income or growth in values. The essential quality of an

investment is that it involves waiting for a reward. Investment involves the commitment

of resources which has been saved in the hopes that some benefits will accrue in the

future.

Thus, investment may be defined as “a commitment of funds made in the expectation of

some positive rate of return”. Expectation of return is an essential element of

investment. Since the return is expected to be realized in future, there is a possibility

that the return actually realized is lower than the return expected to be realized. The

possibility of variation in the actual return is known as investment risk. Thus, every

investment involves return and risk.

Financial and economic meaning of investment

In the financial sense, investment is the commitment of a person’s funds to derive future

income in the form of interest, dividend, premiums, pensions, benefits or appreciation in

the value of their capital purchasing of shares, debenture, post office saving certificate,

insurance policies are all investments in the financial sense. Such investments generate

financial assets.

In the economic sense, investment means the net additions to the economy’s capital

stock which consists of goods and services that are used in the production of other

goods and services. Investment in this sense implies the formation of new and

productive capital in the form of new constructions, plant and machinery, inventories,

etc. such investments generate physical assets.

The two types of investments are, however, related and dependent. The money

invested in financial investments are ultimately converted into physical assets. Thus, all

investments results in the acquisition of some assets either financial or physical

CHARACTERSTICS OF INVESTMENTS

All investments are characterized by certain features. Let us analyze these

characteristic of investments.

Return

All investments are characterized by the expectation of a return. In fact, investments are

made with primary objective of deriving a return. The return may receive in the form of

tiled plus capital appreciation. The return may be received in the form of yield plus

capital appreciation. The dividend or interest received from the investment is the yield.

Different types of investments promise different types of returns. The return from an

investment depends upon the nature of the investments, the maturity period and the

host of other factors.

Risk

Risk is inherent in any investment. The risk may relate to loss of capital, delay in

repayment of capital , non-payment of interest, or variability of return. The risk of an

investment depends on the following factors.

1. The longer the maturity period, the larger is the risk.

2. The lower the credit worthiness of the borrower, the higher is the risk.

3. The risk varies with the nature of investment. Investments in ownership securities

like equity share higher risk compared to investments in debt instruments like

debentures and bonds.

Safety

The safety of an investment implies the certainty of capital without loss of money.

Liquidity

An investment which easily is saleable or marketable without loss of money and without

loss of time is said to possess liquidity.

OBJECTIVES OF INVESTMENTS

An investor has various alternative avenues of investments for his savings to flow to.

Savings kept as cash are barren and do not earn anything. Hence, savings are invested

in assets depending on their risk and return characteristics. The objective of the investor

is to minimize the risk involved in investment and maximize the return from the

investment.

Thus, the objective of investment can be stated as: maximization of return, minimization

of risk & hedge against inflation.

INVESTMENT PROCESS

The investment process is generally described in four stages. These stages are

investment policy, investment analysis, valuation of securities, and portfolio

construction.

I. Investment policy: determination of ingestible wealth determination of

portfolio objectives. Identification potential investments assets consideration

of attributes of investment assets allocation of wealth to asset categories.

II. Investment policy: valuation of stocks, debentures, other asset and bonds.

III. Investment analysis

a. Equity stock analysis

b. Screenings of industries

c. Analysis of industries

d. Quantitative analysis of stocks

e. Analysis of the economy

f. Debentures and bond analysis

g. Qualitative analysis of debentures

h. Other assets analysis

Portfolio construction: determination of diversification level

consideration of investment assets evaluation of portfolio for feedback.

Investment avenues

There are various investment avenues available to investors now a days. With the

opening up of the economy the number of investments has also increased and the

quality of the investments has improved due to the use of the professional activity of

players involved in this segment. Today investment is no longer a process of trial and

error and it became a systematized process, which involves the use of the professional

investment solution provider to player greater role in the investment process.

Different investors have different objectives of the investment and they have different

risk capacities. The below it has been listed down some of the investment avenues on

the basis of risk involved. Investments in government bonds or bank deposits carry

lesser risk whereas investment in equities has comparatively higher risk. From the

following we can also see that higher the risk higher the return. Thus every person

would invest according to his requirements and risk tolerance.

1. Stock Market

The Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) are the

two primary exchanges in India. In addition there are 22 regional stock

exchanges. However the BSE and NSE have established themselves as two

leading exchange and account for about 90% of the equity volume in trade in

India.

The primary index of BSE is BSE Sensex comprising 30 stocks. NSE has the

S&P NSE 50 index (nifty) which consists of 50 stocks. The BSE Sensex is the

older and more widely followed index. Both exchange have switched over from

the open outcry trading system to fully automated computerized mode of trading

known as BOLT (BSE on line trading) and NEAT (national exchange automated

trading) system. It facilitates more efficient processing, automatic order matching,

faster execution of trader and transparency.

A. Equity shares

Ordinary shares are also known as equity shares and they are the most

common form of shares in UK. An ordinary share gives the right to its

owner to share in the profits of the company (dividends) and to vote at

general meetings of the company. Since the profits of the companies can

vary widely from year to year, so can the dividends paid to ordinary

shareholders. In bad years, dividends may be nothing whereas in good

years they may be substantial. Ordinary shareholders can vote on all of

the issues raised at a general meeting of the company.

The nominal value of a share is the issue value of the share – it is the

value written on the share certificate that all shareholders will be given by

the company in which they own shares. The market value of a share is

the amount at which a share is being sold on the stock exchange and may

be radically different from the nominal value.

Types of stocks

1. Common Stock

Common Stock is also referred to as common or ordinary shares, as the name

implies, the most usual and commonly held from the stock in a company.

2. Preferred Stock

Preferred stock sometimes called preferred shares, have priority over common

stock in the distribution of dividends and assets.

3. Treasury Stock

Treasury stock is shares that have been bought back from the public. Treasury

stock is considered issued, but not outstanding.

4. Dual Class Stock

Dual class stock is shares issued for a single company with varying classes

indicating different rights on voting and dividend payments. Each kind of shares

has its own class shareholders entitling different rights.

Advantages of Equity Financing

You can use your cash and that of your investors when you start up your

business for all the startup costs, instead of making large loan payments to

banks or other organizations or individuals. You can get underway without the

burden of debt on your back.

If you have prepared a prospectus for your investors and explained to them that

their money is at risk in your brand new startup business, they will understand

that if your business fails, they will not get their money back.

Depending on who your investors are, they may offer valuable business

assistance that you may not have. This can be important, especially in the early

days of a new firm. You may want to consider angel investors or venture capital

funding. Choose your investor wisely.

Disadvantages of Equity Financing

1. Remember that the investors will actually own a piece of your business; how

large that piece is depends on how much money they invest. You probably

will not want to give up control of your business, so you have to be aware of

that when you agree take on investors. Investors do expect a share of profits

where, if you obtain debt financing banks or individuals only expect their loans

repaid. If you do not make a profit during the first years of your business, then

investors don’t expect to be paid and you don’t have the money on your back

of paying back loans.

2. Since your investors own a piece of your business, you are expected to act in

their best interest as well as your own, or you could open yourself up to a

lawsuit. In some cases, if you make your firm’s securities available to just a

few investors, you may not have to get into a lot of paperwork may overwhelm

you. You will need to check with the Securities and Exchange Commission to

see the requirements before you make decisions on how widely you want to

open up your business for investments.

B. Preference Shares

Preference shares offer their owners preferences over ordinary

shareholders. There are two major differences between ordinary

and preference shares:

Preference shareholders are often entitled to a fixed dividend even when

ordinary shareholders are not.

Preference shareholders cannot normally vote at general meetings. The

preference dividend is fixed in the sense that preference shares are often issued

with the rate of dividend fixed at the time of issue and you might see

something like this: 4% preference dividend $0.25 note, that if by any

chance a company cannot pay its preference share dividend then it

cannot pay any ordinary share dividend since the preference

shareholders have the right to receive their dividend before the ordinary

shareholders under all circumstances – hence the term 'preference'.

Types of preference shares

1. Cumulative preference shares

Preference shares are usually cumulative and th is means tha t i f t h i s

year ' s d iv idend wasn't paid, then it will be carried forward to next year.

2. Non-Cumulative preference shares

Some preference shares are non-cumulative, if the company can’t pay the

dividend for one particular year, the dividend for that year lapses.

3. Redeemable preference shares

A preference share may be redeemable which means that at some time

in the future, the company will effectively buy if back.

4. Irredeemable preference shares

A preference share may be irredeemable which means that at some time in the

future, the company will not effectively buy it back.

5. Convertible Preference Shares

Preference shares may be issued with the right of conversion into ordinary

shares. These are called Convertible Preference Share.

6. Non-Convertible Preference shares

Preference shares may be issued without the right of conversion into

ordinary shares. These are called Convertible Preference Share.

7. Participating Preference Share

If a preference share is a participating preference share then the owner of such a

share has the r igh t to par t i c ipa te in , o r rece ive , add i t iona l

d iv idends over and above the f i xed  percentage dividend.

Advantages of preference shares

You are assured of a dividend

If you own ordinary shares, you are not automatically entitled to a

dividend every year. The dividend will be paid only if the company makes

a profit and declares a dividend. Th is i s no t the case w i th p re fe rence

shares . A p re fe rence shareho lder i s en t i t l ed to a d iv idend every

year . What happens i f the company doesn ' t have the money to pay

dividends on preference shares in a particular year? The dividend is then added

to the next year's dividend. If the company can't pay it the next year as well,

the dividend keeps getting added until the company can pay.

They get priority over ordinary shares

Ordinary shareholders get a dividend only after the cumulative preference

shareholders get theirs. Preference shareholders are given a preference

over the rest. That's why it is called a preference share.

Preference shares are safer

In case the company is wound up and its assets (land, building, offices, machinery,

furniture, etc.) are being sold. The money that comes from this sale is given to

shareholders. After all, shareholders invest in a business and own a portion of it.

Preference shareholders get the money first. Their accounts are settled before that

of the ordinary shareholders, who are the last to get paid.

Disadvantages of Preference Shares

They are not easily available

They are not traded on the stock exchange

C.Bank Deposits

1. Fixed Deposit

When you deposit a certain sum in a bank with a fixed rate of

interest and specified time period, it is called a bank fixed deposit (FD). At

maturity, you are entitled to receive the principal amount as well as the

interest earned at the pre-specified rate during that period. The rate of

interest varies between 4 and 6 per cent, depending on the maturity

period of the FD and the amount invested.

How to apply in fixed deposit?

One can get a bank FD at any bank, be it nationalized, private, or

foreign. You have to open a FD account with the bank, and make the deposit.

However, some banks insist that you maintain a savings account with them to

operate a FD. When a depositor opens an FD account with a bank, a

deposit receipt or an account statement is issued to him, which can be updated

from time to time, depending on the duration of the FD and the frequency of the

interest calculation. Check deposit receipts carefully to see that all particulars

have been properly and accurately filled in.

Features of bank deposit

1. Safety

Bank deposits are fairly safe because banks are subject to control of the Reserve

Bank of India (RBI) with regard to several policy and operational parameters. The

banks are free to offer varying interests in fixed deposits of different maturities.

Interest is compounded once a quarter, leading to a somewhat higher effective

rate.

2. Minimum deposit

The minimum deposit amount varies with each bank. It can range from as low as

Rs.100 to an unlimited amount with some banks. Deposits can be made in

multiples of Rs.100/.

3. Deposit period fixed

Before opening a FD account, try to check the rates of interest for

different banks for different periods. It is advisable to keep the amount in five

or ten small deposits instead of making one big deposit. In case of any premature

withdrawal of partial amount, then only one or two deposit need be prematurely

encased. The loss sustained in interest will, thus, be less than if one big deposit

were to be enchased. Check deposit receipts carefully to see tha t a l l

pa r t i cu la rs have been p roper ly and accura te ly f i l l ed in . The

th ing to consider before investing in an FD is the rate of interest and

the inflation rate. A high inflation rate can simply chip away your real returns.

4. Returns from Fixed bank deposit

The rate of interest for Bank Fixed Deposits varies between 4 and 11 per cent,

depending on the maturity period (duration) of the FD and the amount

invested. Interest rate also varies between each bank. A Bank FD does

not provide regular interest income, but a lump-sum amount on its maturity.

Some banks have facility to pay interest every quarter o r every month , bu t

the in te res t pa id may be a t a d iscoun ted ra te in case o f month ly

interest. The Interest payable on Fixed Deposit can also be transferred to

Savings Bank or Current Account of the customer. The deposit period can vary

from 15, 30 or 45 days to 3, 6 months, 1 year and 1.5 years to 10 years.

Advantages of fixed bank deposit

Safest investment

Bank  depos i t s  a re   the  sa fes t   inves tmen t  a f te r  Pos t  o f f i ce  

sav ings  because  a l l   bank  deposits are insured under the Deposit

Insurance & Credit Guarantee Scheme of India. It is possible to get loans up to

75- 90% of the deposit amount.

Any Where in India

One can get a bank FD at any bank, be it nationalized, private, or

foreign. You have to open a FD account with the bank, and make the deposit.

However, some banks insist that you maintain a saving account with them to

operate a FD. When a depositor opens an FD account with a bank, a

deposit receipt or an account statement is issued to him, which can be updated

from time to time, depending on the duration of the FD and the frequency of the

interest calculation. Check deposit receipts carefully to see that all particulars

have been properly and accurately filled in.

2. Time deposit

How to start a Time Deposit?

A Time Deposits account can be opened at any post-office in the country.

Account may be opened by an individual i.e. Single Joint A/B (not more than two

adults) Trust, Regimental Fund and Welfare Fund. On opening a Time Deposit,

you will receive an account statement stating the amount deposited and the

duration of the account. The account can be closed after 6 months of opening the

account. On such closer the amount invested is returned with/without interest

depends on the time the deposit was maintained.

Features of Time Deposit

Time Deposits can be made for the periods of 1 year, 2 years, 3 years

and 5 years. The minimum investment in a post-office Time deposit is

Rs 200 and then its multiples and there is no prescribed upper limit

on your investment. Account may be opened by an individual, Trust,

Regimental Fund and Welfare Fund. The account can be closed after 6 months

but before one year of opening the account. On such closure the amount

invested is returned without interest. two year, three year and five year

accounts can be c losed a f te r one year a t a d iscoun t . They

invo lve a loss in the  in te res t  acc rued   fo r the   t ime   the  accoun t

has  been in  opera t ion .   In te res t   i s  payab le  annually but is calculated

on a quarterly basis at the prescribed rates. One can take a loan against a time

deposit with the balance in your account pledged as  security for the loan.

D.REAL ESTATE

The growth curve of Indian economy is at an all-time high and contributing to the

Upswing is the real estate sector in particular. Investments in Indian real estate

have been s t rong ly tak ing the g rowth curve o f Ind ian economy

up over o ther  options for domestic as well as foreign investors. The boom in

the sector has been so appealing that real estate has turned out to be a

convincing investment as compared to other investment vehicles such as capital

land debt markets and bullion market. It is attracting investors by offering a

possibility of stable income yields, moderate capital appreciations, tax structuring

benefits and higher security in comparison to other investment options.

A survey by the Federation of Indian Chambers of Commerce and Industry

(FCCI) and Ernst and Young has predicted that Indian real estate industry is

poised to merge as one of the most preferred investment destinations for global

reality and investment firms in next few years.

The potential of India’s property market has a revolutionizing effect on the overall

economy of India as it transforms the skyline of the Indian cities mobilizing

investments segments ranging from commercial, residential, retail, industrial,

hospitality, healthcare etc. But maximum growth is attributed to its growth from

the booming IT sector, since an estimated 70 per cent of the new construction

is for the IT sector.

Factors Favoring Investments:

Tremendous growth has been taking place in both residential as well as

commercial segments that is attracting huge investments phenomenal price escalation

(More than100% in several places) in last couple of years.Lower interest rates,

easy availability of housing finance, burgeoning income

andbetter job prospects, increase of nuclear families have given a boost

to the demand for residential properties in India. The net yields(after accounting

for all outgoings) onresidential property are currently at 4-6% p.a. However,

these investments have benefitedfrom the improving residential capital

values. As such, investors can count on potentialcapital gains to improve

their overall returns. Capital values in the residential sector haverisen by about 25-

40% p.a. in the last 2 years.The real market in India has been growing due to increasing

demand from retailers, higher disposable incomes and openings up of FDI in retail. The capital

appreciation in this sector is close to 20-35% p.a. However, the risks associated with this

sector are higher as retailers are prone to cyclical changes typical of a business

cycle. Changing consumer behavior combined with increasing disposable

incomes will ensure future growth of the retail sector in India. In the present

day scenario, there is the powerful investment tool that brings

burgeoning financial returns, it is INDIAN REAL ESTATE!!! Investors

should the parameters minutely and meticulously to find out why

investing in Real Estate now is best viable option.

High Demand for Commercial Real Estate:

The commercial property market has been growing at an annual rate of approximately3

0% over the past eight years across major locations in India. Moreover, there is an up

shooting demand for 200 million sq. ft. over the next fiveyears.

Real estate industry research has also thrown light on investment opportunities in the

commercial office segment in India. The demand for office space is expected to

increase significantly in the next few years, primarily driven by the IT and ITES industry

that requires an projected office space of more than 367million sq. ft. till 2012-13.

Retail Sector Facilitating Real Estate Growth:

Apart from the IT and ITES industry influencing the Indian real estate sector, India isalso

getting into the knowledge based manufacturing industry on a large scale. Retail, oneof

India's largest industries, has presently emerged as one of the most dynamicand fast

paced industries of our times with several players entering the market.

The contemporary retail sector in India which is reflected in sprawling shopping centers

and multiplex- malls is also contributing to large scale investments in the Real

Estatesector with major national and global players investing in developing

theinfrastructureand construction of the retailing business.

SEZs- The Emerging Investment Option:

Moreover, as real estate sector expands beyond the city limits with

government promoting industrial belts, real estate developers are eyeing

Special Economic Zones (SEZs) as an extension of their business.

Several upcoming special economic zones are also expected to provide

the momentum to the commercial office space development in related

area where the land comes cheaper; and a SEZ developer is entitled for

taxexemptions like a I0-year corporate tax holiday.

FDI - Inviting Real Estate Investments:

Not surprisingly, most foreign investors have aimed India in a big way, largely

through joint ventures. Along with curtailing the risk factor, it provides

the participating companies an exit route. Since 2005, when FDI in

Indian Real State was permitted, US $7-8 billion have been parked

in.The  Government  o f   Ind ia ' s   l i be ra l i za t ion  and  economic  

re fo rms  p rogrammedencourages industrial policy reforms that have

reduced the industrial licensingrequirements,removed restrictions on

investment and expansion, and facilitatedeasy access to fo re ing

techno logy and FDI . Inc reased in f low o f inves tment a r i s ing ou t

o f f l ex ib le FDI po l i c ies i s su re to have a d i rec t and pos i t i ve

impac t on the Rea l Es ta te scenar io o f Ind ia .

Why Invest in Real Estate in India?

The Indian economy and the real estate sector in particular are high on itsride

toprosperity. As India's economic growth curve raises, real estate India has

emerged as one of themost appealing investment areas for domestic as well

as foreigninvestors. Indian realestate has huge potential demand in almost

every sector, butespecially commercial,residential, retail, industrial,

hospitality, healthcaree tc . Bu t max imum growth i sa t t r ibu ted to i t s

g rowth f rom the booming IT sector, since an estimated 70 per cent of

thenew construction is for the IT sector.

Key Facts

Selling and buying Indian property is now considered as the most profitable and

attractive business opportunity in the present real estate scenario in India. New

demands have added to strength of real estate markets across the commercial,

residential and retail sectors in India. Not surprisingly, demand for Indian property

has been increasingly steady for the past few years ant it has exceeded supply.

There has also been an upward swing on the real estate price values in the

recent years. Due to the huge demand and rising prices, investment and speculative

interest in real estate is growing while excess money supply, stock market gains

and policy changes are adding to the trend in favor of the real estate sector.

In the last one year, the capital values of the commercial office

spaces hasincreased by up to 40%owing to the increase in the demand from IT / ITES and

BPOsector across major metros in India.

India hasa distinct regulatory and financing management in place.

Real estate boom in India is supported byi t s own f lou r i sh ing

economy on asustainable basis. Here, growth of the property market is not a

result of renovationand overhauling; but rapiddevelopment that witness for India riding

the high growth wave.

E. MUTUAL FUNDS

They buy shares in companies with high potential for growth (some of

which might not pay dividends). The NAV of such fund will tend to be

erratic since these so-called growth shares experience high price

volatility. They also make quick profits by investing in the small cap

shares and by investing in the Initial Public Offering (IPO’s) of small

companies. However, growth strategy may differ from one fund to

another. Not all growth funds operate similarly.

Income Funds

The a im o f income funds i s to p rov ide regu la r and s teady

income to inves to rs . Such schemes generally invest in fixed income

securities such as bonds, corporate debentures an d Government securities.

Income Funds  a re   idea l   fo r   cap i ta l   s tab i l i t y  and   regu la r   income.

They aim to provide safety of principal and regular (monthly, quarterly or

semiannually) income by investing in bonds, corporate debentures and

other fixed incomeinstruments. The AMC in this case will also be

guided by ratings given to the issuer of  debt by credit rating agencies.

Wherever a debt instrument is not rated, specific approvalof the board of the

AMC is required. Since most corporate debt is illiquid, the fund triesto provide

liquidity by investing in debt of varying maturity.

Balanced Funds

The aim of balanced funds is to provide both growth and regular

income. Such schemes periodically distribute a part of their earning and invest

both in equities and fixed income securities in the proportion indicated

in their offer documents. In a rising stock market, the NAV of these

schemes may not normally keep pace, or fall equally when the market falls.The

investors looking for a combination of income and moderate growth, the idea is

to get the best of both the worlds, equity shares and debt. The

proportion of the two asset classes depends on the fund manager’s

preference for risk against

return.Bu t  because the investments are highly diversified, investors reduce thei

r market risk. Normally about 50 to 65 per cent of a portfolio's assets are invested

in equity shares.

Money Market Funds

The aim of money market funds is to provide easy liquidity, preservation of capital

and modera te   income.

These  schemes  genera l l y   inves t   in   sa fe r   shor t - te rm   ins t ruments .

Returns on these schemes may fluctuate depending upon the interest rates

prevailing inthe market. These are ideal for Corporate and individual investors as a

means to park their surplus funds for short periods. Also known as Liquid Plans,

these funds are a playon volatility in interest rates. Most of their investment is in

fixed-income instrumentswith maturity period of less than a year. Since they accept

money even for a few days,they are best used to park short-term money, which

otherwise earns a lower return in asavings bank account.

Advantages of Mutual Funds:

There are numerous benefits of investing in mutual funds and one of the key

reasons for i t s phenomena l success in the deve loped marke ts l i ke

US and UK is the range o f bene f i t s they o f fe r , wh ich a re

unmatched by mos t o ther inves tment avenues . We haveexplained

the key benefits in this section. The benefits have been broadly split

intouniversal benefits, applicable to all schemes and benefits

applicable specifically toopen-ended schemes. 

Professional Management

The primary advantage of funds (at least theoretically) is the professional

managemento f the money . Inves to rs purchase funds because they

do no t have the t ime o r the expertise to manage their own portfolios. A

mutual fund is a relatively inexpensive wayfor a small investor to get a full-time

manager to make and monitor investments.

MutualFunds  p rov ide   the  serv ices  o f  exper ienced  and  sk i l l ed  

p ro fess iona ls ,  backed  by  adedicated investment research team that

analyses the performance and prospects of companies and selects suitable

investments to achieve the objectives of the scheme.

Diversification

 M u t u a l   F u n d s   i n v e s t   i n   a   n u m b e r   o f   c o m p a n i e s   a c r o s s   a  

b r o a d   c r o s s - s e c t i o n   o f   industries and sectors. This diversification

reduces the risk because seldom do all stocksdec l ine a t the same t ime

and in the same propor t ion . Cus tomers can ach ieve

th isdiversification through a Mutual Fund with far less money than you

can do on your own. By owning shares in a mutual fund instead of owning

individual stocks or bonds,your risk is spread out. The idea behind diversification

is to invest in a large number of assets so that a loss in any particular investment

is minimized by gains in others.

Liquidity

Just like an individual stock, a mutual fund allows the customers to

request that your shares be converted into cash at any time. In open-

end schemes, the investor gets themoney back promptly at net asset value

related prices from the Mutual Fund. In closed-end schemes, the units can be

sold on a stock exchange at the prevailing market price or the investor can

avail of the facility of direct repurchase at NAV related prices by

theMutual Fund.

Flexibility

Through   fea tu res  such  as   regu la r   inves tment  p lans ,   regu la r  

w i thdrawa l  p lans  anddividend reinvestment plans, you can systematically

invest or withdraw funds accordingto your needs and convenience.

Choice of Schemes

Mutual Funds offer a family of schemes to suit the customers varying

needs over alifetime. Mutual funds offer a tremendous variety of schemes. This

variety is beneficialin two ways: first, it offers different types of schemes to

investors with different needsand risk appetites; secondly, it offers an opportunity

to an investor to invest sums acrossa variety of schemes, both debt and equity.

Tax benefits

Any income distributed after March 31, 2002 will be subject to tax in the

assessment of all Unit holders. However, as a measure of concession to

Unit holders of open-endedequity-oriented funds, income distributions for the

year ending March 31, 2003, will betaxed at a concessional rate of 10.5%.In

case of Individuals and Hindu Undivided Families a deduction up to

Rs.9, 000 fromthe Total Income will be admissible in respect of income from

investments specified inSection 80L, including income from Units of the Mutual

Fund. Units of the schemes arenot subject to Wealth-Tax and Gift-Tax

Limitations of Mutual funds

 No Control over Costs

I nves to r has to pay inves tment management fees as long as he

rema ins in the fund.Investors who invest on their own can build their own

portfolios of shares, bonds and other securities Investing through funds

means he delegates this decision to fund managers.

Managing Portfolio of Funds

Availability of large number of funds can actually mean too much of

choice for the investor. He may again need advice on how to select a

fund to achieve hisobjectives.

No Guarantee

When the en t i re s tock marke t goes down, the Mutua l Fund shares

will also go down even if the portfolio is balanced though the risk is low.

Administrative fees or sales commissions are charged by all the funds to

compensate brokers and financial planners.

F. METALS

GOLD

Introduction

The rea l va lue o f go ld i s no t tha t i t p rov ides a qu ick ,

specu la t i ve f i x , bu t tha t

i t can  provide a sure and steady means ofprotecting wealth and enhance the co

nsistency of returns. With gold's role as a portfolio diversifier, a hedge

against inflation and exposure to the dollar, there are several compelling

arguments for investing a portion of one's portfolio in the yellow metal.

Portfolio Diversification:

Most investment portfolios are invested primarily in traditional

financial assets such asstocks and bonds. The reason for holding diverse

investments is to protect the portfolioagainst fluctuations in the value of any

single asset class. Portfolios that contain gold aregenerally more robust and

better able to cope with market uncertainties than those thatdon't.Adding

gold to a portfolio introduces an entirely different class of asset. Gold is

unusual because it is both a commodity and a monetary asset and is an effective 

diversifier because its performance tends to move independently of other

investments.

Dollar Hedge:

Gold is often cited as being an effective hedge against fluctuations in

the US dollar, theworld's main trading currency.  If the dollar

appreciates, the dollar gold price falls andsimilarly a fall in the dollar

relative to the other main currencies produces a rise in thegold price.Like

all physical commodities, gold is an asset that bears no credit risk. Holding

assets inthe yellow metal involves no counterparty and is no one's liability. In

addition to that, the physical properties of the metal make it an excellent

alternative to money.

Durable:

Gold is durable. Unlike many of the other commodities examined, other things

remainingequal (i.e. assuming no changes in price), there is no

depreciation in the value of gold,other than any storage costs that

might apply. Gold is fungible. It is, at least in theory, infinitely divisible with

virtually no losses (other than any operational costs the processmight

incur).Furthermore, gold has a high value to volume ratio, which makes

it easily transferable,with low transport and storage costs.  Moreover,

gold is one of the deepest commoditymarkets with the highest levels of

liquidity, second only to oil.

Inflation: 

The purchasing power of gold has not diminished since Biblical times. According

to theOld Testament, during the reign of King Nebuchadnezzar, an

ounce of gold bought 350loaves o f b read . Today , an  ounce  o f go ld

s t i l l buys 350 loaves .  The va lue  o f go ld therefore, in terms of real

goods and services that it can buy, has remained remarkablystable.In

contrast, the purchasing power of many currencies has generally

declined. There is agrowing body of research to bolster gold's reputation as a

protector of wealth against theravages of inflation. Market cycles come

and go, but gold has maintained its long termvalue.

Safe Haven:

In volatile and uncertain times, we often witness a ‘flight to quality', as investors

seek to protect their capital by moving it into assets considered to be safer stores

of value.Gold is among only a handful of financial assets that is not matched by a

liability. It can provide insurance against extreme movements on the value of 

traditional asset classes that can happen in unsettled times.

Liquidity

Gold's liquidity is one of its critical investment attributes. Gold can be

traded around the clock in large size, at narrower spreads and more rapidly than

many competing diversifiers or main stream investment.

SILVER

Introduction

Silver is a white colored shiny element that is highly ductile and malleable and is

used inmak ing jewe l ry , co ins and tab leware . I t i s a lso used in

chemica l exper iments as i t  provides a high electrical and thermal

conductivity. It is found in the metallic state andalso in a large amount of minerals

mainly in argentite. That is why it is called argentumin LatinSilver is a metal that

is associated with metals like gold, lead, zinc and copper, though it’sunusual

properties makes it very different from them. It is used in making various kindsof

jewelry, as it is considered as a precious metal second to gold but its

contribution inthe various industrial sectors as a raw material makes it

unmatchable. No other metal canreplace silver as it has an endless number of

uses.Silver is produced throughout the world but an interesting fact

remains that the primarysource o f s i l ve r i s no t the s i l ve r m ines bu t

the o ther sources o f s i l ve r . S i l ve r m ines  produce a small amount of

silver that is 25% of the world’s total production and the restof it is derived as

a by-product from gold mines (15%), copper mines (24%), lead andzinc

mines (34%) and other sources. The total production of silver in the world figures

to be around 615 million ounces and Mexico is the leading 

silver producing country. Thetotal demand of silver in the world amounts to be

around 29 thousand tons. About 95% of this demand is contributed largely by

three industrial sectors namely photography, jewelry and silverware sectors.

The idea of silver as a holding asset and as a source of coinage is losing

popularity to the idea of silver as an industrial commodity. The demand of silver

in 2002 from these sectors was: -

Photography sector – 342 million ounces

Jewelry sector – 205 million ounces

Silverware sector – 259 million ounces

The countries that are the major consumers of silver are: -

United states,

Canada, 

Mexico,

United Kingdom,

France,

Germany,

Italy,

Japan

India.

Production of silver in India

India hardly produces any silver and is basically a silver importing country. It

holds the20th place in the list of silver producing countries and the total

production of silver inIndia in 2004 was around 2.1 million ounces.

The three major silver producing states inIndia are: - Rajasthan, Gujarat,

Jharkhand.Rajasthan is the leading silver producing state in India with a

production of around 32thousand tons . Gu ja ra t fo l lows on the

second p lace w i th a p roduc t ion o f a round 20 thousand tons.

Indian Silver Market:

As mentioned above, India is primarily a silver importing country, as

the production of India is not sufficient to satisfy the ever-growing

domestic demand. The production of silver in India stands out at the figure

of around 2.1 million ounces placing it at the 20th position in the list of major 

silver producing countries. The import of silver in India hovers over 110 million

ounces that shows the huge size of Indian domestic demand.However,

this import level fell sharply as a result of the decline in demand due to rise

insilver prices and inconsistent monsoon on which the income of the rural sector

depends.India stands third after United States and Japan among the leading

consumers of silver inthe world.

Major trading centers of Silver

London

Zurich

 New York (COMEX)

Chicago (CBOT)

Hong Kong

Tokyo Commodity Exchange (TOCOM)

In India, silver is traded at the following places 1) Delhi 2) Indore 3) 

Rajasthan 4)Madhya Pradesh 5) Mathura (Uttar Pradesh) 6) Rajkot (Gujarat).

Also, silver is traded in the Indian commodity exchanges like:-

National Commodity and Derivatives Exchange Ltd.

Multi Commodity Exchange of India Ltd.

National Multi Commodity Exchange of India Ltd.

G.COMMODITY

Introduction

A physical substance, such as food, grains, and metals, which is

interchangeable with another product of the same type, and which investors

buy or sell, usually through futures contracts. The price of the commodity is

subject to supply and demand. Risk is actuallythe reason exchange trading

of the basic agricultural products began. For example, afarmer risks

the cost of producing a product ready for market at some time in the

future because he doesn't know what the selling price will be.

Definition

Commodity is defined as any bulk good traded on an exchange or in the cash

market.One of the first forms of trade between individuals began by what is

calledthe barter system wherein goods were traded for goods. Lack of a

medium for exchange was thesole initiator of this system. People sold

what they had inexcess and bought what theylacked. Animals were the first

few commodities to be exchanged. Some examples ofcommodities include

grain, oats, gold, oil, beef,silver, and natural gas.

Commodities Exchange in India:-

In India, there are 26 registered commodities exchanges. Out of them only 3

commodities exchange offer online screen based trading system. They are

National Multi Commodities Exchange of India Limited(NMCE)

National Commodities and Derivatives Exchange of India Limited(NCDEX)

Multi Commodities Exchange of India Limited(MCX)

H. INSURANCE

Definition

The insurance that covers loss of an interest in a property due to legal

defectsand that is required if the property has a mortgage.Title insurance is a

police issued by title insurance company, assuring that thetitle is a clear in the

name of title owner. That means if owner wish to

salethe property, that time he don't

have any problem to sell that. If any problemcreates after selling the

property to the new owner that time title insurancecompany will pay the

damage for that or take action to solve that problem.

Origin and growth of Insurance Sector in India

Insurance sector in India is one of the booming sectors of the economy and is

growing atthe rate of 15-20 per cent annum. Together with banking services, it

contributes to about7 per cent to the country's GDP. Insurance is a

federal subject in India and Insuranceindustry in India is governed by

Insurance Act, 1938, the Life Insurance Corporation Act,1956 and General

Insurance Business (Nationalization) Act, 1972, Insurance Regulatory and

Development Authority (IRDA)Act, 1999 and other related Acts. The origin of life

insurance in India can be traced back to 1818 with the establishment of the

Oriental Life Insurance Company in Calcutta. It was conceived as a means to

providefor English Widows. In those days a higher premium was

charged for Indian lives thanthe non-Indian lives as Indian lives were

considered riskier for coverage. The BombayMutual Life Insurance Society

that started its business in 1870 was the first company tocharge same premium

for both Indian and non-Indian lives. In 1912, insurance regulationformally

began with the passing of Life Insurance Companies Act and the

ProvidentFund Act.By 1938, there were 176 insurance companies in

India. But a number of frauds during1920s and 1930s ta in ted the

image o f insurance indus t ry in Ind ia . In 1938 , the

f i r s tcomprehens ive   leg is la t ion   regard ing   insurance  was  

i n t roduced  w i th   the  pass ing  o f   Insurance  Ac t  o f  1938   tha t  p rov i

ded  s t r i c t    S ta te Cont ro l  over   insurance  bus iness . Insurance sector

in India grew at a faster pace after independence. In 1956, Governmentof India

brought together 245 Indian and foreign insurers and provident

societies under one nationalized monopoly corporation and formed Life

Insurance Corporation (LIC) byan Act of Parliament, viz. LIC Act, 1956,

with a capital contribution of Rs.5 cr.The (non-life) insurance

business/general insurance remained with the private sector till1972. There

were 107 private companies involved in the business of general

operationsand their operations were restricted to organized trade and

industry in large cities.

TheGenera l   Insurance  Bus iness   (Na t iona l i sa t ion )  Ac t ,  1972  

na t iona l i sed   the  genera l insurance business in India with effect from

January 1, 1973. The 107 private

insurancecompan ies  were  ama lgamated  and  

g rouped   in to   four   compan ies :  Na t iona l   InsuranceCompany, New

India Assurance Company, Oriental Insurance Company and

UnitedIndia Insurance Company. These were subsidiaries of the

General Insurance Company(GIC).

Insurance as Investment

 Agreed, insurance may not be the best place to invest your hard-earned money.

But thereare su f f i c ien t reasons fo r one to be l ieve tha t i t can be a

h igh ly luc ra t i ve avenue to facilitate savings. People often talk about yield

on investment and tend to compare their values with those available on

various insurance schemes. This is particularlytypicalw i th in   the  

Ind ian  sub-con t inen t  where  one  conven ien t l y   fo rge ts   the

e lement  o f   r i sk  covered by life insurance.It is extremely unfair to compare

the performance of insurance against other investmentswithout considering

the core features of insurance. The very essence of insurance is

to protect your family from the uncertainty of your life. Hence it proves very logic

al toevaluate the costs involved towards this feature. Ask yourself this

questionwhen you pay insurance premium for your car, do you get

anything if fortunately nomishap happens? This means that you spent the

amount to secure a valuable property.Hence you must accept that out of the total

amount paid by you for your life insurance, ascertain amount is used for

providing the risk cover and only the balance can be utilized assavings.In other

words, the total premium you pay minus the amount evaluated as the

cost of insurance must be considered as the amount invested to get the

maturity amount. If youcalculate the yield from returns, you will be in for a

surprise.

Indian Insurance Industry

I nsurance may be descr ibed as a soc ia l dev ice to reduce o r

e l im ina te r i sk o f l i f e and  property. Under the plan of insurance, a

large number of people associate themselves bysharing risk, attached

to individual. The risk, which can be insured against include fire,the

per i l o f sea , dea th , inc iden t , & burg la ry . Any r i sk con t ingen t

upon these may be insured against at a premium commensurate with the risk

involved.Insurance i s ac tua l l y a con t rac t be tween 2 par t ies

whereby one par ty ca l led insure r  undertakes in exchange for a fixed

sum called premium to pay the other party happeningof a certain event.

Insurance is a contract whereby, in return for the payment of premium by the

insured, the insurers pay the financial losses suffered by the insured as a

result of the occurrence of unforeseen events.Wi th the he lp o f Insurance ,

la rge number o f peop le exposed to a s im i la r r i sk

makecontributions to a common fund out of which the losses suffered by the

unfortunate few,due to accidental events, are made good

I. TAX SAVING SCHEME

Public Provident Fund (PPF):

Introduction:

Under this scheme, there is a return at the -interest rate of 8% p.a. The

minimum investment limit is Rs.500/- and limitation is Rs.70, 000/-. It

can be obtained any time throughout the year. It can be operated either

single or jointly.In case of minor, with parent/guardian, there is also a

facility of nomination inthis scheme.

Highlights:

The Public P r o v i d e n t F u n d S c h e m e i s a s t a t u t o r y s c h e m e o f

t h e CentralGovernment of India.

The Scheme is for 15 years.

The rate of interest is 8% compounded annually.

The minimum deposit is 500/- and maximum is Rs. 70,000/- in a financial year.

One deposit with a minimum amount of Rs.500/- is mandatory in each

financial year.

The deposit can be in lump sum or in convenient installments, not more than 12

installments in a year or two installments in a month subject to total deposit of Rs.70,000/-.

It is not necessary to make a deposit in every month of the year. The amount of deposit can

be varied to suit the convenience of the account holders.

The account in which deposits are not made for any reasons is treated

asdiscontinued account and such account cannot be closed before maturity.

The discontinued account can be activated by payment of minimum deposit of Rs.500/- with

default fee of Rs.50/- for each defaulted year.

Account can be opened by an individual or a minor through the guardian.

The depos i t s sha l l be in mu l t ip le o f Rs .5 / - sub jec t to m in imum

amount of Rs.500/-.

The depos i t s in a m inor accoun t i s c lubbed w i th the depos i t s o f

the accoun t o f the guard ian fo r the l im i t s i f Rs .70 ,000 / - .

The PPF scheme is operated through Post Office and Nationalized banks.

Deposits in PPF qualify for rebate under section 80-C of Income Tax Act.

Deposits are exempt from wealth tax.

 Nomination facility available. Best for long term investment.

Why You Should Invest in a Public Provident Fund Account?

Your money in the PPF account is perfectly safe, earns 8% (at the moment),

qualifies for Section 80C of the Income Tax Act, and at the moment is

EEE (Exempt ExemptExempt -the money you invest, the interest earned, and

the final withdraw able amount are all taxexempt).

You can invest a low of 500 rupees and a high of 70,000 rupees a year (over a

maximum of twelve installments per year). You are allowed to withdraw

money or take a loan; there’s a weird formula to compute the same, but 1

advice against doing so ever.

If you invest Rs.10,000 a year your final balance stands at Rs.293,243.

If you invest 35,000 rupees a year the final balance becomes 1,026,350 rupees;

at 70,000 rupees a year, the final balance is a whopping 2,052,700 rupees. At

the end of 15 years, you can extend your subscription in blocks of 5 years or else close the

account and reap the benefits. The RPF is a great way to set aside money for say

your child's higher education. You can open a PPF account at State Bank

of India (SBI) or any of its subsidiaries or at the local post office. An

individual is allowed to have only one PPF account.

COMPANY PROFILE

History

Reliance Capital Limited (RCL) was incorporated in year 1986 at Ahmedabad in Gujarat

as Reliance Capital & Finance Trust Limited. The name RCL came into effect from

January 5, 1995. In 2002, RCL shifted its registered office to Jamnagar in Gujarat

before it finally moved to Mumbai in Maharashtra, in 2006.

In 2006, Reliance Capital Ventures Limited merged with RCL and with this merger the

shareholder base of RCL rose from 0.15 million shareholders to 1.3 million.

RCL entered the Capital Market with a maiden public issue in 1990 and in subsequent

years further tapped the capital market through rights issue and public issues. The

equity shares were initially listed on the Ahmedabad Stock Exchange and The Stock

Exchange Mumbai. Presently the shares are listed on The Stock Exchange Mumbai and

the National Stock Exchange of India.

RCL in the initial years engaged itself in steady annuity yielding businesses such as

leasing, bill discounting, and inter-corporate deposits. Later, in 1993 diversified its

business in the areas of portfolio investment, lending against securities, custodial

services, money market operations, project finance advisory services, and investment

banking.

RCL was accredited a Category 1 Merchant banker by the Securities Exchange Board

of India (SEBI). It had lead managed/co-managed 15 issues of an aggregate value of

Rs. 400 crore and had underwritten 33 issues for an aggregate value of Rs. 550 crore.

All these companies were listed on various exchanges.

RCL obtained its registration as a Non-banking Finance Company (NBFC) in December

1998. In view of the regulatory requirements RCL surrendered its Merchant Banking

License.

RCL has since diversified its activities in the areas of asset management and mutual

fund; life and general insurance; consumer finance and industrial finance; stock broking;

depository services; private equity and proprietary investments; exchanges, asset

reconstruction; distribution of financial products and other activities in financial services.

Overview

Reliance Capital, a constituent of CNX Nifty Junior and MSCI India, is a part of the

Reliance Group. It is one of India's leading and amongst most valuable financial

services companies in the private sector.

Reliance Capital has interests in asset management and mutual funds; life and general

insurance; commercial finance; equities and commodities broking; investment banking;

wealth management services; distribution of financial products; exchanges; private

equity; asset reconstruction; proprietary investments and other activities in financial

services.

Reliance Mutual Fund is amongst top two Mutual Funds in India with over six million

investor folios. Reliance Life Insurance and Reliance General Insurance are amongst

the leading private sector insurers in India. Reliance Securities is one of India’s leading

retail broking houses. Reliance Money is one of India’s leading distributors of financial

products and services.

Reliance Capital has a net worth of Rs. 11,991 crore (US$ 2.2 billion) and total assets of

Rs. 40,588 crore (US$ 7.5 billion) as on March 31, 2013.

Business mix of Reliance Capital

Asset

Management

Mutual Fund, Offshore Fund, Pension fund, Portfolio

Management

Insurance Life Insurance, General Insurance

Commercial

Finance

Mortgages, Loans against Property , SME Loans, Loans for

Vehicles, Loans for Construction Equipment, Business Loans,

Infrastructure financing

Broking and

Distribution

Equities, Commodities and Derivatives, Wealth Management

Services, Portfolio Management Services, Investment Banking,

Foreign Exchange, Third Party Products

Other

Businesses

Private Equity, Institutional Broking, Asset Reconstruction,

Venture Capital

Chairman’s Profile

Shri Anil D. Ambani, regarded as one of the foremost corporate

leaders of contemporary India, Shri Anil D. Ambani, is the

Chairman of Reliance Capital Limited, Reliance Infrastructure

Limited, Reliance Communications Limited and Reliance Power

Limited. He is also on the Board of Reliance Infratel Limited and

Reliance Anil Dhirubhai Ambani Group Limited. He is the President

of the Dhirubhai Ambani Institute of Information and Communication Technology,

Gandhinagar, Gujarat.

An MBA from the Wharton School of the University of Pennsylvania, Shri Ambani is

credited with pioneering several path-breaking financial innovations in the Indian capital

markets. He spearheaded the country’s first forays into overseas capital markets with

international public offerings of global depositary receipts, convertibles and bonds.

Under his Chairmanship, the constituent companies of the Reliance Group have raised

nearly US$ 7 billion from global financial markets in a period of less than 3 years.

Shri Ambani has been associated with a number of prestigious academic institutions in

India and abroad.

He is currently a member of:

Wharton Board of Overseers, The Wharton School, USA

Board of Governors, Indian Institute of Management (IIM), Ahmedabad

Executive Board, Indian School of Business (ISB), Hyderabad

In June 2004, Shri Ambani was elected as an Independent member of the Rajya Sabha

– Upper House, Parliament of India, a position he chose to resign voluntarily on March

29, 2006.

Awards and Achievements

Awarded by Light Readings as the Person of the Year – 2008 for outstanding

achievements in the communication industry.

Voted 'the Businessman of the Year' in a poll conducted by The Times of India –

TNS, December, 2006.

Voted the 'Best role model' among business leaders in the biannual Mood of the

Nation poll conducted by India Today magazine, August 2006.

Conferred 'the CEO of the Year 2004' in the Platts Global Energy Awards.

Conferred ‘The Entrepreneur of the Decade Award’ by the Bombay Management

Association, October 2002.

Awarded the First Wharton Indian Alumni Award by the Wharton India Economic

Forum (WIEF) in recognition of his contribution to the establishment of Reliance

as a global leader in many of its business areas, December, 2001.

Short Biographic Profile

Anil Dhirubhai Ambani

Born on: June 4, 1959

Birthplace: Mumbai, India

Father's name: Dhirubhai Hirachand Ambani

Mother's name: Kokilaben Dhirubhai Ambani

Education: Bachelor of Science from the University of Mumbai and

MBA from The Wharton School, University of Pennsylvania, USA

Family: Married to Tina and has two sons Jai Anmol and Jai Anshul

Business address: Reliance Communications Limited, I Block, 2nd

Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai - 400710, India

Telephone: +91 22 3037 5522, +91 22 3037 5534

Fax: +91 22 3037 5577

E-mail:anil.ambani@relianceada.com

Vision

Reliance Capital's vision is that:

By 2015, it will be a company that is known as:

"The most profitable, innovative, and most trusted financial services company in India

and in the emerging markets".

In achieving this vision, the company will be both customer-centric and innovation-

driven.

Social Responsibility

Organizations, like individuals, depend for their survival, sustenance and growth on the

support and goodwill of the communities of which they are an integral part, and must

pay back this generosity in every way they can...

This ethical standpoint, derived from the vision of our founder, lies at the heart of the

CSR philosophy of the Reliance Group.

Reliance Group is committed to being an ideal corporate citizen and doing more than its

fair share to support various deserving causes, in the field of medicine in particular;

setting up and operating Kokilaben Dhirubhai Ambani Hospital. Reliance Capital

supports this and other CSR ventures.

Each of Reliance Capital’s different businesses vigorously implements their own CSR

initiatives. Indeed, their CSR efforts are counted when calculating the business’s

performance. Some of the work done by them include blood donation camps, donation

of old computers to various schools, donations are given to NGOs working with children

or the aged or to the Missionaries of Charity across the country, direct cash aid for

paying the medical expenses of life threatening requirements for some under-privileged

people etc.

Other businesses work with self-help groups to provide them with funding and other

advice to function better. Some other businesses have also worked with educational

institutions to promote financial literacy and financial inclusiveness.

This is in addition to supporting the charitable activities of the Reliance Group, both in

healthcare and in caring for older people – Silvers. The Company also follows an active

program of energy abatement. This is not just in its corporate office, but also in other

large offices in big cities.

Reliance Capital Limited Competition

Indians rely on Reliance Capital to provide financial services. The company, which

is part of the Anil Dhirubhai Ambani Group, offers non-banking services including asset

management, mutual funds, life and general insurance, private equity and proprietary

investments, consumer finance, and stock brokerage services through its various

subsidiaries. Reliance Capital has numerous investments in the infrastructure sector

including power, ports, and telecommunications in addition to dabbling in the

entertainment sector with the acquisition of a controlling stake of Adlab Films in 2005.

Top Competitors for Reliance Capital Limited

Standard Chartered PLC

ICICI Bank Limited

Bank of India

STANDARD CHARTERED PLC

We've been in India for over 150 years

We're India's largest international bank with 99 branches in 42 cities, and we've been

operating here since 1858.

Customers and Clients Come First

We use our global capabilities and deep local knowledge in India to provide a wide-

range of products and services to meet the needs of our personal banking and business

customers.

We build our products and services around you and have a number of commitments to

help ensure that our customer have the best possible experience with us.

Sponsorships

We're proud sponsors of:

The Standard Chartered Mumbai Marathon - title sponsor for the last ten years

Asia Cup - official partner of the bi-annual cricket tournament

The Economic Times Awards for Corporate Excellence - title sponsor from 2012 to 2016

Liverpool Football Club - our four year sponsorship started in June 2012.

Awards

Our products and services are often recognised by industry leaders. Here are a few of

our recent awards:

Best Foreign Bank 2012 - Bloomberg Financial Leadership Awards

Financial Advisor of the Year Award 2012 - UTI CNBC

Best Private Bank in India by the Asian Private Banker at the Awards for Distinction

2012.

Listings and Subsidiaries

Standard Chartered PLC, our UK based parent, became the first foreign company to list

in India through the issuance of Indian Depository Receipts in June 2010.

We also have a number of subsidiaries operating in India:

Standard Chartered Securities (India) Ltd, the vehicle for the equities business

Standard Chartered Private Equity Advisory (India) Private Limited

Standard Chartered Investments and Loans (India) Limited

Standard Chartered Finance limited and SCOPE International.

History

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial

institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI Bank was

reduced to 46% through a public offering of shares in India in fiscal 1998, an equity

offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's acquisition

of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and secondary

market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002. ICICI was

formed in 1955 at the initiative of the World Bank, the Government of India and

representatives of Indian industry. The principal objective was to create a development

financial institution for providing medium-term and long-term project financing to Indian

businesses. 

In the 1990s, ICICI transformed its business from a development financial institution

offering only project finance to a diversified financial services group offering a wide

variety of products and services, both directly and through a number of subsidiaries and

affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the first

bank or financial institution from non-Japan Asia to be listed on the NYSE. 

After consideration of various corporate structuring alternatives in the context of the

emerging competitive scenario in the Indian banking industry, and the move towards

universal banking, the managements of ICICI and ICICI Bank formed the view that the

merger of ICICI with ICICI Bank would be the optimal strategic alternative for both

entities, and would create the optimal legal structure for the ICICI group's universal

banking strategy. The merger would enhance value for ICICI shareholders through the

merged entity's access to low-cost deposits, greater opportunities for earning fee-based

income and the ability to participate in the payments system and provide transaction-

banking services. The merger would enhance value for ICICI Bank shareholders

through a large capital base and scale of operations, seamless access to ICICI's strong

corporate relationships built up over five decades, entry into new business segments,

higher market share in various business segments, particularly fee-based services, and

access to the vast talent pool of ICICI and its subsidiaries. 

In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger

of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal Financial

Services Limited and ICICI Capital Services Limited, with ICICI Bank. The merger was

approved by shareholders of ICICI and ICICI Bank in January 2002, by the High Court

of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at

Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the

ICICI group's financing and banking operations, both wholesale and retail, have been

integrated in a single entity. 

Investor Relations

ICICI Bank disseminates information on its operations and initiatives on a regular basis.

The ICICI Bank website serves as a key investor awareness facility, allowing

stakeholders to access information on ICICI Bank at their convenience. ICICI Bank's

dedicated investor relations personnel play a proactive role in disseminating information

to both analysts and investors and respond to specific queries.

Awards

ICICI Bank ranks 10th in Fortune India's list of 50 most admired companies in India.

Ms. Chanda Kochhar, MD & CEO, has been ranked as the most powerful business

woman in India in the Forbes' list of 'The World's 100 Most Powerful Women 2013'

ICICI Bank Limited has been conferred the Best Remittance Business award at The

Asian Banker's International Excellence in Retail Financial Services 2013 Awards

ceremony.

ICICI Bank was honored with the Medici Innovation Hall of Fame Award, instituted by

The Medici Institute in collaboration with the Medici Group, USA.

ICICI Bank and its IT partner Fundtech won The Asian Banker Technology

Implementation Award for the Convergence Banking project from Asian Banker.

Ms Chanda Kochhar received the 'Transformation Leader Award' by NDTV Profit

Business Leadership Awards 2012.

For the second consecutive year, Mr. N.S.Kannan, Executive Director & CFO, received

the "Best Performing CFO", in the Banking / Financial Services category by CNBC - TV

18.

For the third year in a row, Ms. Chanda Kochhar, Managing Director & CEO, is in the

Power List 2013 of 25 most powerful women in India, by India Today.

Ms. Chanda Kochhar is the only Indian to be featured in the Dow Jones list of Most

Influential Female Executives in the World of the last decade. She is ranked 12th in the

global list.

ICICI Bank awarded the Most Admired Infrastructure Debt Financer and PPP Project of

the Year: Yamuna Expressway Project, in the 5th KPMG Infrastructure Today Awards

by ASAPP Media Information Group, publishers of Infrastructure Today in association

with KPMG

For the 4th consecutive year, ICICI Bank won the Celent Model Bank for the next

generation technology oriented banking solutions.

ICICI Bank was awarded a "Special IT Innovation Award" by Lenovo - NASSCOM and

CNBC-TV18.

ICICI Bank was the winner of "6th Loyalty Awards" for My Savings Rewards by AIMIA

(global leader in Loyalty).

ICICI Bank UK PLC's online savings product HiSAVE won the "Highly Commended"

(2nd rank) at the Consumer Moneyfacts Awards.

ICICI Bank received the "Gram Samvad",Service for Low cost/Small budget marketing

initiative Award by Rural Marketing Association of India (RMAI).

Ms. Chanda Kochhar awarded the Businessperson Of The Year 2012 by Business

India. She is the first woman recipient of this award in 31 years.

ICICI Bank won the Best domestic bank, India by The Asset Triple A Country Awards.

History

Bank of India was founded on 7th September, 1906 by a group of eminent businessmen

from Mumbai. The Bank was under private ownership and control till July 1969 when it

was nationalized along with 13 other banks.

Beginning with one office in Mumbai, with a paid-up capital of Rs.50 lakh and 50

employees, the Bank has made a rapid growth over the years and blossomed into a

mighty institution with a strong national presence and sizable international operations. In

business volume, the Bank occupies a premier position among the nationalized banks. 

The Bank has 4322 branches in India spread over all states/ union territories including

specialized branches. These branches are controlled through 50 Zonal Offices. There

are 29 branches/ offices (including five representative offices) and 3 Subsidiaries and 1

joint venture abroad.

The Bank came out with its maiden public issue in 1997 and follow on Qualified

Institutions Placement in February 2008. . Total number of shareholders as on

30/09/2009 is 2, 15,790. 

While firmly adhering to a policy of prudence and caution, the Bank has been in the

forefront of introducing various innovative services and systems. Business has been

conducted with the successful blend of traditional values and ethics and the most

modern infrastructure. The Bank has been the first among the nationalized banks to

establish a fully computerized branch and ATM facility at the Mahalaxmi Branch at

Mumbai way back in 1989. The Bank is also a Founder Member of SWIFT in India. It

pioneered the introduction of the Health Code System in 1982, for evaluating/ rating its

credit portfolio. 

Presently Bank has overseas presence in 20 foreign countries spread over 5 continents

– with 53 offices including 4 Subsidiaries, 4 Representative Offices and 1 Joint Venture,

at key banking and financial centers viz., Tokyo, Singapore, Hong Kong, London,

Jersey, Paris and New York.

Contribution of foreign branches in the global business of the Bank as at 31.03.2013 is

as under:

 

Deposits 22.98%

Advances 30.36%

Business Mix 26.19%

Vision

To become the bank of choice for corporates, medium business and Upmarket Retail

customers and development banking for small business, mass market rural market.

Mission

To provide superior, proactive banking services to niche markets globally, while

providing cost effective, responsive services to others in our role as a development

bank, and in doing so, meet the requirements of our stakeholders.

Quality Policy

We at Bank of India are committed to become the bank of choice by providing

Superior, Pro-Active, Innovative, State of The Art banking services with an attitude

of care and concern for the customers and patrons.

L&T FINANCE HOLDINGS

Overview

L&T Finance Holdings Ltd. is a financial holding company offering a diverse range of

financial products and services across the corporate, retail, housing and infrastructure

finance sectors, as well as mutual fund products and investment management services,

through direct and indirect wholly-owned subsidiaries. Our Company is registered with

the RBI as an NBFC.

We are promoted by Larsen & Toubro Limited, one of the leading companies in India,

with interests in engineering, construction, electrical and electronics manufacturing and

services, information technology and financial services.

We are headquartered in Mumbai, and have a presence in 23 states in India. Our

network of offices has been established to cater to the growing business needs of our

diverse customer base, which includes individual retail customers as well as large

companies, banks, multinational companies and small and medium-enterprises, and to

provide them with satisfactory customer service according to their varying requirements.

Our operations are arranged into five business groups, being the Infrastructure Finance

Group, the Retail Finance Group, the Corporate Finance Group, the Investment

Management Group and the Housing Finance Group.

Infrastructure Finance Group

Our wholly-owned subsidiary, L&T Infrastructure Finance Company Limited (L&T Infra),

conducts our infrastructure finance business (our Infrastructure Finance Group) which

provides financial products and services to our customers engaged in infrastructure

development and construction, with a focus on the power, roads, telecommunications,

oil and gas and ports sectors in India. L&T Infra is registered with the RBI as a

Systemically Important Non Deposit-accepting Non-Banking Financial Company

(NBFC-ND-SI) and an Infrastructure Finance Company (IFC), which allows it to optimize

its capital structure by diversifying its borrowings and accessing long-term funding

resources, thereby expanding its financing operations while maintaining its competitive

cost of funds. In addition, L&T Infra has been notified as a Public Financial Institution

(PFI) under Section 4A of the Companies Act.

Retail Finance Group and Corporate Finance Group

Our wholly-owned subsidiary, L&T Finance Limited (L&T Finance), conducts our retail

finance business and our corporate finance business (our Retail Finance

Group and Corporate Finance Group, respectively). L&T Finance is registered with

the RBI as a Systemically Important Non Deposit-accepting Non-Banking Financial

Company (NBFC-ND-SI) and an Asset Finance Company (AFC).

Our Retail Finance Group provides financing to our retail customers for the acquisition

of income generating assets and for income-generating activities. It comprises the

segments of construction equipment finance, transportation equipment finance, rural

products finance and microfinance. In addition, our Retail Finance Group caters to the

non-financing needs of our retail customers through the distribution of in-house financial

products such as insurance and mutual funds.

Our Corporate Finance Group provides financial products and services to our

corporate customers, and comprises the segments of corporate loans and leases (in the

form of asset-backed loans, term loans, receivables discounting, short-term working

capital facilities and operating and finance leases), supply chain finance (which includes

vendor and dealer finance products) and capital markets products.

Company Structure

Larsen & Toubro Limited is the promoter of our company. L&T was

incorporated on February 7, 1946. L&T is one of the leading companies in India,

with interests in engineering, construction, electrical and electronics

manufacturing and services, information technology and financial services.

L&T Finance Holdings Limited was incorporated in 2008, and is

registered with the RBI as an NBFC-ND-SI and has applied to the RBI for

registration as a CIC-ND-SI.

L&T Infra was incorporated in 2006, and is registered with the RBI as an

NBFC-ND-SI, is classified as an IFC and has been notified as a PFI under

Section 4A of the Companies Act. L&T Infra is the entity through which we

conduct the operations of our Infrastructure Finance Group.

L&T Finance was incorporated in 1994, and is registered with the RBI as an

NBFC-ND-SI and classified as an AFC. L&T Finance is the entity through which

we conduct the operations of our Retail and Corporate Finance Groups.

L&T Investment Management formerly DBS Cholamandalam Asset

Management Limited, was acquired by L&T Finance on January 20, 2010,

together with DBS Cholamandalam Trustees Limited, the trustee company for

DBS Chola Mutual Fund. DBS Cholamandalam Asset Management Limited, DBS

Cholamandalam Trustees Limited and DBS Chola Mutual Fund were renamed

"L&T Investment Management Limited", "L&T Mutual Fund Trustee Limited" and

"L&T Mutual Fund" respectively in February 2010. Further on November 23,

2012, L&TIM and L&TMFTL acquired L&T Fund Management Private Limited

(formerly known as FIL Fund Management Private Limited) and L&T Trustee

Services Private Limited (formerly known as FIL Trustee Company Private

Limited respectively). L&TIM is the entity through which we conduct the mutual

fund business in India.

L&T Housing Finance Limited formerly Indo Pacific Housing Finance

Limited, is registered with the National Housing Bank as a housing finance

company under the NHB Act, 1987. Incorporated in 1994, it was acquired by L&T

Finance Holdings on October 9, 2012 and was later renamed "L&T Housing

Finance Limited" with effect from December 4, 2012. L&T Housing Finance is the

entity through which we conduct the operations of our Housing Finance Group.

FamilyCredit Limited is registered with the RBI as an NBFC-ND-SI. It was

acquired by L&T Finance Holdings on December 31, 2012.

L&T FinCorp Limited is registered with the RBI as an NBFC-ND-SI.

L&T Capital Markets is a subsidiary of L&T Finance Holdings Limited. It

focuses on a client-centric approach, robust execution capabilities and attentive

client servicing. Its purpose is to create long-term value and adhere to the

highest principles of integrity, transparency and ethical practices, creating long

lasting relationships based on trust.

L&T Capital Market's customized execution addresses unique and different

needs of the wealthy and their heirs. Its methodology and approach identify

Investment Managers of different styles and asset classes who have

demonstrated their ability in generating consistent long-term risk-adjusted

returns.

The following solutions are offered:

Wealth Advisory

Estate Planning

Financial Planning

Alternate Investments

Mutual Funds

L&T Access serves as the non-branch acquisition engine for the L&T

Financial Services group, aimed at improving efficiency and productivity at the

overall group level.

Furthermore, we have made the following investments:

We hold less than 5% interests in City Union Bank Limited;

We hold an 8.90% interest in Invent ARC and in Invent/10-11/S3 Trust

We hold a 30% interest in NAC Infrastructure & Equipment Limited

Milestone

Key Strengths

MUTHOOT FINANCE

OVERVIEW

“Desire is the key to motivation, but it’s determination and commitment to an unrelenting

pursuit of your goal — a commitment to excellence — that will enable you to attain the

success you seek.” — Mario Andretti

Growth and money cannot sustain an organization for as long as uniqueness and

excellence can. We at Muthoot Finance Limited are harbingers of this belief since our

inception. Moreover, being a part of the rapidly growing family, Muthoot Group, fosters

in our culture, profound values of integrity, honesty and humility.

Knowing Our Roots

These values were inculcated when the company was formed, with the vision of

“creating an organization capable of serving the versatile needs of a growing Indian

financial market”. The purpose at hand is to identify and utilize untapped sections of the

market and reach out to as wide an audience as possible.

The focus of the company is on creating liquidity with an asset class, namely gold, that

has the largest consumer market in India. We see it as one of the preeminent ways of

creating wealth in the economy. With over 6 million loan accounts in its loan portfolio,

Muthoot Finance is recognized as a pioneer in gold financing. Undoubtedly, gold

funding is our niche; nonetheless our lendings are not restricted to gold loans. An

assorted asset portfolio impels us on the road to pioneer a competent financial market.

The Larger Picture

At Muthoot Finance, we understand the responsibility that rests on our shoulders. Being

a company with an increasing asset base, we take upon ourselves the onus of ensuring

smoother processes of monetary transactions, whether they are money transfer, gold

loans or gold bonds.

Being entrusted with the purpose of delivering value enables us to consider each

customer’s need as unique. We cater to gold loan requirements varying from a principle

loan amount of Rs. 1500 up to the maximum extent of Rs 10,000,000 (1 crore). This is

instrumental in accomplishing our objective of holistic growth for the economy.

Numbers Speak

Trusting numbers alone would be a myopic view of estimating our growth. However,

they do give an insight into our strength. We’ve deployed 25,000 people in over 4100

branches spread over 21 states and 4 Union Territories. With such rapid growth

potential, Muthoot Finance is an a market player dedicated to make a positive impact on

countless people, ranging from farmers to salaried employees seeking financial aid. A

diversified portfolio of assets is what sets us apart from the competition. It is

accentuated by the unbridled trust that our customers have bestowed on us, over the

years. It is this mutual trust that has, in turn, and over the years, created the long

relationships between Muthoot Finance and its invaluable customers. Such conviction

is, indeed, humbling.

SOCIAL RESPONSIBILITY

Corporate Social Responsibility

The Muthoot Group nurtures a commitment of giving back manifold to the society. In the

wake of an age where the society expects the corporate sector to step in and take up

the responsibility for community growth, we at the Muthoot Group focus our CSR

initiatives towards sustainability.

Our Beliefs

At Muthoot Finance Ltd. we foster a spirit of reliability. We work towards a new

framework driven by trust, and propelled by integrity. The core purpose is to create

awareness and consistency for those classes of the economy that have little or no trust

in the financial system of the country. We want to reinforce their belief in the economic

system of the country by being a bankable organization. Our value system has fortified

the roots of our heritage. It is due to these indispensible values and our commitment to

keeping the customer first that we have been rapidly growing since the past 126 years

Components of CSR at Muthoot Finance

Corporate Social Responsibility at Muthoot Finance Ltd. comprises an economic, legal

as well as philanthropic outlook that society entrusts an organization with. Education,

healthcare, sanitation, financial parity and the environment are only a few constituents

of the elaborate purview of Muthoot Finance Ltd’s CSR.

Our Efforts

As a beacon of CSR, Muthoot Finance Ltd. has been continually setting benchmarks for

responsibility towards corporates as well as the community. All CSR initiatives of

Muthoot Finance are implemented by the Muthoot M George Foundation. The efforts

are propelled by the motive of creating a balance between corporate practices and

community welfare by harnessing untapped resources that can make

considerable differences to economic and social health. We commit our social

responsibility initiatives to a sustainable future.

MILESTONE

The growth story

1887 The Group comes into being as a trading business

in a Kerala village.

1939 Commences Gold Loan business.

2001 Muthoot Finance receives RBI License to function as an NBFC.

2004 Receives highest rating of F1 from Fitch Ratings for a shirt-term

debt of Rs. 200 mn.

2005 Retail Loan and debenture portfolio crosses Rs. 5 bn.

2007

Retail Loan portfolio crosses Rs. 14 bn.

Net owned funds cross Rs. 1 bn.

Accorded SI-ND-NBFC status.

Branch network crosses 500 branches.

2008

Retail Loan portfolio crosses Rs. 21 bn.

Retail debenture portfolio crosses Rs. 1 bn.

Fitch affirms the F1 short term debt rating with an enhanced amount of

Rs. 800 mn.

Converted into a public limited company.

2009

Retail Loan portfolio crosses Rs. 33 bn.

Retail debenture portfolio crosses Rs. 19 bn.

Net owned funds crosses Rs. 3 bn.

Gross annual income crosses Rs. 6 bn.

Bank credit limits cross INR 10 bn.

Branch network crosses 900 branches.

2010

Retail Loan portfolio crosses Rs. 74 bn.

Retail debenture portfolio crosses Rs. 27 bn.

CRISIL assigns ‘P1+’ rating for short term debt of Rs. 4 bn, ICRA

assigns A1+ for short term debt of Rs. 2 bn.

Net owned funds crosses Rs. 5 bn.

Gross annual income crosses Rs. 10 bn.

Bank credit limits cross Rs. 17 bn.

Branch network crosses 1,600 branches.

2011 Retail Loan portfolio crosses Rs. 158 bn.

Retail debenture portfolio crosses Rs. 39 bn.

CRISIL assigns long-term rating of AA- Stable for Rs. 1 bn subordinated

debt issueand for Rs. 4 bn non-convertible debentures issue

respectively.

ICRA assigns long-term rating of AA- Stable for Rs. 1 bn subordinated

debt issueand for Rs. 2 bn non-convertible debentures issue

respectively.

PE Investments of Rs. 2556.85 mn in the Company by Matrix partners,

LLC the Welcome Trust, Kotak PE, Kotak Investments and Baring India

PE.

Net owned funds cross Rs. 13 bn.

Gross annual income crosses Rs. 23 bn.

Bank credit limit crosses Rs. 60 bn.

Branch network crosses 2,700 branches.

2012 Retail Loan portfolio crosses Rs. 246 bn.

Retail debenture portfolio crosses Rs. 66 bn.

ICRA assigns long-term rating of AA- Stable and short-term rating

of A1+ for Rs. 9,353 cr Line of credit.

Successful IPO of Rs. 9,012.50 mn in April 2011.

Raised Rs. 6.93 bn through Non-convertible Debenture Public Issue

- Series I.

Raised Rs. 4.59 bn through Non-convertible Debenture Public Issue

- Series II.

Net owned funds crossed Rs. 29 bn.

Gross annual income crosses Rs. 45 bn.

Bank credit limit crosses Rs. 92 bn.

Branch network crosses 3,600 branches.

2013

Raises INR 2.59 bn through Non-convertible Debenture Public Issue

- Series III.

Obtains RBI License to start operating 9,000 White Label ATMs

TRADE PROFILE

Reliance Money is carrying such as it is giving a service of online trading with less

brokerage charge, and it also having financial products such as Life Insurance, General

Insurance, Investment facility in Equity, Mutual Funds, PMS, and also it is carrying a money

transfer and money exchange and also dealing with gold coins.

PRODUCT & SERVICES:

A. TRADING PORTAL:

1. EQUITY BROKING: An equity investment generally refers to the buying and holding of shares of stock on

a stock market by individuals and firms in anticipation of income from dividends and capital

gains, as the value of the stock rises. Typically equity holders receive voting rights, meaning that

they can vote on candidates for the board of directors (shown on a proxy statement received by

the investor) as well as certain major transactions, and residual rights, meaning that they share

the company's profits, as well as recover some of the company's assets in the event that it

folds, although they generally have the lowest priority in recovering their investment.

The Equities markets offers range of investment opportunities and we at Reliance

Securities bring along with us the added advantage of our innovative products to suite your

investment profile and help you make the right decision.

Under Reliance Securities, equity broking is divided amongst eight heads called equity

financial services:

DELIVERY CASH:

The same-day settlement of a currency trade in the forex market. This means that

delivery and settlement of the transaction occur on the same date that the currency

trade is made. In order for this to occur, the forex position must be opened and closed

within the same trading day. Also referred to as "same-day settlement." Delivery Cash is

further divided into two sub heads:

DELIVERY:

DELIVERY (CNC)

DELIVERY (NRML)

TRADING INTRADAY:

Intraday Trading, also known as Day Trading, is the system where you take a position on

a stock and release that position before the end of that day's trading session. There by

making a profit for you in that buy-sell or sell-buy exercise. All in one day.

Active traders can take advantage of market movements by leveraging with our unique

products. In addition, we also provide intraday live market calls that help the customer

trade efficiently.

The Intraday Trading is further subdivided into two categories:

MARGIN INTRADAY SQUARE-OFF (MIS):

The Margin Intraday Square-off (MIS) facilitates you to take leverage in intraday

position in cash & futures. Unlike CNC, instead of blocking 100% as margin, it

only blocks a pre-specified percentage as margin. You can Buy and Sell stocks on

NSE and BSE during the trading hours. You need to square off all open positions

under MIS product before 3:20 p.m. on same trading day. MIS is a product that

offers approximately 5 times exposure in cash segment, 6.5 times in stock

futures and 10 times in index futures.

There are two additional features in the MIS that enhance your intraday buying

positions viz.

Plus Multiplier:

Plus Multiplier is a product that offers approximately 10 times exposure

in cash segment, 8 times in stock futures and 15 times in index futures.

Super Multiplier :

Super Multiplier is a product that offers approximately 10 times exposure

in cash segment, 10 times in stock futures and 18 times in index futures.

AFTER MARKET ORDERS (AMO):

A facility that gives you an option to place orders even after or before the trading hours,

using our online trading platforms. As a customer, you can place AMO in Equity (NSE

and BSE) and Derivatives (NSE) as per below timing:

Online: From 5:30 P.M. IST onwards up-to 9:14 A.M IST next trading day

Call & Trade: Daily from 8:30 A.M. IST onwards up to 9:14 A.M. IST

All accumulated orders will be sent to exchange on market open

Due to scheduled system maintenance process, AMO orders will not be accepted

between 12:00 AM (midnight) to 7:00 AM.

EXPOSER AGAINST STOCK:

This product provides trading opportunities to clients by accepting Demat shares as

collateral. The client can pledge these share positions as collateral to gain additional

margin.

We provide an intraday limit on defined set of stocks based on a certain haircut

percentage. This facility is activated for all Reliance Securities Limited (RSL) customers

except NRI. Delayed Payment Charges (DPC) will be levied on debits arising out of

positions taken against collateral.

COMPETITIVE TARIFFS:

At Reliance Securities we not only offer customized services but also offer various tariff

plans where you can pick one that best suits your profile. Some of them are as fallows:

RMAX

RFIXED

RFLEXI

DP CHARGES

OTHER CHARGES

R-MODEL PORTFOLIO:

R-Model Portfolio is a tool as well as a service which combines the power of Securities

Trading and Portfolio Allocation to invest in a portfolio of stocks created by the Reliance

Securities Research Team

2. DERIVATIVES:

A derivative is a financial instrument which derives its value from the value of underlying

entities such as an asset, index, or interest rate—it has no intrinsic value in

itself. Derivative transactions include a variety of financial contracts,

including structured debt obligations and deposits, swaps, futures, options, caps, floors,

collars, forwards, and various combinations of these. In practice, derivatives are

a contract between two parties that specify conditionsunder which payments are to be

made between the parties. A derivative includes future and options.

3. COMMODITY BROKING:

Reliance Securities also executes orders to buy or sell commodity contracts on behalf of

clients and charges them a commission.

4. OFFSHORE INVESTMENT:

Offshore investment is the keeping of money in a jurisdiction other than one's country of

residence. Offshore jurisdictions are a commonly accepted solution to reducing tax

burdens levied in most countries to both large and small scale investors alike. Offshore

investing includes investment strategies outside of an investor's home country.

Investment opportunities in money-market, bond and equity assets are available through

offshore companies.

5. DEMAT ACCOUNT:

A Demat account is an account in which the shares and securities are held electronically.

Reliance Securities offers demat services through Reliance Capital and are a registered

member with NSDL and CDSL.

1. MUTUAL FUNDS:

A Mutual Fund is a trust that pools the savings of a number of investors who share a

common financial goal. A Mutual Fund is the most suitable investment for the common

man as it offers an opportunity to invest in a diversified, professionally managed basket of

securities at a relatively low cost.

Reliance Securities Online Trading account, helps to purchase and redeem mutual fund

schemes of all major fund houses online without the hassle of filing up lengthy application

forms.

2. IPO’s:

Initial Public Offerings (IPO’s) have always been the first step towards investing. IPO

investments have seen a huge rise during last decade with Retail Investment

participation increasing to Rs. 2, 00,000.

With RSL Online Trading account investing in IPO’s is just a click away without any paper

work, It also gives you the option of investing through various banks.

It gives unique single cash feature, allows to invest in IPO’s from the same ledger

account and Allotment of Share happens in the same demat account.

3. NRI OFFERINGS:

NRI clients can place orders using the new trading platform such as Insta Express. NRI’s

can execute their securities transactions under the provisions of the RBI guidelines for

NRI Portfolio Investment Scheme (PIS).

4. NON-CONVERTIBLE DEBENTURES (NCD’s)/BONDS:

Non Convertible Debentures (NCDs) or Bonds are nothing but debt instruments issued by

a corporation. Ordinarily, a company can raise money by either issuing shares or taking a

loan. They can take a loan from a bank, financial institutions, raise money abroad, or take

a loan from the public. When they take a loan from the public - the instrument used is

called a debenture or a bond. Further, there are two types of debentures - Convertible

Debentures, and Non Convertible Debentures.

5. CORPORATE FD’s:

Corporate Fixed Deposits are Fixed Deposits placed by investors with Companies for a

fixed term carrying a prescribed rate of interest. The companies in turn use these funds to

fulfil their capital requirement from time to time. Corporate FDs are attractive investment

avenue for conservative investors who do not want to take the risk of vagaries of stock

market. Corporate FDs also offer higher interest rates than normal bank FDs.

Corporate FD is being offered by the respective Company mentioned in the list of FDs.

Reliance Securities is acting only as a Distributor.

6. RMOBILE EXPRESS:

RMobile Xpress is a smart mobile trading application that allows you to be in touch with

market anytime and anywhere during market hours. Just subscribe for the plan of your

choice and enjoy trading at your finger tips.

FEATURES OF RMOBILE XPRESS:

Place Orders anytime from anywhere.

 Access Streaming Market Watch.

 Get Intraday Charts.

 View Order Book, Trade Book, Trading Limits & Holdings, Quotes, and Market

Depth.

Check status of orders & trade reports.

View your days / net position.

FINDINGS AND INTERPRETATION

Q)Which age groupdo you belong?

Age Group No. of Persons

18-30 13

30-45 44

45-55 38

55 and Above 5

This can be shown graphically as:

18-30 30-45 45-55 55 & Above05

101520253035404550

Age Group

Age Group

From the above graph, it is clear that 13% of the respondents belong to 18-30 years

age group, 44% belong to 30-45 years age group, 38% belong to 45-55 years age

group and only 5% belong to more than 55 years age group. So we can say 26-45

year age group investors are active age group while only 5%investor belongs to

senior citizen age group.

Q) Are you an Income Tax payee?

TAX PAYEE No. of Persons

YES 86

NO 14

This can be shown graphically as:

86%

14%

Tax Payee

YESNO

From the above graph, it is clear that 86% of defense employees are tax payer while

14% of defense employees don’t pay tax as they are not eligible for it.

Q) How much is your annual income?

INCOME (in lakhs) PERCENTAGE

Below 1 13

1-3 48

3-5 21

5 and Above 18

This can be shown graphically as:

Below 1 1 to 3 3 to 5 5 and Above05

101520253035404550

Income (in lakhs)

Income

Perc

enta

ge

With the help of above graph, we can say that 13% investors have an annual

income less than 1,00,000 48% investors have an annual income between

1,00,001-3,00,000, 21% investors have an annual income between 3,00,001-

5,00,000, and 18% investors have an annual income more than 5,00,001.

So we can say majority of investors belong to middle class category and only

few percent say 21% investors belong to upper middle class,

18% investor belong to higher class category and minority of investor belong

to lower class category.

We can clearly see that highly unequal income distribution in Lucknow city.

Q) Where do you generally prefer to invest in?

INVESTMENTS PERCENTAGE

PPF 7%

Fixed Deposit 45%

Mutual Funds 18%

Real Estate 10%

Gold ETF 8%

LIC 12%

This can be shown graphically as:

PPF Fixed deposit

Mutual Funds

Reaal estate Gold ETF LIC0%5%

10%15%20%25%30%35%40%45%50%

INVESTMENTS

INVESTMENTS

From the above graph, it is clear that defense employees generally prefer to invest in

Fixed Deposits.

Q) How much percentage of your income you invest yearly?

INCOME NO. of Persons

0-20% 61

20-35% 17

35-50% 12

50% and above 10

This can be shown graphically as:

0-20 %

20-35%

35-50%

50% and Above

0 10 20 30 40 50 60 70

No. Of Persons

No. Of Persons

From the above graph, it is clear that 61 out of 100 defense employees mainly invest

0-20% of their income yearly.

Q) Which Of the following policies do you own?

POLICIES No. of Persons

Child Planning 38

Education Planning 27

Retirement Planning 19

Tax Planning 16

This can be shown graphically as:

38%

27%

19%

16%

No. Of Persons

Child PlanningEducation PlanningRetirement PlanningTax Planning

From the above graph, it is clear that 38% of defense employees prefer to invest in

child planning, 27% of them invest in education planning, 19% and 16% of them invest

in retirement and tax planning respectively.

Q) Have you taken any loan and if yes, then for what purpose?

LAON TAKEN PERCENTAGE

YES 37%

NO 63%

This can be shown graphically as:

Loan

YESNO

If yes, then for what purpose?

PURPOSE OF LOAN No. OF PERSONS

Housing Loan 18

Vehicle Loan 9

Education Loan 7

Business Loan -

Marriage Loan 3

This can be shown graphically as:

Housing loan

Vehicle Loan

Education Loan

Business loan

Marriage Loan

0

2

4

6

8

10

12

14

16

18

Purpose Loan

Purpose Loan

From the above graph, it is clearly stated that only 37% of defense employees go for

loan options. Ashousing loan is the top most priority for them. Then it is the vehicle,

education and marriage loans. The defense employees don’t like to take loan for

business purpose.

Q) For how much period you would prefer to invest?

Periods Percentage

Short Term 73%

Long Term 27%

This can be shown graphically as:

73%

27%

Percentage

Short TermLong Term

Q) What is the purpose behind investment?

Purpose Percentage

Returns 57%

Liquidity 10%

Wealth 13%

Tax savings 17%

This can be shown graphically as:

Returns

Liqudity

Waelth

Tax Savings

0% 10% 20% 30% 40% 50% 60%

57%

10%

13%

17%

Percentage

Q) Do you currently own an investment portfolio?

Currently Owned Percentage

YES 69%

NO 31%

This can be shown graphically as:

Currently Owned0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

NoYes

RESULT

It is proved that (accept) there is no significant influence of socio-economic profile on

saving, objective, return, risk, preferred investment period, internal of investment,

minimum investment level, research and type of research for investment, reinvest and

advice. According to rank wise analysis we can say that insurance is the preference for

investment.

Insurance is the present need of the investors. Second Preference of Investor is Bank

deposit and third preference is the Stock Market.As today Insurance is getting very

good response as an investment avenues, it is openingwide door for the investors as

well as for the agents and subagents who can offer variousinvestment avenues with

their concern avenues to their clients.Further, people are very much concern about

Savings, Tax saving and Liquidity. So thesefactors give them freedom of thinking

and option to invest in more than one avenue. Ithelps investor selecting

the appropriate investment avenue for asset allocation accordingto needs.

Investor can diversify its portfolio according to risk and return on investment.At last the

survey concludes with more requirement of financial advisor who

providesmore knowledge to the investors regarding various avenues.

Investment decisions are ultimately the responsibility of investors. As such, investors

need to be better supported by the enhancement of disclosure requirements,

establishment of investor’s protection measures, and investors education to strengthen

decision making skills and knowledge. For many investors, the painful experience of the

financial crisis was a wakeup call on the unparalleled importance of self-responsibility.

Responsibility credit investment requires a significant input of human resources and

physical resources, with extensive experience as a guide. The key to successful

investment lies in taking the time to nurture investment professionals with a broad

perspective and keen sensitivity to information. Investors who simply pursue large

spread will likely continue to suffer losses whenever a credit event occurs.

However, we do not intend to revert to a bygone era that tried to shield investors against

all risk in the high yield corporate bond market. After all, if risk could be avoided, there

would be no yield spread.

Conclusion and Findings

Income level of investors is an important factor, which affects portfolio of the

investors.

It is clear that 86% of defense employees are tax payer while 14% of defense

employees don’t pay tax as they are not eligible for it.

Majority of investors belong to middle class category and only few percent say

21% investors belong to upper middle class. We can also say that there is a

highly unequal income distribution in Lucknow city.

27% of investors are preferred to invest in long-term avenues where as 73% of

investors are preferred to invest in short-term avenues.

The investors decisions are driven by the economic indicators such as GDP, inflation

rate, unemployment rate, NNP, GNP, Government Policies etc. the study shows how

different factors and instruments have different risk, returns and tax considerations while

taking investment decisions and are of diverse natures. It is very difficult to come to any

definite conclusion that how a particular market instrument is doing and how they will

perform in the future, but still the study concludes to an extent that the particular

instruments or product like equity of government security has performed well in the past,

and supported with strong demands will perform well in the future.

Indian economy has grown from a position of 2 to 3% of growth rate to a position of

8.5% at present in a very less time. The economy has done immensely well and so is

the performance of the equity market, which has given a very high return to the

investors. Thus equity market is presently very booming and expected even more in the

future. The study takes a random sample of 100 prospective and existing clients that

denotes the whole population of investing community, which is limited to the extent of

accurate results. The population for the future of the investing community is that it will

give very high returns for the securities that are fundamentally strong and not by any

other means.

Thus to conclude, the study says that the Indian investment community have shown

much interest in investing different financial products available in the market due to

spiraling growth of Indian GDP, better performance by the companies, liberal rules and

regulations by the authority like SEBI to protect the investors’ interest and this process

will grow much more quicker in the future.

Scope for further research:-

The study is concluded by taking a limited number of sample sizes, which is stated

earlier. And the study reflects the perception of these investors who are residing in

Lucknow. There might be a chance that the perception of investors of different nature

are varied due to diversity in social life, living pattern, income level etc. that needs to be

studied further.

LIMITATIONS

Useful Financial insights are not easily available.

Due to time constraint sufficient research on all the investment tools is difficult.

The survey sample is not very large for analysis.

Properly convincing people to invest inproducts is challenging.

Due to recession there is liquidity crunch in the market.

There might have been tendencies among the respondents to amplify or filter their

responses under the testing conditions.

The research is confined to Lucknow and does not necessarily shows a

pattern applicable to other parts of the country.

APPENDICES

QUESTIONNAIRE

Name: ________________________________________________________________

Address:______________________________________________________________

Postal code _____________Residential Contact number: ___________________

Mobile number: ___________________________

Email id: ___________________________________________________

Annual income: _____________________________

Q1) Which age group do you belong?

a) 18 - 30 b) 30 - 45 c) 45 - 55 d) 55 & above

Q3) Are you an income tax payee?

a) Yes b) No

Q4) How much is your yearly income?

a) Below 1lakh b) 1-3lakhsc) 3-5lakh d) 5lakhs & above

Q5) Where do you generally prefer to invest in?

a) PPF b) Fixed deposit c) Mutual funds d) Real estate e) Gold ETF

f) LIC

Q6) How much % of your income you invest yearly?

a) 0-20% b) 20-35% c) 35-50% d) 50% & above

Q7) Which of the following planning policies you own?

a) Child planning b) Education planning c) Retirement planning d) Tax

planning

Q8) Have you taken any loan and if yes then for what purpose ?

a) Yes b) No

If yes then tick one or more applicable-

a) Housing loan b) Vehicle loans c) Education loan d) Business loan

e) Marriage loan

Q9) For how much period you would prefer to invest?

a) Short term (0-5yrs) b) Long term (5 & above)

Q10) What is the purpose behind investment?

a) Returns b) Liquidity c) Wealth d) Tax savings

Q11) Do you currently own an investment portfolio?

a) Yes b) no

Q12) What is the minimum investment that you have made annually

in the recent past?

a) Less than $5,000 b) $5,000 – $10,000 c) $10,000 – $15,000 d)

$15,000 – $20,000 e) $20,000 – $30,000 f) More than $30,000

Q13) Are your investments taken care of by an investment agency?

If yes then please mention the name of the agency.

Yes

No

Agency Name:_________________

Q14) Which of the following areas have you invested in so far?

Stock Market

Mutual Funds

Bonds

Real Estate

Retirement

Forex

Offshore

Gold

Options and Futures

HYIP

Thank you

( )

Date: - Signature

FINAL STATEMENT OF THE COMPANY

Profit and loss account

For the year ending March 2012 and 2013

Particulars MAR'13

(Rs. Cr.)

MAR'12

(Rs. Cr.)

Change %

Operating Income 3,838.00 3,275.00 17.19%

Net Sales 3,838.00 3,275.00 17.19%

EXPENDITURE:

Increase/Decrease in Stock 0.00 0.00 0.00%

Purchase of Shares / Units 0.00 0.00 0.00%

Employee Cost 165.00 141.00 17.02%

Operating & Establishment Expenses 73.00 58.00 25.86%

Administrations & Other Expenses 133.00 135.00 -1.48%

Provisions and Contingencies 597.00 300.00 99.00%

Expenses Capitalized 0.00 0.00 0.00%

Total Expenditure 968.00 634.00 52.68%

PBIDT (Excel OI) 2,870.00 2,641.00 8.67%

Other Income 43.00 72.00 -40.28%

Operating Profit 2,913.00 2,713.00 7.37%

Interest 2,180.00 2,066.00 5.52%

Depreciation 29.00 26.00 11.54%

Profit Before Taxation & Exceptional Items 704.00 621.00 13.37%

Exceptional Income / Expenses 0.00 0.00 0.00%

Profit Before Tax 704.00 621.00 13.37%

Provision for Tax 42.00 102.00 -58.82%

PAT 662.00 519.00 27.55%

Extraordinary Items 0.00 0.00 0.00%

Adj. to Profit After Tax 0.00 0.00 0.00%

Profit Balance B/F 1,144.00 1,972.00 -41.99%

Appropriations 1,806.00 2,491.00 -27.50%

Equity Dividend (%) 130.00 75.00 73.33%

Earnings Per Share (in Rs.) 27.02 21.18 27.55%

Book Value (in Rs.) 464.74 447.06 3.95%

Balance Sheet as on March 2012 and 2013

Particulars MAR'13

(Rs. Cr.)

MAR'12

(Rs. Cr.)

YoY

%Change

EQUITY AND LIABILITIES

Share Capital 246.00 246.00 0.00%

Share Warrants & Outstanding’s

Total Reserves 11,266.00 10,798.00 4.33%

Shareholder's Funds 11,512.00 11,044.00 4.24%

Long-Term Borrowings 0.00 0.00 0.00%

Secured Loans 10,844.00 9,560.00 13.43%

Unsecured Loans 1,558.00 1,305.00 19.39%

Deferred Tax Assets / Liabilities 6.00 -3.00 -300.00%

Other Long Term Liabilities 14.00 0.00 100.00%

Long Term Trade Payables 0.00 0.00 0.00%

Long Term Provisions 205.00 167.00 22.75%

Total Non-Current Liabilities 12,627.00 11,029.00 14.49%

Current Liabilities

Trade Payables 1.00 7.00 -85.71%

Other Current Liabilities 5,171.00 4,583.00 12.83%

Short Term Borrowings 4,190.00 3,453.00 21.34%

Short Term Provisions 231.00 206.00 12.14%

Total Current Liabilities 9,593.00 8,249.00 16.29%

Total Liabilities 33,732.00 30,322.00 11.25%

ASSETS

Non-Current Assets 0.00 0.00 0.00%

LOANS 238.00 199.00 19.60%

Gross Block 274.00 265.00 3.40%

Less: Accumulated Depreciation 123.00 102.00 20.59%

Less: Impairment of Assets 0.00 0.00 0.00%

Net Block 151.00 163.00 -7.36%

Lease Adjustment A/c 0.00 0.00 0.00%

Capital Work in Progress 0.00 0.00 0.00%

Intangible assets under development 3.00 0.00 100.00%

Pre-operative Expenses pending 0.00 0.00 0.00%

Assets in transit 0.00 0.00 0.00%

Non-Current Investments 13,309.00 13,225.00 0.64%

Long Term Loans & Advances 10,107.00 8,622.00 17.22%

Other Non-Current Assets 1,248.00 925.00 34.92%

Total Non-Current Assets 25,056.00 23,134.00 8.31%

Current Assets Loans & Advances

Currents Investments 366.00 600.00 -39.00%

Inventories 0.00 0.00 0.00%

Sundry Debtors 0.00 193.00 -100.00%

Cash and Bank 745.00 436.00 70.87%

Other Current Assets 431.00 475.00 -9.26%

Short Term Loans and Advances 7,009.00 5,394.00 29.94%

Total Current Assets 8,551.00 7,098.00 20.47%

Net Current Assets (Including Current

Investments)

-1,042.00 -1,151.00 -9.47%

Total Current Assets Excluding Current

Investments

8,185.00 6,498.00 25.96%

Miscellaneous Expenses not written off 125.00 90.00 38.89%

Total Assets 33,732.00 30,322.00 11.25%

Contingent Liabilities 1,301.00 1,005.00 29.45%

Total Debt 20,833.00 18,260.00 14.09%

Book Value (in Rs.) 464.73 447.06 3.95%

Adjusted Book Value (in Rs.) 464.73 447.06 3.95%

BIBLIOGAPHY

Websites

1. www.nseindia.com

2. www.bseindia.com

3. www.sebi.com

4. www.investmetnz.com

5. www.google.com