Faqs On Rif

FAQs on Reliance Infrastructure Fund 1. What is Reliance Infrastructure Fund? Reliance Infrastructure Fund is an Open ended equity scheme. The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related instruments of companies engaged in infrastructure and infrastructure related sectors and which are incorporated or have their area of primary activity, in India and the secondary objective is to generate consistent returns by investing in debt and money market securities.

2. In a nutshell what does the fund intend to do? The investment focus would be guided by the growth potential and other economic factors of the country. The Fund aims to maximize long term total return by investing in equity and equityrelated securities which have their area of primary activity in India A) The Fund intends to invest in (i) Companies in sectors related to infrastructure; (ii) Companies operating and listed in India engaged in Infrastructure Sector and (iii) In diversified companies, where a major portion of their revenues (primary activity) is derived from the infrastructure related activities. Investment in overseas securities shall be made in accordance with the requirements stipulated by SEBI and RBI from time to time. B) Following areas/sectors of the economy listed below are covered in infrastructure sector; 1. Airports 2. Banks, Financial Institutions & Term lending Institutions 3. Cement & Cement Products 4. Coal 5. Construction 6. Electrical & Electronic components 7. Engineering 8. Energy including Coal, Oil & Gas, Petroleum & Pipelines 9. Industrial Capital Goods & Products 10. Metals & Minerals 11. Ports 12. Power and Power equipment 13. Road & Railway initiatives 14. Telecommunication 15. Transportation 16. Urban Infrastructure including Housing & Commercial Infrastructure PMG/RIF/ver1.0/25th May 09

17. Mining, 18. Aluminum Please note that the list provided is indicative and the Investment Manager may add such other sectors/ group of industries which broadly satisfy the category of being under Infrastructure Sector or are related to the Infrastructure growth, depending on the relevance of that sector to the investment objective of the scheme.

3. What will be the Asset allocation of Reliance Infrastructure Fund? Under normal circumstances, the anticipated asset allocation would be:

Instruments Equities and equity related securities including derivatives engaged in infrastructure sectors and infrastructure related sectors # Debt and Money market securities** (including investments in securitised debt) ** including securitised debt upto 30%

Indicative asset allocation (% of total assets) Minimum Maximum

Risk Profile

65%

100%

Medium to High

0%

35%

Low to Medium

Atleast 65% of investment would be made in equity /equity related securities of companies engaged in infrastructure sectors and infrastructure related sectors. If the Fund Manager decides to invest in ADRs / GDRs issued by Indian / foreign companies and in foreign Securities in accordance with SEBI Regulations in the Scheme, it is the intention of the Fund Manager that such investments will not normally exceed 20% of the net assets of the Scheme. #“An overall limit of 100 % of the portfolio value has been introduced for the purpose of equity derivatives in the scheme. The margin money requirement for the purpose of derivative exposure will be as per the SEBI Regulations. The derivate exposure will be restricted to such limit so that the scheme does not leverage upon margin requirements.” The Scheme may take derivatives position based on the opportunities available subject to the guidelines issued by SEBI from time to time and in line with the overall investment objective of the Scheme. These may be taken to hedge the portfolio, rebalance the same or to undertake any other strategy as permitted under the SEBI Regulations. The fund will also invest in Pre IPO Placement, lock-in non transferable securities and upto 5% or max permissible limit in Unlisted Securities. The above Asset Allocation Pattern is only indicative. The investment manager in line with the investment objective may alter the above pattern for short term and on defensive consideration.

4. Is it a sector specific fund or diversified equity fund? Reliance Infrastructure Fund has a broader theme of investment in a number of sub sectors such as Power and Power equipment, ports, engineering, Industrial capital goods and others sectors. PMG/RIF/ver1.0/25th May 09

Therefore though it is termed as a open ended equity scheme, it’s objective it to diversify investments across various sub sectors of infrastructure sector.

5. What will be the benchmark of Reliance Infrastructure Fund? BSE 100

6. What will be the tax treatment for investors in this Scheme? This is an equity scheme and will qualify for all tax benefits that any normal equity fund enjoys. Capital Gains Applicability

Long Term Capital Gains (LTCG)

If the investments are made for a period of more than 12 months

Applicable Tax Rate

Short Term Capital Gain (STCG) If the investments are made for a period of less than or equal to 12

NIL

months 15%+surcharge+cess*

*surcharge: 10% (In

case of non-corporate unit holders excluding fi rms, where the total income exceeds Rs. 10,00,000. In the case of firms and corporate unit holders, surcharge is applicable where the total income exceeds Rs. 1,00,00,000.), education cess- 3% (2 per cent by way of Education Cess and 1 per cent by way of Secondary and Higher Education Cess)

7. WHY should one invest in an Equity Scheme offered by Reliance Mutual Fund? ‰ Experienced Fund Management Team ‰ Research Capabilities and robust Risk Management System ‰ Expertise Equities fund management for over a decade ‰ Range of equity funds on offer with a variety of Sectoral funds and Diversified funds

8. What is the investment philosophy of Reliance Mutual Fund Schemes? ‰ Following combination of Bottom up and Top down approach in stock selection ‰ Focus on proper asset allocation with well diversified portfolio in terms of the provisions of the offer document of the respective scheme. ‰ Portfolio management through o

Disciplined approach to selling

o

Using debt as an effective tool

o

Systematic use of Derivatives

9. What is the minimum application amount? Retail Plan: Rs. 5000 and in multiples of Re.1 thereafter Institutional Plan: Rs. 5 crore and in multiples of Re.1 thereafter

PMG/RIF/ver1.0/25th May 09

10. What is the minimum additional investment amount? Retail Plan: Rs. 1,000 (plus in the multiple of Re.1) Institutional Plan: Rs. 1, 00,000 (plus in the multiple of Re.1)

11. Is there any facility of SIP during the New Fund Offer (NFO)? Yes, SIP is available only in Retail Plan during NFO & subsequently as well. Monthly SIP: ƒ

Minimum 60 installments of Rs. 100/- per month and in multiples of Re. 1 thereafter or,

ƒ

Minimum 12 installments of Rs. 500/- per month and in multiples of Re. 1 thereafter or,

ƒ

Minimum 6 installments of Rs. 1000/- per month and in multiples of Re. 1 thereafter

Quarterly SIP ƒ

Minimum 12 installments of Rs. 500/- per quarter and in multiples of Re. 1 thereafter or,

ƒ

Minimum 4 installments of Rs. 1500/- per quarter and in multiples of Re. 1 thereafter

During NFO, the SIPs will be accepted only through Direct Electronic Debit to the investor’s bank account of HDFC bank and Axis Bank only.

12. What are the applicable loads during and after the NFO? During the New Fund Offer (NFO) Period & Continuous Offer Period including SIP Installments following load structure is applicable.

For Retail Plan Entry Load •

For subscription below Rs. 2 Crs - 2.25%

•

For subscription of Rs 2 Crs & above and below Rs 5 Crs - 1.25%

•

For subscription of Rs 5 Crs and above- Nil

Exit Load: For subscriptions of less than Rs 5 Crs per purchase transactions •

1% if redeemed/switched on or before completion of 1 year from the date of allotment

•

Nil if redeemed/switched after completion of 1 year from the date of allotment

For subscriptions of more than Rs 5 Crs - nil

For Institutional Plan •

Entry Load: Nil

•

Exit Load: Nil

Pursuant to SEBI Circular No. SEBI/IMD/CIR No. 10/112153/07 dated December 31, 2007, with effect from January 4, 2008, no entry load shall be charged in respect of direct applications received by Reliance Mutual Fund (RMF) i.e. applications received through internet or submitted to the AMC or any designated collection centre/Investor Service Centre of RMF that are not routed through any distributor/agent/broker.

PMG/RIF/ver1.0/25th May 09

Pursuant to SEBI circular No. SEBI/IMD/CIR No. 14/120784/08 dated March 18, 2008, with effect from April 1, 2008, no entry load or exit load shall be charged in respect of bonus units and of units allotted on reinvestment of dividend.

13. What are the plans available under the scheme? The scheme will have the following plans /options ‰ Retail Plan ‰ Institutional Plan Each of the above plans will have Growth & Dividend Plans respectively as specified below ‰ Growth Plan: Growth Option & Bonus Option ‰ Dividend Plan: Dividend Payout Option & Dividend Reinvestment Option

14. Why should one invest in this NFO at Rs 10 whereas the existing ones are available at a discount? Even if the existing ones are available at discount and Reliance Infrastructure Fund is available at Rs 10, it does not matter. What matters is actual appreciation in the NAV irrespective of the base NAV at which one enters. This means even if you enter at Rs 10 or Rs 8, if the % increase in the NAV happens to be the same under both the scenarios, it does not matter.

For ex. If an existing infrastructure fund ‘A’ has NAV of Rs 5 and Reliance Infrastructure Fund is issued at Rs 10 per unit, assume same portfolio in both the funds and Investor invests Rs. 1000/-, He will be allocated 200 Units of fund ‘A’ and 100 Units of Reliance Infrastructure Fund. One year down the line lets assume both the funds have appreciated by 20% , the respective NAVs would be Rs 6 for Fund ‘A’ and Rs. 12 for Reliance Infrastructure Fund. The total value of the investment will be same i.e Rs 1200 (Rs 12 X 100 Units = Rs 1200; Rs. 6 X 200 Units = Rs 1200) Sponsor: Reliance Capital Limited. Trustee: Reliance Capital Trustee Co. Limited. Investment Manager: Reliance Capital Asset Management Limited. Statutory Details: The Sponsor, the Trustee and the Investment Manager are incorporated under the Companies Act 1956.

Reliance Infrastructure Fund (An open ended Equity Scheme): The primary investment objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related instruments of companies engaged in infrastructure and infrastructure related sectors and which are incorporated or have their area of primary activity, in India and the secondary objective is to generate consistent returns by investing in debt and money market securities. Terms of Issue: The Units are available at Rs. 10/- per unit plus applicable load during the New Fund Offer Period and thereafter at applicable NAV based prices. The Scheme will offer for subscription/switch-in & redemption/switch-out of units on every Business Day on an ongoing basis commencing not later than 30 days from the closure of New Fund Offer Period. The AMC will calculate and disclose the first NAV not later than 30 days from the closure of the New Fund Offer Period. Subsequently, the NAV will be calculated and disclosed at the close of every working day which shall be published in at least in two daily newspapers and also uploaded on AMFI site i.e. www.amfiindia.com and Reliance Mutual Fund website i.e. www.reliancemutual.com. Scheme Specific Risk factors: The scheme carries risk associated with investing in equities, bonds, foreign securities, derivatives, securitized debt, short selling and securities lending. Trading volumes and settlement periods may restrict liquidity in equity and debt investments. Investment in Debt is subject to price, credit, and interest rate risk. The NAV of the Scheme may be affected, inter alia, by changes in the market conditions, interest rates, trading volumes, settlement periods and transfer procedures. The NAV may also be subjected to risk associated with investment in derivatives, foreign securities or script lending as may be permissible by the Scheme Information Document. General Risk Factors: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the Units

PMG/RIF/ver1.0/25th May 09

issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. Reliance Infrastructure Fund is only the name of the Scheme and does not in any manner indicate either the quality of the Scheme; it's future prospects or returns. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond their initial contribution of Rs.1 lakh towards the setting up of the Mutual Fund and such other accretions and additions to the corpus. The Mutual Fund is not guaranteeing or assuring any dividend. The Mutual Fund is also not assuring that it will make periodical dividend distributions, though it has every intention of doing so. All dividend distributions are subject to the availability of the distributable surplus in the Scheme. For details of scheme features apart from those mentioned above and scheme specific risk factors, please refer to the provisions of the Scheme Information Document. Scheme Information Document and KIM cum application form is available at all the DISCs/ Distributors of RMF/www.reliancemutual.com. MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISK, PLEASE READ THE SCHEME INFORMATION DOCUMENT & STATEMENT OF ADDITIONAL INFORMATION CAREFULLY BEFORE INVESTING.

PMG/RIF/ver1.0/25th May 09