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					                                                                                                 OFFER DOCUMENT



                                                                        SBI MUTUAL FUND
                                                                     INVITES SUBSCRIPTIONS TO




                                                            MAGNUM MONTHLY INCOME PLAN*
                                                             (*The scheme does not assure any income and distribution of
                                                             dividends under the scheme shall depend on the availability of
                                                                                  adequate income)


                                                                        An Open-ended Income Scheme

                                                                     Initial Issue of Magnums of face value of
                                                                            Rs. 10 /- each for cash at par




                                                                    Scheme open for 30 days from 22.02. 2001
                                                                                    to 23.03.2001.


                                                                     Scheme reopens for continuous sale and
                                                                            repurchase from 23.04.2001




                                                             APPLICATION FORMS ARE AVAILABLE WITH SBIMF AGENTS,
                                                             STOCK EXCHANGE BROKERS, AUTHORIZED BRANCHES OF
                                                             SBI AND SBIMF INVESTOR SERVICE CENTRES & SBIMF
                                                             CORPORATE OFFICE AND ARE AVAILABLE FOR DOWNLOAD
                                                             AT www.sbimf.com

                                                            “This offer document sets forth information about the scheme
                                                            that a prospective investor ought to know before investing.
                                                            The scheme particulars have been prepared in accordance
                                                            with the Securities and Exchange Board of India (Mutual
                                                            Funds) Regulations, 1996, as amended till date, and filed with
                                                            SEBI. The units being offered for public subscription have not
                                                            been approved or disapproved by the SEBI nor has the SEBI
                                                            certified the accuracy or adequacy of the offer document.
                                                            The investors are required to read the terms of offer carefully
                                                            before investing. The offer document should be retained by
                                                            the investors for future reference. The offer document shall
                                                            remain effective till a material change (other than a change in
                                                            the fundamental attributes and within the purview of the offer
            Principal Trustee : State Bank of India,        document) occurs and thereafter the changes shall be filed
Assets Management Company : SBI Funds Management Limited,
     191, Maker Tower “E”, Cuffe Parade, Mumbai 400 005
                                                            with SEBI and circulated to the Magnumholders.”
                        www.sbimf.com
MAGNUM MONTHLY INCOME PLAN

                                                                        I. CONTENTS

I.      CONTENTS ------------------------------------------------------------------------------------------------------------------------------------   2

II.     DEFINITIONS AND EXPLANATIONS OF TERMS USED --------------------------------------------------------------------------                           3

III.    RISK FACTORS -------------------------------------------------------------------------------------------------------------------------------    4

IV.     HIGHLIGHTS OF THE SCHEME ---------------------------------------------------------------------------------------------------------              5

V.      DUE DILIGENCE CERTIFICATE ----------------------------------------------------------------------------------------------------------            6

VI.     EXPENSES ------------------------------------------------------------------------------------------------------------------------------------   7

VII.    CONDENSED FINANCIAL INFORMATION --------------------------------------------------------------------------------------------                    10

VIII.   CONSTITUTION OF THE MUTUAL FUND --------------------------------------------------------------------------------------------                    14

IX.     INVESTMENT OBJECTIVES & POLICIES ----------------------------------------------------------------------------------------------                 16

X.      MANAGEMENT OF THE FUND ------------------------------------------------------------------------------------------------------- ---              20

XI.     UNITS AND OFFER --------------------------------------------------------------------------------------------------------------------------      23

XII.    SALE OF UNITS -------------------------------------------------------------------------------------------------------------- ----------------   24

XIII.   DIVIDEND AND DISTRIBUTIONS -------------------------------------------------------------------------------------------------------              26

XIV.    INTER-SCHEME TRANSFERS ------------------------------------------------------------------------------------------------------------             26

XV.     ASSOCIATE TRANSACTIONS ------------------------------------------------------------------------------------------------------------             27

XVI.    BORROWING BY THE MUTUAL FUND ------------------------------------------------------------------------------------------------                   27

XVII.   NAV AND VALUATION OF ASSETS OF THE SCHEME ----------------------------------------------------------------------------                          28

XVIII. REDEMPTION AND REPURCHASE -----------------------------------------------------------------------------------------------------                  30

XIX.    ACCOUNTING POLICIES -------------------------------------------------------------------------------------------------------------------         32

XX.     TAX TREATMENT OF INVESTMENTS IN MUTUAL FUNDS ---------------------------------------------------------------------                              32

XXI.    INVESTORS’ RIGHTS AND SERVICES -------------------------------------------------------------------------------------------------                33

XXII. INVESTOR GRIEVANCES REDRESSAL MECHANISM -----------------------------------------------------------------------------                             35


XXIII. PENDING LEGAL PROCEEDINGS AND OTHER INFORMATION ----------------------------------------------------------------                                 35




                                                                                   2
MAGNUM MONTHLY INCOME PLAN

                            II. DEFINITIONS AND EXPLANATIONS OF TERMS USED
The AMC                 :   The Asset Management Company; refers to “SBI Funds Management Ltd. (SBIFM)”, a wholly owned
                            subsidiary formed by State Bank of India which manages the assets of investors in various schemes of
                            SBI Mutual Fund.
AMC Fees                :   Investment management & advisory fees charged by the AMC to the scheme as disclosed in the section
                            on “Expenses” in the offer document.
The Associate           :   A transaction that involves associate companies with SBI Mutual fund.
Transaction
The Auditors            :   The statutory auditors to the scheme whose appointment is approved by the board of trustees of SBI
                            Mutual Fund. This is disclosed under the section “Management of the Fund” in the Offer Document.
The Custodians          :   The custodians to the scheme whose appointment is approved by the board of trustees of SBI Mutual
                            Fund. This is disclosed under the section “Management of the Fund” in the Offer Document.
Contingent Deferred     :   CDSC a charge imposed when the Magnums are redeemed within the first four years of Unit ownership.
Sales Charge (CDSC)         Under the SEBI Regulations, the Fund can charge CDSC to Magnumholders exiting from the scheme
                            within 4 years of entry. SEBI Regulations mandate the maximum amount that can be charged in each
                            year.
Date of Application     :   The date of receipt of a valid application complete in all respects for issue or repurchase (depending
                            upon the context) of Magnums of the scheme by the Registrars.
The Fund                :   SBI Mutual Fund (SBIMF); constituted as a Trust with SBI as the Principal Trustee, to mobilize savings
                            from a wide cross-section of people and to provide them attractive returns, security and liquidity
                            through investments in capital & money markets.
ISCs                    :   Investor Service Centers opened by SBI Mutual Fund at various locations in India, listed in the section
                            “Investors’ Rights & Services” in the Offer Document.
Magnum                  :   One undivided unit issued under the scheme by SBI Mutual Fund.
Magnum Holder           :   Any eligible applicant who has been allotted and holds a valid Magnum in his/her/its name.
NAV                     :   The Net Asset Value of one Magnum of the scheme.
NAV related price       :   The Repurchase Price and the Sale Price are calculated on the basis of NAV and are known as NAV
                            related prices. The repurchase price is calculated by deducting the exit load factor (if any) from the
                            NAV and the sale price is calculated by adding the entry load factor (if any) to NAV.
NRI                     :   An Indian will be treated as a non-resident in any previous year if he fulfills any of the following two
                            conditions: (a) he/she has not resided in India in that year for period or periods amounting in all to 182
                            days or more, or (b) Having within the four years preceding that year has not resided in India for a
                            period or periods amounting in all to 365 days or more, and has not resided in India for 60 days or
                            more in that year.
NSE MIBOR               :   NSE MIBOR is an acronym for National Stock Exchange (NSE) Mumbai Inter Bank Offer Rate. This rate
                            is computed by NSE on basis of indication by various market participants and published daily.
The Offer               :   The issue of Magnums of the scheme as per the terms contained in this Offer Document.
Offer Document          :   This document issued by SBI Mutual Fund, containing the terms of offering Magnums of the scheme of
                            SBI Mutual Fund for subscription as per the terms contained herein.
The Principal Trustee   :   State Bank of India
RBI                     :   Reserve Bank of India, established under Reserve Bank of India Act, 1934.
The Registrars          :   The registrars and transfer agents to the scheme whose appointment is approved by the board of
                            trustees of SBI Mutual Fund. This is disclosed under the section “Management of the Fund” in the Offer
                            Document.
SBI                     :   State Bank of India, having its Corporate Office at State Bank Bhavan, Madame Cama Road, Mumbai -
                            400 021. Also referred to as the Sponsor or the Settler or the Principal Trustee.
SBIMF                   :   SBI Mutual Fund (see “the Fund”)
SBIFM                   :   SBI Funds Management Ltd. (see “the AMC”)
Scheme                  :   Magnum Monthly Income Plan of SBI Mutual Fund.
SEBI                    :   Securities and Exchange Board of India established under Securities and Exchange Board of India Act,
                            1992.
SEBI Regulations        :   Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 for the time being in force
                            and as amended from time to time.




                                                                 3
MAGNUM MONTHLY INCOME PLAN

 The Settler                :    State Bank of India
 The Sponsor                :    State Bank of India, having its Corporate Office at State Bank Bhavan, Madame Cama Road, Mumbai - 400
                                 021, which has made an initial contribution of Rs. 5 lacs towards the trust fund and has appointed a Board
                                 of Trustees to supervise the activities of the Fund.
 Switchover                 :    Simultaneous application by a Magnum holder for repurchase of Magnums under one scheme (or a plan
                                 under the scheme) of SBI Mutual Fund and, through the repurchase proceeds, for the purchase of fresh/
                                 additional Magnums under another scheme (or another plan under the same scheme) of SBI Mutual Fund
                                 which is open for issue at the time.
 The Trustees               :    The Principal Trustee, i.e., State Bank of India, and one or more member(s) of the Board of Trustees
                                 appointed by SBI to supervise the activities of the Fund as disclosed in the section “Constitution of the
                                 Mutual Fund” in the Offer Document.
 Unit Capital               :    The aggregate face value of the Magnums issued and outstanding under the scheme.



                                                           III. RISK FACTORS

1. Standard Risk Factors
(a)   Mutual funds and securities investments are subject to market risks and there is no assurance or guarantee that the Fund’s objective
      will be achieved.
(b)   As with any investment in securities, the NAV of the units issued under the scheme can go up or down depending on the factors and
      forces affecting the capital markets.
(c)   Past performance of the Sponsor / AMC / Mutual Fund does not guarantee the future performance of the schemes of the Mutual Fund.
(d)   Magnum Monthly Income Plan (MMIP) is only the name of the scheme and does not, in any manner, indicate either the quality of the
      scheme or its future prospects and returns.
(e)   State Bank of India, the sponsor, is not responsible or liable for any loss resulting from the operation of the scheme beyond the initial
      contribution made by it of an amount of Rs. 5 lacs. towards setting up of the mutual fund.
(f)   SEBI has appointed an adjudicating officer to enquire into alleged violation by SBI Funds management Ltd., of the time frame of six
      weeks from date of closure of initial subscription list, prescribed for the dispatch of account statements, in respect of two close ended
      schemes viz. MMIS ‘98(I) and MMIS ‘98(II). We have represented the reasons for the delay in despatch of the unit certificates with the
      Adjudicating Officer.

2. Scheme-Specific Risk Factors
a.    Magnum Monthly Income Plan will be investing in debt instruments (including securitized debt), Government Securities and money
      market instruments (such as call money market, term/notice money market, repos, reverse repos and any alternative to the call money
      market as may be directed by the RBI) as also equity & equity related instruments. The liquidity of the scheme’s investments is
      inherently restricted by trading volumes and settlement periods. In the event of an inordinately large number of redemption requests,
      or of a restructuring of the scheme’s investment portfolio, these periods may become significant.
b.    The Mutual Fund is not assuring that it will make monthly or quarterly or annual dividend distributions. All dividend distributions are
      subject to the availability of distributable surplus.
c.    Investments under the scheme may also be subject to the following risks:
      i)     Credit risk: Credit risk is risk resulting from uncertainty in a counterparty’s ability or willingness to meet its contractual
             obligations. This risk pertains to the risk of default of payment of principal and interest. Government Securities have zero credit
             risk while other debt instruments are rated according to the issuers ability to meet the obligations.
      ii)    Liquidity Risk pertains to how saleable a security is in the market. If a particular security does not have a market at the time of
             sale, then the scheme may have to bear an impact depending on its exposure to that particular security.
      iii)    Interest Rate risk is associated with movements in interest rate, which depend on various factors such as government borrowing,
             inflation, economic performance etc. The value of investments will appreciate/depreciate if the interest rates fall/rise.
      iv)    Equity and equity related risk: Equity instruments carry both company specific and market risks and hence no assurance of
             returns can be made for these investments.
      v)     Derivative risks: The derivatives will entail a counter-party risk to the extent of amount that can become due from the party. The
             cost of hedge can be higher than adverse impact of market movements. An exposure to derivatives in excess of the hedging
             requirements can lead to losses. An exposure to derivatives can also limit the profits from a genuine investment transaction.
             Efficiency of a derivatives market depends on the development of a liquid and efficient market for underlying securities and
             also on the suitable and acceptable benchmarks.
      vi)    Reinvestment risk: This risk arises from uncertainty in the rate at which cash flows from an investment may be reinvested. This
             is because the bond will pay coupons, which will have to be reinvested. The rate at which the coupons will be reinvested will
             depend upon prevailing market rates at the time the coupons are received.


                                                                        4
MAGNUM MONTHLY INCOME PLAN

                                                 IV. HIGHLIGHTS OF THE SCHEME
1.    Scheme Type and Objective
      MMIP is an open-end debt scheme.
      The objective of the scheme is to provide regular income, liquidity and attractive returns to the investors through an actively
      managed portfolio of debt, equity and money market instruments.
2.    Choice of 2 Investment Plans
      (a)      Dividend Plan: Offers regular income through Monthly or Quarterly or Annual Dividend options. Option to reinvest dividend
               available.
      (b)      Growth Plan: Offers growth along with long-term capital gains tax benefits but declares no dividend.
      (c)      The Growth Plan and all options under Dividend Plan will declare separate daily NAVs.
3.    The initial offer period will be from 22.02.2001 to 23.03.2001. The scheme will reopen for sale/repurchase on a continuous basis from
      23.04.2001.
4.    Minimum investment amount The minimum amount of application will be Rs. 10,000/- and in multiples of Rs.500/- thereafter. Units
      will be issued at Rs. 10 during the initial offer period. On reopening, units will be issued at NAV related prices.
5.    Dividend Payments Through ECS / Direct Credit / Dividend Warrants
      The Mutual Fund intends to make dividend payments by ECS using the RBI Electronic Clearing Service (ECS) at certain centers,
      through direct credit to the magnumholders’ bank account in designated banks or through dividend warrants mailed to the investors.
6.    Investment Policy
      The broad investment pattern will be the same for all the options. The funds collected under the scheme shall generally be invested
      consistent with the objective of the scheme. The investment pattern of the scheme will be as follows:
            Instrument                                      % of portfolio                                Risk Profile

            Equity and related instruments                  Not more than 15%                             Medium to High

            Debt instruments                                Not less than 85%                             Low to Medium
            (including securitised debt),
            Govt. Securities and Money
            market instruments

            Securitized Debt                                Not more than 10% of                          Medium to High
                                                            investments in debt instruments

      SBI Mutual has an established track record in managing debt and equity schemes through its family of funds as also various Monthly
      Income Schemes (close-end) in the past.
7.    Repurchase
      Full/Partial repurchase permitted once the scheme goes open-end. Minimum amount under partial repurchase is Rs. 500/- or 50
      Magnums whichever is lower per application. Repurchase will be at NAV based prices.
8.    Load Structure
      For repurchases within the first six months of investment, an exit load of 0.5% will be charged on the NAV. SBI Mutual Fund reserves
      the right to revise the entry and exit load structure within the regulatory limits from a prospective date. Such changes in the load
      structure will be applicable only to prospective investors.
9.    Liquidity
      This scheme offers easy issue and repurchase at NAV related prices on an on-going basis.
10.   Transparency
      Full portfolio disclosure every quarter.
      NAV will be calculated on a prospective basis and announced every business day.




                                                                      5
MAGNUM MONTHLY INCOME PLAN

11.    Tax Benefits
       (a)    Tax benefits to the unit holders: The tax benefits that will be available to the scheme’s investors will be as per the prevailing
              laws thus:
             i.     Income from Mutual Fund remains fully exempt from tax in the hands of investors.
             ii.    Tax benefit is available under sections 48 & 112 on capital gains for resident Indians. The Magnumholders will have the
                    option to pay the long term capital gains tax @ 10% (plus applicable surcharge) without the cost inflation index benefit
                    or @ 20% (plus applicable surcharge) with the cost inflation index benefit, whichever is more beneficial.
             iii.   Magnums held under this scheme will not be liable to wealth tax and gift tax.
       (b)    Tax benefits to the Mutual Fund: The entire income of the Mutual Fund is exempt from income tax under section 10 (23D) of
              the Act. The fund will, however, have to pay tax @ 20% (plus applicable surcharge) on the dividends distributed by it.
              These tax exemptions will strictly be governed by the relevant provisions under the existing tax laws and are subject to change
              as and when relative tax laws are changed.
12.    Systematic Investment Plan (SIP): SIP is also available for the investors to invest a certain sum of money at regular intervals. SIP is
       available under both the Plans at the prevailing NAV related price. This facility is available only after the Schemes re-opens for
       continuous sale/repurchase. This facility is available only at the ISC centres.
13.    Systematic Withdrawal Plan (SWP): SWP is available under the Growth Plan only. A minimum of Rs. 500 can be withdrawn every
       month or quarter through repurchase of units.
14.    Automatic Withdrawal Facility (AWF): AWF is available under the Dividend Plan (Monthly option) for investments of Rs. 100,000 &
       above. Under this facility, investors can exercise the option at the time of application, to withdraw 1% of their outstanding capital
       through repurchase of units during months where there is no income distribution, subject to minimum balance requirements.
       Switchover Facility: Investors have the facility to switchover between the Options/Plans at NAV related prices. Also, switchover
       facility at NAV related prices to other open-end schemes of SBI Mutual Fund is available. This facility of switchover to other schemes
       is not available to NRIs, FIIs, and OCBs.




                                                  V. DUE DILIGENCE CERTIFICATE

It is confirmed that :

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

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

III.   The disclosures made in the offer document are true, fair and adequate to enable the investors to make a well informed decision
       regarding investment in the proposed scheme;

IV.    All the intermediaries named in the offer document are registered with SEBI and till date such registration is valid.




                                                                              Signature     :
                                                                              Name          :     Niamatullah
                                                                                                  Managing Director
                                                                                                  SBI Funds Management Limited
                                                                                                  (seal)
Date : 25 January 2001
Place : Mumbai.




                                                                        6
MAGNUM MONTHLY INCOME PLAN

                                                                             Fund will also endeavour to keep the investors informed through
                        VI. EXPENSES                                         the following measures:
                                                                             i)       An addendum detailing the changes will be attached to the
1. Magnum holder transaction expenses or Sales Load
                                                                                      offer documents and abridged offer documents. The
The following table illustrates the expenses that the investors will                  addendum will also be available with the distributors/brokers
incur on their purchases/ sales of Magnums under this scheme:                         and will also be sent alongwith the newsletter sent to the
                                                                                      magnumholders immediately after the changes.
            Nature of expense             Maximum Charge
                                                                             ii)      The Mutual Fund will display the changes/modifications in
                     Applicable to all the Plans                                      the offer document in the form of a notice at all ISCs and
                                                                                      distributors/brokers office.
   Maximum sales load imposed
    on purchases of Magnums                                                  iii)     The introduction of the exit load/CDSC alongwith the details
                                                                                      will be stamped in the acknowledgement slip issued to the
        l    At Initial Offer                      —                                  investors on submission of the application form and will also
        l    For on-going basis                  2.00%                                be disclosed in the statement of accounts issued after the
                                                                                      introduction of such load/CDSC.
    Sales load if any on issue of                                            iv)      Any other measures which the Mutual Fund considers
    Magnums in lieu of dividends             Not applicable                           necessary in the interest of the magnumholders.

  Contingent Deferred Sales Load        Applicable to all Plans:             All loads including CDSC are intended to enable the AMC to recover
                                                                             expenses incurred for promotion or distribution and sales (including
              (CDSC)                         Year 1 : 4%                     agents’ commission) of the schemes. All loads including CDSC for
                                             Year 2 : 3%                     each scheme shall be maintained in separate accounts and may be
                                             Year 3 : 2%                     utilized towards meeting the selling and distribution expenses. Any
                                             Year 4 : 1%                     surplus in these accounts may be credited to the scheme, whenever
                                                                             felt appropriate by the AMC.
 Redemption / Repurchase load                    3.00%                       In accordance with SEBI Regulations, the repurchase price will not
             Switchover load                                                 be lower than 93% of the NAV and the sale price will not be higher
                                                                             than 107% of the NAV, and the difference between sale price and
        l    Interscheme switches                2.00%                       repurchase price shall not exceed 7% of the sale price.
        l    Intrasheme switches                 2.00%                       2. Initial Issue Expenses
Contingent Deferred Sales Charge (CDSC): Under the Regulations,
the Fund can charge CDSC to magnumholders exiting from the                   (a) Present scheme
scheme within 4 years of entry. The AMC reserves the right to                The initial issue expenses charged to the scheme will be up to 6%
charge CDSC in case of switchovers. Under the scheme, the Mutual             of the corpus collected and the rest will be borne by the AMC. For
Fund reserves the right to change the CDSC structure if it so deems          the information of the investors, the initial issue expenses are
fit in the interest of smooth and efficient functioning of the Fund.         estimated on a target amount of Rs. 25 crores and would
Should the Mutual Fund on any date, decide to change the CDSC                approximately be 5.94% of the resources mobilized. The details
structure, investments made by Magnumholders prior to such date              are as follows:
will attract the CDSC prior to the change of such CDSC. Should the
Mutual Fund on any date, decide to introduce a CDSC structure,                    Category of Expense                   % of Initial Collection
such a structure will be applicable to prospective investors only.                                                    (not including entry load)
Repurchases within the first 6 months of investment will attract and              Advertisement                                 4.00%
exit load of 0.5% on the NAV
                                                                                  Brokerage Fees & Commission                   0.80%
The AMC reserves the right to introduce a load structure, levy a
different load structure or remove the load structure for any of the              Registrars expenses                           0.02%
Plans within the Fund. Sales load, the repurchase, the load and / or
switchover load may be increased or decreased by the AMC, within                  Printing & Marketing expenses                 0.50%
the overall ceiling of 2.00% of NAV in case of sales load & switchover
                                                                                  Postage and
load and 3.00% of NAV in case of repurchase load, at any time
after giving notice to that effect to the investors through an                    Miscellaneous expenses                        0.62%
advertisement in an English language daily that circulates all over               Total                                         5.94%
India as well as in a newspaper published in the language of the
region where the Head Office of the mutual fund is situated.                 The above expenses are subject to change as per actuals. The
In any case, should the load structure change in future, such changes        entire initial issue expenses for this scheme are within those allowed
in load will be applicable only to prospective investors who invest          under SEBI (MF) Regulations, 1996, which allow initial issue
after the date specified in the advertisement and not to the existing        expenses of up to 6% of the initial resources raised and require that
investors on the amounts already invested by them. The Mutual                any excess over 6% be borne by the Asset Management Company.




                                                                         7
MAGNUM MONTHLY INCOME PLAN

The total initial issue expenses is estimated to be around Rs. 1.5 crores which is 5.94% for a target corpus of 25 crores. This is an indicative
figure only and the initial issue expenses will change in proportion to the initial issue corpus as indicated in the table below:
         Target Corpus                    Amount subscribed                    Amount available                     Amount available
                                           by the investor                      for investment                       for Initial Issue
                                                                                                                        Expense

              25 crores                           100                                 94.06                               5.94%

              50 crores                           100                                 96.63                               3.37%

              100 crores                          100                                97.915                               2.085%



(b) Past schemes
 Scheme Name                                            Estimated Issue Expenses Actual Issue Expenses             Remarks
 Magnum Gilt Fund                                       2.92% of the Initial          Rs. 0.36 cr., i.e., 0.123%   Being a no load scheme,
                                                        issue corpus.                 of initial corpus            the entire initial issue
                                                                                                                   expenses were borne by the
                                                                                                                   AMC.
 Magnum Sector Funds Umbrella                           6% of corpus collected        Rs. 0.49 cr., i.e., 4.24%    Rs. 1.25 lac. borne by the
                                                                                      of initial corpus            AMC
 Magnum InstaCash Fund                                  6% of corpus collected        Rs. 32785, i.e. 0.01% of     Being a no load scheme,
                                                                                      initial corpus               the entire initial issue
                                                                                                                   expenses were borne by the
                                                                                                                   AMC
 Magnum LiquiBond Income Fund 1998                      6% of corpus collected        Rs. 1.23 cr., i.e., 3.69%    Fully borne by the AMC.
                                                                                      of initial corpus
 Magnum Monthly Income Scheme 1998 (I)                  Being a no load scheme,       Rs. 5.06 cr., i.e., 4.35% of Being a no load scheme, the
                                                        no estimates were given       initial corpus               entire initial issue expenses
                                                        in the offer document.                                     were borne by the AMC.
 Magnum Monthly Income Scheme 1998 (II)                 6% of corpus collected        Rs. 5.33 crs., i.e. 2.88%    Fully borne by the scheme.
                                                                                      of initial corpus

3. Annual scheme recurring expenses
The fees and expenses of operating the scheme on an annual basis, expressed as a percentage of the amount of the scheme’s average daily
net assets, are estimated as follows:
 Expense Item                                                                     Dividend Plan                       Growth Plan
                                                                                  (All options)
 Investment Management Fee                                                              1.00%                             1.00%
 Marketing & Selling expenses
 & Agent’s commission                                                                   0.50%                             0.50%
 Registrar & Transfer Agent’s fees                                                      0.15%                             0.15%
 Custodial fees & expenses                                                             0.12%                              0.12%
 Costs related to Investor
 communication                                                                         0.08%                              0.08%
 Audit fees                                                                            0.05%                              0.05%
 Costs of Statutory
 Advertisements                                                                         0.05%                             0.05%
 Trustee fees                                                                           0.01%                             0.01%
 Miscellaneous expenses                                                                0.02%                              0.02%
 Total expenses to be
 charged to the scheme                                                                  1.98%                             1.98%



                                                                        8
MAGNUM MONTHLY INCOME PLAN

The above annual recurring expenses are only the estimates and the actual expenses will be restricted to the ceilings of recurring expenses
prescribed in the SEBI Regulation, which are as follows:
 Category of expense                                   Ceilings as per SEBI

 Investment management & advisory                      Subject to the following ceilings :
 fee to be charged by the AMC.                         i) Not exceeding 1.25% of the average weekly net assets of the scheme
                                                           outstanding in the year as long as the net assets do not exceed Rs. 100 crores
                                                           and
                                                       ii) 1% of the amount in excess of Rs. 100 crores where net assets so calculated
                                                           exceed Rs. 100 crores

 Fees and expenses of Trustees                        0.01% of the average weekly net assets, subject to a minimum of Rs. 15 lakhs to be
                                                      allocated across all schemes of the fund.

 Custodian fee                                         On actuals, within the overall ceiling mentioned below

 Registrar Services for transfer of units              On actuals, within the overall ceiling mentioned below
 sold or redeemed

 Brokerage & Transaction cost                          On actuals, within the overall ceiling mentioned below

 Audit fees                                            On actuals, within the overall ceiling mentioned below

 Marketing & selling expenses,                         On actuals, within the overall ceiling mentioned below.

 Cost of investor communication                        On actuals, within the overall ceiling mentioned below
 & statutory advertising

 Cost of providing account statements                  On actuals, within the overall ceiling mentioned below
 & redemption warrants

 Insurance premium paid by the fund                    On actuals, within the overall ceiling mentioned below

 Winding up costs                                      On actuals, within the overall ceiling mentioned below

 Total Expenses Charged to the scheme                  Subject to the following limits :
                                                       i) 2.25% on the first Rs. 100 cr. of average weekly net assets.
                                                       ii) 2.00% on the next Rs. 300 cr. of average weekly net assets
                                                       iii) 1.75% on the next Rs. 300 cr. of the average weekly net assets
                                                       iv) 1.50% on the balance of the average weekly net assets

The purpose of the table is to assist the investor in understanding the various costs and expenses that an investor in the scheme will bear
directly or indirectly. Any expenses incurred in excess of the above overall limits will be borne by the AMC.




                                                                     9
MAGNUM MONTHLY INCOME PLAN

                                          VII. CONDENSED FINANCIAL INFORMATION

1. Historical Per Unit Statistics
The data for 2000-2001 pertains to data up to and as on 30th December 2000.
                                                                         Magnum Monthly Income Scheme 1998 (II)
 Particulars                                             Monthly                Quarterly          Annual           Cumulative
                                                          Income                 Income            Income              Growth
                                                           Option                 Option            Option             Option
 (Statistics for the year 1998-1999)
 NAV at the beginning of the year
 Net Income per unit (Before payout)                        0.404                  0.400             0.400                0.400
 Dividends (payout)                                         0.104                       -                -                    -
 Transfer to Reserves (if any)                                  -                       -                -                    -
 Latest NAV                                               10.404                  10.400            10.400               10.400
 Annualised Return (%)                                    3.60%*                 3.60%*             3.60%*              3.80%*
 Net Assets at the end of the year (Rs. Cr.)                58.84                  20.68            100.47                11.54
 Ratio of recurring expenses to Net Assets (%)             0.12%                   0.12%            0.12%                0.12%
 (Statistics for the year 1999-2000)
 NAV at the beginning of the year                          10.404                 10.400            10.400               10.400
 Net Income per unit (before payout)                        2.771                  2.754             1.580                2.950
 Dividends (Payout)                                         1.441                  1.264             1.325                    -
 Transfer to Reserves (if any)                                  -                       -                -                    -
 Latest NAV                                                 11.33                  11.49             11.58                12.95
 Annualised Return (%)                                   25.82%                  24.45%            24.76%               24.73%
 Net Assets at the end of the year (Rs. Cr.)                58.04                  20.17             93.15                14.31
 Ratio of recurring expenses to Net Assets (%)             1.35%                   1.35%            1.35%                1.35%
 (Statistics for the year 2000 – 2001)
 NAV at the beginning of the year                           11.33                  11.49             11.58                12.95
 Net Income per unit (before payout)                        2.841                  2.777             3.125                3.130
 Dividends (Payout)                                         2.311                  2.057             1.325                    -
 Transfer to Reserves (if any)                                  -                       -                -                    -
 Latest NAV                                                 10.53                  10.72             11.80                13.13
 Annualised Return (%)                                   18.82%                  17.84%            18.07%               18.04%
 Net Assets at the end of the year (Rs. Cr.)                52.65                  18.34             84.97                14.51
 Ratio of recurring expenses to Net Assets (%)             1.40%                   1.40%            1.40%                1.40%
                                 th
(Date of allotment of units: 29 January 1999)
Note: The latest NAV is dated as on 30th December 2000. The compounded annualized returns have been calculated since inception of
      the schemes, taking adjusted NAV, i.e., after adjusting dividends paid out on initial NAV of Rs. 10/- per Magnum.
      * - indicates the returns for periods less than one year are in absolute terms only and not annualized.




                                                                    10
MAGNUM MONTHLY INCOME PLAN

 Particulars                                                                     Magnum LiquiBond (Growth)
                                                                    2000-2001             1999-2000                     1998-99
 NAV at the beginning of the period                                   11.8100                  10.52                          -
 Net income per unit                                                   2.6420                  1.810                          -
 Dividends per unit                                                         -                      -                          -
 Transfer from Reserves                                                     -                      -                          -
 NAV at the end of the period                                         12.6420               11.8100                       10.52
 Annualized return since inception for the period                      8.81%                 13.28%                     5.20%*
 Net Asset at the end of the period                                    396.74                 326.46                      58.55
 Ratio of Recurring expenses to Net Assets                             1.69%                  1.97%                      1.43%
 (Date of allotment of units: 30th November 1998)
 Particulars                                                                    Magnum LiquiBond (Dividend)
                                                                    2000-2001             1999-2000                     1998-99
 NAV at the beginning of the period                                   10.3400                  10.52                          -
 Net income per unit                                                   2.2060                  1.635                          -
 Dividends per unit                                                     1.645                  1.295                          -
 Transfer from Reserves                                                     -                      -                          -
 NAV at the end of the period                                         10.5610               10.3400                       10.52
 Annualized return since inception for the period                      8.00%                   12.54                    5.20%*
 Net Asset at the end of the period                                    301.51                 351.59                      58.55
 Ratio of Recurring expenses to Net Assets                             1.69%                  1.97%                      1.43%
 (Date of allotment of units: 30th November1998)
 Particulars                                                                                 Magnum Growth Fund
                                                                                          2000-2001                  1999-2000
 NAV at the beginning of the period                                                            16.36                          -
 Net income per unit                                                                          5.8050                     12.485
 Dividends per unit                                                                            6.125                      6.125
 Transfer from Reserves                                                                            -                          -
 NAV at the end of the period                                                                   9.68                      16.36
 Annualized return since inception for the period                                            32.07%                   133.47%*
 Net Asset at the end of the period                                                           200.02                     338.20
 Ratio of Recurring expenses to Net Assets                                                   0.43 %                      0.41%
                                                      th
 (Date of allotment of units: Magnum Growth Fund – 24 May 1999)
Note: The latest NAV is dated as on 30th December 2000. The compounded annualized returns have been calculated since inception of
      the schemes, taking adjusted NAV, i.e., after adjusting dividends paid out on initial NAV of Rs. 10/- per Magnum.
      * - indicates the returns for periods less than one year are in absolute terms only and not annualized.




                                                               11
MAGNUM MONTHLY INCOME PLAN

 Particulars                                                     Magnum InstaCash                   Magnum InstaCash
                                                                  Fund - Cash                        Fund – Dividend
                                                             2000-2001          1999-2000         2000-2001          1999-2000
 NAV at the beginning of the period                               10.83                   -            11.01                  -
 Net income per unit                                              1.565              0.830            1.4909              1.010
 Dividends per unit                                                    -                  -           0.7850                  -
 Transfer from Reserves                                                -                  -                 -                 -
 NAV at the end of the period                                  11.5646               10.83           10.7059              11.01
 Annualized return since inception for the period                7.08%             8.30%*             6.32%            10.10%*
 Net Asset at the end of the period                                 6.00              8.35              4.64               0.09
 Ratio of Recurring expenses to Net Assets                       0.70%               0.47%             1.5%              0.58%
                                                        th
 (Date of allotment of units: Magnum InstaCash Fund – 28 May 1999)

 Particulars                                                         MSFU (Contra)                       MSFU (IT)
                                                             2000-2001          1999-2000         2000-2001          1999-2000
 NAV at the beginning of the period                                 9.45                  -            26.80                  -
 Net income per unit                                             -1.660              -0.550            5.410             20.800
 Dividends per unit                                                    -                  -                4                  4
 Transfer from Reserves                                                -                  -                 -                 -
 NAV at the end of the period                                       8.34              9.45             11.41              26.80
 Annualized return since inception for the period               -9.16%            -5.50%*            31.50%           347.51%*
 Net Asset at the end of the period                               11.57              10.88            121.16             234.93
 Ratio of Recurring expenses to Net Assets                          2%               2.06%            1.74%              2.06%
                                st
 (Date of allotment of units: 31 July 1999)



 Particulars                                                      MSFU (FMCG)                         MSFU (Pharma)
                                                             2000-2001          1999-2000         2000-2001          1999-2000
 NAV at the beginning of the period                               10.92                   -            10.97                  -
 Net income per unit                                             -1.530              0.920             -0.110             0.970
 Dividends per unit                                                    -                  -                                   -
 Transfer from Reserves                                                -                  -                 -                 -
 NAV at the end of the period                                       8.47             10.92              9.89              10.97
 Annualized return since inception for the period               -8.41%             9.30%*             -0.58%            9.70%*
 Net Asset at the end of the period                               15.05              12.65             24.97              19.77
 Ratio of Recurring expenses to Net Assets                       2.25%               2.06%            2.22%              2.06%
                                st
 (Date of allotment of units: 31 July 1999)
Note: The latest NAV is dated as on 30th December 2000. The compounded annualized returns have been calculated since inception of
      the schemes, taking adjusted NAV, i.e., after adjusting dividends paid out on initial NAV of Rs. 10/- per Magnum.
      * - indicates the returns for periods less than one year are in absolute terms only and not annualized.




                                                               12
MAGNUM MONTHLY INCOME PLAN

2. Details of borrowings by other schemes :
Scheme Name                Amount          Date of       Amounts         Date of        Purpose of    Interest
                          Borrowed      Borrowing         Repaid      Repayment         Borrowing        Rate

Magnum Bond              250,00,000           24/6/98   100,00,000       30/7/98        Funding of    14.79%
Fund 1994                                               125,00,000        4/8/98       Repurchases
                                                         25,00,000        6/8/98              A/c.
                          12,76,366           27/8/98    12,76,366        1/9/98
                          11,21,657           23/2/99    11,21,657       31/3/99

Magnum Monthly           150,00,000            4/8/98   150,00,000       24/8/98        Funding of    14.79%
Income Scheme 1997                                                                 Repurchases A/c.

Magnum Monthly            45,67,368           31/7/98    45,67,368        6/8/98       Funding for    14.79%
Income Scheme 1998 (I)                                                              Monthly payout

Magnum GIFTS - A           40,00,000       18/7/98        40,00,000      28/7/98      Funding of      14.79%
                           10,33,441       16/3/99       10,33,441       31/3/99 Repurchases A/c.
                         1,80,00,000       21/7/99       1,00,00,00      28/7/99                      14.50%
                                                         80,00,000        5/8/99                      14.50%
                          26,07,099       28/10/99       93,14,005      30/11/99                      13.50%
                          45,06,906        1/11/99
                          22,00,000       22/11/99

                           9,04,000    23/08/2000
                          12,47,000    26/08/2000        21,51,000      8/9/2000

Magnum Equity Linked     100,00,000           18/9/98   100,00,000       7/10/98        Funding of    14.79%
Savings Scheme 1995                                                                Repurchases A/c.

Magnum Tax Gain 1993     22,43,905.5       16/7/99      22,43,905.5      19/7/99        Funding of    14.79%
                         1,02,04,262       18/8/99                                 Repurchases A/c.
                           82,38,072        2/9/99      1,84,42,334      15/9/99
                           43,23,727      28/10/99      1,99,23,727     30/11/99                      13.50%
                           75,00,000       1/11/99
                           81,00,000       5/11/99




                                                          13
MAGNUM MONTHLY INCOME PLAN

3. Disclosure under Regulation 25(11)                                      companies are fundamentally strong and possess a high potential
                                                                           for growth and are market leaders in their respective fields.
During the last financial year (1st April 1999 up to 31st March 2000),     Accordingly, investments were made in the said companies. The
SBI Mutual Fund has made the following investments in companies            investments made by some schemes of SBIMF in bonds issued by
which hold units in excess of 5% of the Net Asset Value of any             associate companies including State Bank of India and its
scheme of SBI Mutual Fund:                                                 subsidiaries are in compliance with the investment restrictions
 Scheme Name             Investments by the respective schemes             contained in clause 9 of the seventh schedule to the SEBI (MF)
                         in Companies or its subsidiaries where            Regulations, 1996.
                         that Company or its subsidiaries have
                         invested more than 5% of the NAV in                      VIII. CONSTITUTION OF THE MUTUAL FUND
                         any scheme
 Gifts-B                 ITC Bhadrachalam Paper Boards                        1. Constitution
                         (Equity), TISCO (Equity) and State Bank              SBI Mutual Fund has been constituted as a Trust, sponsored by SBI.
                         of India (Equity)                                    SBI has made an initial contribution of Rs. 5 lacs towards setting up
 MMPS 93                 ITC Bhadrachalam Paper Boards                        of the Trust fund. SBI has been designated as the Principal Trustee,
                         (Equity), TISCO (Equity), State Bank of              and has appointed a Board of Trustees to supervise the activities of
                         India (Equity), SBI Home Finance Ltd.                the Fund. The Board of Trustees has entrusted the work of
                         (Equity), State Bank of Bikaner & Jaipur             management of the Fund to SBI Funds Management Ltd., an Asset
                         (Equity), Thermax Ltd. (Equity) and HDFC             Management Company.
                         Bank Ltd. (Equity)
 MELS91                  State Bank of India (Equity), State Bank of          2. Objective of SBI Mutual Fund
                         India (Equity – Demat) and TISCO (Equity)            The basic objective of SBI Mutual Fund is to mobilize savings from
 MGLF-94                 TISCO (Equity)                                       a wide cross-section of people and to provide them attractive
 MMIS-97                 State Bank of India (Equity), TISCO, State           returns, security and liquidity through investments in capital and
                         Bank of Hyderabad (Bonds) and State                  money markets.
                         Bank of Travancore (Bonds)
                                                                              3. The Sponsor
 MMIS-91                 State Bank of India (Equity), TISCO
                         (Equity), TISCO (Bonds) and TISCO                    The State Bank of India or SBI having its Corporate Office at State
                         (NCDs)                                               Bank Bhavan, Madame Cama Road, Mumbai - 400 021, is the largest
 Magnum Equity Fund State Bank of India (Equity) and TISCO                    public sector bank in India with 8930 branches in India and 52
 (formerly MMS-90)  (Equity)                                                  offices in 34 countries worldwide. In addition to this, SBI also has 7
                                                                              associates and 1 banking subsidiary in addition to other non-banking
 Magnum Balanced         State Bank of India (Equity), TISCO                  subsidiaries in India and abroad. SBI is the leader in providing
 Fund                    (Equity), State Bank of Hyderabad (Bonds             loans and related services (which generate singificant fee-bsed
 (formerly MOEF-95)      & NCD), State Bank of Travancore (Bonds
                                                                              income) to trade & industry. It has also identified project finance
                         & NCD) and ICICI Bank (Equity)
                                                                              and consumer banking as key areas.
 MTPL (redeemed on State Bank of India (Equity) and TISCO
 19th May 1999)    (Equity)                                                   The financial performance of SBI is summarized below:
 MELS96                  TISCO (Equity)                                        Year ended March 31st          2000   1999    1998     1997    1996
 MGF 99                  HDFC Bank Ltd. (Equity) and TISCO                     Turnover /
                         (Equity)                                              Total Income (Rs. Cr.)        25770 22392     18699   17594 15716
 MSFU-Contra             TISCO (Equity)                                        Profit after Tax (Rs. Cr.)     2051   1028    1861     1349     832
 MLIF-98                 State Bank of India (Bonds) and TISCO
                         (Bonds & NCD)                                         Equity Capital (Rs. Cr.)        526    526     526      526     474
 MMIS 98(II)             State Bank of Saurashtra (Bonds)                      Free Reserves (Rs. Cr.)       11620   9876    9082     7451    4989
 MBF 94                  State Bank of India (Equity) and TISCO                Net Worth (Rs. Cr.)           12147 10402     9608     7977    5463
                         (Bonds)
                                                                               Deposits (Rs. Cr.)           196821 169041 131091 110701 96395
 MMIS 98(I)              TVS-SUZUKI Ltd. (Equity) and TISCO
                         (Bonds & NCD)                                         Earnings per
 MRIS 93                 TISCO (NCD), State Bank of India (Equity),            share (Rs.)                   38.98   19.53   35.36   26.66 17.54
                         SBI Home Finance (Equity), State Bank of              Book Value per
                         Hyderabad (Bonds) and SBS (Bonds)                     share (Rs.)                  230.93 197.64 182.66 151.65 115.25
 MTP 94                  State Bank of India (Equity) and TVS-
                         SUZUKI Ltd. (Equity)                                  Capital Adequacy
                                                                               Ratio (%)                     11.49   12.51   14.58   12.17 11.60
 MTGS 93                 Thermax (Equity)
                                                                               Dividend paid (%)              50%    40%      40%     40%     35%
These investments comprise debt, equity and money market
instruments. SBI Mutual Fund is of the opinion that the said                  Source: SBI Annual Reports




                                                                         14
MAGNUM MONTHLY INCOME PLAN

4. Board of Trustees
The Trust is administered by a Board of Trustees comprising the following eminent persons:
 Name                           Address                          Principal                        Current
                                                                 Occupation                       Directorships
 Prof. A.M. Khusro              B-11,                            Formerly Chairman,               1.    Chairman, Kohinoor Cement Ltd.
 Chairman,                      Chirag Enclave,                  Finance Commission               2.    Director, Transworld Leasing Ltd.
 Board of Trustees              New Delhi - 110 048                                               3.    Director, Hi- Tech Security Prints Ltd
                                                                                                  4.    Director, CT Cotton Yarn Ltd.
                                                                                                  5.    Director, Indian Express Newspaper
                                                                                                  6.    Director, Traders Ltd.
                                                                                                  7.    Director, Mekaster Finlease Ltd.
                                                                                                  8.    Chairman, Mekaster Securities (P) Ltd.
 Dr. (Mrs.) Malati Anagol       Flat No. 6, Koumari,             Professor Emeritus,              1.    Director, Imeco Ultrasonics Pvt. Ltd.
 Trustee                        Ahimsa Marg, Khar (West),        UGC, University of               2.    Director, Imeco Cleaning &
                                Mumbai - 400 052                 Bombay                                 Welding Equipments (P) Ltd.
 Prof. S. K. Barua              Indian Institute of              Professor,                       None
 Trustee                        Management,                      IIM,
                                Vastrapur,                       Ahmedabad
                                Ahmedabad- 380 015
 Shri Mukand                    205, Agarwal                     Chartered                        None
 M. Chitale                     Shyamkamal                       Accountant
 Trustee                        Ville Parel (E)
                                Mumbai 400 057


All the above dignitaries are independent persons. SBI, the sponsor,                     regulatory requirements and to redress investor
is in the process of appointing one of its senior officials as a Trustee                 grievances;
to the Board in place of Shri S. K. Mukherji who has retired from                v       appointed registrars and laid down parameters for their
service.                                                                                 supervision;
Apart from one nominee member of SBI (to be nominated) no                        vi      prepared a compliance manual and designed internal
other trustee is an associate of the Sponsor or of the AMC. SBIMF                        control mechanisms including audit systems;
has been complying with SEBI regulations stipulating that two third              vii     specified norms for empanelment of brokers and
members must be independent.                                                             marketing agents.
                                                                            d)   To ensure that the AMC has been diligent in empanelling the
5. Duties and Obligations of Trustees and Substantial                            brokers, in monitoring securities transactions with brokers
                                                                                 and avoiding undue concentration of business with any broker.
Provisions of the Trust Deed:                                               e)   To ensure that the AMC has not given any undue or unfair
The Board of Trustees monitors the activities of the AMC. In the last            advantage to any associates or dealt with any of the associates
financial year, the Board of Trustees met 4 times. Periodic reports,             of the asset management company in any manner detrimental
including quarterly reviews of each scheme, are submitted by the                 to the interest of the magnumholders.
AMC to the Trustees. Specific approval of the Trustees is obtained          f)   To ensure that the transactions entered into by the asset
on important matters such as a new scheme design and launch.                     management company are in accordance with SEBI (Mutual
Under the Trust Deed constituting the Mutual Fund and SEBI (Mutual               Fund) Regulations, 1996 and the scheme.
Fund) Regulations, 1996, the Trustees have several rights, duties           g)   To ensure that the AMC has been managing the mutual fund
and obligations including the following:                                         schemes independently of other activities and have taken
                                                                                 adequate steps to ensure that the interests of investors of one
a)   To enter into an investment management agreement with the                   scheme are not being compromised with those of any other
     AMC with the prior approval of SEBI.                                        scheme or of other activities of the asset management
b) To ensure that the investment management agreement                            company.
     contains such clauses as are mentioned in the Fourth Schedule          h)   To ensure that all activities of the AMC are in accordance with
     of SEBI (Mutual Fund) Regulations, 1996 and such other clauses              the provisions of SEBI (Mutual Fund) Regulations, 1996.
     as are necessary for the purpose of making investment.                 i)   Where the trustees have reason to believe that the conduct of
c)   To ensure before the launch of any scheme that the AMC                      business of the mutual fund is not in accordance with SEBI
     has :-                                                                      (Mutual Fund) Regulations, 1996 and the scheme they shall
     i      systems in place for its back office, dealing room and               forthwith take such remedial steps as are necessary by them
            accounting;                                                          and shall immediately inform the SEBI of the violation and the
     ii     appointed all key personnel including fund manager(s)                action taken by them.
            for the scheme(s) and submitted their bio-data which            j)   To file the details of his/her holdings in securities on a quarterly
            shall contain the educational qualifications, past                   basis with the trust.
            experience in the securities market with the trustees,          k)   To be accountable for, and be the custodian of, the funds and
            within 15 days of their appointment;                                 property of the respective schemes and to hold the same in
     iii    appointed auditors to audit its accounts;                            trust or the benefit of the unit holders in accordance with SEBI
                                                                                 (Mutual Fund) Regulations, 1996 and the provisions of trust
     iv     appointed a compliance officer to comply with                        deed.


                                                                           15
MAGNUM MONTHLY INCOME PLAN

l)     To take steps to ensure that the transactions of the mutual fund            As per the sub-regulation (25), the Trustees shall exercise
       are in accordance with the provisions of the trust deed.                    due diligence as under:
m) To be responsible for the calculation of any income due to be                   A. General Due Diligence:
       paid to the mutual fund and also of any income received in                  (i)   the Trustees shall be discerning in the appointment of the
       the mutual fund for the holders of the units of any scheme in                     directors on the Board of the asset management company.
       accordance with SEBI (Mutual Fund) Regulations, 1996 and                    (ii) Trustees shall review the desirability of continuance of the
       the trust deed.                                                                   asset management company if substantial irregularities are
n)     To obtain the consent of the magnumholders :-                                     observed in any of the schemes and shall not allow the asset
       i       whenever required to do so by the SEBI in the interest                    management company to float new schemes.
               of the magnumholders; or                                            (iii) The trustee shall ensure that the trust property is properly
       ii      whenever required to do so on the requisition made by                     protected, held and administered by proper persons and by
               three fourths of the magnumholders of any scheme; or                      a proper number of such persons.
       iii     when the majority of the trustees decide to wind up or              (iv) The trustee shall ensure that all service providers are holding
               prematurely redeem the units;                                             appropriate registrations from the Board or concerned
o) To call for the details of transactions in securities by the key                      regulatory authority.
       personnel of the AMC in his own name or on behalf of the                    (v) The Trustees shall arrange for test checks of service contracts.
       AMC and shall report to the SEBI, as and when required.                     (vi) Trustees shall immediately report to Board of any special
p) To quarterly review all transactions carried out between the                          developments in the mutual fund.
       mutual fund, asset management company and its associates.                   B. Specific Due Diligence:
q) To continuously review the net worth of the AMC and in case                     The Trustees shall:
       of any shortfall, ensure that the AMC make up for the shortfall
                                                                                   (i)   obtain internal audit reports at regular intervals from
       as per clause (f) of sub-regulation (1) of regulation 21 of SEBI
                                                                                         independent auditors appointed by the Trustees.
       (Mutual Fund) Regulations, 1996.
                                                                                   (ii) obtain compliance certificates at regular intervals from the
r)     To periodically review all service contracts such as custody
                                                                                         asset management company.
       arrangements, transfer agency of the securities and satisfy
       itself that such contracts are executed in the interest of the              (iii) hold meeting of trustees at frequent intervals.
       magnumholders.                                                              (iv) consider the reports of the independent auditors and
s)     To ensure that there is no conflict of interest between the                       compliance reports of asset management company at the
       manner of deployment of its net worth by the AMC and the                          meetings of trustees for appropriate action.
       interest of the magnumholders.                                              (v) maintain records of the decisions of the Trustees at their
t)     To periodically review the investor complaints received and                       meetings and of the minutes of the meetings.
       the redressal of the same by the AMC.                                       (vi) prescribe and adhere to a code of ethics by the Trustees,
u)     To abide by the Code of Conduct as specified in the fifth                         asset management company and its personnel.
       schedule of SEBI (Mutual Fund) Regulations, 1996.                           (vii) communicate in writing to the asset management company
v)     To furnish to the SEBI on a half yearly basis :-                                  of the deficiencies and checking on the rectification of
       i       a report on the activities of the mutual fund;                            deficiencies.
       ii      a certificate stating that the trustees have satisfied              6. Trusteeship Fees
               themselves that there have been no instances of self
               dealing or front running by any of the trustees, directors          As per the provisions of the trust deed, the Principal Trustee, viz.,
               and key personnel of the AMC;                                       State Bank of India, is entitled to a trusteeship fee of 0.01% p.a. of
       iii     a certificate to the effect that the AMC has been                   net asset value of each scheme, subject to a minimum fee of Rs. 15
               managing the schemes independently of any other                     lakhs to be allocated across schemes in proportion to their weekly
               activities and in case any activities of the nature referred        average NAVs. Fees, however can be modified with the approval
               to in sub-regulation (2) of regulation 24 of SEBI (Mutual           of the Board of Trustees, within reasonable limits.
               Fund) Regulations, 1996 have been undertaken by the
               AMC and has taken adequate steps to ensure that the                 7. Modifications to the Trust Deed
               interests of the magnumholders are protected.
w) The independent Trustees referred to in regulation 16 shall                     No amendments to the Trust Deed will be carried out without the
       give their comments on the report received from the AMC                     prior approval of SEBI and the Magnumholders’ approval would
       regarding the investments made by the schemes in the                        be obtained where it affects the interests of the Magnumholder.
       securities of group companies of the Sponsor.
x)     The trustees shall ensure that no change in the fundamental                       IX. INVESTMENT OBJECTIVES & POLICIES
       attributes of any scheme or the trust or fees and expenses
       payable or any other change which would modify the scheme                   1. State of Debt and Money markets in India
       and affects the interest of unitholders, shall be carried out
       unless, a written communication about the proposed change                   The Debt market in India is currently in bullish mode. Daily volumes
       is sent to each unitholder and an advertisement is given in                 are anywhere between Rs. 2000 crore to Rs. 3000 crore. Yields
       one English daily newspaper having nationwide circulation                   have been coming down steadily since November 2000. There are
       as well as in a newspaper published in the language of the                  two types of markets – Primary and Secondary. Of all debt
       region where the Head Office of the mutual fund is situated;                instruments the most active and liquid is the Government Securities
       and the unitholders are given an option to exit at the prevailing           market. In Government Securities, papers are available of various
       Net Asset Value without any exit load.                                      tenors from 1 year to 10-year papers. 5 year benchmark Government
Explanation: For the purposes of this clause “fundamental attributes”              Securities is being traded at around a yield of 10.1% and 10 year
means the investment objectives and terms of a scheme as defined                   paper is being traded at yield of 10.65%.
later in the offer document under the section “Investment Objectives               Of late the corporate bond market has become active. The most
and Policies”.                                                                     traded tenors in the secondary market are 1 year to 5-year papers.




                                                                              16
MAGNUM MONTHLY INCOME PLAN

There is not much interest beyond the 5 year segment. In the                   The above investment pattern is indicative and may be changed
corporate bond market various types of issuers are present like                by the Fund Manager on defensive considerations. The funds raised
PSUs, Banks, NBFCs and Manufacturing companies. The corporate                  under the scheme shall be invested only in transferable securities
bond market yields track the G Sec market. 5 year papers are being             as per Regulation 44(1), Schedule 7 of the SEBI (Mutual Funds)
traded at a yield of 11.15%. The other debt instruments available              Regulations, 1996.
are treasury bills issued by GOI, commercial paper issued by                   The Mutual Fund reserves the right to suitably alter the frequency of
corporates and the overnight call money market. The most                       the dividend payments under the various plans depending on the
commonly issued Treasury Bills are of 91 day and 365 day tenors.               performance and any change in the tax laws.
Currently the yield on 1 year T Bill is about 9.65%. The most active           There can be no assurance that the investment objective of the
tenor in CPs is 90 days. Presently the yield on 90 day CP is around            scheme will be realized. However, the scheme will largely invest in
10.20 – 10.35%. Overnight call rates vary from day to day. Any                 Corporate Papers of reputed and sound companies, Government
cash can be lent in this market so as not to remain idle.                      Securities, Money Market instruments and also in the scrips of similar
Liquidity is of prime importance while making investments.                     companies in accordance with the investment pattern stated above.
Depending on sentiments certain tenors become more liquid. For                 The scheme will also review these investments from time to time
example during a bullish phase long tenor paper gain interest                  and the Fund Manager may churn the portfolio to the extent as
while in a bearish market short maturity papers like T Bills, CPs etc          considered beneficial to the investors.
are more actively traded.
                                                                               2. Trading in Derivatives
1A. Investment Objective and Policies
                                                                               a) Use of Derivatives
The objective of the scheme will be to provide regular income,
liquidity and attractive returns to the investors through an actively          (i) The Fund may use any hedging techniques that are permissible
managed portfolio of debt, equity and money market instruments.                now or in future, under SEBI regulations, in consonance with the
Income may be generated through the receipt of coupon payments,                scheme’s investment objective, including investment in derivatives
the amortization of the discount on the debt instruments, receipt of           such as interest rate swaps. As per SEBI guidelines, the Fund’s
dividends or purchase and sale of securities in the underlying                 trading in derivatives shall be restricted to hedging and portfolio
portfolio. The following table shows percentage portfolio allocation:          balancing purposes. The Fund shall fully cover its position in the
                                                                               derivatives market by holding underlying securities / cash or cash
 Instrument                 % of portfolio    Risk Profile                     equivalents / option and / or obligation for acquiring underlying
 Equity and related         Not more than 15% Medium to High                   assets to honour the obligations contracted in the derivatives market.
 instruments                                                                   The Fund shall maintain separate records for holding the cash and
 Debt instruments           Not less than 85%       Low to Medium              cash equivalents / securities for this purpose. The securities held
 (including securitized                                                        shall be marked to market by the AMC to ensure full coverage of
 debt) and Govt.                                                               investments made in derivative products at all times.
 Securities and Money
 market instruments                                                            (ii) Illustration: Interest Rate Swap (IRS)
 Securitized Debt           Not more than 10% Medium to High                   Assume that a Mutual Fund has INR 10 crore, which is to be
                            of investments in                                  deployed in overnight products for 7 days. This money will be
                            debt instruments                                   exposed to interest rate risk on daily basis*. The fund can buy an
                                                                               Interest Rate Swap receiving fixed interest rate and paying NSE
The proportion of the scheme portfolio invested in each type of
security will vary in accordance with economic conditions, interest            MIBOR.
rates, liquidity and other relevant considerations, including the risks        The deal will be as under:
associated with each investment. Performance will depend on the
Asset Management Company’s ability to assess accurately and                    Counterparty Bank                                   Mutual Fund
react to changing market conditions. The scheme may also enter                                      Floating rate (NSE MIBOR)
into repurchase and reverse repurchase obligation in all securities            Receives                                                    Pays
held by it as per the guidelines and regulations applicable for such
transactions. Further, the scheme may participate in securities                                          Fixed rate (8.75%)
lending as permitted under SEBI (MF) Regulations, 1996.                        Pays                                                   Receives
*The cash flows on a notional principal amount of Rs. 10 crs. would be-
                                                         Principal                      NSE MIBOR                    Interest              Amount
                                                                                                                                     (in Rs. Crore)
 Day 1                                                         10.0000                       8.10%                 .0022192           10.00221918
 Day 2                                                        10.00222                       8.20%                 .0022466           10.00446575
 Day 3                                                        10.00447                       8.30%                   .002274          10.00673973
 Day 4 (for 2 days)                Saturday                   10.00674                       8.15%                 .0044658           10.01120548
 Day 5                              Sunday                                                  Holiday
 Day 6                                                         10.01121                      8.40%                 .0023014           10.01350685
 Day 7                                                         10.01351                      8.50%                 .0023288           10.01583562
 Floating Interest Payable                                                                                                            .0158356164
 Fixed Interest Receivable                                                                                                            .0167808219
 Net Receivable for Mutual Fund receiving fixed rate                                                                                  .0009452055
 In this example Mutual Fund stands to gain by receiving fixed rates. As the NSE MIBOR floating rate is decided daily, in adverse scenario,
 the Mutual Fund may have to pay the difference.
The counter-party providing Swap, Options, Forward Rate Agreements (FRAs) will do the same at a cost.


                                                                          17
MAGNUM MONTHLY INCOME PLAN

(iii) The risks involved in derivatives are:                                 (iv)     Short-fall, if any, in the assets covering investment in derivative
                                                                                      products and the manner of bridging it.
1.      The cost of hedge can be higher than adverse impact of
        market movements.                                                    (v)      The Trustees shall offer their comments on the above aspects
                                                                                      in the report filed with SEBI under sub regulation (23) (a) of
2.      The derivatives will entail a counter-party risk to the extent of
                                                                                      regulation 18 of SEBI Regulations
        amount that can become due from the party.
3.      An exposure to derivatives in excess of the hedging                      3. Provision to introduce new Plans:
        requirements can lead to losses.                                         Under the scheme, there is a provision to introduce one or more
4.      An exposure to derivatives can also limit the profits from a             plans at a later date. Such Plans, if introduced, would be introduced
        genuine investment transaction.                                          with the prior approval of SEBI.
5.      Efficiency of a derivatives market depends on the development            4. Portfolio turnover
        of a liquid and efficient market for underlying securities and
        also on the suitable and acceptable benchmarks.                          The Asset Management Company will manage the portfolio such
                                                                                 that it tries to better returns by making the most of trading
Methods to tackle these risks:                                                   opportunities that may arise due to factors like policy changes,
1.      Hedging will not be done on a carpet basis but based on a                liquidity conditions, yield curve shifts, etc.
        view about interest rates, economy and expected adverse
                                                                                 5. Investment limitations
        impact.
2.      Limits of appropriate nature will be developed for counter               The investment policies of the scheme comply with the rules,
        parties                                                                  regulations and guidelines laid out in the SEBI (MF) Regulations,
                                                                                 1996. As per the Regulations, specifically the Seventh Schedule,
3.      Such an exposure will be backed by assets in the form of cash            the following investment limitations are applicable to schemes of
        or securities adequate to meet cost of derivative trading and            Mutual Funds.
        loss, if any, due to unfavourable movements in the market.
                                                                                 a.   The scheme shall not invest more than 15% of its NAV in debt
(iv) The losses that may be suffered by the investors as a                            instruments issued by a single issuer which are rated not below
consequence of such investments:                                                      investment grade by a credit rating agency authorized to
1.      As the use of derivatives is based on the judgement of the                    carry out such activity under the Act. Such investment limit
        Fund Manger, the view on market taken may prove wrong                         may be extended to 20% of the NAV of the scheme with the
        resulting in losses.                                                          prior approval of the Board of Trustees and the Board of
                                                                                      Asset Management Company. Such limit shall not be
2.      The upside potential of investments may be limited on account                 applicable for investments in government securities and
        of hedging which may cause opportunity losses.                                money market instruments. Also investment within such limit
(v) The use of derivatives for hedging will give benefit of:                          can be made in mortgaged-backed securitized debt, which
                                                                                      are rated not below investment grade by a credit rating
1.      Curtailing the losses due to adverse movement in interest                     agency registered with the Board.
        rates
                                                                                 b.   The scheme shall not invest more than 10% of its NAV in
2.      Securing upside gains at cost                                                 unrated debt instruments issued by a single issuer and the
(vi) Exposure limits: The Mutual Fund will set the exposure limits at                 total investment in such instruments shall not exceed 25% of
a future date with the requisite internal approvals.                                  the NAV of the scheme. All such investments shall be made
                                                                                      with the prior approval of the Board of Trustees and the Board
b) Valuation                                                                          of AMC.
(i)     The traded derivatives shall be valued at market price in                c.   Debt instruments in which the scheme invests should be rated
        conformity with the stipulations of sub clauses (i) to (v) of                 as not below investment grade by at least one recognized
        clause 1 of the Eighth Schedule to the SEBI Regulations.                      credit rating agency authorized under the SEBI Act, 1992. In
                                                                                      case a debt instrument is not rated, mutual funds may
(ii)    The valuation of untraded derivatives shall be done in                        constitute committees who can approve such proposals for
        accordance with the valuation method for untraded                             investments in unrated instruments subject to the approval of
        investments prescribed in sub clauses (i) and (ii) of clause 2 of             the detailed parameters for such investments by the Board of
        the Eighth Schedule to the SEBI Regulations.                                  Directors and the Board of Trustees.

c) Reporting                                                                     d.   Transfer of investments from one scheme to another scheme,
                                                                                      including this scheme, under the Mutual Fund shall be allowed
The AMC shall cover the following aspects in their reports to trustees                only if :
periodically, as provided for in the Regulations:
                                                                                      (i)    Such transfers are done at the prevailing market price
(i)     Transactions in derivatives, both in volume and value terms.                         for quoted securities on spot basis; explanation – “spot
                                                                                             basis” shall have the same meaning as specified by the
(ii)    Market value of cash or cash equivalents / securities held to
                                                                                             stock exchange for spot transactions, and
        cover the exposure.
                                                                                      (ii)   The securities so transferred shall be in conformity with
(iii)   Any breach of the exposure limit laid down in the scheme
                                                                                             the investment objective of the relevant scheme to which
        offer document.
                                                                                             such transfer has been made.



                                                                            18
MAGNUM MONTHLY INCOME PLAN

e.     The scheme may purchase or sell securities to any other                 These exposure limits are being followed with the objective to
       scheme of the Mutual Fund as stated above.                              ensure diversification of portfolio and risk minimization. These
                                                                               internal norms are subject to periodic review and change
f.     The initial issue expenses in respect of any scheme, including
                                                                               depending on market conditions and in the interest of the
       this scheme, may not exceed 6% of the funds raised under
                                                                               magnumholders. Such changes whenever made would be effected
       that scheme.
                                                                               without prior notice to the unitholders but would be reflected in the
g.     The Mutual Fund shall buy and sell securities on the basis of           periodic portfolio disclosures sent to unitholders.
       deliveries and shall in all cases of purchases, take delivery of
                                                                               Notwithstanding the foregoing investment policies, for temporary
       relative securities and in all cases of sale, deliver the securities
                                                                               defensive purposes (e.g., during periods in which the Asset
       and shall in no case put itself in a position whereby it has to
                                                                               Management Company believes changes in the securities markets
       make short sale or carry forward transaction or engage in
                                                                               or economic or other conditions warrant), the scheme may invest
       badla finance.
                                                                               substantially in Indian Government Treasury Bills and or keep cash
h.     The scheme shall provide that the securities be purchased or            balances which will be deployed in call markets. The Trustees
       transferred in the name of the Mutual Fund for the relevant             have the right in their sole discretion, to limit redemptions under
       scheme, wherever the investments are intended to be of a                certain circumstances. Please refer to the paragraph “Right to
       long-term nature.                                                       Limit Redemptions” in the section “Redemption and Repurchase”.
i.     Pending deployment of funds of the scheme in securities                 Please refer to the section “NAV and Valuation of Assets of the
       pursuant to the investment objectives of the scheme the Mutual          scheme”.
       Fund can invest the funds of the scheme in short-term deposits
                                                                                   6. Fundamental Attributes
       of scheduled commercial banks.
j.     The assets of the scheme shall not in any manner be used in                 The fundamental attributes and salient features of the scheme are
       short selling or carry forward transactions.                                set out below for the purpose of inviting subscriptions to the scheme
                                                                                   from the public.
k.     The mutual fund under all its schemes will not own more than
       ten per cent of any company’s paid up capital carrying voting               The following attributes will be considered as fundamental
       rights.                                                                     attributes:

l.     The scheme may invest in another scheme under the same                      a)   Type of scheme: Open-end debt scheme offering regular
       asset management company or any other mutual fund without                        distribution of dividend subject to availability of distributable
       charging any fees, provided that aggregate interscheme                           income.
       investment made by all schemes under the same management                    b)   Investment Objective: Primary objective is to generate regular
       or in schemes under the management of any other asset                            income in order to make regular dividend payments and the
       management company shall not exceed 5% of the net asset                          secondary objective is growth of capital.
       value of the mutual fund.
                                                                                   c)   Terms of Issue: Open-end scheme with purchase and
m.     The mutual fund will enter into derivatives transactions in a                    redemption of units on any business day. The nature and
       recognized stock exchange for the purpose of hedging and                         duration of the scheme, provision for repurchase, scheme
       portfolio balancing, in accordance with the guidelines issued                    expenses & fees, as stated elsewhere in the Offer Document.
       by the Board.
                                                                                   The fundamental attributes as defined above or fees and expenses
n.     The scheme shall not make any investment in;                                payable or any other change which would modify the scheme and
                                                                                   affects the interest of unitholders, shall not be carried out unless, a
       i     any unlisted security of an associate or group company
                                                                                   written communication about the proposed change is sent to each
             of the sponsor; or
                                                                                   unitholder and an advertisement is given in one English daily
       ii    any security issued by way of private placement by an                 newspaper having nationwide circulation as well as in a newspaper
             associate or group company of the sponsor; or                         published in the language of the region where the Head Office of
       iii   the listed securities of group companies of the sponsor               the mutual fund is situated; and the unitholders are given an option
             which is in excess of 25% of the net assets.                          to exit at the prevailing Net Asset Value without any exit load.

o.     The scheme shall not invest more than 10 per cent of its NAV                7. Investments in other schemes
       in the equity shares or equity related instruments of any
       company and shall not invest more than 5% of its NAV in the                 According to the Regulation 44(1), Schedule 7 of the SEBI (MF)
       unlisted equity shares or equity related instruments.                       Regulations, 1996:

In addition to the above limitations, the Mutual Fund follows certain              “A scheme may invest in another scheme under the same asset
internal norms vis-à-vis limiting exposure to a particular scrip,                  management company or any other mutual fund without
sector, etc in respect of diversified equity funds, which are detailed             charging any fees, provided that aggregate inter-scheme
below:                                                                             investments made by all schemes under the same management
                                                                                   or in schemes under the management of any other asset
i)     Information Technology – 35 %                                               management company shall not exceed 5% of the net asset value
ii)    Media – 25%                                                                 of the mutual fund
iii)   Telecom – 25%                                                               8. AMC’s investments in the scheme
       Overall exposure in the above three sectors is limited to 60%               The AMC may invest in the scheme, either in the initial issue or on
iv)    Industry wise exposure for other sectors – 15%                              an ongoing basis, such amount, as they deem appropriate. But the



                                                                              19
MAGNUM MONTHLY INCOME PLAN

AMC shall not be entitled to charge any management fees on this               2. AMC Fees
investment in the scheme. Investments by the AMC will be in
accordance with Regulation 24(3) of the SEBI (MF) Regulations,                For management of the above funds, the AMC at present charges a
1996 which states that:                                                       fee not exceeding 1% of the weekly average NAV of each scheme,
                                                                              which is charged to the respective scheme. However, AMC charges
“ the asset management company shall not invest in any of its                 2% management fee to Magnum Monthly Income Scheme 1998 (I),
schemes unless full disclosure of its intention to invest has been            as the entire initial issue expenses were borne by AMC as per SEBI
made in the offer document, provided that the asset management                regulations.
company shall not be entitled to charge any fees on its investment            In future, the AMC may modify the fee from scheme to scheme,
in the scheme.”                                                               within the limits specified in the Regulations and disclosed in the
                                                                              offer documents of the respective schemes.
9. Underwriting
                                                                              3. Board of Directors
The scheme will not take up underwriting of the securities of other
issuers.                                                                      The Board of Directors of the SBIFM comprises the following
                                                                              eminent persons:
10. Stock lending
                                                                              Shri Janaki Ballabh             D-7, Kinellan Tower
The Fund may in future carry out stock-lending activity under any             Chairman                        100A, Napean Sea Road,
of its schemes, in order to augment its income. Stock-lending may             State Bank of India             Mumbai - 400 006.
involve risk of default on part of the borrower. However, this risk           Shri S.L. Rao                   A-165, Defence Colony,
will be substantially reduced as the Fund has opted for the “Principal        Chairman,                       New Delhi-110 024.
Lender Scheme of Stock Lending”, where entire risk of borrower’s              Central Electricity
default rests with approved intermediary and not with the Fund.               Regulatory Commission
Any stock-lending done by the scheme shall be in accordance with              New Delhi
any Regulations or guidelines regarding the same. The Policy                  Shri R.G. Kare            Kare House
followed for stock lending has been approved by the Board of                  Industrialist             Near Metropol Cinema
Directors of the AMC and the Board of Trustees.                                                         Margao, Goa - 403 601.
            X. MANAGEMENT OF THE FUND                                                  .
                                                                              Shri D. P Roy             D-11, Kinellan Tower
                                                                              Dy. Managing Director     100A, Napean Sea Road,
The Board of Trustees of SBI Mutual Fund has entrusted the                    State Bank of India       Mumbai - 400 006.
management of the Fund to SBI Funds Management Ltd., the AMC.                 Shri Birendra Kumar       Flat No. C-6, Kinellan Tower
Further details regarding the set up are furnished in the following           Managing Director         Opp. Elizabeth Nursing Home,
paragraphs.                                                                   SBI Capital Markets Ltd.  L. J. Marg, Mumbai - 400 006.
1. About the AMC                                                              Shri Niamatullah          Flat No. C-2, Kinellan Tower
                                                                              Managing Director         Opp. Elizabeth Nursing Home
SBI Funds Management Ltd. (SBIFM) having its corporate office at              SBI Funds Management Ltd. L.J. Marg,
191, Maker Tower “E”, 19th floor, Cuffe Parade, Mumbai - 400 005,                                       Mumbai - 400 006.
is a wholly owned subsidiary formed by State Bank of India. As per            Shri Ajay Shah            Santosh Nagar,
the audited accounts on 31st March 2000, the authorized and paid              Asst. Professor           General Arun Kumar Vaidya Marg
up capital of the AMC was Rs. 50 crores and the net worth of the              Indira Gandhi Institute   Film City Road, Goregaon (E)
AMC was Rs. 47.72 crores.                                                     of Development Research   Mumbai-400065
SBI Funds Management Limited has signed an Investment                         Shri Manu Chadha          B-30 Connaught Place
                                                                              Chartered Accountant      Kuthiala Building
Management Agreement with the Trustees of SBI Mutual Fund on
                                                                                                        New Delhi 110 001.
14th May 1993. In terms of this Agreement, SBIFM has assumed the
day to day investment management of the fund and in that capacity             4. Key Personnel
makes investment decisions and manages the SBI Mutual Fund
Schemes in accordance with the scheme objectives, Deed of Trust,              The day to day operations of the AMC are looked after by
provisions of Investment Management Agreement and SEBI                        experienced and qualified professionals, consisting of senior
Regulations & Guidelines.                                                     officials on deputation from the State Bank of India as well as directly
                                                                              recruited officials of the AMC
To date, SBIFM has successfully launched and managed 31 schemes
                                                                              a. The top key management personnel of SBI Funds Management
(including 2 offshore funds) of SBI Mutual Fund. Of these 10 schemes
                                                                              Ltd. are
have been redeemed. Of the 19 schemes still being managed, 10
are open-end schemes and the rest are close-end schemes, with                 Name                      Designation Business Experience
total net assets of approximately Rs.3400 crores (as on 30st                  Shri Niamatullah          Managing      Experience of over 35 years
December2000), including offshore funds. SBI Funds Management                                           Director      with SBI, including 11 years
is already Y2K compliant. The expenditure that has been incurred                                                      as a senior executive.
by the Mutual Fund for the same purpose is Rs. 80,000 and no
                                                                              Shri K. G. Ravindran      Executive     33 years of experience with
further expenses are expected to be incurred for the same.
                                                                                                        Vice          SBI including 5 years as a
                                                                                                        President     senior executive.



                                                                         20
MAGNUM MONTHLY INCOME PLAN

b. Head of Debt                                                            depending on operational necessities and in the overall interest of
                                                                           the fund.
Name                   Qualifications Experience
Shri Pijush Das        B.Sc., MA,       13 years of experience in the          5. Duties and Obligations of the Asset Management
                       Economics        treasury at the State Bank of          Company:
                                        India. Served as Head of
                                        Treasury at SBI Singapore              Under the SEBI (Mutual Fund) Regulations, 1996, the AMC has the
                                        from 1995-99                           following obligations:
                                                                               a)   to take all reasonable steps and exercise due diligence to
c. Fund Manager
                                                                                    ensure that the investment of funds pertaining to any scheme
Name                   Qualifications Experience                                    is not contrary to the provisions of SEBI (Mutual Fund)
Shri Saravana          B.E. PGDM        Experience      of    over                  Regulations 1996 and the Trust Deed.
Kumar                  (IIM – B),       8 years in area of funds               b)   to exercise due diligence and care in all its investment
                       C.A.I.I.B        management in the mutual                    decisions as would be exercised by other persons engaged
                                        fund industry and presently                 in the same business.
                                        managing funds with
                                                                               c)   to be responsible for the acts of commissions or omissions
                                        net    assets of about
                                                                                    by its employees or the persons whose services have been
                                        Rs.875 crores
                                                                                    procured by the AMC.
d. Chief Investment Officer                                                    d)   to submit to the trustees quarterly reports of each year on its
Name                   Qualifications Experience                                    activities and the compliance with SEBI (Mutual Fund)
Ms. Divya Krishnan B.Com.,              Experience of over 8 years                  Regulations 1996.
                   P.G.D.M.             in area of funds management            e)   The trustees at the request of the Asset Management Company
                                        in the mutual fund industry.                may terminate the assignment of the AMC at any time.
In absence of the fund manager, one of the other fund managers                 f)   Provided that such termination shall become effective only
will look after the operations of the scheme. The AMC will have the                 after the trustees have accepted the termination of assignment
discretion to change the Chief Investment Officer/Fund Manager                      and communicated their decision in writing to the AMC.
depending on operational necessities and in the overall interest of            g)   Notwithstanding anything contained in any contract or
the fund.                                                                           agreement or termination, the AMC or its directors or other
The AMC has appointed the following people as fund managers                         officers shall not be absolved of liability to the mutual fund for
for various schemes:                                                                their acts of commissions or omissions, while holding such
                                                                                    position or office.
Name                    Designation     Experience
                                                                               h)   not to deal in securities through any broker associated with
Ms. Sonia Sharma        B.A., MFC       Experience of over 6 years                  the sponsor or a firm which is an associate or a sponsor
                                        in the mutual fund industry                 beyond 5% of the daily gross business of the mutual fund.
                                        and presently managing
                                                                               i)   not to utilize the services of the sponsor or any of its associates,
                                        funds with net assets of about
                                                                                    employees or their relatives, for the purpose of any securities
                                        Rs. 500 crores
                                                                                    transaction and distribution and sale of securities.
Mr. Ajay Bodke         B.E.          Experience of over 5 years                     Provided that the AMC may utilize such services if disclosure
                       (Mechanical), in the mutual fund industry                    to that effect is made to the unit holders and the brokerage
                       MMS           and presently managing                         or commission paid is also disclosed in the half yearly/
                                     funds with net assets of about                 annual accounts of the mutual fund *.
                                     Rs. 350 crores                                 *
                                                                                      Note: Please note that the AMC utilizes the services of
Mr. Sandip              B. Tech.,       Experience of over 5 years                  some branches of the SBI Group as authorized collecting
Sabharwal               P.G.D.M.        in the mutual fund industry                 branches for the scheme. It may also utilize the services of
                                        and presently managing                      some of the Associate companies of SBI for various
                                        three funds with net assets of              transactions. This has also been mentioned in the section
                                        about Rs. 400 crores.                       ‘Associate Transactions’. Suitable disclosure as required
Mr. Sachin              B.E., PGDM      Experience of over 5 years                  under SEBI (MF) Regulations 2000 will be made in the half
Sawrikar                                in the mutual fund industry                 yearly and annual accounts of the Fund.
                                        and presently managing             j)       to file with the trustees the details of transactions in securities
                                        funds with net assets of about              by the key personnel of the asset management company in
                                        Rs. 400 crores                              their own name or on behalf of the asset management
                                                                                    company and to also report to the SEBI, as and when required
e. Investor Relations Officer
                                                                                    by the SEBI.
The AMC has appointed Shri Dinesh Prasad, Vice President, as the           k)       In case the AMC enters into any securities transactions with
Investor Relations Officer to look into investor grievances regarding               any of its associates, a report to that effect to be sent
deficiencies, if any, in the services provided by the Registrars or the             immediately to the trustees.
Investor Service Centres. He can be contacted at the address given
in the section on ‘Investors’ Rights and Services’. The AMC will           l)       In case any company has invested more than 5% of the net
have the discretion to change the Investor Relations Officer                        asset value of a scheme, the investment made by that scheme



                                                                          21
MAGNUM MONTHLY INCOME PLAN

      or by any other scheme of the same mutual fund in that                          iii)  delivery of scrips purchased is taken and that delivery
      company or its subsidiaries to be brought to the notice of the                        is given in the case of scrips sold and shall in no case
      trustees by the AMC and to be disclosed in the half yearly and                        engage in short selling or carry forward transactions or
      annual accounts of the respective schemes with justification                          badla finance.
      for such investment.                                                   (e)      Transfers from one scheme to another in the same mutual
m)    to file with the trustees and the SEBI-                                         fund shall be allowed only if:-
      i      detailed bio-data of all its directors alongwith their                   i)    such transfers are done at the prevailing market price
             interest in other companies within fifteen days of their                       for quoted instruments on spot basis.
             appointment; and                                                         ii)   the securities so transferred would be in accordance
      ii      any change in the interests of directors every six months.                    with the investment objective of the transferee scheme.
n)    to file with the trustees a statement of holdings in securities of              iii)  the registration and accounting of the transaction is
      the directors of the AMC with the dates of acquisition of such                        completed and is ratified in the next meeting of the
      securities at the end of each financial year.                                         Trustees.
o)    not to appoint any person as key personnel who has been                (f)      The AMC shall not acquire any property out of the Funds
      found guilty of any economic offence or involved in violation                   under its management which results in the mutual fund
      of securities laws.                                                             assuming any unlimited liability or which may have the effect
                                                                                      of encumbering any of the assets of the Mutual Fund in any
p)    to appoint registrars and share transfer agents who are
                                                                                      way.
      registered with the SEBI.
                                                                             (g)      No application form, or sales literature or any other printed
      Provided if the work relating to the transfer of units is processed             matter issued to the prospective buyers or advertisements or
      in-house, the charges at competitive market rates may be                        reports and or announcement (other than that of price or yields)
      debited to the scheme and for rates higher than the competitive                 addressed to the general body of Magnum holders, or to the
      market rates, prior approval of the trustees shall be obtained                  public or to the press or other communications media, is
      and reasons for charging higher rates shall be disclosed in                     issued or published without the prior approval of the Board
      the annual accounts.                                                            of Trustees. Such application forms, sales literature or other
q)    to abide by the Code of Conduct as specified in the fifth                       printed matter shall not contain any statement or material
      schedule of SEBI Regulations.                                                   extraneous to the Trust Deed or scheme offer document and
                                                                                      the contents there of shall first be approved by the Trustees.
6. Substantive Provisions of the Investment Management
Agreement between the Board of Trustees of SBI Mutual                            7. Registrars
Fund and the Asset Management Company (AMC)                                      SBIMF will utilize the services of M/s MCS Ltd. (SEBI registration
                                                                                 number: INR000000056) located at Sri Padmavathi Bhavan, Plot
a)    The AMC shall be permitted to invest only in transferable
                                                                                 No. 93, Road No. 16, M.I.D.C Area, Andheri (E), Mumbai – 400 093
      securities either in the money market or in the capital market,
                                                                                 as Registrars and Transfer Agents to the scheme. The Board of
      including any privately placed debentures or securitised debt.
                                                                                 Trustees and the AMC have ensured that the Registrar has adequate
b)    (i)    The Trustees have the right to decide the percentage of             capacity to discharge responsibilities with regard to processing of
             AMC’s investment in privately placed debentures,                    applications and dispatch of Magnum certificates / Statement of
             securitised debt and other unquoted debt instruments.               Accounts to investors within the time limit prescribed in the SEBI
      (ii)   The AMC shall ensure that all debt instruments have been            Regulations and that they have sufficient capacity to handle investor
             rated as investment grade by an approved credit rating              complaints. The AMC reserves the right to change the Registrars at
             agency. In case a debt instrument is not rated, mutual              any time with the approval of the Board of Trustees and the
             funds may constitute committees who can approve such                Committee of Board of Directors of the AMC.
             proposals for investments in unrated instruments subject            8. Register of Magnum holders
             to the approval of the detailed parameters for such
             investments by the Board of Directors and the Board of              A register of Magnum holders under this scheme containing the
             Trustees.                                                           necessary particulars will be maintained at the office of the Registrar
                                                                                 to the scheme and at such place(s) as the Trustees may decide.
(c)   The AMC shall not give or guarantee any loans or take up any
      activity in contravention of the SEBI regulations.                         9. Custodians
(d)   The AMC shall ensure that:
                                                                                 SBIMF Mutual Fund has appointed ABN AMRO Bank N.V. (SEBI
      i)     the mutual fund under all its schemes put together shall            registration no. IN/CUS/013) situated at Raheja Chambers, Ground
             not own more than 10% of any one company’s paid up                  Floor, Nariman Point, Mumbai 400 021, as the Custodians for the
             capital carrying voting rights.                                     scheme.
      ii)    a scheme may invest in another scheme under the AMC                 The Custodians will be required to take delivery of all properties
             of any other mutual fund without charging any fees,                 belonging to the scheme and to hold them in separate custody
             provided that aggregate inter-scheme investment made                account and also separately from the assets of the custodians and
             by all schemes under the same management or in                      their clients. The Custodians will make efforts to have the properties
             schemes under the management of any other AMC shall                 of the Fund registered in the name of the Fund and will deliver them
             not exceed 5% of the Net Asset Value of the mutual                  only as per instructions of the AMC and on receipt of the
             fund.                                                               consideration. The Custodians shall collect, receive and deposit in



                                                                            22
MAGNUM MONTHLY INCOME PLAN

the account or accounts of the Fund with the Bank, income, dividend,         based on the closing NAV of Wednesday. Applications received
interest, rights and other payments of whatever kind with respect to         by post will be deemed to have been submitted on date of receipt
the securities and other assets and items of alike nature of the Fund        at the registrar’s end.
held by or to the order of the Custodians and shall execute such
                                                                             POP: The POP is based on the applicable NAV and it includes the
ownership and other confirmations as are necessary. The
                                                                             sales charge (if any). This is calculated as follows:
Custodians shall be generally authorized to attend to all non-
discretionary and procedural details for discharge of normal                 POP = Applicable NAV per Magnum [1 + (applicable sales charge
custodial functions in connection with the sale, purchase, transfer          / 100)]
and other assets held for the account of the fund by the Custodians
as an Agent except as may otherwise be directed by the Fund. For                 2.Investment Plans
their services, the Custodians shall be paid a custodial fee as agreed           MMIP is an open-end debt scheme. The objective of the scheme
upon by the AMC and the Custodians and within the limits given in                will be to provide regular income, liquidity and attractive returns
the section “Expenses”. The AMC reserves the right to change the                 to the investors through an actively managed portfolio of debt,
Custodians at any time with the approval of the Board of Trustees                equity and money market instruments.
and the Committee of Board of Directors of the AMC.
                                                                                 The scheme provides a choice of 2 investment Plans to the investors:
10. Auditors
                                                                                 l    Dividend Plan: Offers regular income through Monthly or
SBIMF has appointed M/s Bharat S. Raut & Co., located at The                          Quarterly or Annual dividend options. Option to reinvest
Metropolitan, floor III, Bandra-Kurla Complex (E Block), Mumbai                       dividend available.
400 051, as the auditors to the scheme. The Board of Trustees of
                                                                                 l    Growth Plan: Offers growth along with long-term capital
SBIMF shall review the appointment of auditors after every two
                                                                                      gains tax benefits but pays no dividend.
years or at such time as may be deemed fit in the opinion of the
Board. The AMC reserves the right to change the Auditors at any              The Growth Plan and all options under Dividend Plan will declare
time with the approval of the Board of Trustees and the Committee            separate daily NAVs and each option under dividend plan, will
of Board of Directors of the AMC.                                            have a separate asset class.
11. Collecting Banker(s)                                                         3.Target Corpus
SBIMF will utilize the services of State Bank of India (SEBI registration        The AMC seeks to raise, under the scheme, a minimum corpus of
no. INBI00000038), HDFC Bank Ltd. (SEBI registration no.                         Rs. 1 crore, aggregate for both the Plans. The AMC reserves the
INBI00000063) and ABN AMRO Bank N.V. (SEBI registration                          right to retain in full, the subscription received over and above the
no.INBI00000034) as the collecting banker for the scheme during                  target corpus.
the initial offer. In addition to these banks, Bank of Madura, (SEBI
registration no.INBI00000045) (correspondent bank to ABN AMRO                    The AMC reserves the right of discretion to close the scheme for
Bank N.V.) will also accept application forms during the initial issue.          subscription with one week’s notice.
Please note that the AMC may utilize the services of branches of the
SBI Group or any other bank as authorized collecting branches for                4. Refund of application money
the scheme. This has also been mentioned under the section                       In case of failure to mobilize the minimum amount mentioned above,
“Associate Transactions”. The branches will be paid handling                     the mutual fund and the asset management company are liable to
charges as per the prevailing market rates and/or as negotiated                  refund the application money to the applicants in accordance with
with them. For applications directly solicited and collected by the              Regulation 35 of SEBI (MF) Regulations, 1996, within a period of six
branches of SBI or its associates, they may also be paid an agent                weeks from the date of closure of subscription by registered AD
commission at a rate not exceeding the rate of commission being                  and by cheque or demand draft marked “A/C Payee” to the
paid to other agents for the scheme. The list of collecting branches
                                                                                 applicants. Also, in the event of delay in refunding the amounts
of all the banks will be printed in the application form. The AMC
                                                                                 within 6 weeks, the AMC shall be liable to pay interest to the
has the option to change the number of collecting banks and the
                                                                                 applicant at a rate of 15% p.a. on the expiry of 6 weeks from the
number of collecting branches when the scheme goes open-end.
                                                                                 date of closure of subscription list.
                    XI. UNITS AND OFFER                                          Regulation 35(3) states that:
                                                                                 “ Any amount refundable shall be refunded within a period of six
1. Issue Price
                                                                                 weeks from the date of closure of subscription list, by registered
a. Initial Issue: Rs. 10/- per Magnum for cash at par.                           A.D. and by cheque or demand draft marked “A/c payee” to the
b. Ongoing Basis: On an ongoing basis, Magnums under the                         applicants.”
scheme will be offered for sale on any working day at NAV related                Regulations 35(4) further states that:
prices. The number of units allotted will be equal to the amount
                                                                                 “ In the event of failure to refund the amounts within the period
invested divided by the Public Offering Price (POP) for the same
working day for applications received at the collection centres                  specified in sub-regulation (3), the asset management company
before 2.00 p.m. and POP of next working day for applications                    shall be liable to pay interest to the applicants at a rate of fifteen
received at the collection centres after 2.00 p.m., viz. for an                  percent per annum on the expiry of six weeks from the date of
application received on Tuesday after 2.00 p.m. the POP will be                  closure of the subscription.”




                                                                            23
MAGNUM MONTHLY INCOME PLAN

5. Date of opening of subscription list                                     accepted. For valid applications made through outstation drafts
                                                                            (i.e., at such locations where there is no authorized collecting branch
22.02.2001.                                                                 for the Issue of the scheme) payable at a collecting branch where
                                                                            the application is deposited, the draft charges incurred (as per
6. Period for which subscription is open                                    guidelines of Indian Banks Association) may be reimbursed to the
Initial Issue: The subscription will be open to the public for 30           investors. In such a case, the draft charges may be deducted upfront
days from the commencement of banking hours on 22.02.2001 to                from the application amount. Applications by mail should be mailed
the close of banking hours on the 23.03.2001. However, the AMC              directly to the Registrars and must be accompanied by a Demand
reserves the right to close the subscription earlier, after giving a        Draft payable at SBI Mumbai Main Branch (Code: 0300).
day’s notice to the investors. The AMC also reserves the right to           Investors are advised to fill up the details of their bank account
suspend the issue at any time after a day’s notice.                         numbers on the application form in the space provided. Please
On Ongoing basis: The scheme will be open for fresh subscription            refer to the para “Bank Account Numbers” later in this section.
on a daily basis from 23.04.2001, on any working day. However,              Investors can also opt for Electronic Credit Clearing System (ECS)
the Fund may temporarily suspend acceptance of fresh applications           facility being offered at select centres and receive direct credit of
at any time.                                                                their repurchases / dividend into their bank accounts through
                                                                            designated Banks or for Reinvestment of Dividend into further units.
7. Allotment
                                                                            Investors will have to clearly indicate in the application form, the
Allotment will be made to all applicants in the initial offer provided      Plan under which the application for Magnums is being made, in
the applications are complete in all respects and are in order. The         the box provided for that purpose.
allotment will be made as on 24.03.2001.                                    b. Ongoing Basis: After the scheme reopens for sale/repurchase,
On an ongoing basis issue of Magnums may be discontinued or                 applications to the scheme, complete in all respects together with
suspended if the trustees feel that increase in the size of the fund        necessary remittance, may be submitted at the SBIMF Investor
would be detrimental to the interest of existing investors.                 Service Centres, the designated offices of the Registrar or such
Application for issue of Magnums will not be binding on the fund            other collection centres as may be designated by the AMC. The
and may be rejected.                                                        number of units allotted will be equal to the amount invested divided
                                                                            by the Public Offering Price (POP) for the same working day for
Investors will be issued a Magnum Statement of Account in lieu of
                                                                            applications received at the collection centres before 2.00 p.m.
Magnum Certificates. Despatch of Magnum statements of account
                                                                            and POP of next working day for applications received at the
will be made as soon as possible but not later than 10 days from
                                                                            collection centres after 2.00 p.m. Applications received by post
the date of closure of subscription list or from the date of investment.
                                                                            will be deemed to have been submitted on date of receipt at the
If an investor specifically requests the Registrars in writing for issue
                                                                            registrar’s end. In case of payment by cheque, the amount of
of a Magnum Certificate, the Magnum Certificates shall be sent to
                                                                            investment will be deemed to be the amount realized net of bank
the investor within 6 weeks of receipt of request as stipulated under
                                                                            charges (if any). In case of applications made by a demand draft,
SEBI Regulation 36.
                                                                            the draft charges may be deducted from the amount to be invested,
8. Interest on application money                                            only for applications sent by mail from centres not having a
                                                                            collection account for the scheme.
No interest will be paid on the application amount.
                                                                            c. Procedure for NRIs: Their applications on a repatriable basis
9. Date of commencement of the scheme                                       will be made by remitting funds from abroad through normal
                                                                            banking channels or by submitting payments made by demand
24.03.2001.                                                                 drafts purchased from FCNR accounts or by cheques drawn on
                                                                            NRE accounts or through Special Non-resident Rupee Accounts
10. Listing & Transfer                                                      maintained with banks authorized to deal in foreign exchange in
The Magnums issued under the scheme will not be listed on a                 India. NRI applicants are requested to instruct the bank branch
Stock Exchange. Since the scheme is open for repurchase, no                 through which they have made the remittance or where they have
transfer of Magnums is envisaged under ordinary circumstances.              the NRE / FCNR / Special Non-resident Rupee Account to send the
                                                                            necessary FIRCs in original on security paper to the registrars as
                     XII. SALE OF UNITS                                     soon as possible to enable early processing of their applications.
                                                                            A copy of these instructions to the bank may also be enclosed
1. How to apply                                                             along with the application to expedite the follow-up by the registrars.
                                                                            d. Procedure for OCBs / FIIs: The scheme is also open for investment
a. Initial Issue: Applications complete in all respects together with
                                                                            to OCBs and FIIs on full repatriation basis. Overseas Corporate
necessary remittance may be submitted before the closing of the
                                                                            Bodies, firms and societies which are held directly or indirectly but
offer at any of the designated collecting branches of the Bank or
                                                                            ultimately to the extent of at least 60% by non-resident individuals
SBIMF Investor Service Centres or designated office of Registrar or
                                                                            of Indian nationality or origin, and trusts in which at least 60% of the
other such collecting centres as may be designated by AMC. The
                                                                            beneficial interest is similarly held irrevocably by such persons are
investors can invest by cheque, or demand draft. The application
                                                                            also eligible to invest in the scheme. Such investors may enclose
amount in cheque or Demand Draft shall be payable to “SBIMF -
                                                                            bank certificate(s) and certificate in original from Overseas Auditors
Magnum Monthly Income Plan – DP (Monthly), SBIMF - Magnum
                                                                            on form OAC/ OAC-I in respect of their investment in the scheme.
Monthly Income Plan – DP (Quarterly), SBIMF - Magnum Monthly
Income Plan – DP (Annual), SBIMF - Magnum Monthly Income                    All investors may make the cheque/D.D. for the application amount
Plan – Growth”. No outstation cheques or stockinvests will be               payable to the scheme as specified in the application form. The



                                                                           24
MAGNUM MONTHLY INCOME PLAN

investors are advised to fill up the details of their bank account            investors wanting to opt out of AWF at a later stage may do so by
numbers on the application form in the space provided. Please                 informing the Registrar in writing of their intention to do so.
refer to the para “Bank Account Numbers” later in this section.
                                                                              AWF is available only to investors having an investment of Rs.
Investors can also opt for Electronic Credit Clearing System (ECS)
                                                                              100,000 or more. This option is available only under the Monthly
facility and receive direct credit of their dividend (if the amount is
                                                                              Dividend Option and not under any other option. AWF will be
below Rs. 1 lakh) into their bank accounts.
                                                                              triggered on the record date for the declaration of dividend if no
Investors are advised to retain the acknowledgement slip signed/              dividend is declared under the Monthly Dividend Option.
stamped by the collection centre where they submit the application.
                                                                                  5. Minimum amount of subscription per application
2. Systematic Investment Plan (SIP)
                                                                                  Initial Offer and Ongoing basis:
          ,
Under SIP a minimum of Rs. 500 can be invested every month or
                                                                                  The minimum amount of subscription per application is Rs. 10,000/
quarter by indicating in the application form or by issuing advance
                                                                                  - and in multiples of Rs. 500/- thereafter under both the Plans.
instructions to the Registrars at any time.
                                                                                  The Mutual Fund reserves the right to alter the minimum subscription
For individual investors, the fund offers a Systematic Investment
                                                                                  amount under both the plans of the scheme.
Plan (SIP) facility at all our Investor Service Centers. Under this
Facility, the fund offers 3 options: an investor can invest a fixed               6. Maximum amount of subscription per application
amount – (subject to a minimum of Rs. 500 and in multiples of Rs.
100)- (a) every month for six months (b) every month for one year or              No upper limit.
(c) every quarter for one year through post-dated cheques at
applicable NAV-related prices. This facility will help the investor               7. Who can invest
to average out their cost of investment over a period of six months               A) The following categories of Indian nationals are eligible to invest
or one year and thus overcome the short-term fluctuations in the                  in the scheme:
market.
                                                                                  (i)     Adult individuals. NRIs can apply on fully repatriable basis.
This facility is not available during the initial issue. For subsequent
applications, investors must indicate their choice on their application           (ii)    Adult individuals, not exceeding three, either
form in the box provided for the purpose. The post-dated cheques                          - jointly, or
must be dated the 5th of every month/ 5th of the first month in the
quarter and drawn in favour of the scheme as specified in the                             - on either / anyone or survivor basis, or
application form and crossed “Account Payee Only”. The                                    - on first holder or survivor basis
application may be mailed to the Registrars directly or submitted
                                                                                  (iii)   Minors through their parents / step parents / guardians
at any of the Investor Service Centres. The amount will be invested
in the scheme at the closing NAV of the date of realization of the                        (applications of minors jointly with adults not allowed)
cheque. The number of Magnums allotted to the investor will be                    (iv)    Hindu undivided family (HUF) in the name of karta
equal to the amount invested during the month divided by the POP
                                                                                  (v)     Companies/ Bodies corporate/ PSUs/ Banks/ Financial
for that day. An intimation of the allotment will be sent to the investor.
The facility may be terminated by the investor after giving at least                      Institutions registered in India. Applications by above should
three weeks’ written notice to the Registrar.                                             be accompanied by their Memorandum /Articles of
                                                                                          Association, certified copy of the Board Resolution authorizing
For all payments made by cheques, the date of realization of a                            the investment, and list of authorized signatories with
cheque will be taken as the date of investment and the amount                             specimen signatures.
invested will be deemed to be the amount realized net of bank
charges (if any).                                                                 (vi)    Religious/charitable/other trusts, wakfs and societies registered
                                                                                          under the applicable laws and authorized to invest in mutual
3. Systematic Withdrawal Plan (SWP)                                                       funds. Applications by above should be accompanied by
Under SWP a minimum of Rs. 500 can be withdrawn every month
            ,                                                                             their Trust Deed, certified copy of the Board Resolution
or quarter by indicating in the application form or by issuing advance                    authorizing the investment, and list of authorised signatories
instructions to the Registrars at any time. SWP is available under                        with specimen signatures.
the Growth Plan only.                                                             (vii) Partnership firms
The payment will be made through post-dated cheques subject to                    (viii) An association of persons or body of individuals, in either
a balance of 25% of the net assets in the investment account. Such                       case, consisting only of husband and wife, governed by the
post-dated cheques will be issued for six months at a time (or two                       system of community of property in force in the state of Goa
quarters). SWP entails redemption of certain number of Magnums
                                                                                         and the Union territory of Dadra Nagar Haveli, Daman & Diu.
that represents the amount withdrawn. Thus it will be treated as
capital gains for tax purposes.                                                   (ix)    Army/ air force/ navy/ paramilitary funds and other eligible
                                                                                          institutions.
4. Automatic Withdrawal Facility (AWF)
                                                                                  (x)     International Multilateral Agencies approved by the
An investor, at the time of application, may indicate his preference                      Government of India.
for AWF under which he would receive 1% of his outstanding
capital as monthly income through repurchase of units. AWF would                  (xi)    Non-Government or Government Provident / Pension /
be triggered only during those months when income is not declared                         Superannuation /Gratuity and such other Funds as permitted
and will be subject to minimum balance requirements. Those                                to invest.



                                                                             25
MAGNUM MONTHLY INCOME PLAN

(B) Non Resident Indians (NRIs), Overseas Corporate Bodies and               2. Mode of Distribution
FIIs can invest on fully repatriable basis. An FII must be registered
with SEBI and should have obtained the requisite approvals from              The dividends will be distributed to the investors under the Dividend
                                                                             Plan within 30 days of declaration of dividends, through any of the
the RBI.
                                                                             following modes:
8. Defective applications liable for rejection                               a) Direct Credit: The Mutual Fund currently has an agreement with
                                                                             HDFC Bank Ltd. and ABN AMRO Bank under which investors holding
Applications not complete in any respect are liable to be rejected.          an account with these designated banks can have their dividends
In the event of non-allotment of Magnums, no interest will be paid           credited directly to their accounts under advice to the
on the money refunded. In case of any representation to the Trustees         magnumholders. The Mutual Fund has the discretion to change the
against the disqualification of any application, the decision of the         designated banks at any time during the tenor of the scheme. If the
Trustees will be final.                                                      investor has an account with any of the above banks, the complete
                                                                             details of the account maybe provided at the time of application.
9. Bank Account Numbers
                                                                             b)Electronic Clearing Service (ECS): ECS is a facility offered by
SEBI has made it mandatory for investors in mutual funds to state            the Reserve Bank of India for facilitating better customer service by
their bank account numbers in their applications. Investors are              direct credit of dividend or redemption amount to an investor’s
requested to provide these details in the space provided in the              bank account through electronic credit. This helps in avoiding loss
application form. This measure is intended to avoid fraud / misuse           of dividend or redemption warrants in transit or fraudulent
or theft of warrants in transit. Kindly note that applications not           encashment. This facility is optional for the investors in the scheme.
containing these details may be rejected.                                    Dividends or redemption proceeds may be distributed through
                                                                             the ECS facility to investors residing in any of the cities where such
10. Permanent Account Number (PAN)                                           a facility is available.
Applicant’s PAN / GIR Number and I.T. Circle / Ward / District (if           All investors will have to provide the additional details required in
available) are to be mentioned if the amount invested is Rs. 50,000/         the space provided on the application form. If they have also opted
- or more. In case the applicant is not allotted a PAN / GIR No.,            for the ECS facility, their bank branch will directly credit the amount
please state “Not Allotted”.                                                 due to them to their account wherever the payment is through ECS.
                                                                             The Registrars will send a separate advice to the investors informing
         XIII. DIVIDEND AND DISTRIBUTIONS                                    them of the direct credit.
                                                                             The ECS facility will be offered by the Fund in any centre only if
1. Returns to the Investors                                                  there is sufficient demand for the facility. In places where such a
                                                                             facility is not available or if the facility is discontinued by the scheme
a) Dividend Plan                                                             for any reason, or in cases where the dividends or redemption
Under the Dividend Plan, the returns will be distributed through             proceeds exceed Rs. one lakh, the dividend / redemption warrants
declaration of dividends on the basis of the option chosen by the            will be mailed to the investors.
investor. The rate of dividend to be declared and distributed will           c) Dividend Warrants: The Mutual Fund will issue dividend warrants
be decided by the Fund Manager with the approval of the Managing             to those investors who have not opted for the above two options.
Director. Although the scheme will strive to declare a regular               Investors have the option to change the mode of receipt of dividends
dividend, the declaration of dividends and the percentage to be              at a later date by prior intimation to the Mutual Fund.
distributed will depend upon the NAV at that time and the returns
are not assured.                                                                          XIV. INTER-SCHEME TRANSFERS
Under the monthly dividend option, dividend will be declared as
on the last Friday of each month. For the quarterly dividend option,         Policy on Inter-scheme Transfers
dividend will be declared as on the last Friday of the each quarter.         The scheme, or any other scheme of the Mutual Fund, may make
For the annual dividend option, dividend will be declared on the             investments or effect a sale of some of its investments by means of
last Friday of the each financial year. There is no assurance or             transfers from one scheme to another in the same mutual fund.
guarantee to magnumholders as to the rate of the dividend                    Such transfers will be done in accordance with clause 3 of seventh
distribution or that the dividend will be paid regularly.                    schedule to SEBI Regulations and subject to the following
                                                                             conditions:
b) Growth Plan                                                               i)     such transfers are done at the prevailing market price for
Under the Growth Plan, no dividend is proposed to be distributed.                   quoted instruments on spot basis. (Where such a spot price is
The returns to investors will be through capital gains at the time                  not available or if the market is closed, the inter-scheme
                                                                                    transfer may be done at the latest closing price available).
they choose to repurchase any or all of their holdings. Investors
may refer to the next section “Redemption and Repurchase” for                ii)    the securities so transferred would be in accordance with the
further information.                                                                investment objective of the transferee scheme.
                                                                             iii)   the registration and accounting of the transaction is effected
Refer to the section “Tax Treatment of Investments in Mutual Funds”
                                                                                    on a spot basis so that the NAV of the scheme is impacted,
for further information. Please note that past performance does not
                                                                                    and the transaction is ratified in the next meeting of the
necessarily indicate the future performance.                                        Trustees.




                                                                        26
MAGNUM MONTHLY INCOME PLAN

            XV. ASSOCIATE TRANSACTIONS                                          5. Associate Broker
                                                                                At present, SBI Mutual Fund has no transactions with any associate
1. Who is an associate?                                                         broker in any of its schemes.
For the purpose of this section, an associate or group company                  6. Collecting Banker(s) and Distributors
shall include State Bank of India (SBI), its subsidiaries (including the
AMC), joint ventures and the associate banks of SBI.                            SBIMF will utilize the services of State Bank of India as the collecting
                                                                                banker for the scheme.
2. Investments in Associate or Group Companies of the
Sponsor                                                                         7. Collecting Branches
                                                                                The AMC may utilize the services of some branches of the SBI
As per SEBI Regulation, the scheme will not invest more than 25%                Group as authorized collecting branches for the scheme. The list of
of net assets of the scheme in the securities of the State Bank Group           collecting branches will be printed in the application form. They
companies. Further, the aggregate investment made by all the SBI                will be paid handling charges at such a rate as may be prevalent in
Mutual Fund schemes in the securities of State Bank Group                       the market at the time of the issue and/or as negotiated with the
companies will not exceed 25% of the net assets of the fund as a                concerned banks.
whole. No investment shall be made in any unlisted security of an
                                                                                8. Agent Commission
associate or group company of the Sponsor, any security issued
by way of private placement by an associate or group company of                 For applications directly solicited and collected by the branches
the Sponsor.                                                                    of SBI or by any associates, they may also be paid an agent
                                                                                commission at a rate not exceeding the rate of commission being
As on 30th December 2000, all the schemes of the Mutual Fund have               paid to other agents for the scheme.
Rs. 2.38 crores invested in the various equity instruments of State
Bank Group Companies. The scheme shall not invest in privately                  9. Other Associate Transactions
placed or unlisted securities of associates / group companies.                  Individual schemes of SBI Mutual Fund lend in the Call Money
3. Underwriting Obligations of SBI Mutual Fund                                  Market from time to time in order to continuously earn returns on
                                                                                their short-term surplus cash. This is in accordance with the
As on date, SBIMF has no underwriting obligations.                              applicable Regulations. SBI, SBI Commercial & International Bank,
                                                                                any of SBI’s associate banks or SBI Gilts Ltd. may be some of the
4. Subscription in Issues Lead Managed by Associates of                         players who may borrow from SBI Mutual Fund at market rates.
Sponsor                                                                         SBI or any associates of SBI (including SBI Capital Markets, SBI
In the last three fiscal years, different schemes of the Fund have              Gilts Ltd. and/or SBI Securities Ltd.) may be entrusted the work of
subscribed to some of the issues lead managed by SBI Capital                    marketing, book-building, distribution or any other activity
                                                                                connected with the scheme or any other schemes of SBI Mutual
Markets Ltd. The details of these are as follows:
                                                                                Fund, as may be allowed by SEBI or any other competent authority,
Name of the           Type          Quantity Quantity   Amount
                                                                                and within the relevant provisions of Regulations prevailing from
Company                              Applied Allotted (Rs. lakhs)
                                                                                time to time. SBI Capital Markets was appointed as the Principal
                                                                                Marketing Advisors for Magnum Gilt Fund.
Corporation Bank      Equity (pp)    2000000      98000         78.40
                                                                                      XVI. BORROWING BY THE MUTUAL FUND
ICICI Banking
Corporation           Equity        4150000      525500        183.92           1. Borrowing by the scheme

Gujarat Gas                                                                     The scheme may borrow upto 20% of the net assets managed for
                                                                                a maximum tenure of 6 months for the purpose of meeting outflows
Company Ltd.          Debentures           20         20       200.00
                                                                                on account of repurchase or dividend payments / interest payments.
Krishna Baghya                                                                  In terms of Regulation 44(2) of SEBI (MF) Regulations, 1996:
Jala Nigam Ltd.       Debentures          500        500       500.00
                                                                                “ The mutual fund shall not borrow except to meet temporary
National                                                                        liquidity needs of the mutual fund for the purpose of repurchase,
Aluminum Co. Ltd. Debentures          500000     450000       4500.00           redemption of units or payment of interest or dividend to the unit
                                                                                holders.
Deepak Fertilizers Debentures             500        500       500.00           Provided that the mutual fund shall not borrow more than 20% of
                                                                                the net assets of the scheme and the duration of such a borrowing
State Bank of                                                                   shall not exceed a period of six months.”
Bikaner & Jaipur      Equity           30000        5595        30.21
                                                                                If the scheme decides to borrow, it may borrow either from SBI
TOTAL                                                         5992.53           Group banks and / or any other bank(s) or from any other sources
                                                                                as may be decided by the AMC. The loans may be without collateral
However, these investments may or may not stand in the books of                 or may consider using a part of the scheme’s assets as collateral
concerned schemes at present.                                                   with the prior approval of the Board of Directors of the AMC and
                                                                                the Board of Trustees of the scheme.



                                                                           27
MAGNUM MONTHLY INCOME PLAN

2. Potential risk of loss to the AMC / Magnum holders                     (ii) Thinly Traded Debt Securities:

The borrowing by the scheme will not involve any potential loss to        A debt security (other than Government Securities) that has a trading
the AMC or to the Magnumholder. However, it will involve a certain        volume of less than Rs. 5 crores in the previous calendar month
cost on account of interest paid on borrowing at market rates as          shall be considered as a thinly traded security based upon
may be negotiated with the concerned lender. In any case, the             information provided by the relevant stock exchange on the volume
scheme may resort to borrowings only if the possible benefit from         of debt securities traded.
borrowings exceeds the cost of immediate liquidation of its assets        A thinly traded debt security as defined above would be valued as
for meeting repurchase needs / dividend payments / interest               per the norms set for non-traded debt security.
payments.
                                                                              C. Non-Traded Securities
        XVII. NAV AND VALUATION OF ASSETS
                                                                              When a security is not traded on any stock exchange for a period of
                   OF THE SCHEME                                              thirty days prior to the valuations date, the scrip must be treated as
                                                                              a ‘non-traded’ scrip.
1. Valuation of Assets pertaining to the scheme
                                                                              D. Valuation of Non-traded/Thinly traded securities
Valuation of Assets, computation of NAV, repurchase price and
their frequency of disclosure will be in accordance with the                  Non-traded/Thinly traded securities shall be valued “in good faith”
provisions of SEBI (MF) Regulations 1996/Guidelines/Directives                by the asset management company on the basis of appropriate
issued by SEBI from time to time. The assets of the scheme will be            valuation methods used based on the principles approved by the
valued based on the following valuation norms.                                Board of the Asset Management Company. For the purpose of
                                                                              valuation of non-traded/thinly traded securities, the following
A. Traded Securities                                                          principles will be adopted:
a)   The securities shall be valued at the last quoted price on the           (a)   Based on the latest available Balance Sheet, net worth shall
     stock exchange.                                                                be calculated as follows: Net Worth per share = [share capital
b)   When the securities are traded on more than one recognized                     + reserves (excluding revaluation reserves) – Misc.
     stock exchange, the securities shall be valued at the last quoted              expenditure and Debit Balance in P&L A/c] Divided by No. of
     closing price on the stock exchange where the security is                      Paid up Shares.
     principally traded. It would be left to the Asset Management             (a)   Average capitalization rate (P/E ratio) for the industry based
     Company to select the appropriate stock exchange, but the                      upon either BSE or NSE data shall be taken and discounted
     reasons for the selection should be recorded in writing. There                 by 75% i.e. only 25% of the Industry average P/E shall be
     should however be no objection for all scrips being valued at                  taken as capitalization rate (P/E ratio). Earnings per share of
     the prices quoted on the stock exchange where a majority in                    the latest audited annual accounts will be considered for this
     value of the investments are principally traded.                               purpose.
c)   Once a stock exchange has been selected for valuation of a               (b)   The value as per the net worth value per share and the capital
     particular security, reasons for change of the exchange shall                  earning value calculated as above shall be averaged and
     be recorded in writing by the Asset Management Company.                        further discounted by 10% for ill-liquidity so as to arrive at the
d)   When on a particular valuation day, a security has not been                    fair value per share.
     traded on the selected stock exchange, the value at which it is
                                                                              (c)    In case the EPS is negative, EPS value for that year shall be
     traded on another stock exchange may be used.
                                                                                    taken as zero for arriving at capitalized earning.
e)   When a security is not traded on any stock exchange on a
                                                                              (d)   In case where the latest balance sheet of the company is not
     particular valuation day, the value at which it was traded on
                                                                                    available within nine months from the close of the year, unless
     the selected stock exchange or any other stock exchange, as
                                                                                    the accounting year is changed, the shares of such companies
     the case may be, on the earliest previous day may be used
     provide such date is not more than thirty days prior to the                    shall be valued at zero.
     valuation date.                                                          (e)   In case an individual security accounts for more than 5% of
                                                                                    the total assets of the scheme, an independent valuer shall be
B. Thinly Traded Securities                                                         appointed for the valuation of the said security.
(i) Thinly Traded Equity/Equity Related Securities:                           (ii)(a) Non Traded /Thinly Traded Debt Securities of upto 182 Days
When trading in an equity/equity related security (such as convertible        to Maturity:
debentures, equity warrants, etc.) in a month is less than Rs. 5 lacs         As the money market securities are valued on the basis of
or the total volume is less than 50,000 shares, it shall be considered        amortization (cost plus accrued interest till the beginning of the day
as a thinly traded security and valued accordingly.                           plus the difference between the redemption value and the cost
In case trading in an equity security is suspended upto 30 days,              spread uniformly over the remaining maturity period of the
then the last traded price would be considered for valuation of that          instruments) the same process should be adopted for non-traded
security. If an equity security is suspended for more than 30 days,           debt securities with residual maturity of upto 182 days, in the
then the Asset Management Company/Trustees will decide the                    absence of any other standard benchmarks in the market. All other
valuation norms to be followed and such norms would be                        non traded Non Government debt instruments should be valued
documented and recorded.                                                      using the method suggested in (ii)(b) hereof.




                                                                         28
MAGNUM MONTHLY INCOME PLAN

(ii)(b) Non Traded/ Thinly Traded Debt Securities of Over 182 Days              In case there are multiple put options, the highest value
to Maturity:                                                                    obtained by valuing to the various put dates and valuing to
                                                                                the maturity date is to be taken as the value of the instruments.
For the purpose of valuation, all Non Traded Debt Securities would
be classified into “Investment grade” and “Non Investment grade”           c.   Securities with both Put and Call option on the same day
securities based on their credit ratings. The non-investment grade              The securities with both Put and Call option on the same day
securities would further be classified as “Performing” and “Non                 would be deemed to mature on the Put/Call day and would
Performing” assets                                                              be valued accordingly.
All Non Government investment grade debt securities, classified            (ii)(c) Government securities (not traded for more than 30 days or
as not traded, shall be valued on yield to maturity basis as described             one which would qualify as a thinly traded security) will be
below.                                                                             valued at cost plus accrual and amortizing the discount or
All Non Government non-investment grade performing debt                            premium over the like of the security.
securities would be valued at a discount of 25% to the face value          F. While investments in call money, bills purchased under
All Non Government non-investment grade non performing debt                rediscounting scheme and short term deposits with banks shall be
securities would be valued based on the provisioning norms.                valued at cost plus accrual; other money market instruments shall
                                                                           be valued at the yield at which they are currently traded. For this
The approach in valuation of non traded debt securities will be            purpose non-traded instruments that is instruments not traded for a
based on the concept of using spreads over the benchmark rate to           period of seven days will be valued at cost plus interest accrued at
arrive at the yields for pricing the non traded security.                  the beginning of the day plus the redemption value and the cost
The Yields for pricing the non traded debt security would be arrived       spread uniformly over the remaining maturity period of the
at using the process as defined below.                                     instruments;
                                                                           G. Government securities will be valued at yield to maturity based
Step A
                                                                           on the prevailing market rate.
A Risk Free Benchmark Yield is built using the government securities       H. Where instruments have been bought on ‘repo’ basis, the
(GOI Sec) as the base. GOI Secs are used as the benchmarks as they         instrument must be valued at the resale price after deduction of
are traded regularly; free of credit risk; and traded across different     applicable interest up to date of resale. Where an instrument has
maturity spectrums every week.                                             been sold on a ‘repo’ basis, adjustment must be made for the
                                                                           difference between the repurchase price (after deduction of
Step B                                                                     application interest up to date of repurchase) and the value of the
A Matrix of spreads (based on the credit risk) are built for marking       instrument. If the repurchase price exceeds the value, the
up the benchmark yields. The matrix is built based on traded               depreciation must be provided for and if the repurchase price is
corporate paper on the wholesale debt segment of an appropriate            lower than the value, credit must be taken for the appreciation.
stock exchange and the primary market issuances. The matrix is             I. All expenses and incomes accrued up to the valuation date shall
restricted only to investment grade corporate paper.                       be considered for computation of net asset value. For this purpose,
                                                                           while major expenses like management fees and other periodic
Step C                                                                     expenses should be accrued on a daily basis, other minor expenses
The yields as calculated above are Marked-up/Marked-down for               and income need not be so accrued, provided the non-accrual
ill-liquidity risk                                                         does not affect the NAV calculations by more than 1%.
                                                                           J. Any changes in securities and in the number of units be recorded
Step D
                                                                           in the books not later than the first valuation date following the date
The Yields so arrived are used to price the portfolio                      of transaction. If this is not possible given the frequency of the Net
                                                                           Asset Value disclosure, the recording may be delayed up to a
E. Valuation of securities with Put/Call Options                           period of seven days following the date of the transaction, provided
                                                                           that as a result of the non-recording, the Net Asset Value calculations
The option embedded securities would be valued as follows:
                                                                           shall not be more than 2%.
a.   Securities with call option:                                          K. Illiquid Securities:
     The securities with call option shall be valued at the lower of       (a) Aggregate value of “illiquid securities” of scheme, which are
     the value as obtained by valuing the security to final maturity       defined as non-traded, thinly traded and unlisted equity shares,
     and valuing the security to call option.                              shall not exceed 15% of the total assets of the scheme and any
     In case there are multiple call options, the lowest value obtained    illiquid securities held above 15% of the total assets shall be assigned
     by valuing to the various call dates and valuing to the maturity      zero value.
     date is to be taken as the value of the instrument.                   (b) The Mutual fund will disclose as on March 31 and September
b.   Securities with Put option                                            30, the scheme-wise total illiquid securities in value and percentage
                                                                           of the net assets while making disclosures of half yearly portfolios
     The securities with put option shall be valued at the higher of       to the unitholders. In the list of investments, an asterisk mark shall
     the value as obtained by valuing the security to final maturity       also be given against all such investments, which are recognized
     and valuing the security to put option                                as illiquid securities.




                                                                          29
MAGNUM MONTHLY INCOME PLAN

2. Determination of Net Asset Value                                            2. Minimum amount of repurchase per application
The value determined as above, will be adjusted for the following:             The minimum amount of repurchase would be Rs 500/- or 50
a)   all income and expenditure accrued.                                       Magnums whichever is lower. If as a result of repurchase the balance
                                                                               in the account of an investor falls below Rs. 10, 000/- or 1, 000
b)   major expenses like management fees and other periodic                    Magnums, whichever is lower, in case of Growth option below Rs.
     expenses to accrue on a day to day basis.                                 10,000/- or 1,000 Magnums, whichever is lower, in case of Monthly
c)   The basis for calculation of NAV will be subject to regulations           Dividend option and Quarterly Dividend option under the respective
     and guidelines of the SEBI issued from time to time.                      Plans, the fund will reserve the right to compulsorily redeem the
Minor expenses, if any, will not be accrued on a day to day basis if           account completely at applicable repurchase price, after giving
they do not affect the NAV by more than 1%.                                    him/her 30 days’ notice requesting him to enhance the balance by
                                                                               making fresh investments. Repurchases within the first six months
The Mutual Fund shall comply with the investment valuation norms               of investment will attract an exit load of 0.5% of the NAV.
spelt out in the Eighth Schedule of SEBI Regulations.
The Net Asset Value per Magnum shall be calculated by dividing                 3. How to repurchase
the Net Assets of the scheme by the total number of Magnums                    The application for repurchase can be made on a pre-printed
outstanding on the valuation date, as follows:                                 repurchase application form sent along with the Magnum
     Total unit capital + Reserves + Income (net of expenses)                  Statement of Account mailed to the investor. In this connection,
       + Appreciation / -depreciation in investments                           the repurchase applications along with the Magnum certificates (if
NAV = —————————————————————————                                                any) should be submitted to the Registrars/ISCs/SBI MF Corporate
          Total no. of Magnums outstanding                                     Office.
                                                                               For applications made on either / anyone or survivor basis, only
Any changes in securities and in the number of units will be                   one of the holders needs to sign on the repurchase application.
recorded in the books not later than the first valuation date following        However, the repurchase warrant will normally be issued in the
the date of transaction. If this is not possible given the frequency of        name of the first holder only.
the NAV disclosure, the recording may be delayed upto a period                 A complete list of the ISCs is given in the section ‘Investors’ Rights
of seven days following the date of the transaction, provided that             & Services’. SBIMF may appoint additional centres for acceptance
as a result of the non-recording, the NAV calculations shall not be            of applications, if required.
affected by more than 2%.
The NAV will be calculated every day and will be published atleast             4. Repurchase Schedule and Service Standards
in two daily newspapers at such intervals as are prescribed by                 In accordance with sub clause (c) of Regulation 53 of the SEBI
SEBI.                                                                          (Mutual Funds) Regulations, 1996, in the event of failure to despatch
                                                                               the redemption or repurchase proceeds within the period specified
        XVIII. REDEMPTION AND REPURCHASE
                                                                               in sub-clause (b) of the said regulation i.e 10 working days, asset
                                                                               management company is liable to pay interest to the unitholders at
1. Repurchase facility
                                                                               such rate as may be specified by SEBI. Such interest is required to
The repurchases will commence from 23.04.2001 onwards.                         be borne by the Asset Management Company (AMC). The interest
Thereafter this repurchase facility will be available to the investor          for the period of delay in despatch of redemption or repurchase
on an ongoing basis.                                                           proceeds, would presently be paid to the unitholders @ 15% per
For applications received by the Registrar’s/ISCs/SBI MF Corporate             annum.
Office before 2.00 p.m., the repurchase price will be based on the             The redemption will be permitted to the extent of credit balance in
closing NAV of the same day and for applications received at the               the Magnumholders account. The repurchase warrant will normally
Registrar’s/ISCs/SBI MF Corporate Office end after 2.00 p.m, the               be despatched to the investor within 5 business days from the date
repurchase price will be calculated based on the closing NAV of                of repurchase.
the next working day e.g. for an application received on Tuesday
before 2.00 p.m., the repurchase price will be calculated based on             5. Right to limit Redemption
Tuesday’s closing NAV and for a repurchase application received
on Tuesday after 2.00 p.m., the repurchase price will be based on              The Mutual Fund reserves the right to temporarily suspend further
the closing NAV of Wednesday. Applications received by post will               reissues or repurchases under the scheme in case of any of the
be deemed to have been submitted on the date of receipt at the                 following:
registrar’s end.                                                               -    a natural calamity or
The repurchase price for the above will be based on the prospective            -    in case of conditions leading to a breakdown of the normal
NAV of the following day and it will incorporate the applicable                     functioning of securities markets or
repurchase load. In case the offices of the AMC or the registrars or
the Banks are closed for any reason the repurchase date will be                -    periods of extreme volatility or illiquidity
taken as the date of the next working day.                                     -    under a SEBI or Government directive
The repurchased Magnums will be extinguished and will not be                   -    under a court decree / directive
reissued.



                                                                          30
MAGNUM MONTHLY INCOME PLAN

6. Switchover facility                                                     In case of termination of the scheme, the Trustees shall proceed as
                                                                           follows:
Investors in any of the Plans under the scheme will have the option
of switching over to other options/Plan of the scheme at NAV related       From the proceeds of the assets of the scheme, the Trustees shall
prices. Switchover between options/plans within the first six months       first discharge all liabilities of the scheme and make provision for
of investment will attract an exit load of 0.5% of NAV.                    meeting the expenses of the winding-up of the scheme, including
                                                                           the fees of the AMC. The Trustees shall distribute the proceeds to
Investors may also have the facility of switchover to some other           the Magnumholders, in proportion to their respective interest in the
open-end funds of SBI Mutual Fund such as Magnum Balanced                  assets of the scheme as on the date when the decision for winding
Fund (previously known as Magnum Open Fund 95), Magnum                     up was taken, all proceeds derived from the realization of the
Multiplier Plus ‘93, Magnum Equity Fund (previously known as               investments, after recovering all costs, charges, expenses, claims,
Magnum Multiplier Scheme ‘90 (Open)), Magnum Gilt Fund, Magnum             liabilities, whether actual or contingent, incurred, made or
LiquiBond Income Fund, or Magnum InstaCash Fund at NAV related             apprehended by the Trustees in connection with or arising out of
prices. The terms of switchover may change from time to time.              the termination of the scheme. It will be ensured that the redemption
Investors may contact the nearest ISC for further details on               proceeds are dispatched to the Magnum holder within a maximum
switchover facility.                                                       period of 10 working days from the date of redemption for the
At the time of switchover, the investors will be required to surrender     holders of Statement of Account, or from the date he/ she has
Magnum certificates / Statement of Accounts.                               tendered the Magnum certificates to the Registrars.
This facility of switchover is not available to NRIs/OCBs/FIIs.                9. Redemption record
7. Loan facility                                                               Till date SBI Mutual Fund has redeemed 10 schemes. The
                                                                               redemption details for these schemes are given below:
Magnum holders can obtain loan against their Magnums from any
bank, subject to relevant RBI regulations and the respective bank’s             Scheme                    Redeemed on             Compounded
instructions, by getting a lien registered / recorded with the                                                                     Annualized
Registrars.                                                                                                                        Yield (p.a.)
Magnum holders who have borrowed against their Magnums by                       MRIS 87                   30th June 1993              15.26%
recording a lien against their holding can avail of repurchase facility         MTSS 88-89                31st Mar 1994               21.89%
only after the receipt of instructions from the concerned lender that
the loan has been repaid in full and the lien can be discharged. In             MRIS 89                   31st Mar 1994               15.73%
case such an instruction is not received, the lender can apply for              MTSS 90                   31st Mar 1995               15.38%
redemption in his favour. In such a case, the Mutual Fund reserves
the right to redeem the Magnums in favour of the concerned lender               MRIS 90                   31st July 1995              11.46%
after giving 15 days notice to the Magnum holder.                               MMIS 89                   31st Dec 1996               13.99%
8. Termination of the scheme                                                    MEX 91                    19th Nov 1997                2.60%
                                                                                                            th
The Trustees reserve the right to terminate the scheme at any time              MTPL 91                   19 May 1999                 15.78%
if the corpus of the scheme falls below Rs. 1 crore.                                                        st
                                                                                MBF                       31 Jan 2000                 17.17%
Regulation 39(2) of the SEBI Regulations provides that any scheme
                                                                                MMIS 91                   30th June 2000              14.13%
of a mutual fund may be wound up after repaying the amount due
to the magnumholders:                                                          However, please note that past performance is not necessarily
(a)   on the happening of any event which, in the opinion of the               indicative of the future results.
      Trustees, requires the scheme to be wound up; or                         10. Extension record
(b)   if 75% of the magnumholders of a scheme pass a resolution
      that the scheme be wound up; or                                          The Magnum Monthly Income Scheme 1991 (MMIS’91) has been
                                                                               extended by 3 years from its original redemption on 30.06.1997 to
(c)   if SEBI so directs in the interest of the unit holders.                  30.06.2000. The extension was done after obtaining an approval
Where a scheme is wound up under the above Regulation, the                     from SEBI. An option was granted to all the investors to exit, if they
trustees shall give a notice disclosing the circumstances leading to           so chose, at the assured return price of Rs. 100 per Magnum. Simple
the winding up of the scheme:                                                  yield p.a. as on 30.06.1997 was 14.13%.
(a)   to SEBI; and                                                             Two other equity schemes – Magnum Equity Fund (previously
                                                                               known as Magnum Multiplier Scheme 1990 (MMS’90)) and Magnum
(b)   in two daily newspapers having circulation all over India & a
                                                                               Multiplier Plus Scheme 1993 (MMPS’93) - have also been converted
      vernacular newspaper circulating at the place where the mutual
                                                                               to open-end schemes w.e.f. 1st January 1998 and 1st April 1998
      fund is formed.




                                                                          31
MAGNUM MONTHLY INCOME PLAN

respectively, after giving the existing investors an option to redeem     Income-tax Act, 1961 and as amended by the changes approved
their Magnums, if they so chose, at NAV related prices. Magnum            as per the Finance Bill 2000.
Global Fund, an equity scheme, launched on 24th August 1994, with
redemption date of 30th September 1999, has also been converted           Prospective investors should not treat the contents of this section of
into an open-end scheme w.e.f. 1st October 1999, after giving the         the offer document as advice relating to legal, taxation, investment
existing investors an option to redeem their Magnums, if they so          or any other matter and are recommended to consult their own
chose, at NAV related prices.                                             professional advisors concerning the acquisitions, holding or
                                                                          disposal of the Magnums.
               XIX. ACCOUNTING POLICIES
                                                                              1. Tax benefits to magnumholders
1. Accounting year end                                                        All tax benefits will be available only to the Magnum holder or the
                                                                              first named holder in case the Magnums are held in the names of
The accounts of the scheme shall be closed every year as on 31st              more than one person.
March. The Trustees shall cause the accounts of the scheme to be
maintained in such form and manner as may be decided by them                  Where a partition has taken place among the members of a Hindu
and in accordance with the Mutual Fund Regulations, 1996. The                 Undivided Family or when an Association of Persons has been
Trustees and the AMC shall, at the close of each half year, i.e., 30th        dissolved after a deduction has been allowed under this scheme,
September and 31st March, publish the financial results of the                the first name holder will be in receipt of the amount withdrawn
scheme, as provided in SEBI (MF) Regulations, 1996.                           and will be deemed to be the assessee.

2. Other Accounting Policies and Standards                                    2. Tax benefits related to Income Distribution
a)   For the purposes of the financial statements, mutual fund shall          As per the provisions, income from mutual fund is fully exempt in
     mark all investments to market.                                          the hands of the investors. However, any income distributed by a
                                                                              mutual fund to its magnumholders will be subject to an income tax
b)   In respect of all interest-bearing instruments, income will be           of 20% (plus applicable surcharge) of such income distributed.
     accrued on a day to day basis as it is earned.
c)   Average cost method will be followed in determining the                  3. Tax benefits related to Capital Gains
     holding cost of investments and the gains or losses on sale of           Tax benefit is available under sections 48 & 112 on capital gains for
     investments.                                                             resident Indians. Such investments have to be done within a period
d)   Transactions for sale or purchase of investments will be                 of six months after the date of such transfer, in the Magnums / units
     recognized on the transaction date.                                      of the scheme.
e)   Income accrued on an investment but not received for 12                  4. Tax benefits related to Repurchase/ Redemption/
     months beyond the due date shall be provided for and no
     further accrual shall be made for income in respect of such an
                                                                              Transfer
     investment.                                                              Magnums held for a period of more than 1 year will be treated as
f)   When the units are sold, an appropriate part of the sale                 long-term capital assets and will qualify for taxation at a lower rate
     proceeds will be credited to an equalization account and                 as laid down in section 112 of the Income-tax Act, 1961. The investor
     when units are repurchased, an appropriate part will be debited          concerned will be entitled to the benefit of indexation of the cost
     to the equalization account. The net balance on this account             for the purposes of computing capital gains as laid down in section
     will be credited or debited to the revenue account as an                 48 of the Income-tax Act, 1961.
     adjustment to the distributable surplus.                                 As “Units” are proposed to be included in the provision to the
g)   The cost of investment acquired or purchased shall include               subsection (1) to Section 112 of the Act and hence Magnumholders
     brokerage, stamp duty and any other charge customarily                   can opt for being taxed at 10% (plus applicable surcharge) without
     included in the broker’s purchase note. In respect of any                the cost inflation index benefit or 20% (plus applicable surcharge)
     privately placed debt instruments any front-end discount                 with the cost inflation index benefit whichever is beneficial.
     offered should be reduced from the cost of the investment.
                                                                              The rates of taxation on long-term capital gains as per section 112
h)   Underwriting commission, if any, shall be recognized as                  of the Income-tax Act, 1961 are as follows :
     revenue only when there is no devolvement on the scheme.                 -    10%* or 20%** for Resident Individuals & HUFs
     Otherwise the entire commission received will be reduced
     from the cost of investment.                                             -    10%* or 20%** for domestic companies.
The Mutual Fund shall comply with the accounting policies and                 -    10%* or 20%** in case of other residents
standards spelt out in the Ninth Schedule of SEBI Regulations.                -    10%* or 20%** for non-residents (not being a company) and
                                                                                   foreign companies
     XX. TAX TREATMENT OF INVESTMENTS IN
                                                                              Note: * indicates without indexation benefit and ** indicates with
                MUTUAL FUNDS                                                  indexation benefit
This section give information on various tax benefits available to            The capital gains may be arrived at after adjusting the following
the Magnumholders.                                                            from the sale consideration:
The provisions mentioned in the following paras are based on the              -    Expenditure incurred wholly and exclusively in connection
law and practice as on the date of this offer document, i.e., the                  with such a sale,



                                                                         32
MAGNUM MONTHLY INCOME PLAN

-     Cost of investments as inflated by the Cost Inflation Index            d)         The investors have the right to ask the Trustees about any
      notified by CBDT.                                                                 information which may have an adverse bearing on their
There will be no TDS on capital gains for resident investors.                           investments and the trustees shall be bound to make
                                                                                        disclosures about such information to the investors.
5. Wealth Tax benefits
                                                                             The investors are also advised to see the relevant provisions of the
Mutual fund units are not considered as “assets” liable to wealth tax        Indian Trust Act, 1882, in this regard.
u/s 2(ea) of the Wealth-tax Act, 1957. Consequently Magnums held
under the scheme will not be liable to wealth tax under the Wealth-              2. Other significant rights of the Magnumholders
tax Act, 1957.
                                                                                 (a)    The fundamental attributes as defined above or fees and
6. Tax benefits to Religious / Charitable Trusts                                        expenses payable or any other change which would modify
                                                                                        the scheme and affects the interest of unitholders, shall not be
Investments in these Magnums by Religious / Charitable Trusts will                      carried out unless, a written communication about the
rank as eligible investments and will qualify for tax benefits under
                                                                                        proposed change is sent to each unitholder and an
section 11(5) of the Income Tax Act, 1961.
                                                                                        advertisement is given in one English daily newspaper having
7. Tax benefits to Mutual Fund                                                          nationwide circulation as well as in a newspaper published in
                                                                                        the language of the region where the Head Office of the mutual
a)    As the Mutual Fund has been registered with SEBI under the                        fund is situated; and the unitholders are given an option to
      SEBI Regulations, the entire income of the Fund is exempt                         exit at the prevailing Net Asset Value without any exit load.
      from income tax under Section 10 (23D) of the Act.
                                                                                 (b)    The Appointment of the AMC for the scheme can be terminated
b)    The Finance Act, 1999 has inserted section 15R in the Income
                                                                                        by a majority of the Trustees or by not less than 75% of the
      Tax Act, 1961 w.e.f. Assessment Year 2000-2001. As per said
                                                                                        Magnumholders of the scheme.
      section, the Mutual Fund will have to now pay tax @ 20% on
      amount of income distributed to the magnumholders. Further,                c)     The dispatch of dividend warrants shall be made within 30
      surcharge @ 10% of the amount of tax would also be payable.                       days of the declaration of the dividend and dispatch of
                                                                                        redemption/repurchase proceeds will be made within 10
      XXI. INVESTORS’ RIGHTS AND SERVICES                                               working days from the date of redemption/repurchase.

1. Rights of beneficiaries                                                       d)     No amendments to the Trust Deed will be carried out without
                                                                                        the prior approval of SEBI and the Magnumholders’ approval
a) After closing of the annual accounts, SBI Mutual Fund shall provide                  would be obtained where it affects the interests of the
for depreciation on investments and also make a provision for bad                       magnumholders.
and doubtful debts to the satisfaction of its auditors and shall disclose
the method of depreciation in the notes to the accounts. After making            3. Documents available for inspection
such provisions the profits of the scheme together with the capital
appreciation, if any, may be distributed to the investors either as a            Following documents are available for inspection by investors at
dividend payout or plough back to the scheme as may be decided                   their office of the SBI Funds Management Ltd., 191, Maker Tower E,
by the Board of Trustees.                                                        Cuffe Parade, Mumbai - 400 005:
b) SBI Mutual Fund will publish-                                                 i)     Trust deed
i)    the schemes’ audited annual accounts or an abridged                        ii)    Memorandum and Articles of Association of SBI Funds
      summary of the same within six months from the date of                            Management Ltd. and the State Bank of India Act &
      closure of the relevant financial year.                                           Regulations.
ii)   six monthly unaudited accounts or an abridged summary of
                                                                                 iii)   Copy of Annual Reports including Auditors Report of SBI
      the same before the expiry of two months from the close of
      each half year i.e. on 31st March and on 30th Sept.                        iv)    Scheme Rules and Regulations
This will be published in one national English daily newspaper and               v)     Auditors Reports, Audited Annual Accounts & Offer
in a Marathi newspaper. The investors have a right to call for the                      Documents of all the existing schemes of the SBIMF.
above information, including the full annual report, at the SBI Mutual
Fund’s office or its Investors Service Centres and if so desired, they           vi)    Agreements with Custodians, Registrars & Transfer Agents,
can receive a copy of the above information on payment of a                             Bankers, if any.
nominal fee.
                                                                                 vii)   Investment Management Agreement with the Trustees.
The Fund will also issue for publication the NAV and the sale and
the repurchase prices of this scheme on a daily basis in at least two            viii) Securities & Exchange Board (Mutual Fund) Regulations 1996
newspapers in accordance with SEBI Regulations.                                  ix)    Indian Trust Act, 1882.
c)    an abridged schemewise annual report will be mailed to all
                                                                                 x)     Consent letters of Auditors and Legal Advisors
      the Magnum holders not later than six months from the date
      of closure of the relevant accounting year, containing also the
      details of group company investments.




                                                                            33
MAGNUM MONTHLY INCOME PLAN

4. For your convenience and help                                     8.        Chennai

SBI Mutual Fund has opened 21 Investor Service Centres (ISCs) all              Shri V. Sukumar
over the country. The addresses of these ISCs and the name of the              Manager
contact person are given below:                                                SBIMF Investor Service Centre
                                                                               SBI Bldg., 8th Floor, 157 Annasalai
1.   Ahmedabad                                                                 Chennai - 600 002
     Shri. S. G. Bengali                                                       Tel. (044) 852 3797, 8418061
     Manager                                                             9.    Ernakulam
     SBIMF Investor Service Centre
     C/o SBI, Ahmedabad Main Branch                                            Shri T. Mohan Kumar
     1st Floor, Bhadra                                                         Manager
     Ahmedabad - 380 001                                                       SBIMF Investor Service Centre
     Tel. (079) 550 7442                                                       C/o SBI, Ernakulam South Branch,
                                                                               28/218 II Floor, S.A. Road,
2.   Bangalore                                                                 Manorama Junction,
     Shri S.S.Narayanswamy                                                     Panampilly Nagar
     Asst. Vice President                                                      Cochin, Kerala - 682 036
     SBIMF Investor Service Centre                                             Tel. (0484) 318 886 / 320 107
     SBI LHO Bldg, 4th Floor,
                                                                         10.   Guwahati
     65, St. Marks Road
     Bangalore - 560 001                                                       Shri Utpal Baruah
     Tel. (080) 227 2284, 299 3407                                             Manager
3.   Bhilai                                                                    SBIMF Investor Service Centre
                                                                               C/o SBI Local Head Office Guwahati
     Shri A.K. Mitra                                                           (Applo Building Anex.), Bharalumukh
     Manager                                                                   Guwahati - 781 001
     SBIMF Investor Service Centre                                             Tel. (0361) 521 993
     F – 7 Uttar Gangotri, G.E. Road,
     Supela, Bhilai 490 023                                              11.   Hyderabad
     Tel. (0788) 410955, 273 261                                               Shri A. Subramaniyam
4. Bhopal                                                                      Asst. Vice President
                                                                               SBIMF Investor Service Centre
     Shri V.V. K. Rao
                                                                               C/o SBI LHO, 6th Floor, Koti
     Manager
                                                                               Hyderabad - 500 195
     SBIMF Investor Service Centre
                                                                               Tel. (040) 475 6241
     C/o SBI LHO, Hoshangabad Road
     Bhopal - 462 011                                                    12.   Jaipur
     Tel. (0755) 557 341                                                       Shri Lalit Mehta
5.   Bhubaneshwar                                                              Asst. Vice President
     Shri N. Tripathy                                                          SBIMF Investor Service Centre
     Asst. Vice President                                                      C/o SBI, Sanganeri Gate
     SBIMF Investor Service Centre                                             Jaipur - 302 001
     SBI LHO BLDG, Ground Floor,                                               Tel. (0141) 567 354.
     Pandit Jawaharlal Nehru Marg,                                       13.   Lucknow
     Janpath, Bhubaneshwar - 751 001
                                                                               Shri S. Bose
     Tel. (0674) 402 401
                                                                               Asst. Vice President
6.   Calcutta                                                                  SBIMF Investor Service Centre
     Shri A. K. Sarkar                                                         C/o SBI LHO,
     Asst. Vice President                                                      6th Floor, A-wing
     SBIMF Investor Service Centre                                             Moti Mahal Marg, Hazratganj
     Nagaland House, 10th Floor,                                               Lucknow - 226 001
     11 & 13 Shakespeare Sarani                                                Tel. (0522) 215 668
     Calcutta - 700 071
                                                                         14.   Managalore
     Tel. (033) 282 2816 / 282 1471
                                                                               Shri Ashok Kumar
7.   Chandigarh
                                                                               Deputy Manager
     Shri D.P.Singh                                                            SBIMF Investor Service Centre
     Manager                                                                   C/o SBI, Arya Samaj Road
     SBIMF Investor Service Centre                                             Bellamatta,
     C/o SBI LHO, 1st floor                                                    Mangalore - 575 003
     Sector 17-B, Chandigarh - 160 017
                                                                               Tel. (0824) 445 892
     Tel. (0172) 709 728



                                                                    34
MAGNUM MONTHLY INCOME PLAN

15.   Mumbai                               5. Investor Relations Officer
      Shri Santanu Ray
                                           The AMC has appointed an Investor Relations Officer to look into
      Deputy Manager
                                           investor grievances regarding deficiencies, if any, in the services
      SBIMF Investor Service Centre
                                           provided by the Registrars or the Investor Service Centres.
      C/o SBI Funds Management Ltd.
      191, Maker Tower ‘E’                 Name of the Investor         : Shri Dinesh Prasad
      Cuffe Parade,                        Relations Officer              Vice President, Customer Service
      Mumbai - 400 005                     Address                      : SBI Funds Management Ltd.
      Tel. (022) 218 2187, 2155702                                        191, Maker Tower “E”, 19th floor
16.   New Delhi                                                           Cuffe Parade, Mumbai - 400 005.
      Shri Sudhir Kumar                    Telephone Number             : 218 0244 / 218 0221
      Asst. Vice President                 The AMC will have the discretion to change the Investor Relations
      SBIMF Investor Service Centre        Officer depending on operational necessities and in the overall
      5th Floor, Ashoka Estate             interest of the fund.
      24, Barakhamba Road
      New Delhi - 110 001                       XXII. INVESTOR GRIEVANCES REDRESSAL
      Tel. (011) 331 5058, 3317262
                                                             MECHANISM
17.   Patna
      Shri S. K. De                        The Customer Service Department at SBI Mutual Fund functions
      Manager                              under the supervision of Vice President. The investor grievances
      SBIMF Investor Service Centre        are redressed by the AMC directly and also by our 21 Investor
      1st Floor, Chamber Bhavan            Service Centres (ISC) all over the country. All grievances are
      J.C. Road, Patna - 800 001           redressed within the time stipulated by SEBI. Our ISCs are equipped
      Tel. (0612) 685 665                  with upgraded technological facilities to respond to the investor
                                           queries.
18.   Pune
      Shri Arun P Joshi
                  .                        The statistical data for investor complaints received are as under:
      Manager                              From            01.04.00 01.04.99     01.04.98 01.04.97 01.04.96
      SBIMF Investor Service Centre        To              31.12.00 29.03.00     31.03.99 31.03.98 31.03.97
      C/o SBI Service Branch
                                           Complaints        13771       26081      21535       21430     5488
      ‘Grace’, Dhole Patil Road
                                           Received
      Pune - 411 001
      Tel. (020) 6113974, 6053208          Complaints        13821       26031      21535       21430     5488
19.   Ranchi                               Redressed

      Shri A.K. Jain                       Balance                nil       50         nil         nil       nil
      Asst. Vice President
      SBIMF Investor Service Centre             XXIII. PENDING LEGAL PROCEEDINGS AND
      C/o SBI Service Branch                              OTHER INFORMATION
      Kutchery Road
      Ranchi - 834 001                     1. Pending Legal Proceedings
      Tel. (0651) 315 212
                                           Apart from the ordinary routine litigations incidental to the business
20.   Siliguri                             of the Fund, the following petition / summary suit against the Fund
      Shri P Sherpa
             .T.                           is pending in the Court:
      Asst. Vice President                 Ø    Summary Suit No. 3799 of 1996, filed by M/s Morarka Finance
      SBIMF Investor Service Centre             Limited is pending in the High Court of Juridicature at Bombay.
      C/o SBI Siliguri Branch                   The Plaintiff has filed the suit for recovery of Rs. 8.44 lakhs
      Hill Cart Road,                           together with interest being the excess price paid by them in
      Siliguri - 734 401                        equity buyback transaction relating to the shares of M/s
      Distt. Darjeeling                         Pumpsar Distillaries Ltd.
      Tel. (0353) 537 065
                                           AMC’s perception: The AMC has received advice that the case is
21.   Vijayawada                           likely to be decided in its favour.
      Shri B. Gopikrishna                  Our Sponsor, the State Bank of India is India’s largest bank with
      Asst. Vice President                 8930 branches in India and 52 offices in 34 countries worldwide. In
      SBIMF Investor Service Centre        addition to this, SBI also has 7 associates and 1 banking subsidiary
      C/o SBI Station Road Branch          in addition to other non-banking subsidiaries in India. To the best
      Station Road                         of our knowledge there are no criminal cases against the Sponsor,
      Vijayawada - 520 016                 its Directors or Key Personnel, which will have any impact on the
      Tel. (0866) 574 113                  operations of SBI Mutual Fund.




                                      35
MAGNUM MONTHLY INCOME PLAN

2. Penalties Awarded by SEBI or Any Other Regulatory Body                        add to, alter or amend all or any of the terms or rules that may be
                                                                                 framed from time to time. However, any alteration amounting to a
As on date, there are no cases of penalties awarded by SEBI or any               change in fundamental attributes of the scheme shall be made only
financial regulatory body against the Sponsor or any company in                  after obtaining the approval of magnumholders in accordance
any capacity associated with the Sponsor including the AMC, the                  with SEBI Regulations as stated elsewhere in the offer document.
Board of Trustees or any of the directors or key personnel of the
AMC. Further, there is no deficiency in the systems or operations of             6. Power to remove difficulties
the Sponsor or any company associated with the Sponsor (including
the AMC), which SEBI or any other regulatory agency has                          In case of any difficulty in giving effect to the provisions of the
specifically advised to be disclosed in the offer document.                      scheme, the Trustees may do anything not inconsistent with such
                                                                                 provisions, which appears to them to be necessary, desirable or
3. Enquiry or Adjudication                                                       expedient, for the purpose of removing such difficulty.

SEBI has appointed an Adjudicating Officer to inquire into the                   7. Scheme to be binding
alleged violations by SBIFM Ltd. These violations relate to the
delay in dispatch of unit certificates/account statements to investors           The Trustees may, from time to time, add to or otherwise vary or
in case of two schemes viz. MMIS – 98(I) and MMIS 98(II). As per                 alter all or any of the features or terms of the scheme, with prior
regulation 36 of SEBI (MF) Regulations, 1996, the AMC is required                approval of SEBI and the Magnum holders in accordance with
to issue a unit certificate to an applicant as soon as possible but not          SEBI Regulations, and the same shall be binding on each Magnum
later than six weeks from the date of closure of the initial subscription        holder and any person(s) claiming through or under it, as if each
list.                                                                            Magnum holder or such person(s) expressly agreed that such
                                                                                 features or terms should be so binding.
We have represented the reasons for the delay in despatch of the
unit certificates with the Adjudicating Officer. We are taking necessary         Date of Approval of the scheme by the Board of Trustees:
steps against such reported delays, by effectively monitoring the                19.08.2000.
operations of our registrars and transfer agents, Investor service                                  For and on behalf of the Board of Directors,
centers and collecting centers.                                                                                SBI Funds Management Limited
                                                                                        (the Asset Management Company for SBI Mutual Fund)
4. Jurisdiction
The jurisdiction for any matters or disputes arising out of the scheme
shall reside with the Courts in India.
                                                                                 Place: Mumbai                 Name          : Niamatullah
5. Power to Make Rules
                                                                                 Date : 25th January, 2001     Designation : Managing Director
The Trustees may from time to time, with prior approval of SEBI,
prescribe such terms or make such rules for the purpose of giving                (Notwithstanding anything contained in the offer document the
effect to the provisions of this scheme with power to the AMC to                 provisions of the SEBI (Mutual Funds) Regulations, 1996 and the
                                                                                 Guidelines thereunder shall be applicable.)




                                                                            36
MAGNUM MONTHLY INCOME PLAN

                                       LIST OF COLLECTION CENTRES
     APPLICATIONS TOGETHER WITH DEMAND DRAFTS/CHEQUES MAY BE SUBMITTED
                       AT ANY OF THE FOLLOWING CENTRES:
                 DESIGNATED COLLECTING BRANCHES* OF STATE BANK OF INDIA (ONLY FOR IPO)
Agra : (Main Branch) Chipitola, Amritsar : Town Hall, Allahabad : (Main) Kutchery Road, Ambala Cantt. : The Mall,
                                                                               .B.
Ajmer: Opp. Collectorate, Agartala : H.G.B. Road, Ahmednagar : (P No-11), Akola : Jawaharlal Nehru Marg,
Anand, Bathinda : (Main) Kikkar Bazar, Bankura : (Main), Berhampore, Begusarai : Near Kutchery Road, Burdwan : Cout
Compound, Bokaro : Steel City, City Centre, Bikaner : Dauji Road, Barauni : Fertiliser Township, Bhagalpur : Chhoti
Khanjarpur, Bhavnagar : Mangal Mahal, Bilaspur : Juna Bilaspur, Cuttack: Collectrate Compound, Cuddalore : (O.T.) Rope
Street, Coimbatore : (Main) Kurinji Complex, Dhanbad, Durgapur : (Main), Dehradun : Convent Road, Dibrugarh : (Main)
Branch, Digboi , Dhule : (Main), Durg : G. E. Road, Erode : (Main) State Bank Road, Faridabad : Neelam Chowk,
Ghaziabad : (Main) Navyug Market, Gorakhpur : Bank Road, Gaya : (Main), Gurgaon : Mehrauli Road, Gangtok : (Main)
M.G. Road, Hubli : (Keshbapur), Indore : (Main), Jalagon l (MIDC)Jammu : (Main) Hari Market, Jalandhar : (Main) Civil
Lines, Jamshedpur : (Main) Singhbhum Dist., Jodhpur : Kutchery P        .O., Jamnagar : New Super Market, Jabalpur : (Main)
Civil Lines, Jagdalpur : (Main) Branch, Junagadh : (Main), Kanpur : (Main) Civil Lines, Kumbakonam : (Main), Krishnanager
: (Main), Kota : (Main) LIC Bldg, Kakinada : (Main), Katihar : (Main), Korba : Near Old Bus Stand, Kurnool : (Main), Ludhiana
: (Main) Civil Lines, Mumbai : (Main), Madurai : (Main) Sangam Towers, Meerut : Cantt. Roorkee Road, Moradabad,
Muzaffarpur : Red Cross Bldg., Munger : (Main), Miraj : Branch, Nadia, Nasik : (Main) Old Agra Road, Nagercoil:
(Main),Pathankot : (Main) Thandu Road, Patiala : (Main) Mall Road, Purulia : (Main), Purnea : (Main), Panipat : G.T Road,
Ratlam : Mitra Niwas Road, Pobandar : (Main), Rajnandgaon : (Main),Rajkot : Kothi Compound, Raipur : Jaisthambh
Chowk, Rourkela : Bisra Road, Sambalpur : (Main) Kutchery Road, Salem : (Main) Main Road, Simla : The Mall, Silchar:
Park Road, Shillong : Kachari Road, Solapur : (Main) Balives, Sangli : (Main) Near Ganapati Temple, Thanjavur : Rajamirasadar
Road , Trichy : (Main) McDonalds Road, Tirupur : (Main), Tinsukia : (Main), Udaipur : Hospital Road, Udipi : Branch, Mythir
Complex, Valsad : (Main) Branch, Varanasi : (Main).
SBH Capital Market Services: Fort, Mumbai.
* Subject to change.

                           DESIGNATED COLLECTING BRANCHES OF HDFC (ONLY FOR IPO)
Ahmedabad: HDFC House, Navrangpura, Bangalore: HDFC House, 61, Kasturba Road, Baroda: Arun Complex, R.C. Dutt
Road, Bharuch: HDFC Bank Ltd., Link Road, Bhopal: HDFC Bank Ltd., Arera Colony, Chennai: ITC Centre, 759, Anna Salai,
Coimbatore: Damodar Centre, Avanashi Road, Calcutta: Central Plaza, 2/6, Sarat Bose Road, Chandigarh: HDFC Bank Ltd.,
Sector 35B, Cochin: HDFC Annexure, M.G. Rd., Goa: HDFC Bank Ltd., (Panjim), HDFC Bank Ltd., (Margao),
Hyderabad: Hotel Ashoka Complex, Lakdipur, Indore: UB House, South Tukogung, Jalandhar: Delta Chamber, G.T. Road,
Jaipur: Siddhivinayak Ashok Marg, Ludhiana: HDFC Bank Ltd., The Mall, Lucknow: Times Bank Ltd. M.G. Road,
Mumbai: HDFC Bank Ltd., Manekji Wadia Building, (Fort), Sandoz House, (Worli), HDFC Annexe, Sector 17, (Vashi),
Mysore: HDFC Bank Ltd., Saraswathypuram, Nagpur: Mashruwala Marg, Nasik: HDFC Bank Ltd., Thatte Nagar, Gangapur
Rd., New Delhi: Hindustan Times House, K. G. Marg, Pune: Netrali Apartments, Law College Road, Rajkot: Venktesh Plaza,
Off. Yagnik Rd., Surat: HDFC Bank Ltd., Athwa Lines, Trichy: HDFC Bank Ltd., Thillai Nagar, Vishakapatnam: Potluri Castle,
Dwarkanagar.

                            DESIGNATED COLLECTING BRANCHES OF BANK OF MADURA
                                               (ONLY FOR IPO)
Agra: (21-A Nehru Nagar), Ahmedabad: (Premabhai Hall), Allahabad: (Civil Lines), Bangalore: (No.7 South End Road,
Narsima Raja Road), Bhubaneshwar: (Janpath Unit 3), Chandigarh: (SCO 485-486), Cochin: (M. G. Road),
Coimbatore: (23-A, Mill Road), Guntur: (Arunde Pet), Guwahati: (Nehru Road), Indore: (M. G. Road), Jaipur: (M.I. Road),
Jalandhar: (BMC Chowk), Kanpur: (The Mall), Kollam-Quilon: (M.C. No.1203, Ward 17), Lucknow: (Opp. to Power
House), Ludhiana: (Feroz Gandhi Market), Madurai: (Main), (TPK Road), Mangalore: (Balmatta Road), Meerut: (Hapur
Road), Mysore: (Devaraj Urs Road), Nagpur: (26, C.B. Road), Nasik: (Opp. Rajiv Gandhi Bhavan), Panjim: (18th June
Road), Patna: (Dak Bunglow Road), Pondicherry: (105, Chatt Street), Rajkot: (433, Kalawad Road), Salem: (Appuchetty),
Surat: (Ring Road), Trichy: (9, West Bouleward Road), Trivendrum: (M.G. Road), Vijaywada: (J. D. Hospital Road),
Vishakapatanam: (Dwarka Nagar).



                                                             37
MAGNUM MONTHLY INCOME PLAN


                           DESIGNATED COLLECTING BRANCHES OF ABN AMRO BANK N.V.
                                               (ONLY FOR IPO)
 Mumbai: ((Sakhar Bhavan, Nariman Point), (14, Veer Nariman Point), (Dalamal House, Nariman Point), (Raheja Chamber,
 Nariman Point)), New Delhi: ((Barekhamba Road), (Sansad Marg) (Gopaldas Bhavan, Barakhamba Road)), Calcutta: [(8,
 India Exchange Place), (Russel Street),] Chennai: (19/1, Haddows Road), Baroda: (R.C. Dutta Road), Pune: (Pune
 Camp), Hyderabad: (Banjara Hills),

                             FOR ANY INFORMATION AT THIS CENTRES PLEASE CONTACT
                                         LIST OF DISTRICT ORGANISERS (DOs)
 Allahabad : Mr. V. K. Goel, Tel. : (0523) 608281, Baroda : Mr. Rasesh Dalal, Tel. : (0265) 44744/49749,
 Cuttak : Mr. Arun Kumar Agarwal Tel. : (0671) 617 486/616703, Dehra Dun : Mr. Kapil Behal, Tel : (0135)659752/
 653860/724342, Dhanbad : Mr. Sandeep Kumar, Tel. (0326) 203554, Durgapur : Mr. A.B. Kundu, Tel. (0343) 564543,
 Gorakhpur : Mr. Sarjoo Prasad, Tel. (0551) 310335, Indore : Mr. Ghewar Mal Jain, Tel. (0731) 533643,
 Jalandar : Mr. Brij Bhushan Marwaha, Tel. Tel. ( 0141) 225310, Jammu : Mr. Sanjeev Gupta, Tel. : (0191) 579 001/
                             .
 577365, Jodhpur : Shri B.P Goyal, Tel. (0291) 627 918/641533, Junagadh : Mr. Sailesh Pandya, Tel. (0285) 623377/
 650194/9825222402, Kanpur : Mr. Manoj Srivastav, Tel. : (0521) 251 073/25109/9839031073, Meerut : Mr. Pankaj
 Kumar Sharma, Tel : (0121) 642180/642703, Moradabad : Mr. S. K. Garg, Tel. (0591) 418667,
 Muzaffarpur : Mr. Ashwin Kumar Agarwal, Tel. : (0621) 245585, Nagpur : Mr. Aniruddha V. Shenwai,
 Tel. : (0712) 544798/556258, Nasik : Mr. Ravindra Wani, Tel. : (0253) 391971, Panipat : Mr. Adesh Agarwal,
 Tel. : (01742) 60030, 60836, Porbandar : Mr. K. K. Makecha, Tel. (0286) 46907/44907, Rajnandgaon : Mr. Gambhir Mal
 Chhajed, Tel. (07744) 25554/25577, Rajkot : Mr. S. D. Davda, Tel. (0281) 465435/46379/478427, Udaipur : Mr. Prem
 Kumar Soni, Tel (0294) 412320/525094, Rourkela : Mr. Viresh Himani, Tel. (0661) 540493/540476, Thane : Mr. Arvind
                                               .
 Karkhanis, Tel. (022) 5430445, Trichy : P Gunapalan, Tel. : (0431) 700731, Valsad : Mr. Uday J. Marjadi,
 Tel. (02632) 43577/49744, Varanasi : Mr. Chandra Sekhar Kabra, Tel. (0542) 311904.

                                   FOR YOUR CONVENIENCE AND HELP
                                        SBIMF INVESTOR SERVICE CENTRE
 Ahmedabad: Shri S.G. Bengali, C/o SBI, Ahmedabad Main Branch, 1st Floor, Bhadra, Ahmedabad - 380 001,
 Tel. (079) 5507442. Bangalore: Shri S.S. Narayanswamy, SBI LHO Bldg, 4th Floor, 65, St. Marks Road,
 Bangalore - 560 001, Tel. (080) 2272284, 2993407. Bhilai: Shri A.K. Mitra, F-7, Uttar Gangotri, G.E. Road, Supela, Bhilai-
 490 023, Tel. (0788) 410955, 273261. Bhopal: Shri V.V.K.Rao, C/o SBI LHO, Hoshangabad Road, Bhopal - 462 011, Tel.
 (0755) 557341 Bhubaneshwar: Shri N.Tripathi, Ground Floor, SBI LHO Bldg., Pt. Jawaharlal Nehru Marg, Janpath,
 Bhubaneshwar - 751 001, Tel. (0674) 402401. Calcutta: A.K.Sarkar, Nagaland House, 10th Floor, 11 & 13 Shakespeare
                                                                                 .
 Sarani, Calcutta - 700 071, Tel. (033) 2821471, 2822816. Chandigarh: Shri D.P Singh, C/o SBI LHO, 1st Floor, Sector 17-
 B, Chandigarh - 160 017, Tel. (0172) 709728. Chennai: Shri V. Sukumar, SBI Bldg., 8th Floor,157, Annasalai,
 Chennai - 600 002, Tel. (044) 8523797, 8418061. Ernakulam: Shri T. Mohan Kumar, C/o. SBI Ernakulam South Branch,
 28/218, 2nd Floor, Manorama Junction, Panampilly Nagar, Cochin, Kerala - 682 036, Tel. (0484) 318886.
 Guwahati: Shri Utpal Baruah, C/o SBI Local Head Office (Applo Bldg. Annex), Bharalumukh, Guwahati - 781 001. Tel.
 (0361) 521993. Hyderabad: Shri A. Subramanyam, C/o SBI LHO, 6th Floor, Koti, Hyderabad - 500 195, Tel. (040)
 4756241. Jaipur: Shri Lalit Mehta, C/o SBI, Sanganeri Gate, Jaipur - 302 001, Tel. (0141) 567354. Lucknow: Shri S.
 Bose, C/o SBI LHO, 6th Floor, A-Wing, Moti Mahal Marg, Hazratganj, Lucknow - 226 001, Tel. (0522) 215668.
 Mangalore: Shri Ashok Kumar, C/o SBI, Arya Samaj Road, Bellamatta, Mangalore - 575 003, Tel. (0824) 445892.
 Mumbai: Shri Santanu Ray, C/o SBI Funds Management Ltd., 191, Maker Tower ‘E’, Cuffe Parade, Mumbai - 400 005,
 Tel. (022) 2155702. New Delhi: Shri Sudhir Kumar, 5th Floor, Ashoka Estate, 24, Barakhamba Road, New Delhi - 110
 001, Tel. (011) 3315058. Patna: Shri S.K. De, 1st Floor, Chamber Bhavan, J.C. Road, Patna - 800 001, Tel. (0612) 685 665.
                     .
 Pune: Shri Arun P Joshi, C/o SBI Service Branch, ‘Grace’, Dhole Patil Road, Pune - 411 001, Tel. (020) 6113974.
 Ranchi: Shri A.K. Jain, C/o SBI Service Branch, Kutchery Road, Ranchi - 834 001,Tel. (0651) 315212. Siliguri: Shri P   .T.
 Sherpa, C/o SBI Siliguri Branch, Hill Cart Road, Siliguri - 734 401, Distt. Darjeeling, Tel. (0353) 537065.
 Vijayawada: Shri B.Gopikrishna, C/o SBI Station Road Branch, Station Road, Vijayawada - 520016. Tel. (0866) 574113.



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