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An Open-ended Liquid Scheme

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					                                                                                                       OFFER DOCUMENT




                                    Principal Trustee                       : State Bank of India
                                    Asset Management Company                : SBI Funds Management Ltd.
                                                                              191, Maker Tower ‘E’
                                                                              Cuffe Parade, Mumbai 400 005.




                                              INVITES SUBSCRIPTIONS TO




                                 An Open-ended Liquid Scheme
            Asset Management Company : SBI Funds Management Limited



APPLICATION FORMS ARE AVAILABLE WITH SBIMF AGENTS, STOCK EXCHANGE BROKERS, AUTHORIZED STATE
BANK GROUP BRANCHES, SBIMF INVESTOR SERVICE CENTRES & SBIMF CORPORATE OFFICE. APPLICATION
FORMS ARE ALSO 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 document) occurs and thereafter the changes shall be filed with SEBI and circulated to
  the Magnumholders.”


             Initial offer opened for 7 days from 13th May, 1999 to 19th May, 1999
       and thereafter reopened for continuous sales and repurchases on 24th May, 1999.
                                                                                                           MAGNUM

            SBI MUTUAL FUND
                                                                                                    Income Fund


                                                                                        I. CONTENTS
                                                                                                                                                                                       PAGE NO.

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

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

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

    I V.     HIGHLIGHTS OF THE SCHEME ...............................................................................................................................                    4

    V..      DUE DILIGENCE CERTIFICATE .............................................................................................................................                     5

    VI.      EXPENSES ..............................................................................................................................................................     5

    VII.     CONDENSED FINANCIAL INFORMATION ................................................................................................................                            6

    VIII.    CONSTITUTION OF THE MUTUAL FUND .................................................................................................................                           7

    IX.      MANAGEMENT OF THE FUND ................................................................................................................................                     9

    X.       INVESTMENT OBJECTIVES & POLICIES ..................................................................................................................                        12

    XI.      UNITS AND OFFER .................................................................................................................................................          14

    XII.     SALE OF UNITS ......................................................................................................................................................       14

    XIII.    RETURNS AND DISTRIBUTION ...............................................................................................................................                   15

    XIV.     REDEMPTION AND REPURCHASE ..........................................................................................................................                       15

    XV.      TAX TREATMENT OF INVESTMENTS IN MUTUAL FUNDS ........................................................................................                                      17

    XVI.     INTER-SCHEME TRANSFERS .................................................................................................................................                   17

    XVII.   ASSOCIATE TRANSACTIONS ..................................................................................................................................                   18

    XVIII. BORROWING BY THE MUTUAL FUND .....................................................................................................................                           18

    XIX.     STOCK LENDING BY THE MUTUAL FUND ...............................................................................................................                           19

    XX.      NAV AND VALUATION OF ASSETS OF THE SCHEME ...............................................................................................                                  19

    XXI.    ACCOUNTING POLICIES .........................................................................................................................................               19

    XXII.    INVESTORS’ RIGHTS AND SERVICES .....................................................................................................................                       20

    XXIII. INVESTOR GRIEVANCES REDRESSAL MECHANISM ...............................................................................................                                      22

    XXIV. PENDING LEGAL PROCEEDINGS AND OTHER INFORMATION .................................................................................                                             22



2
                                                                             MAGNUM

        SBI MUTUAL FUND
                                                                         Income Fund


                                  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 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.
The 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 Centres 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                     :   The National Stock Exchange, Mumbai.
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 Settlor or the Principal Trustee.
SBIMF                   :   SBI Mutual Fund (see “the Fund”)
SBIFM                   :   SBI Funds Management Ltd (see “the AMC”)
The Scheme              :   Magnum InstaCash Fund 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.
The Settlor             :   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.


3
                                                                                MAGNUM

      SBI MUTUAL FUND
                                                                              Income Fund




         III. HIGHLIGHTS OF THE SCHEME                                                                 IV. RISK FACTORS
a)    An open-ended scheme, offering high degree of liquidity on                 1. Standard Risk Factors
      investment and superior returns consistent with such high liquidity.        a)   Mutual funds and securities investments are subject to market
      The initial offer was open from13th May 1999 to 19th May 1999                    risks and there is no assurance or guarantee that the Fund’s
                                                                                       objective will be achieved.
      and the scheme re-opened for ongoing sales and repurchases
                                                                                  b)   As with any investment in securities, the NAV of the units issued
      from 24th May 1999.
                                                                                       under the scheme can go up or down depending on the factors
b)    Following Plans are available to the investors:                                  and forces affecting the capital markets.
(i)   Plan A - Dividend Plan (ii) Plan B - Cash Plan                              c)   Past performance of the Sponsor / AMC / Mutual Fund does not
                                                                                       guarantee the future performance of the schemes of the Mutual
c)    Both Plans will invest their entire corpus in debt (Corporate                    Fund.
      debentures & bonds, PSU/FI/Govt. guaranteed bonds), Govt.                   d)   Magnum InstaCash Fund is only the name of the scheme and
      securities, call money and money market instruments (commercial                  does not, in any manner, indicate either the quality of the scheme
      paper, certificates of deposit, T-bills, bills rediscounting, repos,             or its future prospects and returns.
      short-term bank deposits etc).                                              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
d)    Dividend Plan will make payment of weekly dividends, subject to                  contribution made by it of an amount of Rs. 5 lacs towards
      availability of distributable surplus. Dividends declared will be                setting up of the mutual fund.
      automatically reinvested on the next day’s NAV. The periodicity of
                                                                                 2. Scheme-Specific Risk Factors
      payment of dividend may be changed by the Mutual Fund.
                                                                                  a)   As in the case of any fund investing in debt, the NAV of the
e)    Cash Plan is intended for investors who do not want to be paid                   scheme will be sensitive to changes in interest rate. In case of an
      periodic dividend. The Cash Plan provides relatively higher liquidity            increase in interest rates, the market value of existing debt
                                                                                       instruments may fall, leading to a fall in the NAV. The sensitivity of
      and the returns will depend on the short-term interest rates. This               the NAVs of either of the Plans to interest rate movements cannot
      Plan will invest in debentures and bonds maturing not later than 3               be entirely eliminated and investment in the either Plan is not
      years, in Govt. securities, in money-market instruments and in call              guaranteed to protect the value of the investment completely from
                                                                                       unfavourable changes in the interest rates. However, the NAV of
      money.                                                                           the Cash Plan is expected to be less sensitive to the long-term
f)    Both Plans will declare separate daily NAVs and the switchovers                  interest rate movements.
      between the two Plans will be at NAV related prices. The scheme             b)   AMC’s perception: The impact of a rise in interest rates will be
                                                                                       reduced through good fund management practices. In anticipation
      will endeavour to declare NAVs on Saturday and Sunday also                       of any rise in interest rates, the Scheme will attempt to move the
      under both Plans.                                                                funds in from long-term instruments into short-term debt & money
g)    No entry or exit load for initial investors and no lock-in period for            market instruments where the impact on the NAV will be much
                                                                                       lower. Also, if the interest rates at any point of time are expected to
      the investment. However the Fund reserves the right to increase or               ease, the Scheme can move back into long-term debt to take
      decrease the load or completely remove it.                                       advantage of appreciation in the market value of its investments.
h)    Total recurring expenses to be limited to 1.00% of weekly average           c)   In an open ended fund, any disruption in the normal functioning
                                                                                       of the markets for debt instruments or extreme illiquidity in any of
      NAV in case of Cash Plan & within SEBI limits in case of Dividend                the debt instruments may affect the ability of the fund manager to
      Plan.                                                                            buy or sell freely in the market. In the event of inordinately large
                                                                                       number of redemption requests or of a restructuring of the
i)    Minimum subscription: Rs. 10,000/- only. No maximum limit.
                                                                                       Scheme’s portfolio, the time taken by the Fund for redemption
j)    AMC has borne the initial issue expenses and every rupee invested                may become significant. Please see para “Right to Limit
      by the investor was fully invested in the scheme.                                Redemptions” in section “Redemptions and Repurchase”.

k)    Tax benefits are available under sections 48 & 112 on capital               d)   AMC’s perception: Such situations may be extremely rare and
      gains for resident Indians.                                                      temporary in nature. Although the debt market in India is not very
                                                                                       liquid, there is always demand for debt instruments having a high
l)    Switchover facility at NAV related prices to other open-ended                    rating & issued by good companies, at appropriate yields. At
      schemes of SBI Mutual Fund, viz., Magnum Balanced Fund,                          times, the fund may choose to hold such instruments till maturity
                                                                                       and meet redemption needs through temporary borrowing within
      Magnum Equity Fund, Magnum Multiplier Plus Scheme 1993,                          permissible limits. The fund will keep a sufficient amount of the
      Magnum LiquiBond Income Fund, Magnum Gilt Fund and                               funds in cash, call money and liquid money market instruments
      Magnum Sector Funds Umbrella.                                                    to take care of the normal redemption needs.



4
                                                                                  MAGNUM

          SBI MUTUAL FUND
                                                                                Income Fund


                                                                                    after giving notice to that effect to the investors through an advertisement
             V. DUE DILIGENCE CERTIFICATE                                           in an English language daily that circulates all over India as well as in a
It is confirmed that :                                                              newspaper published in the language of the region where the Head
                                                                                    Office of the Mutual Fund is located. In any case, the increase will be
I.      The draft offer document forwarded to SEBI is in accordance with
                                                                                    applicable only to investors who invest after the date specified in the
        the Securities and Exchange Board of India (Mutual Funds)
                                                                                    advertisement and not to the existing investors on the amounts already
        Regulations, 1996, and the guidelines and directives issued by
                                                                                    invested by them. The loads can also be decreased or altogether removed
        SEBI from time to time;
                                                                                    by the Mutual Fund. The loads, if any, will be credited to the scheme and/
II.     All legal requirements connected with the launching of the scheme           or used for paying selling and marketing expenses as permissible under
        as also the guidelines, instructions, etc., issued by the Government        SEBI regulations.
        and any other competent authority in this behalf, have been duly            In any case, should the load structure change in future, such changes
        complied with.                                                              in load will be applicable only to prospective investors who invest after
III.    The disclosures made in the offer document are true, fair and               the date specified in the advertisement and not to the existing investors
        adequate to enable the investors to make a well informed decision           on the amounts already invested by them. The Mutual Fund will also
        regarding investment in the proposed scheme;                                endeavour to keep the investors informed through the following measures:
                                                                                    i) An addendum detailing the changes will be attached to the offer
IV.     All the intermediaries named in the offer document are registered                 documents and abridged offer documents. The addendum will
        with SEBI and till date such registration is valid.                               also be available with the distributors/brokers and will also be sent
                                                                                          alongwith the newsletter sent to the magnumholders immediately
                          Signature     :
                                                                                          after the changes.
                                                                                    ii)    The Mutual Fund will display the changes/modifications in the offer
                          Name          : Niamatullah                                      document in the form of a notice at all ISCs and distributors/
                                          Managing Director                                brokers office.
                                          SBI Funds Management Limited              iii)   The introduction of the exit load/CDSC alongwith the details will be
Date       :                                                                               stamped in the acknowledgement slip issued to the investors on
Place      : Mumbai                                                                        submission of the application form and will also be disclosed in the
                                                                                           statement of accounts issued after the introduction of such load/
                            VI. EXPENSES                                                   CDSC.
1. Magnum holder transaction expenses or sales load :                               iv)    Any other measures which the Mutual Fund considers necessary
                                                                                           in the interest of the magnumholders.
The following table illustrates the expenses that the investors will incur on
their purchases / sales of Magnums under this scheme :                              In accordance with SEBI Regulations, the repurchase price cannot be
                                                                                    lower than 93% of the NAV and the sale price will not be higher than
Nature of expense                           % of NAV                                107% of the NAV, and the difference between sale price and repurchase
Maximum sales load imposed on                                                       price shall not exceed 7% of the sale price.
purchases of Magnums                        NIL
                                                                                    2. Initial issue expenses:
Sales load if any on issue of
                                                                                    (a) Present scheme
Magnums in lieu of dividends                Not applicable
                                                                                    The initial issue expenses associated with the launch of this scheme
Contingent deferred sales load              NIL                                     were fully borne by SBI Funds Management Ltd. The initial issue expenses
Repurchase load                             NIL                                     were estimated at 6% of corpus collected. The actual initial expenses
                                                                                    were Rs. 32,785, i.e. 0.01% of initial corpus.
Switchover load                             NIL
                                                                                    Any investment made by the investors during the initial issue period was
The sales load and/or the repurchase load and/or the switchover load                fully invested in the scheme.
may be increased by the AMC at any time to a maximum of 3% of NAV




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                                                                            MAGNUM

       SBI MUTUAL FUND
                                                                          Income Fund


(b) Past Schemes
                                                                             Registrar Services for       On actuals, within the overall ceiling
Scheme Name        Estimated         Actual Issue     Remarks                transfer of units sold       mentioned below
                   Issue             Expenses                                or redeemed
                   Expenses                                                  Brokerage & Transaction      On actuals, within the overall ceiling
Magnum Gilt Fund 2.92% of the        Rs. 0.36 cr., Being a no load           cost                         mentioned below
                 Initial issue       i.e., 0.123% of scheme, the
                                     initial corpus  entire initial          Audit fees                   On actuals, within the overall ceiling
                 corpus.
                                                     issue expenses                                       mentioned below
                                                     were borne by
                                                                             Marketing & selling      On actuals, within the overall ceiling
                                                     the AMC.
                                                                             expenses, including      mentioned below.
Magnum Sector 6% of corpus           Rs. 0.49 cr., Rs. 1.25 lac              agent commission, if any
Funds Umbrella collected             i.e., 4.24% of borne by the             Cost of investor             On actuals, within the overall ceiling
                                     initial corpus AMC                      communication &              mentioned below
Magnum             6% of corpus      Rs. 32785, i.e. Being a no load         statutory advertising
InstaCash Fund     collected         0.01% of initial scheme, the            Cost of providing            On actuals, within the overall ceiling
                                     corpus           entire initial
                                                                             account statements           mentioned below
                                                      issue expenses
                                                      were borne by          & redemption warrants
                                                      the AMC                Insurance premium            On actuals, within the overall ceiling
                                                                             paid by the fund             mentioned below
M a g n u m Fund 1998                Rs. 1.23 cr.,      Fully borne by
LiquiBond Income 6%        of        i.e., 3.69% of     the AMC.             Winding up costs             On actuals, within the overall ceiling
                 corpus              initial corpus                                                       mentioned below
                 collected
                                                                             Total Expenses Charged       Subject to the following limits :
Magnum Monthly Being a no load Rs. 5.06 cr.,           Being a no load       to the scheme                Cash Plan
Income Scheme scheme, no i.e., 4.35% of                scheme, the                                        1.00% of the average weekly net assets
1998 (I)       estimates were initial corpus           entire initial
                                                                                                          Dividend Plan
               given in the offer                      issue expenses
               document.                               were borne by                                      i) 2.25% on the first Rs. 100 cr. of average
                                                       the AMC.                                              weekly net assets.
                                                                                                          ii) 2.00% on the next Rs. 300 cr. of average
Magnum Monthly 6% of corpus 5.33 crs., i.e.            Fully borne by
                                                                                                              weekly net assets
Income Scheme collectedR s . 2.88% of initial          the scheme.
1998 (II)                    corpus                                                                       iii) 1.75% on the next Rs. 300 cr. of the
                                                                                                             average weekly net assets
3. Annual Scheme Recurring Expenses:                                                                      iv) 1.50% on the balance of the average
The following expenses will be charged to the scheme on a recurring                                           weekly net assets
basis:
Category of expense       Ceilings as per SEBI                               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
Investment management     Subject to the following ceilings :
& advisory fee to be      i) Not exceeding 1.25% of the average              directly or indirectly. The total expenses charged to the Scheme (Cash
charged by the AMC.          weekly net assets of the scheme                 Plan) will be restricted to 1% of the weekly average NAV. Expenses
                             outstanding in the year as long as the net      incurred in excess of the above overall limits will be borne by the
                             assets do not exceed Rs. 100 crores and         AMC. The AMC reserves the right to revise this limit upwards to 1.5% in
                          ii) 1% of the amount in excess of Rs. 100          case of unforeseen expenses in the future, after giving at least 30 days’
                              crores where net assets so calculated          notice to the investors through an English language daily circulating all
                              exceed Rs. 100 crores                          over India.
Fees and expenses of      0.01% of the average weekly net assets,            In case of the Dividend Plan, the total expenses charged to the Scheme
Trustees                  subject to a minimum of Rs. 15 lakhs to be         will be restricted to (i) 2.25% on the first 100 crores of average working
                          allocated across all schemes of the fund.          net assets, (ii) 1.75% on the next Rs. 300 crores of average working net
Custodian fee             On actuals, within the overall ceiling             assets and (iii) 1.25% on the balance of average working net assets.
                          mentioned below



6
                                                                                  MAGNUM

         SBI MUTUAL FUND
                                                                                Income Fund


                                                                                                                            Magnum LiquiBond (Growth)
    VII. CONDENSED FINANCIAL INFORMATION                                           Particulars                         2000-2001 1999-2000         1998-1999
1. Historical Per Unit Statistics                                                  NAV at the beginning
The data for 2000-2001 pertains to data up to and as on 30th December              of the period                          11.9378          10.52             -
2000.                                                                              Net income per unit                     2.6420          1.810             -
(* - Indicates the returns for periods less than one year are in absolute          Dividends per unit                            -             -             -
terms only and not annualized.)                                                    Transfer from Reserves                        -             -             -
                                                Magnum Monthly Income
                                                                                   NAV at the end of the period           12.6420        11.8100        10.52
                                                    Scheme 1998 (II)
                                                                                   Annualized return since
Particulars                          Monthly Quarterly Annual Cumulative
                                     Income Income Income        Growth            inception for the period                 8.81%        13.28%       5.20%*
                                      Option   Option Option      Option           Net Asset at the end
(Statistics for the year 1998-99)                                                  of the period                           396.74         326.46        58.55
NAV at the beginning of the year                                                   Ratio of Recurring expenses
Net Income per unit                                                                to Net Assets                            1.69%         1.97%        1.43%
                                                                                                                  th
(Before payout)                         0.404       0.400    0.400      0.400      (Date of allotment of units: 30 November1998)
Dividends (payout)                      0.104           -        -          -
                                                                                   Particulars                             Magnum LiquiBond (Dividend)
Transfer to Reserves (if any)               -           -        -          -
                                                                                                                       2000-2001 1999-2000         1998-1999
Latest NAV                            10.404       10.400   10.400   10.400
                                                                                   NAV at the beginning
Annualised Return (%)                 3.60%*      3.60%* 3.60%*      3.80%*
                                                                                   of the period                          10.4098          10.52             -
Net Assets at the end
of the year (Rs. Cr.)                   58.84       20.68   100.47      11.54      Net income per unit                     2.2060          1.635             -
Ratio of recurring expenses                                                        Dividends per unit                            -         1.295             -
to Net Assets (%)                      0.12%       0.12%    0.12%       0.12%      Transfer from Reserves                        -             -             -
(Statistics for the                                                                NAV at the end of the period           10.5610        10.3400        10.52
year 1999-2000)                                                                    Annualized return since
NAV at the beginning of the year      10.404       10.400   10.400   10.400        inception for the period                 8.00%          12.54      5.20%*
Net Income per unit                                                                Net Asset at the end
(before payout)                         2.771       2.754    1.580      2.950      of the period                           301.51         351.59        58.55
Dividends (Payout)                      1.441       1.264    1.325          -      Ratio of Recurring expenses
Transfer to Reserves (if any)               -           -        -          -      to Net Assets                            1.69%         1.97%        1.43%
Latest NAV                              11.33       11.49    11.58      12.95      (Date of allotment of units: 30th November1998)
Annualised Return (%)                25.82%       24.45% 24.76%      24.73%        (* - Indicates the returns for periods less than one year are in absolute
Net Assets at the end of                                                           terms only and not annualized.)
the year (Rs. Cr.)                      58.04       20.17    93.15      14.31
                                                                                   Particulars                                          Magnum Growth Fund
Ratio of recurring expenses
to Net Assets (%)                      1.35%       1.35%    1.35%       1.35%                                                         2000-2001    1999-2000
(Statistics for                                                                    NAV at the beginning of the period                      15.51             -
the year 2000 – 2001)
                                                                                   Net income per unit                                    5.8050       12.485
NAV at the beginning of the year        11.39       11.58    11.67      13.05
                                                                                   Dividends per unit                                      6.125        6.125
Net Income per unit
                                                                                   Transfer from Reserves                                      -             -
(before payout)                         2.841       2.777    3.125      3.130
                                                                                   NAV at the end of the period                             9.68        16.36
Dividends (Payout)                      2.311       2.057    1.325          -
Transfer to Reserves (if any)               -           -        -          -      Annualized return since inception for the period      32.07%     133.47%*

Latest NAV                              10.53       10.72    11.80      13.13      Net Asset at the end of the period                     200.02       338.20

Annualised Return (%)                18.82%       17.84% 18.07%      18.04%        Ratio of Recurring expenses to Net Assets             0.43 %        0.41%

Net Assets at the end                                                              (Date of allotment of units: Magnum Growth Fund – 24th May 1999)
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%

(Date of allotment of units: 29th January 1999)



7
                                                                                 MAGNUM

         SBI MUTUAL FUND
                                                                               Income Fund


                            Magnum InstaCash            Magnum InstaCash          Note: The latest NAV is dated as on 30th December 2000. The
      Particulars               (Cash)                     (Dividend)             compounded annualized returns have been calculated since inception
                           2000-2001 1999-2000 2000-2001 1999-2000
                                                                                  of the schemes, taking adjusted NAV, i.e., after adjusting dividends paid
                                                                                  out on initial NAV of Rs. 10/- per Magnum.
NAV at the beginning
of the period                 10.8389               -     11.01            -
                                                                                  * - indicates the returns for periods less than one year are in absolute
                                                                                  terms only and not annualized.
Net income per unit             1.565          0.830     1.4909       1.010
Dividends per unit                  -               -    0.7850            -
                                                                                  2. Details of borrowings by other schemes :
                                                                                  Scheme Name          Amount   Date of            Amounts Date of      Purpose of    Interest
Transfer from Reserves              -               -         -            -                          Borrowed Borrowing           Repaid Repayment     Borrowing        Rate
NAV at the end of                                                                 Magnum Bond        250,00,000 24/6/98         100,00,000    30/7/98   Funding of    14.79%
the period                    11.5646          10.83    10.7059       11.01       Fund 1994                                     125,00,000    4/8/98    Repurchases
                                                                                                                                 25,00,000    6/8/98    A/c.
Annualized return since                                                                               12,76,366 27/8/98          12,76,366    1/9/98
inception for the period       7.08%       8.30%*        6.32%    10.10%*                             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%
Net Asset at the end
                                                                                  Income Scheme                                                         Repurchases
of the period                    6.00            8.35      4.64         0.09      1997                                                                  A/c.
Ratio of Recurring                                                                Magnum Monthly      45,67,368 31/7/98          45,67,368 6/8/98       Funding for   14.79%
                                                                                  Income Scheme                                                         Monthly
expenses to
                                                                                  1998 (I)                                                              payout
Net Assets                     0.70%           0.47%      1.5%        0.58%
                                                                                  Magnum GIFTS - A    40,00,000 18/7/98           40,00,000   28/7/98   Funding of    14.79%
(Date of allotment of units: Magnum InstaCash Fund – 28th May 1999)                                    10,33,441 16/3/99          10,33,441   31/3/99   Repurchases
                                                                                                     1,80,00,000 21/7/99         1,00,00,00   28/7/99   A/c.          14.50%
(* - Indicates the returns for periods less than one year are in absolute                                                         80,00,000   5/8/99                  14.50%
terms only and not annualized.)                                                                       26,07,099    28/10/99      93,14,005 30/11/99                   13.50%
                                                                                                      45,06,906    1/11/99
Particulars                   MSFU (Contra)              MSFU (IT)                                    22,00,000    22/11/99
                           2000-2001 1999-2000 2000-2001 1999-2000                                     9,04,000    23/08/2000
                                                                                                      12,47,000    26/08/2000    21,51,000 8/9/2000
NAV at the beginning
                                                                                  Magnum Equity      100,00,000 18/9/98         100,00,000 7/10/98      Funding of    14.79%
of the period                    9.21               -     24.67            -      Linked Savings                                                        Repurchases
Net income per unit            -1.660          -0.550     5.410      20.800       Scheme 1995                                                           A/c.
                                                                                  Magnum Tax          2243905.5    16/7/99       2243905.5 19/7/99      Funding of    14.79%
Dividends per unit                  -               -        4             4
                                                                                  Gain 1993            10204262    18/8/99                              Repurchases
Transfer from Reserves              -               -         -            -                            8238072    2/9/99       1,84,42,334 15/9/99     A/c.
                                                                                                       43,23,727   28/10/99                 30/11/99                  13.50%
NAV at the end of
                                                                                                       75,00,000   1/11/99      1,99,23,727
the period                       8.34            9.45     11.41       26.80                            81,00,000   5/11/99
Annualized return since
                                                                                  3. Disclosure under Regulation 25(11)
inception for the period      -9.16%      -5.50%*       31.50%    347.51%*
Net Asset at the end
                                                                                  During the last financial year (1st April 1999 up to 31st March 2000), SBI
of the period                   11.57          10.88     121.16      234.93       Mutual Fund has made the following investments in companies which
Ratio of Recurring
                                                                                  hold units in excess of 5% of the Net Asset Value of any scheme of SBI
expenses to Net Assets            2%           2.06%     1.74%        2.06%       Mutual Fund:
(Date of allotment of units: 31st July 1999)                                      Scheme Name                         Investments by the respective schemes in
Particulars                     MSFU (FMCG)             MSFU (Pharma)                                                 Companies or its subsidiaries where that
                                                                                                                      Company or its subsidiaries have invested
                           2000-2001 1999-2000 2000-2001 1999-2000
                                                                                                                      more than 5% of the NAV in any scheme
NAV at the beginning
of the period                   10.68              -      10.91           -       Gifts-B                             ITC Bhadrachalam Paper Boards (Equity),
Net income per unit            -1.530          0.920     -0.110       0.970                                           TISCO (Equity) and State Bank of India
Dividends per unit                  -              -                      -                                           (Equity)
Transfer from Reserves              -              -          -           -       MMPS 93                             ITC Bhadrachalam Paper Boards (Equity),
NAV at the end of                                                                                                     TISCO (Equity), State Bank of India (Equity),
the period                       8.47          10.92       9.89       10.97
Annualized return since                                                                                               SBI Home Finance Ltd. (Equity), State Bank
inception for the period      -8.41%       9.30%*       -0.58%       9.70%*                                           of Bikaner & Jaipur (Equity), Thermax Ltd.
Net Asset at the end                                                                                                  (Equity) and HDFC Bank Ltd. (Equity)
of the period                   15.05          12.65      24.97       19.77       MELS91                              State Bank of India (Equity), State Bank of
Ratio of Recurring                                                                                                    India (Equity – Demat) and TISCO (Equity)
expenses to Net Assets         2.25%           2.06%     2.22%        2.06%
                                                                                  MGLF-94                             TISCO (Equity)
(Date of allotment of units: 31st July 1999)


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MMIS-97              State Bank of India (Equity), TISCO, State                     VIII. CONSTITUTION OF THE MUTUAL FUND
                     Bank of Hyderabad (Bonds) and State Bank
                     of Travancore (Bonds)                                       1. Constitution
MMIS-91              State Bank of India (Equity), TISCO (Equity),               SBI Mutual Fund has been constituted as a Trust, sponsored by SBI. SBI
                     TISCO (Bonds) and TISCO (NCDs)                              has made an initial contribution of Rs. 5 lacs towards setting up of the
Magnum Equity Fund    State Bank of India (Equity) and TISCO                     Trust fund. SBI has been designated as the Principal Trustee, and has
(formerly MMS-90)     (Equity)                                                   appointed a Board of Trustees to supervise the activities of the Fund. The
                                                                                 Board of Trustees have entrusted the work of management of the Fund to
Magnum Balanced Fund State Bank of India (Equity), TISCO (Equity),
                                                                                 SBI Funds Management Ltd., an Asset Management Company.
(formerly MOEF-95)    State Bank of Hyderabad (Bonds & NCD),
                      State Bank of Travancore (Bonds & NCD)                     2. Objective of SBI Mutual Fund
                      and ICICI Bank (Equity)                                    The basic objective of SBI Mutual Fund is to mobilize savings from a wide
MTPL (redeemed on     State Bank of India (Equity) and                           cross-section of people and to provide them attractive returns, security
19th May 1999)        TISCO (Equity)                                             and liquidity through investments in capital and money markets.
MELS96               TISCO (Equity)                                              3. The Sponsor
MGF 99               HDFC Bank Ltd. (Equity) and TISCO (Equity)                  The State Bank of India or SBI having its Corporate Office at State Bank
MSFU-Contra          TISCO (Equity)                                              Bhavan, Madame Cama Road, Mumbai - 400 021, is the largest public
MLIF-98              State Bank of India (Bonds) and TISCO (Bonds                sector bank in India with 8,836 branches all over India. SBI is the leader
                     & NCD)                                                      in providing loans to trade & industry. It also provides related services
                                                                                 which generate significant fee-based income. It has also identified project
MMIS 98(II)          State Bank of Saurashtra (Bonds)
                                                                                 finance and consumer banking as key areas.
MBF 94               State Bank of India (Equity) and TISCO
                                                                                 The financial performance SBI is summarized below:
                     (Bonds)
MMIS 98(I)           TVS-SUZUKI Ltd. (Equity) and TISCO (Bonds                   Year ended March 31st 2000          1999   1998   1997    1996
                     & NCD)                                                      Turnover /
MRIS 93              TISCO (NCD), State Bank of India (Equity),                  Total Income (Rs. cr.)       25770 22392 18699 17594 15716
                     SBI Home Finance (Equity), State Bank of                    Profit after Tax (Rs. cr.)     2051  1028   1861   1349    832
                     Hyderabad (Bonds) and SBS (Bonds)                           Equity Capital (Rs. cr.)        526   526    526    526    474
MTP 94               State Bank of India (Equity) and TVS-SUZUKI                 Free Reserves (Rs. cr.) 11620        9876   9082   7451   4989
                     Ltd. (Equity)                                               Net Worth (Rs. Cr.)          12147 10402   9608   7977    5463
MTGS 93              Thermax (Equity)                                            Deposits (Rs. cr.)         196821 169041 131091 110701 96395
                                                                                 Earnings
These investments comprise debt, equity and money market instruments.            per share (Rs.)               38.98 19.53 35.36 26.66 17.54
SBI Mutual Fund is of the opinion that the said companies are fundamentally      Book Value
strong and possess a high potential for growth and are market leaders in         per share (Rs.)             230.93 197.64 182.66 151.65 115.25
their respective fields. Accordingly, investments were made in the said          Capital Adequacy
companies. The investments made by some schemes of SBIMF in bonds                Ratio (%)                     11.49 12.51 14.58 12.17 11.60
issued by associate companies including State Bank of India and its
                                                                                 Dividend paid (%)               50%   40%    40%    40%    35%
subsidiaries are in compliance with the investment restrictions contained
in clause 9 of the seventh schedule to the SEBI (MF) Regulations, 1996.          source : SBI Annual Reports




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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,                  Formerly Professor,           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                     1. Director, IDBI Bank Ltd.
M. Chitale                         Shyamkamal                            Accountant                    2. Director, Investor Services of India Ltd.
Trustee                            Ville Parel (E)                                                     3. Director, Sun Vacuum Formers Ltd.
                                   Mumbai 400 057

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



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h)   To ensure that all activities of the AMC are in accordance with the                  iii   a certificate to the effect that the AMC has been managing the
     provisions of SEBI (Mutual Fund) Regulations, 1996.                                        schemes independently of any other activities and in case any
i)   Where the trustees have reason to believe that the conduct of business                     activities of the nature referred to in sub-regulation (2) of
     of the mutual fund is not in accordance with SEBI (Mutual Fund)                            regulation 24 of SEBI (Mutual Fund) Regulations, 1996 have
     Regulations, 1996 and the scheme they shall forthwith take such                            been undertaken by the AMC and has taken adequate steps
     remedial steps as are necessary by them and shall immediately                              to ensure that the interests of the magnumholders are
     inform the SEBI of the violation and the action taken by them.                             protected.
j)   To file the details of his/her holdings in securities on a quarterly basis      w) The independent Trustees referred to in regulation 16 shall give their
     with the trust.                                                                    comments on the report received from the AMC regarding the
                                                                                        investments made by the schemes in the securities of group
k)   To be accountable for, and be the custodian of, the funds and
                                                                                        companies of the Sponsor.
     property of the respective schemes and to hold the same in trust or
     the benefit of the unit holders in accordance with SEBI (Mutual                 x)   The trustees shall ensure that no change in the fundamental attributes
     Fund) Regulations, 1996 and the provisions of trust deed.                            of any scheme or the trust or fees and expenses payable or any
                                                                                          other change which would modify the scheme and affects the
l)   To take steps to ensure that the transactions of the mutual fund are
                                                                                          interest of unitholders, shall be carried out unless, a written
     in accordance with the provisions of the trust deed.
                                                                                          communication about the proposed change is sent to each
m) To be responsible for the calculation of any income due to be paid                     unitholder and an advertisement is given in one English daily
   to the mutual fund and also of any income received in the mutual                       newspaper having nationwide circulation as well as in a newspaper
   fund for the holders of the units of any scheme in accordance with                     published in the language of the region where the Head Office of the
   SEBI (Mutual Fund) Regulations, 1996 and the trust deed.                               mutual fund is situated; and the unitholders are given an option to
n)   To obtain the consent of the magnumholders :-                                        exit at the prevailing Net Asset Value without any exit load.
     i      whenever required to do so by the SEBI in the interest of the            Explanation: For the purposes of this clause “fundamental attributes”
            magnumholders; or                                                        means the investment objectives and terms of a scheme as defined later
     ii     whenever required to do so on the requisition made by three              in the offer document under the section “Investment Objectives and
            fourths of the magnumholders of any scheme; or                           Policies”.
     iii    when the majority of the trustees decide to wind up or                   As per the sub-regulation (25), the Trustees shall exercise due
            prematurely redeem the units.                                            diligence as under:
o)   To call for the details of transactions in securities by the key personnel      A. General Due Diligence:
     of the AMC in his own name or on behalf of the AMC and shall                    (i) The Trustees shall be discerning in the appointment of the directors
     report to the SEBI, as and when required.                                            on the Board of the asset management company.
p)   To quarterly review all transactions carried out between the mutual             (ii) Trustees shall review the desirability of continuance of the asset
     fund, asset management company and its associates.                                   management company if substantial irregularities are observed in
q)   To continuously review the net worth of the AMC and in case of any                   any of the schemes and shall not allow the asset management
     shortfall, ensure that the AMC make up for the shortfall as per                      company to float new schemes.
     clause (f) of sub-regulation (1) of regulation 21 of SEBI (Mutual               (iii) The trustee shall ensure that the trust property is properly protected,
     Fund) Regulations, 1996.                                                              held and administered by proper persons and by a proper number
r)   To periodically review all service contracts such as custody                          of such persons.
     arrangements, transfer agency of the securities and satisfy itself that         (iv) The trustee shall ensure that all service providers are holding
     such contracts are executed in the interest of the magnumholders.                    appropriate registrations from the Board or concerned regulatory
s)   To ensure that there is no conflict of interest between the manner of                authority.
     deployment of its net worth by the AMC and the interest of the                  (v) The Trustees shall arrange for test checks of service contracts.
     magnumholders.                                                                  (vi) Trustees shall immediately repor t to Board of any special
t)   To periodically review the investor complaints received and the                      developments in the mutual fund.
     redressal of the same by the AMC.                                               B. Specific Due Diligence:
u)   To abide by the Code of Conduct as specified in the fifth schedule              The Trustees shall:
     of SEBI (Mutual Fund) Regulations, 1996.                                        (i) obtain internal audit reports at regular intervals from independent
v)   To furnish to the SEBI on a half yearly basis :-                                     auditors appointed by the Trustees.
     i      a report on the activities of the mutual fund;                           (ii) obtain compliance certificates at regular intervals from the asset
     ii     a certificate stating that the trustees have satisfied themselves             management company.
            that there have been no instances of self dealing or front               (iii) hold meeting of trustees at frequent intervals.
            running by any of the trustees, directors and key personnel of
            the AMC;


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(iv) consider the reports of the independent auditors and compliance             3. Board of Directors:
     reports of asset management company at the meetings of trustees             The Board of Directors of the SBIFM comprises the following eminent
     for appropriate action.                                                     persons:
(v) maintain records of the decisions of the Trustees at their meetings          Shri Janaki Ballabh               D-7, Kinellan Tower
    and of the minutes of the meetings.                                          Chairman                          100A, Napean Sea Road,
(vi) prescribe and adhere to a code of ethics by the Trustees, asset             State Bank of India
     management company and its personnel.                                       Mumbai - 400 006.
(vii) communicate in writing to the asset management company of the              Shri S.L. Rao                     A-165, Defence Colony,
      deficiencies and checking on the rectification of deficiencies.            Chairman,                         New Delhi-110 024.
                                                                                 Central Electricity
6. Trusteeship Fees:
                                                                                 Regulatory Commission
As per the provisions of the Trust Deed, the Principal Trustee, viz., State      New Delhi
Bank of India, is entitled to a trusteeship fee of 0.01% p.a. of net asset       Shri R.G. Kare                    Kare House
value of each Scheme, subject to a minimum fee of Rs. 15 lakhs to be             Industrialist                     Near Metropol Cinema
allocated across schemes in proportion to their weekly average NAVs.                                               Margao, Goa - 403 601.
7. Modifications to the Trust Deed:                                                       .
                                                                                 Shri D. P Roy                     D-11, Kinellan Tower
No amendments to the Trust Deed will be carried out without the prior            Dy. Managing Director             100A, Napean Sea Road,
approval of SEBI and the Magnumholders’ approval would be obtained               State Bank of India               Mumbai - 400 006.
where it affects the interests of the magnumholders.                             Shri Birendra Kumar               C-6, Kinellan Tower
                                                                                 Managing Director                 100A, Napean Sea Road,
            IX. MANAGEMENT OF THE FUND                                           SBI Capital Markets Ltd.          Mumbai - 400 006.
The Board of Trustees of SBI Mutual Fund have entrusted the management           Shri Niamatullah                  C-2, Kinellan Tower
of the Fund to SBI Funds Management Ltd., the AMC. Further details               Managing Director                 100A, Napean Sea Road,
regarding the set up are furnished in the following paragraphs.                  SBI Funds Management Ltd.         Mumbai - 400 006.
1. About the AMC:                                                                Shri Ajay Shah                    Santosh Nagar,
SBI Funds Management Ltd. (SBIFM) having its corporate office at 191,            Asst. Professor                   General Arun Kumar Vaidya Marg
Maker Tower “E”, 19th floor, Cuffe Parade, Mumbai - 400 005, is a wholly         Indira Gandhi Institute of        Film City Road, Goregaon (E)
owned subsidiary formed by State Bank of India. As per the audited               Development Research              Mumbai-400065
accounts on 31st March 2000, the authorized and paid up capital of the           Shri Manu Chadha                  B-30 Connaught Place
AMC was Rs. 50 crores and the net worth of the AMC was Rs. 47.72                 Chartered Accountant              Kuthiala Building
crores.                                                                                                            New Delhi 110 001.
SBI Funds Management Limited has signed an Investment Management                 4. Key Personnel:
Agreement with the Trustees of SBI Mutual Fund on 14th May 1993. In              The day to day operations of the AMC are looked after by experienced
terms of this Agreement, SBIFM has assumed the day to day investment             and qualified professionals, consisting of senior officials on deputation
management of the fund and in that capacity makes investment decisions           from the State Bank of India as well as directly recruited officials of the
and manages the SBI Mutual Fund Schemes in accordance with the                   AMC.
scheme objectives, Deed of Trust, provisions of Investment Management
                                                                                 a. The top key management personnel of SBI Funds Management Ltd.
Agreement and SEBI Regulations.
                                                                                 are
To date, SBIFM has successfully launched and managed 30 schemes
                                                                                  Name                    Designation      Business Experience
(including 2 offshore funds) of SBI Mutual Fund. Of these 10 schemes
have been redeemed. Of the 18 schemes still being managed, 9 are                  Shri Niamatullah        Managing         Experience of over 35 years
open-ended schemes and the rest are close-ended schemes, with total                                       Director         with SBI, including 11 years
net assets of approximately Rs.3, 400 crores, including offshore funds                                                     as a senior executive.
(as on 30st December, 2000). SBI Funds Management is already Y2K                  Shri K. G. Ravindran    Executive        33 years of experience with
compliant. The expenditure that has been incurred by the Mutual Fund                                      Vice             SBI including 5 years as a
for the same purpose is Rs. 80,000 and no further expenses are expected                                   President        senior executive.
to be incurred for the same.                                                     5. Head of Debt and Fund Manager
2. AMC Fees:                                                                      Name                    Qualifications Experience
For management of the above funds, the AMC at present charges a fee               Shri Pijush Das         B.Sc., M.A,     13 years of experience in the
not exceeding 1% of the weekly average NAV of each scheme, which is                                       Economics       treasury at the State Bank of
charged to the respective scheme. In future, the AMC may modify the fee                                                   India. Served as Head of
from scheme to scheme, within the limits specified in the Regulations                                                     Treasury at SBI Singapore from
and disclosed in the offer documents of the respective schemes.                                                           1995-99


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

Under the SEBI (Mutual Fund) Regulations, 1996, the AMC has the                    m) to file with the trustees and the SEBI-
following obligations:                                                                  i     detailed bio-data of all its directors alongwith their interest in
a) to take all reasonable steps and exercise due diligence to ensure that                     other companies within fifteen days of their appointment; and
      the investment of funds pertaining to any scheme is not contrary to               ii    any change in the interests of directors every six months.
      the provisions of SEBI (Mutual Fund) Regulations 1996 and the                n)   to file with the trustees a statement of holdings in securities of the
      Trust Deed.
                                                                                        directors of the AMC with the dates of acquisition of such securities
b)   to exercise due diligence and care in all its investment decisions as              at the end of each financial year.
     would be exercised by other persons engaged in the same business.
                                                                                   o)   not to appoint any person as key personnel who has been found
c)   to be responsible for the acts of commissions or omissions by its                  guilty of any economic offence or involved in violation of securities
     employees or the persons whose services have been procured by                      laws.
     the AMC.


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            SBI MUTUAL FUND
                                                                                 Income Fund


p)   to appoint registrars and share transfer agents who are registered             g)   No application form, or sales literature or any other printed matter
     with the SEBI.                                                                      issued to the prospective buyers or advertisements or reports and
     Provided if the work relating to the transfer of units is processed in-             or announcement (other than that of price or yields) addressed to
     house, the charges at competitive market rates may be debited to                    the general body of Magnum holders, or to the public or to the
     the scheme and for rates higher than the competitive market rates,                  press or other communications media, is issued or published
     prior approval of the trustees shall be obtained and reasons for                    without the prior approval of the Board of Trustees. Such application
     charging higher rates shall be disclosed in the annual accounts.                    forms, sales literature or other printed matter shall not contain any
                                                                                         statement or material extraneous to the Trust Deed or scheme offer
q)   to abide by the Code of Conduct as specified in the fifth schedule of
                                                                                         document and the contents there of shall first be approved by the
     SEBI Regulations.
                                                                                         Trustees.
9. Substantive Provisions of the Investment Management                              10. Registrars:
Agreement between the Board of Trustees of SBI Mutual 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 No. 93, Road
a)   The AMC shall be permitted to invest only in transferable securities
                                                                                    No. 16, M.I.D.C Area, Andheri (E), Mumbai – 400 093 as Registrars and
     either in the money market or in the capital market, including any
                                                                                    Transfer Agents to the scheme. The Board of Trustees and the AMC have
     privately placed debentures or securitised debt.
                                                                                    ensured that the Registrar has adequate capacity to discharge
b)   i)      The Trustees have the right to decide the percentage of AMC’s          responsibilities with regard to processing of applications and dispatch of
             investment in privately placed debentures, securitised debt            Magnum certificates to investors within the time limit prescribed in the
             and other unquoted debt instruments.                                   SEBI Regulations and that they have sufficient capacity to handle investor
     ii)     The AMC shall ensure that all debt instruments have been               complaints. The AMC reserves the right to change the Registrars at any
             rated as investment grade by an approved credit rating agency.         time with the approval of the Board of Trustees.
             In case a debt instrument is not rated, mutual funds may               11. Register of Magnum holders:
             constitute committees who can approve such proposals for
                                                                                    A register of Magnum holders under this scheme containing the necessary
             investments in unrated instruments subject to the approval of
                                                                                    particulars will be maintained at the office of the Registrar to the scheme
             the detailed parameters for such investments by the Board of
                                                                                    and at such place(s) as the Trustees may decide.
             Directors and the Board of Trustees.
c)   The AMC shall not give or guarantee any loans or take up any
                                                                                    12. Custodians:
     activity in contravention of the SEBI regulations.                             SBIMF Mutual Fund has appointed ABN AMRO Bank N.V. (SEBI registration
                                                                                    no. IN/CUS/013) situated at Raheja Chambers, Ground Floor, Nariman
d)   i)      The AMC shall ensure that : i) the mutual fund under all its
                                                                                    Point, Mumbai 400 021, as the Custodians for the scheme.
             schemes put together shall not own more than 10% of any
             one company’s paid up capital carrying voting rights.                  The Custodians will be required to take delivery of all properties belonging
                                                                                    to the scheme and to hold them in separate custody account and also
     ii)     a scheme may invest in another scheme under the AMC of
                                                                                    separately from the assets of the custodians and their clients. The
             any other mutual fund without charging any fees, provided
                                                                                    Custodians will make efforts to have the properties of the Fund registered
             that aggregate inter-scheme investment made by all schemes
                                                                                    in the name of the Fund and will deliver them only as per instructions of
             under the same management or in schemes under the
                                                                                    the AMC and on receipt of the consideration. The Custodians shall
             management of any other AMC shall not exceed 5% of the
                                                                                    collect, receive and deposit in the account or accounts of the Fund with
             Net Asset Value of the mutual fund.
                                                                                    the Bank, income, dividend, interest, rights and other payments of whatever
     iii)    delivery of scrips purchased is taken and that delivery is given       kind with respect to the securities and other assets and items of alike
             in the case of scrips sold and shall in no case engage in short        nature of the Fund held by or to the order of the Custodians and shall
             selling or carry forward transactions or badla finance.                execute such ownership and other confirmations as are necessary. The
e)   Transfers from one scheme to another in the same mutual fund shall             Custodians shall be generally authorized to attend to all non-discretionary
     be allowed only if: -                                                          and procedural details for discharge of normal custodial functions in
     i)      such transfers are done at the prevailing market price for quoted      connection with the sale, purchase, transfer and other assets held for the
             instruments on spot basis.                                             account of the fund by the Custodians as an Agent except as may
                                                                                    otherwise be directed by the Fund. For their services, the Custodians shall
     ii)     the securities so transferred would be in accordance with the
                                                                                    be paid a custodial fee as agreed upon by the AMC and the Custodians
             investment objective of the transferee scheme.
                                                                                    and within the limits given in the section “Expenses”. The AMC reserves
     iii)    the registration and accounting of the transaction is completed        the right to change the Custodians at any time with the approval of the
              and is ratified in the next meeting of the Trustees.                  Board of Trustees.
f)   The AMC shall not acquire any property out of the Funds under its              13. Auditors:
     management which results in the mutual fund assuming any
                                                                                    SBIMF has appointed M/s. Bharat S. Raut & Co., located at The
     unlimited liability or which may have the effect of encumbering any
                                                                                    Metropolitan, Floor III, Bandra-Kurla Complex (E Block), Mumbai 400
     of the assets of the Mutual Fund in any way.




14
                                                                                  MAGNUM

        SBI MUTUAL FUND
                                                                                Income Fund


051, as the auditors to the scheme. The Board of Trustees of SBIMF shall           instruments also tends to move up or down with a change in the interest
review the appointment of auditors after every two years or at such time           rates. Accordingly, the scheme will have two investment plans for the
as may be deemed fit in the opinion of the Board. The AMC reserves the             investors’ convenience:
right to change the Auditors at any time with the approval of the Board of         Plan A: Dividend Plan
Trustees.                                                                          Plan B: Cash Plan
14. Collecting Banker(s):                                                          Both Plans will invest their entire corpus in debt (Corporate debentures &
SBIMF will utilize the services of State Bank of India as the collecting           bonds, PSU/FI/Govt. guaranteed bonds), Govt. securities and money
banker (SEBI registration no. INBI00000038) for the Scheme. Please                 market instruments (commercial paper, certificates of deposit, T-bills,
note that the AMC may utilize the services of branches of the SBI Group            bills rediscounting, repos, short-term bank deposits, call money etc.).
or branches of any other Bank as maybe decided at a later date, as                 The Dividend Plan will invest in debt instruments of longer maturities as
authorized collecting branches for the scheme. This has also been                  well as money market instruments. The returns from long maturity
mentioned under the section “Associate Transactions”. The branches                 instruments will be higher while the money market instruments will lend
will be paid handling charges as per the prevailing market rates and/or as         liquidity to the portfolio. The returns will however vary according to
negotiated with them. For applications directly solicited and collected by         interest rate changes. The Mutual Fund reserves the right to suitably alter
the branches of SBI or its associates, they may also be paid an agent              the frequency of the dividend payments under the Plan depending on the
commission at a rate not exceeding the rate of commission being paid to            performance and any change in the tax laws.
other agents for the Scheme.                                                       The Cash Plan is intended for investors who want to invest in shorter
                                                                                   maturity instruments. The Cash Plan provides relatively higher liquidity
     X. INVESTMENT OBJECTIVES & POLICIES                                           and the returns will depend on the movement in short-term interest rates.
                                                                                   This Plan will invest in debentures and bonds maturing not later than 3
1. The scheme:                                                                     years, in Govt. securities and in money-market instruments.
The fundamental attributes and salient features of Magnum InstaCash                Both Plans will declare separate daily NAVs (including Saturday and
Fund are set out below for the purpose of inviting subscriptions to the            Sunday) and the switchover between the two Plans and to the other
scheme from the public.                                                            schemes of the mutual fund will be at NAV related prices.
2. Fundamental Attributes:                                                         4. Objective of the scheme
The following attributes will be considered as fundamental attributes:             The objective of the scheme is to provide investors an investment
1. Type of Scheme            : Open-ended liquid scheme investing in               opportunity to earn returns that are likely to be superior to the returns
                                 debt, Government Securities, money                offered by comparable investment avenues, through investment in debt
                                 market instruments including call money.          & money market securities, while retaining a very high level of liquidity to
2. Investment Objective : To provide the investors an opportunity to               meet unexpected needs for cash.
                                 earn returns through investment in debt &
                                 money market securities, while having the
                                                                                   5. a. Investment strategy
                                 benefit of a very high degree of liquidity.       The funds collected under the scheme shall be invested, consistent with
                                 The investment objective is given in the          the objective of the scheme. The investment pattern of the scheme will
                                 following paragraphs in this section.             be as follows:
3. Terms of Issue            : The nature & duration of the scheme,                Instrument                       % of portfolio % of portfolio Risk
                                 provision for repurchase, scheme                                                   Dividend Plan Cash Plan        Profile
                                 expenses & fees, as stated elsewhere in
                                 the Offer Document.                               Cash & Call Money                Upto 100%       Upto 100% Low
Changes in the fundamental attributes of the scheme as defined above or            Money Market Instruments * Upto 100%             Upto 100% Low
any other change which would modify the scheme and affects the                     Government Securities            Upto 100%       Upto 100% Low
interest of unitholders, shall be carried out only after – (i) a written           Corporate debentures &           Upto 80%        Upto 80%       Low to
communication about the proposed change is sent to each unitholder                 Bonds / PSU / FI / Govt                                         medium
and an advertisement is given in one English newspaper having nationwide
                                                                                   Guaranteed Bonds /others
circulation as well as in a newspaper published in the language of the
region where the Head Office of the mutual fund is situated; and (ii) the          including Securitised debt
unitholders will be given an option to exit at the prevailing Net Asset Value      (less than 3 year maturity)
without any exit load.                                                             Corporate debentures &           Upto 60%        NIL            Low to
                                                                                   Bonds / PSU / FI / Govt                                         medium
3. Type, Nature & Duration of the scheme:
                                                                                   Guaranteed Bonds / others
Magnum InstaCash Fund is an open ended highly liquid scheme investing              including securitised debt
in debt & money market instruments. Being open-ended the scheme will
                                                                                   (greater than 3 year maturity)
have an unlimited duration.
In general, a fall in the long term interest rates leads to higher capital         Units of other mutual funds Upto 5%              Upto 5%        Low
appreciation on debt investments, and similarly, if there is an increase in        (debt & money market funds)
long term interest rates, the market prices of debt instruments tend to fall.      * Money Market Instruments will include Commercial Paper, Certificates
The change in prices of debt instruments is higher for instruments with                  of Deposit, Treasury Bills, Bills Rediscounting, Repos, short term
longer maturity. Thus the NAV of a debt fund which invests in these                      bank deposits, short-term Government Securities (of maturities less


15
                                                                                  MAGNUM

           SBI MUTUAL FUND
                                                                                Income Fund


     than 1 year) and any other such short-term instruments or investment               (ii)   The securities so transferred shall be in conformity with the
     options as may be allowed under the regulations prevailing from                           investment objective of the relevant scheme to which such
     time to time.                                                                             transfer has been made.
The investments may be made in primary as well as secondary markets.               e.   The scheme may purchase or sell securities to any other scheme of
The portfolio will be sufficiently diversified so as to reduce the risk of              the Mutual Fund as stated above.
underperformance due to unexpected scrip-specific factors. If allowed              f.   The Mutual Fund shall buy and sell securities on the basis of deliveries
in future, the fund may invest in foreign debt (subject to relevant RBI                 and shall in all cases of purchases, take delivery of relative securities
guidelines and subject to SEBI and RBI approval). Any investment in                     and in all cases of sale, deliver the securities and shall in no case put
Government securities may be in securities supported by ability to borrow               itself in a position whereby it has to make short sale or carry forward
from the Treasury, or sovereign or state government guarantee, or                       transaction or engage in badla finance.
supported by the Government of India / a State Government in any other
                                                                                   g.   The scheme shall provide that the securities be purchased or
manner.
                                                                                        transferred in the name of the Mutual Fund for the relevant scheme,
5. b. Investment Limitations                                                            wherever the investments are intended to be of a long-term nature.
The scheme being open-ended, some portion of the portfolio will be                 h.   Pending deployment of funds of the scheme in securities pursuant
invested in highly liquid money market instruments or government paper                  to the investment objectives of the scheme the Mutual Fund can
so as to meet the normal repurchase requirements. The remaining                         invest the funds of the scheme in short-term deposits of scheduled
investments will be made in securities which are either expected to be                  commercial banks.
reasonably liquid or of varying maturities. However, the NAV of the scheme
                                                                                   i.   The assets of the scheme shall not in any manner be used in short
may be impacted if the securities invested in are rendered illiquid after
                                                                                        selling or carry forward transactions.
investment. The investment policies of the scheme comply with the
rules, regulations and guidelines laid out in the SEBI (MF) Regulations,           j.   The scheme may invest in another scheme under the same asset
1996. As per the Regulations, specifically the Seventh Schedule, the                    management company or any other mutual fund without charging
following investment limitations are applicable to schemes of Mutual                    any fees, provided that aggregate interscheme investment made by
Funds.                                                                                  all schemes under the same management or in schemes under the
                                                                                        management of any other asset management company shall not
a. The scheme shall not invest more than 15% of its NAV in debt
                                                                                        exceed 5% of the net asset value of the mutual fund.
      instruments issued by a single issuer which are rated not below
      investment grade by a credit rating agency authorized to carry out           k.   The mutual fund will enter into derivatives transactions in a recognized
      such activity under the Act. Such investment limit may be extended                stock exchange for the purpose of hedging and portfolio balancing,
      to 20% of the NAV of the scheme with the prior approval of the                    in accordance with the guidelines issued by the Board.
      Board of Trustees and the Board of Asset Management Company.                 l.   The scheme shall not make any investment in;
      Such limit shall not be applicable for investments in government                  i      any unlisted security of an associate or group company of the
      securities and money market instruments. Also investment within                          sponsor; or
      such limit can be made in mortgaged-backed securitized debt,
      which are rated not below investment grade by a credit rating agency              ii     any security issued by way of private placement by an associate
      registered with the Board.                                                               or group company of the sponsor; or
b. The scheme shall not invest more than 10% of its NAV in unrated                      ii     the listed securities of group companies of the sponsor which
      debt instruments issued by a single issuer and the total investment                      is in excess of 25% of the net assets .
      in such instruments shall not exceed 25% of the NAV of the scheme.           The above investment pattern is indicative and may be changed by the
      All such investments shall be made with the prior approval of the            fund manager on defensive considerations. The funds raised under the
      Board of Trustees and the Board of AMC.                                      scheme shall be invested only in transferable securities as per Regulation
c. Debt instruments in which the scheme invests should be rated as                 44(1), Schedule 7 of the SEBI (Mutual Funds) Regulations, 1996. The
      not below investment grade by at least one recognized credit rating          Trustees have the right in their sole discretion, to limit redemptions under
      agency authorized under the SEBI Act, 1992. In case a debt                   certain circumstances. Please refer to the paragraph “Right to Limit
      instrument is not rated, mutual funds may constitute committees              Redemptions” in the section “Redemption and Repurchase”. Please
      who can approve such proposals for investments in unrated
                                                                                   refer to the section “NAV and Valuation of Assets of the scheme”.
      instruments subject to the approval of the detailed parameters for
      such investments by the Board of Directors and the Board of                  6. Portfolio Turnover Policy
      Trustees.                                                                    The portfolio may be churned in order to take advantage of anticipated
d.   Transfer of investments from one scheme to another scheme,                    interest rate movements or market opportunities in order to maximize the
     including this scheme, under the Mutual Fund shall be allowed only            average yield on the portfolio while maintaining a desirable risk profile and
     if :                                                                          adequate liquidity. The impact of any rise in interest rates will be reduced
     (i)    Such transfers are done at the prevailing market price for quoted      through good fund management practices. In anticipation of an imminent
            securities on spot basis; explanation – “spot basis” shall have        rise in interest rates, the scheme will attempt to move the funds from
            the same meaning as specified by the stock exchange for                long-term instruments into short-term debt & money-market instruments
            spot transactions, and                                                 where the impact on the NAV will be much lower. Also, if the interest rates



16
                                                                                 MAGNUM

        SBI MUTUAL FUND
                                                                               Income Fund


at any point of time are expected to ease, the scheme can move back into          11. Hedging & Derivatives
long-term debt to take advantage of appreciation in the market value of its       The fund may use any hedging techniques that are permissible or in
investments.                                                                      future may become permissible under SEBI regulations, in consonance
7. Investments in Associate or Group Companies of the Sponsor                     with the scheme’s investment objective, including investment in derivatives
The scheme will not invest more than 25% of net assets of the scheme in           such as interest rate derivatives.
the securities of the State Bank Group companies. Further, the aggregate          Trading in derivatives has the following risks:
investment made by all the SBI Mutual Fund schemes in the securities of           (a) An exposure to derivatives in excess of the hedging requirements
State Bank Group companies will not exceed 25% of the net assets of the                 can lead to losses.
fund as a whole. The scheme shall not invest in privately placed or               (b) An exposure to derivatives can also limit the profits from a genuine
unlisted securities of associates / group companies.                                  investment transaction.
8. Investment in other schemes                                                    (c) Efficiency of a derivatives market depends on the development of a
The investment by this scheme in other mutual fund schemes will be in                 liquid and efficient market for underlying securities.
accordance with Regulation 44(1), Schedule 7 of the SEBI (MF)                     Any loss on derivative transaction is sought to be prevented by taking
Regulations, 1996 according to which:                                             exposure to derivatives only for the purpose of hedging and not for
“ A scheme may invest in another scheme under the same asset                      speculative purposes. Such an exposure will be backed by assets in the
management company or any other mutual fund without charging any                  form of cash or securities adequate to meet cost of derivative trading and
fees, provided that aggregate inter-scheme investment made by all                 loss, if any, due to unfavourable movements in the market. There will be
schemes under the same management or in schemes under the                         no investment in derivatives based on equity or equity index. The investment
management of any other asset management company shall not exceed                 in derivatives will be based only on derivatives related to debt such as
5% of the net asset value of the mutual fund”.                                    interest rate derivatives. Any transaction in derivatives will be strictly in
In order to be consistent with the scheme’s objectives, such an investment        compliance with relevant SEBI Regulations and guidelines for trading in
may only be in another scheme investing in debt and / or money market             derivatives.
instruments and / or derivatives based on these, and will not be in any
scheme which invests in equity or equity-linked securities or derivatives                              XI. UNITS AND OFFER
based on equity. No investment management fee will be charged by the              1. Issue Price
AMC on such investments.
                                                                                  Initial Issue: Rs. 10/- per Magnum for cash at par.
9. AMC’s investments in the scheme
                                                                                  Ongoing Basis: Magnums under the scheme are on offer for sale on any
The AMC may invest in the scheme, either in the initial issue or on an            working day at NAV. In case payment is by cheque/draft, the date of
ongoing basis, such amount, as they deem appropriate. But the AMC                 realization of the cheque/draft will be considered as the date of application
shall not be entitled to charge any management fees on this investment            and NAV as on the date of realization of the cheque/draft will be applicable
in the scheme. Investments by the AMC will be in accordance with                  for allotment of magnums. The number of units allotted will be equal to
Regulation 24(3) of the SEBI (MF) Regulations, 1996 which states that:            the amount invested divided by the prospective NAV for the same working
“ the asset management company shall not invest in any of its schemes             day for applications received at the collection centre before 11 a.m. and
unless full disclosure of its intention to invest has been made in the offer      cleared on the same day and prospective NAV of the following day for
document provided that the asset management company shall not be                  applications received at the collection centre after 11 a.m. and cleared on
entitled to charge any fees on its investment in the scheme.”                     the following day. For e.g. an application received on Tuesday after 11
10. Underwriting                                                                  a.m. the sale price will be the closing NAV, with an appropriate discount,
                                                                                  of Wednesday, subject to realization of the proceeds of the cheque/draft
The Scheme may take up underwriting of the securities of other issuers
                                                                                  in our collection account on Wednesday. Applications received by post
subject to the relevant SEBI Regulations and as may be permitted by the
                                                                                  will be deemed to have been submitted on date of receipt at the registrar’s
Board of Directors of the AMC.
                                                                                  end.
Regulation 46 states that:
                                                                                  2. Date of opening of subscription list
“ Mutual Funds may enter into underwriting agreement after obtaining a
certificate of registration in terms of the SEBI (Underwriters) Rules and         13th May, 1999.
SEBI (Underwriters) Regulations, 1993 authorizing it to carry on activities       3. Period for which subscription is open
as underwriters.                                                                  Initial Issue: The subscription was open to the public for 7 days from the
(1) For the purpose of these regulations, the underwriting obligation will        commencement of banking hours on 13th May, 1999 to the close of
      be deemed as if the investments are made in such securities.                banking hours on the 19th May, 1999. The AMC had also reserved the
(2) The capital adequacy norms for the purpose of underwriting shall              right to suspend the issue at any time after a day’s notice.
    be the net assets of the scheme. Provided that the underwriting               On Ongoing Basis: The scheme is open for fresh subscription on a daily
    obligation of a mutual fund shall not at any time exceed the total net        basis, on any working day. However, the Fund may temporarily suspend
    asset value of the scheme.”                                                   acceptance of fresh applications at any time.




17
                                                                                   MAGNUM

        SBI MUTUAL FUND
                                                                                 Income Fund


4. Allotment                                                                        (ii) Adult individuals, not exceeding three, either
Allotment was made to all applicants in the initial offer in respect of the              - jointly, or
applications that were complete in all respects and were in order. The                   - on either / anyone or survivor basis, or
allotment was made as on 20th May 1999.
                                                                                         - on first holder or survivor basis
On an ongoing basis issue of Magnums may be discontinued or
suspended if the trustees feel that increase in the size of the fund would          (iii) Minors through their parents/ step parents/ guardians (applications
be detrimental to the interest of existing investors. Application for issue of            of minors jointly with adults not allowed)
Magnums will not be binding on the fund and may be rejected.                        (iv) Hindu undivided family (HUF) in the name of karta
Investors will be issued a Magnum Statement of Account in lieu of                   (v) Companies/ Bodies corporate/ PSUs/ Banks/ Financial Institutions
Magnum Certificates. Despatch of Magnum statements of account will                      registered in India. Applications by above should be accompanied
be made as soon as possible but not later than 6 weeks from the date of                 by their Memorandum /Articles of Association, and a copy of the
investment. If an investor specifically requests the Registrars in writing for          Resolution authorizing the investment.
issue of a Magnum Certificate, the Magnum Certificates shall be sent to             (vi) Religious/ charitable/ other trusts, wakfs and societies registered
the investor within 6 weeks of receipt of request as stipulated under SEBI               under the applicable laws and authorized to invest in mutual funds.
Regulation 36.
                                                                                    (vii) Partnership firms.
5. Interest on application money                                                    (viii) An association of persons or body of individuals, in either case,
No interest will be paid on the application amount.                                        consisting only of husband and wife, governed by the system of
6. Listing & Transfer                                                                      community of property in force in the state of Goa and the Union
                                                                                           territory of Dadra, Nagar Haveli, Daman & Diu.
The Magnums issued under the scheme will not be listed on a Stock
Exchange. Since the scheme is open for repurchase, no transfer of                   (ix) Army/ air force/ navy/ paramilitary funds and other eligible institutions.
Magnums is envisaged under ordinary circumstances.                                  5. Defective applications liable for rejection
                       XII. SALE OF UNITS                                           Applications not complete in any respect are liable to be rejected. In the
                                                                                    event of non-allotment of Magnums, no interest will be paid on the
1. How to apply                                                                     money refunded. In case of any representation to the Trustees against the
Applications complete in all respects together with necessary remittance            disqualification of any application, the decision of the Trustees will be
may be submitted at the SBIMF Investor Service Centres, the designated              final.
offices of the Registrar or such other collection centres as may be                 6. Bank Account Numbers
designated by the AMC. The number of units allotted will be equal to the
                                                                                    SEBI has made it mandatory for investors in mutual funds to state their
amount invested divided by the applicable NAV. Applications received by
                                                                                    bank account numbers in their applications and in redemption requests.
post will be deemed to have been submitted on date of receipt at the
registrar’s end. In case of payment by cheque, the date of realization of           Investors are requested to provide these details in the space provided in
the cheque will be considered as the date of application and the amount             the application form. This measure is intended to avoid fraud / misuse or
of investment will be deemed to be the amount realized net of bank                  theft of warrants in transit. Kindly note that applications not containing
charges. In case of applications made by a demand draft, the draft                  these details may be rejected.
charges are not reimbursable and the date of allotment of units will be as          7. Permanent Account Number (PAN)
on the date of clearance of the demand draft.
                                                                                    Applicant’s PAN / GIR Number and I.T. Circle / Ward / District (if available)
All investors may make the cheque/D.D. for the application amount payable           are to be mentioned, since minimum amount to be invested will be
to “SBI A/c SBIMF – MICF – Dividend Plan” or “SBI A/c SBIMF –                       greater than Rs. 50,000/- . In case the applicant is not allotted a PAN /
MICF – Cash Plan” as the case maybe. The investors are advised to fill              GIR No., please state “Not Allotted”.
up the details of their bank account numbers on the application form in
the space provided. Please refer to the para “Bank Account Numbers”                           XIII. RETURNS AND DISTRIBUTION
later in this section.
Investors are advised to retain the acknowledgement slip signed/stamped             1. Returns to the Investors
by the collection centre where they submit the application.                         The Dividend Plan of the scheme will distribute income in the form of
2. Minimum amount of subscription per application                                   weekly dividends, subject to availability of distributable surplus. The rate
Minimum Rs. 10,000/-.                                                               of dividend will be decided by the Fund Manager with the approval of the
                                                                                    Managing Director. Although the scheme will strive to declare a regular
3. Maximum amount of subscription per application                                   dividend, the declaration of dividends and the quantum of dividend to be
No upper limit.                                                                     distributed will depend upon the availability of distributable surplus at that
4. Who can invest                                                                   time and no returns are assured. Dividend will be declared as on the Friday
                                                                                    of every week and will be compulsorily reinvested at the NAV as on
The following categories of Indian nationals are eligible to invest in the
                                                                                    Saturday.
scheme:
                                                                                    Cash Plan will not distribute any income in the form of dividend. The
(i) Adult individuals
                                                                                    return to the investors will be realized at the time of redemption or


18
                                                                                 MAGNUM

        SBI MUTUAL FUND
                                                                               Income Fund


switchover. Investor can choose to redeem all or part of his holdings at          working day of the date of repurchase. The list of designated centres
any time at the applicable repurchase price. Refer to the section                 where this facility is available is provided in the application form
“Redemption and Repurchase” for further details.                                  In all other cases, the repurchase warrant will be mailed to the investor
                                                                                  within 3 working days of the date of repurchase.
        XIV. REDEMPTION AND REPURCHASE
                                                                                  5. Right to Limit Repurchases
1. Repurchase facility                                                            In an open ended fund, any disruption in the normal functioning of the
The repurchases commenced from 24th May 1999.                                     markets for debt or money market instruments or extreme illiquidity in any
For applications received by the Registrars before 11 a.m. the repurchase         of the debt instruments may affect the ability of the fund manager to buy
price will be based on the closing NAV of the same day and for applications       or sell freely in the market. The fund shall strive to maintain an adequate &
received at the registrar’s end after 11 a.m., the repurchase price will be       desirable level of liquidity for both the Plans. However, in the event of an
calculated based on the closing NAV of the next working day. e.g. for an          inordinately large number of redemption requests or of restructuring of
application received on Tuesday before 11 a.m., the repurchase price will         the scheme’s portfolio, the time taken by the Fund for redemption of
be calculated based on Tuesday’s closing NAV and for a repurchase                 Magnums may become significant.
application received on Tuesday after 11 a.m., the repurchase price will          The fund reserves the right to limit repurchases to 5% of the units issued
be based on the closing NAV of Wednesday, with an appropriate exit                per day for the fund as a whole. In case such a limit is imposed on any
load, if applicable. Applications received by post will be deemed to have         day, Magnums will be redeemed on a pro-rata basis in proportion to the
been submitted on date of receipt at the registrar’s end.                         total amount of redemption sought per folio on that day. Any Magnums
The scheme will declare NAV on Saturday and Sunday also. Redemption               which are not redeemed due to this limitation will be carried forward to the
requests submitted before the cutoff time on Saturday will be governed            next day and redeemed at the applicable repurchase price in the order of
by the Sunday NAV while redemption requests submitted after the cutoff            receipt. This limit may be changed from time to time.
time on Saturday will be governed by Monday NAV.                                  This limit is not expected to be enforced in general, and may be enforced
The repurchase price for the above will be based on the closing NAV of            only when any redemptions above the limit are prejudicial to the interest
the prospective day and it will incorporate the applicable repurchase load.       of the investors or in case of lack of sufficient liquidity in the debt market.
In case the offices of the AMC or the registrars or the Banks are closed for      The Mutual Fund also reserves the right to temporarily suspend further
any reason the repurchase date will be taken as the date of the next              reissues or repurchases under the scheme in case of any of the following:
working day.                                                                      -     a natural calamity or
The repurchased Magnums will be extinguished and will not be reissued.            -    in case of conditions leading to a breakdown of the normal
2. Minimum Amount of Repurchase per Application                                        functioning of securities markets or
The minimum amount of redemption would be Rs 1000/-. If as a result               -    periods of extreme volatility or illiquidity
of repurchase the balance in the account of an investor falls below Rs.           -    under a SEBI directive
10,000/-, the fund will reserve the right to compulsorily redeem the
                                                                                  6. Switchover facility
account completely at applicable repurchase price, after giving him 30
days’ notice requesting him to enhance the balance by making fresh                The investor in any of the Plans under the scheme will have the option of
investments.                                                                      switching over to the other Plan of the scheme at NAV related price.
3. How to Repurchase                                                              Investors may also have the facility of switchover to some other open-
                                                                                  ended funds of SBI Mutual Fund such as Magnum Balanced Fund,
The application for repurchase can be made on a pre-printed repurchase            Magnum Multiplier Plus ’93, Magnum Equity Fund, Magnum Gilt Fund or
application form available in the Magnum Statement of Account provided            Magnum LiquiBond Income Fund at NAV related price, if they so desire.
to the investor. In this connection, the repurchase applications along            The terms of switchover may change from time to time. Investors may
with the Magnum certificates (if any) should be submitted to the Registrars.      contact the nearest ISC for further details on switchover facility.
For applications made on either / anyone or survivor basis, only one of the       At the time of switchover, the investors will be required to surrender along
holders needs to sign on the repurchase application. However, the                 with the Magnum certificates, if any have been issued.
repurchase warrant will normally be issued in the name of the first holder
                                                                                  The facility of switchover is not available to NRIs.
only.
A complete list of the ISCs is given in the section ‘Investors’ Rights &          7. Loan facility
Services’. SBIMF may appoint additional centres for acceptance of                 Magnumholders shall be entitled to obtain a loan against their Magnums
applications, if required.                                                        from any bank, subject to relevant RBI regulations and the respective
4. Repurchase Schedule and Service Standards                                      bank’s instructions, by getting a lien registered / recorded with the
                                                                                  Registrars.
The redemption will be permitted to the extent of credit balance in the
                                                                                  Magnum holders who have borrowed against their Magnums by recording
magnumholders account. The repurchase proceeds exceeding Rs. 1
                                                                                  a lien against their holding can avail of repurchase facility only after the
lakh will be delivered to the investor by Hand delivery or Courier wherever
                                                                                  receipt of instructions from the concerned lender that the loan has been
such a service is available. In four metro cities and other designated
                                                                                  repaid in full and the lien can be discharged. In case such an instruction
cities, such repurchase warrants will be sent to the investor within 1



19
                                                                                   MAGNUM

        SBI MUTUAL FUND
                                                                                 Income Fund


is not received and the lender can apply for redemption in his favour. In           However, please note that past performance is not necessarily indicative
such a case, the Mutual Fund reserves the right to redeem the Magnums               of the future results.
in favour of the concerned lender after giving 15 days notice to the                10. Extension Record
Magnumholder.
                                                                                    The Magnum Monthly Income Scheme 1991 (MMIS’91) was extended
8. Termination of the scheme                                                        by 3 years from its original redemption on 30.06.1997 to 30.06.2000.
The Trustees reserve the right to terminate the Scheme at any time if the           The extension was done after obtaining an approval from SEBI. An option
corpus of the Scheme falls below Rs. 1 crore.                                       was granted to all the investors to exit, if they so chose, at the assured
Regulation 39(2) of the SEBI Regulations provides that any scheme of a              return price of Rs. 100 per Magnum. Simple yield p.a. as on 30.06.1997
mutual fund may be wound up after repaying the amount due to the                    was 14.13%.
unitholders:
                                                                                    Two other equity schemes – Magnum Equity Fund (previously known as
(a) on the happening of any event which, in the opinion of the Trustees,            Magnum Multiplier Scheme 1990 (MMS’90)) and Magnum Multiplier
     requires the scheme to be wound up; or
                                                                                    Plus Scheme 1993 (MMPS’93) - have also been converted to open-
(b) if 75% of the unitholders of a scheme pass a resolution that the                ended schemes w.e.f. 1st January 1998 and 1st April 1998 respectively,
     scheme be wound up; or                                                         after giving the existing investors an option to redeem their Magnums, if
(c) if SEBI so directs in the interest of the unit holders.                         they so chose, at NAV related prices. Magnum Global Fund, an equity
Where a scheme is wound up under the above Regulation, the trustees                 scheme, launched on 24th August 1994, with redemption date of 30th
shall give a notice disclosing the circumstances leading to the winding             September 1999, has also been converted into an open-ended scheme
up of the scheme:                                                                   w.e.f. 1st October 1999, after giving the existing investors an option to
(a) to SEBI; and                                                                    redeem their Magnums, if they so chose, at NAV related prices.
(b) in two daily newspapers having circulation all over India & a vernacular
    newspaper circulating at the place where the mutual fund is formed.                   XV. TAX TREATMENT OF INVESTMENTS
In case of termination of the scheme, the Trustees shall proceed as                                IN MUTUAL FUNDS
follows:
                                                                                    1. Information on Tax Benefits
From the proceeds of the assets of the scheme, the Trustees shall first
discharge all liabilities of the scheme and make provision for meeting the          This section gives information on various tax benefits available to the
expenses of the winding-up of the scheme, including the fees of the                 Magnumholders.
AMC. The Trustees shall distribute the proceeds to the Magnumholders,               The provisions mentioned in the following paragraphs are based on
in proportion to their respective interest, all proceeds derived from the           the law and practice as on the date of this offer document, i.e., the
realization of the investments, after recovering all costs, charges, expenses,      Income-tax Act, 1961 and as amended by the changes approved as
claims, liabilities, whether actual or contingent, incurred, made or                per the Finance Bill 2000.
apprehended by the Trustees in connection with or arising out of the                Prospective investors should not treat the contents of this section of
termination of the scheme. It will be ensured that the redemption proceeds          the offer document as advice relating to legal, taxation, investment
are dispatched to the Magnumholder within a maximum period of 10                    or any other matter and are recommended to consult their own
working days from the date of redemption for the holders of Statement of
                                                                                    professional advisors concerning the acquisitions, holding or disposal
Account, or from the date he/ she has tendered the Magnum certificates
                                                                                    of the Magnums.
to the Registrars.
                                                                                    1. Tax benefits to magnumholders
9. Redemption Record
                                                                                    All tax benefits will be available only to the Magnum holder or the first
Till date SBI Mutual Fund has redeemed 10 schemes. The redemption
                                                                                    named holder in case the Magnums are held in the names of more than
details for these schemes are given below:
                                                                                    one person.
Scheme                 Redeemed on         Compounded
                                                                                    Where a partition has taken place among the members of a Hindu
                                           Annualized Yield (p.a.)
                                                                                    Undivided Family or when an Association of Persons has been dissolved
MRIS 87                30th June 1993      15.26%                                   after a deduction has been allowed under this scheme, the first name
MTSS 88-89             31st Mar 1994       21.89%                                   holder will be in receipt of the amount withdrawn and will be deemed to
MRIS 89                31st Mar 1994       15.73%                                   be the assessee.
MTSS 90                31st Mar 1995       15.38%                                   2. Tax benefits related to Income Distribution
MRIS 90                31st July 1995      11.46%                                   As per the provisions, income from mutual fund is fully exempt in the
MMIS 89                31st Dec 1996       13.99%                                   hands of the investors. However, any income distributed by a mutual
MEX 91                 19th Nov 1997        2.60%                                   fund to its magnumholders will be subject to an income tax of 20% (plus
MTPL 91                  th
                       19 May 1999         15.78%                                   applicable surcharge) of such income distributed.
MBF                    31st Jan 2000       17.17%
MMIS 91                30th June 2000      14.13%



20
                                                                                   MAGNUM

         SBI MUTUAL FUND
                                                                                 Income Fund


3. Tax benefits related to Capital Gains
Tax benefit is available under sections 48 & 112 on capital gains for
                                                                                               XVI. INTER-SCHEME TRANSFERS
resident Indians.                                                                   1. Policy on Inter-scheme Transfers
4. Tax benefits related to Repurchase/ Redemption/ Transfer                         The Scheme, or any other scheme of the Mutual Fund, may make
Magnums held for a period of more than 1 year will be treated as long-              investments or effect a sale of some of its investments by means of
term capital assets and will qualify for taxation at a lower rate as laid down      transfers from one scheme to another in the same mutual fund. Such
in section 112 of the Income-tax Act, 1961. The investor concerned will             transfers will be done in accordance with clause 3 of seventh schedule to
be entitled to the benefit of indexation of the cost for the purposes of            SEBI Regulations and subject to the following conditions:
computing capital gains as laid down in section 48 of the Income-tax                i) such transfers are done at the prevailing market price for quoted
Act, 1961.                                                                               instruments on spot basis. (Where such a spot price is not available
                                                                                         or if the market is closed, the inter-scheme transfer may be done at
As “Units” are proposed to be included in the provision to the subsection
                                                                                         the latest closing price available).
(1) to Section 112 of the Act and hence Magnumholders can opt for
                                                                                    ii) the securities so transferred would be in accordance with the
being taxed at 10% (plus applicable surcharge) without the cost inflation
                                                                                         investment objective of the transferee scheme.
index benefit or 20% (plus applicable surcharge) with the cost inflation
index benefit whichever is beneficial.                                              iii) the registration and accounting of the transaction is effected on a
                                                                                         spot basis so that the NAV of the Scheme is impacted, and the
The rates of taxation on long-term capital gains as per section 112 of the               transaction is ratified in the next meeting of the Trustees.
Income-tax Act, 1961 are as follows :
     -      10%* or 20%** for Resident Individuals & HUFs                                       XVII. ASSOCIATE TRANSACTIONS
     -      10%* or 20%** for domestic companies.                                   1. Who is an Associate
     -      10%* or 20%** in case of other residents                                For the purpose of this section, an associate or group company shall
     -      10%* or 20%** for non-residents (not being a company)                   include State Bank of India (SBI), its subsidiaries (including the AMC),
            and foreign companies                                                   joint ventures and the associate banks of SBI.
Note: * indicates without indexation benefit and ** indicates with                  2. Investments in Associate or Group Companies of the Sponsor
indexation benefit                                                                  The scheme will not invest more than 25% of net assets of the scheme in
The capital gains may be arrived at after adjusting the following from the          the securities of the State Bank Group companies. Further, the aggregate
sale consideration:                                                                 investment made by all the SBI Mutual Fund schemes in the securities of
-    Expenditure incurred wholly and exclusively in connection with                 State Bank Group companies will not exceed 25% of the net assets of the
     such a sale,                                                                   fund as a whole.
                                                                                    As on 30th September 2000, all the schemes of the Mutual Fund have Rs.
-    Cost of investments as inflated by the Cost Inflation Index notified
                                                                                    14.40 crores invested in the various equity instruments of State Bank
     by CBDT.
                                                                                    Group Companies. The scheme shall not invest in privately placed or
There will be no TDS on capital gains for resident investors.                       unlisted securities of associates / group companies.
5. Wealth Tax benefits                                                              3. Underwriting Obligations of SBI Mutual Fund
Mutual fund units are not considered as “assets” liable to wealth tax u/s           As on date, SBIMF has no underwriting obligations.
2(ea) of the Wealth-tax Act, 1957. Consequently Magnums held under
                                                                                    4. Subscription in Issues Lead Managed by Associates of Sponsor
the scheme will not be liable to wealth tax under the Wealth-tax Act,
1957.                                                                               In the last three fiscal years, different schemes of the Fund have subscribed
                                                                                    to some of the issues lead managed by SBI Capital Markets Ltd. The
6. Tax benefits to Religious / Charitable Trusts
                                                                                    details of these are as follows:
Investments in these Magnums by Religious / Charitable Trusts will rank
                                                                                    Name of the Company           Type          Quantity Quantity     Amount
as eligible investments and will qualify for tax benefits under section                                                          Applied Allotted (Rs. Lakhs)
11(5) of the Income Tax Act, 1961.
                                                                                    Corporation Bank              Equity (pp) 2000000        98000         78.40
7. Tax benefits to Mutual Fund                                                      ICICI Banking Corporation     Equity        4150000     525500        183.92
a)   As the Mutual Fund has been registered with SEBI under the SEBI                Gujarat Gas Company Ltd.      Debentures          20        20        200.00
     Regulations, the entire income of the Fund is exempt from income               Krishna Baghya Jala
     tax under Section 10 (23D) of the Act.                                         Nigam Ltd.                    Debentures        500        500        500.00
b)   The Finance Act, 1999 has inserted section 15R in the Income Tax               National Aluminum Co. Ltd.    Debentures     500000     450000       4500.00
     Act, 1961 w.e.f. Assessment Year 2000-2001. As per said section,               Deepak Fertilizers            Debentures        500        500        500.00
     the Mutual Fund will have to now pay tax @ 20% on amount of                    State Bank of Bikaner
     income distributed to the magnumholders. Further, surcharge @                  & Jaipur                      Equity          30000       5595         30.21
     10% of the amount of tax would also be payable.
                                                                                    TOTAL                                       5992.53 5.         Associate


21
                                                                                 MAGNUM

         SBI MUTUAL FUND
                                                                               Income Fund


Broker                                                                            2. Potential Risk of Loss to the AMC / Magnum holders
At present, SBI Mutual Fund has no transactions with any associate                The borrowing by the Scheme will not involve any potential loss to the
broker in any of its schemes.                                                     AMC or to the Magnumholder. However, it will involve a certain cost on
6. Collecting Banker(s)                                                           account of interest paid on borrowing at market rates as may be negotiated
                                                                                  with the concerned lender. In any case, the Scheme may resort to
SBIMF will utilize the services of State Bank of India as the collecting          borrowings only if the possible benefit from borrowings exceeds the cost
banker or branches of any other Bank as maybe decided at a later date, as
                                                                                  of immediate liquidation of its assets for meeting redemption / repurchase
authorized collecting branches for the scheme.
                                                                                  needs / dividend payments / interest payments.
7. Collecting Branches
The AMC may utilize the services of some branches of the SBI Group as               XIX. STOCK LENDING BY THE MUTUAL FUND
authorized collecting branches for the scheme. The list of collecting             The Fund may in future carry out stock-lending activity under any of its
branches will be printed in the application form. They will be paid handling      schemes, in order to augment its income. Stock lending may involve the
charges at such a rate as may be prevalent in the market at the time of the       risk of default on part of the borrower. However, this is unlikely to happen
issue and/or as negotiated with the concerned banks.                              if the stock lending is carried out for stocks which are in dematerialized
8. Agent Commission                                                               form and through an authorized stock-lending scheme which is subject
For applications directly solicited and collected by the branches of SBI or       to appropriate regulation. Any stock lending done by the Scheme shall be
by any associates, they may also be paid an agent commission at a rate            in accordance with any Regulations or guidelines regarding the same.
not exceeding the rate of commission being paid to other agents for the           The policy followed for stock lending shall be approved by the Board of
Scheme.                                                                           Directors of the AMC as well as by the Board of Trustees.
9. Other Associate Transactions                                                     XX. NAV AND VALUATION OF ASSETS OF THE
Individual schemes of SBI Mutual Fund lend in the Call Money Market                                SCHEME
from time to time in order to continuously earn returns on their short-term
surplus cash. This is in accordance with the applicable Regulations. SBI,         1. Valuation of Assets pertaining to the Scheme
SBI Commercial & International Bank, any of SBI’s associate banks or SBI          Valuation of Assets, computation of NAV, repurchase price and their
Gilts Ltd may be some of the players who may borrow from SBI Mutual               frequency of disclosure will be in accordance with the provisions of SEBI
Fund at market rates.                                                             (MF) Regulations 1996/Guidelines/Directives issued by SEBI from time to
SBI or any associates of SBI (including SBI Capital Markets, SBI Gilts Ltd        time. The assets of the scheme will be valued based on the following
and/or SBI Securities Ltd) may be entrusted the work of marketing, book-          valuation norms.
building, distribution or any other activity connected with the Scheme or         A. Traded Securities
any other schemes of SBI Mutual Fund, as may be allowed by SEBI or any
other competent authority, and within the relevant provisions of Regulations           a)    The securities shall be valued at the last quoted price on the
prevailing from time to time.                                                                stock exchange.
                                                                                       b)    When the securities are traded on more than one recognized
     XVIII. BORROWING BY THE MUTUAL FUND                                                     stock exchange, the securities shall be valued at the last
                                                                                             quoted closing price on the stock exchange where the security
1. Borrowing by the Scheme                                                                   is principally traded. It would be left to the Asset Management
The scheme may borrow upto 20% of the net assets managed for a                               Company to select the appropriate stock exchange, but the
maximum tenure of 6 months for the purpose of meeting outflows on                            reasons for the selection should be recorded in writing. There
account of repurchase / redemption or dividend / interest payments.                          should however be no objection for all scrips being valued at
In terms of Regulation 44(2) of SEBI (MF) Regulations, 1996:                                 the prices quoted on the stock exchange where a majority in
“ The mutual fund shall not borrow except to meet temporary liquidity                        value of the investments are principally traded.
needs of the mutual fund for the purpose of repurchase, redemption of                  c)    Once a stock exchange has been selected for valuation of a
units or payment of interest or dividend to the unit holders.                                particular security, reasons for change of the exchange shall
provided that the mutual fund shall not borrow more than 20% of the net                      be recorded in writing by the Asset Management Company.
assets of the scheme and the duration of such a borrowing shall not                    d)    When on a particular valuation day, a security has not been
exceed a period of six months.”                                                              traded on the selected stock exchange, the value at which it
If the Scheme decides to borrow, it may borrow either from SBI Group                         is traded on another stock exchange may be used.
banks and / or any other bank(s) or from any other sources as may be                   e)    When a security is not traded on any stock exchange on a
decided by the AMC. The loans may be without collateral or may consider                      particular valuation day, the value at which it was traded on
using a part of the Scheme’s assets as collateral with the prior approval of                 the selected stock exchange or any other stock exchange, as
the Board of Directors of the AMC and the Board of Trustees of the                           the case may be, on the earliest previous day may be used
Scheme.                                                                                      provide such date is not more than thirty days prior to the
                                                                                             valuation date.



22
                                                                                     MAGNUM

        SBI MUTUAL FUND
                                                                                   Income Fund


B.   Thinly Traded Debt Securities                                                         Step B
     A debt security (other than Government Securities) that has a trading                 A Matrix of spreads (based on the credit risk) are built for marking up
     volume of less than Rs. 5 crores in the previous calendar month                       the benchmark yields. The matrix is built based on traded corporate
     shall be considered as a thinly traded security based upon information                paper on the wholesale debt segment of an appropriate stock
     provided by the relevant stock exchange on the volume of debt                         exchange and the primary market issuances. The matrix is restricted
     securities traded.                                                                    only to investment grade corporate paper.
     A thinly traded debt security as defined above would be valued as                     Step C
     per the norms set for non-traded debt security.                                       The yields as calculated above are Marked-up/Marked-down for ill-
C.   Non-Traded Securities                                                                 liquidity risk.
     When a security is not traded on any stock exchange for a period of                   Step D
     thirty days prior to the valuations date, the scrip must be treated as                The Yields so arrived are used to price the portfolio
     a ‘non-traded’ scrip.                                                            E.   Valuation of securities with Put/Call Options
D.   Valuation of Non-traded/Thinly traded securities                                      The option embedded securities would be valued as follows:
     Non-traded/Thinly traded securities shall be valued “in good faith”                   a.    Securities with call option:
     by the asset management company on the basis of appropriate                                 The securities with call option shall be valued at the lower of
     valuation methods used based on the principles approved by the                              the value as obtained by valuing the security to final maturity
     Board of the Asset Management Company.                                                      and valuing the security to call option.
     (i) (a) Non Traded /Thinly Traded Debt Securities of Upto 182 Days                          In case there are multiple call options, the lowest value obtained
     to Maturity:                                                                                 by valuing to the various call dates and valuing to the maturity
     As the money market securities are valued on the basis of amortization                       date is to be taken as the value of the instrument.
     (cost plus accrued interest till the beginning of the day plus the                    b.    Securities with Put option
     difference between the redemption value and the cost spread
     uniformly over the remaining maturity period of the instruments) the                        The securities with put option shall be valued at the higher of
     same process should be adopted for non-traded debt securities                               the value as obtained by valuing the security to final maturity
     with residual maturity of upto 182 days, in the absence of any other                        and valuing the security to put option.
     standard benchmarks in the market. All other non traded Non                                 In case there are multiple put options, the highest value obtained
     Government debt instruments should be valued using the method                                by valuing to the various put dates and valuing to the maturity
     suggested in (ii)(b) hereof.                                                                 date is to be taken as the value of the instruments.
     (i)(b) Non Traded/ Thinly Traded Debt Securities of Over 182 Days to                  c.    Securities with both Put and Call option on the same day
     Maturity:                                                                             The securities with both Put and Call option on the same day would
     For the purpose of valuation, all Non Traded Debt Securities would                    be deemed to mature on the Put/Call day and would be valued
     be classified into “Investment grade” and “Non Investment grade”                      accordingly.
     securities based on their credit ratings. The non-investment grade                    (ii)(c) Government securities (not traded for more than 30 days or
     securities would further be classified as “Performing” and “Non                       one which would qualify as a thinly traded security) will be valued at
     Performing” assets                                                                    cost plus accrual and amortizing the discount or premium over the
     All Non Government investment grade debt securities, classified as                    like of the security.
     not traded, shall be valued on yield to maturity basis as described              F.   While investments in call money, bills purchased under rediscounting
     below.                                                                                scheme and short term deposits with banks shall be valued at cost
     All Non Government non investment grade performing debt securities                    plus accrual; other money market instruments shall be valued at the
     would be valued at a discount of 25% to the face value.                               yield at which they are currently traded. For this purpose non-traded
                                                                                           instruments that is instruments not traded for a period of seven days
     All Non Government non investment grade non performing debt
                                                                                           will be valued at cost plus interest accrued at the beginning of the
     securities would be valued based on the provisioning norms.
                                                                                           day plus the redemption value and the cost spread uniformly over
     The approach in valuation of non traded debt securities will be                       the remaining maturity period of the instruments;
     based on the concept of using spreads over the benchmark rate to
                                                                                      G.   Government securities will be valued at yield to maturity based on
     arrive at the yields for pricing the non traded security.
                                                                                           the prevailing market rate.
     The Yields for pricing the non traded debt security would be arrived
                                                                                      H.   Where instruments have been bought on ‘repo’ basis, the instrument
     at using the process as defined below.
                                                                                           must be valued at the resale price after deduction of applicable
     Step A                                                                                interest up to date of resale. Where an instrument has been sold on
     A Risk Free Benchmark Yield is built using the government securities                  a ‘repo’ basis, adjustment must be made for the difference between
     (GOI Sec) as the base. GOI Secs are used as the benchmarks as                         the repurchase price (after deduction of application interest up to
     they are traded regularly; free of credit risk; and traded across different           date of repurchase) and the value of the instrument. If the repurchase
     maturity spectrums every week.                                                        price exceeds the value, the depreciation must be provided for and


23
                                                                                    MAGNUM

        SBI MUTUAL FUND
                                                                                  Income Fund


     if the repurchase price is lower than the value, credit must be taken
     for the appreciation.                                                                         XXI. ACCOUNTING POLICIES
I.   All expenses and incomes accrued up to the valuation date shall be              1. Accounting year end
     considered for computation of net asset value. For this purpose,
     while major expenses like management fees and other periodic                    The accounts of the scheme shall be closed every year as on 31st
     expenses should be accrued on a daily basis, other minor expenses               March. The Trustees shall cause the accounts of the scheme to be
     and income need not be so accrued, provided the non-accrual                     maintained in such form and manner as may be decided by them and in
     does not affect the NAV calculations by more than 1%.                           accordance with the Mutual Fund Regulations, 1996. The Trustees and
J.   Any changes in securities and in the number of units be recorded in             the AMC shall, at the close of each half year, i.e., 30th September and
     the books not later than the first valuation date following the date of         31st March, publish the financial results of the scheme, as provided in
     transaction. If this is not possible given the frequency of the Net             SEBI (MF) Regulations, 1996.
     Asset Value disclosure, the recording may be delayed up to a period             2. Other Accounting Policies and Standards
     of seven days following the date of the transaction, provided that as           a)   For the purposes of the financial statements, mutual fund shall mark
     a result of the non-recording, the Net Asset Value calculations shall
                                                                                          all investments to market.
     not be more than 2%.
                                                                                     b)   Dividend income earned by the scheme shall be recognized on an
K.   Illiquid Securities :
                                                                                          ex-dividend basis for quoted investments and on the date of
     (a) Aggregate value of “illiquid securities” of scheme, which are                    declaration for unquoted investments.
             defined as non-traded, thinly traded, shall not exceed 15% of
             the total assets of the scheme and any illiquid securities held         c)   In respect of all interest-bearing instruments, income will be accrued
             above 15% of the total assets shall be assigned zero value.                  on a day to day basis as it is earned.
     (b) The Mutual fund will disclose as on March 31 and September                  d)   Average cost method will be followed in determining the holding
             30, the scheme-wise total illiquid securities in value and                   cost of investments and the gains or losses on sale of investments.
             percentage of the net assets while making disclosures of half           e)   Transactions for sale or purchase of investments will be recognized
             yearly portfolios to the unitholders. In the list of investments,            on the transaction date.
             an asterisk mark shall also be given against all such investments,
                                                                                     f)   Bonus shares and rights entitlements on investments will be
             which are recognized as illiquid securities.
                                                                                          recognized on the ex-bonus and ex-rights dates respectively.
2. Determination of Net Asset Value                                                  g)   Income accrued on an investment but not received for 12 months
The value determined as above, will be adjusted for the following:                        beyond the due date shall be provided for and no further accrual
a) all income and expenditure accrued.                                                    shall be made for income in respect of such an investment.
b)   major expenses like management fees and other periodic expenses                 h)   When the units are sold, an appropriate part of the sale proceeds will
     to accrue on a day to day basis.                                                     be credited to an equalization account and when units are
                                                                                          repurchased, an appropriate part will be debited to the equalization
c)   The basis for calculation of NAV will be subject to regulations and
                                                                                          account. The net balance on this account will be credited or debited
     guidelines of the SEBI issued from time to time.
                                                                                          to the revenue account as an adjustment to the distributable surplus.
Minor expenses, if any, will not be accrued on a day to day basis if they
                                                                                     i)   The cost of investment acquired or purchased shall include
do not affect the NAV by more than 1%.
                                                                                          brokerage, stamp duty and any other charge customarily included
The Mutual Fund shall comply with the investment valuation norms spelt                    in the broker’s purchase note. In respect of any privately placed
out in the Eighth Schedule of SEBI Regulations.                                           debt instruments any front-end discount offered should be reduced
The Net Asset Value per Magnum shall be calculated by dividing the Net                    from the cost of the investment.
Assets of the scheme by the total number of Magnums outstanding on
                                                                                     j)   Underwriting commission, if any shall be recognized, as revenue
the valuation date, as follows:
                                                                                          only when there is no devolvement on the scheme. Otherwise the
      Total unit capital + Reserves + Income (net of expenses)                            entire commission received will be reduced from the cost of
        + Appreciation / -depreciation in investments                                     investment.
NAV = —————————————————————————                                                      The Mutual Fund shall comply with the accounting policies and standards
          Total no. of Magnums outstanding
                                                                                     spelt out in the Ninth Schedule of Securities and Exchange Board of India
Any changes in securities and in the number of units will be recorded in             (Mutual Funds) Regulations, 1996.
the books not later than the first valuation date following the date of
transaction. If this is not possible given the frequency of the NAV                       XXII. INVESTORS’ RIGHTS AND SERVICES
disclosure, the recording may be delayed upto a period of seven days
following the date of the transaction, provided that as a result of the non-         1. Rights of Beneficiaries:
recording, the NAV calculations shall not be affected by more than 2%.               i)   After closing of the annual accounts, SBI Mutual Fund shall provide
The NAV will be calculated every day (including Saturday and Sunday)                      for depreciation on investments and also make a provision for bad
and will be published atleast in two daily newspapers at such intervals as                and doubtful debts to the satisfaction of its auditors and shall disclose
are prescribed by SEBI.                                                                   the method of depreciation in the notes to the accounts. After


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            SBI MUTUAL FUND
                                                                                  Income Fund


       making such provisions the profits of the scheme together with the            3. Documents Available for Inspection
       capital appreciation, if any, may be distributed to the investors either      Following documents are available for inspection by investors at their
       as a dividend payout or plough back to the scheme as may be                   office of the SBI Funds Management Ltd., 191, Maker Tower E, Cuffe
       decided by the Board of Trustees.                                             Parade, Mumbai - 400 005:
ii)    SBI Mutual Fund will publish-                                                 i) Trust deed
       a)    the schemes’ audited annual accounts or an abridged                     ii)    Memorandum and Articles of Association of SBI Funds Management
             summary of the same within six months from the date of                         Ltd and the State Bank of India Act & Regulations.
             closure of the relevant financial year.
                                                                                     iii)   Copy of Annual Reports including Auditors Report of SBI
       b)    six monthly unaudited accounts or an abridged summary of
                                                                                     iv)    Scheme Rules and Regulations
             the same before the expiry of two months from the close of
             each half year i.e. on 31st March and on 30th Sept.                     v)     Auditors Reports, Audited Annual Accounts & Offer Documents of
                                                                                            all the existing schemes of the SBIMF.
       This will be published in one national English daily newspaper and in
       a Marathi newspaper. The investors have a right to call for the above         vi)    Agreements with Custodians, Registrars, Bankers, if any.
       information, including the full annual report, at the SBI Mutual Fund’s       vii) Investment Management Agreement with the Trustees.
       office or its Investors Service Centres and if so desired, they can           viii) Securities & Exchange Board (Mutual Fund) Regulations 1996
       receive a copy of the above information on payment of a nominal
                                                                                     ix)    Indian Trust Act, 1882.
       fee.
       The Fund will also publish the NAVs of all its schemes on a weekly            4. For Your Convenience and Help
       basis and the NAVs of its open-ended schemes on a daily basis in              SBI Mutual Fund has opened 21 Investor Service Centres (ISCs) all over
       at least two newspapers. The sale and repurchase prices shall also            the country. The addresses of these ISCs and the name of the contact
       be published in a daily newspaper at least once a week in accordance          person are given below
       with SEBI Regulations.                                                        1. Ahmedabad
iii)   an abridged schemewise annual report will be mailed to all the                     Shri. S. G. Bengali
       Magnum holders, containing also the details of group company                       Manager
       investments.                                                                       SBIMF Investor Service Centre
                                                                                          C/o SBI, Ahmedabad Main Branch
iv)    The investors have the right to ask the Trustees about any information
                                                                                          1st floor, Bhadra
       which may have an adverse bearing on their investments and the
                                                                                          Ahmedabad - 380 001
       trustees shall be bound to make disclosures about such information
                                                                                          Tel. (079) 550 7442
       to the investors.
                                                                                     2.     Bangalore
The investors are also advised to see the relevant provisions of the Indian
                                                                                            Shri S.S.Narayanswamy
Trust Act, 1882, in this regard.
                                                                                            Asst. Vice President
2. Other Significant Rights of the Magnumholders:                                           SBIMF Investor Service Centre
(a) Changes in the fundamental attributes of the scheme as defined                          SBI LHO Bldg, 4th floor,
    above or any other change which would modify the scheme and                             65, St. Marks Road
    affects the interest of unitholders, shall be carried out only after – (i)              Bangalore - 560 001
    a written communication about the proposed change is sent to                            Tel. (080) 227 2284
    each unitholder and an advertisement is given in one English                     3.     Bhilai
    newspaper having nationwide circulation as well as in a newspaper                       Shri A.K. Mitra
    published in the language of the region where the Head Office of the                    Manager
    mutual fund is situated; and (ii) the unitholders will be given an                      SBIMF Investor Service Centre
    option to exit at the prevailing Net Asset Value without any exit load.                 F – 7 Uttar Gangotri, G.E. Road,
(b) The Appointment of the AMC for the scheme can be terminated by                          Supela
    a majority of the Trustees or by not less than 75% of the                               Bhilai 490 023
    Magnumholders of the Scheme.                                                            Tel. (0788) 410955, 273 261
(c) The dispatch of dividend warrants shall be made within 30 days of                4.     Bhopal
    the declaration of the dividend and despatch of redemption/                             Shri V.V. K. Rao
    repurchase proceeds will be made within 10 working days from the                        Manager
    date of redemption/repurchase.                                                          SBIMF Investor Service Centre
                                                                                            C/o SBI LHO,
                                                                                            Hoshangabad Road
                                                                                            Bhopal - 462 011
                                                                                            Tel. (0755) 557 341



25
                                           MAGNUM

       SBI MUTUAL FUND
                                         Income Fund


5.   Bhubaneshwar                           11. Hyderabad
     Shri N. Tripathy                           Shri A. Subramaniyam
     Asst. Vice President                       Asst. Vice President
     SBIMF Investor Service Centre              SBIMF Investor Service Centre
     SBI LHO BLDG, ground floor,                C/o SBI LHO
     Pandit Jawaharlal Nehru Marg,              6th floor, Koti
     Janpath,                                   Hyderabad - 500 195
     Bhubaneshwar - 751 001                     Tel. (040) 475 6241
     Tel. (0674) 512 473                    12. Jaipur
6.   Calcutta                                   Shri Lalit Mehta
     Shri A. K. Sarkar                          Asst. Vice President
     Asst. Vice President                       SBIMF Investor Service Centre
     SBIMF Investor Service Centre              C/o SBI,
     Nagaland House, 10th floor,                Sanganeri Gate
     11 & 13 Shakespeare Sarani                 Jaipur - 302 001
     Calcutta - 700 071                         Tel. (0141) 567 354.
     Tel. (033) 282 2816 / 282 1471         13. Lucknow
7.   Chandigarh                                 Shri S. Bose
     Shri D.P.Singh                             Asst. Vice President
     Manager                                    SBIMF Investor Service Centre
     SBIMF Investor Service Centre              C/o SBI LHO,
     C/o SBI LHO, 1st floor                     6th floor, A-wing
     Sector 17-B,                               Moti Mahal Marg, Hazratganj
     Chandigarh - 160 017                       Lucknow - 226 001
     Tel. (0172) 709 728                        Tel. (0522) 215 668
8.   Chennai                                14. Managalore
     Shri V. Sukumar                            Shri Ashok Kumar
     Manager                                    Deputy Manager
     SBIMF Investor Service Centre              SBIMF Investor Service Centre
     SBI Bldg., 8th floor,                      C/o SBI, Arya Samaj Road
     103 A Annasalai                            Bellamatta,
     Chennai - 600 002                          Mangalore - 575 003
     Tel. (044) 852 3797, 8418061               Tel. (0824) 445 892
9.   Ernakulam                              15. Mumbai
     Shri T. Mohan Kumar                        Shri Santanu Ray
     Manager                                    Deputy Manager
     SBIMF Investor Service Centre              SBIMF Investor Service Centre
     C/o SBI, Ernakulam South Branch,           C/o SBI Funds Management Ltd.
     Manorama Junction,                         191, Maker Tower ‘E’
     Panampilly Nagar                           Cuffe Parade,
     Cochin, Kerala - 682 036                   Mumbai - 400 005
     Tel. (0484) 318 886 / 320 107              Tel. (022) 218 2187
10. Guwahati                                16. New Delhi
    Shri Utpal Baruah                           Shri Sudhir Kumar
    Manager                                     Asst. Vice President
    SBIMF Investor Service Centre               SBIMF Investor Service Centre
    C/o SBI Local Head Office Guwahati          5th floor, Ashoka Estate
    (Applo Building Anex.)                      24, Barakhamba Road
    Bharalumukh                                 New Delhi - 110 001
    Guwahati - 781 001                          Tel. (011) 331 5058
    Tel. (0361) 521 993




26
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        SBI MUTUAL FUND
                                                                             Income Fund


17. Patna
    Shri S. K. Dey                                                                  XXIII. INVESTOR GRIEVANCES REDRESSAL
    Manager                                                                                       MECHANISM
    SBIMF Investor Service Centre
    1st floor, Chamber Bhavan                                                   The Customer Service Department at SBI Mutual Fund has been established
    J.C. Road                                                                   under the supervision of Vice President. The investor grievances are
    Patna - 800 001                                                             redressed by the AMC directly and also by our 21 Investor Service Centres.
    Tel. (0612) 685 665                                                         All grievances are redressed within the time stipulated by SEBI. Our ISCs
                                                                                are equipped with upgraded technological facilities to respond to the
18. Pune                                                                        investor queries.
               .
    Shri Arun P Joshi
                                                                                The statistical data for investor complaints received are as under:
    Manager
    SBIMF Investor Service Centre                                                           From 01.04.00 01.04.99 01.04.98 01.04.97 01.04.96
    C/o SBI Service Branch                                                                      To 31.12.00 29.03.00 31.03.99 31.03.98 31.03.97
    ‘Grace’, Dhole Patil Road                                                   Complaints
    Pune - 411 001                                                              Received                13771      26081      21535     21430       5488
    Tel. (020) 6113974, 6053208                                                 Complaints
19. Ranchi                                                                      Redressed               13821      26031      21535     21430       5488
    Shri A.K. Jain                                                              Balance                      nil      50          nil        nil       nil
    Asst. Vice President
    SBIMF Investor Service Centre
    C/o SBI Service Branch                                                          XXIV. PENDING LEGAL PROCEEDINGS AND
    Kutchery Road
    Ranchi - 834 001
                                                                                             OTHER INFORMATION
    Tel. (0651) 315 212                                                         1. Pending Legal Proceedings
20. Siliguri                                                                    Apart from the ordinary routine litigations incidental to the business of the
          .T.
    Shri P Sherpa                                                               Fund, the following petition / summary suit against the Fund is pending
    Asst. Vice President                                                        in the Court:
    SBIMF Investor Service Centre
                                                                                Summary Suit No. 3799 of 1996, filed by M/s Morarka Finance Limited is
    C/o SBI Siliguri Branch
                                                                                pending in the High Court of Juridicature at Bombay. The Plaintiff has
    Hill Cart Road,
                                                                                filed the suit for recovery of Rs. 8.44 lakhs together with interest being the
    Siliguri - 734 401
                                                                                excess price paid by them in equity buyback transaction relating to the
    Distt. Darjeeling
                                                                                shares of M/s Pumpsar Distilleries Ltd.
    Tel. (0353) 537 065
                                                                                AMC’s perception: The AMC has received advice that the case is likely to
21. Vijayawada                                                                  be decided in its favour.
    Shri B. Gopikrishna
                                                                                No criminal cases are pending against the AMC or any of its Directors or
    Asst. Vice President
                                                                                key personnel. No criminal cases incidental to the business of mutual
    SBIMF Investor Service Centre
                                                                                funds are pending against the Sponsor or any company associated with
    C/o SBI Station Road Branch
                                                                                the Sponsor in any capacity or against the Board of Trustees.
    Station Road
    Vijayawada - 520 016                                                        Our Sponsor, the State Bank of India is India’s largest commercial bank
    Tel. (0866) 574 113                                                         with 8930 branches in India and 52 offices in 34 countries worldwide. In
                                                                                addition to this, SBI also has 7 associates and 1 banking subsidiary in
5. Investor Relations Officer:                                                  addition to other non-banking subsidiaries in India. To the best of our
The AMC has appointed an Investor Relations Officer to look into investor       knowledge there are no criminal cases against the Sponsor, Directors or
grievances regarding deficiencies, if any, in the services provided by the      Key Personnel, which will have any impact on the operations of SBI
Registrars or the Investor Service Centres.                                     Mutual Fund.
Name of the Investor        : Shri Dinesh Prasad                                2. Penalties awarded by SEBI or any other Regulatory Body
Relations Officer               Vice President, Customer Service                As on date, there are no cases of penalties awarded by SEBI or any
Address                     : SBI Funds Management Ltd.                         financial regulatory body against the Sponsor or any company in any
                                191, Maker Tower “E”, 19th floor                capacity associated with the Sponsor including the AMC, the Board of
                                Cuffe Parade, Mumbai - 400 005.                 Trustees or any of the directors or key personnel of the AMC. Further,
Telephone Number            : 218 0244 / 218 0221                               there is no deficiency in the systems or operations of the Sponsor or any
The AMC will have the discretion to change the investor relations officer       company associated with the Sponsor (including the AMC), which SEBI
depending on operational necessities and in the overall interest of the         or any other regulatory agency has specifically advised to be disclosed in
fund.                                                                           the offer document.


27
                                                                                   MAGNUM

        SBI MUTUAL FUND
                                                                                 Income Fund


3. Enquiry or Adjudication                                                          6. Power to remove difficulties
SEBI has appointed an Adjudicating Officer to inquire into the alleged              In case of any difficulty in giving effect to the provisions of the scheme,
violations by SBIFM Ltd. These violations relate to the reported delay in           the Trustees may do anything not inconsistent with such provisions,
dispatch of unit certificates/account statements to investors in case of            which appears to them to be necessary, desirable or expedient, for the
two schemes viz. MMIS – 98(I) and MMIS 98(II). As per regulation 36 of              purpose of removing such difficulty.
SEBI (MF) Regulations, 1996, the AMC is required to issue a unit certificate        7. Scheme to be binding
to an applicant as soon as possible but not later than six weeks from the
                                                                                    The Trustees may, from time to time, add to or otherwise vary or alter all or
date of closure of the initial subscription list.
                                                                                    any of the features or terms of the scheme, with prior approval of SEBI
We have represented the reasons for the delay in despatch of the unit               and the Magnum holders in accordance with SEBI Regulations, and the
certificates with the Adjudicating Officer. We have since taken necessary           same shall be binding on each Magnum holder and any person(s) claiming
steps against such reported delays, by effectively monitoring the operations        through or under it, as if each Magnum holder or such person(s) expressly
of our registrars and transfer agents, Investor service centers and collecting      agreed that such features or terms should be so binding.
centers.
                                                                                    Date of Approval of the scheme by the Board of Trustees: 11th September
4. Jurisdiction                                                                     1998.
The jurisdiction for any matters or disputes arising out of the scheme
shall reside with the Courts in Mumbai or such other place as may be
                                                                                                                For and on behalf of the Board of Directors,
decided by the AMC with the approval of the Trustees.
                                                                                                                         SBI Funds Management Limited
5. Power to make Rules                                                                              (the Asset Management Company for SBI Mutual Fund)
The Trustees may from time to time, with prior approval of SEBI, prescribe
such terms or make such rules for the purpose of giving effect to the
provisions of this Scheme with power to the AMC to 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 change in fundamental                  Place : Mumbai                           Name        : Niamatullah
attributes of the scheme shall be made only after obtaining the approval            Date : 1st , February, 2000              Designation : Managing Director
of unitholders in accordance with SEBI Regulations as stated elsewhere
in the offer document.                                                              (Notwithstanding anything contained in the offer document the
                                                                                    provisions of the SEBI (Mutual Funds) Regulations, 1996 and the
                                                                                    Guidelines thereunder shall be applicable.)




28
                                 FOR YOUR CONVENIENCE AND HELP
                         LIST OF SBIMF INVESTOR SERVICE CENTRES (ISC)
1.   Ahmedabad   :   Shri. S. G. Bengali, Manager, SBIMF ISC, C/o SBI, Ahmedabad Main Branch, 1st floor, Bhadra,
                     Ahmedabad - 380 001. Tel. (079) 550 7442




                                                   REGISTRARS
                                         KARVY CONSULTANTS LTD.
                                      Unit : SBI Mutual Fund-INSTACASH FUND
                                       Karvy House, 46, Avenue 4, Street No. 7,
                                          Banjara Hills, Hyderabad 500 034.

				
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