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					                                       HIGHLIGHTS

1.     Liquidity Orientation: The primary investment objective of the scheme is to
       provide income and liquidity consistent with the prudent risk from a portfolio
       comprising of money market and debt instruments. This income may be
       complemented by possible capital appreciation. The aim is to optimise returns
       while providing liquidity.
2.     Minimum Application: The minimum application amount shall be Rs. 1,000/-
       and in multiples of Re. 1/- thereafter.
3.     Multiple Investment Options: The investor can opt for either Daily Dividend
       Option, Weekly Dividend Option, Monthly Dividend Option or Growth Option.
       Daily & Weekly Dividend will be reinvested whereas an investor in monthly
       dividend can opt for payout / reinvestment. Units under each Investment Option
       will have a separate Net Asset Value, after the first dividend distribution. All
       investment options will have a common portfolio.
4.     Switching: Unit holdings can be switched from one Option to another within the
       Scheme or to Options under other Open Ended Schemes of Escorts Mutual Fund
       at Net Asset Value based prices, on daily basis.
5.     No Entry or Exit Load: There is no entry or exit load at present.
6.     Liquidity: An open-ended scheme giving opportunity to invest and exit at NAV
       related prices on daily basis.
7.     Multiple Investment Plan: Investors can participate in Systematic Transfer Plan
       (STP), Systematic Investment Plan (SIP), Systematic Withdrawal Plan (SWP)
       and/or Dividend Re-investment Plan (DRIP) on on-going basis, and thus invest
       regularly at daily, weekly, monthly, quarterly and annual rests.
8.     Transparency: Daily determination of Net Asset Value and half yearly disclosure
       of portfolio.

                  INVESTMENT OBJECTIVES AND POLICIES

INVESTMENT OBJECTIVE

The primary investment objective of the scheme is to provide income and liquidity
consistent with the prudent risk from a portfolio comprising of money market and debt
instruments. This income may be complemented by possible capital appreciation. The
aim is to optimise returns while providing liquidity.

ASSET ALLOCATION

The following asset allocation is proposed to be adhered to, under normal circumstances:

                          Instrument                           Likely Proportion*   Risk
                                                                      (%)
Money Market Instruments including, but are not limited to,       90 – 100          Low
inter bank call and notice money, Mumbai Inter Bank Offer
Rate (MIBOR), linked instruments, repo, reverse repo,
treasury bills, commercial paper of public sector undertakings
and private sector corporate entities, floating rate paper, deep
discount bonds with maturity upto 365 days, certificates of
deposits of scheduled commercial banks and development
financial institutions, bills of exchange / promissory notes of
public sector and private sector corporate entities (co-accepted
by banks), government securities with unexpired maturity of
one year or less and other money market instruments as may
be permitted by SEBI/RBI.
Debt Securities                                                       0 – 10       Low to
                                                                                   Medium
Notes : * = as a proportion of the net assets of the scheme

Pending deployment of funds of the scheme in securities in terms of investment
objectives of the scheme, it can invest the funds of the scheme in short term deposits of
scheduled commercial banks. Further, all references to bank fixed deposits appearing
anywhere in the offer document shall be exactly in accordance with the provisions laid
down under Clause 8 of Schedule VII to SEBI (Mutual Funds) Regulations, 1996. The
investment in short term deposits shall be reported to the trustees along with the reasons
for the investment, which, interalia, would include comparison with interest rates offered
by other scheduled commercial banks. Further, the AMC shall ensure that the reasons for
such investments are recorded in the manner prescribed in SEBI Circular
MFD/CIR/6/73/2000 dated 27.07.2000.

The debt securities include (but not restricted to) debentures/ bonds/ debt obligations
(whether listed, privately placed or otherwise and including asset backed securitised
debt) issued by the Government of India, State governments, local bodies, government
agencies, statutory bodies, scheduled commercial banks, development finance
institutions and corporate entities.

In accordance with SEBI Circular No. SEBI/IMD/CIR No.4/2627/2004 dated 06.02.2004
each mutual fund shall have a maximum derivatives net position of 50% of the portfolio
(i.e. net assets including cash). However, derivative products carry the credit risk (risk of
default by counterparty), market risk (due to market movements) and liquidity risk (due
to lack of liquidity in derivatives). In case interest rates are likely to step up across the
yield curve over short term, the fund may, in order to protect the possible depreciation on
securities of varying maturities, decide to swap fixed interest maturity bills or securities
with floating interest rate or agreements (Mumbai Inter Bank Offer Rate {MIBOR}
linked) in the form of Overnight Index Swaps (OIS) or otherwise. This would be done in
a scenario where even short term interest rates are seen rising upwards in the form of rise
in Commercial Paper (CP), T Bills, MIBOR reference rates etc.

The Scheme may invest in domestic securitised debt such as asset backed securities
(ABS) or mortgage backed securities (MBS) upto a maximum of 25% of its NAV.
However, the scheme will not invest in foreign securitised debt. Asset Backed Securities
(ABS) are securitised debts where the underlying assets are receivables arising from
automobile loans, personal loans, loans against consumer durables, credit card
receivables, loans to SME businesses etc. Mortgage backed securities (MBS) are
securitised debts where the underlying assets are receivables arising from loans backed
by mortgage of residential / commercial properties. ABS / MBS instruments reflect the
undivided interest in the underlying of assets and do not represent the obligation of the
issuer of ABS / MBS or the originator of the underlying receivables. The ABS / MBS
holders have a limited recourse to the extent of credit enhancement provided. If the
delinquencies and credit losses in the underlying pool exceed the credit enhancement
provided, ABS / MBS holders will suffer credit losses. ABS / MBS are also normally
exposed to a higher level of reinvestment risk as compared to the normal corporate or
sovereign debt. Apart from the interest rate, credit and liquidity risk, other risks
associated with securitised debts are (a) Prepayment risks – Prepayment on receivables
will cause prepayments on the securities resulting in reinvestment risk to the investor (b)
Potential loss on securities due to limited assets of the SPV (c) Bankruptcy of originator
could result in losses or delays in payments on the securities (d) Prepayments, potential
losses and change in order of priority of principal payments following an event of default
(e) Risks arising out of geographic concentration of receivables, if any.

Market for Securitised Debt has increased substantially across the world and has
provided much needed depth to the debt market instruments. Mortgages are most
common form of asset backed securities. Investors have demonstrated an increasing
appetite for these securities as they can provide diversification benefits, higher yields and
associated reductions in portfolio volatility. These securities are rated, have low average
maturity and hence these securities can be suitable choice for investment in the fund to
ward off the interest rate risk. High rated securities with a defined remaining maturity
can be invested to enhance the overall yield of the portfolio. Union Budget 2005 has also
provided for Pass Through Certificates to be included as a form of securities by
amending the Securities Contracts Regulation Act, thereby highlighting the need for this
instrument.

In terms of SEBI Circular No. SEBI/IMD/CIR No.8/5611/2004 dated 19.03.2004 and
SEBI Circular No. SEBI/IMD/CIR No.9/6016/2004 dated 25.03.2004, the scheme shall
have the following characteristics :

A.     Mark-to-Market component of the fund on a weekly average basis is less than
       10%. (Mark to Market would mean the valuation of an asset (e.g. marketable
       securities, derivatives and other financial contracts) using a traded price or a
       derived price from the corresponding yield curve). and
B.     Maximum re-pricing tenor of 1 year reckoned as under :
       i.      For a fixed rate asset, the remaining tenor is 1 year or less.
       ii.     For a floating rate asset, the interest reset frequency is 1 year or less.
       iii.     For a fixed rate/floating rate asset where the principal is paid in a
                staggered and/or on amortizing basis (e.g. securitised papers), the average
                maturity of such an asset is 1 year or less.
       iv.     For a portfolio using Interest Rate Swaps :-
               a.       the composite floating rate asset (underlying fixed rate asset and
                        Interest Rate Swap, paying fixed and receiving floating) has
                        interest reset frequency upto 1 year.
                b.      If Interest Rate Swaps (receiving fixed and paying floating), have
                        been used to convert a floating rate asset into a fixed rate asset, the
                        fixed leg of the Interest Rate Swap having remaining tenor upto 1
                        year.
       v.       For a portfolio using Forward Rate Agreements, the summation of the
                beginning and end dates of the period covered is 1 year or less.
C.     If there are positions in Interest Rate Futures and Bond Futures, the re-pricing risk
       is 1 year or less.

It is clarified that for the purpose of calculating the mark to market component money
market instruments shall be excluded. Further, the re-pricing tenor of each of the
securities included in the portfolio of the liquid scheme(s)/ plan(s) shall be 1 year or less.

DERIVATIVES AND HEDGING

SEBI vide its circular no. MFD/CIR/011/061/2000 dated February 1, 2000 has permitted
all the mutual funds to participate in the derivatives trading subject to observance of
guidelines issued by SEBI in this behalf. In terms of SEBI guidelines, trading in
derivatives by the mutual funds should be restricted to hedging and portfolio balancing
and the Fund has to comply with the prescribed disclosure requirements. SEBI had
further issued clarifications vide its circular no. MFD/CIR/21/25467/2002 dated
December 31, 2002 and has clarified certain types of transactions with illustrative
examples, which may be considered as hedging and portfolio balancing.

Trading in Derivatives: The scheme may use derivative instruments like Interest rate
swaps, Forward rate agreements or such other derivative instruments as may be
introduced from time to time for the purpose of hedging and portfolio balancing as may
be permitted under the Regulations and Guidelines. The sum total of derivative contracts
outstanding shall not exceed the SEBI prescribed limits.

An interest rate swap is a financial contract between two parties exchanging a stream of
interest payments for a notional principal amount on multiple occasions during a
specified period. Typically, one party receives a pre-determined fixed rate of interest
while the other party, receives a floating rate, which is linked to a mutually agreed
benchmark with provision for mutually agreed periodic resets. Accounts are generally
settled on a net basis on predetermined settlement dates. Accordingly, on each agreed
payment date, amounts owed by each party is calculated by applying the agreed rate i.e.
fixed in one case and floating in the other, on the notional amount. The party who owes
the higher amount i.e. the difference between the interest rate amount and the floating
interest rate amount or vice versa, makes a payment of the net amount. No principal
amount is exchanged. Generally, interest rate swaps involve exchange of a fixed rate to a
floating rate of interest or vice versa. These are known as Plain Vanilla Swaps. The RBI
has currently allowed only these swaps in the Indian market.
Example: The most common type of swaps is where one party agrees to pay a fixed rate
of interest (fixed-rate payer) to the other party who agrees to pay a floating rate of interest
(floating-rate payer). The payments are exchanged on designated dates during the life of
the contract at agreed rates. Suppose, the view on interest rate is that they would come
down over the next three months if a particular investment is yielding a rate of return at
10% p.a. currently, the Fund Manager would like to lock-in this rate of return which in a
downward interest rate scenario would appear attractive. He, then, enters into a swap
transaction with a counterparty that is willing to pay a fixed rate of 10% p.a. and accept a
floating rate linked to say, MIBOR which would vary everyday but is currently at 7% p.a.

The transaction would be represented thus:
Receives fixed rate@10% p.a., EMF Counterparty B, Pays Floating Rate MIBOR
Note:
i.     No principal amount is exchanged. A notional principal amount is agreed upon for
       interest calculation purposes.
ii.    Only the difference between the two rates is exchanged at agreed intervals or
       payment dates. When fixed interest rate amount is higher, the fixed rate payer
       pays the difference amount i.e. fixed interest rate amount minus the floating
       interest rate amount or vice-versa.

Forward Rate Agreements (FRAs):
A FRA is a financial contract between parties agreeing to exchange interest payments for
a notional principal amount on settlement dates for a specified period from start date to
maturity date. A FRA enables parties to fix interest cost on a future borrowing or fix an
interest rate for a future investment. Hedging a future asset:

Example: Assuming, EMF has funds to invest after two months for a period of three
months. The Fund Manager expects interest rates to soften in the next two months. He,
therefore, would like to lock-in the interest rate today for his investment to be made after
two months. The instrument in which he wishes to invest is a 91-day Treasury Bill at
8.25% p.a. He, therefore, enters into an agreement where he sells a 2 x 5 FRA for a
notional principal amount. 2 represent the start date of the FRA and 5 represents the
maturity date or end date. The details will be as under:
Asset : 91-day T Bill
Tenor : 3 months commencing from 2 months from date of agreement.
Indicative 2 x 5 : 8.25% p.a.
Benchmark : 91-day T‟ Bill cut-off yield on the last auction preceding settlement date

Hence, EMF receives 8.25% p.a. on the notional amount on settlement date. Counterparty
will receive 91-day T Bill cut-off rate on the 91-day T‟ Bill auction, on the auction just
preceding the settlement date. Both, IRS and FRAs can be thus effectively used as
hedging products for interest rate risks.

Accordingly, the Fund may use derivatives instruments like Stock Index Futures, Interest
Rate Swaps, Forward Rate Agreements or such other derivative instruments as may be
introduced from time to time for the purpose of hedging and portfolio balancing, within a
permissible limit of 50% of portfolio, which may be increased as permitted under the
Regulations and guidelines from time to time.

The SEBI has issued guidelines for participation in Derivative trading by Equity schemes
of Mutual Funds vide its circular dated February 6, 2004, to determine permissible limits
for participation in derivative trading. In accordance with the same following will be the
Common Derivatives Positions and Limits :
S. No.   Derivative           Action           Description                         Limit
  1. Index futures             Buy     Buy futures against cash to      To the extent of cash /
                                       protect against rising market    equivalents in the portfolio.
                                                                        Max. limit (50%) of portfolio
 2.    Index futures           Sell    Hedging of portfolio against     Up to (50%) of portfolio.
                                       expected market downturn
 3.    Index Options - Call    Buy     Buy index calls against cash     To the extent of cash /
                                       (existing    /expected)     to   equivalents in the portfolio.
                                       protect against rising market    Max. limit (50%) of portfolio
 4.    Index Options - Call    Sell    Covered Call Sale- against       Up to (50%) of portfolio
                                       existing portfolio
 5.    Index Options - Put     Buy     Buy index puts to hedge          Up to (50%) of portfolio
                                       existing portfolio
 6.    Index Options - Put     Sell    Covered Put Sale- Possible       To the extent of cash /
                                       top sell index puts against      equivalents in the portfolio.
                                       existing / expected cash         Max. limit (50%) of portfolio
 7.    Stock futures           Buy     Buy against cash to protect      To the extent of cash /
                                       against rising share prices      equivalents in the portfolio.
                                                                        Max.     limit    (50%)      of
                                                                        portfolio; per scrip limit
                                                                        (100%)
 8.    Stock futures           Sell    Sell against existing stock –    To the extent of the
                                       Hedging against downside         particular scrip holding in the
                                       on existing stock in the face    portfolio; per scrip limit
                                       of expected volatility in the    100%)
                                       stock price
 9.    Stock options - Call    Buy     Buy against cash to protect      To the extent of cash /
                                       against rising share prices      equivalents in the portfolio.
                                                                        Max.     limit    (50%)      of
                                                                        portfolio; per scrip limit
                                                                        (100%)
 10.   Stock options - Call    Sell    Sell against existing stock      To the extent of the
                                                                        particular scrip holding in the
                                                                        portfolio; per scrip limit
                                                                        100%)
 11.   Stock options - Put     Buy     Purchase against existing        To the extent of the
                                       stock. Hedging against           particular scrip holding in the
                                       downside on existing stock       portfolio; per scrip limit
                                       in the face of expected          100%)
                                       volatility in the stock price
12.    Stock options - Put      Sell     Covered Put Sale against         To the extent of cash /
                                         cash                             equivalents in the portfolio.
                                                                          Max.     limit    (50%)    of
                                                                          portfolio; per scrip limit
                                                                          (100%)
Note: The per scrip limit disclosed above is as % of the holding in the scrip and not as a % of the
portfolio of the scheme.

                                       UNITS AND OFFER

NEW FUND OFFER

1. Offer: The offer is being made for subscription to ESCORTS LIQUID PLAN, an
    open-ended liquid scheme.
2. Face Value: The Units under the Scheme have a face value of Rs. 10/- each.
3. Offer Price: The Units under the Scheme will be offered at the face value of Rs. 10/-
    each during the New Fund Offer Period.
4. New Fund Offer Period: The New Fund Offer of Units under the Scheme shall be
    open for subscription from Tuesday, 27.09.2005 to Thursday, 29.09.2005 („the New
    Fund Offer Period‟).
5. Multiple Investment Options: The investors can opt for Daily Dividend Option,
    Weekly Dividend Option, Monthly Dividend Option or Growth Option.
6. Minimum Subscription Amount: The minimum subscription amount for the New
    Fund Offer of Units under the Scheme is 1,00,000 Units of Rs. 10/- each aggregating
    to Rs. 10 lakhs. In the event this amount is not raised during the new fund offer
    period, the amount collected will be refunded to the applicants. However, any over
    subscription will be retained.
7. Switching: Unit holdings can be switched from one Option to another within the
    Scheme or to Options under other Open Ended Schemes of Escorts Mutual Fund at
    Net Asset Value based prices, on daily basis, subject to applicable load, if any.
8. Duration of the Scheme: The duration of the Scheme is perpetual. However, the
    Scheme may be wound up,
 on the happening of any event which, in the opinion of the Trustee requires the
    Scheme to be wound up;
 if seventy five percent of the Unit holders of the Scheme pass a resolution that the
    Scheme be wound up; or
 if SEBI so directs in the interest of the Unit holders.
9. Commencement of the Scheme: The Scheme will commence on the day subsequent
    to the date of closure of the New Fund Offer Period.
10. Minimum Application: The minimum application amount shall be Rs. 1,000/-and in
    multiples of Re. 1/- thereafter.
11. Maximum Application: There is no maximum Application size as such. However,
    the Trustee reserves the right to review, at its sole discretion any large application for
    subscription to Units under the Scheme, in the best interest of the investors and to
    accept such application(s) upto such extent that they may deem fit and refund the
    excess subscription amount, if any.
12. Subscription Amount: During the New Fund Offer Period, the subscription amount
    is the face value of the number of Units being applied for.

WHO CAN APPLY

The following persons/ entities (subject, wherever relevant to purchase of Units of
Mutual Funds being permitted under relevant statutory regulations and their respective
constitutions, wherever applicable) may apply for subscription to Units under the
Scheme :
1. Resident adult individuals, either singly or jointly (not exceeding three)
2. Minors through their parents/ legal guardians;
3. Hindu Undivided Family („HUF‟), in the name of karta;
4. Sole Proprietors, Partners of (Partnership) Firms and Association of Persons or Body
    of Individuals;
5. Bodies corporate/ Companies registered in India:
6. Banks (including Co-operative and Regional Rural Banks) and financial institutions;
7. Religious and Charitable (public) and private Trusts authorised to invest in such
    Units;
8. Registered societies and Co-operative societies authorised to invest in such Units;
9. Provident/ Pension/ Gratuity/ Superannuation and such other Funds as and when
    permitted to invest.
10. Army/ Air Force/ Navy and other para-military Funds and eligible institutions;
11. Scientific and/ or industrial research organisations authorised to invest in such Units;
12. Other associations, institutions, bodies etc. authorised to invest in such Units:
13. Non-Resident Indians and persons of Indian origin residing abroad (collectively
    „NRIs‟);
14. Foreign Institutional Investors („FIIs‟) registered with SEBI;
15. Multilateral agencies approved by the Government of India can apply subject to
    obtaining Reserve Bank of India („RBI‟) approval; and
16. Other Mutual Funds and Schemes of Escorts Mutual Fund.

Investments in Units under the scheme by religious and charitable trusts will rank as an
eligible investment under Section 11(5) of the Act read with Rule 17C of the Income-tax
Rules, 1962. Eligible institutions such as those covered under section 11 and 10(23C) of
the Act, investing in Units under the scheme would therefore continue to qualify for
exemption, in respect of income therefrom under the applicable sections of the Act.

In terms of Schedule 5 of Notification No. FEMA 20/2000 dated May 3, 2000, RBI as
amended vide FEMA Notification No. 101 dated October 3, 2003 has granted general
permission to NRIs to purchase, on a repatriation basis, units of domestic mutual funds.
Further, the general permission is also granted to NRIs to sell the units to the mutual
funds for repurchase or for the payment of maturity proceeds, provided that the units
have been purchased in accordance with the conditions set out in the aforesaid
notification.
For the purpose of this section, the term “mutual funds” is as referred to in Clause (23D)
of Section 10 of Income-tax Act, 1961.

However, NRI investors also have the option to make their investment on a non-
repatriable basis.

In terms of Schedule 5 of Notification No. FEMA 20/2000 dated May 3, 2000, RBI has
granted general permission to a registered FII to purchase, on repatriation basis, units of
domestic mutual funds. Further, the general permission is also granted to FIIs to sell the
units to the mutual funds for repurchase or for the payment of maturity proceeds,
provided that the units have been purchased in accordance with the conditions set out in
the aforesaid notification.

For the purpose of this section, the term “mutual funds” is as referred to in Clause (23D)
of Section 10 of Income-tax Act, 1961.

HOW TO APPLY (Instructions for investors)

1. This Application Form may be used by resident and non-resident investors.
2. The Application Form must be completed in English in BLOCK LETTERS. Please
                                                  )
   tick () in the appropriate box, where boxes ( have been provided.
3. Application under Power of Attorney: In case of an Application under a Power of
   Attorney or by a limited company or a body corporate or a registered society or a
   trust, the original Power of Attorney or a duly notarised copy thereof or the relevant
   resolution or authority to make the application, as the case may be or a duly certified
   copy thereof along with a duly certified copy of the memorandum and articles of
   association and/ or the bye-laws, if any must be submitted to the Asset Management
   Company at New Delhi, at the earliest but in any case no later than 7 days from the
   date of closure of the New Fund Offer Period.
4. Wherever an application is for total value of Rs. 50,000 or more, the applicant or in
   case of application in joint names, each of the applicants, should mention his / her
   permanent account number (PAN) allotted under the Income-tax Act, 1961 or where
   the same has not been allotted, the GIR number and the income-tax
   Circle/Ward/District should be mentioned. In case where neither the PAN nor GIR
   number has been allotted, the fact of non-allotment should be mentioned in the
   application form. Any application form without these details shall not be accepted by
   the mutual fund (SEBI Circular No. SEBI/IMD/CIR No.6/4213/04 Dated 01.03.2004)
5. Applicants are encouraged to provide their email addresses in the application form to
   enable the Fund to send them various investor communications more efficiently, on
   request basis.
6. Applications complete in all respects may be lodged on or before the date of closure
   of the New Fund Offer Period as follows:
        Applications accompanied by subscription amount in cash or by cheque/
            demand draft, to be deposited by Resident investors with the collecting
            branches of the bankers to the New Fund Offer, mentioned in the application.
          Applications accompanied by subscription amount by cheque/ demand draft,
           to be deposited by Non-Resident investors with the NRI collecting branches
           of the bankers to the New Fund Offer, mentioned in the application.
          Applications by mail, from investors located at places where there are no
           collecting branches of the bankers to the New Fund Offer should be sent,
           preferably by Registered Post to the Asset Management Company
           accompanied by the subscription amount by cheque / demand draft.
Important
       No receipt will be issued for the application. However, the Acknowledgement
          Slip, at the bottom of the application, duly initialled/ stamped by collecting
          branches of the bankers to the New Fund Offer shall be issued to the investor
          for future reference. All communication in respect of the application should
          be sent to the Asset Management Company quoting the full name of the
          investor, application serial number, number of Units applied for, date on
          which and name of the collecting branch of the bankers to the New Fund
          Offer.

Rejection of Applications
The following kinds of Applications are liable to be rejected :
1. Incomplete or incorrectly filled Applications and/or those not accompanied by the
   subscription amount or otherwise found invalid;
2. Applications under Power of Attorney for which the requisite documents are not
   submitted within the time period stipulated in this regard;
3. Applications accompanied by cheques / demand drafts that have been dishonoured /
   returned unpaid;
4. The Trustee reserves the sole and absolute right to accept or reject applications, in
   whole or in part, without assigning any reason therefor. The decision of the Trustee in
   this regard shall be absolute and final.

Pledge
The units can be pledged by the unitholders as security for raising loans, availing credit
facility etc., subject to the conditions of the lender. The Registrar shall take note of such
pledge / charge in its records.

MODE OF PAYMENT

   For application(s) from Resident investors payment should be made either by cash or
    by local cheque/ demand draft drawn in favour of “ESCORTS MUTUAL FUND –
    A/C ESCORTS LIQUID PLAN”, crossed “A/c payee only” and made payable at par
    locally and drawn on any bank branch which is a member of Bankers Clearing House
    located in the centre where the application is lodged. Bank charges for outstation
    demand drafts will be borne by the AMC during New Fund Offer Period.
    Stockinvests, outstation cheques, post-dated cheques, postal orders or money orders
    will not be accepted. In case of payment by cheque/ demand draft, a separate cheque/
    demand draft must accompany each application.
    For application(s) from NRIs, in case of purchase of units on repatriation basis,
     payment shall be made either by inward remittance through normal banking channels
     or out of the funds held in his Non-Resident (External) Account / FCNR Account. In
     case of purchase of units on non repatriation basis, payment shall be made either by
     inward remittance through normal banking channels or out of the funds held in his
     Non-Resident (External) Account / FCNR Account / Non Resident Ordinary Account
     / NRNR Account. All cheques/ demand drafts should be drawn in favour of
     “ESCORTS MUTUAL FUND – A/C ESCORTS LIQUID PLAN – NRI”. Payment in
     the form of foreign exchange/ Dollar drafts may result in subscription to fractional
     Units. Applicable Exchange Rate shall be that prevailing on the date of remittance of
     dividend / redemption.
    Cheque/ demand draft accompanying the application, if any should contain the
     application serial number on its reverse.

INVESTMENT OPTIONS
The investor can opt for Daily Dividend Option, Weekly Dividend Option, Monthly
Dividend Option or Growth Option. Daily & Weekly Dividend will be reinvested
whereas an investor in monthly dividend can opt for payout / reinvestment. Units under
each Investment Option will have a separate Net Asset Value, after the first dividend
distribution. The Dividend Option will suit the needs of those investors who are desirous
of receiving regular income by way of dividends, which are exempt from tax under
section 10(33) of the Act. The Growth Option will suit the needs of those investors who
do not require regular income, by way of dividends but are desirous of enjoying capital
appreciation. They will enjoy the twin tax benefits of indexation and lower tax rate on
long term capital gains under sections 48 and 112 of the Act.

INVESTMENT PLANS
1.   Systematic Transfer Plan (STP)
      The investors can opt to transfer a fixed amount or capital appreciation
        (variable amount) without disturbing the initial capital contribution, at regular
        intervals to another open ended scheme of Escorts Mutual Fund.
      The investor can choose to transfer on a fortnightly, monthly or a quarterly
        basis Rs. 1,000/- per execution for Fixed STP and a minimum of Rs. 500/- per
        execution on Capital Appreciation STP.
      The dates of transfer shall be : Fixed STP – Fortnightly and Monthly :- 1st and
        15th of every month; Quarterly :- 1st and 15th of the starting month of every
        Quarter.
      Minimum Balance for availing the facility shall be Rs. 1,00,000/-.
      For enrolment into STP for stopping the STP the request should be received at
        any of the investor service centre of the AMC atleast 4 days prior to the
        commencement of the STP execution date. Requests not fulfilling this
        requirement will be considered from the following STP date.
      The Board of Trustees/AMC reserve the right to alter/vary the terms of STP.

2.      Systematic Investment Plan (SIP)
          The investors can enroll themselves for Systematic Investment Plan (SIP) by
           ticking the appropriate box on the application
          The investor can choose to invest a minimum of Rs. 500/- on a monthly or Rs.
           1,250/- on a quarterly basis, subject to a minimum of Rs. 5,000/- per annum
           by enclosing, along with their application for purchase sufficient number of
           post-dated cheques (monthly or quarterly), for a continuous period of at least
           one year.
          Subject to realisation of the cheques on their due dates units will be allotted at
           the applicable NAV. In case the date falls on a holiday or during book closure
           period, the immediate next business day will be considered for this purpose.
          Notice of discontinuance should be received atleast 7 days prior to the due
           date of the next cheque.
          The Board of Trustees/AMC reserve the right to alter/vary the terms of SIP.

3.     Dividend Re-investment Plan (DRIP)
        Unit holders, under the Dividend Option may choose to re-invest the whole or
          a part of their dividend income (subject to a minimum of Rs. 1,000/-) in
          additional Units of the Scheme instead of receiving the same in cash under
          DRIP.
        The dividend due and payable to the Unitholder will be automatically
          reinvested at the first ex-dividend NAV prevailing after the dividend
          declaration.
        The dividend so reinvested shall be construed as payment of dividends to the
          Unitholder and construed as receipt of same amount from each Unitholder for
          reinvestment in units.
        On reinvestment of dividends, the number of units to the credit of Unitholder
          will increase to the extent of the dividend reinvested divided by the NAV
          applicable on the day of reinvestment.
        Such reinvested dividends being similar to dividend payout, it will be tax
          exempt in the hands of the Unitholder.

4.     Systematic Withdrawal Plan (SWP)
        The SWP allows investors to withdraw fixed amounts on monthly or quarterly
          basis, for any continuous period of not less than six months by redeeming
          their investments in Units.
        The minimum amount, which the Unit holder can withdraw, is Rs. 1,000/- per
          month or quarter.
        Unit holders may change the amount indicated in the SWP, subject to a
          minimum amount of Rs. 1,000/-, per month or quarter.
        The Board of Trustees/AMC reserve the right to alter/vary the terms of SWP.

INTER PLAN SWITCHING
With effect from not later than 30 days after the close of the New Fund Offer Period,
unitholders will have the option to switch all or part of their investment(s) from one
investment plan of this scheme to the other Investment Plan of this scheme. The switch
will be effected by way of redemption of Units of the relevant Investment Plan of this
scheme and re-investment of the redemption proceeds in the other Investment Plan of the
Scheme selected by the unitholder on the prevailing terms of the Scheme.

The price at which the Units will be switched out of the Scheme will be at the Applicable
NAV on the Business Day of acceptance of switching request and the net proceeds will
be invested in the other Investment Plan of the Scheme at the prevailing purchase price
for Units in that Investment Plan.

REFUNDS
Refund warrants for the following amounts will be dispatched within 15 days from the
date of closure of the New Fund Offer Period:
1. Where an application is rejected in full, the subscription amount in full;
2. Where an application is accepted in part, the excess subscription amount;
3. For applications accompanied by payment in the form of foreign exchange/ Dollar
    drafts, where the remittance is in excess of the subscription amount due on the nearest
    lower multiple of 100 Units, the excess subscription amount;
4. If the entire subscription does not amount to the target amount of Rs. 10 lakhs, on the
    date of closure of the New Fund Offer Period, then the entire subscription amount in
    full and the Scheme shall be deemed to have been terminated.
5. No interest will be payable on any subscription amount so refunded. However, if the
    Mutual Fund fails to refund the above excess subscription amount, if any within 6
    weeks from the date of closure of the New Fund Offer Period, then interest @ 15%
    per annum will be paid out of the assets of the Mutual Fund for the period thereafter.
6. Refund warrants, marked "A/c Payee Only" will be drawn in the name of the investor
    and despatched by registered post A.D. to the address of the sole/ first-named investor
    as per the application.

SUBSEQUENT PURCHASE OF UNITS
1. After 3 days from the date of closure of the New Fund Offer Period or as earlier as
   the Trustee may decide, the Units under the Scheme can be purchased at the then
   prevailing NAV.
2. The terms under which the subsequent purchase of Units will be made will be, inter
   alia, unless repugnant to the subject or context hereof the same as for the New Fund
   Offer of Units. An existing Unit holder may also make subsequent purchase of Units
   under the same account or a fresh account.
3. A Unit holder/ investor may request for purchase of Units for a specific amount (not
   less than Rs. 1,000/-).
4. Unit holders/ investors who are desirous of purchasing Units are required to lodge the
   application duly signed with any of the offices of the Asset Management Company
   mentioned in the Offer Document. Applications for purchase by mail, from Unit
   holders/ investors located at places where there are no offices of the Asset
   Management Company should be sent, preferably by Registered Post to the Asset
   Management Company at New Delhi. Applications for purchase by telephone,
   telegram, facsimile or other means and/ or those that lack valid signatures will not be
   accepted. However, the Mutual Fund may specify alternate means, in this regard,
   from time to time.
5. In respect of valid applications on any business day (which excludes Saturday,
   Sunday and any holiday declared under the Negotiable Instruments Act, 1882 at New
   Delhi), closing NAV of the day immediately previous to the day on which funds are
   available for utilisation by the fund shall be applicable. However, in respect of any
   application received after 1.00 P.M. by the Mutual Fund and the funds are available
   for utilisation by the fund on the same day, closing NAV of the day immediately
   previous to the next business day shall be applied.
6. Sale of Units may be suspended temporarily or indefinitely when any one or more of
   the following conditions exist:
        The stock/ fixed income securities/ money market stops functioning or trading
           is restricted;
        Periods of extreme volatility in the stock/ fixed income securities/ money
           market, which, in the opinion of the Asset Management Company is
           prejudicial to the interest of the existing Unit holders;
        Declaration of war or occurrence of insurrection, civil commotion, natural
           calamity or sustained financial, political or industrial emergency, strife or
           disturbance; and/ or
        SEBI, by order so directs.
7. Barring unforeseen circumstances, a Statement of Account, reflecting the number of
   Units purchased, the purchase value and the fresh balance of Units outstanding in the
   account will be despatched within 10 business days from the date of application for
   purchase. However, endeavour shall be made to despatch the Statement of Account
   within 1 working day from the date of purchase. For applications for purchase
   received on any business day upto 1:00 P.M., the applicable business date will be the
   closing NAV of the day immediately previous to the day on which funds are available
   for utilisation by the fund. It is clearly understood that the date of application for
   purchase will be determined by the date (and time) of receipt of the application for
   purchase at the offices of the Asset Management Company. Further, it is clarified that
   the day(s) on which the money markets are closed / not accessible, shall not be treated
   as business day(s).
8. The effect of purchases, inter alia, will be to increase the outstanding Unit Capital of
   the Scheme by an amount equivalent to the product of the number of Units purchased
   and the face value of the Units. Further, since Unit holders may purchase Units
   valued at Rs. 1,000/- or more, their consequent holding of Units may be fractional
   (upto three decimal places). Holding of fractional Units does not in any way reduce or
   limit the rights of such Unit holders.

                         DIVIDENDS AND DISTRIBUTIONS

1. No dividend will be declared and distributed under the Growth Option, and the
   distributable surplus, which thus remains wholly undistributed, would be transferred
   to the reserves of the Scheme attributable to the Unit holders of this Option alone.
2. Under the Dividend Option, the Trustee may decide and declare dividend at such
   rests, as it deems fit, after the close of the relevant period, subject to availability of
   distributable surplus, from time to time.
3. When dividends are declared and distributed, the reserves of the Scheme attributable
    to the Unit holders of this Option alone, will stand reduced by an amount equivalent
    to the product of the number of Units outstanding, under the Dividend Option and the
    dividend per Unit (including Dividend Tax plus surcharge as applicable thereon, if
    any).
4. Dividend will be paid by cheque favouring the registered holder of the Units and, if
    there is more than one registered holder, then the first-named registered holder.
5. Dividend warrants will be despatched to the Unit holder‟s address in the Register of
    Unit holders and made payable to the bank, branch and account number of the Unit
    holder.
6. Dividend warrants will be despatched, within 30 days from the date of declaration of
    dividend.
7. Dividend Payout of Rs. 100/- and below shall be automatically re-invested in the
    scheme.
8. Payment of dividend and despatch of dividend warrants to Non-Resident Unit holders
    / FIIs will be subject to obtaining requisite RBI directions from time to time.
    Similarly, issue of „at par‟ dividend warrants will be subject to RBI directions, in this
    regard, from time to time.
9. The Trustee may introduce Electronic Clearing Service (ECS), at a later date to
    obviate the need for issuing and handling paper instruments such as dividend warrants
    and thereby facilitate improved investor service, for which purpose a separate
    communication will be sent to all eligible Unit holders at the appropriate time.
10. In terms of SEBI Circular No. MFD/CIR/9/120/2000 dated 24.11.2000 the unclaimed
    dividend amount shall be deployed by the mutual fund in call money market or
    money market instruments only and the investors who claim these amounts during the
    period of 3 years from the due date shall be paid at the prevailing NAV. After a
    period of 3 years this amount shall be transferred to a pool account and the investors
    can claim the amount at NAV prevailing at the end of the third year. The income
    earned on such funds can be used for the purpose of investor education. The AMC
    shall make a continuous effort to remind the investors through letters to take their
    unclaimed amounts.

                          REDEMPTION OR REPURCHASE

1. After 3 days from the date of closure of the New Fund Offer Period or as earlier as
   the Trustee may decide, the Units can be redeemed, on daily basis, at the then
   prevailing NAV.
2. A Unit holder may request for redemption of a specific redemption amount (not less
   than Rs. 1,000/-). The sale and re-purchase prices for subsequent purchase and
   redemption of Units under the Scheme, respectively shall be disclosed for each such
   business day. The sale and repurchase price of units shall be published in a daily
   newspaper on a daily basis. In accordance with the Regulations, it shall be ensured
   that the sale price is not higher than 107% of the Net Asset Value and the repurchase
   price is not lower than 93% of the Net Asset Value and that the difference between
   the sale and repurchase price does not exceed 7% of the sale price.
3. Notice for redemption of Units, in the prescribed form, duly signed by all the
   registered unit holders (except if held on „either or survivor‟ or „anyone or survivor‟
   basis in which case the notice can be signed singly) may be sent to the offices of the
   Asset Management Company, preferably by registered post. Notices for redemption
   by telephone, telegram, facsimile or other means and/ or those that lack valid
   signatures will not be accepted. However, the Mutual Fund may specify alternate
   means, in this regard, from time to time. It is mandatory for the investors of Escorts
   Mutual Fund Scheme(s) to mention their bank account particulars in their requests for
   redemption.
4. In case of valid notices for redemption received on any business day (which excludes
   Sunday and any holiday declared under the Negotiable Instruments Act, 1882 at New
   Delhi) upto 10.00 A.M. by the Mutual Fund, previous day‟s closing NAV shall be
   applicable. In respect of valid notices for redemption received after 10.00 A.M. by the
   Mutual Fund the closing NAV of the day immediately previous to the next business
   day shall be applicable.
5. Barring unforeseen circumstances, redemption warrants (along with fresh Statements
   of Account reflecting the number of Units redeemed, the redemption proceeds as well
   as the fresh balance of Units outstanding in the account, if any) will be despatched
   within 10 working days from the date of notice for redemption. However, endeavour
   shall be made to despatch redemption warrant within 1 working day from the date of
   notice for redemption.
6. In any case, if the effect of the notice for redemption is to reduce the balance in the
   account of the investor below the minimum account balance of Rs. 1,000/-, the
   Mutual Fund has the right to close the account and redeem the balance holding of
   Units, at the prevailing NAV after 30 days from the date on which the balance in the
   account of the investor fell below the minimum account balance of Rs. 1,000/- unless
   the Unit holder responds favourably to the notice issued by the Mutual Fund to the
   Unit holder, in this regard. In case, the effect of the notice for redemption is to reduce
   the balance in the account of the investor to a debit balance, then the credit balance in
   the account of the investor, as on the date of notice for redemption, prior to
   consideration of the notice for redemption will be payable.
7. The Trustee reserves the right, in its sole discretion, in response to unforeseen
   circumstances or unusual market conditions, to limit the total number of Units
   redeemable on any particular business day to not more than 5% of the total number of
   Units outstanding (Investment Option-wise) at the close of the previous business day.
   Any Units which, by virtue of this limitation are not redeemed on any particular
   business day will be carried forward to the next succeeding business day, and so on,
   in order of receipt.
8. Redemption of Units may be suspended temporarily or indefinitely when any one or
   more of the following conditions exist:
        The stock/ fixed income securities/ money market stops functioning or trading
           is restricted;
        Periods of extreme volatility in the stock/ fixed income securities/ money
           market, which, in the opinion of the Asset Management Company is
           prejudicial to the interest of the continuing Unit holders;
             Declaration of war or occurrence of insurrection, civil commotion, natural
              calamity or sustained financial, political or industrial emergency, strife or
              disturbance; and/ or
           SEBI, by order so directs.
9.    No tax is required to be deducted at source from the redemption proceeds. However,
      for a non-resident Unit holder, tax will be deducted at source from the redemption
      proceeds, at the applicable rates in force, from time to time.
10.   In the case of Non-Resident Unit holders, redemption proceeds will be payable by
      means of a Rupee cheque payable to the Non-Resident (External)/ special Non-
      Resident Rupee account of the Unit holder, if any or by a Dollar draft drawn at the
      then prevailing exchange rates, if the Units are held on repatriable basis, subject to
      requisite RBI directions.
11.   Redemption warrants will be drawn in the name of the registered holder of the Units,
      made payable to the bank, branch and account number of the Unit holder.
12.   Redemption warrants will be despatched to the address of the sole/ first-named
      registered holder in the Register of Unit holders.
13.   In accordance with Regulation 53(c) of the SEBI guidelines, in the event of failure to
      despatch the redemption or repurchase proceeds within 10 working days, the AMC is
      liable to pay interest to the unitholders @15% p.a. Such interest is required to be
      borne by the AMC. Interest for the period of delay in despatch of repurchase /
      redemption warrants shall be added to the proceeds when such payments are made to
      the unitholders. Investors should also be informed about the rate and amount of
      interest paid to them.
14.   In terms of SEBI Circular No. MFD/CIR/9/120/2000 dated 24.11.2000 the unclaimed
      redemption amount shall be deployed by the mutual fund in call money market or
      money market instruments only and the investors who claim these amounts during
      the period of 3 years from the due date shall be paid at the prevailing NAV. After a
      period of 3 years this amount shall be transferred to a pool account and the investors
      can claim the amount at NAV prevailing at the end of the third year. The income
      earned can be used for the purpose of investor education. The AMC shall make a
      continuous effort to remind the investors through letters to take their unclaimed
      amounts.

				
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