IDFC Tax Saver ELSS Fund - Kotak SecuritiesIDFC Tax Saver (ELSS) Fund 1 SPONSOR The sponsor of IDFC Mutual Fund is Infrastructure Development Finance Company Limited (IDFC) NAME OF

IDFC AMC Offices

Ahmedabad Ground Floor, Zodiac Avenue, Opp. Mayor's Bunglow, Near Law Garden, Ahmedabad - 380 006. Tel.: 079-64505881/5857.Bangalore Raheja Point, 2nd Floor, Magrath Road, Opp. Garuda Mall, Bangalore - 25. Tel.: 080-64501951/52, 66111504/05/06.Bhubaneshwar Plot No. 3, Bapuji Nagar, Bhubaneshwar - 751 009.Chandigarh SCO 137 - 138, Sector 9C, Madhya Marg, Chandigarh - 160 017. Tel.: 0172 - 5071919 /1918.Chennai Maalavika Centre, Old no. 144/145, New No. 60, Kodambakkam High Road, Nungambakkam, Chennai - 600 034.Cochin HDFC House, 1st Floor, Ravipuram Junction, Cochin - 682 015. Tel.: 0484 - 2358639.Coimbatore Red Rose Plaza, 509, D.B. Road, R. S. Puram, Coimbatore - 641 002. Tel.: 0422-2542645, 2542678.Hyderabad #6/ 3/ 1090, TSR Towers, Raj Bhavan Road, Somajiguda, Hyderabad - 500 082. Tel.: 040 - 55329924 /25 /27.Indore 21/ 1, DM Tower, Race Course Road, Indore - 452 001. Tel.: 0731 - 4206927.Jaipur G - 7, G - 8, Anukampa Towers Church Road, Jaipur - 302 001. Tel.: 0141 -5105797, 5105798.Kanpur Office No 214, 215, IInd Floor, KAN Chambers, 14/113, Civil Lines, Kanpur - 208 001. Tel: 0512-2331071, 2331119.Kolkata Oswal Chambers, 1st Floor, 2 Church Lane, Kolkata - 700 001. Tel.: 033-2288 2048 / 3016Lucknow Narain Automobiles, 4 Shahnazaf Road, Lucknow - 226 001. Tel.: 0522-2200097.Ludhiana SCO 16-17, Basement, Feroze Gandhi Market, Ludhiana - 141 001. Tel.: 0161-5022155, 5022156.Mumbai 270, DN Road, Ground Floor, Cox Building, Fort, Mumbai - 1. Tel.: 022-66511022-26Nagpur 1st Floor, Narang Towers, 27, Palm Road, Civil Lines, Nagpur - 440 001. Tel.: 0712 - 6620714New Delhi 4th Floor, Narain Manzil, 23 Barakhamba Road, New Delhi - 110 001. Tel.: 011-41513040, 41513041, 41513042.Patna Bhagwati Dwarka Arcade, Plot No 830 P Patna - 800 001. Telefax 2223172.Pune 1st Floor, Building C, Dr. Herekar Park Apartment, Bhamburda, Shivajinagar, Pune - 411 004. Tel.: 020-66020965.Rajkot Business Empire, 5 Jagnath Plot Corner, Gymkhana Road, Rajkot - 360 001. Tel. 0281-6626012.Surat C K Tower, 1st Floor, Near Sargam Shopping Centre, Parle Point, Surat - 7. Tel. 0261-2258330.Vadodara Ground Floor, Akash Ganga Complex, Adjacent to Vanijya Bhavan, Race Course Circle, Vadodara - 390 007. Tel.: 0265 - 6620919 / 939.

SponsorInfrastructure Development Finance Company Limited (IDFC)Registered Office:ITC Centre, 3rd Floor,760, Anna Salai, Chennai - 600 002.

TrusteeIDFC AMC Trustee Company Private Limited90 M G Road, Fort, Mumbai 400 001

Investment ManagerIDFC Asset Management Company Private Ltd. (IDFCAMC)Registered & Corporate Office:90 M G Road, Fort, Mumbai 400 001

RegistrarComputer Age Management Services Private LimitedGround floor, 178/10, Kodambakkam High Road,Opposite Hotel Palm Grove, Numgambakkam, Chennai 600 034Tel. + 91 - 44 - 2828 3606/ 07Registration No. INR 000002813

CustodianDeutsche Bank AGKodak House, 222 D N Road, Fort, Mumbai 400 001

AuditorsBSR & CoKPMG House, Kamala Mills Compound448, Senapati Bapat Marg, Lower Parel, Mumbai 400 013

www.idfcmf.com

Please note our new investor redressal email id is

[email protected]

Offices of Registrar, Computer Age Management Services Private Limited

l Ahmedabad : 402-406, 4th Floor - Devpath Building, Off C G Road, Behind Lal Bungalow, Ellis Bridge, Ahmedabad - 380 006. Phone:079-30082468/ 30082469/ 30082470 l Bangalore : Trade Centre, 1st Floor 45, Dikensen Road (Next to Manipal Centre), Bangalore-560 042. Phone : 080-30574709/ 30574710/ 30578004/30578006 l Bhubaneswar: 101/ 5, Janpath, Unit – III , Near Hotel Swosti, Bhubaneswar - 751 001. Phone : 0674-325 3307/325 3308 l Chandigarh : Deepak Towers, SCO 154-155, 1st Floor, Sector 17-C, Chandigarh-160 017.Phone:0172-304 8720/304 8721/304 8722/3048723 l Chennai : Ground Floor No.178/10, Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai -600 034 Phone : 044-3911 5563/ 3911 5565 /3911 5567/39115561l Cochin : 40 / 9633 D, Veekshanam Road, Near International Hotel, Cochin-682 035. Phone : 0484-323 4658 /323 4662 l Coimbatore : Old # 66 New # 86, Lokamanya Street (West), Ground Floor, R.S.Puram, Coimbatore-641 002. Phone:0422-301 8000/301 8001. l Durgapur : 4/2, Bengal Ambuja Housing Development Ltd, Ground Floor, City Centre Dist - Burdwan, West Bengal, Durgapur-713 216 Phone : 0343/329 8890 /329 8891/6451419 l Goa : No.108, 1st Floor, Gurudutta Bldg, Above Weekender M G Road, Panaji (Goa) - 403 001. Phone : 0832/325 1755-325 1640 l Hyderabad : 102, First Floor , Jade Arcade, Paradise Circle, Secunderabad-500 003. Phone : 040-3918 2471/3918 2473 /3918 2468/3918 2469 l Indore : 101, Shalimar Corporate Centre, 8-B, South tukogunj, Opp.Greenpark, Indore-452 001. Phone : 0731-325 3692/325 3646 l Jaipur : G-III, Park Saroj , Behind Ashok Nagar Police Station, R-7, Yudhisthir Marg ,C-Scheme. Jaipur-302 001Phone - 0141/326 9126/326 9128/5104373/5104372 l Kanpur : G - 27,28 - Ground Floor, CITY CENTRE, 63/ 2, THE MALL, Kanpur-208 001. Phone : 0512-3918003/ 3918000/ 3918001/3918002 l Kolkata: “LORDS Building”, 7/1,Lord Sinha Road, Ground Floor, Kolkata-700 071. Phone : 033/32550760/3058 2285/ 3058 2303 / 30582281 l Lucknow : Off # 4,1st Floor,Centre Court Building, 3/c, 5 - Park Road, Hazratganj, Lucknow-226 001. Phone : 0522/391 8000/391 8001/391 8002/ 3918003 l Ludhiana : U/ GF, Prince Market, Green Field, Near Traffic Lights, Sarabha Nagar Pulli, Pakhowal Road, Above Dr. Virdi’s Lab, P.O Model Town, Ludhiana-141 002. Phone : 0161-301 8000/301 8001 l Madurai : 86/71A, Tamilsangam Road, Madurai-625 001. Phone : 0452-325 1357/325 2468 l Mangalore : No. G 4 & G 5, Inland Monarch, Opp. Karnataka Bank, Kadri Main Road, Kadri, Mangalore-575 003. Phone : 0824-325 1357/325 2468 l Mumbai : Rajabahdur Compound, Ground Floor, Opp Allahabad Bank, Behind ICICI Bank 30, Mumbai Samachar Marg, Fort, Mumbai-400 023.Phone : 022-30282468/ 30282469/ 30282471/ 65257932 l Nagpur : 145 Lendra, Behind Indus Ind Bank, New Ramdaspeth, Nagpur - 440 010. Phone : 0712-325 8275/2432447 l New Delhi : 304-305 III Floor, Kanchenjunga Building, 18, Barakhamba Road, Cannaugt Place, New Delhi - 110 001. Phone : 011-3048 2471 /3048 1203 /3048 1205/ 30482468 l Patna : Kamlalaye Shobha Plaza (1st Floor), Behind RBI Near Ashiana Tower, Exhibition Road, Patna-800 001. Phone : 0612-325 5284/325 5285/ 3255286 l Pune : Nirmiti Eminence, Off No. 6, I Floor, Opp Abhishek Hotel, Mehandale Garage Road, Erandawane, Pune - 411 004. Phone:020-30283005/ 30283003/30283000/30283001 l Surat : Office No 2 Ahura -Mazda Complex, First Floor, Sadak Street, Timalyawad, Nanpura, Surat - 395 001. Phone : 0261/326 2267/326 2468/326 0352 l Vadodara : 109 - Silver Line, Besides world Trade Centre, Sayajigunj, Vadodara - 390 005 Phone :0265-301 8029/301 8031 l Vijayawada: 40-1-68, Rao & Ratnam Complex, Near Chennupati Petrol Pump, M.G Road, Labbipet, Vijayawada - 520 010 Phone : 0866-329 9181/329 5202 l Visakhapatnam: 47/ 9 / 17, 1st Floor, 3rd Lane , Dwaraka Nagar, Visakhapatnam-530016. Phone : 0891-329 8397/329 8374/2554893

A 10 years close ended Equity Linked Savings Scheme from IDFC Mutual Fund(subject to lock in for a period of 3 years from date of allotment)

IDFC Tax Saver ELSS Fund

IDFC Asset Management Company Pvt. Ltd.

New Fund Offer

New Fund Offer Opens :

New Fund Offer Closes :

Offer for Units of Rs. 10 Per Unit during the New Fund Offer Period & at NAV based prices during the continuous Offer Period

INVESTORS SHOULD NOTE THAT

This Offer Document sets forth concisely the information that a prospective investor ought to know before investing. Investors should carefully read the Offer Document before making an investment decision.

This Offer Document remains effective until a ‘material change’ (other than a change in Fundamental Attributes and within the purview of the offer document) occurs. Material change will be filed with Securities Exchange Board of India (SEBI) and circulated to the Unit holders or as may be publicly notified by advertisements in the newspapers subject to the applicable Regulations.

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 neither been approved nor disapproved by SEBI, certified the accuracy or adequacy of this Offer Document.

Please retain this Offer Document for future reference

Printed on May 24, 2008

IDFC Tax Saver (ELSS) Fund ( i )

INDEXSr. Particulars Page Nos.No.

I Highlights, Risk Factors and Due Diligence 1-6

Highlights 2

Risk Factors 2-3

Scheme Specific Risk Factors & Special Considerations 3-5

Due Diligence Certificate 6

II Definitions and Abbrevations 7-9

III Constitution and Management of the Fund 10-19

The Fund 10

Sponsor 10

Trustee 11

Directors 11

Rights, Obligations, Responsibilities and Duties of the Trustee 12-13under the Trust Deed and Regulations

Trusteeship Fees 14

Asset Management Company 14

Directors 14

Powers, Duties and Responsibilities of the AMC 16

AMC Fee 16

Key Personnel of the AMC 17

Auditors 18

The Registrar 18

The Custodian 18

Collecting Bankers 19

IV Investment of the Fund 20-34

Type of Scheme & Investment Objective 20

Investment Pattern 20

Asset Allocation 20

Fundamental Attributes 20

Investment Strategies and Risk Control 21

Debt Market & Money Market in India 22

Change in Investment Pattern 23

Trading in Derivatives 23-25

Portfolio Turnover 26

Investment of Subscription Money 26

Investment by the AMC in the Scheme 26

Investment in Overseas Financial Assets 26

Investment restrictions for the Scheme 27

Underwriting by the Fund 28

Computation of the NAV 28

Accounting Policies and Standards 34-36

( ii ) IDFC Tax Saver (ELSS) Fund

Sr. Particulars Page Nos.No.

V Units on offer 37-74

Type of Scheme 37

Minimub Subscription Amount / Target Amount 37

Minimum Application Amount 37

Subscription - New Fund Offer Period 38

Face Value of the Units 38

Pledge of Units for loans 38

Switch Facility 38

Who can invest ? 38

How to Apply ? 39-40

Application under Power of Attorney Body Corporate /Registered society / Trust / Partnership 41

Joint Applications 41

Nomination Facility 41

Account Statements 42

Issuance of Units 42

Refunds 42

Listing and Transfer of units 42

Redemption of units 42

Applicable NAV 42

How to redeem ? 43

Payment of proceeds 43

Redemption by NRIs / FII 43

Fractional Units 43

Suspension of Rdemption Repurchase of Units and Idvidend Distribution 43

Mandatory Quoting of the Bank mandage and PAN number by investors 44

Phone Transact 45

Official Points of Acceptance of Transactions 46

VI Loads and Expenses 46-59

Load Structure of the Scheme 46

Exit Load 46

Fees and Expenses of the Scheme 46

New Fund Offer Expenses 46

Fees and Expenses of the Existing Schemes 49

Estimated Recurring Expenses 59

Condensed Financial information 60

IDFC Tax Saver (ELSS) Fund ( iii )

VII Unitholders Rights and Services 74-80

Unitholders Rights and Services 74

Investor Services 74

Ease of Transactions 74

Problem Resolution 74

Information about the scheme 74

NAV Information 74

Disclosure of information under the Regulations 75

Rights of the unitholders of the Scheme 75

Unclaimed Redemption 75

Duration of the Scheme / Winding up 76

Procedure and manner of Winding up 76

Tax Benefits of investing in the Mutual Fund 76-79

VIII Other Matters 80

Unitholder Grievances Redressal Mechanism 80

Associate Transactions 80

Details of Investment in Companies that holds more than 5 % of the Net 81-89Assets of the Scheme(s) / Plan(s)

Penalties and Pending Litigations 90-91

Borrowing by the Mutual Fund 92

Inter Schemes Transfers 92

Stock Lending 92

Dividends and Distribution 92

General Information 93

Power to make rules 93

Power to remove Difficulties 93

Scheme to be binding on Unitholders 93

Documents available for inspection 93

Sr. Particulars Page Nos.No.

( iv ) IDFC Tax Saver (ELSS) Fund

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IDFC Tax Saver (ELSS) Fund 1

SPONSOR The sponsor of IDFC Mutual Fund is Infrastructure Development Finance CompanyLimited (IDFC)

NAME OF THE SCHEME IDFC Tax Saver (ELSS) Fund

STRUCTURE Close Ended Equity Linked Savings Scheme. The Scheme has been prepared inaccordance with the requirements of specified notification dated November 3, 2005issued by the Department of Economic Affairs, Ministry of Finance, Government ofIndia.

The Scheme is an Equity Linked Savings Scheme and intends to meet the requirementsof other notifications/ regulations that may be prescribed by the Government /regulatory bodies from time to time.

Specified Investors in the Scheme are entitled to deductions of the amount investedin Units of the Scheme, subject to a maximum of Rs. 1,00,000 under and in termsof Section 80 C (2) (xiii) of the Income Tax Act, 1961.

INVESTMENT OBJECTIVE The investment objective of the Scheme is to seek to generate long-term capitalgrowth from a diversified portfolio of predominantly equity and equity-relatedsecurities.

There can be no assurance that the investment objective of the scheme will berealised.

The investment policies shall be framed in accordance with SEBI (Mutual Funds)Regulations, 1996 and rules and guidelines for Equity Linked Savings Scheme (ELSS),2005 (and modifications to them).

OPTIONS

Growth Option Dividend (payout and reinvestment) Option

This option is suitable for investors This option is suitable for investors seeking income through dividend declared bywho are not seeking dividend the Scheme.

Reinvestment facility is also available

Under this Option, the Fund will endeavour to declare dividends from time to time.The dividend shall be dependent on the availability of distributable surplus.

Minimum Application Amount Rs. 500 per application

ADDITIONAL PURCHASE In multiples of Rs. 500

MINIMUM SUBSCRIPTION AMOUNT Rs. 1 croreTO BE RAISED

NEW FUND OFFER EXPENSES New Fund Offer Expenses will be charged to the Scheme to the extent permitted underthe SEBI Regulations. Any excess shall be borne by the AMC. The details of New FundOffer Expenses are provided in the Offer Document.

NEW FUND OFFER PRICE Rs. 10/- per Unit (subject to applicable load)

DIVIDEND RE-INVESTMENT PRICE At ex-dividend NAV

DIVIDEND FREQUENCY / PREFERENCE To be decided from time to time.

DESPATCH OF REDEMPTION PROCEEDS The Fund will despatch redemption cheques within 10 (ten) Business Days from thedate of such acceptance at any of the official points of acceptance within the cut offtimes specified.

MINIMUM REDEMPTION AMOUNT In multiples of Rs. 500 /-

MINIMUM BALANCE TO BE MAINTAINED Re. 1/-

NAV DECLARATION NAV calculated up to four decimal places and declared on each Business Day.

LIQUIDITY Units of the scheme may be redeemed (subject to lock-in of 3 years) on every BusinessDay at NAV based prices subject to the prevailing load structure. Investors having abank account with Standard Chartered Bank or such other Banks with whom the Fundwould have an arrangement from time to time, can avail of the facility of direct creditto their account for sale of their units (subject to terms of the offer document). The

I. HIGHLIGHTS, RISK FACTORS, DUE DILIGENCE & SCHEDULE

2 IDFC Tax Saver (ELSS) Fund

Fund will despatch redemption cheques within 10 (ten) Business Days from the dateof such acceptance at any of the official points of acceptance within the cut off timespecified (subject to lock-in period).

REPATRIATION FACILITY NRIs, FIIs and PIOs may invest in the Scheme on full repatriation basis. (Investmentwill be governed by rules laid down by RBI / SEBI in this regard).

SWITCH FACILITY Unitholders can easily move from this Scheme to another Scheme / Plan accordingto their needs (Subject to lock-in).

TRANSPARENCY NAV will be determined on every Business Day except in special circumstances. Pleaserefer to the para on "Suspension of Redemption of Units" in Section V of this OfferDocument. NAV of the Scheme shall be made available at the website of AMFI atwww.amfiindia.com, the Registrar at www.camsonline.com and the Mutual Fund atwww.idfcmf.com and available on call free number : 1-1800-22-66-22. The Fundshall have the NAV published in two daily newspapers. A complete statement of theScheme portfolio would be published by the Fund as an advertisement in twonewspapers within one month from the close of each half-year (i.e. 31 March and30 September) or would be mailed to the unitholders. NAV of the scheme shall bemade available at all official points of acceptance of the AMC.

Risk Factors :

STANDARD RISK FACTORS

Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the

Scheme will be achieved.

• As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors

and forces affecting the capital markets.

• Past performance of the Mutual Funds managed by the Sponsors and its affiliates / AMC is not necessarily indicative of the future

performance of the Scheme.

• IDFC Tax Saver (ELSS) Fund is the name of the Scheme and does not in any manner indicate either the quality of the Schemes / its

future prospects or returns.

• The Sponsor or any of its associates are not responsible or liable for any loss resulting from the operation of the Scheme/s, and

the Sponsor's initial contribution towards setting up the Mutual Fund is limited to Rs. 30,000/-

• Investors in the scheme/s are not being offered any guaranteed or assured rate of returns.

SCHEME SPECIFIC RISK FACTORS :

• The Scheme proposes to invest in equity and equity related instruments. Equity instruments by nature are volatile and prone to

price fluctuations on a daily basis due to both macro and micro factors. Trading volumes, settlement periods and transfer procedures

may restrict the liquidity of these investments. Different segments of financial markets have different settlement periods and such

periods may be extended significantly by unforeseen circumstances. The inability of the Scheme to make intended securities'

purchases due to settlement problems could cause the Scheme to miss certain investment opportunities.

• Price-Risk or Interest-Rate Risk: Fixed income securities such as bonds, debentures and money market instruments run price-risk

or interest-rate risk. Generally, when interest rates rise, prices of existing fixed income securities fall and when interest rates drop,

such prices increase. The extent of fall or rise in the prices is a function of the existing coupon, days to maturity and the increase

or decrease in the level of interest rates.

• Reinvestment Risk: Investments in fixed income securities may carry reinvestment risk as interest rates prevailing on the interest

or maturity due dates may differ from the original coupon of the bond. Consequently, the proceeds may get invested at a lower

rate.

• Minimum Number of Investors in the Scheme: The Scheme seeks to have a minimum of 20 investors with no single investor

accounting for more than 25% of the corpus of the scheme. In the event, the scheme is unable to comply with the aforesaid

conditions, the investors money would be refunded, in full, immediately after the close of the NFO. The Scheme shall adhere to

requirements specified by SEBI from time to time.


• Amounts invested in the Scheme shall be subject to a lock-in of three years from the date of allotment.

• Credit Risk : In simple terms this risk means that the issuer of a debenture / bond or a money market instrument may default oninterest payment or even in paying back the principal amount on maturity. Even where no default occurs, the price of a securitymay go down because the credit rating of an issuer goes down. It must, however, be noted that where the Scheme has investedin Government securities, there is no credit risk to that extent.

• Basis Risk (Interest - rate movement) : During the life of a floating rate security or a swap, the underlying benchmark index maybecome less active and may not capture the actual movement in interest rates or at times the benchmark may cease to exist. Thesetypes of events may result in loss of value in the portfolio.

• Spread Risk : In a floating rate security the coupon is expressed in terms of a spread or mark up over the benchmark rate. However,depending upon the market conditions, the spreads may move adversely or favourably leading to fluctuation in the NAV.

• Liquidity Risk : Due to the evolving nature of the floating rate market, there may be an increased risk of liquidity risk in the portfoliofrom time to time.

• Other Risk: In case of downward movement of interest rates, floating rate debt instruments will give a lower return than fixed ratedebt instruments.

Risk Factors for derivatives

1. Credit Risk: The credit risk is the risk that the counter party will default obligations and is generally negligible, as there is no exchangeof principal amounts in a derivative transaction. (especially in case of debt derivatives).

2. Market Risk: Derivatives carry the risk of adverse changes in the market price.

3. Illiquidity Risk: The risk that a derivative cannot be sold or purchased quickly enough at a fair price, due to lack of liquidity in themarket.

4. The risk is to the extent that returns are limited for the investor in case of extreme movement in call rates. (applicable to debtderivatives).

5. The fund pays the daily compounded rate. In practice however there can be a difference in the actual rate at which money is lentin the call market and the benchmark, which appears and is used. (applicable to debt derivatives).

6. Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to theinvestor. Execution of such strategies depends upon the ability of the fund manager to identify such opportunities. Identificationand execution of the strategies to be pursued by the fund manager involve uncertainty and decision of fund manager may not alwaysbe profitable. No assurance can be given that the fund manager will be able to identify or execute such strategies.

7. The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly

in securities and other traditional investments.

Risk Associated with Securitised Debt

The Scheme may invest in domestic securitised debt such as Asset Backed Securities (ABS) or mortgage backed securities (MBS). Asset Backed

Securities (ABS) are securitised debts where the underlying assets are receivables arising from various loans including automobile loans,

personal loans, loans against consumer durables, 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 pool 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.

At present in Indian market, following types of loans are securitised:

Auto Loans (cars / commercial vehicles / two wheelers)

Residential Mortgages or Housing Loans

Consumer Durable Loans

Personal Loans

Corporate Loans

The main risks pertaining to each of the asset classes above are described below :


Auto Loans (cars / commercial vehicles / Two wheelers)

The underlying assets (cars etc.) are susceptible to depreciation in value whereas the loans are given at high loan to value ratios. Thus,

after a few months, the value of asset becomes lower than the loan outstanding. The borrowers, therefore, may sometimes tend to

default on loans and allow the vehicle to be repossessed. These loans are also subject to model risk. ie if a particular automobile model

does not become popular, loans given for financing that model have a much higher likelihood of turning bad. In such cases, loss on

sale of repossession vehicles is higher than usual.

Commercial vehicle loans are susceptible to the cyclicality in the economy. In a downturn in economy, freight rates drop leading to higher

defaults in commercial vehicle loans. Further, the second hand prices of these vehicles also decline in such economic environment.

Housing Loans

Housing loans in India have shown very low default rates historically. However, in recent years, loans have been given at high loan to

value ratios and to a much younger borrower classes. The loans have not yet gone through the full economic cycle and have not yet

seen a period of declining property prices. Thus the performance of these housing loans is yet to be tested and it need not conform

to the historical experience of low default rates.

Consumer Durable Loans

The underlying security for such loans is easily transferable without the bank's knowledge and hence repossession is difficult. The

underlying security for such loans is also susceptible to quick depreciation in value. This gives the borrowers a high incentive to default.

Personal Loans

These are unsecured loans. In case of a default, the bank has no security to fall back on.

The lender has no control over how the borrower has used the borrowed money.

Further, all the above categories of loans have the following common risks:

All the above loans are retail, relatively small value loans. There is a possibility that the borrower takes different loans using the same

income proof and thus the income is not sufficient to meet the debt service obligations of all these loans.

In India, there is no ready database available regarding past credit record of borrowers. Thus, loans may be given to borrowers with

poor credit record. In retail loans, the risks due to frauds are high.

Corporate Loans

These are loans given to single or multiple corporates. The receivables from a pool of loans to corporates are assigned to a trust that

issues Pass through certificates in turn. The credit risk in such PTCs is on the underlying pool of loans to corporates. The credit risk of

the underlying loans to the corporates would in turn depend of economic cycles.

Risk Factors associated with Stock lending:

The risks in lending portfolio securities, as with other extensions of credit, consist of the failure of another party, in this case the approved

intermediary, to comply with the terms of agreement entered into between the lender of securities i.e. the Scheme and the approved

intermediary. Such failure to comply can result in the possible loss of rights in the collateral put up by the borrower of the securities,

the inability of the approved intermediary to return the securities deposited by the lender and the possible loss of any corporate benefits

accruing to the lender from the securities deposited with the approved intermediary. The Mutual Fund may not be able to sell such lent

securities and this can lead to temporary illiquidity.

Special Consideration:

All the above factors not only affect the prices of securities but may also affect the time taken by the Fund for redemption of units,

which could be significant in the event of receipt of a very large number of redemption requests or very large value of redemption

requests. The liquidity of the assets may be affected by other factors such as general market conditions, political events, bank holidays

and civil strife. In view of this, the Trustee has the right in its sole discretion to limit redemption (including suspension of redemption)

under certain circumstances. Please refer to Section V titled "Units on Offer".

The liquidity of the Scheme's investments may be restricted by trading volumes, settlement periods and transfer procedures. In the event

of an inordinately large number of redemption requests or of a restructuring of the Scheme's portfolio, the time taken by the Scheme

for redemption of Units may become significant. In view of this, the Trustee has the right in its sole discretion to limit redemption


(including suspension of redemption) under certain circumstances. Please refer to Section V titled "Units on Offer".

The Scheme may trade in derivatives as permitted under the Regulations subject to guidelines issued by SEBI and RBI from time to time.

Trading in Derivatives involves risks, which are explained in Section IV titled "Investment Objectives and Policies".

The Scheme may also invest in overseas financial assets as permitted under the applicable regulations. To the extent that the assets of

the Scheme will be invested in securities denominated in foreign currencies, the Indian Rupee equivalent of the net assets, distributions

and income may be adversely affected by changes in the value of certain foreign currencies relative to the Indian Rupee. The repatriation

of capital to India may also be hampered by changes in regulations concerning exchange controls or political circumstances as well as

the application to it of other restrictions on investment.

In case the Scheme undertakes stock lending under the Regulations, the Scheme may, at times be exposed to counter party risk.

Redemptions due to change in the fundamental attributes of the Scheme or due to any other reasons may entail tax consequences.

The Trustee, AMC, Mutual Fund, their directors or their employees shall not be liable for any such tax consequences that may arise.

The tax benefits described in this Offer Document are as available under the present taxation laws and are available subject to conditions.

The information given is included for general purpose only and is based on advice received by the AMC regarding the law and practice

in force in India and the Unitholders should be aware that the relevant fiscal rules or their interpretation may change. As is the case

with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of an investment

in the Scheme will endure indefinitely. In view of the individual nature of tax consequences, each Unitholder is advised to consult his

/ her own professional tax advisor.

No person has been authorised to give any information or to make any representations not confirmed in this Offer Document in

connection with the Offer Document or the issue of Units, and any information or representations not contained herein must not be

relied upon as having been authorised by the Mutual Fund or the Asset Management Company.


DUE DILIGENCE CERTIFICATE

It is confirmed that :

i. The draft Offer Document forwarded to SEBI is in accordance with the SEBI (Mutual Funds) Regulations, 1996 and the guidelines

and directives issued by SEBI from time to time.

ii. All legal requirements connected with the launching of the Scheme and also the guidelines, instructions, etc. issued by the

Government of India and any other competent authority in this behalf, have been duly complied with.

iii. The disclosures made in the Offer Document are true, fair and adequate to enable the investors to make a well-informed decision

regarding investment in the proposed Scheme.

iv. According to the information given to us, Deutsche Bank AG, the custodian to the scheme, is registered with SEBI and till date,

such registration is valid.

v. According to the information given to us, Standard Chartered Bank, the collecting banker for the new fund offer, is registered with

SEBI and till date, such registration is valid.

vi. According to the information given to us, Computer Age Management Services Pvt. Limited, the Registrar and Transfer Agent to

the scheme, is registered with SEBI and till date, such registration is valid.

For IDFC Asset Management Company Pvt. Ltd.

(Asset Management Company for IDFC Mutual Fund)

Sd/-Gopal Menon

VP - Risk & Compliance

Place : Mumbai,

Date : October 13, 2006

The aforesaid Due Diligence Certificate was filed with SEBI on October 13, 2006.


In this Offer Document, the following words and expressions shall have the meaning specified herein, unless the context otherwiserequires :

AMC IDFC Asset Management Company Private Limited previously known as Standard Chartered Asset

Management Company Private Limited (which was earlier known as ANZ Grindlays Asset Management

Company Private Limited) a company set up under the Companies Act, 1956, and approved by SEBI

to act as the Asset Management Company for the Schemes of IDFC Mutual Fund.

Application form A form meant to be used by an investor to open a folio and Purchase Units in the Scheme.

Applicable NAV Unless stated otherwise in the Offer Document, Applicable NAV is the Net Asset Value as of theDay as of which the redemption is sought by the Investor and determined by the Fund. (Fordetails, please refer paragraph "Applicable NAV" in the Section named "Units on Offer").

Business Day A day other than (i) Saturday or Sunday or (ii) a day on which The Stock Exchange, Mumbai orNational Stock Exchange of India Limited or Reserve Bank of India or banks in Mumbai are closedor (iii) a day on which the Reserve Bank of India &/or Banks in Mumbai are closed for businessor clearing or (iv) a day on which there is no RBI clearing / settlement of securities; or (v) a dayon which the Bombay Stock Exchange and/or National Stock Exchange are closed; or (vi) a dayon which the Redemption of Units is suspended by the Trustee / AMC; or (vii) a day on whichnormal business could not be transacted due to storms, floods, other natural calamities,bandhs, strikes or such other events or as the AMC may specify from time to time (viii) a bookclosure period as may be announced by the Trustees / AMC.

Provided that the days when the banks in any location where the AMC's Official Points ofAcceptance are located, are closed due to a local holiday, such days will be treated as non-Business Days at such centres for the purposes of accepting fresh subscriptions. However, if theOfficial points of acceptance in such locations are open on such local holidays, then redemptionand switch requests will be accepted at those Centres, provided it is a Business Day for theScheme on an overall basis. Notwithstanding the above, the AMC may declare any day as aBusiness Day.

The AMC reserves the right to declare any day as a Business Day or otherwise at any or allcollection &/or Official points of acceptance.

CDSC Contingent Deferred Sales Charge permitted under the Regulations for a "No Load Scheme"to be borne by the Unit holder upon exiting (whether by way of redemption or Inter-schemeswitching) from the scheme based on the period of holding of units.

Custodian Deutsche Bank, Mumbai, acting as Custodian to the Scheme, or any other custodian who isapproved by the Trustee.

Collection centre(s) Such centres including collecting bank branches as may be designated by the AMC for collectionof applications for investment in the Scheme.

Contingent Exit Load Load on redemption and means Contingent Deferred Sales Charge referred to in the TenthSchedule of the regulations.

Cut off time A time prescribed in this Offer Document prior to which an investor can submit a Purchase /Redemption request along with a local cheque or a demand draft payable at par at the placewhere the application is received, to be entitled to the Applicable NAV for that Business Day.

Distributor Such persons / firms / companies / corporates who fulfill the criteria laid down by SEBI from timeto time and as may be appointed by the AMC to distribute / sell / market the Schemes of theFund

Depository Depository as defined in the Depositories Act, 1996

Exit Load A charge that may be levied as a percentage of NAV at the time of exiting from the Scheme.

FIIs Foreign Institutional Investors, registered with SEBI under Securities and Exchange Board of India(Foreign Institutional Investors) Regulations, 1995.

II. DEFINITIONS AND ABBREVIATIONS


Fixed Income Securities Debt Securities created and issued by, inter alia, Central Government, State Government, LocalAuthorities, Municipal Corporations, PSUs, Public Companies, Private Companies, BodiesCorporate, Unincorporated SPVs and any other entities which may be recognised / permitted,which yield at fixed or variable rate by way of interest, premium, discount or a combination ofany of them.

Floating Rate Debt Instruments Floating rate debt instruments are debt securities issued by the Central and/or a State Government,Corporates or PSUs with interest rates that are reset periodically. The periodicity of the interestreset could be daily, monthly, quarterly, half-yearly, annually or any other periodicity that maybe mutually agreed between the issuer and the fund.

The interest on such instruments may also be in the nature of fixed basis points over thebenchmark gilt yields.

Fund or Mutual Fund IDFC Mutual Fund (“the Mutual Fund” or “the Fund”) previously known as Standard Chartered

Mutual Fund (which was earlier known as ANZ Grindlays Mutual Fund) had been constituted as

a Trust in accordance with the provisions of the Indian Trusts Act, 1882 (2 of 1882) vide a Trust

Deed dated December 29, 1999. The office of the Sub-Registrar of Assurances at Mumbai had

registered the Trust Deed establishing the Fund under the Registration Act, 1908. The Fund was

registered with SEBI vide registration number MF/042/00/3 dated March 13, 2000. A deed of

amendment to the Trust Deed had been executed and registered to recognize the change in

sponsor of the Mutual Fund.

Fund of Funds / FOF A mutual fund scheme that invests primarily in other schemes of the same Mutual Fund or othermutual funds.

Gilt or Govt. Securities Securities created and issued by the Central Government and/or a State Government (includingTreasury Bills).

High Value High Value means amount eligible for high value clearing as prescribed by Reserve Bank of Indiafrom time to time.

New Fund Offer Offer of the Units of the Scheme during the New Fund Offer Period.

New Fund Offer Period The dates on or the period during which the initial subscription to Units of the Scheme can bemade.

Investment Management The Agreement dated January 3, 2000 entered into between IDFC AMC Trustee Company Private

Agreement Limited previously known as Standard Chartered Trustee Company Private Limited (which was

earlier known as ANZ Grindlays Trustee Company Private Limited) and IDFC Asset Management

Company Private Limited previously known as Standard Chartered Asset Management Company

Private Limited (which was earlier known as ANZ Grindlays Asset Management Company Private

Limited) as amended from time to time.

Money Market Instruments Commercial paper, Commercial bills, Treasury bills, Government securities having an unexpiredmaturity upto one year, call or notice money, certificate of deposit, usance bills and any otherlike instruments as specified by the Reserve Bank of India from time to time including miborlinked securities, call products having unexpired maturity upto one year.

NAV Net Asset Value of the Units of the Scheme as calculated in the manner provided in this OfferDocument or as may be prescribed by the Regulations from time to time.

NRIs Non-Resident Indians. A person resident outside India who is a citizen of India or is a personof Indian origin as per the meaning assigned to the term under Foreign Exchange Management(Investment in firm or proprietary concern in India) Regulations, 2000.

Official Points of Acceptance All applications for redemption of units should be submitted by investors at the official point ofof Transactions acceptance of transactions at the office of the registrar and/or AMC as may be notified from time

to time. For details please refer to the application form and/or website of the Mutual Fund atwww.idfcmf.com

Offer Document This document issued by IDFC Mutual Fund, offering Units of the IDFC Tax Saver (ELSS) Fund.

Person of Indian Origin A citizen of any country other than Bangladesh or Pakistan, if- a) he at any time held an Indianpassport, or b) he or either of his parents or any of his grand-parents was a citizen of India byvirtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955) or c) the personis a spouse of an Indian citizen or a person referred to in sub clause (a) or (b).


RBI Reserve Bank of India, established under the Reserve Bank of India Act, 1934, as amended fromtime to time.

Registrar Computer Age Management Services Private Limited ("CAMS"), appointed as the registrar andtransfer agent for the Scheme, or any other registrar that may be appointed by the AMC.

Repo / Reverse Repo Sale / Purchase of Government Securities as may be allowed by RBI from time to time withsimultaneous agreement to repurchase / resell them at a later date.

Repurchase / Redemption Repurchase / Redemption of units of the Scheme as permitted.

SEBI Securities and Exchange Board of India established under Securities and Exchange Board of IndiaAct, 1992, as amended from time to time.

Sponsor Infrastructure Development Finance Company Limited (IDFC).

The Regulations Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, as amended from timeto time.

The Scheme IDFC Tax Saver (ELSS) Fund

Transaction slip A form meant to be used by Unit Holders seeking Redemption of Units in the Scheme, changein bank account details, switch-out and such other facilities offered by the AMC and mentionedin Transaction Slips.

Trustee IDFC AMC Trustee Company Private Limited previously known as Standard Chartered TrusteeCompany Private Limited (which was earlier known as ANZ Grindlays Trustee Company PrivateLimited) a company set up under the Companies Act, 1956, and approved by SEBI to act as theTrustee for the Scheme/s of IDFC Mutual Fund.

Trust Deed The Trust Deed dated December 29, 1999 establishing IDFC Mutual Fund previously known asStandard Chartered Mutual Fund (which was earlier known as ANZ Grindlays Mutual Fund), asamended from time to time.

Trust Fund Amounts settled / contributed by the Sponsor towards the corpus of the IDFC Mutual Fund andadditions / accretions thereto.

Unit The interest of an investor that consists of one undivided share in the Net Assets of the Scheme.

Unitholder A holder of Units in any Scheme of "The Scheme", as contained in this Offer Document.

Valuation Day Business Day

Interpretation

For all purposes of this Offer Document, except as otherwise expressly provided or unless the context otherwise requires:

• the terms defined in this Offer Document include the plural as well as the singular.

• Pronouns having a masculine or feminine gender shall be deemed to include the other.

• all references to "Sterling Pounds" refer to United Kingdom Sterling Pounds , "dollars" or "$" refer to United States Dollars and"Rs." refer to Indian Rupees. A "crore" means "ten million" and a "lakh" means a "hundred thousand".


III. CONSTITUTION AND MANAGEMENT OF THE FUND

A. THE FUND

IDFC Mutual Fund

IDFC Mutual Fund (“the Mutual Fund” or “the Fund”) previouslyknown as Standard Chartered Mutual Fund (which was earlierknown as ANZ Grindlays Mutual Fund) had been constituted as aTrust in accordance with the provisions of the Indian Trusts Act,1882 (2 of 1882) vide a Trust Deed dated December 29, 1999. Theoffice of the Sub-Registrar of Assurances at Mumbai had registeredthe Trust Deed establishing the Fund under the Registration Act,1908. The Fund was registered with SEBI vide registration numberMF/042/00/3 dated March 13, 2000. A deed of amendment to theTrust Deed had been executed and registered to recognize thechange in sponsor of the Mutual Fund.

IDFC / its nominees acquired 100% equity shares of the AssetManagement Company and the Trustee Company and had furthercontributed an amount of Rs.10,000/- to the corpus of the Fund.The Trust has been formed for the purpose of pooling of capitalfrom the public for collective investment in securities / any otherproperty for the purpose of providing facilities for participation bypersons as beneficiaries in such properties/ investments and in theprofits / income arising there from.

B. SPONSOR

IDFC :

Sponsor of the Mutual Fund, IDFC is a leading diversified financialinstitution providing a wide range of financing products and fee-based services with infrastructure as its focus area. IDFC’s keybusinesses include project finance, investment banking, assetmanagement, principal investments and advisory services. IDFCalso works closely with government entities and regulators in Indiato advise and assist in formulating policy and regulatory frameworksthat support private investment and public-private partnerships ininfrastructure development.

IDFC was established in 1997 as a private sector enterprise by aconsortium of public and private investors and operates as aprofessionally managed commercial entity. IDFC listed its equityshares in India pursuant to an initial public offering in August2005. As at March 31, 2008, IDFC’s shareholders included theGovernment of India - 20%, foreign investors (including KhazanahNational, IFC, CDC, Morgan Stanley, Goldman Sachs and Citigroupamong others) - 47% and public / others 33%. As on December31, 2007 IDFC had an asset base of over USD 6.5 billion, net worthof USD 1.4 billion and a market capitalization of USD 7.5 billion

A brief summary of the Sponser’s financials follows :

(Amt in multiples of Rs 10,00,000)

March March March March March2007 2006 2005 2004 2003

(A)INCOME STATEMENT

Total Income 15,713 10,368 7,420 6,486 4,608

Total Expenses 9,507 5,903 4,070 3,653 2,556

Profit after tax 5,039 3,908 3,088 2,642 1,799

Retained Earnings 3,719 2,625 1,946 1,514 671

(B) ASSETS AND LIABILITIESASSETSCURRENT ASSETS 183,835 122,969 87,412 59,510 39,752Investments 23,903 12,928 7,473 11,699 9,149Others 149,132 106,512 75,274 47,685 29,486Cash and bank 10,800 3,530 4,665 126 1,117balancesLESSCurrent Liabilities 154,359 97,285 68,432 42,477 24,235and ProvisionsNET WORTH 29,476 25,685 18,980 17,033 15,518REPRESENTED BY :Issued and Paid 11,259 11,225 10,000 10,000 10,000up capitalFree Reserves 18,217 14,460 8,980 7,033 5,518

TOTAL 29,476 25,685 18,980 17,033 15,518

Pa r t i cu la r sPa r t i cu la r sPa r t i cu la r sPa r t i cu la r sPa r t i cu la r s 20072007200720072007 20062006200620062006 20052005200520052005 20042004200420042004 20032003200320032003

N o t e sN o t e sN o t e sN o t e sN o t e s

Note 1 : Other Income break-upNote 1 : Other Income break-upNote 1 : Other Income break-upNote 1 : Other Income break-upNote 1 : Other Income break-upInterest Income onInfrastructure Loands 11,260 7,192 5,302 3,998 3,228Interest Income on otherLoands & Investments 1,351 565 195 175 281Profit on sale of Investments 1,605 1,561 1,298 1,153 511Profit on assignment of loans 105 0 0 0 0Other Income 52 22 40 613 167T o t a lT o t a lT o t a lT o t a lT o t a l 14 ,37314 ,37314 ,37314 ,37314 ,373 9 ,3409 ,3409 ,3409 ,3409 ,340 6 ,8366 ,8366 ,8366 ,8366 ,836 5 ,9405 ,9405 ,9405 ,9405 ,940 4 ,1874 ,1874 ,1874 ,1874 ,187

Note 2 : Other Expenses break-upNote 2 : Other Expenses break-upNote 2 : Other Expenses break-upNote 2 : Other Expenses break-upNote 2 : Other Expenses break-upInterest & Other charges 8,555 5,008 3,119 2,260 1,870Staff expenses 480 315 183 160 131Establishment expenses 40 26 25 31 27Other expenses 257 167 99 118 279Provisions & contingencies 175 387 645 1,084 250T o t a lT o t a lT o t a lT o t a lT o t a l 9 ,5079 ,5079 ,5079 ,5079 ,507 5 ,9035 ,9035 ,9035 ,9035 ,903 4 ,0704 ,0704 ,0704 ,0704 ,070 3 ,6533 ,6533 ,6533 ,6533 ,653 2 ,5562 ,5562 ,5562 ,5562 ,556

Note 3 : Other adjustmentsNote 3 : Other adjustmentsNote 3 : Other adjustmentsNote 3 : Other adjustmentsNote 3 : Other adjustmentsShare of profit of associates 118 0 0 0 0Less : share of profit ofminority interest 0 2 0 0 0Less : Other adjustments 0 0 8 -5 2T o t a lT o t a lT o t a lT o t a lT o t a l 118118118118118 - 2- 2- 2- 2- 2 - 8- 8- 8- 8- 8 55555 - 2- 2- 2- 2- 2

Note 4 : Other assets break-upNote 4 : Other assets break-upNote 4 : Other assets break-upNote 4 : Other assets break-upNote 4 : Other assets break-upGoodwill on consolidation(Long term) 969 0 0 0 0Fixed assets (Long term) 489 508 512 561 598Infrastructure loans(Long term) 139,184 100,871 70,370 44,243 26,614Deferred tax assets(Long term) 857 794 663 532 214Other current assets 7,632 4,340 3,729 2,349 2,060T o t a lT o t a lT o t a lT o t a lT o t a l 149 ,132149,132149,132149,132149,132 106,512106,512106,512106,512106,512 75 ,27475 ,27475 ,27475 ,27475 ,274 47 ,68547 ,68547 ,68547 ,68547 ,68529 ,48629 ,48629 ,48629 ,48629 ,486

Note 5 : Current Liabilities & provisions break-upNote 5 : Current Liabilities & provisions break-upNote 5 : Current Liabilities & provisions break-upNote 5 : Current Liabilities & provisions break-upNote 5 : Current Liabilities & provisions break-upLoans Funds 149,028 93,802 65,587 39,883 21,853Current Liabilities & Provisions 5,330 3,480 2,845 2,597 2,383Minority Interest 0 3 1 0 0Deferred tax liabilities 0 0 0 0 0T o t a lT o t a lT o t a lT o t a lT o t a l 154 ,359154,359154,359154,359154,359 97 ,28597 ,28597 ,28597 ,28597 ,285 68 ,43268 ,43268 ,43268 ,43268 ,432 42 ,47742 ,47742 ,47742 ,47742 ,47724 ,23524 ,23524 ,23524 ,23524 ,235

The sponsor or any of its associates / group companies do not in any way guaranteeperformance or returns of the schemes of the Mutual Fund and an investment inthese schemes do not in any way represent deposit or any other liability of theSponsor or any of its associates / group companies.

Shareholding pattern of the Shareholding pattern of the Shareholding pattern of the Shareholding pattern of the Shareholding pattern of the AMCAMCAMCAMCAMC P e r c e n t a g eP e r c e n t a g eP e r c e n t a g eP e r c e n t a g eP e r c e n t a g eInfrastructure Development Finance Company Limited / its nominees 100


C. THE TRUSTEE

The Trustee Company (The Trustee)

ANZ Trustee Company Private Limited, a company registered under the Companies Act, 1956, was established by Australia and New

Zealand Banking Group (ANZ) and had been appointed as the Trustee of ANZ Grindlays Mutual Fund vide Trust Deed dated December 29,

1999, as amended from time to time. ANZ sold the business to Standard Chartered Bank (SCB) in 2001, whereby SCB held 100% stake

in the equity share capital of the Trustee Company. SCB decided to sell the business to Infrastructure Development Finance Company

Limited (IDFC) in 2008. Pursuant to the transaction, IDFC will be holding 100% of the shares of the Trustee Company

1. Directors

The details of the Directors of the Trustee Company in brief :

He is a Chartered Accountant and is the Chief Financial Officer – India & South Asia region of

Standard Chartered Bank with overall responsibilities for regional governance for Finance

function for the region. Prior to this assignment he was associated with HSBC India as Chief

Financial Officer – India for around 8 years. As the CFO – India he was responsible for overall

finance function of the bank.

Other Directorships :

1. Standard Chartered Investments and Loans (India) Limited – Additional Director

2. Standard Chartered Finance Limited - Director

3. Standard Chartered Private Equity Advisory (India) Private Limited – Director

In his career spanning over 34 years till 1990 as an IAS Officer, he had held very important

portfolios in the Govt. of Maharashtra including that of Secretary, Education Department,

Secretary, Industries Dept, Metropolitan Commissioner, Municipal Commissioner, Greater

Bombay, and finally as Chief Secretary to the Govt. of Maharashtra. He was also the Secretary,

Ministry of Urban Development, Govt. of India for two years.


1. Housing Development Finance Corporation Limited

2. Tata Housing Development Co. Limited

3. Phoenix Township Limited

4. Indoco Remedies Limited

5. HDFC Developers Limited

6. Sangit Mahabharati, Mumbai-Vice Chairman

7. The Society for Recycling of Waste of Recoverable Disposal (REWARD), Mumbai- Board

of Trustees/Management

8. The Electoral Trust, Mumbai- Board of Trustees/Management

Mr. Dattatraya M. Sukthankar

5 ‘Priya’,

9 Abdul Gaffar Khan Road,

Worli, Mumbai 400 018.

Mr. Anurag Adlakha*

CFO – India & South Asia

Standard Chartered Bank

29A Ridge Road,

Malabar Hill,

Mumbai – 400 006.

*Associate Director (Represents SCB)


2. Rights, Obligations, Responsibilities and Duties of theTrustee under the Trust Deed and the Regulations :

Pursuant to the Trust Deed dated December 29, 1999constituting the Mutual Fund and in terms of the Regulations,the rights, obligations, responsibilities and duties of theTrustee are as follows:

1. The Trustee shall have a right to obtain from the AMC suchinformation as is considered necessary by it.

2. The Trustee shall ensure before the launch of any Scheme thatthe Asset Management Company has :

a. Systems in place for its back office, dealing room andaccounting;

b. Appointed all key personnel including fund manager(s)for the Scheme(s) and that the trustees are satisfied withthe adequacy of number of key personnel consideringthe size of the mutual fund and the proposed Scheme;

c. Appointed auditors to audit the accounts of the Schemes;

d. Appointed a compliance officer who shall be responsiblefor monitoring the compliance of the act, rules andregulations, notification, Guidlines, instructions etc.issued by the Board or the Central Government and forredressal of investors grievances.

e. Appointed registrars and laid down parameters for theirsupervision and periodical inspections;

f. Prepared a compliance manual which is updated byincluding all the provisions of regulations and guidelinesissued by SEBI from time to time and designed internalcontrol mechanisms including internal audit systemscommensurate with the size of the mutual fund;

g. Specified norms for empanelment of brokers andmarketing agents.

3. The Trustee shall ensure that the AMC has been diligent inempanelling the brokers, in monitoring securities transactionswith brokers and avoiding undue concentration of businesswith any broker.

4. The Trustee is required to ensure that the AMC has not givenany undue or unfair advantage to any associate or dealt withany of the associates of the AMC in any manner detrimentalto the interests of the Unitholders.

5. The Trustee is required to ensure that the transactions enteredinto by the AMC are in accordance with the Regulations andthe Scheme.

6. The Trustee is required to ensure that the AMC has beenmanaging the Scheme(s) independently of other activitiesand has taken adequate steps to ensure that the interest ofinvestors of one Scheme are not compromised with those ofany other Scheme or of other activities of the AMC.

7. The Trustee is required to ensure that all the activities of theAMC are in accordance with the provisions of the Regulations.

8. Where the Trustee has reason to believe that the conduct ofthe business of the Fund is not in accordance with theseRegulations and the Scheme it is required to take such remedialsteps as are necessary by it and to immediately inform SEBIof the violation and the action taken by it.

9. Each Director of the Trustee is required to file with the Trustthe details of his transactions of dealings in securities on aquarterly basis.

In his career as an I A S officer, he held various important positions including that of Managing

Director, Maharashtra State Agro Industries Development Corporation and Maharashtra State

Tourism Development Corporation, Joint Secretary, Finance Department, Maharashtra State,

Joint Secretary (Projects & Finance), Department of Atomic Energy, Secretary to Government of

Maharashtra, Municipal Commissioner, Bombay Municipal Corporation, Chairman and

Managing Director, Export Credit Guarantee Corporation of India in the rank of Secretary to

Government of India. After retirement, he had been the Vice-Chairman and Managing Director

of Tata Housing Development Co. Limited and now is a Senior Corporate Advisor to Tata

Housing Development Co. Limited from April 1997. He is also a Consultant to Forbes Gokak

Limited.

Other Directorships

1. Forbes Campbell Holdings Limited

2. The Associated Building Company Limited

Mr. U. Sundararajan He is a Cost Accountant. He was formerly the Chairman & Managing Director of BharatLokhandwala Complex, Petroleum Corporation Ltd for 9 years.Kandivali East,Mumbai - 400101. Other Directorships :

1. Thirumalai Chemicals Limited

2. IDFC Trustee Company Limited

3. Gujarat State Petronet Limited

4. Larsen & Toubro Limited

Mr. Jamsheed G. Kanga182, Buena Vista,General Bhosale Marg,Cuffe Parade,Mumbai 400 021.


10. The Trustee is accountable for and is required to be thecustodian of the Fund's property of the respective Schemeand to hold the same in trust for the benefit of the Unitholdersin accordance with the Regulations and the provisions of theTrust Deed.

11. The Trustee is required to take steps to ensure that thetransactions of the Fund are in accordance with the provisionsof the Trust Deed.

12. The Trustee is responsible for the calculation of any incomedue to be paid to the Fund and also of any income receivedin the Mutual Fund for the holders of the Units of any Schemein accordance with the Regulations and the Trust Deed.

13. The Trustee is required to obtain the consent of the Unitholdersof a Scheme :

a. When the Trustee is required to do so by SEBI in theinterest of the Unitholders of that Scheme, or

b. Upon a requisition made by three-fourths of theUnitholders of any Scheme under the Fund for thatScheme, or

c. If a majority of the Trustees decide to wind up the Schemeor prematurely redeem the Units.

14. The Trustee is required to ensure that no change in thefundamental attributes of any Scheme or the trust or fees andexpenses payable or any other change which would modifythe Scheme and affect the interest of Unitholders, shall becarried out unless,

a. a written communication about the proposed change issent to each Unitholder and an advertisement is given inone English daily newspaper having nationwidecirculation as well as in a newspaper published in thelanguage of the region where the head office of themutual fund is situated; and

b. the Unitholders are given an option to exit at theprevailing net asset value without any exit load.

15. The Trustee is required to call for the details of transactionsin securities by the directors and key personnel of the AMCin their own names or on behalf of the AMC and report thesame to SEBI as and when called for.

16. The Trustee is required to review quarterly, all transactionscarried out between the Fund, the AMC and its associates.

17. The Trustee is required to review quarterly, the net worth ofthe AMC and in case of any shortfall ensure that the AMCmakes up for the shortfall as per clause (f) of sub regulation(1) of Regulation 21 of the Regulations.

18. The Trustee is required to periodically review all servicecontracts such as custody arrangements and transfer agency,and satisfy itself that such contracts are executed in theinterest of the Unitholders.

19. The Trustee is required to ensure that there is no conflict ofinterest between the manner of deployment of its net worthby the AMC and the interest of the Unitholders.

20. The Trustee is required to periodically review the investorcomplaints received and the redressal of the same by theAMC.

21. The Trustee is required to abide by the Code of Conduct asspecified in the Fifth Schedule of the Regulations.

22. No amendment to the trust deed shall be carried out withoutthe prior approval of SEBI and unitholders approval would beobtained where it affects the interest of the unitholders.

23. The Trustee has to furnish to SEBI on a half yearly basis:

a. a report on the activities of the Fund;

b. a certificate stating that the Trustees have satisfiedthemselves that there have been no instances of selfdealing or front running by any of the directors of theTrustee Company, directors and key personnel of theAMC;

c. a certificate to the effect that the AMC has been managingthe Schemes independently of any other activities and incase any activities of the nature referred to in Regulations24, sub-regulation (2) of the Regulations have beenundertaken, the AMC has taken adequate steps to ensurethat the interest of the Unitholders is protected.

24. The independent Directors of the Trustee are required to givetheir comments on the report received from the AMC regardingthe investments by the Mutual Fund in the securities of thegroup companies of the Sponsors.

General Due Diligence:

25. The Trustee shall be discerning in the appointment of thedirectors of the Asset Management Company.

26. The Trustee shall review the desirability of continuance of theAMC if substantial irregularities are observed in any of theSchemes and shall not allow the AMC to float any newSchemes.

27. The Trustee shall ensure that all service providers are holdingappropriate registrations from SEBI or the concerned regulatoryauthority.

28. The Trustee shall arrange for test checks of service contracts.

29. The Trustee shall immediately report to SEBI of any specialdevelopments in the mutual fund.

Specific Due Diligence:

30. The Trustee shall:

a. Obtain internal / concurrent audit reports at regularintervals from independent auditors appointed by theTrustee.

b. Obtain compliance certificates at regular intervals fromthe AMC.

c. Hold meeting of Trustees more frequently and at least sixsuch meetings shall be held in every year.

d. Consider the reports of the independent auditor andcompliance reports of the AMC at the meetings of theTrustee for appropriate action.

e. Maintain records of the decisions of the Trustees at theirmeetings and of the minutes of the meetings.

f. Prescribe and adhere to the code of ethics by the Trustees,AMC and its personnel.

g. Communicate in writing to the AMC of the deficienciesand checking on the rectification of deficiencies.Notwithstanding anything contained in sub-regulations(1) to (25), the trustees shall not be held liable for actsdone in good faith if they have exercised adequate duediligence honestly.


31. The independent directors of the Trustee or AMC shall pay

specific attention to the following, as may be applicable,

namely:

a. The Investment Management Agreement and the

compensation paid under the agreement.

b. Service contracts with affiliates; whether the AMC has

charged higher fees than most contractors for the same

services.

c. Selection of the AMC's independent Directors.

d. Securities transactions involving affiliates to the extent

such transactions are permitted.

e. Selecting and nominating individuals to fill independent

directors' vacancies.

f. Ensure that the Code of Ethics is designed to prevent

fraudulent, deceptive or manipulative practices by insiders

in connection with personal securities transactions.

g. Ensure the reasonableness of fees paid to Sponsor, the

AMC and any others for services provided.

h. Review principal underwriting contracts and their

renewals.

i. Review any service contract with the associates of the

AMC.

Notwithstanding anything contained in the Regulations, the

Trustee and its Directors shall not be held liable for acts done

in good faith if they have exercised adequate due diligence

honestly.

During the period from April 1, 2004 till date, Nineteen

meetings of the Directors of the Trustee were held. The Trustee's

supervisory role is discharged by reviewing the Half-Yearly

and Annual Accounts of the Fund and the Bi-monthly,

Quarterly and Half-Yearly compliance reports. Further, the

Audit Committee of the Trustee has been set up which reviews

reports being submitted by the Concurrent Auditors of the

Fund.

3. Trusteeship Fees

Pursuant to the Deed of Trust constituting the Fund, the

Scheme/s are authorised to pay the Trustee a fee for its services

in such capacity of a sum, computed at a rate up to 0.05%

per annum payable annually. The Trustee may charge further

fees as permitted from time to time under the Trust Deed and

the Regulations in addition to the reimbursement of all costs,

charges and expenses.

D. ASSET MANAGEMENT COMPANY

ANZ Grindlays Asset Management Company Private Limited, a

company registered under the Companies Act, 1956, was

established by Australia and New Zealand Banking Group (ANZ),

and had been appointed by the Trustee to act as the Investment

Manager of the ANZ Grindlays Mutual Fund vide the Investment

Management Agreement dated January 3, 2000. Consequent to

sale of business by ANZ to Standard Chartered Bank (SCB), 75%

stake in the equity share capital of the AMC and 100% stake in the

Preference Share Capital of the AMC had been transferred to SCB.

IDFC acquires the equity and preference shares held by SCB in the

Asset Management Company Private Limited (AMC). IDFC also

acquires the equity shares held by minority shareholders in the AMC.

The shareholding pattern of the AMC, pursuant to such change in

shareholding is as under :

Shareholding pattern of the AMC Percentage

Infrastructure Development 100

Finance Company Limited / its nominees

The AMC will manage the Scheme mentioned in this Offer

Document, in accordance with the provisions of Investment

Management Agreement, the Trust Deed, the Regulations and

the objectives of the Scheme.

1. Directors

The details of the Directors of the Asset Management Company in brief :

He is the Head Funds Management, Global Markets with Standard Chartered Bank. He has been

associated with Standard Chartered Bank since June 1977 with responsibilities of institutional and

commercial bank sales and marketing and treasury functions. He was the Group Head of Institutional

and Commercial Bank Sales and Marketing from 1999 to 2001 and the Global Head of Treasury

Bank relationships from 1998 to 1999.

Other Directorships :1. Standard Chartered Global Liquidity Funds plc.

2. Standard Chartered UK Trustee Ltd.

*(Represents SCB)

Mr. Paul Jebson*

(Chairman)

15 Cheltenham Road

Orpington

Kent BRL 9HL


Dr. R. H. Patil He has completed M.A., Ph.D. (Economics) from the University of Bombay. He is presently the Chairman

Gloriosa Apartments, of Clearing Corporation of India Limited and Clearcorp Dealing Systems (India) Ltd. He was formerly

N. M. Kale Marg, the Managing Director of National Stock Exchange of India Limited for over 7 years. During his

Off. S K Bole Road, career spanning more than 35 years, he has been closely associated with the financial sector in

Dadar (West), various capacities and particularly with the capital market.

Mumbai – 400 028. Other Directorships :

1. National Stock Exchange of India Limited

2. NSDL Database Management Ltd (NDML)

3. National Securities Clearing Corporation Limited

4. National Securities Depository Limited

5. Corp Bank Securities Ltd.

6. NSE IT Limited

7. SBI Capital Markets Limited

8. Clearing Corporation of India Limited

9. Clearing Corp Dealing Systems (India) Ltd.

10. Axis Bank (erstwhile UTI Bank Ltd)

11. L & T Infrastructure Finance Co. Ltd.

He was the Chairman of Thomas Cook (India) Limited and was responsible for enhancing its position

externally, through further strengthening the company’s relationships with business partners, trade

bodies and associates. He had been with Thomas Cook since 1977 and had held senior positions as

Managing Director in 1979, Deputy Chairman & Managing Director in 1982, Executive Chairman in

1993 and was the Chairman since 1995. Prior to this he was with Dena Bank for over 18 years.


1. Kishco Cutlery Limited

2. United Phosphorus Limited

3. Parmananddas Jivandas Hindu Gymkhana - Trustee

4. Beachheads Advisory Board of India-Chairman

5. Australia New Zealand Business Association in India

She is a Chartered Secretary from the Chartered Institute of Companies Secretary, U.K. She was the

Sheriff of Mumbai from 1992 – 1993. She is a Member of Zonal Advisory Board, Western Zone, Life

Insurance Corporation of India and Western Regional Advisory Committee, Industrial Development

Bank of India. She was a member on the Indian Advisory Board, Standard Chartered Grindlays Bank

Limited and the Chairperson of Maharashtra State Financial Corporation from 1992 to 1995.


1. Neo Indcom Consultancy Pvt. Limited

2. Bay Petroplast Pvt. Limited

3. M/s Merchant Media Pvt. Limited

4. Dynamic Advertising & Research Team Pvt. Limited

Mr. Pradip Madhavji

1 Aashiana

5 Altamount Road

Mumbai 400026.

Mrs. Bakul Patel

P1 & P2 Eden Hall

Rajni Patel Chowk

Dr. Annie Besant Road

Worli, Mumbai 400 018.


2. Powers, Duties and Responsibilities of the AMC

The Regulations and the Investment Management Agreement

shall govern the duties and responsibilities of the AMC. The

AMC, in the course of managing the affairs of the Mutual

Fund, has the power, inter alia:

a. to invest in, acquire, hold, manage or dispose of all or

any securities and to deal with, engage in and carry out

all other functions and to transact all business pertaining

to the Fund;

b. to keep the moneys belonging to the Trust with scheduled

banks and Custodians as it may deem fit;

c. to issue, sell and purchase Units under any Scheme;

d. to repurchase the Units that are offered for repurchase

and hold, reissue or cancel them;

e. to formulate strategies, lay down policies for deployment

of funds under various Schemes and set limits collectively

or separately for privately placed debentures, unquoted

debt instruments, securitised debts and other forms of

variable securities which are to form part of the

investments of the Trust Funds;

f. to arrange for investments, deposits or other deployment

as well as disinvestments or refund out of the Trust Funds

as per the set strategies and policies;

g. to make and give receipts, releases and other discharges

for money payable to the Trust and for the claims and

demands of the Trust;

h. to get the Units under any Scheme listed on any one or

more stock exchanges in India or abroad;

i. to open one or more bank accounts for the purposes of

the Fund, to deposit and withdraw money and fully

operate the same;

j. to pay for all costs, charges and expenses, incidental to

the administration of the Trust and the management and

maintenance of the Trust property, Custodian and/or any

other entities entitled for the benefit of the Fund, audit

fee, management fee and other fees;

k. to provide or cause to provide information to SEBI and

the Unitholders as may be specified by SEBI; to generally

do all acts, deeds, matters and things, which are necessary

for any object, purpose or in relation to the IDFC Mutual

Fund in any manner or in relation to any Scheme of the

IDFC Mutual Fund.

3. AMC Fee

In terms of the Investment Management Agreement and the

Regulations, the AMC is entitled to an investment

management fee at 1.25% per annum of the average net

assets for a corpus up to Rs.100 crores and at 1.00% per

annum for the corpus amount in excess of Rs.100 crores. For

Schemes launched on a No-Load basis, the AMC is entitled

to collect an additional management fee up to 1.00% per

annum of the average net assets outstanding in each financial

year and the total management fee shall not exceed the limit

stated under the Regulations.

He is the Managing Director of IDFC Asset Management Company Private Limited. Prior to this he

was Director & Head Originations of Global Capital Markets for ANZ Investment Bank. In this role he

has handled debt and equity capital market transactions for a number of leading Indian corporates

and was successful in improving the Bank’s position in the domestic capital markets from 193 to number

6. He joined the Bank in 1990 in the Merchant Banking Division and was appointed Head of the

Merchant Bank for West India in 1994 and subsequently Head of the Investment Bank for West India

in 1996. In these roles he has worked on a cross-section of investment banking products such as:

Infrastructure financing, Corporate finance, Cross-border debt financing and Domestic capital market

transactions. He worked briefly with Colgate Palmolive (India) Limited as a Brand Manager prior to

joining Standard Chartered Grindlays Bank.He is a rank holder in Mathematics from Bombay University

and holds an MBA from the Indian Institute of Management, Calcutta.


1. Association of Mutual Fund of India

Mr. Naval Bir Kumar*

B-1, Breach Candy

Apartment, Bhulabhai

Desai Road,

Mumbai 400 026.

*Associate Director


4. Key Personnel of AMC

Employee Designation Qualifications ExperienceMr. Naval Bir Kumar Managing Director PGDM (IIM, Calcutta), Over 15 years of experience in capital markets.

BA-Mathematics(Bombay University).

Last assignments held: Was a Director & Head Origination of Global Capital Markets for ANZ Investment Bank. In this role, he hashandled debt and equity capital market transactions for a number of leading Indian corporates. He joined the Bank in 1990 in theMerchant Banking Division and was appointed Head of the Merchant Bank for West India in 1994 and subsequently Head of theInvestment Bank for West India in 1996. Age : 43 years

Mr. Rajiv Anand Head–Investments B.Com, ACA. Over 15 years’ experience in fixed income markets.

Last assignments held: Worked in treasury of HSBC for 4 years and Standard Chartered Grindlays Bank for 3 years. In last assignment,was part of the bank’s Treasury team managing balance sheet portfolios like SLR, daily funding as well as the foreign currency loan /deposit book. It was in this job that he was exposed to the cutting edge techniques of interest rate and liquidity risk management. Itis this experience that he brings to managing investments in a manner that will meet the stated investment philosophy of each scheme.Age : 41 years

Mr. Debashis Roy Head - Operations & M.Sc, MBA Over 16 years’ experience in Capital Market Operations.Business Development

Last assignment held : Was Senior Manager, Projects & Domestic Custody for Standard Chartered Bank. In this role, he handled aspecial project team to provide comprehensive one stop services to domestic mutual funds. He joined the Standard Chartered GrindlaysBank in 1995 in Custodial Services and was later appointed as Head of Custody in 2001. Prior to joining the bank he worked for ICICILimited and SHCIL. Age : 44 years

Mr. Emron Samuel Head – Sales B.Com, ACA. Over 12 years’ experience in capital markets.

Last assignments held: Previously was with ANZ Grindlays Bank (now Standard Chartered Grindlays Bank) in Treasury- Sales for twoyears. Age : 39 years.

Mr. Ashwin Patni Fund Manager PGDM-IIM Calcutta Over Six years of experience in Wealth Management,B.E. Structured Finance, Credit and Markets Group and

Business Consulting.

Last assignments held: In his last assignment he was designated as Product Manager, Investment Services for Wealth Management Functionof Standard Chartered Bank (January 2005-November 2007). Prior to this he was working as Manger, Syndication for ICICI Bank (February2003 – January 2005). He has also worked with Accenture India Pvt. Ltd. from June 2001- January 2003 as Analyst. Age : 28 years.

Mr. Gopal Menon VP- Risk & A.C.A, LLB (Hons), He has over 9 years of experience in compliance, operations,Compliance B.Com finance, legal, audit, consultancy & secretarial functions.

Last assignment held: In his last assignment with HSBC Asset Management (India) Pvt. Ltd. he was designated as Manager – Compliance& Legal for 2 years (2003-2005). Prior to this he was with Zurich Asset Management Company Private Limited as Manager-Compliance for2 years (2001-2003) He practiced as a Chartered Accountant during 2000-2001. He was also employed with JM Capital ManagementCompany Private Limited as Manager (1999-2000) where he was involved in Compliance, Operations and Finance. He had worked withM/s N.M. Raiji & Co., CAs for a period of two years (1997-1999). Age: 34 years

Mr Ajay Bodke Sr. Fund Manager B. E. (Mechanical), Over 9 years’ experience in funds management.Masters in FinancialManagement & MBA

Last assignments held : Senior Fund Manager (Equity), SBI Funds Management Pvt. Ltd. (June 95 - March 04) managed portfolio of equity,Age : 37 years

Mr. Sunil Nair Equity - Dealer B. A Around 12 years of experience in equity trading .

Last assignments held: In his last assignment he was designated as Equity - Dealer in Birla Sunlife AMC Ltd. (1995-2005). Prior to which hewas employed with Insec Shares & Stock (1994 - 1995) and has around eleven years of experience in equity trading. Age: 34 years.

Ms. Punam Sharma VP B.Sc- Non Medical, Over 8 years experience in research, co-ordinating detailsMBA - Finance on products and markets for the sales team.

Last assignments held: In the last assignment with Kotak Mahindra Asset Management Company she was responsible for setting up ofthe research desk, working on reports on products and markets and developing databases. Age : 32 years


Mr. Kenneth Andrade Sr. Fund Manager Graduate (B.Com) Around 15 years experience in Equity Research & fund management .

Last assignments held : Fund Manager (Equity)Kotak Mahindra Asset Management Company Limited (July 2002- Sept.2005) , managedequity portfolios. SSKI Investor Services (March 1999- July 2001) & (Jan 2002 –July 2002) was involved in Portfolio advisory –Retail BrokingServices, Nimbus Communications-(July 2001-Jan 2002) was involved in Broadcasting – Content Development, LKP Shares & StockBrokers Pvt. Ltd (January 1998- March 1999) was a Analyst -Equity Research, Meghraj Financial Services (July 1996-July 1998) was aPortfolio Manager Age : 38 years.

Mr. Praveen L. Bhatt VP – Customer B.E. (Instrumentation) Over 10 years of experience in Customer Service & Marketing.Service & & Master of He has been employed with IDFCAMC since July 2001.Marketing Management

studies (M.M.S.).

Last assignments held: In his last assignments he was designated as the Head of Strategic Marketing at www.iinvestor.com (Part ofOutlook Publications) and was a key player in the development of the site www.iinvestor.com (March 2000 – June 2001). Prior to that heworked at Zurich India AMC Pvt Ltd. & was involved in Marketing & Communication (February 1998- March 2000). Age: 38 years.

Mr. Chintan Mehta Associate PGMBA (Finance), Over 7 years of experience in Capital MarketsFund Manager B.Com

Last assignments held: In the last assignment with DBS Cholamandalam Mutual Fund, he was Fund Manager & Dealer for fixed income(From October 2004 – March 2008). Prior to that he worked at Sahara India Financial Corporation Limited as Dealer- Treasury and wasinvolved in dealing and investment management in fixed income market (From June 2001 – October 2004). He had worked with LKPSecurities Limited as Dealer and was involved in dealing and over the counter broking in the fixed income market. Age: 30 years.

No. of persons involved in Fund Management : Nine

No. of persons involved in Equity Research : Two

Name of the Fund Manager : Mr. Ajay Bodke

Head Investments : Mr. Rajiv Anand

Managing Director : Mr. Naval Bir Kumar

Compliance Officer : Mr. Gopal Menon

Investor Relations Officers :

Sr. No. Name Region Address and Contact Number

1. Sunil Aryamane West 90 M. G. Road, Fort , Mumbai 400 001 Tel. 91-22- 2267 4160

2. Vijith Raghavan East Oswal Chambers, 1st Floor, 2 Church Lane, Kolkata 700 001. Tel. : 91-33-2288 1686

3. Chetan Mankame North 4th Floor, Narain Manzil, 23, Barakhamba Road, New Delhi - 110 001.

Tel: 4151 3042-44 / 2332 6669

4. Shaji Perincheri South Maalavika Centre, Old No. 144/145, New No. 60, Kodambakkam High Road,

Nungambakkam, Chennai - 600 034.

E. AUDITORS

BS.R & Co., Chartered Accountants, KPMG House, Kamala MillsCompound, 448 Senapati Bapat Marg, Lower Parel, Mumbai 400013, have been appointed as Auditors of the Scheme by theTrustee Company.

F. THE REGISTRAR

Computer Age Management Services Pvt. Limited, A & B LakshmiBhawan, 609, Anna Salai, Chennai - 600 006 (CAMS) have beenappointed as Registrar for the Scheme. The Registrar is registeredwith SEBI under registration No: INR000002813 dated July 22,1995. As Registrar to the Scheme, CAMS will handlecommunications with investors, perform data entry services anddespatch Account Statements. The AMC and the Trustee havesatisfied themselves that the Registrar can provide the servicerequired and has adequate facilities and the system capabilities.

G. THE CUSTODIAN

Deutsche Bank Limited AG, Mumbai has been appointed asCustodian for the Scheme mentioned in the Offer Document. TheCustodian has been registered with SEBI and has been awarded

registration No. IN/CUS/003 dated March 20, 1998. The Trusteehas entered into a Custodian Agreement dated January 3, 2000with the Custodian and the salient features of the said Agreementare to:

a. Provide post-trading and custodial services to the MutualFund.

b. Ensure benefits due on the holdings are received.

c. Provide detailed management information and other reportsas required by the AMC.

d. Maintain confidentiality of the transactions.

e. Be responsible for the loss or damage to the assets belongingto the Scheme due to negligence on its part or on the partof its approved agents.

f. Segregate assets of each Scheme.

g. The Custodian shall not assign, transfer, hypothecate, pledge,lend, use or otherwise dispose any assets or property, exceptpursuant to instruction from the Trustee/AMC or under theexpress provisions of the Custodian Agreement.


The Custodian will be entitled to remuneration for its services inaccordance with the terms of the Custodian Agreement. TheTrustee has the right to change the Custodian, if it deems fit, afterobtaining approval of SEBI.

H. COLLECTING BANKERS

The collecting bankers during the Offer will be the StandardChartered Bank (SEBI registration no. INBI0000885), HDFC Bank

(SEBI registration no. INBI00000063), ABN Amro Bank (SEBIregistration no. INBI00000034), Axis Bank (SEBI registration no.INBIINBI00000017) and such other banks registered with SEBI asmay be decided by the AMC from time to time. Applications forthe NFO will be accepted at designated collections centers asspecified by the AMC.


IV. INVESTMENT OF THE FUND

1. TYPE OF SCHEME & INVESTMENT OBJECTIVE

A close ended Equity Linked Savings Scheme.

IDFC Tax Saver (ELSS) Scheme is a scheme formulated underthe Equity Linked Savings Schemes (including modificationsthereto), issued by the Central Government. Accordingly,investment made by individuals or HUFs or specified categoryof BOI / AOPs (as per ELSS notification) in the Scheme upto asum of Rs. 100,000 in a financial year would qualify fordeduction under Section 80-C of the Act. Investments in thescheme shall be locked in for a period of 3 years from the dateof allotment. The lock in period may however be removed /modified if the same is permitted by the regulations / relevantgovernment guidelines / applicable laws.

The investment objective of the Scheme is to seek to generatelong-term capital growth from a diversified portfolio ofpredominantly equity and equity-related securities.

There can be no assurance that the investment objective ofthe scheme will be realised.

2. INVESTMENT PATTERN

The corpus of the Scheme will be invested in equity and equityrelated products & in debt and money market instruments.These investments shall be made in compliance with the ELSSGuidelines as applicable. Subject to the Regulations, thecorpus of the Scheme can be invested in any (but notexclusively) of the following securities / instruments :

1) Equity and Equity related instruments include equity warrantsand convertible instruments.

2) ADRs / GDRs issued by Indian companies and equity of listedoverseas companies subject to necessary regulatoryrequirements (or such other limits that the regulations maypermit from time to time).

3) Stock futures / index futures and such other permitted derivativeinstruments

4) Securities created and issued by the Central and StateGovernments and/or repos / reverse repos in such GovernmentSecurities as may be permitted by RBI (including but notlimited to coupon bearing bonds, zero coupon bonds andtreasury bills).

5) Securities guaranteed by the Central and State Governments(including but not limited to coupon bearing bonds, zerocoupon bonds and treasury bills).

6) Debt instruments issued by domestic Government agenciesand statutory bodies, which may or may not carry a Central/ State Government guarantee.

7) Corporate debt and securities (of both public and privatesector undertakings) including Bonds, Debentures, Notes,Strips, etc.

8) Debt instruments (both public and private sector) issued bybanks / development financial institutions.

9) Money market instruments permitted by SEBI including callmoney market or in alternative investments for the call moneymarket as may be provided by RBI to meet the liquidityrequirements.

10) Certificate of Deposits (CDs).

11) Commercial Paper (CPs).

12) Securitised Debt instruments.

13) The non-convertible part of convertible securities.

14) Any other domestic fixed income securities includingStructured Debt instruments.

15) Any overseas debt instrument, as permitted by extantregulations.

16) Pass through, Pay through or other Participation Certificatesrepresenting interest in a pool of assets including receivables.

17) Any other securities / instruments as may be permitted by SEBIfrom time to time.

For the purpose of further diversification and liquidity, theScheme may invest in another scheme managed by the sameAMC or by the AMC of any other Mutual Fund withoutcharging any fees on such investments, provided thataggregate inter-scheme investment made by all schemesmanaged by the same AMC or by the AMC of any otherMutual Fund shall not exceed 5% of the net asset value of theFund.

The securities mentioned above could be listed, unlisted,privately placed, secured, unsecured, rated or unrated and ofany maturity. The securities may be acquired through InitialPublic Offerings ( IPOs), secondary market operations, privateplacement, rights offers or negotiated deals. The scheme mayinvest the funds of the scheme in short term deposits ofscheduled commercial banks as permitted under extantregulations.

The Scheme may also enter into repurchase and reverserepurchase obligations in all securities held by it as per theguidelines and regulations applicable to such transactions.

The scheme shall not make investments in Foreign Securitiseddebt. The Scheme may participate in securities lending aspermitted under the Regulations.

3. ASSET ALLOCATION

The asset allocation under the scheme will be as follows :

Asset Class Range of Riskallocation Profile(% ofNet Assets)

Equities & Equity 80 - 100 HighRelated securities

Debt & Money 0 - 20 Low toMarket instruments Medium

Securitised debt 0 - 20 Low toinstruments Medium

Investments in Derivatives - upto the limits permitted by SEBIMutual Funds regulations from time to time.

Investments in Securities Lending - upto 100% of the equityinvestments of the Scheme.

Investments in ADRs and GDRs issued by Companies in India/ equity of listed overseas companies as permitted by SEBIregulations - upto 20% of the net assets of the scheme.


The funds collected under the scheme shall be invested inequities, cumulative convertible preference shares and fullyconvertible debentures and bonds of companies. Investmentmay also be made in partly convertible issues of debenturesand bonds including those issued on right basis subject tothe condition that, as far as possible, the non- convertibleportion of the debentures so acquired or subscribed, shall bedisinvested within a period of twelve months.

The corpus of the assets of the Scheme shall be predominantlyinvested in equity and equity related instruments. In accordancewith ELSS, investments in equity and equity related instrumentsshall be to the extent of at least 80% of net assets of theScheme. The fund shall strive to invest the funds in the mannerstated within a period of six months from the date of allotment.In exceptional circumstances, this requirement may bedispensed with by the Fund in order that the interest of theassesses are protected.

Pending investment of funds in the required manner, theFund may invest the funds in short-term money marketinstruments or other liquid instruments or both. After threeyears of the date of allotment of the units, the Fund may holdupto twenty per cent of net assets of the plan in short termmoney market instruments and other liquid instruments toenable them redeem investment of those unitholders whowould seek to tender the unit for repurchase.

The Scheme is an Equity Linked Savings Scheme and intendsto meet the requirements of any other notifications / regulationsthat may be prescribed by the Government / regulatory bodieswith respect to ELSS.

4. FUNDAMENTAL ATTRIBUTES

Notwithstanding the above, when any change in thefundamental attributes of the Scheme or the Trust or fees andexpenses payable or any other change which would modifythe Scheme or affect the interest of the Unitholders, isproposed to be carried out, the Trustees shall ensure thatsuch changes are made on fulfillment of parameters laiddown by SEBI (Mutual Funds) Regulations, 1996.

For the purposes of this section, as per the current Regulations,"fundamental attributes" of the scheme shall mean:

(i) Type of Scheme

A ten year close-ended equity linked savings scheme.

(ii) Investment Objectives & Policies

Investment Objective as defined in paragraph (1).

Asset Allocation Pattern as defined in paragraph (3).

(iii) Terms of Issue

Close ended scheme with redemption / switch out of Units onany Business Day, after three years from the date of allotment.

Fees and expenses as permitted by the Regulations.

Fundamental Attributes will not cover such actions of theTrustees of the Mutual Fund or the Board of Directors of theAsset Management Company, made in order to conduct thebusiness of the Trust, the Scheme or the Asset ManagementCompany, where such business is in the nature of dischargingthe duties and responsibilities with which they have beencharged. Nor will it include changes to the Scheme made inorder to comply with changes in regulation with which theScheme has been required to comply.

5. INVESTMENT STRATEGY AND RISK CONTROL

(i) Investment Strategy

Equity

The Scheme will invest in well-managed growth companiesthat are available at reasonable value. Companies would beidentified through a systematic process of forecasting earningsbased on a deep understanding of the industry growthpotential and interaction with company management to accessthe company's core competencies to achieve long-termsustainable profit growth.

The Scheme is expected to deliver superior relative returns forinvestors looking for a focused aggressive portfolio offundamentally good businesses. The guiding principles whilemanaging the portfolio are summarized below :

1) Sustainable company profits drives long term share valueFund management would focus primarily on businessfundamentals of the underlying company. The Equity Researchprocess will endeavour to acquire a robust understanding ofthe dynamics of the underlying business. This would form thebasis for forecasts on future profitability and sustainability ofcash profit growth. Stock prices of companies that can sustainperiods of high cash profit growth will outperform the marketsover the long term. Investors entering this scheme are thereforeexpected to have at least a one year time horizon.

2) Acquire stocks at reasonable value

Once good businesses are identified, stocks would be acquiredwhen they are available at a reasonable value. Overall marketcorrections and stock price falls due to temporary factors thatdon't affect long-term profitability are an excellent opportunityto buy stocks cheap.

3) Monitor market interest to ensure consistent performanceSystematically tracking over stock ownership and overresearched sectors would help to reduce the risk of a suddensell off. Stock prices react to event triggers that are constantlymonitored to ensure that portfolio performance is moreconsistent.

Debt

The domestic debt markets are maturing rapidly with liquidityemerging in various debt segments through the introductionof new instruments and investors.The actual percentage ofinvestment in various fixed income securities will be decidedafter considering the prevailing political conditions, theeconomic environment (including interest rates and inflation),the performance of the corporate sector and general liquidityand other considerations in the economy and markets. TheFund has put in place detailed Investment Discretion Guidelinesdefining the prudential and concentration limits for theportfolio limits. The investment management team is allowedfull discretion to make sale and purchase decisions within thelimits established. The Fund Manager/(s) record a justificationfor investments made, on the deal slip.

Investment Management Committee (IMC) in its periodicmeetings will track portfolio investment rationale, portfoliocomposition, performance etc. Any modifications to theInvestment Discretion Guidelines can be made by the IMCand will be ratified by the Board. The performance of the fundwill be monitored against its peer group in the industry andpresented at every Board meeting along with the portfolio of


the Schemes. The Board of Directors discusses the performanceand portfolio composition of the scheme and queries will beresponded to by the Managing Director.

(ii) Procedure & Recording of Investment Decisions and riskcontrol

All investment decisions, relating to the Scheme, will beundertaken by the AMC in accordance with the Regulationsand the investment objectives specified in this Offer Document.All investment decisions taken by the AMC in relation to theScheme shall be recorded.

The Investment Management Committee (IMC) consisting ofsenior employees including the Managing Director of theAMC to over see the Investment function, will be responsiblefor laying down the broad Investment Policy and the Specificscheme mandates, in addition to monitoring schemeperformance and reviewing portfolio strategy. The risk controlparameters would be laid down for each scheme based on theobjectives of the scheme and prudent fund managementpractices will ensure that investor monies are invested in theappropriate risk / reward environment. The AMC would ensurethat investments are made in accordance with the regulatory/ internal guidelines, if any

The designated Fund manager of the scheme will beresponsible for taking the day-to-day investment decisionsand will inter alia be responsible for security selection, portfoliocreation and timing of investment decisions.

The Fund Manager would work with Research team to pickstocks. They will prepare a detailed report on any new companythat would be acquired for the Scheme. This report wouldcover the overall industry environment, discuss demand supplydynamics of the company's products and make profitabilityprojections. This report would also contain a discussion onthe valuation for the stock price. The Fund Manager woulddocument reasons for each transaction.

The Scheme performance would be benchmarked to the BSE200 Index. The fund reserves the right to change the saidbenchmark and/or adopt one / more other benchmarks tocompare the performance of the Scheme.

In case of investments in debt instruments, the AMC aims toidentify securities, which offer superior levels of yield at lowerlevels of risks. With the aim of controlling risks, requisitecredit evaluation of the securities proposed to be invested inwill be carried out by the investment team of the AMC. RatedDebt instruments in which the Scheme invests will be ofinvestment grade as rated by a credit rating agency. The AMCwill be guided by the ratings of Rating Agencies such asCRISIL, CARE, ICRA and Duff and Phelps Credit Rating IndiaLimited or any other rating agencies that may be registeredwith SEBI from time to time. In case a debt instrument is notrated, prior approval of the Board of Directors of Trustee andthe AMC will be obtained for such an investment.

In addition, the investment team of the AMC will study themacro economic conditions, including the political andeconomic environment and factors affecting liquidity andinterest rates. The AMC will use this analysis to attempt topredict the likely direction of interest rates and position theportfolio appropriately to take advantage of this.

The Scheme may use various derivatives and hedging productsfrom time to time, as would be available and permitted bySEBI, in an attempt to protect the value of the portfolio andenhance Unitholders' interests.

The Scheme may invest in other Schemes managed by theAMC or in the Schemes of any other Mutual Funds, providedit is in conformity to the investment objectives of the Schemeand in terms of the prevailing Regulations. As per theRegulations, no investment management fees will be chargedfor such investments and the aggregate inter-Schemeinvestment made by all Schemes of IDFC Mutual Fund or inthe Schemes under the management of other assetmanagement companies shall not exceed 5% of the net assetvalue of the IDFC Mutual Fund. The limit however does notapply to any Fund of Funds scheme.

For the present, the Scheme does not intend to enter intounderwriting obligations. However, if the Scheme does enterinto an underwriting agreement, it would do so aftercomplying with the Regulations.

6. DEBT MARKET & MONEY MARKET IN INDIA

The Indian debt markets are one of the largest such marketsin Asia. Government and public Sector enterprises arepredominant borrowers in the market. While interest rateswere regulated till a few years back, there has been a rapidderegulation and currently both the lending and depositrates are market determined.

The debt markets are developing fast, with the rapidintroduction of new instruments including derivatives. ForeignInstitutional Investors are also allowed to invest in Indian debtmarkets now. There has been a considerable increase in thetrading volumes in the market with the relatively high tradingvolumes. The trading volumes are largely concentrated in theGovernment of India Securities, which contribute a highproportion of the daily trades.

The money markets in India essentially consist of the callmoney market (i.e. market for overnight and term moneybetween banks and institutions), repo transactions (temporarysale with an agreement to buy back the securities at a futuredate at a specified price), commercial papers (CPs, short termunsecured promissory notes, generally issued by corporates),certificate of deposits (CDs, issued by banks) and Treasury Bills(issued by RBI). A predominantly institutional market, the keymoney market players are banks, financial institutions,insurance companies, mutual funds, primary dealers andcorporates.

Certain instruments currently available for investments andtheir current yields are given as under :

Instruments Current Yields* Liquidity*

Central / State 7.00% - 8.25% Very highGovernment Securities

PSU Bonds / Corporate 7.00% - 9.75% Medium - HighDebentures

Securitised debt 9.00% - 10.50% Low - Medium

Commercial Papers / 7.00% - 9.50% HighCertificates of Deposit

Call / Notice Money 6.00% - 7.75% Very high

Repo 6.00% - 7.75% Very high*As on April 30, 2008

The actual yields will, however, vary in line with general levelsof interest rates and debt / money market conditions prevailingfrom time to time.


Investments in Securitised Debt Instruments

Investment in such securities will not exceed 35% of the netassets of the Scheme or such other limit as may be decidedby the Trustee from time to time. Scheme may invest in domesticsecuritised debt such as asset backed securities (ABS) ormortgage backed securities (MBS). Asset Backed Securities(ABS) are securitized debts where the underlying assets arereceivables arising from automobile loans, personal loans,loans against consumer durables, etc. Mortgage backedsecurities (MBS) are securitized debts where the underlyingassets are receivables arising from loans backed by mortgageof residential / commercial properties. At present in Indianmarket, following types of loans are securitised 1) Auto Loans(cars / commercial vehicles / two wheelers) 2) ResidentialMortgages or Housing Loans 3) Consumer Durable Loans &4) Personal Loans. Investments in securitised debt instrumentsshall be made when in view of the Fund Manager, suchinvestments could provide reasonable returns commensuratewith risks associated with such investments and shall be madein accordance with the investment objective of the Scheme.Typically, investments in securitised debt instruments offerbetter yield to the investors. The various types of receivablesthat can be securitised can be receivables from auto loans,personal loans, loans to corporates etc. The investment wouldbe made in line with the objective of the fund.

7. CHANGE IN INVESTMENT PATTERN

Subject to the Regulations, the asset allocation pattern of theschemes may change from time to time, keeping in viewmarket conditions, market opportunities, applicableregulations and political and economic factors. It must beclearly understood that the percentages stated above are onlyindicative and not absolute. The proportions can varysubstantially depending upon the perception of theInvestment Manager, the intention being at all times to seekto protect the interests of the Unitholders. Such changes inthe investment pattern will be for a short term and for defensiveconsiderations only.

8. TRADING IN DERIVATIVES

The Scheme intends to use derivatives for purposes that maybe permitted by SEBI Mutual Fund regulations from time totime.

Derivative transactions that can be undertaken by the Schemeinclude a wide range of instruments, including, but not limitedto

• Futures

• Options

• Swaps

• Any other instrument, as may be regulatorily permitted

Derivatives can be either exchange traded or can be over thecounter (OTC). Exchange traded derivatives are listed andtraded on Stock Exchanges whereas OTC derivative transactionsare generally structured between two counterparties.

SEBI has vide its circular DNPD/Cir-29/2005 dated September14, 2005 inter alia specified the guidelines pertaining totrading by Mutual Funds in Exchange Traded derivatives. Theposition limits have subsequently been modified vide circularsinteralia including circular no. SEBI/DNPD/Cir-31/2006 datedSeptember 22, 2006.

All derivative position taken in the portfolio would be guidedby the following principles.

i. Position limit for the Mutual Fund in index optionscontracts

a. The Mutual Fund position limit in all index optionscontracts on a particular underlying index shall be Rs.500 crores or 15% of the total open interest of themarket in index options, whichever is higher, per StockExchange.

b. This limit would be applicable on open positions in alloptions contracts on a particular underlying index.

ii. Position limit for the Mutual Fund in index futurescontracts

a. The Mutual Fund position limit in all index futures contractson a particular underlying index shall be Rs. 500 croresor 15% of the total open interest of the market in indexfutures, whichever is higher, per Stock Exchange.

b. This limit would be applicable on open positions in allfutures contracts on a particular underlying index.

iii. Additional position limit for hedging

In addition to the position limits at point (i) and (ii) above, theMutual Fund may take exposure in equity index derivativessubject to the following limits :

1. Short positions in index derivatives (short futures, short callsand long puts) shall not exceed (in notional value) the MutualFund's holding of stocks.

2. Long positions in index derivatives (long futures, long callsand short puts) shall not exceed (in notional value) the MutualFund's holding of cash, government securities, T-Bills andsimilar instruments.

iv. Position limit for Mutual Fund for stock based derivativecontracts

The Mutual Fund position limit in a derivative contract on aparticular underlying stock, i.e. stock option contracts andstock futures contracts, is defined in the following manner:-

1. For stocks in which the market wide position limit is less thanor equal to Rs. 250 crores, the Mutual Fund position limit insuch stock shall be 20% of the market wide position limit.

2. For stocks in which the market wide position limit is greaterthan Rs. 250 crores, the Mutual Fund position limit in suchstock shall be Rs. 50 crores.

v. Position limit for each scheme of a Mutual Fund for stockbased derivative contracts

The scheme-wise position limit / disclosure requirements shallbe -

1. For stock option and stock futures contracts, the gross openposition across all derivative contracts on a particularunderlying stock of a scheme of a mutual fund shall notexceed the higher of :

1% of the free float market capitalisation (in terms of numberof shares) or 5% of the open interest in the derivative contractson a particular underlying stock (in terms of number ofcontracts).

2. This position limits shall be applicable on the combinedposition in all derivative contracts on an underlying stock ata Stock Exchange.


3. For index based contracts, Mutual Funds shall disclose thetotal open interest held by its scheme or all schemes puttogether in a particular underlying index, if such open interestequals to or exceeds 15% of the open interest of all derivativecontracts on that underlying index.

Illustrations

Index Futures

Index Futures have been introduced by BSE and NSE. Generallythree futures of 1 month 2 months and 3 months are presentlytraded on these exchanges. These futures expire on the lastworking Thursday of the respective months.

If the Nifty (Index) was 1875 at the beginning of a month andthe quotes for the three futures were as under:

Month Bid Price Offer Price

1 1880 1885

2 1900 1915

3 1910 1930

The Fund can buy an Index of month 1 on the last day of themonth prior to month 1 in the illustration above at an offerprice of 1885.

Numerical example of futures trade

The following is a hypothetical example of a typical likelyindex future trade and the associated costs.

Particulars Index ActualFuture purchase

of stocks

Index at the beginning 1875 1875of the month

Price of 1 Month Future 1885

A. Execution Cost: 10 NilCarry and otherIndex Future costs(1885-1875)

B. Brokerage Cost: 5.66 9.38Assumed at 0.30%for Index Futureand 0.50% for spotStocks(0.30% of 1885)(0.50% of 1875)

C. Gains on Surplus 13.87 NilFunds:(assumed 10%return on 90% ofthe money leftafter paying 10%margin)(10%*1875*90%*30 days/365)

Total Cost (A+B-C) 1.79 9.38

In this example, the Index Future trade has resulted inprofitability compared to actual purchase of the underlyingindex stocks. The profitability of Index Future as compared toan individual security will inter alia depend upon the carryingcost, the interest available on surplus funds and thetransaction cost.

There are futures based on stock indices as mentioned aboveas also futures based on individual stocks.

Illustrative list of strategies that can employ futures Strategiesthat employ index futures and their objectives :

(a) The fund has an existing equity portion invested in a basketof stocks. In case the fund manager has a view that the equitymarkets are headed downwards, the fund can then hedge theexposure to equity either fully or partially by initiating shortfutures positions in the index. A similar position in the longdirection can also be initiated by the fund to hedge its positionof cash and permissible equivalents. The extent to which thiscan be done is determined by existing guidelines.

(b) To the extent permissible by extant regulations the schemecan initiate a naked short position in an underlying indexfuture traded on a recognized stock exchange. In case thenifty near month future contract trading at say, 1850, and thefund manager has a view that it will depreciate going forward,the fund can initiate a sale transaction of nifty futures at 1850without holding a portfolio of equity stocks or any otherunderlying long equity position. Once the price falls to 1800after say, 20 days the fund can initiate a square-up transactionby buying the said futures and book a profit of 50.Correspondingly the fund can take a long position withoutan underlying cash / cash equivalent subject to the extantregulations.

Risk associated with this strategy :

1. Lack of opportunities available in the market

2. Inability of the derivatives to correlate perfectly with underlyingindices

3. Execution risk, whereby the rates seen on the screen may notbe the rates at which the ultimate execution takes place.

Strategies that employ Stock specific Futures and theirobjectives :

Individual stock futures are also available in the Indian EquityMarkets. Stock futures trade either at a premium or at discountto the spot prices, the level of premium generally reflects thecost of carry. Stock specific issues may have a bearing onfutures as speculators may find futures as a cost-effective wayof executing their view on the stock. However such executionsusually increase the premium/discount to the spot significantly,thereby giving rise to arbitrage opportunities for a fund.

(a) Selling spot and buying future : In case the fund holds thestock of a company at say Rs. 1000 while in the futures marketit trades at a discount to the spot price say at Rs. 980 thenthe fund may sell the stock and buy the futures. On the dateof expiry of the stock future, the fund may reverse thetransactions (i.e. Buying at Spot & Selling futures) and earna risk-free Rs. 20/- (2% absolute) on its holdings. As this canbe without any dilution of the view of the fund on theunderlying stock the fund can still benefit from any movementof the price in the northward direction, i.e. if on the date ofexpiry of the futures, if the stock trades at 1100 which wouldbe the price of the futures too, the fund will have a benefitof Rs. 100/- whereby the fund gets the 10% upside movementtogether with the 2% benefit on the arbitrage, and thusgetting a total return of 12%.

(b) Buying spot and selling future : Where the fund holds thestock of a company trading in the spot market at Rs 1000


while it trades at Rs. 1020/- in the futures market then fundmay buy the stock at spot and sell in the futures marketthereby earning Rs. 20. In case of adequacy of cash with thefund, this strategy may be used to enhance returns of theScheme which was otherwise sitting on cash.

(c) Buying stock future: Where the scheme wants to initiate along positon in a stock whose spot price is at say, Rs.1000and futures is at 980, then the fund may just buy the futurescontract instead of the spot thereby benefiting from a lowercost option.

(d) In case the fund has a bearish view on a stock which is tradingin the spot market at Rs. 1000/- and the futures market at sayRs. 980/-. The fund can express such a view subject to extantSEBI regulations by initiating a short postion in the futurescontract. In case the view is right and the futures pricedepreciates to say 900/- the fund can square up the shortposition thereby earning a profit of Rs. 80/-.


• Lack of opportunities available in the market

• Inability of the derivatives to correlate perfectly with underlyingsecurity

• Execution risk, whereby the rates seen on the screen may notbe the rates at which the ultimate execution takes place.

Strategies that use Options and the objectives of suchstrategies :

Option contracts are of two types - Call and Put; the formerbeing the right, but not obligation, to purchase a prescribednumber of shares at a specified price before or on a specificexpiration date and the latter being the right, but notobligation, to sell a prescribed number of shares at a specifiedprice before or on a specific expiration date. The price atwhich the shares are contracted to be purchased or sold iscalled the strike price. Options that can be exercised on orbefore the expiration date are called American Options, whilethose that can be exercised only on the expiration date arecalled European Options. Option contracts are designated bythe type of option, name of the underlying, expiry month andthe strike price. Thus options can be used to earn less volatilereturns, earn the premium or use for hedging purposes etc.

Ilustrations of use of Options

Call Option (Buy): The fund buys a Call Option at the strikeprice of say Rs.1000 and pays a premium of say Rs. 50, thefund would earn profits if the market price of the stock at thetime of expiry of the option is more than 1050 being the totalof the strike price and the premium thereon. If on the dateof expiry of the option the stock price is below Rs. 1000, thefund will not exercise the option while it loses the premiumof Rs. 50.

Put Option (Buy): The fund buys a Put Option at Rs. 1000by paying a premium of say Rs. 50. If the stock price goesdown to Rs. 900, the fund would protect its downside andwould only have to bear the premium of Rs. 50 instead of aloss of Rs. 100 whereas if the stock price moves up to say Rs.1100 the fund may let the Option expire and forego thepremium thereby capturing Rs. 100 upside after bearing thepremium of Rs. 50.

Writing a Call Option: The fund writes a call option at Rs. 1050and earn a premium of, say, Rs. 10. If the price is higher than Rs.1050, say Rs.1100/- at expiry then the option is exercised, theFund earns the premium of Rs. 10/- but loses the differencebetween the market price and the exercise price i.e. Rs. 50/-. In casethe stock price is less than Rs.1050, the fund gets to keep thepremium of Rs.10/-.

Writing a Put Option: The fund writes a put option with the strikeprice of Rs. 1000 and earn a premium of say Rs. 20. In case thestock trades at Rs. 950 the put option will be exercised, the fundwill earn the premium of Rs. 20/- but losses the difference betweenthe exercise price and the market price which is Rs. 50/-. Where thestock trades at above the exercise price, the option-holder will notexercise the option and let it expire. In this case the fund will earnthe premium income of Rs. 20.

The above four option positions can be initiated in both indexbased options as well as stock specific options.


• Lack of opportunities available in the market

• Inability of the derivatives to correlate perfectly with underlyingsecurity

• Execution risk, whereby the rates seen on the screen may notbe the rates at which the ultimate execution takes place.

The AMC retains the right to enter into such derivativetransactions as may be permitted by the applicable regulationsfrom time to time.

Debt Derivatives

In terms of Circular No. MFD.BC.191/07.01.279/1999-2000and MPD.BC.187/07.01.279/1999-2000 dated November 1,1999 and July 7, 1999 respectively issued by Reserve Bank ofIndia permitting participation by Mutual Funds in InterestRate Swaps and Forward Rate Agreements, the Fund will usederivative instruments for the purpose of hedging and portfoliobalancing. The AMC would undertake the same for similarpurposes only.

Interest Rate Swaps (IRS)

An IRS is an agreement between two parties to exchangestated interest obligations for an agreed period in respect ofa notional principal amount. The most common form is afixed to floating rate swap where one party receives a fixed(pre-determined) rate of interest while the other receives afloating (variable) rate of interest.

Forward Rate Agreement (FRA)

A FRA is basically a forward starting IRS. It is an agreementbetween two parties to pay or receive the difference betweenan agreed fixed rate (the FRA rate) and the interest rate(reference rate) prevailing on a stipulated future date, basedon a notional principal amount for an agreed period. The onlycash flow is the difference between the FRA rate and thereference rate. As is the case with IRS, the notional amountsare not exchanged in FRAs.

EXAMPLE OF A DERIVATIVES TRANSACTION

Basic Structure of A Swap

Bank A has a 6 month Rs. 10 crore liability, currently beingdeployed in call. Bank B has a Rs 10 crores 6 month asset,being funded through call. Both banks are running an interestrate risk.


To hedge this interest rate risk, they can enter into a 6 monthMIBOR (Mumbai Inter Bank Offered Rate) swap. Through thisswap, A will receive a fixed preagreed rate (say 7%) and pay"call" on the NSE MIBOR ("the benchmark rate"). Bank A'spaying at "call" on the benchmark rate will neutralise theinterest rate risk of lending in call. B will pay 7% and receiveinterest at the benchmark rate. Bank A's receiving of "call" onthe benchmark rate will neutralise his interest rate risk arisingfrom his call borrowing.

The mechanism is as follows :

• Assume the swap is for Rs.10 crores from March 1, 2002 toSeptember 1, 2002. A is a fixed rate receiver at 7% and B isa floating rate receiver at the overnight compounded rate.

• On March 1, 2002 A and B will exchange only an agreementof having entered this swap. This documentation would beas per International Swaps and Derivatives Association (ISDA).

• On a daily basis, the benchmark rate fixed by NSE will betracked by them.

On September 1, 2002 they will calculate the following:

• A is entitled to receive interest on Rs.10 crores at 7% for 184days i.e. Rs. 35.28 lakhs, (this amount is known at the timethe swap was concluded) and will pay the compoundedbenchmark rate.

• B is entitled to receive daily compounded call rate for 184 days& pay 7% fixed.

• On September 1, 2002, if the total interest on the dailyovernight compounded benchmark rate is higher than Rs.35.28 lakhs, A will pay B the difference. If the dailycompounded benchmark rate is lower, then B will pay A thedifference.

• Effectively Bank A earns interest at the rate of 7% p.a. for sixmonths without lending money for 6 months fixed, whileBank B pays interest @ 7% p.a. for 6 months on Rs. 10 crores,without borrowing for 6 months fixed.

The AMC retains the right to enter into such derivativetransactions as may be permitted by the applicable regulationsfrom time to time.

8) PORTFOLIO TURNOVER

Portfolio turnover in the scheme will be a function of marketopportunities. It is difficult to estimate with any reasonablemeasure of accuracy, the likely turnover in the portfolio. TheAMC will endeavor to optimize portfolio turnover to optimizerisk adjusted return keeping in mind the cost associated withit. A high portfolio turnover rate is not necessarily a drag onportfolio performance and may be representative of arbitrageopportunities that exist for scrips / securities held in the portfoliorather than an indication of change in AMC's view on a scripetc.

9. INVESTMENT OF SUBSCRIPTION MONEY

The Fund may invest subscription money received from theinvesting public in bank deposits, or money marketinstruments. The AMC, on being satisfied of the receipt of theminimum subscription amount, can commence investmentout of the funds received in accordance with the investmentobjectives of the Scheme and as per the existing Regulations.The income earned out of such investments would be mergedwith the corpus of the Scheme on completion of the allotmentof the Units.

10. INVESTMENT BY THE AMC IN THE SCHEME

The AMC may invest in the Scheme from time to time. As perthe Regulations, such investments are permitted subject todisclosure being made in this Offer Document. However, theAMC shall not be entitled to charge any management fee onits investments in the Scheme. The investment by the AMCeither in the New Fund Offer or on an ongoing basis shall bein accordance with the approval given by the Board of Directorsof the Company.

11. INVESTMENT IN OVERSEAS FINANCIAL ASSETS

Mutual funds have been permitted to invest in ADRs / GDRsissued by Indian Companies within certain limits, from 1999.Mutual funds have also been permitted to invest in foreigndebt securities, since 2002, in countries with full convertiblecurrencies, short term as well as long term debt instrumentswith highest rating (foreign currency credit rating) by accredited/ registered credit rating agencies including A-1/AAA byStandard and Poor, P-1/AAA by Moody's, and F1/AAA by Fitch.Mutual funds are also permitted to invest in governmentsecurities where the countries are AAA rated. As there isupper limit of US$500 million for the entire mutual fundsindustry for making investment in ADRs / GDRs and foreignsecurities, each mutual fund is permitted to invest up to 4%of its net assets subject to a maximum of US $50 Millions.

Further, SEBI vide circular SEBI / MFD / CIR No. 02 /6855/ 03April 4, 2003 has permitted investments in equity of listedoverseas companies which have a shareholding of at least10% in an Indian company listed on a recognised stockexchange in India (as on January 31 of the year of investment).This circular also revised the overall cap for the entire mutualfunds industry to invest in ADRs / GDRs issued by Indiancompanies and foreign equity and debt securities, to US $1billion and individual limits for mutual funds to 10% of netsassets as on January 31, 2003 retaining the earlier cap onindividual limits.

SEBI vide its circular SEBI / IMD / CIR No.7 / 5573/04 datedMarch 19, 2004, permitted each mutual fund to invest inforeign securities up to 10% of its net assets as on January31 of each relevant year.

SEBI vide its circular no. SEBI/IMD/CIR No.7/73202/06 datedAugust 2, 2006 has increased the aggregate ceiling for themutual fund industry to invest in ADRs / GDRs issued byIndian companies, equity of overseas companies listed onrecognized stock exchanges overseas and rated debt securitiesto US $ 2 billions from the earlier limit of US $ 1 million. EachMF can invest up to 10% of the net assets managed by thatfund as on March 31 of each relevant year subject to maximumof US $ 100 millions per mutual fund.

The MF shall appoint a dedicated fund manager for makinginvestments in ADRs / GDRs / Foreign Securities in line with theSEBI regulations. As and when the Scheme actually invests inthese securities, the name of the dedicated fund managershall be communicated. Necessary disclosure shall also beprovided in the financial statements released by the fund.

It is the Investment Manager's belief that overseas securitiesoffer new investment and portfolio diversificationopportunities into multi-market and multi-currency products.However, such investments also entail additional risks. Suchinvestment opportunities may be pursued by the InvestmentManager provided they are considered appropriate in terms


of the overall the investment objectives of the Scheme and inaccordance with any guidelines issued by SEBI from time totime. Since the Scheme would also invest in overseas securities,there may not be readily available and widely acceptedbenchmarks to measure performance of the Scheme. Offshoreinvestments shall be made subject to any necessary approvalsor conditions stipulated by SEBI and the expenses charged tothe Scheme shall not exceed the total limits on expenses asprescribed under the Regulations and guidelines thereunder.The details of calculation for charging such expenses shall bereported to the Boards of AMC and trustees and shall also bedisclosed in the Annual Report of the Scheme. The Fund may,where necessary, appoint other intermediaries of repute asadvisors, sub-managers, or sub-custodians for managing andadministering such investments. The appointment of suchintermediaries shall be in accordance with the applicablerequirements, if any, of SEBI.

To the extent that the assets of the Scheme will be investedin securities denominated in foreign currencies, the IndianRupee equivalent of the net assets may be adversely affectedby changes in the value of certain foreign currencies relativeto the Indian rupee. The repatriation of capital to India mayalso be hampered by changes in regulations concerningexchange controls or political circumstances or any otherrestriction applicable to it. To manage risk associated withforeign currency and interest rate exposure and for efficientportfolio management, the fund may use derivatives such ascross currency swaps etc. The use of derivatives would be inaccordance with the prevailing regulations.

However, the AMC with a view to protecting the interests ofinvestors may increase exposure in foreign securities asdeemed fit from time to time.

Debt Markets abroad:

Overseas debt markets are deep and vibrant and much moresophisticated than the Indian debt markets. Most individualbonds are bought and sold in the over-the-counter (OTC)market, although some corporate bonds are also listed on theNew York Stock Exchange. The OTC market compriseshundreds of securities firms and banks that trade bonds byphone or electronically. Some are dealers that keep an inventoryof bonds and buy and sell these bonds for their own account;others act as agent and buy from or sell to other dealers inresponse to specific requests on behalf of customers. Quotesare available for an entire gamut of securities of varyingmaturities. Among the types of bonds one can choose fromare: Government securities, municipal bonds, corporate bonds,mortgage and asset-backed securities, federal agency securitiesand foreign government bonds.

Bond choices range from the highest credit quality Treasurysecurities, which are backed by the full faith and credit of thegovernment, to bonds that are below investment-grade andconsidered speculative. Since a bond may not be redeemed,or reach maturity, for years - even decades, credit qualitybecomes an important consideration when you are evaluatinga fixed / floating-income investment.

In the United States, major rating agencies include Moody'sInvestors Service, Standard & Poor's Corporation and Fitch.Each of the agencies assigns its ratings based on in-depthanalysis of the issuer's financial condition and management,economic and debt characteristics and the specific revenuesources securing the bond. The highest ratings are AAA (S&P

and Fitch) and AAA (Moody's). Bonds rated in the BBB categoryor higher are considered investment grade; securities withratings in the BB category and below are considered "highyield" or below investment grade. While experience has shownthat a diversified portfolio of high-yield bonds will, over thelong run, have only a modest risk of default, it is extremelyimportant to understand that, for any single bond, the highinterest rate that generally accompanies a lower rating is asignal or warning of higher risk.

The Link Between Interest Rates and Maturity

Changes in interest rates do not affect all bonds equally. Thelonger it takes for a bond to mature, the greater the risk thatprices will fluctuate along the way and that the fluctuationswill be greater and the more the investors will expect to becompensated for taking the extra risk. There is a direct linkbetween maturity and yield. It can best be seen by drawinga line between the yields available on like securities of differentmaturities, from shortest to longest. Such a line is called ayield curve. A yield curve could be drawn for any bond marketbut it is most commonly drawn for the Treasury market, whichoffers securities of every maturity and where all issues bear thesame top credit quality. By watching the yield curve, as reportedin the daily financial press, you can gain a sense of where themarket perceives interest rates to be headed one of theimportant factors that could affect your bonds' prices. Anormal yield curve would show a fairly steep rise in yieldsbetween short and intermediate term issues and a lesspronounced rise between intermediate and long term issues.That is as it should be, since the longer the investor 's moneyis at risk, the more the investor should expect to earn.

Indicative yields (As on April 30, 2008)

US treasuries :

1 Month : 1.05%

3 Month : 1.37%

6 Month : 1.60%

2 Year : 2.25%

5 Year : 3.00%

10Year : 3.73%

30Year : 4.46%

12. INVESTMENT RESTRICTIONS FOR THE SCHEME

Pursuant to the Regulations and amendments thereto, thefollowing investment restrictions are presently applicable tothe Scheme :

1) The Fund under all its schemes shall not own more than 10%of any company's paid up capital carrying voting rights.

2) The New Fund Offer Expenses in respect of the Scheme maynot exceed 6% of the funds raised under the Scheme.

3) The Scheme shall buy and sell securities on the basis ofdeliveries and shall in all cases of purchases, take delivery ofrelative securities and in all cases of sale, deliver the securitiesand shall in no case put itself in a position whereby it has tomake short sale or carry forward transaction or engage inbadla finance.

4) The Scheme shall not invest more than 10% of its net assetsin equity shares or equity related instruments of any company.

5) The Scheme shall not invest more than 5% of its net assetsin unlisted equity shares or equity related instruments.


6) Debt instruments in which the Scheme invests should berated as investment grade by a credit rating agency. Till theregulations so require, not more than 15% of the Net Assetsof the Scheme shall be invested in debt instruments issued bya single issuer. Provided that such investment limit may beexceeded to 20% of the Net Assets of the Scheme with theprior approval of the Board of Trustees and the Board of AMCtill such time the regulation requires such approvals. Providedthat such limit shall not be applicable for investments ingovernment securities and money market instruments.Provided further that investment within such limit can bemade in mortgaged backed securitised debt which are ratednot below investment grade by a rating agency registeredwith SEBI.

7) All investments in unrated debt instruments shall be madewith the prior approval of the Board of the AMC and theTrustee till the regulations so require. SEBI vide its circular no.MFD/CIR/9/120/2000 dated November 24, 2000 has permittedthe Mutual Fund to constitute a committee for Investment inUnrated debt Instruments. The said committee can approvesuch investments based on parameters laid down by theBoard of AMC and the Trustees and details of such investmentsshould be communicated by the AMC to the Trustees in theirperiodical/ quarterly reports along with a disclosure regardinghow the parameters have been complied with. Further, theScheme shall not invest more than 10% of its Net Assets inunrated instruments by a single issuer and the total investmentin such instruments shall not exceed 25% of the Net Assetsof the Scheme till the regulations so require. Provided furtherthat investment within such limit can be made in mortgagedbacked securitised debt, which are rated not below investmentgrade by a rating agency, registered with the Board.

Debentures, irrespective of any residual maturity period (aboveor below one year), shall attract the investment restrictions asapplicable to debt instruments under clause 1 and 1 A of theVII Schedule to the regulations.

8) Till the regulations so require, the Scheme shall not make anyinvestment in :

a) any unlisted security of an associate or group companyof the sponsor;

b) any security issued by way of private placement by anassociate or group company of the sponsor or

c) the listed securities of group companies of the sponsorwhich is in excess of 25% of the net assets.

9) Transfer of investments from one Scheme to another Schemein the same Mutual Fund is permitted provided:

a) such transfers are done at the prevailing market price forquoted instruments on a spot basis (spot basis shall havethe same meaning as specified by a Stock Exchange forspot transactions); transfer of unquoted securities will bemade as per the policies laid down by the Trustees fromtime to time, and

b) the securities so transferred shall be in conformity withthe investment objective of the Scheme to which suchtransfer has been made.

10) The Scheme may invest in other Schemes under the sameAMC or any other Mutual Fund without charging any fees,provided the aggregate inter-Scheme investment made by allthe Schemes under the same management or in Schemes

under management of any other asset management companyshall not exceed 5% of the Net Asset Value of the Fund.Provided that this clause shall not apply to any Fund of Fundsscheme.

11) The Fund shall get the securities purchased transferred in thename of the Fund on account of the concerned Scheme,wherever investments are intended to be of a long-term nature.

12) The Fund may buy and sell securities on the basis of deliveriesand will not make any short sales or engage in carry forwardtransactions except as and when permitted by the RBI in thisregard (for example "when issued market" transactions).

13) All the Scheme's investments will be in transferable securitiesor bank deposits or in money at call or any such facilityprovided by RBI in lieu of call.

14) No loans for any purpose can be advanced by the Scheme.

15) The Fund shall not borrow except to meet temporary liquidityneeds of the Fund for the purpose of repurchase/ redemptionof units or payment of interest and/or dividend to theUnitholders, provided that the Fund shall not borrow morethan 20% of the net assets of the individual Scheme and theduration of the borrowing shall not exceed a period of 6months.

16) Pending deployment of funds of a Scheme in securities interms of investment objectives of the Scheme, the AMC caninvest the funds of the Scheme in short-term deposits ofscheduled commercial banks or in call deposits.

17) The Scheme may also use various hedging and derivativeproducts from time to time, as are available and permitted bySEBI, in an attempt to protect and enhance the interests ofthe Unitholders at all times. Derivatives are contractualinstruments whose performance is derived from that of anunderlying asset.

18) The scheme shall not make any investment in a Fund of Fundsscheme.

The Scheme will comply with SEBI regulations and any otherRegulations applicable to the investments of Mutual Fundsfrom time to time. The Trustees may alter the above restrictionsfrom time to time to the extent that changes in the Regulationsmay allow and/or as deemed fit in the general interest of theUnitholders.

All investment restrictions shall be applicable at the time ofmaking the investment.

13. UNDERWRITING BY THE FUND

Subject to the Regulations, the Scheme may only enter intounderwriting agreements after the Fund obtains a certificateof registration in terms of the Securities and Exchange Boardof India (Underwriters) Rules and Securities and ExchangeBoard of India (Underwriters) Regulations, 1993, authorisingit to carry on activities as underwriters.

The capital adequacy norms for the purpose of underwritingshall be the net assets of the Scheme and the underwritingobligation of the Scheme shall not at any time exceed the totalnet asset value of the Scheme.

14. COMPUTATION OF NET ASSET VALUE

The NAV of the Units of the Scheme will be computed bydividing the net assets of the Scheme by the number of Units


outstanding on the valuation date. The Fund shall value itsinvestments according to the valuation norms, as specified inSchedule VIII of the Regulations, or such norms as may beprescribed by SEBI from time to time. The broad valuationnorms are detailed below.

These norms are indicated based on the current Regulationsand the guidelines / instructions issued by SEBI i.e. MFD/CIR/8/92/2000 dated September 18, 2000. In terms of SEBI letterno. MFD/CIR/8(A)/104/2000 dated October 3, 2000, the saidguidelines on valuation of non-traded and thinly traded debtsecurities came into force from December 1, 2000 and thesame was modified vide letter no. MFD/CIR/14/088/2001 datedMarch 28, 2001 & MFD/CIR/No.14/.442/2002 dated February20, 2002.

1) Traded Securities

(i) Traded securities (other than Government Securities) arevalued at the last quoted closing price on the NationalStock Exchange of India (NSE). If a particular security is notlisted on the NSE, it is valued at the last quoted closingprice on the stock exchange where it is principally traded("another stock exchange").

(ii) When on a particular Valuation Day, a security listed onthe NSE has not been traded on the NSE, the value atwhich it has been traded on another stock exchange isused.

When a equity security is not traded on any stock exchangeon a particular valuation day, the value at which it wastraded on the selected stock exchange or any other stockexchange, as the case may be, on the earliest previousday may be used provided such date is not more than 30days prior to the Valuation Day.

(iii) All Government bonds are to be valued at the pricesprovided by CRISIL.COM on a daily basis. In the event ofnon availability of the CRISIL.COM's prices for any reasonwhatsoever prices released by FIMMDA will be used.When prices from both the aforesaid sources are notavailable, Reuters or Bloomberg price quotes (bid pricequotes) will be used, failing which the average of theindicative bid price quotes obtained from two Governmentsecurities brokers will be used.

Traded Treasury Bills (T-Bills) are to be valued at last tradedyield to maturity (YTM) for up to next 15 days and are tobe amortized at YTM on a straight-line basis from thatlevel.

Valuation - ADRs / GDRs / other foreign securities(equities)

Trades in ADRs / GDRs /other foreign securities shall beaccounted for on the day following the trade on the relevantstock exchanges where such ADRs / GDRs / other foreignsecurities are listed viz. New York Stock Exchange, NASDAQ,London Stock Exchange (LSE), Luxembourg Stock Exchangeetc. The valuation of such investments shall be done at the lasttraded price of the previous day on the relevant exchangewhere the ADR / GDR / other foreign securities is listed andtraded. For instance, in case of GDR listed on LuxembourgStock Exchange, the last traded price on Luxembourg StockExchange shall be used for the purpose of valuation. In caseof GDRs listed on more than one foreign stock exchange, thescheme shall use the last traded price on LSE, in the absence

of which last traded price on Luxembourg Stock Exchangeshall be used. If the GDR was not traded on LuxembourgStock Exchange too, the last traded price on such other StockExchange as the AMC may deem appropriate shall be used forportfolio valuation, the intention being to provide fairvaluation to the investors of the Scheme. In case of an ADRlisted on more than one stock exchange the last traded priceon NYSE shall be used for valuation. If the ADR is not tradedon NYSE, the last traded price on NASDAQ shall be used forvaluation and if the ADR is not traded on NASDAQ too, thelast traded price on such other stock exchange as the AMCmay deem appropriate shall be used for portfolio valuation,the intention being to provide fair valuation to the investorsof the Scheme.

In the absence of prices on any exchange on the concernedvaluation date, the price prevailing at the close of business onthe previous date of trade in such ADR / GDR / other foreignsecurities shall be used for valuation provided that suchprevious date is not more than 30 days prior to the date ofvaluation.

However, the AMC reserves the right to choose the price forvaluation of ADRs / GDRs / other foreign securities which maybe different from the procedure given above depending uponthe prevailing circumstances, the intention being to providefair valuation to the investors of the Scheme.

Since the traded price would be in foreign currency theconversion rate to INR would also be as of the previous day.

In case such quotes are not available on any day, the foreignexchange rates as available for the immediately preceding daymay be used. The AMC reserves the right to chooseappropriate rates for conversion of the last traded price forthe purpose of valuation, depending upon the prevailingcircumstances, the intention being to provide fair valuationto the investors of the Scheme.

Valuation policy for foreign debt instruments :

Where Debt Instruments are listed and regularly traded onstock exchanges the last traded price at the close of businesswill be considered for valuation. In view of the time zonedifference it is possible that the price taken for valuationwould be the previous day's closing price. Since the tradedprice would be in foreign currency the conversion rate to INRwould also be as of the previous day.

Where the securities are either not listed on stock exchangesor listed but not traded, but whose prices are transmitted vianews agency such as Reuters / Bloomberg / Bridge, the pricesat a predetermined time from a predetermined source (page)would be considered for the valuation. It will be theresponsibility of the fund to ensure that the source is reliableand authentic for valuation purpose and reflects the fairprices.

For Debt Instruments where regular market-making facility isavailable, the bid price will be taken for valuation. The fundwill procure tradable quotes from the market maker i.e. quotesat which actual buying and selling can happen. Thecommunication for two-way quotes would be documented.


2) Thinly Traded Securities / Non-Traded Securities / UnlistedEquity Securities

i) Thinly Traded Equity / Equity related securities

When trading in an equity / equity related security (such asconvertible debentures, equity warrants, etc.) in a month isless than Rs. 5 lakhs and the total volume is less than 50,000shares, it shall be considered as a thinly traded security andvalued accordingly.

Where a stock exchange identifies the "thinly traded" securitiesby applying the above parameters for the preceding calendarmonth and publishes / provides the required information alongwith the daily quotations, the same can be used by the Fund.

If the share is not listed on the stock exchanges which providesuch information, then it will be obligatory on the part of theFund to make its own analysis in line with the above criteriato check whether such securities are thinly traded which wouldthen be valued accordingly.

In case trading in an equity security is suspended upto 30days, then the last traded price would be considered forvaluation of that security. If an equity security is suspended formore than 30 days, then the AMC/Trustees will decide thevaluation norms to be followed and such norms would bedocumented and recorded.

(ii) Non-Traded Equity Securities

When a security (other than debt and Government securities)is not traded on any stock exchange for a period of 30 daysprior to the Valuation Day, the scrip is treated as non-tradedscrip.

Non-traded / thinly traded equity securities shall be valued "ingood faith" by the asset management company on the basisof the valuation principles laid down below:

a) Based on the latest available Balance Sheet, net worth shallbe calculated as follows:

(b) Net Worth per share = [share capital+ reserves (excludingrevaluation reserves) - Miscellaneous expenditure and DebitBalance in P&L A/c] Divided by No. of Paid-up Shares.

(c) Average capitalisation rate (P/E ratio) for the industry basedupon either BSE or NSE data (which should be followedconsistently and changes, if any, noted with proper justificationthereof) shall be taken and discounted by 75% i.e. only 25%of the Industry average P/E shall be taken as capitalisation rate(P/E ratio). Earnings per share of the latest audited annualaccounts will be considered for this purpose.

(d) The value as per the net worth value per share and the capitalearning value calculated as above shall be averaged and furtherdiscounted by 10% for illiquidity so as to arrive at the fairvalue per share.

(e) In case the EPS is negative, EPS value for that year shall betaken as zero for arriving at capitalised earning.

(f) In case where the latest balance sheet of the company is notavailable within nine months from the close of the year,unless the accounting year is changed, the shares of suchcompanies shall be valued at zero.

(g) In case an individual security accounts for more than 5% ofthe total assets of the scheme, an independent valuer shallbe appointed for the valuation of the said security.

(iii) Unlisted Equity Shares

Unlisted equity shares of a company shall be valued "in goodfaith" on the basis of the valuation principles laid downbelow :

(a) Based on the latest available audited balance sheet, networth shall be calculated as lower of (i) and (ii) below :

i. Net worth per share = [share capital plus free reserves(excluding revaluation reserves) minus Miscellaneousexpenditure not written off or deferred revenueexpenditure, intangible assets and accumulatedlosses] divided by Number of Paid-up Shares.

ii. After taking into account the outstanding warrantsand options, Net worth per share shall again becalculated and shall be = [share capital plusconsideration on exercise of Option / Warrantsreceived / receivable by the Company plus free reserves(excluding revaluation reserves) minus Miscellaneousexpenditure not written off or deferred revenueexpenditure, intangible assets and accumulatedlosses] divided by {Number of Paid-up Shares plusNumber of Shares that would be obtained onconversion/exercise of Outstanding Warrants andOptions}

The lower of (i) and (ii) above shall be used forcalculation of net worth per share and for furthercalculation in (c) below.

(b) Average capitalisation rate (P/E ratio) for the industrybased upon either BSE or NSE data (which should befollowed consistently and changes, if any, noted withproper justification thereof) shall be taken and discountedby 75% i.e. only 25% of the Industry average P/E shall betaken as capitalisation rate (P/E ratio). Earnings per shareof the latest audited annual accounts will be consideredfor this purpose.

(c) The value as per the net worth value per share and thecapital earning value calculated as above shall be averagedand further discounted by 15% for illiquidity so as toarrive at the fair value per share.

The above methodology for valuation shall be subject to thefollowing conditions :

i. All calculations as aforesaid shall be based on auditedaccounts.

ii. In case where the latest balance sheet of the company is notavailable within nine months from the close of the year,unless the accounting year is changed, the shares of suchcompanies shall be valued at zero.

iii. If the net worth of the company is negative, the share wouldbe marked down to zero.

iv. In case the EPS is negative, EPS value for that year shall betaken as zero for arriving at capitalised earning.

v. In case an individual security accounts for more than 5% ofthe total assets of the scheme, an independent valuer shallbe appointed for the valuation of the said security. To determineif a security accounts for more than 5% of the total assets ofthe scheme, it should be valued in accordance with theprocedure as mentioned above on the date of valuation.


At the discretion of the AMC and with the approval of thetrustees, an unlisted equity share may be valued at a pricelower than the value derived using the aforesaid methodology.

3) While investments in call money, bills purchased underrediscounting plan and short term deposits with banks shallbe valued at cost plus accrual, other money market instrumentsshall be valued at the yield at which they are currently traded.For this purpose, non-traded instruments, that is instrumentsnot traded for a period of 7 days, will be valued at cost plusinterest accrued till the beginning of the Valuation Day plusthe difference between the redemption value and the costspread uniformly over the remaining maturity period of theinstruments.

4) Non-traded T-Bills with residual maturity up to 182 days (nottraded for more than 15 days or one which would qualify asa thinly traded security), will be valued on straight-lineamortization of last traded YTM or purchased YTM. Non-traded T-Bills with residual maturity greater than 182 days(not traded for more than 15 days or one which would qualifyas a thinly traded security), will be valued at the average ofthe indicative bid YTM obtained from two Government securitybrokers failing which at prices provided by FIMMDA or REUTERSor Bloomberg price quotes.

5) The non-convertible and convertible components ofconvertible debentures and bonds shall be valued separately.The non-convertible component would be valued on thesame basis as would be applicable to a debt instrument.

6) Where an instrument has been bought on a 'Repo' basis, theinstrument would be valued at the resale price after deductionof applicable interest upto the date of resale. Where aninstrument has been sold on a 'Repo' basis, adjustmentwould be made for the difference between the repurchaseprice (after deduction of applicable interest up to date ofrepurchase) and the value of the instrument. If the repurchaseprice exceeds the value of the instrument, the depreciationwould be provided for, and if the repurchase price is lowerthan the value of the instrument, credit would be taken forthe appreciation.

7) In respect of warrants to subscribe attached to instruments,the warrants would be valued at the value of the share whichwould be obtained on exercise of the warrant as reduced bythe amount which would be payable on exercise of thewarrant. A discount similar to the discount to be determinedin respect of convertible debentures shall be deducted toaccount for the period, which must elapse before the warrantcan be exercised.

8) Until they are traded, the value of "rights" shares shall becalculated as :

Vr = n ÷ m x (Pex - Pof)

Where Vr = Value of rights

n = no. of rights offered

m = no. of original shares held

Pex = Ex-rights price

Pof = Rights Offer Price

Where the rights are not treated pari passu with the existingshares, suitable adjustments shall be made to the value of therights. Where it is decided not to subscribe for the rights butto renounce them and renunciations are being traded, therights can be valued at the renunciation value.

Valuation of Non-Traded / Thinly Traded Securities :

(II)(A) Non-traded / Thinly Traded Debt Securities of Upto 182Days to Maturity :

As the money market securities are valued on the basis ofamortization (cost plus accrued interest till the beginning of theday plus the difference between the redemption value and thecost spread uniformly over the remaining maturity period of theinstruments) a similar process should be adopted for non-tradeddebt securities with residual maturity of upto 182 days, in theabsence of any other standard benchmarks in the market. Debtsecurities purchased with residual maturity of upto 182 days areto be valued at cost (including accrued interest till the beginningof the day) plus the difference between the redemption value(inclusive of interest) and cost spread uniformly over the remainingmaturity period of the instrument. In case of a debt security withmaturity greater than 182 days at the time of purchase, the lastvaluation price plus accrued interest should be used instead ofpurchase cost. All other non-traded Non Government debtinstruments shall be valued using the method suggested below.

(II)(B) Non-traded / Thinly Traded Debt Securities of Over 182Days to Maturity :

For the purpose of valuation, all Non-Traded Debt Securities wouldbe classified into "Investment grade" and "Non-Investment grade"securities based on their credit ratings. The non-investment gradesecurities would further be classified as "Performing" and"Non-Performing" assets.

• All Non Government investment grade debt securities,classified as not traded, shall be valued on yield to maturitybasis as described below.

• All Non Government non-investment grade performing debtsecurities would be valued at a discount of 25% to the facevalue.

• All Non Government non-investment grade non-performingdebt securities would be valued based on the provisioningnorms.

The approach in valuation of non-traded debt securities isbased on the concept of using spreads over the benchmarkrate to arrive at the yields for pricing the non-traded security.

The Yields for pricing the non-traded debt security would bearrived at using the process as described:

Step A

A Risk Free Benchmark Yield is built using the government securities(GOI Sec) as the base. GOI Secs are used as the benchmarks as theyare traded regularly, free of credit risk, and traded across differentmaturity spectra every week.

Step B

A Matrix of spreads (based on the credit risk) is built for markingup the benchmark yields. The matrix is built based on tradedcorporate paper on the wholesale debt segment of an appropriatestock exchange and the primary market issuances. The matrix isrestricted only to investment grade corporate paper.

Step C

The yields as calculated above are Marked-up/Marked-down forilliquidity risk.


Step D

a. Construction of Risk-Free Benchmark

Using Government of India dated securities, the Benchmarkshall be constructed as below :

METHODOLOGY

• Government of India Dated securities will be grouped into thefollowing duration buckets viz., 0.5-1 year, 1-2 years, 2-3years, 3-4 years, 4-5 years, 5-6 years and greater than 6 yearsand the volume weighted yield would be computed for eachbucket. Accordingly, there will be a benchmark YTM for eachduration bucket. These duration buckets may be changed toreflect the market value more closely by any agency suggestedby AMFI giving benchmark yield / matrix of spreads overbenchmark yield.

The benchmark as calculated above will be set weekly, and inthe event of any change in the Reserve Bank of India (RBI)policies affecting interest rates during the week, the benchmarkwill be reset to reflect any change in the market conditions.

Note : The concept of duration over tenor has been chosenin order to capture the reinvestment risk. It is intended togradually move towards a methodology that incorporates thecontinuous curve approach for valuation of such securities.However, in view of the current lack of liquidity in the corporatebond markets, a continuous curve approach to valuationwould be necessarily based on limited data points, and thiswould result in out of line valuations. As an interimmethodology therefore it is proposed that the Duration Bucketapproach be adopted and continuously tracked in order tofine tune the duration buckets on a periodic basis. Over thenext few years it is expected that with the deepening of thesecondary market trading, it would be possible to make agradual move from the Duration Bucket approach towards acontinuous curve approach.

The Yields so arrived at are used to price the portfolio.

b. Building a Matrix of Spreads for Marking-up theBenchmark Yield

Mark-up for credit risk over the risk free benchmark YTM ascalculated in step a, will be determined using the trades ofcorporate debentures / bonds of different ratings. All tradeson appropriate stock exchanges during the fortnight prior tothe benchmark date will be used in building the corporateYTM and spread matrices. Initially these matrices will be builtonly for corporate securities of investment grade. The matricesare dynamic and the spreads will be computed every week.The matrix will be built for all duration buckets for which thebenchmark GOI matrix is built to effectively link the corporatematrix with the GOI securities matrix. Accordingly :

• All traded paper (with minimum traded value of Rs. 1 crore)will be classified by their ratings and grouped into 7 durationbuckets; for rated securities, the most conservative publiclyavailable rating will be used.

• For each rating category, average volume weighted yield willbe obtained both from trades on the appropriate stockexchange and from the primary market issuances.

• Where there are no secondary trades on the appropriate stockexchange in a particular rating category and no primary marketissuances during the fortnight under consideration, thentrades on the appropriate stock exchange during the 30 day

period prior to the benchmark date will be considered forcomputing the average YTM for such rating category.

• If the matrix cannot be populated using any or all of the abovesteps, then credit spreads from trades on appropriate stockexchange of the relevant rating category over the AAA tradeswill be used to populate the matrix.

• In each rating category, all outliers will be removed forsmoothening the YTM matrix.

• Spreads will be obtained by deducting the YTM in each durationcategory from the respective YTM of the GOI securities.

• In the event of lack of trades in the secondary market and theprimary market the gaps in the matrix would be filled byextrapolation. If the spreads cannot be extrapolated for thereason of practicality, the gaps in the matrix will be filled bycarrying the spreads from the last matrix.

c. Mark-up/ Mark-down Yield

The Yields calculated would be marked-up /marked - down toaccount for the illiquidity risk, promoter background, financecompany risk and the issuer class risk. As the level of illiquidityrisk would be higher for non-rated securities, the markingprocess for rated and non-rated securities, would bedifferentiated as follows :

(i) Adjustments for Securities rated by external ratingagencies :

The Yields so derived out of the above methodology could beadjusted to account for risk mentioned above.

A discretionary discount / premium of upto +100/-50 basispoints for securities having a duration of upto 2 years andupto +75/- 25 basis points for securities having durationhigher than 2 years will be permitted to be provided for theabove mentioned types of risks. The rationale for the abovediscount structure is to take cognizance of the differentialinterest rate risk of the securities. This structure will be reviewedperiodically.

(ii) Adjustments for Internally Rated Securities :

To value an un-rated security, the fund manager has to assignan internal credit rating, which will be used for valuation.Since un-rated instruments tend to be more illiquid thanrated securities, the yields would be marked-up by adding+50 basis points for securities having a duration of upto twoyears and +25 basis points for securities having duration ofhigher than two years to account for the illiquidity risk.

Category Discretionarydiscount overbenchmark yieldin basis points

Unrated DiscretionaryInstruments Discount of upto +50with duration over and above theupto 2 years mandatory Discount

of +50

Unrated DiscretionaryInstruments Discount upto +50with duration over and above theover 2 years mandatory Discountof +25


(iii) The benchmark yield / matrix of spreads over benchmark yieldobtained from any agency suggested by AMFI (currently CRISIL)as a provider of benchmark yield / matrix of spreads overbenchmark yield to mutual funds, must be applied forvaluation of securities on the day on which the bench markyield / matrix of spreads over benchmark yield is released bythe aforesaid agency.

Valuation of securities with Put / Call Options:

The option embedded securities would be valued as follows:

Securities with Call option:

The securities with Call option shall be valued at the lower ofthe value as obtained by valuing the security to final maturityand valuing the security to call option.

In case there are multiple Call options, the lowest valueobtained by valuing to the various call dates and valuing tothe maturity date is to be taken as the value of the instrument.

Securities with Put option:

The securities with Put option shall be valued at the higherof the value as obtained by valuing the security to final maturityand valuing the security to Put option.

In case there are multiple put options, the highest valueobtained by valuing to the various put dates and valuing tothe maturity date is to be taken as the value of the instruments.

Securities with both Put and Call option on the same day:

The securities with both Put and Call option on the same daywould be deemed to mature on the Put / Call day and wouldbe valued accordingly.

3) Asset backed securities

• Asset backed securities with a residual maturity over 182 daysand where the cash flows are variable are valued on the samebasis as that for non-traded securities with residual maturityover 182 days.

• Asset backed securities with a residual maturity upto 182 daysand where cashflows are variable are valued on the basis ofamortisation, the last valued yield being the base foramortisation.

4) Government Securities

Government securities are valued at prices obtained fromCRISIL in accordance with the guidelines for valuation ofsecurities for mutual funds issued by SEBI.

5) Money Market Instruments (including CollateralisedBorrowing & Lending Obligation)

While investments in Call money, Bills purchased underrediscounting scheme, Collateralised Borrowing & LendingObligation and short term deposits with banks shall be valuedat cost plus accrual; other money market instruments shall bevalued at the yield at which they are currently traded. Non-traded money market instruments are valued at cost / lastvaluation price (including accrued interest till the beginningof the day) plus the difference between the redemption value(inclusive of interest) and cost / last valuation price, spreaduniformly over the remaining maturity period of the instrument.

6) Repos

Instruments bought on 'repo' basis are valued at the resaleprice after deduction of applicable interest upto date of resale.

7) Valuation of Derivative Products

i) The traded derivatives shall be valued at market price inconformity with the stipulations of sub clauses (i) to (v) ofclause 1 of the Eighth Schedule to the Securities and ExchangeBoard of India (Mutual Funds) Regulations, 1996 as amendedby SEBI Circular No.MFD/CIR/8/92/2000 and MFD/CIR/14/088/2001 dated September 18, 2000 and March 28, 2001respectively.

ii) The valuation of untraded derivatives shall be done inaccordance with the valuation method for untradedinvestments prescribed in sub clauses (i) and (ii) of clause 2 ofthe Eighth Schedule to the Securities and Exchange Board ofIndia (Mutual Funds) Regulations, 1996 as amended by SEBICircular No.MFD/CIR/8/92/2000 and MFD/CIR/14/088/2001dated September 18, 2000 and March 28, 2001 respectively.

In accordance with SEBI guidelines, the Fund enters intoderivative transactions in the form of Interest Rate Swaps forthe purposes of hedging and portfolio balancing.

RBI vide its circular no. MPD.BC.191/07.01.279/1999-2000dated November 1, 1999 has permitted mutual funds toenter into Interest Rate Swaps / Forward Rate Agreement forhedging and portfolio balancing. As per RBI circular no.MPD.BC.187/07.01.279/1999-2000 dated July 7, 1999 itspecifies that "The Swap that is accounted for like a hedgeshould be accounted for on accrual basis except the swapdesignated with an asset or liability that is carried at marketvalue or lower of cost or market value in the financialstatements. In that case the swap should be marked to marketwith the resulting gain or loss recorded as an adjustment tothe market value of designated asset or liability."

As per the said circular, swaps less than 6 months to beamortised and more than six months has to be valued /marked to market.

The valuation methods have not been prescribed either byRBI, SEBI or AMFI and as per Eighth Schedule of SEBI Regulation,the security should be marked to market and the Mutual Fundshould adopt fair valuation methods.

Valuation of Swaps :

A. Less than six months: Amortisation.

B. More than 6 months :

• The fixed and the floating rate sides have to bevalued.

• There are currently three swaps structures quoted inthe market.

• OIS (Overnight Interest Swaps)

• MIFOR (Mumbai Implied Forward OvernightRate)

• INBMK (Indian Benchmark)

• Use the Reuters benchmark curves for valuation.

• Reuters MIOIS = Mid 3.45 P.M. fixation for OIS swaps

• Reuters MIFOR= Mid 4.30 P.M. fixation for MIFORswaps

• Reuters MIOCS= Mid 5.00 P.M. fixation for MIFORswaps


• Fixed leg valuation:

• Fixed rate coupon to be discounted using the swapcurve.

• Floating leg valuation:

• Estimate the zero coupon curve based on thebenchmark par coupon curve

• Determine FRAs

• Estimate future cash flows on the floating leg

• PV the same using the benchmark curve.

• Final value of the swap: Sum of principal value offixed leg and the principal value of the floating leg.

• Interest accrued: Sum of interest accrued on the fixedleg and interest accrued on the floating leg.

For valuation purposes we adopt the end of the daybenchmarks released by Reuters for both OIS and MIFOR. Inthe case of INBMK Reuters does not provide end of daybenchmarks. Hence we need to poll the market for benchmarks.End of day, at 5.00 P.M., available indicative quotes would betaken from three market participants who can be polled for Bid /Ask quotes for the available swap tenors.

• The highest and the lowest Bid / Ask to be eliminated for eachtenor.

• Simple arithmetic average to be taken of the rest of the quotesand this is to be taken as the benchmark.

The valuation guidelines as outlined above are as per prevailingRegulations and are subject to change from time to time inconformity with changes made by SEBI.

All expenses and incomes accrued up to the valuation dateshall be considered for computation of NAV. For this purpose,major expenses like management fees and other periodicexpenses would be accrued on a day to day basis. The minorexpenses and income will be accrued on a periodic basis,provided the non-daily accrual does not affect the NAVcalculations by more than 1%.

Any changes in securities and in the number of units berecorded in the books not later than the first valuation datefollowing the date of transaction. If this is not possible giventhe frequency of the Net Asset Value disclosure, the recordingmay be delayed upto a period of seven days following thedate of the transaction, provided that as a result of the non-recording, the Net Asset Value calculations shall not be affectedby more than 1%.

In case the Net Asset Value of a scheme differs by more than1%, due to non - recording of the transactions, the investorsor scheme/s as the case may be, shall be paid the differencein amount as follows :-

(i) If the investors are allotted units at a price higher than NetAsset Value or are given a price lower than Net Asset Value atthe time of sale of their units, they shall be paid the differencein amount by the scheme.

(ii) If the investors are charged lower Net Asset Value at the timeof purchase of their units or are given higher Net Asset Valueat the time of sale of their units, asset management companyshall pay the difference in amount to the scheme. The assetmanagement company may recover the difference from theinvestors.

NAV of units under the Scheme shall be calculated as shownbelow :

NAV (Rs.) =

Market Current Currentor Fair Assets LiabilitiesValue of + including - andScheme's Accrued Provisionsinvestments Income

includingaccruedexpenses

No. of Units outstanding under Scheme

The valuation of the Scheme's assets and calculation of theScheme's NAV shall be subject to audit on an annual basis andshall be subject to such regulations as may be prescribed by SEBIfrom time to time. NAV shall be calculated up to four decimalplaces. However the AMC reserves the right to declare the NAVsup to additional decimal places as it deems appropriate.

During the continuous offer NAVs shall be calculated andannounced on all Business Days. The NAVs of the Growth Optionand the Dividend Option will be different after the declaration ofthe first dividend.

15. ACCOUNTING POLICIES & STANDARDS

In accordance with the Regulations, the AMC will follow theaccounting policies and standards, as detailed below :

a) The AMC, for the Scheme, shall keep and maintain properbooks of account, records and documents, so as to explainits transactions and to disclose at any point of time thefinancial position of the Scheme and, in particular, give a trueand fair view of the state of affairs of the Fund.

b) For the purposes of the financial statements, the Schemeshall mark all investments to market and carry investments inthe balance sheet at market value. However, since theunrealised gain arising out of appreciation on investmentscannot be distributed, provision shall be made for exclusionof this item when arriving at distributable income.

c) In respect of all interest-bearing investments, income shall beaccrued on a day-to-day basis as it is earned. Therefore, whensuch investments are purchased, interest paid for the periodfrom the last interest due date up to the date of purchase shallnot be treated as a cost of purchase but shall be debited toInterest Recoverable Account. Similarly, interest received atthe time of sale for the period from the last interest due dateup to the date of sale must not be treated as an addition tosale value but shall be credited to Interest Recoverable Account.

d) In determining the holding cost of investments and the gainsor loss on sale of investments, the "average cost" methodshall be followed for each security.

e) Transactions for purchase or sale of investments shall berecognised as of the trade date and not as of the settlementdate, so that the effect of all investments traded during afinancial year are recorded and reflected in the financialstatements for that year. Where investment transactions takeplace outside the stock market, for example, acquisitionthrough private placement or purchases or sales throughprivate treaty, the transaction would be recorded, in the eventof a purchase, as of the date on which the Scheme obtainsan enforceable obligation to pay the price or, in the event of


a sale, when the Scheme obtains an enforceable right tocollect the proceeds of sale or an enforceable obligation todeliver the instruments sold.

f) Where income receivable on investments has been accruedand has not been received for a period specified in theguidelines issued by SEBI, provision shall be made by debitingto the revenue account for the income so accrued in themanner specified by guidelines issued by SEBI.

g) In a close ended scheme which provides to the unitholdersthe option for an early redemption or repurchase, the parvalue of the units shall be debited to capital account and thedifference between the redemption price and the par valueif positive shall be credited to reserves and if negative, shallbe debited to reserves.

h) The cost of investments acquired or purchased shall includebrokerage, stamp charges and any charge customarily includedin the broker's bought note. In respect of privately placeddebt instruments any front-end discount offered shall bereduced from the cost of the investment.

i) Underwriting commission shall be recognised as revenueonly when there is no devolvement on the Scheme. Wherethere is devolvement on the Scheme, the full underwritingcommission received and not merely the portion applicableto the devolvement shall be reduced from the cost of theinvestment.

The accounting policies and standards outlined above are asper the existing Regulations and are subject to change as perchanges in the Regulations.

Guidelines for Identification and Provisioning for Non-PerformingAssets (Debt Securities) for Mutual Funds:

(a) Definition of a Non-Performing Asset (NPA) :

An 'asset' shall be classified as non-performing, if the interestand/or principal amount have not been received or remainedoutstanding for one quarter from the day such income /instalment has fallen due.

(b) Effective date for classification and provisioning ofNPAs :

The definition of NPA may be applied after a quarter past duedate of the interest. For e.g. if the due date for interest is30.06.2003, it will be classified as NPA from 01.10.2003.

(c) Treatment of income accrued on the NPA and furtheraccruals :

• After the expiry of the 1st quarter from the date the incomehas fallen due, there will be no further interest accrual on theasset i.e. if the due date for interest falls on 30.06.2003 andif the interest is not received, accrual will continue till30.09.2003 after which there will be no further accrual ofincome. In short, taking the above example, from thebeginning of the 2nd calendar quarter there will be no furtheraccrual on income.

• On classification of the asset as NPA from a quarter past duedate of interest, all interest accrued and recognised in thebooks of accounts of the Fund till the date, should be providedfor. For e.g. if interest income falls due on 30.06.2003, accrualwill continue till 30.09.2003 even if the income as on30.06.2003 has not been received. Further, no accrual will bedone from 01.10.2003 onwards. Full provision will also bemade for interest accrued and outstanding as on 30.06.2003.

(d) Provision for NPAs - Debt Securities:

Both secured and unsecured investments once they arerecognized as NPAs call for provisioning in the same mannerand where these are related to close ended schemes thephasing would be such as to ensure full provisioning prior tothe closure of the scheme or the scheduled phasing whicheveris earlier.

The value of the asset must be provided in the followingmanner or earlier at the discretion of the fund. Fund will nothave discretion to extend the period of provisioning. Theprovisioning against the principal amount or instalmentsshould be made at the following rates irrespective of whetherthe principal is due for repayment or not.

• 10% of the book value of the asset should be provided forafter 6 months past due date of interest i.e. 3 months fromthe date of classification of the asset as NPA.

• 20% of the book value of the asset should be provided forafter 9 months past due date of interest i.e. 6 months fromthe date of classification of the asset as NPA.

• Another 20% of the book value of the assets should beprovided for after 12 months past due date of interest i.e. 9months form the date of classification of the asset as NPA.

• Another 25% of the book value of the assets should beprovided for after 15 months past due date of interest i.e. 12months from the date of classification of the asset as NPA.

• The balance 25% of the book value of the asset should beprovided for after 18 months past due date of the interest i.e.15 months from the date of classification of the assets as NPA.

Book value for the purpose of provisioning for NPAs shall betaken as a value determined as per the prescribed valuationmethod.

This can be explained by an illustration :

Let us consider that interest income is due on a half yearlybasis and the due date falls on 30.06.2002 and the interestis not received till 1st quarter after due date i.e. 30.09.2002.This provisioning will be done in the following phased manner:

10% provision 01.01.2003 6 months past duedate of interest i.e.3 months from thedate of classificationof asset as NPA(01.10.2002)






Thus, 1 1/2 years past the due date of income or 1 1/4 yearsfrom the date of classification of the 'asset' as an NPA, the'asset' will be fully provided for. If any instalment has fallendue, during the period of interest default, the amount ofprovision should be instalment amount or above provisionamount, whichever is higher.

(e) Reclassification of assets :

Upon reclassification of assets as 'performing assets' :

1. In case a company has fully cleared all the arrears of interest,the interest provisions can be written back in full.

2. The asset will be reclassified as performing on clearance of allinterest arrears and if the debt is regularly serviced over thenext two quarters.

3. In case the company has fully cleared all the arrears of interest,the interest not credited on accrual basis would be creditedat the time of receipt.

4. The provision made for the principal amount can be writtenback in the following manner:

• 100% of the asset provided for in the books will be writtenback at the end of the 2nd calendar quarter where the provisionof principal was made due to the interest defaults only.

• 50% of the asset provided for in the books will be writtenback at the end of the 2nd calendar quarter and 25% afterevery subsequent quarter where both instalments and interestwere in default earlier.

5. An asset is reclassified, as 'standard asset' only when bothoverdue interest and overdue instalments are paid in full andthere is satisfactory performance for a subsequent period of6 months.

(f) Receipt of past dues :

When the fund has received income/principal amount aftertheir classifications as NPAs,

• For the next two quarters, income should be recognised oncash basis and thereafter on accrual basis. The asset will becontinued to be classified as NPA for these two quarters.

• During this period of two quarters although the asset isclassified as NPA no provision needs to be made for theprincipal if the same is not due and outstanding.

• If part payment is received towards principal, the assetcontinues to be classified as NPA and provisions are continuedas per the norms set at (d) above. Any excess provision will bewritten back.

(g) Classification of Deep Discount Bonds as NPAs :

Investments in Deep Discount Bonds can be classified asNPAs, if any two of the following conditions are satisfied:

• If the rating of the Bond comes down to grade 'BB' orbelow.

• If the company is defaulting in their commitments inrespect of other assets, if available.

• Full Net worth erosion.

Provision should be made as per the norms set at (d) aboveas soon as the asset is classified as NPA.

Full provision can be made if the rating comes down to grade'D'.

(h) Reschedulement of an asset :

In case any company defaults on either interest or principalamount and the fund has accepted a reschedulement of theschedule of payments, then the following practice may beadhered to:

i. In case it is a first reschedulement and only interest is indefault, the status of the asset, namely 'NPA' may becontinued and existing provisions should not be writtenback. This practice should be continued for two quartersof regular servicing of the debt. Thereafter, this may beclassified as 'performing asset' and the interest providedmay be written back.

ii. If the reschedulement is done due to default in interestand principal amount, the asset should be continued asnon-performing for a period of 4 quarters, even thoughthe asset is continued to be serviced during these 4quarters regularly. Thereafter, this can be classified as'performing asset' and all the interest provided till suchdate should be written back.

iii. If the reschedulement is done for a second / third time orthereafter, the characteristic of NPA should be continuedfor eight quarters of regular servicing of the debt. Theprovision should be written back only after it is reclassifiedas 'performing asset'.

(i) Disclosure in the Half Yearly Portfolio Reports:

The mutual funds shall make scripwise disclosures of NPAs onhalf yearly basis along with the half yearly portfolio disclosure.

The total amount of provisions made against the NPAs shallbe disclosed in addition to the total quantum of NPAs andtheir proportion of the assets of the mutual fund scheme. Inthe list of investments an asterisk mark shall be given againstsuch investments, which are recognized as NPAs. Where thedate of redemption of an investment has lapsed, the amountnot redeemed shall be shown as 'Sundry Debtors' and notinvestment provided that where an investment is redeemableby instalments that will be shown as an investment until allinstalments have become overdue.

The guidelines for identification and provisioning for non-performing assets in respect of debt securities are as per theexisting Regulations and are subject to change as per changesin the Regulations.


1. TYPE OF SCHEME & INVESTMENT OPTIONS

IDFC Tax Saver (ELSS) Fund is a close ended Equity LinkedSavings Scheme.

Options available in the scheme:

Growth Option

The Scheme will generally not declare any dividend underthis option. The income attributable to Units under thisOption will continue to remain invested in the Scheme andwill be reflected in the Net Asset Value of Units under thisoption. This option is suitable for investors who are notlooking for dividend, but who have invested with theintention of capital appreciation. If the Units under thisoption are held as a capital asset for a period of at least oneyear, from the date of acquisition, Unitholders should getthe benefit of long term capital gains tax.

If no indication is given by the investor in the Scheme, thedefault options that will become applicable are as under :

If no indication is given under the following Defaultoption

Option Growth

Dividend Payout / reinvestment Reinvestment

Dividend Option

Under this option, the Fund will endeavour to declaredividends from time to time.

This option is suitable for investors seeking income throughdividend declared by the scheme. The distribution of dividendwill be made out of the net surplus under this Option subjectto availability of distributable profits, as computed inaccordance with SEBI Regulations. The remaining net surplusafter considering the dividend and tax, if any, payable thereonwill remain invested in the Scheme and be reflected in theNAV.

Dividends, if declared, to those Unitholders whose namesappear in the Register of Unitholders on the record date.There is no assurance or guarantee to Unitholders as to therate of dividend distribution nor that dividends will be paid,though it is the intention of the Mutual Fund to makedividend distributions under the Dividend Option of theScheme. In order to be a Unitholder, an investor has to beallocated Units against clear funds. The exact record date willbe communicated to the Registrar. Dividends declared underthe Reinvestment Option will be compulsorily reinvested ata price based on the prevailing Ex-Dividend Net Asset Valueper Unit.

Any such reinvestment will result in the Unit holder beingcredited with additional Units representing the value ofdividend reinvested at the ex-dividend NAV. The dividend soreinvested shall be constructive payment of dividend to theUnitholders and constructive receipt of the same amountfrom each Unitholder for reinvestment in Units.

However, it must be distinctly understood that the actualdeclaration of dividend and the frequency thereof will interalia, depend on the availability of distributable profits ascomputed in accordance with SEBI Regulations. The decision

V. UNITS ON OFFER

of the Trustee / AMC in this regard shall be final. The AMCreserves the right to change the record date and the AMCalso reserves the right to change the frequency of dividends.

Investors should indicate the Option for which thesubscription is made by indicating the choice in theappropriate box provided for this purpose in the applicationform. In case of valid applications received, without indicatingany choice of Option, it will be considered for the GrowthOption and processed accordingly. Investors may also opt toinvest in both the Options of the Scheme subject to minimumsubscription requirements under each Option.

The Fund reserves the right to introduce new investmentoption/s at a later date.

The NAV of the Unit holders in the Dividend Option willstand reduced by the amount of dividend declared on theRecord Date. The NAV of the Growth Option will remainunaffected.

As per the Regulations, the Fund shall despatch the dividendwarrants within 30 days of declaration of Dividend. However,the Mutual Fund will endeavour to make dividend paymentssooner to Unitholders.

There is no assurance or guarantee to Unitholders as to therate of dividend distribution nor that dividends will be paid,though it is the intention of the Mutual Fund to makedividend distributions under the respective options of theScheme.

For details on taxation of dividend, please refer to theparagraph titled "Tax Benefits of Investing in the MutualFund" in Section VII.

The investors should note that the NAVs of the DividendOption and the Growth Option will be different after thedeclaration of dividend under the Scheme.

Dividend Re-investment facility

Investors opting for the Dividend Option may choose to re-invest the dividend to be received by them in additional Unitsof the Scheme. Under this provision, the dividend due andpayable to the Unitholders will compulsorily and withoutany further act by the Unitholders, be re-invested in the sameoption (at the first ex-dividend NAV). The dividends so re-invested shall constitute a constructive payment of dividendsto the Unitholders and a constructive receipt of the sameamount from each Unitholder for re-investment in Units.

On re-investment of dividends, the number of Units to thecredit of the Unitholder will increase to the extent of thedividend re-invested divided by the NAV applicable asexplained above.

2. MINIMUM SUBSCRIPTION AMOUNT / TARGET AMOUNT

The Scheme under this Offer Document seeks to raise aminimum subscription of Rs.1 crore during the New FundOffer Period. There is no maximum limit.

3. MINIMUM APPLICATION AMOUNT

The minimum application amount of the Scheme is Rs. 500per application and in multiples of Rs. 500.


4. New Fund Offer Period : The New Fund Offer Period, wasfrom November 20, 2006 to February 23, 2007.

5. EXTENSION OF THE NEW FUND OFFER PERIOD

The Trustee reserves the right to extend / curtail the closingdate, subject to the condition that the subscription list shallnot be kept open for less than three months.

6. FACE VALUE OF UNITS

The face value of each unit issued under the Scheme shallbe Rs. 10/- (Rupees ten).

7. PLEDGE OF UNITS FOR LOANS

The Units can be pledged by the Unitholders as security forraising loans subject to the conditions of the lendinginstitution. The Registrar will take note of such pledge /charge in its records. The registrar would only be marking alien on the units. Disbursement of such loans will be at theentire discretion of the lending institution and the fundassumes no responsibility thereof.

The pledgor will not be able to redeem Units that are pledgeduntil the entity to which the Units are pledged provideswritten authorisation to the fund that pledge / lien chargemay be removed. As long as units are pledged, the pledgeewill have complete authority to redeem such Units. Pledgingof units can be done after a period of 3 years from the dateof allotment or holding of units.

8. SWITCH FACILITY (SUBJECT TO 3 YEAR LOCK-IN)

Unitholders under the Scheme have the option to switchpart or all of their holdings in this scheme to another,subject to conditions attached to that scheme, which isavailable for investment at that time. Switch out facility fromthis scheme shall be available after the completion of 3 yearlock-in from the date of allotment of units for relevantinvestment. This Option will be useful to Unitholders whowish to alter the allocation of their investment among thescheme(s)/ plans of the Mutual Fund in order to meet theirchanged investment needs or risk profiles. Investors canswitch in to this scheme during the NFO from any otherscheme of the mutual fund, subject to the terms of therelevant scheme.

The switch out will be effected by way of a redemption ofUnits from this Scheme and reinvestment of the redemptionproceeds in the other Scheme/ Plan/ sub plan/option andaccordingly, to be effective, the switch must comply with theredemption rules of the Scheme and the issue rules of theother scheme (for e.g. as to the minimum number of Unitsthat may be redeemed or issued). Similarly Switch ins to thisscheme from any other scheme / plan during the NFO will besubject to the terms of the relevant schemes. The price atwhich the Units will be switched out of the Scheme/optionswill be based on the Applicable NAV of the relevant Scheme/Plan(s)/ sub plans/options and considering any exit/entry/combination of entry and exit loads if any that the AMC /Trustee may approve from time to time.

To effect a switch, a Unitholder must provide clearinstructions. A request for a switch may be specified eitherin terms of amount or in terms of the number of Units of theScheme from which the switch is sought. Such instructionsmay be provided in writing and the same, lodged either inperson or by mail, on any Business Day, at any of the Official

Points of acceptance of Transactions. An Account Statementreflecting the new holding will be endeavoured to bedespatched to the Unit holders within three Business Daysof completion of switch transaction.

Note :

The AMC reserves the right to impose loads / remove loads forswitching between Options / Plans / Schemes of the Mutual Fundat a future date. The AMC retains the right to charge different(including zero) load on switchover as compared to Repurchase.

9. WHO CAN INVEST ?

The following persons are eligible and may apply forsubscription to the Units of the Scheme (subject, whereverrelevant, to purchase of units of Mutual Funds beingpermitted under respective constitutions and relevantstatutory regulations) :

• Resident adult individuals either singly or jointly

• Minor through parent / lawful guardian.

• Non-resident Indians (NRIs) / Persons of Indian origin residingabroad on full repatriation basis or on non-repatriation basis.

• Companies, Bodies Corporate, Public Sector Undertakings,association of persons or bodies of individuals whetherincorporated or not and societies registered under theSocieties Registration Act, 1860 (so long as the purchase ofunits is permitted under the respective constitutions).

• Religious and Charitable and Private Trusts under theprovision of Section 11(5) (xii) of the Income Tax Act, 1961read with Rule 17C of Income Tax Rules, 1962 (subject toreceipt of necessary approvals as "Public Securities" whererequired).

The Trustee of Private Trusts authorised to invest in mutualfund Schemes under their trust deed.

• Partnership Firms.

• Karta of Hindu Undivided Family (HUF).

• Banks (including Co-operative Banks and Regional RuralBanks), Financial Institutions and Investment Institutions.

• Foreign Institutional Investors (FIIs) registered with SEBI onfull repatriation basis.

• Army, Air Force, Navy and other para-military funds.

• Mutual fund Schemes.

• Other Schemes of IDFC Mutual Fund subject to the conditionsand limits prescribed in SEBI Regulations and/or by the Trustee,AMC or sponsor may subscribe to the units under thisScheme.

• Scientific and Industrial Research Organizations.

• Provident / Pension / Gratuity and such other Funds as andwhen permitted to invest.

• International Multilateral Agencies approved by theGovernment of India.

• Others who are permitted to invest in the Scheme as pertheir respective constitutions.

Subscriptions from residents in the United States of America andCanada shall not be accepted by the Scheme.


The Fund reserves the right to include / exclude new / existingcategories of investors to invest in this Scheme from time totime, subject to SEBI Regulations, if any.

The AMC reserves the right to scrutinize / verify theapplication / applicant and the source of the applicant'sfunds and also reserves the right on the grounds of moneylaundering by the applicant to force redemption within thirtyBusiness Days of the allotment of units at the applicable NAVprevalent at the time of such redemption, by redeeming theproceeds in favour of the applicant and/or undertaking suchother action with the funds, that may be prescribed underany applicable law or any other action that the AMC maydeem appropriate including redeeming the proceeds infavour of the source account from which the funds had beeninvested in the mutual fund.

Note : IDFC Tax Saver (ELSS) Scheme is a scheme formulatedunder the Equity Linked Savings Scheme, 2005, issued bythe Central Government. Accordingly, investment made byindividuals, HUFs and / or specified category of BOI / AOPs(as per ELSS notification) in the Scheme upto a sum ofRs. 100,000 in a financial year would qualify for deductionunder Section 80-C of the Act. Investors other than thesespecified investors shall not qualify for the tax benefit asmentioned under Section 80-C of the Income Tax Act. Suchinvestors may however avail of such tax benefits at a futuredate, if so permitted under the applicable laws andregulations.

10. HOW TO APPLY ?

a) New Fund Offer

An application form would be applicable for investment byall classes of investors. Application forms would be available/accepted at the official points of acceptance of transactionsat the office of the AMC and/or Registrar.

Kindly retain the acknowledgement slip initialed / stampedby the collecting agency.

Investors may note and follow the below-mentioned directions

while applying for the units of the schemes of IDFC Mutual Fund :

(1) In case where the Broker code is already printed in Application

form / Transaction form / Purchase request form by the AMC /

Registrar / Distributor and :

a. Where the Investor wishes to make an application through

broker / distributor, then the investor will be required to

countersign in the space provided for broker code (printed)

signifying acceptance.

b. Where the Investor wishes to apply directly (i.e. not

through existing broker / distributor), then the investor

should strike off the broker code (printed) and should

write “Direct Applications” or “Not Applicable (N.A.)” and

countersign the same

(2) In case where the Broker code is not printed in application

form / transaction form / purchase request form :

a. In case of direct applications, the Investor should write in

the space provided for the broker code “Direct

Application” or “Not Applicable (N.A.)” and countersign

the same.

b. In case application through broker, the investor will be

required to countersign in space provide for the broker

code (Broker code will be stamped by the broker).

(3) In case of either acceptance or rejection of broker code (for

abovementioned purpose) the investors are required to provide

their full signature. In case of joint applications, signature of

single investor will be accepted.

(4) In case of change in broker, the investor will be required to

strike off the old broker code and countersign near the new

broker code, before submitting the application form /

transaction form / purchase from at the applicable collection

centres / OPA (Official points of Acceptance).

(5) The Registrar and the AMC are shall be diligent in effecting

the received changes in the broker code within the reasonable

period of time from the time of receipt of written request from

the investor at the designated collection centres / OPA.

(6) All Unitholders who have currently invested through channel

distributors and intend to make their future investments

through the Direct route, are advised to complete the

procedural formalities prescribed by AMC from time to time.

(7) List of Official Points of Acceptance is available on the website

of the Mutual Fund. www.idfcmf.com

b) Mode of Payment - Resident Investors :

(i) For Investors having a bank account with IDFC Bank or suchother Banks with whom the Fund would have an arrangementfrom time to time:

Investors may make payments for subscription to the Unitsof the Scheme by issuing a Cheque drawn on the scheme orby giving a debit mandate to their account in the appropriateplace in the application form, with any branch of IDFC Bankor such other Banks with whom the Fund would have anarrangement from time to time and are approved by RBI inIndia.

(ii) For Other Investors not covered by (i) above :

Investors shall make payments for subscription to the Unitsof the Scheme at the bank collection centre / official pointsof acceptance by local Cheque / Payorder / Bank Draft, drawnon any bank branch, which is a member of Bankers ClearingHouse and located in the Offical points of acceptance oftransactions where the application is lodged.

• The Cheque / DD / Payorder should be drawn in favour ofIDFC Tax Saver (ELSS) Fund

• Please note that all cheques / DDs / Payorders should becrossed as account payee and `the DD / bank charges on thesame will have to be borne by the investor. However in caseof outstation demand drafts the bank charges for the samewill under normal circumstances be borne by the AMC as perthe table below.


Amount (Rs.) DD Charges

Up to 500 Rs. 10/- per instrument

501-1000 Rs. 15/- per instrument



10001-100000 Rs. 2.50 per Rs. 1000/- or partthereof

100001-10 lakh Rs. 2 per Rs. 1000/- or partthereof

Above Rs.10 lakh Rs. 1.50 per Rs. 1000/- orpart thereof subject to amaximum of Rs. 5000/-

The AMC may reimburse DD charges (at actuals) if they differfrom the above rates. Decisions of the AMC shall be final.

Payments by Cash, money orders, postal orders, Stockinvestsand out-station and/ or post-dated cheques will not beaccepted.

Centres other than the places where there are Official Pointsof Acceptance of Transactions as designated by the AMCfrom time to time are Outstation centres. Investors residingat outstation centres should send demand drafts drawn onany bank branch which is a member of Bankers ClearingHouse payable at any of the places where an Official Pointsof Acceptance of Transactions is located.

c) NRIs, FIIs

i) NRIs :

The Reserve Bank of India, in terms of Notification No.FERA.195/99-RB dated March 30, 1999 has granted generalpermission to mutual funds referred to in clause (23D) ofSection 10 of Income Tax Act, 1961 :

1. (a) to issue, to Non-Residents of Indian nationality or origin(NRIs) units or similar other instruments of the Schemeapproved by Securities and Exchange Board of Indiasubject to conditions stated in para 2) below,

(b) to send such units/instruments out of India to theirplace of residence or location as the case may be and

(c) to make payment to non-resident investors, onrepurchase of units or other instruments subject toconditions in paragraph 3.

2. The general permission granted herein to issue units issubject to the following conditions:

(a) the Mutual Fund complies with terms and conditionsstipulated by Securities and Exchange Board of India;

(b) in respect of investment made on repatriation basis, theamount representing the investment is received byinward remittance through normal banking channel orby debit to NRE / FCNR account of the non-residentinvestor maintained with an authorised dealer in India;

(c) in respect of investment made on non-repatriation basis,the amount representing the investment is received byinward remittance through normal banking channel orby debit to the NRE / FCNR / NRO / NRSR account of thenon-resident investor maintained with an authoriseddealer in India.

3. The general permission granted herein to repurchase unitsis subject to the following conditions :

(a) Where the investment is made on repatriation basis,the amount representing the dividend / interest andmaturity proceeds may be remitted through normalbanking channel or credited to NRE / FCNR / NRO / NRSRaccount of the non-resident investor.

(b) Where the investment is made by remittance fromabroad through normal banking channel or by debit toNRE / FCNR / NRO account of the non-resident investoron non-repatriation basis the interest / dividend andmaturity proceeds may be credited to the NRO / NRSRaccount of the non-resident investor.

(c) Where the investment is made by debit to NRSR accountof the non-resident investor the dividend/interest andmaturity proceeds shall be credited to the NRSR accountof the non-resident investor.

ii) FIIs :

The Reserve Bank of India, in terms of its notification No.FERA.212/99-RB dated October 18, 1999, has grantedgeneral permission to Mutual Funds :

1. (a) to issue, units or similar instruments under Plansapproved by Securities and Exchange Board of India toForeign Institutional Investors (FIIs) subject to para 2below,

(b) to send such units / instruments out of India to theirglobal custodians,

(c) to repurchase units or other instruments issued to FIIsand make payment thereof, subject to para 3 below.

2. The general permission granted herein to issue units issubject to the following conditions: -

(a) The Mutual Fund complies with terms and conditionsstipulated by the Securities and Exchange Board of India;

(b) The amount representing the investment is received bydebit to the Special Non-Resident Rupee Account of theFII maintained with a designated bank, approved by thebank.

3. The general permission granted herein to repurchase unitsis subject to the condition that the amount representingdividend/interest and maturity proceeds are credited to theSpecial Non-Resident Rupee Account.

Explanation: Foreign Institutional Investor means aninstitution established or incorporated outside India andregistered with SEBI which proposes to make investment inIndia in securities, as defined in SEBI (FII) Regulations, 1995.

d) Mode of Payment on Repatriation basis

In case of NRIs, and persons of Indian origin residing abroad,payment may be made by way of Indian Rupee draftspurchased abroad or by way of cheques/ demand draft drawnon Non-Resident (External) (NRE) Accounts payable at par atMumbai or alternatively by way of a debit mandate on theirNon-Resident (External) (NRE) Account with StandardChartered Bank or such other banks with whom the fundhas an arrangement from time to time and is approved byRBI in India. Payments can also be made by means of rupeedrafts payable at Mumbai and purchased out of funds held


in NRE Accounts / FCNR Accounts. Payments may also bemade through Demand Drafts or other instruments permittedunder the Foreign Exchange Management Act.

Indian Rupee Drafts purchased abroad by NRIs/ PIOs will besubject to fulfillment of conditions and/or submission ofdocuments as per operational procedure/ guidelines as maybe issued by the AMC from time to time.

FIIs and International Multilateral Agencies may pay theSubscription amount by direct remittance from abroad orout of their Non Resident Rupee Accounts maintained witha designated bank in India or as may be permitted by law.

All cheques/ drafts should be made out in favour of IDFC TaxSaver (ELSS) Fund-NRI / FII Subscription.

The cheques / drafts should be crossed "Account PayeeOnly". In case Indian Rupee drafts are purchased abroad orfrom FCNR / NRE Account, a certificate from the Bank issuingthe draft confirming the debit shall also be enclosed.

e) Mode of payment on Non-Repatriation basis

In case of NRIs/ Persons of Indian origin applying for Unitson a non-repatriation basis, payments may be made by localCheques or Payorder or Demand Drafts drawn on any bankbranch which is a member of Bankers Clearing House locatedin the Official points of acceptance of transactions where theapplication is accepted, out of Non-Resident Ordinary (NRO)accounts or by way of a debit mandate on their NRO accountwith Standard Chartered Bank or such other banks withwhom the fund has an arrangement from time to time andis approved by RBI in India.

Payments received will be subject to fulfillment of conditionsand/or submission of documents as per the operationalprocedure / guidelines as may be issued by the AMC fromtime to time.

The AMC reserves the right to reject applications received byany mode of payment other than mentioned above.

11. APPLICATION UNDER POWER OFATTORNEY / BODY CORPORATE / REGISTERED SOCIETY/ TRUST / PARTNERSHIP

In case of an application under a Power of Attorney or by alimited company, body corporate, registered society, trust orpartnership, etc., the relevant Power of Attorney or therelevant resolution or authority to make the application asthe case may be, or duly certified copy thereof, along withthe memorandum and articles of association / bye-laws mustbe lodged at the Registrar's Office.

12. JOINT APPLICANTS

In the event an Account has more than one registered owner,the first-named holder (as determined by reference to theoriginal Application Form) shall receive the AccountStatement, all notices and correspondence with respect tothe Account, as well as the proceeds of any redemptionrequests or dividends or other distributions. In addition,such Unitholders shall have the voting rights, as permitted,associated with such Units, as per the applicable guidelines.

Applicants can specify the 'mode of holding' in theApplication Form. An applicant can hold units either 'Singly'or 'Jointly' or on the basis of 'Anyone or Survivor'. In the caseof holding specified as 'Jointly', redemptions and all otherrequests relating to monetary transactions would have to be

signed by all joint holders. However, in cases of holdingspecified as 'Anyone or Survivor', any one of the Unitholderswill have the power to make redemption requests, withoutit being necessary for all the Unitholders to sign. In case ofvalid application received without indicating "Mode ofholding", it will be considered on "Anyone or Survivor" &processed accordingly. However, in all cases, the proceeds ofthe redemption will be paid to the first-named holder.

13. NOMINATION FACILITY

In terms of SEBI Notification dated July 2, 02 Nominationcan be made only by individuals on their on behalf singly orjointly. If the units are held jointly, all joint unit holders willsign the nomination form. No person other than an individualincluding but not limited to a Company, Body Corporate,PSU, AOP, BOI, Society, Trust, Partnership Firm, Karta of HUF,Banks, FIIs and holders of POA can nominate.

The Unit Holder/s can at the time an application is made orby subsequently writing to an official point of acceptance oftransaction, request for a Nomination Form in order tonominate any one person to receive the Units upon his/herdeath subject to the completion of the necessary formalitieseg. Proof of the death of the Unit Holder, signature of thenominee, furnishing proof of guardianship in case thenominee is a minor, execution of Indemnity Bond of or suchother documents including filling up of fresh applicationform, as may be required from the nominee in favour of andto the satisfaction of the Fund, the AMC, or the Trustee.

If the nominee is a minor, then the name and address of theguardian nominee shall be provided. A NRI can be a nomineesubject to the Exchange Control Regulations from time totime.

In terms of SEBI circular dated February 16, 2004, nominationcan also be in favour of the Central Government, StateGovernment, Local authority, any person designated by virtueof his office or a religious charitable trust. The nominee shallnot be a trust (other than a religious or charitable trust),society, body corporate, partnership firm, Karta of HinduUndivided Family or a power of attorney holder.

Nomination in respect of the Units stands rescinded uponthe redemption of Units. Cancellation of nomination can bemade only by those individuals who hold units on their ownbehalf singly or jointly and who made the original nomination.On cancellation of the nomination the nomination shallstand rescinded and the AMC / Fund shall not be under anyobligation to transfer the units in favour of the nominee.

Transfer of Units / payment to the nominee of the sums shallbe valid and effectual against any demand made upon theTrust / AMC and shall discharge the Trust / AMC of all liabilitytowards the estate of the deceased Unit Holder and his / hersuccessors and legal heirs executors and administrators.

If the Fund or the AMC or the Trustee were to incur, sufferor any claim, demand, liabilities, proceedings or actions arefiled or made or initiated against any of them in respect ofor in connection with the nomination, they shall be entitledto be indemnified absolutely for any loss, expenses, costs,and charges that any of them may suffer or incur absolutelyfrom the investor's estate.


14. ACCOUNT STATEMENT / UNIT CERTIFICATES

An Account Statement will be sent by ordinary post to eachUnitholder, stating the number of Units allotted, not laterthan 30 Days from the close of the New Fund Offer Period.The Account Statement shall not be construed as a proof oftitle and is only a computer generated statement indicatingthe details of transactions under the scheme and is a non-transferable document. If the Unitholder so desires, non-transferable Unit certificates will be issued within six weeksof the receipt of request for the certificate. Unit certificatesif issued must be duly discharged by the Unitholder(s) andsurrendered alongwith the request for redemption / switchout or any other transaction of Units covered therein. Also,an Account Statement reflecting the net balance of theUnitholder will be mailed to the Unitholder within 10 daysby ordinary post after every financial transaction is effected.

Allotment of Units and despatch of Account Statements toFIIs will be subject to RBI norms, where applicable.

15. ISSUANCE OF UNITS

Full allotment shall be made to all valid applications receivedduring the New Fund Offer Period. Allotment of units shallbe completed not later than 30 days after the close of theNew Fund Offer Period. It is to be noted that the MF shallallot units in respect of all valid applications, not later thanon March 31st, in the Financial Year during which the Schemeis launched.

16. REFUNDS

In accordance with the Regulations, if the Scheme fails tocollect the minimum subscription amount, the Fund shall beliable to refund the money to the applicants.

In addition to the above, refund of subscription money toapplicants whose applications are invalid for any reasonwhatsoever will commence immediately after the allotmentprocess is completed. Refunds will be completed within sixweeks of the close of the New Fund Offer Period. If the Fundrefunds the amount after six weeks, interest @ 15% perannum shall be paid by the AMC. Refund orders will bemarked "Account Payee only" and drawn in the name of theapplicant in the case of sole applicant and in the name of thefirst applicant in all other cases. All refund cheques will besent by Registered Post A.D.

As per the directives issued by SEBI, it is mandatory forapplicants to mention their bank account numbers in theirapplications for purchase or redemption of Units.

How to Purchase ?

The application forms for the purchase of Units of the Schemewill be available at the office of the AMC, the Offical pointsof acceptance of transactions and the office of the Registrar.Investors can purchase Units by completing an ApplicationForm.

The Fund shall under normal circumstances endeavour tomail an Account Statement

17. LISTING AND TRANSFER OF UNITS

The Units of the Scheme are presently not proposed to belisted on any stock exchange and no transfer facility isprovided. However, the Fund may at its sole discretion list theUnits under the Scheme on one or more Stock Exchanges ata later date, and thereupon the Fund will make a suitablepublic announcement to that effect.

The Fund, after the NFO Period, will redeem units only afterthree years from the date of allotment of units proposed tobe redeem by the Unitholder.

If a person becomes a holder of the Units consequent tooperation of law, or upon enforcement of a pledge, theFund will, subject to production of satisfactory evidence,effect the transfer, if the transferee is otherwise eligible tohold the Units. Similarly, in cases of transfers taking placeconsequent to death, insolvency etc., the transferee's namewill be recorded by the Fund subject to production ofsatisfactory evidence.

In the event of death of an individual investor, Karta of HUF,members of specified Association of Persons (AOP) / Body ofIndividuals (BOI) as per ELSS Notification, the nominee orlegal heir as the case may be, shall be able to withdraw theinvestment only after completion of one year from the dateof allotment of units to the investor or anytime therafter.

18. REDEMPTION OF UNITS

Units subscribed under this Scheme shall have a lock-inperiod of three years from the date of allotment of relevantinvestment. Such units can be redeemed / switched out onlyafter the expiry of lock-in period of three years. Thereafterthe Units can be redeemed (i.e., sold back to the Fund), atthe Applicable NAV (hereinafter defined) on relevant businessdays.

The lock in period may be changed prospectively if sopermitted by the applicable regulations (SEBI Regulationsand the ELSS guidelines).

A Unitholder may request redemption of a specified amountor a specified number of Units, (subject to the minimumredemption amount which is presently in multiples of Rs.500/-) the number of Units specified will be considered fordeciding the redemption amount. If only the redemptionamount is specified by the Unitholder, the Fund will dividethe redemption amount so specified by the Applicable NAVbased price to arrive at the number of Units.

i) Redemption Price

The Redemption Price of the Units will be based on theApplicable NAV. If the Trustee does not prescribe any exitload, the Redemption Price would be :

Redemption Price = Applicable NAV

Once the Trustee prescribes an exit load, the Redemptionprice would be :

Redemption Price = Applicable NAV* (1-Exit Load, if any)

Eg.: If the applicable NAV is Rs. 10.00; exit load is 2% thenredemption price will be Rs. 9.80.

Investors may note that the AMC / Trustee has a right toprescribe or modify the load structure and to introduce anexit load subject to the Regulations.

ii) Applicable NAV for Redemptions including switch outs(subject to lock-in)

Repurchase facility is available on all business days. (oncompletion of lock in period of 3 years from the date ofallotment).

In respect of valid applications received upto 3 p.m. by theMutual Fund, same day's closing NAV shall be applicable.


In respect of valid applications received after 3 p.m. by theMutual Fund, the closing NAV of the next Business Day shallbe applicable.

The fund shall under normal circumstances endeavour todespatch redemption proceeds within three Business Days(T+3) from the date of acceptance of redemption requests atthe official points of transactions but as per Regulationsunder no circumstances, later than 10 (ten) Business Daysfrom the date of acceptance of the request.

iii) How to Redeem ?

The redemption requests can be made on the transactionslip for redemption available at the official points ofacceptance of transactions at the offices of the Registrar and/or the offices of the AMC. The redemption request can bemade at any of official points of acceptance of transactionsas listed in this Offer Document or can be sent by mail to theRegistrar, Computer Age Management Services Pvt. Ltd., A& B, Lakshmi Bhawan, 609, Anna Salai, Chennai - 600 006.

Investors may please note that for redemption requestsreceived at the offices of the AMC, the Applicable NAVwould be dependent on the time at which the applicationis accepted at the official point of acceptance of transactionsor at the office of the registrar.

In case the Units are standing in the names of more than oneUnitholder, where mode of holding is specified as 'Jointly',redemption requests will have to be signed by all joint holders.However, in cases of holding specified as 'Anyone or Survivor',any one of the Unitholders will have the power to makeredemption requests, without it being necessary for all theUnitholders to sign. However, in all cases, the proceeds ofthe redemption will be paid only to the first-named holder.

The Unitholder may either request for mailing of theredemption proceeds to his / her address or collection of thesame from the official point of acceptance of transactions.

iv) Payment of Proceeds

All redemption requests received prior to the cut-off time asdefined above at an Official point of acceptance oftransactions or the Office of the Registrar on any BusinessDay will be considered accepted on that Business Day, subjectto the redemption request being complete in all respects,and will be priced on the basis of the Applicable NAV (subjectto the applicable load). Where an application is received afterthe cut-off time, as above, then the request will be deemedto have been received on the next Business Day. Please seepara on 'Right to Limit Redemptions' and 'Suspension ofSale and Redemption of Units'.

The redemption cheque will be issued in favour of the sole/ first Unitholder's registered name and bank account numberand will be sent to the registered address of the sole / firstholder as indicated in the original Application Form. Theredemption cheque will be payable at par at all the placeswhere the Official point of acceptance of transactions arelocated. The bank charges for collection of cheques at allother places will be borne by the Unitholder.

Direct Credit Facility for account holders of StandardChartered Bank or such other Banks with whom the Fundwould have an arrangement from time to time:

Unitholders having a bank account with Standard CharteredBank or such other Banks with whom the Fund would have

an arrangement from time to time may avail of the facility ofdirect credit to their account for sale of their units of theScheme.

As per the directives issued by SEBI, it is mandatory forapplicants to mention their bank account numbers and PAN/ GIR number in their applications for purchase or redemptionof Units. Applications without this information will beconsidered incomplete and will not be accepted.

A fresh Account Statement will be sent by the Registrar tothe redeeming investors, indicating the new balance to thecredit in the Account.

The Fund may close a Unitholder's account if, as aconsequence of redemption, the balance falls below Rs.500/-.

v) Redemption by NRIs / FIIs

Units held by an NRI investor and FIIs may be redeemed bysuch an investor in accordance with the procedure describedabove and subject to any procedures laid down by RBI fromtime to time.

vi) Effect of Redemptions

The Unit capital and Reserves of the Scheme will standreduced by an amount equivalent to the product of thenumber of Units redeemed and the Applicable NAV as on thedate of redemption.

vii) Fractional Units

Since a request for redemption can be made in Rupee amountsand not in terms of number of Units of the Scheme, aninvestor may be left with Fractional Units. Fractional Unitswill be computed and accounted for up to three decimalplaces. However, Fractional Units will in no way affect theinvestor's ability to redeem the Units, either in part or in fullstanding to the Unitholder's credit.

viii) Right to Limit Redemptions

The Trustee may, in the general interest of the Unitholdersof the Scheme offered under this Offer Document andkeeping in view the unforeseen circumstances / unusualmarket conditions, limit the total number of Units whichmay be redeemed on any Business Day to 5% of the totalnumber of Units then in issue, or such other percentage asthe Trustee may determine.

Any Units, which by virtue of these limitations are notredeemed on a particular Business Day, will be carried forwardfor redemption to the next Business Day, in order of receipt.Redemptions so carried forward will be priced on the basisof the Applicable NAV (subject to the prevailing load) of theBusiness Day on which redemption is made. Under suchcircumstances, to the extent multiple redemption requestsare received at the same time on a single Business Day,redemptions will be made on pro-rata basis, based on thesize of each redemption request, the balance amount beingcarried forward for redemption to the next Business Day(s).

ix) Suspension of Redemption of Units

The Mutual Fund at its sole discretion reserves the right towithdraw repurchase or switching out of Units (includingany one of the plans / options of the scheme) temporarily orindefinitely, if in the opinion of the AMC the general marketconditions are not favourable and/or suitable investment


opportunities are not available for deployment of funds.However, the suspension of repurchase / switching eithertemporarily or indefinitely will be with the approval of theAMC & Trustee. The AMC reserves the right in its solediscretion to withdraw the facility of switching out of thescheme (including any one / more option(s) of the scheme),temporarily or indefinitely. Further, the AMC & Trustee mayalso decide to temporarily suspend determination of NAV ofthe Scheme / Option(s) offered under this Document, andconsequently redemption of Units, declaration anddistribution of dividend in any of the following events:

1. When one or more stock exchanges or markets, which providebasis for valuation for a substantial portion of the assets ofthe Scheme are closed otherwise than for ordinary holidays.

2. When, as a result of political, economic or monetary eventsor any circumstances outside the control of the Trustee andthe AMC, the disposal of the assets of the Scheme is notreasonable, or would not reasonably be practicable withoutbeing detrimental to the interests of the Unitholders.

3. In the event of breakdown in the means of communicationused for the valuation of investments of the Scheme, withoutwhich the value of the securities of the Scheme cannot beaccurately calculated.

4. During periods of extreme volatility of markets, which in theopinion of the AMC are prejudicial to the interests of theUnitholders of the Scheme.

5. In case of natural calamities, strikes, riots and bandhs.

6. In the event of any force majeure or disaster that affects thenormal functioning of the AMC or the Registrar.

7. During the period of Book Closure.

8. If so directed by SEBI.

In the above eventualities, the time limits indicated above,for processing of requests for redemption of Units and/ordistribution of dividend will not be applicable.

The suspension or restriction of repurchase/redemptionfacility under the scheme shall be made applicable only afterthe approval of the Board of Directors of the AssetManagement Company and the Trustee and the details ofthe circumstances and justification for the proposed actionshall be informed to SEBI in advance.

19. MANDATORY QUOTING OF BANK MANDATE AND PANNUMBER BY INVESTORS

Pursuant to SEBI Circular No. SEBI/IMD/CIR No. 6/4213/04dated March 1, 2004 it is mandatory for investors to mentiontheir bank account number in their application/request forredemption. As per SEBI Circular No. MRD/DoP/Cir- 05/2007dated April 27, 2007, it is now mandatory that PermanentAccount Number (PAN) issued by the Income Tax Departmentwould be the sole identification number for all participantstransacting in the securities market, irrespective of the amountof transaction. Accordingly investors will be required to furnisha copy of PAN together with request for fresh purchases,additional purchases and systematic investments registration(SIP). Application Forms without these information anddocuments will be considered incomplete and are liable tobe rejected without any reference to the investors. The

procedure implemented by the AMC and the decisionstaken by the AMC in this regard shall be deemed final.

20. PHONE TRANSACT

All individual investors in the scheme / plan applying on"Sole" or "Anyone or Survivor" basis in their own capacityshall be eligible to avail of phonetransact facilities forpermitted transactions inter alia on the following terms andconditions :

1. "Terms and Conditions" mean the terms and conditionsset out below by which the Facility shall be used / availed bythe Unit holder and shall include all modifications andsupplements made by AMC thereto from time to time.

2. In order to access the Facility, the Unit holder shall berequired to give Basic Identification Data (BID) to IDFC AssetManagement Company Pvt. Ltd. (AMC) based on which theAMC may allow access to the Facility. The BID may beenhanced / modified by the AMC from time to time. Theunitholder must provide additional BID as & when requiredby the AMC.

3. The AMC has a right to ask such information from theavailable data of the Unit holder before allowing him / heraccess to avail of the Facility. If for any reason, the AMC isnot satisfied with the replies of the Unit holder, the AMChas at its sole discretion the right of refusing access withoutassigning any reasons to the Unit holder.

4. It is clarified that the Facility is only with a view toaccommodate / facilitate the Unit holder and offered at thesole discretion of the AMC. The AMC is not bound and/orobliged in any ways to give access to Facility to Unit holder.

5. AMC may periodically provide the Unit holder with a writtenstatement of all the transactions made by the Unit holderon a regular / as & when basis, as is being currently done.

6. The Unit holder shall check his / her account records carefullyand promptly. If the Unit holder believes that there has beena mistake in any transaction using the Facility, or thatunauthorised transaction has been effected, the Unit holdershall notify AMC immediately. If the Unit holder defaults inintimating the alleged discrepancies in the statement withina period of thirty days of receipt of the statements, hewaives all his rights to raise the same in favour of the AMC,unless the discrepancy / error is apparent on the face of it.

7. By opting for the facility the Unit holder hereby irrevocablyauthorises and instructs the AMC to act as his / her agentand to do all such acts as AMC may find necessary toprovide the Facility.

8. The Unit holder shall not disclose / divulge the BID to anyperson and shall ensure that no person gains access to it.

9. The Unit holder shall at all times be bound by anymodifications and/or variations made to these Terms andConditions by the AMC at their sole discretion and withoutnotice to them.


10. The Unit holder agrees and confirms that the AMC has theright to ask the Unit holder for an oral or written confirmationof any transaction request using the Facility and/or anyadditional information regarding the Account of the Unitholder.

11. The Unit holder agrees and confirms that the AMC may atits sole discretion suspend the Facility in whole or in part atany time without prior notice if (i) the Unit holder does notcomply with any of the Terms and Conditions or anymodifications thereof, (ii) the AMC has the reason to believethat such processing is not in the interest of the Unit holderor is contrary to Regulation / Offer Documents / amendmentsto the Offer Documents and (iii) otherwise at the solediscretion of the AMC in cases amongst when the marketsare volatile or when there are major disturbances in themarket, economy, country, etc.

12. The Unit holder shall not assign any right or interest ordelegate any obligation arising herein.

13. The Unit holder agrees that it shall be his/her soleresponsibility to ensure protection and confidentiality of BIDand any disclosures thereof shall be entirely at the Unitholder's risk.

14. The Unit holder shall take responsibility for all thetransactions conducted by using the Facility and will abideby the record of transactions generated by the AMC. Further,the Unit Holder confirms that such records generated by theAMC shall be conclusive proof and binding for all purposesand may be used as evidence in any proceedings andunconditionally waives all objections in this behalf.

15. The Unit holder shall, in case of accounts opened in thenames of minors and being the natural guardian of suchminor, give all instructions relating to the operation of theaccount and shall not, at any point of time disclose the BIDto the minor / any other person.

16. AMC shall be notified immediately if a record of the BID, islost or stolen or if the Unit holder is aware or suspectsanother person knows or has used his / her BID withoutauthority.

17. The Unit holder agrees and acknowledges that anytransaction, undertaken using the Unit holder's BID shall bedeemed to be that of the Unit holder. If any third party gainsaccess to the Facility, the Unit holder agrees to indemnify theAMC and its directors, employees, agents and representativesagainst any liability, costs, or damages arising out of claimsor suits by such other third parties based upon or related tosuch access or use.

18. The Unit holder agrees that use of the Facility will be deemedacceptance of the Terms and Conditions and the Unit holderwill unequivocally be bound by these Terms and Conditions.

19. Indemnities in favour of the IDFCAMC :

The Unit holder shall not hold the AMC liable for thefollowing:

i) For any transaction using the Facilities carried out in goodfaith by the AMC on instructions of the Unit holder.

ii) For the unauthorized usage / unauthorised transactionsconducted by using the Facility.

iii) For any loss or damage incurred or suffered by the Unitholder due to any error, defect, failure or interruption in theprovision of the Facility arising from or caused by any reasonwhatsoever.

iv) For any negligence / mistake or misconduct by the Unitholder and/or for any breach or non-compliance by the Unitholder of the rules / terms and conditions stated in thisAgreement.

v) For accepting instructions given by any one of the Unitholder in case of joint account/s having mode of operationsas "Either or Survivor" or "anyone or survivor".

vi) For not verifying the identity of the person giving thetelephone instructions in the Unit holder name.

vii) For not carrying out any such instructions where the AMChas reason to believe (which decision of the AMC the Unitholder shall not question or dispute) that the instructionsgiven are not genuine or are otherwise improper, unclear,vague or raise a doubt.

20. The AMC may assign any of its rights under these terms andconditions without the consent of the Unit holder to any ofthe AMC's group companies, subsidiary or AssociateCompany or such other company which the AMC deemssuitable for provision of this Facility.

All other investors in the scheme will be eligible to avail ofphonebanking facilities for permitted transactions (as may bedecided by the AMC from time to time) by entering into anagreement with the AMC / Mutual Fund or by following suchother process as may be required by the AMC from time to time.Requests like change in bank mandate, change of nomination,change in mode of holding, change of address or such otherrequests as the AMC may decide from time to time will not bepermitted using the phonebanking facility. The AMC / MutualFund reserves the right to modify the terms and conditions of theservice from time to time as may be deemed expedient or necessary.

21. OFFICIAL POINTS OF ACCEPTANCE OF TRANSACTIONS

All applications for redemption / switch out of units should besubmitted by investors at the Official Points of Acceptance ofTransactions at the office of the registrar and/or AMC as may benotified from time to time. For details please refer to theApplication Form and/or website of the Mutual Fund atwww.idfcmf.com)


VI. LOADS AND RECURRING EXPENSES

A. LOAD STRUCTURE OF THESCHEME

NFO : The following Exit Loads will be applicable to aninvestor purchasing Units during the NFO :

Exit Load : Load (% of Applicable NAV)

For any redemption / Nilswitch out

The Trustee retains the right to change / impose an Exit Load/ CDSC, subject to the provisions below.

The AMC will endeavour to do the following :

1. An addendum will be attached to the Offer Document andwill be circulated to brokers/distributors so that the same canbe attached to all Offer Documents and Abridged OfferDocuments in stock. Further, the addendum will be sentalong with a newsletter to Unitholders immediately after thechanges.

2. An arrangement will be made to display the changes /modifications in the Offer Document in the form of a noticein all the points of acceptance of transactions and distributors'/ brokers' offices.

3. The introduction of the exit load / Contingent Deferred SalesCharge (CDSC) along with the details will be stamped in theacknowledgement slip issued to the investors on submissionof the application form and will also be disclosed in thestatement of accounts issued after the introduction ofsuch load / CDSC.

The repurchase price of the units as per current SEBIregulations shall not be lower than 95% of the ApplicableNAV. The fund also has the right to charge a different load andtherefore a different repurchase price for investors who wantto switch over to other eligible schemes of the fund.

Under the Scheme, the Trustee reserves the right to introducea Load and change the Load structure if it so deems fit in theinterest of smooth and efficient functioning of the Fund. ALoad Structure if introduced by the Trustee would compriseof an exit load or any other load as may be permissible underthe Regulations.

All Loads / CDSC are intended to enable the AMC to recoverexpenses incurred for promotion or distribution and sales ofthe Units of the Scheme. All Loads including CDSC will beretained in the Scheme in a separate account and will beutilised to meet the distribution and marketing expenses. Anysurplus amounts in this account may be credited to the Schemewhenever considered appropriate by the AMC.

B. FEES AND EXPENSES OF THE SCHEMES

As per the provisions of the Regulations, read with theamendments thereto, the following fees and expenseswill be charged to the Scheme :

Recurring expenses will not exceed the following limits perannum :

i) Maximum Recurring Expenses :

Average daily Maximum, as anet assets % of Average daily net assets

First 100 Crores 2.50%

Next 300 Crores 2.25%

Next 300 Crores 2.00%

Balance Assets 1.75%

Maximum Management Fee to be charged by the AMC:

Average daily Maximum, as a % of Averagenet assets daily net assets

First 100 Crores 1.25%

Balance Assets 1.00%

However, an additional Management Fee of up to 1% maybe charged in case of a No-Load scheme.

New Fund Offer Expenses

As per the regulations, the total New Fund Offer Expenseswhich include broker / agent's commission, advertising,publicity, marketing, registrar expenses, etc., chargeable to ascheme are subject to a maximum of 6% of the initial resourcesraised during the NFO Period. Any expense in excess of 6%shall be borne by the AMC.

New Fund Offer EstimatedExpenses % of amount

collected

Brokers' / Agents' 2.25%commissions

Marketing and 3.35%Advertising

Printing and Mailing 0.35%

Registrar Expenses 0.15%

Miscellaneous 0.25%Expenses

Total 6.00%

The above estimates are made based on the minimumsubscription (target) amount of Rs. 1 Crore. The above estimatesare subject to change as per actual amounts mobilised.

The New Fund Offer Expenses to the extent borne by theScheme will be amortised over a period of ten years from thedate of allotment.

The New Fund Offer Expenses in excess of the above limitsshall be borne by the AMC / Sponsor / Trustee. The AMC maymodify the amortisation of the New Fund Offer Expenses atany point of time in line with the SEBI regulations.

For every Rs. 100 invested by the investor it is estimated thatRs. 94 will be available for investment.


An illustration is provided for clarification of the same :

Face Value ofUnits (Rs. Per Unit) A 10

Issue Price B 10.

Maximum NFO C 0.60expenses as perSEBI Regulations(A*6%)

Total estimated D 0.60NFO Expense

Estimated NFO E 0.60expenses to becharged to theScheme

Estimated amount F 9.40available forinvestment for everyRs 10 contributedby investor (B-F)

Amortisation of G 0.00016NFO expenses perday (Rs. Per unit)(0.60/(365*10)

Balance NFO H 0.59984expenses to becarried forward (E-G)

NAV on day 1 (B-G) I 9.99984

Redemption / repurchase Price would be Applicable NAV* (1-Exit Load, if any)

For illustrating (in the example above) the impact on NAV, noaccruals, appreciation or depreciation on Investments havebeen assumed from the time of New Fund Offer till the dateof computation of NAV.

As per the SEBI regulations, in case of an investor exiting thescheme before amortisation is completed, the AMC shallredeem the units only after recovering the balanceproportionate unamortised issue expenses.

An illustration is provided for clarification of the same:

Estimated NFO expenses 0.60(% of amount collected in the NFO)

Date of allotment (say) 31.3.2007

Total No. of days for 3650amortisation (say) (being 10 years)

NAV at the time of Redemption by 12.5000an Investor (say) on April 5, 2010

Total no. of days from 1100the date of allotment (say)

Total amortised expenses 0.1808upto April 5, 2010 (being0.6000*1100/3650)

Total Unamortised 0.4192Expense as on April 5,2010 (0.6000-0.1808)

Amount Payable to the exiting investor on redemption

= [Number of Units * {Applicable NAV * (1-Exit Load)}] -Balance Unamortised Expenses pertaining to exiting investors

= [1 * {12.5000* (1-0.00)}] - 0.4192

= [1*{12.5000*1}] - 0.4192

= [1 *12.5000] - 0. 4192

Amount payable per unit = 12.0808

* Net Asset Value (NAV) of Rs. 12.5000 on April 5, 2010 isarrived at assuming that the NAV of the scheme appreciateddue to accruals and other income, appreciation in Market /Fair Value of investments etc.


b. For Past Schemes :The details of the Schemes launched during April 2006 to March 2008 and the New fund offer expenses charged there under are as follows :

Name of the Scheme Date of launch New Fund Offer Expenses charged to the Scheme(as per the disclosure made in the offer document)

IDFC-EEF @@@@ April 19, 2006 4.46SCFMP -5 @@@@@ June 6, 2006 0.0033IDFC-FMP - 6 @@@@@@ July 3, 2006 1.0060IDFC-LMP~ March 23, 2006 0.0092SCFMP - 7~~ June 20, 2006 0.0046SCFMP - 8~~~ June 26, 2006 0.0308IDFC-FMP - 9~~~~ September 21, 2006 0.0036SCFMP - QS1< November 6, 2006 0.0018SCFMP - YS1<< October 13, 2006 0.0640GFMPP - III<<< September 14, 2006 0.7227SCFMP-QS2<<<<< December 22, 2006 0.0009SCFMP-QS3<<<<<< January 16, 2007 0.0006SCFMP-QS4> February 3, 2007 0.0011SCFMP-QS5>> February 19, 2007 0.0009SCFMP-QS7>>> March 1, 2007 0.0006IDFC-TS (ELSS) F >>>> November 20, 2006 6.0000SCFMP-10>>>>>> December 18, 2006 0.1040SCFMP-HYS2+ March 20, 2007 0.0124SCFMP-QS6++ March 22, 2007 0.0010SCFMP-QS8+++ April 04, 2007 0.0037SCFMP-QS9++++ April 13, 2007 0.0009SCFMP-QS10+++++ April 24, 2007 0.0021SCFMP-QS11++++++ May 03, 2007 0.0014SCFMP-QS13+++++++ May 17, 2007 0.0036SCFMP-QS14++++++++ June 18, 2007 0.0045SCFMP-HYS 1 ? March 22, 2007 0.0239IDFC-FMP-YS 2 } February 19, 2007 0.4922IDFC-FMP-YS 3 }} March 12, 2007 0.0887IDFC-FMP-YS 4 }}} March 12, 2007 0.5072IDFC-FMP-YS 5 }}}} March 22, 2007 0.0504IDFC-FMP-YS 6 }}}}} March 21, 2007 0.2436IDFC-FMP-YS 7 }}}}}} March 23, 2007 0.2022IDFC-FMP-YS 8 }}}}}}} April 17, 2007 0.2562IDFC-FMP-YS 9 }}}}}}}} May 09, 2007 0.5046IDFC-FMP-YS 11 }}}}}}}}} May 31, 2007 0.5505SCFMP-QS15?? August 24, 2007 0.0093IDFC-FMP-YS10??? August 24, 2007 0.1026IDFC-FMP-YS12???? September 12, 2007 0.5974SCFMP-QS19????? November 15, 2007 0.0011IDFC-FMAF-SI?????? November 16, 2007 0.9424IDFC-FMP-EMS1??????? November16, 2007 0.7846IDFC-FMP-QS25$ February 14, 2008 0.0016IDFC-FMP-QS26$$ February 22, 2008 0.0027IDFC-FMP-QS27$$$ March 5, 2008 0.0071IDFC-FMP-QS28$$$$ March 24, 2008 0.0022IDFC-FMP-YS17$$$$$ February 25, 2008 0.0032IDFC-FMP-YS19$$$$$$ March 7, 2008 0.0020IDFC-FMP-YS20$$$$$$ March 24, 2008 0.0017IDFC-FMP-YS21$$$$$$$ March 28, 2008 0.036@@@@ IDFC Enterprise Equity Fund., @@@@@ Standard Chartered Fixed Maturity 5th Plan, @@@@@@ IDFC Fixed Maturity 6th Plan,~ IDFCLiquidity Manager Plus, ~~ Standard Chartered Fixed Maturity 7th Plan, ~~~ Standard Chartered Fixed Maturity 8th Plan, ~~~~IDFC Fixed Maturity9th Plan, <Standard Chartered Fixed Maturity Plan - Quarterly Series 1, <<Standard Chartered Fixed Maturity Plan - Yearly Series 1, <<<GrindlaysFixed Maturity Plus Plan - III, <<<<< Standard Chartered Fixed Maturity Plan-Quarterly Series 2, <<<<<< Standard Chartered Fixed Maturity Plan-Quarterly Series 3, > Standard Chartered Fixed Maturity Plan-Quarterly Series 4, >> Standard Chartered Fixed Maturity Plan-Quarterly Series 5,>>> Standard Chartered Fixed Maturity Plan-Quarterly Series 7, >>>> IDFC Tax Saver (ELSS) Fund, >>>>>> Standard Chartered Fixed Maturity10th Plan, +Standard Chartered Fixed Maturity Plan - Half Yearly Series 2, ++Standard Chartered Fixed Maturity Plan - Quarterly Series 6,+++Standard Chartered Fixed Maturity Plan - Quarterly Series 8, ++++Standard Chartered Fixed Maturity Plan - Quarterly Series 9, +++++StandardChartered Fixed Maturity Plan - Quarterly Series 10, ++++++Standard Chartered Fixed Maturity Plan - Quarterly Series 11, +++++++StandardChartered Fixed Maturity Plan - Quarterly Series 13, ++++++++Standard Chartered Fixed Maturity Plan - Quarterly Series 14, ? StandardChartered Fixed Maturity Plan - Half Yearly Series 1, } IDFC Fixed Maturity Plan - Yearly Series 2, }} IDFC Fixed Maturity Plan - Yearly Series 3, }}}IDFCFixed Maturity Plan - Yearly Series 4, }}}}IDFC Fixed Maturity Plan - Yearly Series 5, }}}}}IDFC Fixed Maturity Plan - Yearly Series 6, }}}}}}IDFC FixedMaturity Plan - Yearly Series 7, }}}}}}}IDFC Fixed Maturity Plan - Yearly Series 8, }}}}}}}}IDFC Fixed Maturity Plan - Yearly Series 9, }}}}}}}}}IDFC FixedMaturity Plan - Yearly Series 11, ?? Standard Chartered Fixed Maturity Plan-Quarterly Series 15, ??? IDFC Fixed Maturity Plan - Yearly Series 10,???? IDFC Fixed Maturity Plan - Yearly Series 12, ????? Standard Chartered Fixed Maturity Plan - Quarterly Series 19, ?????? IDFC Fixed MaturityArbitrage Fund - Series I, ??????? IDFC Fixed Maturity Plan - Eighteen Months Series 1, $ IDFC Fixed Maturity Plan - Quarterly Series 25, $$ IDFC FixedMaturity Plan - Quarterly Series 26, $$$ IDFC Fixed Maturity Plan - Quarterly Series 27, $$$$ IDFC Fixed Maturity Plan - Quarterly Series 28, $$$$$IDFC Fixed Maturity Plan - Yearly Series 17, $$$$$$ IDFC Fixed Maturity Plan - Yearly Series 19, $$$$$$$ IDFC Fixed Maturity Plan - Yearly Series 20,$$$$$$$$ IDFC Fixed Maturity Plan - Yearly Series 21.


FEES & EXPENSES OF THE EXISTING SCHEMES

New Fund Offer expenses - Comparison of Estimated to Actuals

Description IDFC Enterprise Equity Fund*

Estimated -% to Target Amount Actuals- % to Subscription

Advertising, Marketing 3.35 0.5334Printing and Distribution expenses

Collection and Registrar 0.15 0.0495

Bank charges & other expenses 0.25 0.0105

Selling Commissions 2.25 3.8618

Total 6.00 4.46

Target Amount/Amount Mobilised (Rs. Cr.) 1 1434.29

* Plan A only

Description Standard Chartered Fixed Maturity 5th Plan*





Selling Commissions 2.25 -

Total 6.00 0.0033


Description IDFC Liquidity Manager Plus






Total 6.00 0.0092


Description Standard Chartered Fixed Maturity 7th Plan






Total 6 0.0046


Description Standard Chartered Fixed Maturity 8th Plan






Total 6 0.0308Target Amount/Amount Mobilised (Rs. Cr.) 1 28.65


Description IDFC Fixed Maturity 9th Plan


Advertising, Marketing 3.35 0.0008

Printing and Distribution expenses




Total 6 0.0036


Description Standard Chartered Fixed Maturity Plan - Quarterly Series 1





Bank charges & other expenses 0.01 -


Total 0.25 0.0018


Description Standard Chartered Fixed Maturity Plan -Yearly Series 1







Total 2 0.0640


Description Standard Chartered Fixed Maturity Plus Plan - III







Total 6 0.7227

Target Amount/Amount Mobilised (Rs. Cr.) 1 - Plan A & Plan B 46.43 - Plan A, 12.74 - Plan B

Description IDFC Fixed Maturity 6th Plan*


Advertising, MarketingPrinting 3.35 0.0079

and Distribution expenses




Total 6 1.0060



Description Standard Chartered Fixed MaturityPlan – Quarterly Series 2






Total 0.25 0.0009








Total 0.25 0.0006








Total 0.25 0.0011








Total 0.25 0.0009


Description Standard Chartered FixedMaturity Plan – Quarterly Series 7






Total 0.25 0.0006



Description Standard Chartered Fixed MaturityPlan – Half Yearly Series 2






Total 0.25 0.0124


Description Standard Chartered Fixed Maturity10th Plan






Total 2 0.1040


Description Standard Chartered Fixed Maturity Plan– Quarterly Series 6







Total 0.25 0.0010



Estimated -% to Target Amount Actuals- % to SubscriptionAdvertising, Marketing 0.10 0.0008





Total 0.25 0.0037









Total 0.25 0.0009Target Amount/Amount Mobilised (Rs. Cr.) 1 550.87









Total 0.25 0.0021


Description Standard Chartered Fixed Maturity Plan

– Quarterly Series 11







Total 0.25 0.0014










Total 0.25 0.0036










Total 0.25 0.0045



Description Standard Chartered Fixed Maturity Plan– Half Yearly Series 1







Total 0.25 0.0239


Description IDFC Fixed Maturity Plan–Yearly Series 2







Total 2 0.4922









Total 2 0.0887









Total 2 0.5072









Total 2 0.0504




Estimated -% to Target Amount Actuals- % to SubscriptionAdvertising, Marketing Printing and Distribution expenses 0.75 0.0021Collection and Registrar 0.15 0.0039Bank charges & other expenses 0.10 0.0017Selling Commissions 1.00 0.2359Total 2 0.2436Target Amount/Amount Mobilised (Rs. Cr.) 1 71.56






Estimated -% to Target Amount Actuals- % to SubscriptionAdvertising, Marketing 0.75 0.0015Printing and Distribution expensesCollection and Registrar 0.15 0.0027Bank charges & other expenses 0.10 0.0019Selling Commissions 1.00 0.2500Total 2 0.2562Target Amount/Amount Mobilised (Rs. Cr.) 1 102.81

Description IDFC Fixed Maturity Plan –Yearly Series 11*

Estimated -% to Target Amount Actuals- % to SubscriptionAdvertising, Marketing 0.75 0.0132Printing and Distribution expensesCollection and Registrar 0.15 0.0243Bank charges & other expenses 0.10 0.0130Selling Commissions 1.00 0.5000Total 2 0.5505Target Amount/Amount Mobilised (Rs. Cr.) 1 23.09* Both Plan A & B are put togetherDescription IDFC Tax Saver (ELSS) Fund

Estimated -% to Target Amount Actuals- % to SubscriptionAdvertising, Marketing And Printing 3.35 2.3007Collection and Registrar 0.15 -Bank charges & other expenses 0.25 0.0305Selling Commissions 2.25 3.6688Total 6.00 6.00Target Amount/Amount Mobilised (Rs. Cr.) 1 59.60

This table details the actual expenses borne by the scheme. Actual expenses in excess of 6% have been borne by the AMC. As theamount mobilized in the scheme was not very large, actual expenses as a percentage of amount mobilized exceeded 6%.


Description Standard Chartered Fixed MaturityPlan - Quarterly Series 15

Estimated -% to Target Amount Actuals- % to SubscriptionAdvertising, Marketing 0.10 0.0022Printing and Distribution expenses




Total 0.25 0.0093


Description IDFC Fixed MaturityPlan - Yearly Series 10

Estimated -% to Target Amount Actuals- % to SubscriptionAdvertising, Marketing 0.75 0.0006Printing and Distribution expensesCollection and Registrar 0.15 0.0010Bank charges & other expenses 0.10 0.1000Selling Commissions 1.00 0.1000Total 2 0.1026Target Amount/Amount Mobilised (Rs. Cr.) 1 270.846

Description IDFC Fixed Maturity Plan –Yearly Series 12 – Plan A

Estimated -% to Target Amount Actuals - % to SubscriptionAdvertising, Marketing 0.75 0.0258Printing and Distribution expenses


Other expenses 0.10 0.0254

Commission Charges 1.00 0.300

Total 2 0.3987


Description IDFC Fixed Maturity Plan –Yearly Series 12 – Plan B

Estimated -% to Target Amount Actuals - % to Subscription




Bank Charges and Other Expenses 0.10 0.0254

Commission Charges 1.00 0.1000

Total 2 0.1987


Description Standard Chartered Fixed Maturity Plan –Quarterly Series 19

Estimated -% to Target Amount Actuals- % to SubscriptionAdvertising, Marketing 0.10 0.0003Printing and Distribution expenses




Total 0.25 0.0011



Description IDFC Fixed MaturityArbitrage Fund – Series I (SCFMAF-I)*


Printing and Distribution expenses 0.55 0.0274




Total 1.50 1.3424


*Both Pan A & B are put together

Description IDFC Fixed Maturity Plan –Eighteen Months Series I (SCFMP-EMS 1)*




Other expenses 0.10 0.0502

Broker/Agents Commission 1.00 0.60

Total 2.00 0.7846


*Both Plan A & B are put together

Description IDFC Fixed Maturity Plan -Quarterly Series 25 (SCFMP-QS25) #





Total 0.12 0.0016


# NFO Expenses were borne by the AMC






Total 0.12 0.0027









Total 0.12 0.0071








Total 0.12 0.0022



Description IDFC FixedMaturity Plan -Yearly Series 17#

Estimated -% to Target Amount Actuals*- % to Subscription





Total 2 0.0032


* Both Pan A & B are put _together# NFO Expenses were borne by the AMCIDFC

IDFC FixedMaturity Plan -Yearly Series 19 #






Total 2 0.0020

Target Amount / Amount Mobilised (Rs. Cr.) 1 279.45

* Both Pan A & B are put _together



Description IDFC Fixed MaturityPlan -Yearly Series 20#






Total 2 0.0017


* Both Pan A & B are put _together# NFO Expenses were borne by the AMC

Description IDFC FixedMaturity Plan -Yearly Series 21#






Total 2 0.036


* Both Pan A & B are put _together# NFO Expenses were borne by the AMCNew Fund Offer Expenses disclosed in the Offer Document at the time of launch are estimates and may be generally based on estimated targetamounts. The actual expenses (in absolute terms and as a % of amount mobilised )may vary, based on the amounts mobilized in the schemes.

2. Estimated Recurring Expenses

(% per annum of average net assets)

Nature of Expense % p.a. of Average dailynet assets

Investment Management 1.2500%and Advisory Fee

Trustee Fees and expenses 0.0250%

Custodian Fees 0.2000%

Registrar and Transfer Agent Fees 0.2000%

Audit Fees 0.0100%

Marketing and Selling Expenses 0.6500%including agents' commission

Costs related to investor 0.0100%communications

Costs of fund transfer from 0.0100%location to location

Cost of providing account 0.0125%statements and dividend andRedemption cheques and warrants

Costs of statutory advertisements 0.0050%

Service Tax 0.1275%

Other expenses which are –directly attributable to the Scheme

Total Recurring Expenses 2.5000%

* Other expenses: Any other expenses which are directly attributableto the Scheme, may be charged with within the overall limits asspecified in the Regulations except those expenses which arespecifically prohibited.

The purpose of the above table is to assist the investor inunderstanding the various costs and expenses that an investor inthe Scheme will bear. These estimates are based on a corpus sizeof Rs.1 crore under the Scheme, and would change, to the extentassets are lower or higher. If the corpus size is in excess of Rs.1crore, the above mentioned recurring expenses in the Schemewould change. The above expenses are subject to inter-se changeand may increase / decrease as per actual and/ or any change in theRegulations.

These estimates have been made in good faith as per informationavailable to the AMC and the total expenses may be more thanas specified in the table above. However, as per the Regulations,the total recurring expenses that can be charged to the Schemein this Offer Document shall be subject to the applicable guidelines.Expenses over and above the permitted limits will be borne by theAMC. Further, the AMC reserves the right to charge expenseslower than the prescribed limit as it may deem fit.

The total recurring expenses under the Scheme, including theadditional management fees, will, however, be limited to theceilings as prescribed under Regulation 52(6) of the Regulations.In terms of Regulation 52(3) read with Para (f) of the Tenth Scheduleof the Regulations, the AMC will not charge to the Schemeongoing distribution expenses as long as additional managementfees are charged to the Scheme.


C. CONDENSED FINANCIAL INFORMATIONThe informatiom provided below scheme wise for all scheme launched by IDFC Mutual Fund during the last three fiscal years (excludingredeemed schemes) for each of the last three fiscal years.

IDFC IDFC IDFCClassic Equity Fund Premier Equity Fund Imperial Equity Fund

(IDFC-CEF) (IDFC-PEF) (IDFC-IEF)

Historical per Unit Statistics

Date of Allotment August 10, 2005 September 28, 2005 March 16, 2006

March March March March March March March March March31, 2006 31, 2007 31, 2008 31, 2006 31, 2007 31, 2008 31, 2006 31, 2007 31, 2008(In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)

NAV at the beginning of the year /period

(Plan - A)

Growth Option ^10.0000 14.2200 14.8926 ^10.0000 12.8300 13.0343 ^10.0000 10.6300 11.3996

Dividend Option ^10.0000 14.2200 13.1758 ^10.0000 12.8300 13.0374 ^10.0000 10.6300 11.4374

(Plan - B)

Growth Option - - - - - - - - -

Dividend Option - - - - - - - - -

Net Income per unit *2.5984 4.9261 3.3965 *0.3225 2.6482 3.1239 *0.0723 *1.7859 6.9345

Dividend per unit :

Plan A

8/22/2006 - 1.5000 - - - - - - -

2/19/2007 - - - - - - - - -

3/20/2007 - - - - - - - - -

4/20/2007 - - - - - - - - -

5/25/2007 - - - - - - - - -

5/28/2007 - - 1.5000 - - - - - -

9/3/2007 - - - - - - - - -

10/22/2007 - - 1.5000 - - - - - -

2/11/2008 - - - - - - - - -

3/7/2008 - - - - - - - - -

Plan B

2/19/2007 - - - - - - - - -

3/20/2007 - - - - - - - - -

4/20/2007 - - - - - - - - -

5/25/2007 - - - - - - - - -

9/3/2007 - - - - - - - - -

2/11/2008 -

3/7/2008 -

Transfer to reserves (if any) - - - - - - - -

NAV at the end of the year / period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)

(Plan - A)

Growth Option 14.2200 14.8926 18.7882 12.8300 13.0343 20.0355 10.6300 11.3996 14.6361

Dividend Option 14.2200 13.1758 13.5980 12.8300 13.0374 20.0335 10.6300 11.4374 14.6361

(Plan - B)

Growth Option - - - - - - - - -

Dividend Option - - - - - - - - -

Absolute return - - - - - - - - -

Returns during the half year (absolute) 27.08% 7.12% -8.33% - 15.02% 1.81% - 3.43% -3.47%

Bench mark performance (Absolute) 28.65% 4.10% -8.80% 28.65% 4.10% -8.80% - 4.10% -8.80%

Returns since inception (Absolute) for schemes which 42.20% - - 28.30% - - 6.30% - -

have not completed 1 year

Bench mark performance (Absolute) for schemes which 43.05% - - 28.85% - - 3.77% - -

have not completed 1 year

CAGR (since inception) - 27.47% 26.94% - 19.29% 31.94% - 13.41% 20.49%

Bench mark performance in case of schemes in - 32.02% 28.91% - 26.31% 25.37% - 13.79% 18.70%

existence for more than 1 year - Since Inception

CAGR – (last 1 year) - 4.73% 26.08% - 1.59% 53.52% - 7.24% 28.30%

Bench mark performance Last 1 year CAGR - 10.23% 24.06% - 10.23% 24.06% - 10.23% 24.06%

CAGR - (Last 2 Years) - - 14.92% - - 16.93% - - 17.31%

Bench mark performance Last 2 year CAGR - - 16.93% - - 14.16% - - 16.93%

Net Assets end of period (Rs. Crs.) 788.29 369.84 366.77 309.94 218.75 582.63 449.34 210.56 139.80

Ratio of Recurring Expenses to net assets - Plan A 2.08% 2.24% 2.30% 1.86% 2.38% 2.24% 0.10% 2.30% 1.98%

Ratio of Recurring Expenses to net assets - Plan B - - - - - - - - -

^ For the schemes launched during the period, the NAV at the beginning of the period is considered as Rs. 10/- per unit.* Net Income per unit arrived does not include deferred revenue expenditure which is being ammortised.


IDFC IDFC IDFCEnterprise Equity Fund Tax Saver (ELSS) Fund Arbitrage Fund

(IDFC-EEF) (IDFC-TS (ELSS) F) (IDFC-AF)Historical per Unit Statistics (Contd.)

Date of Allotment June 9, 2006 March 15, 2007 December 21, 2006

March March March March March March31, 2007 31, 2008 31, 2007 31, 2008 31, 2007 31, 2008

(In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)


(Plan - A)

Growth Option 10.7918 11.2454 ^10.0000 10.0549 ^10.0000 10.3327

Dividend Option 10.7918 11.2454 ^10.0000 10.0549 ^10.0000 10.1913

(Plan - B)

Growth Option - - - - ^10.0000 10.3471

Dividend Option - - - - ^10.0000 10.2069

Net Income per unit *0.8353 3.4436 *0.0479 1.0726 1.1710 1.3655

Dividend per unit:

Plan A

8/22/2006 - - - - - -

2/19/2007 - - - - 0.0400 -

3/20/2007 - - - - 0.1000 -

4/20/2007 - - - - - 0.1000

5/25/2007 - - - - - 0.1000

5/28/2007 - - - - - -

9/3/2007 - - - - - 0.1500

10/22/2007 - - - - - -

2/11/2008 - - - - - 0.0750

3/7/2008 - - - - - 0.1000

Plan B

2/19/2007 - - - - 0.0400 -

3/20/2007 - - - - 0.1000 -

4/20/2007 - - - - - 0.1000

5/25/2007 - - - - - 0.1000

9/3/2007 - - - - - 0.1500

2/11/2008 - - - - - 0.0750

3/7/2008 - - - - - 0.1000

Transfer to reserves (if any) - - - - - -

NAV at the end of the year/period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)

(Plan - A)

Growth Option 11.2454 13.8086 10.0549 12.0621 10.3327 11.1911

Dividend Option 11.2454 13.8074 10.0549 12.0619 10.1913 10.4894

(Plan - B)

Growth Option - - - - 10.3471 11.2626

Dividend Option - - - - 10.2069 10.5605

Absolute return - - - - - -

Returns during the half year (absolute) 4.20% -4.29% - -4.05% - 4.30%

Bench mark performance (Absolute) 4.10% -6.98% - -8.80% - 3.45%

Returns since inception (Absolute) for schemes which 12.45% - 0.55% - 3.33% -have not completed 1 year

Bench mark performance (Absolute) for schemes which 31.42% - 4.01% - 1.91% -have not completed 1 year

CAGR ( since inception) - 19.51% - 19.62% - 9.21%

Bench mark performance in case of schemes in existence for - 31.03% - 27.65% - 7.44%more than 1 year - Since Inception

CAGR –(last 1 year) - 22.72% - 19.90% - 8.28%

Bench mark performance Last 1 year CAGR - 24.06% - 24.06% - 7.52%

CAGR –(last 2 years) - - - - - -

Bench mark performance Last 2 years CAGR - - - - - -

Net Assets end of period (Rs. Crs.) 1447.92 1307.22 59.94 71.91 442.10 911.85

Ratio of Recurring Expenses to net assets - Plan A 1.89% 1.91% 2.42% 2.34% 1.54% 1.67%

Ratio of Recurring Expenses to net assets - Plan B - - - - 0.99% 1.18%

^ For the schemes launched during the period, the NAV at the beginning of the period is considered as Rs. 10/- per unit.

* Net Income per unit arrived does not include deferred revenue expenditure which is being ammortised.

Condensed Financial Information for the period ended March 31, 2008 (Contd.)



IDFC IDFC IDFCSmall & Midcap Fixed Maturity Tristar Series- I

Equity Fund Arbitrage Fund - Series I (IDFC-TS-I)(IDFC-SMEF) (IDFC-FMAF-SI)

Historical per Unit Statistics (Contd.)

Date of Allotment March 7, 2008 December 14, 2007 January 12, 2006

March March March March March31, 2008 31, 2008 31, 2006 31, 2007 31, 2008

(In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)


(Plan - A)

Growth Option ^10.0000 ^10.0000 ^10.0000 10.4803 10.7794

Dividend Option ^10.0000 ^10.0000 ^10.0000 10.4803 10.7794

(Plan - B)

Growth Option - ^10.0000 - - -

Dividend Option - ^10.0000 - - -

Net Income per unit -0.0539 1.9391 *0.3195 *0.7971 1.8546

Dividend per unit:Plan A

8/22/2006 - - - - -

2/19/2007 - - - - -

3/20/2007 - - - - -

4/20/2007 - - - - -

5/25/2007 - - - - -

5/28/2007 - - - - -

9/3/2007 - - - - -

10/22/2007 - - - - -

2/11/2008 - - - - -

3/7/2008 - - - - -

Plan B - -

2/19/2007 - - - - -

3/20/2007 - - - - -

4/20/2007 - - - - -

5/25/2007 - - - - -

9/3/2007 - - - - -

2/11/2008 - - - - -

3/7/2008 - - - - -

Transfer to reserves (if any)

NAV at the end of the year/period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)

(Plan - A)

Growth Option 9.7571 10.2650 10.4803 10.7794 11.8017

Dividend Option 9.7571 10.2651 10.4803 10.7794 11.8017

(Plan - B)

Growth Option - 10.2650 - - -

Dividend Option - 10.2650 - - -

Absolute return - -

Returns during the half year (absolute) - - - 2.12% 1.27%

Bench mark performance (Absolute) - - - 0.95% 3.79%

Returns since inception (Absolute) for schemes which have -2.43% 2.65% 4.80% - -not completed 1 year

Bench mark performance (Absolute) for schemes which have -2.80% 2.12% -0.40% - -not completed 1 year

CAGR (since inception) - - - 6.38% 7.76%

Bench mark performance in case of schemes in existence for more - - - 2.72% 5.17%than 1 year - Since Inception

CAGR – (last 1 year) - - - 2.86% 9.46%

Bench mark performance Last 1 year CAGR - - - 3.73% 8.23%

CAGR –(last 2 years) - - - - 6.11%

Bench mark performance Last 2 years CAGR - - - - 5.95%

Net Assets end of period (Rs. Crs.) 251.44 61.70 19.30 19.67 15.85

Ratio of Recurring Expenses to net assets - Plan A 2.29% 0.64% 0.98% 0.95% 0.96%

Ratio of Recurring Expenses to net assets - Plan B - 0.64% - - -



Condensed Financial Information for the period ended March 31, 2008 (Contd.)IDFC IDFC Fixed IDFC IDFC

Fixed Maturity Maturity Plan Fixed Maturity Fixed Maturity6th Plan - 9th Plan Yearly Series 2 Yearly Series 3

(IDFC-FMP-6) (IDFC-FMP-9) (IDFC-FMP-YS2) (IDFC-FMP-YS3)Historical per Unit StatisticsDate of Allotment July July February February February March March March March

21, 2006 21, 2006 28, 2005 28, 2005 28, 2005 31, 2007 31, 2007 31, 2007 31, 2007March March March March March March March March March

31, 2007 31, 2008 31, 2006 31, 2007 31, 2008 31, 2007 31, 2008 31, 2007 31, 2008(In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)

NAV at the beginning of the period(Plan - A)Growth Option 10.1694 10.3031 9.9819 10.3183 10.6425 ^10.0000 10.0845 ^10.0000 10.0488Dividend Option 10.1694 10.3031 9.9819 9.9772 9.9943 ^10.0000 10.0845 ^10.0000 10.0488Dividend (Quarterly) Option - - - - - - - - -Dividend (Half Yearly) Option - - - - - - - - -Dividend (Annual) Option - - - - - - - - -Dividend (Monthly) Option - - - - - - - - -(Plan - B)Growth Option - - - - - - - - -Dividend Option - - - - - - - - -Dividend (Quarterly) Option - - - - - - - - -Dividend (Half Yearly) Option - - - - - - - - -Dividend (Annual) Option - - - - - - - - -Dividend (Monthly) Option - - - - - - - - -Net Income per unit *0.5377 0.8123 0.6733 0.7151 0.7733 *0.1277 1.2935 *0.0453 1.1072Dividend per unit:Plan AJune 29 2007 (others) - - - - - - - - -June 29, 2007 (I&H) - - - - - - - - -December 18, 2007 (others) - - - - - - - - -December 18, 2007 (I&H) - - - - - - - - -March 16, 2008 (others) - - - - - - - - -March 16, 2008 (I&H) - - - - - - - - -March 31, 2008 (others) - - - - - - - - -March 31, 2008 (I&H) - - - - - - - - -Plan BDecember 18, 2007 (others) - - - - - - - - -December 18, 2007 (I&H) - - - - - - - - -March 16, 2008 (others) - - - - - - - - -March 16, 2008 (I&H) - - - - - - - - -Transfer to reserves * - - - - - - - - -*(Including Unit Premium Reserve, EqualisationReserve and Unrealised Appreciation Reserve)NAV at the end of the period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)(Plan - A)*Growth Option 10.3031 11.3003 10.3183 10.6425 11.7316 10.0845 11.0941 10.0488 11.1096Dividend Option 10.3031 11.3003 9.9772 9.9943 11.0171 10.0845 11.0941 10.0488 11.1096Dividend (Quarterly) Option - - - - - - - - -Dividend (Half Yearly) Option - - - -- - - - - -Dividend (Annual) Option - - - - - - - - -Dividend (Monthly) Option - - - - - - - - -(Plan - B)Growth Option - - - - - - - - -Dividend Option - - - - - - - - -Dividend (Quarterly) Option - - - - - - - - -Dividend (Half Yearly) Option - - - - - - - - -Dividend (Annual) Option - - - - - - - - -Absolute return - - - -Returns during the half year (absolute) 1.31% 4.03% -0.73% 0.05% 4.09% - 4.92% - 5.20%Bench mark performance (Absolute) 0.95% 3.79% 0.58% 0.95% 3.79% - 3.79% - 3.79%Returns since inception (Absolute) for schemes 3.03% - - - - 0.85% - 0.49% -which have not completed 1 yearBench mark performance (Absolute) for 2.37% - - - - 0.00% - 0.00% -schemes which have not completed 1 yearReturns in case of schemes redeemed - - - - - - - - - -Since Inception (Absolute)Bench mark performance in case of schemes - - - - - - - - -redeemed - Since Inception (Absolute)CAGR ( since inception) - 7.47% 2.43% 3.03% 5.31% - 10.91% - 11.07%CAGR –(last 1 year) - 9.65% 2.83% 3.14% 10.19% - 9.98% - 10.53%Bench mark performance in case of schemes in - 6.24% 3.33% 3.52% 5.02% - 8.23% - 8.23%existence for more than 1 year - Since InceptionBench mark performance Last 1 year CAGR - 7.99% 3.30% 3.73% 7.99% - 8.23% - 8.23%CAGR –(last 2 years) - - - 3.92% 6.62% - - - -Bench mark performance Last 2 years CAGR - - - 3.51% 5.95% - - - -CAGR –(last 3 years) - - - - 5.53% - - - -Bench mark performance Last 3 years CAGR - - - - 5.06% - - - -Compounded Annualised yield in case of schemes - - - - - - - - -redeemed - Since Inception - CAGRBench mark performance in case of schemes - - - - - - - - -redeemed - Since Inception - CAGR -Net Assets end of period (Rs. Crs.) 58.95 63.14 31.47 31.16 31.11 347.01 379.40 250.01 275.92Ratio of Recurring Expenses to net assets - Plan A 0.33% 0.35% 0.55% 0.54% 0.55% 0.10% 0.09% 0.10% 0.09%Ratio of Recurring Expenses to net assets - Plan B - - - - - - - - -




IDFC IDFC IDFC IDFC IDFCFixed Maturity Fixed Maturity Fixed Maturity Fixed Fixed Yearly Series 4 Yearly Series 5 Yearly Series 6 Maturity Maturity(IDFC-FMP-YS4) (IDFC-FMP-YS5) (IDFC-FMP-YS6) Yearly Yearly

Series 7 Series 8(IDFC-FMP- (IDFC-FMP-

YS7) YS8)Historical per Unit Statistics (Contd.,)

Date of Allotment March March March March March March April April

31, 2007 31, 2007 31, 2007 31, 2007 31, 2007 31, 2007 20, 2007 30, 2007

March March March March March March March March

31, 2007 31, 2008 31, 2007 31, 2008 31, 2007 31, 2008 31, 2008 31, 2008

(In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)NAV at the beginning of the period(Plan - A)Growth Option ^10.0000 10.0336 ^10.0000 10.0070 ^10.0000 10.0067 ^10.0000 ^10.0000Dividend Option ^10.0000 10.0336 ^10.0000 10.0070 ^10.0000 10.0067 ^10.0000 ^10.0000Dividend (Quarterly) Option - - - - - - - -Dividend (Half Yearly) Option - - - - - - - -Dividend (Annual) Option - - - - - - - -Dividend (Monthly) Option - - - - - - - -(Plan - B)Growth Option - - - - - - - -Dividend Option - - - - - - - -Dividend (Quarterly) Option - - - - - - - -Dividend (Half Yearly) Option - - - - - - - -Dividend (Annual) Option - - - - - - - -Dividend (Monthly) Option - - - - - - - -Net Income per unit *0.0309 1.2417 *0.0071 1.0427 *0.0068 1.3407 0.9969 1.6646Dividend per unit:Plan AJune 29 2007 (others) - - - - - - - -June 29, 2007 (I&H) - - - - - - - -December 18, 2007 (others) - - - - - - - -December 18, 2007 (I&H) - - - - - - - -March 16, 2008 (others) - - - - - - - -March 16, 2008 (I&H) - - - - - - - -March 31, 2008 (others) - - - - - - - -March 31, 2008 (I&H) - - - - - - - -Plan BDecember 18, 2007 (others) - - - - - - - -December 18, 2007 (I&H) - - - - - - - -March 16, 2008 (others) - - - - - - - -March 16, 2008 (I&H) - - - - - - - -Transfer to reserves * - - - - - - - -*(Including Unit Premium Reserve, Equalisation Reserve andUnrealised Appreciation Reserve)NAV at the end of the period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)(Plan - A)*Growth Option 10.0336 11.0370 10.0070 11.0932 10.0067 11.0538 10.9664 10.8767Dividend Option 10.0336 11.0370 10.0070 11.1200 10.0067 11.0652 10.9664 10.8767Dividend (Quarterly) Option - - - - - - - -Dividend (Half Yearly) Option - - - - - - - -Dividend (Annual) Option - - - - - - - -Dividend (Monthly) Option - - - - - - - -(Plan - B)Growth Option - - - - - - - -Dividend Option - - - - - - - -Dividend (Quarterly) Option - - - - - - - -Dividend (Half Yearly) Option - - - - - - - -Dividend (Annual) Option - - - - - - - -Absolute return - - - - - - - -Returns during the half year (absolute) - 4.83% - 5.14% - 5.08% 4.95% 4.62%Bench mark performance (Absolute) - 3.79% - 3.79% - 3.79% 3.79% 3.79%Returns since inception (Absolute) for schemes which have 0.34% - 0.07% - 0.07% - 9.66% 8.77%not completed 1 yearBench mark performance (Absolute) for schemes which have 0.00% - 0.00% - 0.00% - 7.78% 7.56%not completed 1 yearReturns in case of schemes redeemed - Since Inception (Absolute) - - - - - - - -Bench mark performance in case of schemes redeemed - - - - - - - - -Since Inception (Absolute)CAGR ( since inception) - 10.34% - 10.90% - 10.51% - -CAGR –(last 1 year) - 9.97% - 10.82% - 10.43% - -Bench mark performance in case of schemes in existence for - 8.23% - 8.23% - 8.23% - -more than 1 year - Since InceptionBench mark performance Last 1 year CAGR - 8.23% - 8.23% - 8.23% - -CAGR –(last 2 years) - - - - - - - -Bench mark performance Last 2 years CAGR - - - - - - - -CAGR –(last 3 years) - - - - - - - -Bench mark performance Last 3 years CAGR - - - - - - - -Compounded Annualised yield in case of schemes redeemed - - - - - - - - -Since Inception - CAGRBench mark performance in case of schemes redeemed - - - - - - - - -Since Inception - CAGRNet Assets end of period (Rs. Crs.) 57.45 62.40 292.37 323.91 71.61 77.24 296.57 159.18Ratio of Recurring Expenses to net assets - Plan A 0.10% 0.09% 0.10% 0.09% 0.10% 0.09% 0.31% 0.60%Ratio of Recurring Expenses to net assets - Plan B - - - - - - - -




IDFC IDFC IDFC IDFC IDFC IDFCFixed Maturity Fixed Maturity Fixed Maturity Fixed Maturity Fixed Maturity Fixed MaturityYearly Series 9 Yearly Series 10 Yearly Series 11 Yearly Series 12 Yearly Series 17 Yearly Series 19

(IDFC-FMP (IDFC-FMP- (IDFC-FMP (IDFC-FMP (IDFC-FMP (IDFC-FMP-YS9) YS10) -YS11) -YS12) -YS17) -YS19)

Historical per Unit Statistics (Contd.)Date of Allotment May September June September March March

25, 2007 4, 2007 11, 2007 27, 2007 27, 2008 27, 2008March March March March March March

31, 2008 31, 2008 31, 2008 31, 2008 31, 2008 31, 2008(In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)

NAV at the beginning of the period(Plan - A)Growth Option ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000Dividend Option ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000Dividend (Quarterly) Option - - - - - -Dividend (Half Yearly) Option - - - - - -Dividend (Annual) Option - - - - - -Dividend (Monthly) Option - - - - - -(Plan - B)Growth Option - - ^10.0000 ^10.0000 ^10.0000 ^10.0000Dividend Option - - ^10.0000 ^10.0000 ^10.0000 ^10.0000Dividend (Quarterly) Option - - - - - -Dividend (Half Yearly) Option - - - - - -Dividend (Annual) Option - - - - - -Dividend (Monthly) Option - - - - - -Net Income per unit 0.8913 0.5542 0.7940 0.4372 0.0704 0.0360Dividend per unit:Plan AJune 29 2007 (others) - - - - - -June 29, 2007 (I&H) - - - - - -December 18, 2007 (others) - - - - - -December 18, 2007 (I&H) - - - - - -March 16, 2008 (others) - - - - - -March 16, 2008 (I&H) - - - - - -March 31, 2008 (others) - - - - - -March 31, 2008 (I&H) - - - - - -Plan BDecember 18, 2007 (others) - - - - - -December 18, 2007 (I&H) - - - - - -March 16, 2008 (others) - - - - - -March 16, 2008 (I&H) - - - - - -Transfer to reserves * - - - - - -*(Including Unit Premium Reserve, Equalisation Reserveand Unrealised Appreciation Reserve)NAV at the end of the period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)(Plan - A)*Growth Option 10.8648 10.5482 10.7746 10.4253 10.0716 10.0368Dividend Option 10.8647 10.5482 10.7746 10.4253 10.0716 10.0368Dividend (Quarterly) Option - - - - - -Dividend (Half Yearly) Option - - - - - -Dividend (Annual) Option - - - - - -Dividend (Monthly) Option - - - - - -(Plan - B)Growth Option - - 10.7746 10.4253 10.0716 10.0368Dividend Option - - 10.7746 10.4253 10.0716 10.0368Dividend (Quarterly) Option - - - - - -Dividend (Half Yearly) Option - - - - - -Dividend (Annual) Option - - - - - -Absolute return - - - - - -Returns during the half year (absolute) 4.86% 4.77% 4.75% 4.18% - -Bench mark performance (Absolute) 3.79% 3.79% 3.79% 3.79% - -Returns since inception (Absolute) for schemes which have 8.65% 5.48% 7.75% 4.25% 0.72% 0.37%not completed 1 yearBench mark performance (Absolute) for schemes which have 7.27% 4.45% 6.82% 3.82% -0.13% -0.13%not completed 1 yearReturns in case of schemes redeemed - Since Inception (Absolute) - - - - - -Bench mark performance in case of schemes redeemed - - - - - - -Since Inception (Absolute)CAGR ( since inception) - - - - - -CAGR –(last 1 year) - - - - - -Bench mark performance in case of schemes in existence - - - - - -for more than 1 year - Since InceptionBench mark performance Last 1 year CAGR - - - - - -CAGR –(last 2 years) - - - - - -Bench mark performance Last 2 years CAGR - - - - - -CAGR –(last 3 years) - - - - - -Bench mark performance Last 3 years CAGR - - - - - -Compounded Annualised yield in case of schemes redeemed - - - - - - -Since Inception - CAGRBench mark performance in case of schemes redeemed - - - - - - -Since Inception - CAGRNet Assets end of period (Rs. Crs.) 109.81 285.64 24.72 6.16 178.69 275.46Ratio of Recurring Expenses to net assets - Plan A 0.40% 0.09% 0.14% 0.09% 0.13% 0.13%Ratio of Recurring Expenses to net assets - Plan B - - 0.15% 0.09% 0.13% 0.13%^ For the schemes launched during the period, the NAV at the beginning of the period is considered as Rs. 10/- per unit.* Net Income per unit arrived does not include deferred revenue expenditure which is being ammortised.


Condensed Financial Information for the period ended March 31, 2008 (Contd.)IDFC IDFC IDFC IDFC IDFC IDFC IDFC

Fixed Maturity Fixed Maturity Fixed Maturity Fixed Maturity Fixed Maturity Fixed Maturity QuarterlyYearly Quarterly Quarterly Quarterly Quarterly EMS Series Interval FundSeries Series Series Series Series I (IDFC-QIF)

20 25 26 27 28 (IDFC-(IDFC-FMP (IDFC-FMP (IDFC-FMP (IDFC-FMP (IDFC-FMP FMPEMS -

-YS20) - QS25) -QS26) -QS27) -QS28) Series I)Historical per Unit StatisticsDate of Allotment March February February March March December September

31, 2008 20, 2008 28, 2008 11, 2008 28, 2008 21, 2007 22, 2007March March March March March March March

31, 2008 31, 2008 31, 2008 31, 2008 31, 2008 31, 2008 31, 2008(In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)

NAV at the beginning of the period(Plan - A)Growth Option ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000Dividend Option ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000 ^10.0000Dividend (Quarterly) Option - - - - - - -Dividend (Half Yearly) Option - - - - - - -Dividend (Annual) Option - - - - - - -Dividend (Monthly) Option - - - - - - -(Plan - B)Growth Option ^10.0000 - - - - ^10.0000 ^10.0000Dividend Option ^10.0000 - - - - ^10.0000 ^10.0000Dividend (Quarterly) Option - - - - - - -Dividend (Half Yearly) Option - - - - - - -Dividend (Annual) Option - - - - - - -Dividend (Monthly) Option - - - - - - -Net Income per unit 0.0084 0.1063 0.0895 0.0528 0.0112 0.2565 1.8516Dividend per unit:Plan AJune 29 2007 (others) - - - - - - -June 29, 2007 (I&H) - - - - - - -December 18, 2007 (others) - - - - - - 0.1626December 18, 2007 (I&H) - - - - - - 0.1747March 16, 2008 (others) - - - - - - 0.1689March 16, 2008 (I&H) - - - - - - 0.1815March 31, 2008 (others) - 0.0866 0.0730 - - - -March 31, 2008 (I&H) - 0.0930 0.0784 - - - -Plan BDecember 18, 2007 (others) - - - - - - 0.1626December 18, 2007 (I&H) - - - - - - 0.1747March 16, 2008 (others) - - - - - - 0.1711March 16, 2008 (I&H) - - - - - - 0.1839Transfer to reserves * - - - - - - -*(Including Unit Premium Reserve, - - - - - - -Equalisation Reserve and UnrealisedAppreciation Reserve)NAV at the end of the period (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-) (In Rs./-)(Plan - A)*Growth Option 10.0373 10.1092 10.0895 10.0528 10.0310 10.2512 10.4742Dividend Option - 10.0030 10.0000 10.0528 10.0310 10.2512 10.0610Dividend (Quarterly) Option - - - - - -Dividend (Half Yearly) Option - - - - - -Dividend (Annual) Option - - - - - -Dividend (Monthly) Option - - - - - - -(Plan - B)Growth Option 10.0373 - - - - 10.2512 11.0400Dividend Option 10.0373 - - - - 10.2512 10.0583Dividend (Quarterly) Option - - - - - - -Dividend (Half Yearly) Option - - - - - - -Dividend (Annual) Option - - - - - - -Absolute return - - - - - - -Returns during the half year (absolute) - - - - - - 4.53%Bench mark performance (Absolute) - - - - - - 3.45%Returns since inception (Absolute) for schemes 0.37% 1.09% 0.90% 0.53% 0.31% 2.51% 4.74%which have not completed 1 yearBench mark performance (Absolute) for N.A. 0.95% 0.75% 0.55% 0.09% 1.98% 3.56%schemes which hav not completed 1 yearReturns in case of schemes redeemed - - - - - - - -Since Inception (Absolute)Bench mark performance in case of schemes - - - - - - -redeemed - Since Inception (Absolute)CAGR ( since inception) - - - - - - -CAGR –(last 1 year) - - - - - - -Bench mark performance in case of schemes in - - - - - - -existence for more than 1 year-Since InceptionBench mark performance Last 1 year CAGR - - - - - - -CAGR –(last 2 years)Bench mark performance Last 2 years CAGR - - - - - - -CAGR –(last 3 years) - - - - - - -Bench mark performance Last 3 years CAGR - - - - - - -Compounded Annualised yield in case of - - - - - - -schemes redeemed - Since Inception - CAGRBench mark performance in case of schemes - - - - - - -redeemed - Since Inception - CAGRNet Assets end of period (Rs. Crs.) 322.73 363.07 191.18 77.64 247.73 6.61 10.73Ratio of Recurring Expenses to net assets-Plan A 0.05% 0.19% 0.12% 0.19% 0.05% 0.19% 0.32%Ratio of Recurring Expenses to net assets-Plan B 0.05% - - - - 0.19% 0.22%




IDFCLiquidity Manager Plus

(IDFC-LMP)


Date of Inception

Date of Allotment March 27, 2006

March March March31, 2006 31, 2007 31, 2008

(In Rs./-) (In Rs./-) (In Rs./-)

NAV at the beginning of the year

(Plan - A)

Growth Option ^^1000.00 1001.0800 1074.3577

Dividend (Daily) Option ^^1000.00 1000.0000 1000.3128

Dividend (Weekly) Option - 1000.1000 1000.3128

Dividend (Monthly) Option - 1000.0000 1000.4132

(Plan - B)

Growth Option - - -

Dividend (Daily) Option - - -

Dividend (Weekly) Option - - -

Dividend (Periodic) Option - - -

(Plan - C)

Growth Option - - -



Dividend (Monthly) Option - - -

Net Income per unit 0.7251 211.0845 120.0234

Dividend per unit:

Plan A

Monthly Option

March 31, 2006 (others) 4.1259 - -

March 31, 2006 (I&H) 4.4303 - -

April 27, 2006 (others) - 4.1259 -

April 27, 2006 (I&H) - 4.4303 -

May 30, 2006 (others) - 4.6183 -

May 30, 2006 (I&H) - 4.9591 -

June 29, 2006 (others) - 4.2521 -

June 29 2006 (I&H) - 4.5659 -

July 31, 2006 (others) - 4.5766 -

July 31 2006 (I&H) - 4.9144 -

Aug 31, 2006 (others) - 4.6599 -

Aug 31 2006 (I&H) - 5.0038 -

Sept 29, 2006 (others) - 4.4420 -

Sept 29 2006 (I&H) - 4.7698 -

October 31, 2006 (others) - 4.9847 -

October 31, 2006 (I&H) - 5.3526 -

November 30, 2006 (others) - 4.8614 -

November 30, 2006 (I&H) - 5.2202 -

December 29, 2006 (others) - 4.7789 -

December 29, 2006 (I&H) - 5.1316 -

January 31, 2007 (others) - 5.6887 -

January 31, 2007 (I&H) - 6.1086 -

Febraury 28, 2007 (others) - 4.8532 -

Febraury 28, 2007 (I&H) - 5.2114 -

March 30, 2007 (others) - 5.7057 -

March 30, 2007 (I&H) - 6.1267 -

April 30, 2007 (others) - - 5.6829

April 30, 2007 (I&H) - - 5.6829

May 31, 2007 (others) - - 5.5744


Condensed Financial Information for the period ended March 31, 2008 (Contd.)IDFC

Liquidity Manager Plus(IDFC-LMP)

Historical per Unit Statistics (Contd.,)

Date of Inception

Date of Allotment March 27, 2006


(In Rs./-) (In Rs./-) (In Rs./-)NAV at the beginning of the yearMay 31, 2007 (I&H) - - 5.5744June 29 2007 (others) - - 3.8138June 29 2007 (I&H) - - 3.8138July 31 2007 (others) - - 4.3179July 31 2007 (I&H) - - 4.3179August 31 2007 (others) - - 4.7175August 31 2007 (I&H) - - 4.7175September 28, 2007 (others) - - 4.5197September 28, 2007 (I&H) - - 4.5197October 31, 2007 (others) - - 5.3252October 31, 2007 (I&H) - - 5.3252November 30, 2007 (others) - - 4.7985November 30, 2007 (I&H) - - 4.7985December 31, 2007 (others) - - 5.2282December 31, 2007 (I&H) - - 5.2282January 31, 2008 (others) - - 5.2521January 31, 2008 (I&H) - - 5.2521Febraury 29, 2008 (others) - - 4.7503Febraury 29, 2008 (I&H) - - 4.7503March 31, 2008 (others) - - 4.7956March 31, 2008 (I&H) - - 4.7956Transfer to reserves * - - -*(Including Unit Premium Reserve, Equalisation Reserve and Unrealised Appreciation Reserve)NAV at the end of the year (In Rs./-) (In Rs./-) (In Rs./-)(Plan - A)*Growth Option 1001.0800 1074.3577 1158.1082Dividend (Monthly) Option 1000.0000 1000.4132 1000.2000Dividend (Daily) Option 1000.1000 1000.3128 1000.2100Dividend (Weekly) Option 1000.0000 1000.3128 1000.8923(Plan - B)Growth Option - - -Dividend (Daily) Option - - -Dividend (Weekly) Option - - -Dividend (Periodic) Option - - -(Plan - C)Growth Option - - -Dividend (Daily) Option - - -Dividend (Weekly) Option - - -Dividend (Monthly) Option - - -Absolute return - - -Returns during the half year (absolute) - 3.86% 3.90%Bench mark performance (Absolute) 3.24% 3.41%Returns since inception (Absolute) for schemes which have not completed 1 year 0.11% - -Bench mark performance (Absolute) for schemes which hav not completed 1 year 0.07% - -CAGR ( since inception) - 7.35% 7.56%CAGR –(last 1 year) - 7.32% 7.77%CAGR –(last 2 year) - - 7.55%Bench mark performance last 2 years CAGR - - 6.95%Bench mark performance in case of schemes in existence for more than 1 year - Since Inception - 6.40% 6.95%Bench mark performance Last 1 year CAGR - 6.39% 7.50%Net Assets end of period (Rs. Crs.) 647.60 1778.08 1713.47Ratio of Recurring Expenses to net assets - Plan A 0.01% 0.34% 0.34%Ratio of Recurring Expenses to net assets - Plan B - - -Ratio of Recurring Expenses to net assets - Plan C - - -

^^ 'For SCLM Plus face value is Rs. 1,000 per unit hence the NAV at the beginning of the half year period is considered as Rs. 1,000/- per unit.Range of dividend declared in DDRP for SCLM Plus - Plan A for Corporates & Non-Corporates from April 01, 2007 till March 31, 2008 is Rs. 0.08238800 to 0.30810600 perunit and WDRP for Corporates & Non-Corporates from April 01, 2007 till March 31, 2008 is Rs. 0.7934 to Rs. 1.3665 per unit. (*Face Value per unit = Rs. 1000/-)

DDRP WDRP

Scheme Date Rate Date Rate

Highest dividend declared SCLM Plus- Plan A - Corporates & Non Corporates 21-Sep-07 0.23441600 4-May-07 1.3665

Lowest dividend declared SCLM Plus- Plan A - Corporates & Non Corporates 16-Jun-07 0.08238800 15-Jun-07 0.7934



Liquidity Manager (IDFC-LM)


Date of Inception

Date of Allotment January 17, 2006


(In Rs./-) (In Rs./-) (In Rs./-)

NAV at the beginning of the year

(Plan - A)

Growth Option ^10.0000 10.1260 10.7690

Dividend (Daily) Option ^10.0000 10.0005 10.0120

Dividend (Weekly) Option - 10.0010 10.0080

Dividend (Monthly) Option - 10.0015 10.0035

(Plan - B)

Growth Option - - -



Dividend (Periodic) Option - - -

(Plan - C)

Growth Option - - -



Dividend (Monthly) Option - - -

Net Income per unit 0.2457 0.3447 3.5797

Dividend per unit:

Plan A

Monthly Option

March 31, 2006 (others) 0.0417 - -

March 31, 2006 (I&H) 0.0447 - -

April 27, 2006 (others) - 0.0330 -

April 27, 2006 (I&H) - 0.0354 -

May 30, 2006 (others) - 0.0407 -

May 30, 2006 (I&H) - 0.0437 -

June 29, 2006 (others) - 0.0340 -

June 29 2006 (I&H) - 0.0365 -

July 31, 2006 (others) - 0.0368 -

July 31 2006 (I&H) - 0.0396 -

Aug 31, 2006 (others) - 0.0383 -

Aug 31 2006 (I&H) - 0.0411 -

Sept 29, 2006 (others) - 0.0368 -

Sept 29 2006 (I&H) - 0.0395 -

October 31, 2006 (others) - 0.0412 -

October 31, 2006 (I&H) - 0.0442 -

November 30, 2006 (others) - 0.0412 -

November 30, 2006 (I&H) - 0.0442 -

December 29, 2006 (others) - 0.0447 -

December 29, 2006 (I&H) - 0.0480 -

January 31, 2007 (others) - 0.0541 -

January 31, 2007 (I&H) - 0.0581 -

Febraury 28, 2007 (others) - 0.0424 -

Febraury 28, 2007 (I&H) - 0.0455 -

March 30, 2007 (others) - 0.0506 -

March 30, 2007 (I&H) - 0.0544 -

April 30, 2007 (others) - - 0.0543

April 30, 2007 (I&H) - - 0.0543

May 31, 2007 (others) - - 0.0339

May 31, 2007 (I&H) - - 0.0339



Liquidity Manager (IDFC-LM)

Historical per Unit Statistics (Contd.,)

Date of Inception

Date of Allotment January 17, 2006


(In Rs./-) (In Rs./-) (In Rs./-)

NAV at the beginning of the yearJune 29 2007 (others) - - 0.0233June 29 2007 (I&H) - - 0.0233July 31 2007 (others) - - 0.0170July 31 2007 (I&H) - - 0.0170August 31 2007 (others) - - 0.0281August 31 2007 (I&H) - - 0.0281September 28, 2007 (others) - - 0.0341September 28, 2007 (I&H) - - 0.0341October 31, 2007 (others) - - 0.0356October 31, 2007 (I&H) - - 0.0356November 30, 2007 (others) - - 0.0412November 30, 2007 (I&H) - - 0.0412December 31, 2007 (others) - - 0.0453December 31, 2007 (I&H) - - 0.0453January 31, 2008 (others) - - 0.0599January 31, 2008 (I&H) - - 0.0599Febraury 29, 2008 (others) - - 0.0456Febraury 29, 2008 (I&H) - - 0.0456March 31, 2008 (others) - - 0.0398March 31, 2008 (I&H) - - 0.0398Transfer to reserves * - - -*(Including Unit Premium Reserve, Equalisation Reserve and Unrealised Appreciation Reserve)NAV at the end of the year (In Rs./-) (In Rs./-) (In Rs./-)(Plan - A)*Growth Option 10.1260 10.7690 11.4081Dividend (Monthly) Option 10.0005 10.0120 10.0010Dividend (Daily) Option 10.0010 10.0080 10.0125Dividend (Weekly) Option 10.0015 10.0035 10.0067(Plan - B)Growth Option - - -Dividend (Daily) Option - - -Dividend (Weekly) Option - - -Dividend (Periodic) Option - - -(Plan - C)Growth Option - - -Dividend (Daily) Option - - -Dividend (Weekly) Option - - -Dividend (Monthly) Option - - -Absolute return - - -Returns during the half year (absolute) - 3.51% 3.45%Bench mark performance (Absolute) - 3.24% 3.41%Returns since inception (Absolute) for schemes which have not completed 1 year 1.26% - -Bench mark performance (Absolute) for schemes which have not completed 1 year 1.08% - -Bench mark performance in case of schemes in existence for more than 1 year - Since Inception - 6.24% 6.81%CAGR ( since inception) - 6.37% 6.16%CAGR –(last 1 year) - 6.35% 5.92%Bench mark performance Last 1 year CAGR - 6.39% 7.50%CAGR –(last 2 years) - - 6.13%Bench mark performance Last 2 years CAGR - - 6.95%Net Assets end of period (Rs. Crs.) 1625.88 599.39 28.25Ratio of Recurring Expenses to net assets - Plan A 0.06% 0.43% 0.55%Ratio of Recurring Expenses to net assets - Plan B - - -

Ratio of Recurring Expenses to net assets - Plan C - - -

Range of dividend declared in DDRP for SCLM - Plan A for Corporates & Non-Corporates from April 01, 2007 till March 31, 2008 is Rs. 0.00011468 to 0.01037554 per unitand WDRP for Corporates & Non-Corporates from April 01, 2007 till March 31, 2008 is Rs. 0.0009 to Rs. 0.0201 per unit. (*Face Value per unit = Rs. 10/-).

DDRP WDRP

Scheme Date Rate Date Rate

Highest dividend declared SCLM - Plan A - Corporates & Non Corporates 4-Apr-07 0.01037554 6-Apr-07 0.0201Lowest dividend declared SCLM - Plan A - Corporates & Non Corporates 25-Jul-07 0.00011468 27-Jul-07 0.0009

IDFC Tax Saver (ELSS) Fund 71b

) N

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IDFC

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IDFC

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GR

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08


c) Borrowings in the month of December, 2005 are given as follows :

Amount Borrowed as % of net assets

Sr. Scheme Year Amount Borrowed % of net assets Time Period Purpose of Borrowingno. (Rs. In Crs) of the scheme of Borrowing

1 IDFC Cash Fund 2005-2006 250.00 6.57% 1 Day For meeting redemption

(On Dec, 22, 2005) requirements

2 IDFC Cash Fund 2005-2006 150.00 4.45% 3 Days For meeting redemption





(On Dec 27, 2005) requirements

Borrowings in the month of January, 2006 are given as follows :

Amount Borrowed as % of net assets

Sr. Scheme Year Amount Borrowed % of net assets Time Period Purpose of Borrowingno. (Rs. In Crs) of the scheme of Borrowing


(On Jan, 16, 2006) requirements

No Borrowings were made during months of February 2006 till February 2007.

Borrowings in the month of March, 2007 are given as follows :

Sr. Scheme Year Amount Borrowed as % of net assets Time Period of Purpose ofNo. Borrowing Borrowing

Amount Borrowed % of net assets

(Rs. In Crs) of the scheme

1 IDFC Liquidity 2006 - 2007 249.00 9.24% 1 Day For meeting

Manager Plus redemption

No Borrowings were made during the months of April, 2007 to December, 2007.

Borrowings in the month of January, 2008 are given as follows :

Sr. Scheme Year Amount Borrowed as % of net assets Time Period of Purpose ofNo. Borrowing Borrowing

Amount Borrowed % of net assets(Rs. In Crs) of the scheme

1 IDFC Floating 2007-2008 200.00 6.09% 1 Day For meeting

Rate Fund (on Jan 23, redemption

– Long Term 2008) requirements

No Borrowings were made in the month of February, 2008, March, 2008 and April, 2008.


A. UNITHOLDERS RIGHTS & SERVICES

1. Investor Services

The Fund believes in providing the investors with a superior

service to make the investors' experience in dealing with the

Fund an efficient and satisfactory one. In order to achieve

these goals, the Fund will endeavour to continuously establish

and upgrade systems to handle transactions efficiently and

resolve any investor grievances promptly.

2. Ease of Transactions

The Fund intends to make every transaction for the investor

a simple and convenient one. The Fund plans to provide the

following services :

i) Official Points of Acceptance of Transactions

The AMC presently has a tie up with the Registrar who has

set up official points of acceptance of transactions in various

cities, the details in respect of which are stated on the last

page of this Offer Document and on the website of the

Mutual Fund at www.idfcmf.com . Over a period of time, the

AMC will endeavour to add further official points of

acceptance of transactions and/or AMC Offices in other cities

of its own/of the Registrar. Unitholders can go to these official

points of acceptance of transactions / AMC Offices for

transactions and enquiries during business hours.

ii) Process transactions in a timely manner

Under the Regulations, the Fund / the Registrar / AMC shall

despatch to the Unitholders the dividend warrants within

thirty days of the date of declaration of dividend and the

redemption proceeds within 10 (ten) Business Days from the

date of acceptance / deemed acceptance of the request for

redemption or repurchase proceeds, as the case may be.

Under normal circumstances, the Fund will endeavour to

complete all monetary transactions within 3 (three) Business

Days from the date of acceptance of a transaction request at

the official points of acceptance of transactions including the

office of the Registrar at A & B, Lakshmi Bhawan, 609, Anna

Salai, Chennai - 600 006.

As per the guidelines issued by SEBI, in the event of failure

to despatch the redemption proceeds within 10 working

days, the AMC is liable to pay interest to the Unitholders @

15% p.a. or such other rate as may be notified by SEBI from

time to time. SEBI has further advised the mutual funds that

in the event of payment of interest to the Unitholders such

Unitholders should be informed about the rate and the

amount of interest paid to them.

Ordinarily, non-monetary transactions or requests will be

processed, (with the exception of issue of Unit certificates)

within 5 (Five) Business Days.

VII. UNITHOLDERS’ RIGHTS AND SERVICES

3. Problem Resolution

The Fund will follow up with Investor Service Centres and

Registrar on complaints and enquiries received from investors

for resolving them promptly.

In case of any unresolved complaints, the Unitholders are

requested to contact the following:

S r. Name Region Address and Contact

No. Number

1. Sunil Aryamane West 90 M. G. Road, Fort,

Mumbai 400 001.

Tel. 91-22- 2267 4160

2. Vijith Raghavan East Oswal Chambers, 1st Floor,

2 Church Lane,

Kolkata 700 001.

Tel. : 91-33-2288 1686

3. Chetan Mankame North 4th Floor, Narain Manzil,

23, Barakhamba Road,

New Delhi - 110 001.

Tel: 4151 3042-44 / 2332 6669

4. Shaji Perincheri South Maalavika Centre,

New No. 60,

Kodambakkam High Road,

Nungambakkam,

Chennai - 600 034.

4. Information about the Scheme

The Fund will publish an abridged summary of an audited

annual report of the Scheme, as on March 31 of each year,

through an advertisement and an abridged Scheme-wise

annual report shall be mailed to all Unitholders, not later

than six months from March 31 of each year. The abridged

annual report shall contain such details as are required under

the Regulations.

The AMC will disclose the NAV of the Scheme on every

Business Day.

5. NAV Information

The NAV of the Scheme will be calculated daily and announced

by the Fund on each Business Day and will be published in

two daily newspapers on a daily basis. The information on

NAV may be obtained by the Unitholders, on any day, by

calling the office of the AMC or any of the official points of

acceptance of transactions or from the website of the Mutual

Fund at www.idfcmf.com or the Registrar at

www.camsonline.com. The Fund shall update NAVs and


Purchase & Redemption prices of Units daily at the website of

Association of Mutual Funds of India at www.amfiindia.com.

6. Disclosure of information under the Regulations

The Fund will, not later than six months after the close of each

financial year (March 31), mail an abridged Annual Report

relating to the Scheme to the unitholders. Further, the full text

of the Annual Report will be available for inspection at the

corporate office of the Fund. A copy of the Annual Report

(abridged / full) will be made available to the Unitholders on

request. The Fund shall before the expiry of one month from

the close of each half year, that is as on March 31 and

September 30, publish its unaudited financial results in one

English daily newspaper circulating all India and in a

newspaper published in the language of the region where

the Head Office of the Fund is situated. To ensure that portfolio

disclosures are made more frequently and timely, a complete

statement of the Scheme portfolio would be published by the

Fund as an advertisement in two newspapers within one

month from the close of each half-year (i.e. March 31 and

September 30) or mailed to the Unitholders. The abovesaid

information will also be posted on the website of the mutual

fund at www.idfcmf.com.

The AMC can send the annual report, portfolio statement,

account statements and other correspondence using email as

an alternate mode of communication with the consent of the

unitholders.

7. Rights of Unitholders of the Scheme

1. Unitholders of the Scheme have a proportionate right in the

beneficial ownership of the assets of the Scheme and in case

of declaration of dividend, for the receipt of the dividend

declared by the Fund under the Scheme.

2. When the Fund declares a dividend under the Scheme, the

Fund shall dispatch the dividend warrants to the Unitholders

within 30 days from the date of declaration of dividend.

3. The Trustee is bound to make such disclosures to the

Unitholders as are essential in order to keep them informed

about any information known to the Trustee which may have

an adverse bearing on their investments.

4. The appointment of an AMC for the Fund can be terminated

by a majority of the Trustees or by 75% of the Unitholders of

the Scheme and any change in the appointment of the AMC

shall be subject to the prior approval of SEBI and the

Unitholders of the Scheme.

5. The Trustee is obliged to convene a meeting on a requisition

of 75% of the Unitholders of the Scheme.

6 75% of the Unitholders of a Scheme can pass a resolution to

wind up the Scheme.

7. Unitholders have the right to inspect all the documents listed

under "Documents Available for Inspection".

8. The Trustee shall obtain the consent of the Unitholders:

a) whenever required to do so by SEBI, in the interest of

Unitholders

b) whenever required to do so on the requisition made by

three-fourths of the Unitholders of the Scheme

c) when the Trustee decides to wind up or prematurely

redeem the units

9. The Trustees shall ensure that no change in the fundamental

attributes of any Scheme or the trust or fee and expenses

payable or any other change which would modify the Scheme

and affect the interests of Unitholders is carried out unless:

a) a written communication about the proposed change is

sent to each Unitholder and an advertisement is given in

one English daily newspaper having nationwide 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

b) the Unitholders are given an option to exit at the

prevailing Net Asset Value without any exit load.

Subject to the Regulations and the guidelines issued by SEBI,

the consent of the Unitholders will be obtained through

voting, by mail. Detailed modalities of the same, including

the principles for entitlement of votes for each Unitholder will

be finalised in consultation with and after obtaining the

approval of SEBI and the Trustee.

Unclaimed Redemption/ Dividend Amount

SEBI vide its circular dated November 24, 2000, has asked the

Mutual Fund to follow below mentioned guidelines :

The unclaimed redemption and dividend amounts may be

deployed by the mutual funds in call money market or money

market instruments and the investors who claim these amounts

during a period of three years from the due date shall be paid

at the prevailing Net Asset Value. The Fund would deploy the

unclaimed redemption and dividend amount in the interest

of the investors in such instruments / securities which the

AMC would feel appropriate from time to time. After a period

of three years, this amount can 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.

It should be specifically noted that the AMC should make a

continuous effort to remind the investors through letters to

take their unclaimed amounts. Further, the investment

management fee charged by the AMC for managing unclaimed

amounts shall not exceed 50 basis points.


As per SEBI circular dated February 9, 2001, investors may

ascertain about any further changes after the date of the Offer

Document from the Mutual Fund / its Investor Service Centres

/ distributors or brokers.

8. Duration of the Scheme / Winding up

The duration of the Scheme is ten years from the date of

allotment for units offered under the NFO of the scheme. The

AMC, the Fund and the Trustee reserve the right to make such

changes / alterations to the Scheme (including the charging

of fees and expenses) offered under this Offer Document to

the extent permitted by the applicable Regulations.

If ninety percent or more of the units of the scheme are

repurchased / redeemed before completion of ten years, the

fund may at its discretion terminate that plan even before the

stipulated period of ten years and redeem the outstanding

units at the final repurchase price to be fixed by the fund.

In terms of the SEBI Regulations, a Scheme may be wound up

after repaying the amount due to the Unitholders :

1. On happening of any event, which in the opinion of the

Trustee, requires the Scheme to be wound up, or

2. If seventy five percent (75%) of the Unitholders of the

Scheme pass a resolution that the Scheme be wound up,

or

3. If SEBI so directs in the interest of the Unitholders.

Where the Scheme is so wound up, the Trustee shall give

notice of the circumstances leading to the winding up of the

Scheme to :

1. SEBI and

2. in two daily newspapers with circulation all over India

and in one vernacular newspaper with circulation where

the office of the Mutual Fund is situated.

On and from the date of the publication of notice of winding

up, the Trustee or the Investment Manager, as the case may

be, shall :

1. cease to carry on any business activities in respect of the

Scheme so wound up;

2. cease to create or cancel Units in the Scheme;

3. cease to issue or redeem Units in the Scheme.

9. Procedure and manner of Winding up

The Trustee shall call a meeting of the Unitholders to approve

by simple majority of the Unitholders present and voting at

the meeting for authorising the Trustee or any other person

to take steps for the winding up of the Scheme.

The Trustee or the person authorised above, shall dispose ofthe assets of the Scheme concerned in the best interest of theUnitholders of the Scheme.

The proceeds of sale realised in pursuance of the above, shallbe first utilised towards discharge of such liabilities as are dueand payable under the Scheme, and after meeting the expensesconnected with such winding up, the balance shall be paidto Unitholders in proportion to their respective interest in theassets of the Scheme, as on the date the decision for windingup was taken.

On completion of the winding up, the Trustee shall forwardto SEBI and the Unitholders a report on the winding up,detailing the circumstances leading to the winding up, thesteps taken for disposal of the assets of the Scheme beforewinding up, net assets available for distribution to theUnitholders and a certificate from the auditors of the Fund.

Notwithstanding anything contained herein above, theprovisions of the Regulations in respect of disclosures of half-yearly reports and annual reports shall continue to beapplicable.

After the receipt of the report referred to above, if SEBI issatisfied that all measures for winding up of the Scheme havebeen complied with, the Scheme shall cease to exist.

B. TAXATION

Tax benefits of investing in the Mutual Fund

As per the taxation laws in force as at the date of this OfferDocument, some broad income tax implications of investing inthe units of the Scheme are stated below. The information sostated is based on the Mutual Fund’s understanding of the taxlaws in force as of the date of this Offer Document, which havebeen confirmed by its auditors.

The information stated below is only for the purposes of providinggeneral information to the investors and is neither designed norintended to be a substitute for professional tax advice. As thetax consequences are specific to each investor and in view of thechanging tax laws, each investor is advised to consult his or heror its own tax consultant with respect to the specific tax implicationsarising out of his or her or its participation in the Scheme.

Implications of the Income-tax Act, 1961 as amended by theFinance Act 2008

(i) To the Mutual Fund

The Fund is a Mutual Fund registered with the Securities andExchange Board of India and hence, is eligible for the benefitsof section 10(23D) of the Income-tax Act, 1961 (“the Act”).Accordingly, the income of the Fund is exempt from incometax.

The Fund will receive all its income without any deduction oftax at source under the provisions of Section 196(iv) of theAct.

a. Securities Transaction Tax (STT)

The Mutual Fund is liable to pay securities transactiontax (STT) at prescribed rates on the value of transactionsof purchase or sale of specified securities.


The rates of STT are as under :

Nature of Transaction Payable by Value on which tax shall be levied Rates (%)

Delivery based purchase transaction in equity shares or units of Purchaser Value at which shares / 0.125

equity oriented fund entered in a recognized stock exchange units are bought

Delivery based sale transaction in equity shares or units of Seller Value at which shares / 0.125

equity oriented fund entered in a recognized stock exchange units are sold

Non-delivery based sale transaction in equity shares or units of Seller Value at which shares / 0.025

equity oriented fund entered in a recognised stock exchange units are sold

Transaction for Derivatives entered in a recognized stock exchange Seller Futures: Value at which futures are traded 0.017

(Futures and options) strike price and premium Options: Aggregate value of

Transaction for sale of an option in securities entered in a recognised Seller The option premium 0 . 0 1 7

stock exchange (proposed change effective 1 June 2008)#

Transaction for sale of an option in securities, where the option is Purchaser The settlement price 0.125

exercised entered in a recognised stock exchange (proposed

change effective 1 June 2008)#

Sale of units of an equity oriented fund to the mutual fund Seller Value at which units are sold 0.25

For this purpose, an “equity oriented fund” is defined to mean :

• such fund where the investible funds are invested by way of equity shares in domestic companies to the extent of more than65 per cent of the total proceeds of such fund; and

• which has been set up under a scheme of mutual fund specified under clause (23D)

The percentage of equity shares holdings of such fund is required to be computed with reference to the annual average ofthe monthly averages of the opening and closing figures.

# Prior to this date, that is upto 31 May 2008, all transactions in derivatives are subject to STT at a uniform rate of 0.017 percent, in the hands of the seller. Further, the value of a taxable securities transaction with respect to “option in securities” uptosuch date shall be the aggregate of the strike price and the option premium of such “option in securities”.

b. Income Distribution Tax

No income distribution tax is payable by the Fund, in respect of schemes in the nature of equity oriented fund, in terms ofsection 115R of the Act, which deals with tax on income distributable to unit holders of mutual funds.

For this purpose, “equity oriented fund” is defined to mean, inter alia, a fund where the investible funds are invested by wayof equity shares in domestic companies to the extent of more than 65 per cent of the total proceeds of such funds. Thepercentage of equity shares holdings of such fund is required to be computed with reference to the annual average of themonthly averages of the opening and closing figures.

The benefit of exemption from income distribution tax is available to both open-ended and close-ended equity orientedschemes.

c. Service tax

The Mutual Fund is liable for payment of service tax as recipient of services on various services availed by it. The rate of servicetax is 12.36 percent (tax rate of 12 percent plus education cess at 3 percent of the tax).

(ii) To the Unitholders

a. Tax on Income

In accordance with the provisions of section 10(35)(a) of the Act, income received by all categories of unit holders in respectof units of the Fund will be exempt from income-tax in their hands.

Exemption from income tax under section 10(35) of the Act would, however, not apply to any income arising from the transferof these units.

b. Tax on capital gains

As per the provisions of section 2(42A) of the Act, a unit of a Mutual Fund, held by the investor as a capital asset, is consideredto be a short-term capital asset, if it is held for 12 months or less from the date of its acquisition by the unit holder. Accordingly,if the unit is held for a period of more than 12 months, it is treated as a long-term capital asset.

Long-term capital gains

Individuals and HUFs, are granted a deduction from total income, under section 80C of the Act upto Rs. 100,000, in respect of specifiedinvestments made during the year.

As per Section 10(38) of the Act, long-term capital gains arising from the sale of unit of an equity oriented fund entered intoin a recognised stock exchange or sale of such unit of an equity oriented fund to the mutual fund would be exempt from income-tax, provided such transaction of sale is chargeable to securities transaction tax. Companies would be required to include suchlong term capital gains in computing the book profits and minimum alternate tax liability under section 115JB of the Act.


Short-term Capital Gains

As per Section 111A of the Act, short-term capital gains from the sale of unit of an equity oriented fund entered into in arecognised stock exchange or sale of such unit of an equity oriented fund to the mutual fund is proposed to be taxed at 15

per cent effective 1 April 2008 (instead of the earlier rate of 10 per cent), provided such transaction of sale is chargeable to

securities transaction tax.

The said tax rate would be increased by a surcharge of :

• 10 per cent in case of non-corporate Unit holders (excluding partnership firms), where the total income exceeds Rs.1,000,000,

• 10 per cent in case of resident partnership firms and corporate Unit holders, and

• 2.5 per cent in case of non-resident unit holders.

However, surcharge is leviable on companies and firms if their total income is in excess of Rs 10,000,000.

Further, an additional surcharge of 3 per cent by way of education cess would be charged on amount of tax inclusive of

surcharge.

In case of resident individual, if the income from short term capital gains is less than the maximum amount not chargeable

to tax, then there will be no tax payable.

Further, in case of individuals/ HUFs, being residents, where the total income excluding short-term capital gains is below the

maximum amount not chargeable to tax1, then the difference between the current maximum amount not chargeable to tax

and total income excluding short-term capital gains, shall be adjusted from short-term capital gains. Therefore only the balanceshort term capital gains will be liable to income tax at the proposed rate of 15 percent, plus surcharge, if applicable and

education cess.

Non-residents

In case of non-resident unit holder who is a resident of a country with which India has signed a Double Taxation Avoidance

Agreement (which is in force) income tax is payable at the rates provided in the Act, as discussed above, or the rates providedin the such agreement, if any, whichever is more beneficial to such non-resident unit holder.

Investment by Minors

Where sale / repurchase is made during the minority of the child, tax will be levied on either of the parents, whose income

is greater, where the said income is not covered by the exception in the proviso to section 64(1A) of the Act. When the childattains majority, such tax liability will be on the child.

Losses arising from sale of units

• As per the provisions of section 94(7) of the Act, loss arising on transfer of units, which are acquired within a period of

three months prior to the record date (date fixed by the Fund for the purposes of entitlement of the unit holder to receivethe income from units) and sold within a period of nine months after the record date, shall not be allowed to the extent

of income distributed by the Fund in respect of such units.

• As per the provisions of section 94(8) of the Act, where any units (“original units”) are acquired within a period of threemonths prior to the record date (date fixed by the Fund for the purposes of entitlement of the unitholder to receive bonus

units) and any bonus units are allotted (free of cost) based on the holding of the original units, the loss, if any, on sale

of the original units within a period of nine months after the record date, shall be ignored in the computation of the unitholder’s taxable income. Such loss will however, be deemed to be the cost of acquisition of the bonus units.

• Each Unit holder is advised to consult his / her or its own professional tax advisor before claiming set off of long-term capitalloss arising on sale / repurchase of units of an equity oriented fund referred to above, against long-term capital gains arising

on sale of other assets.

• Short-term capital loss suffered on sale / repurchase of units shall be available for set off against both long-term and short-

term capital gains arising on sale of other assets and balance short-term capital loss shall be carried forward for set off

against capital gains in subsequent years.

• Carry forward of losses is admissible maximum upto eight assessment years.

1 The maximum amounts of total income, not chargeable to tax are as under :Type of person Maximum amount of income not chargeable to taxWomen Rs. 180,000Senior citizens Rs. 225,000Other individuals and HUFs Rs. 150,000


c. Tax withholding on capital gains

Capital gains arising to a unit holder on repurchase of units by the Fund should attract tax withholding as under :

• No tax needs to be withheld from capital gains arising to a FII on the basis of the provisions of section 196D of the Act.

• In case of non-resident unit holder who is a resident of a country with which India has signed a double taxation avoidanceagreement (which is in force) the tax should be deducted at source under section 195 of the Act at the rate provided in theFinance Act of the relevant year or the rate provided in the said agreement, whichever is beneficial to such non-resident unitholder. However, such a non-resident unit holder will be required to provide appropriate documents to the Fund, to beentitled to the beneficial rate provided under such agreement.

• No tax needs to be withheld from capital gains arising to a resident unit holder on the basis of the Circular no. 715 dated8 August 1995 issued by the CBDT.

Subject to the above, the provisions relating to tax withholding in respect of gains arising from the sale of units of thevarious schemes of the fund are as under :

• No tax is required is to be withheld from long term capital gains arising from sale of units in equity oriented fund schemes,that are subject to securities transaction tax.

• In respect of short-term capital gains arising to foreign companies (including Overseas Corporate Bodies), the Fund isrequired to deduct tax at source at the proposed effective tax rate of 15.836 per cent (15 per cent tax plus 2.5 per centsurcharge thereon

2 plus additional surcharge of 3 per cent by way of education cess on the tax plus surcharge).

• In respect of short-term capital gains arising to non-resident individual unit holders, the Fund is required to deduct tax atsource at the proposed effective tax rate of 16.995 per cent (15 per cent tax plus 10 per cent surcharge thereon

3 plus

additional surcharge of 3 per cent by way of education cess on the tax plus surcharge).

d. Wealth Tax

Units held under the Schemes of the Fund are not treated as assets within the meaning of section 2(ea) of the Wealth Tax Act,

1957 and therefore, not liable to wealth-tax.

e. Notification for the purposes of section 80C"The TS(ELSS)Fund Scheme is a plan formulated under the Equity Linked Savings

Schemes, 2005, issued by the Central Government. Accordingly, investment made by individuals or HUFs in the IDFC-

TS(ELSS)Fund Scheme upto a sum of Rs. 100,000 in a financial year would qualify for deduction under section 80-C of the

Act. Units in other Schemes of the Fund have not been notified by the Central Government as qualifying for any deduction

under clause (xiii) of sub-section (2) of section 80C of the Act.”

2 Assuming that the total income of the unit holder is in excess of Rs. 10,000,000 in a tax year.3 Assuming that the total income of the unit holder exceeds Rs. 1,000,000 in a tax year.

f. Securities Transaction Tax

Nature of Transaction Tax rate (%)

Delivery based purchase transaction in

units of equity oriented fund entered in

a recognized stock exchange 0.125

Delivery based sale transaction in units

of equity oriented fund entered in a

recognized stock exchange 0.125

Non-delivery based sale transaction in

units of equity oriented fund entered in a

recognised stock exchange. 0.025

Sale of units of an equity oriented fund

to the mutual fund 0.25

Value of taxable securities transaction in case of units

shall be the price at which such units are purchased or

sold.

Rebate/ deduction on account of STT

Upto 31 March 2008, deduction on account of STT was

allowed only by way of rebate under section 88 of the

Act.

STT was specifically excluded from being allowed as

deduction in computing Business income. Effective 1 April

2008, it is proposed that deduction in respect of securities

transaction tax paid be allowed in the computation of

business income. This is subject to the condition that

such income from taxable securities transaction is included

in computing such business income.


VIII. OTHER MATTERS

A. UNITHOLDER GRIEVANCES REDRESSAL MECHANISM

Investor grievances will normally be received at the Corporate Office of the AMC or at the official point of acceptance of transactions

or directly by the Registrar. All grievances will be forwarded to the Registrar for their necessary action. The complaints will be closely

followed up with the Registrar to ensure timely redressal and prompt investor service.

The status of complaints received

Period Complaints received Complaints redressed Complaints pending

April, 2001 to March, 2002 1031 1031 NIL



April 2004 to March 2005 1347 1342 NIL




April 2008 352 329 23

B. ASSOCIATE TRANSACTIONS

1. Investment in Group Companies

The AMC has till date not made investment in any of its Group Companies.

2. Underwriting obligations with respect to issues of Associate Companies :

The AMC has till date not entered into any underwriting contracts in respect of any public issue made by any of its associate

companies.

3. Subscription in issues lead managed by the Sponsor or any of its associates :

The AMC may subscribe to issues lead managed by the Sponsor or any of its associates. Such subscriptions shall be in accordance

with the applicable regulatory requirements. Disclosures pertaining to such subscriptions, wherever required, shall be disclosed

appropriately to interalia, the unitholders and trustees.

4. Dealings with Associate Companies

The AMC may, from time to time, for the purpose of conducting its normal business, use the services of the subsidiaries / group

companies of its Sponsors and /or enter into transaction with sponsor and other associates.. The AMC may utilise the services of

these group companies and any other subsidiary or associate company of the Sponsors established or to be established at a later

date in case such an associate company is in a position to provide the requisite services to the AMC. The AMC will conduct its

business with the aforesaid companies on commercial terms and on arm's length basis and at the then prevailing market prices

to the extent permitted under the applicable laws including the Regulations, after an evaluation of the competitiveness of the

pricing offered by the associate companies and the services to be provided by them. The AMC will, before investing in the

securities of the group companies of the Sponsor, evaluate such investments, the criteria for the evaluation being the same as

is applied to other similar investments to be made under the Scheme. Investments under the Scheme in the securities of the

group companies will be subject to the limits under the Regulations. Services of the group /associate companies may be used for

broking, investment and other advise, outsourcing of operational activities etc. (not an exhaustive list of activities).


C) DETAILS OF INVESTMENT IN COMPANIES / SUBSIDIARIES THAT HOLD MORE THAN 5% OF NAV OF ANY SCHEME OF IDFC

MUTUAL FUND :

AMBUJA CEMENT LTD. IDFC-CF GFMPP - 1 194,670.51

GFMPP - II 48,788.81

GFMPP-III 986,523.11

IDFC-AF 211,738,428.30

IDFC-CEF 53,360,269.00

IDFC-EEF 162,757,955.07 66,009,330.90

IDFC-IEF 94,303,342.00

IDFC-TS - I 1,255,126.88 1,048,768.80

AXIS BANK LTD. IDFC-LM IDFC-CF 1,241,295,350.00

IDFC-LMP GFMP-22 70,114,310.74

IDFC-CF GFMP-6th Plan 30,077,010.90

IDFC-FRF - LT 3,946,815,380.89 448,474,658.76

IDFC-FRF-ST 700,301,000.00

IDFC-SSIF-ST 137,914,500.00 96,695,719.90

IDFC-AF 409,524,100.79

IDFC-CEF 246,089,883.57 169,325,532.75

IDFC-EEF 229,556,845.00

SCFMP - QS5 350,000,000.00

SCFMP - QS6 1,168,503,830.00

SCFMP - QS7 600,000,000.00

SCFMP-QS11 19,762,800.00

SCFMP-QS3 400,000,000.00

SCFMP-QS4 250,000,000.00

SCFMP-YS1 508,892,450.00

IDFC-FMP-YS10 458,119,000.00 487,460,049.22

IDFC-FMP-YS12 55,988,606.00 58,984,397.73

IDFC-FMP-YS2 22,028,304.00

IDFC-FMP-YS3 9,178,460.00

IDFC-FMP-YS5 187,667,530.00

IDFC-FMP-YS6 105,992,700.00

IDFC-FMP-YS7 451,347,000.00

IDFC-LM 283,420,200.00

IDFC-LM Plus 16,780,970,039.00

IDFC-PEF 483,332,453.93 346,331,250.00

BAJAJ HOLDINGS AND IDFC-LMP GFMPP - 1 278,316.39

INVESTMENT LTD. IDFC-LM GFMPP - II 66,119.76

GFMPP-III 1,758,990.03

IDFC-AF 19,307,076.27

IDFC-CEF 56,475,138.40

IDFC-EEF 123,708,843.43

IDFC-IEF 64,058,644.85

IDFC-TS - I 79,844.62

THE BOMBAY DYEING & IDFC-GSF-PF IDFC-AF 60,673,195.60 79,335,000.00

MANU. CO. LTD. IDFC-SMEF 69,631,541.94 82,000,000.00

BANK OF BARODA IDFC-LMP IDFC-AF 286,357,002.38 130,681,040.00

IDFC-CEF 18,039,776.94

Company Schemes Investing Aggregate for the period Outstanding as atinvested in by Scheme under Regulation 25(11) 30/04/2008 At Market/ the company Name At Cost (Rs.) Fair Value (Rs.)


C) DETAILS OF INVESTMENT IN COMPANIES THAT HOLD MORE THAN 5% OF NAV OF ANY SCHEME OF IDFC MUTUAL FUND:

(CONTD.)


BANK OF INDIA IDFC-LMP IDFC-SSIF-IP 16,014,038.00

IDFC-AF 457,376,434.45 18,860,730.00

IDFC-CEF 48,536,133.70

IDFC-LM Plus 2,000,000,000.00

BIRLA CORPORATION LTD. IDFC-SSIF-ST IDFC-AF 55,666,902.18 34,309,060.00

IDFC-FMAF-S1IDFC-QIF

BHARAT FORGE LTD IDFC-CF IDFC-AF 147,123,916.90 18,566,100.00

IDFC-AF-FM-S1 4,413,888.71

CESC LTD. IDFC-LMP IDFC-AF 138,715,400.71

IDFC-FRF-LTCUMMINS INDIA LIMITED IDFC-CF IDFC-CEF 6,166,487.00

DABUR INDIA LTD. IDFC-SSIF-MT GFMPP - 1 85,036.71

GFMPP - II 20,732.55


IDFC-AF 6,708,345.54

IDFC-EEF 111,158,307.02

IDFC-IEF 62,801,258.05

IDFC-TS - I 131,928.01

DLF LTD. IDFC-LMP IDFC-FRF - LT 489,725,000.00

IDFC-FRF LT IDFC-AF 189,860,383.84

IDFC-CEF 213,798,556.07

IDFC-EEF 416,700,251.59 458,444,105.55

IDFC-FMP-QS28 1,956,898,500.00

IDFC-IEF 70,774,099.40

IDFC-LM Plus 1,471,176,500.00 491,726,444.44

IDFC-TS - I 1,140,954.61 1,197,344.70

IDFC-TSF-ELSS 27,361,811.00

DSP MERRILL LYNCH CAPITAL LTD. IDFC-LMP IDFC-CF 400,000,000.00

IDFC-CF GFMPP-III 87,000,000.00

IDFC-FRF - LT 2,481,893,617.00

IDFC-SSIF - MT 98,434,500.00

IDFC-SSIF-IP 49,721,700.00

IDFC-SSIF-ST 344,572,950.00

IDFC-AF 379,436,140.00

IDFC-EEF 3,000,000.00

IDFC-FMP-6 19,937,380.00

SCFMP-QS19 979,363,000.00

SCFMP-YS1 149,347,650.00

IDFC-LM Plus 4,221,952,800.00

EDELWEISS CAPITAL LTD. IDFC-LMP IDFC-FRF - LT 2,700,000,000.00

IDFC-SSIF-ST 250,000,000.00

IDFC-CEF 3,507,075.00

IDFC-EEF 15,779,775.00

IDFC-IEF 1,315,050.00

IDFC-LM Plus 1,450,000,000.00

IDFC-PEF 4,382,400.00

IDFC-TSF-ELSS 788,700.00



(CONTD.)


ECL FINANCE LTD. IDFC-LMP IDFC-FRF - LT 600,000,000.00

GMR INFRASTRUCTURE LTD. (FV2) IDFC-LMP IDFC-AF 599,689,463.00

IDFC-LMIDFC-FRF-LT

HCL TECHNOLOGIES LTD. IDFC-LMP GFMPP - 1 202,831.07

IDFC-FRF-LT GFMPP - II 50,420.69

IDFC-FRF-ST GFMPP-III 1,113,881.11

IDFC-AF 37,323,168.87

IDFC-EEF 134,469,852.94 73,150,631.55

IDFC-IEF 23,001,160.00 25,123,995.00

IDFC-TS - I 1,009,967.43 1,285,910.10

HDFC BANK LTD. IDFC-LMP IDFC-CF 147,318,493.20

IDFC-FRF-LT GFMP-6th Plan 49,684,950.00

GFMPP - 1 337,040.68

GFMPP - II 86,683.30

GFMPP-III 1,850,168.59

IDFC-FRF - LT 7,093,456,680.00 2,907,118,596.61

IDFC-SSIF - MT 109,278,640.00

IDFC-SSIF-ST 49,159,800.00

IDFC-AF 2,911,455,340.59 750,000,000.00

IDFC-AF-FM-S1 100,000,000.00 50,000,000.00

IDFC-EEF 1,097,145,846.24 590,713,841.20

SCFMP - QS6 96,710,200.00

SCFMP - QS9 4,870,550,000.00

SCFMP-QS1 981,457,534.00

SCFMP-QS11 1,461,534,246.00

SCFMP-QS3 5,471,710,950.99

SCFMP-QS4 3,276,410,272.41

IDFC-FMP-YS2 242,204,000.00

IDFC-LM 1,016,694,940.00

IDFC-LM Plus 9,688,510,890.80 2,186,477,739.13

IDFC-SMEF 296,732,500.00 50,000,000.00

IDFC-TS - I 596,610.00

HERO HONDA MOTORS LTD. IDFC-LMP GFMPP - 1 151,762.76

IDFC-SSIF-MT GFMPP - II 37,746.57

IDFC-SSIF-ST GFMPP-III 850,842.03

IDFC-LM IDFC-AF 4,427,980.65

IDFC-EEF 236,952,252.77 64,850,191.60

IDFC-IEF 76,678,833.50 68,128,000.00

IDFC-TS - I 1,171,114.81 1,222,897.60

HINDALCO INDUSTRIES LTD. IDFC-SSIF-ST GFMPP - 1 209,200.14

IDFC-LMP GFMPP - II 52,149.70

IDFC-SSIF-MT GFMPP-III 1,160,418.13

IDFC-LM IDFC-AF 270,778,127.48 56,581,907.25

IDFC-DBF IDFC-CEF 37,799,770.00 37,412,080.75

IDFC-ASBF IDFC-EEF 387,087,243.27 90,719,086.10

ALL IDFC-FSS IDFC-IEF 43,603,389.20

ALL GFMP IDFC-TS - I 1,237,870.24 1,205,940.85



(CONTD.)


HINDUSTAN UNILEVER LTD. IDFC-CF GFMPP - 1 520,663.57

IDFC-SSIF-IP GFMPP - II 131,007.23

IDFC-GSF-PF GFMPP-III 2,917,527.96

IDFC-AF 14,579,480.83

IDFC-EEF 260,720,674.76 207,826,619.00

IDFC-IEF 46,464,815.93

IDFC-TS - I 1,359,494.29 1,071,070.00

INFRASTRUCTURE DEVELOPMENT IDFC-LMP IDFC-CF 300,195,150.00 60,027,360.00

FINANCE CO LTD GFMP 16 150,133,650.58

IDFC-FRF - LT 4,499,998,920.95 30,013,680.00

IDFC-SSIF - MT 119,917,020.00 120,086,950.00

IDFC-SSIF-IP 129,932,120.19 49,670,150.00

IDFC-SSIF-ST 829,590,080.41 427,208,250.00

IDFC-AF 243,674,366.56 128,757,912.50

IDFC-AF-FM-S1 15,664,934.58 9,722,536.25

IDFC-EEF 1,350,781,850.00 700,319,200.00

IDFC-FMP-YS20 500,887,400.00 502,570,900.00

IDFC-FMP-YS7 310,276,210.59

IDFC-IEF 114,937,134.33 44,537,500.00

IDFC-LM Plus 2,068,968,891.63

IDFC-SMEF 10,005,310.00 10,004,560.00

IDFC-TSF-ELSS 19,311,344.40 19,507,425.00

ICICI BANK LTD. IDFC-FRF-LT IDFC-CF 3,749,456,103.48

IDFC-LMP IDFC-DBF 96,692,623.50

GFMP 16 24,608,361.00

GFMP-20 66,050,195.00

GFMP-22 99,793,531.50

GFMP-6th Plan 146,209,738.00

GFMP8 73,456,720.00

IDFC-FMP-9 10,266,870.00 47,944,600.00

GFMPP - 1 5,015,987.17

GFMPP - II 456,083.76

GFMPP-III 3,912,123.17

IDFC-FRF - LT 35,907,436,246.82 4,251,625,026.03

IDFC-FRF-ST 1,369,303,090.00

IDFC-SSIF - MT 2,267,176,360.00 230,053,383.29

IDFC-SSIF-IP 413,347,870.00 46,496,467.86

IDFC-SSIF-ST 1,744,494,040.70 95,909,052.95

IDFC-AF 6,631,074,431.64 113,679,766.92

IDFC-AF-FM-S1 52,456,248.10

IDFC-CEF 970,692,771.70 84,924,500.40

IDFC-EEF 7,112,742,270.90 372,801,747.60

SCFMP - QS10 1,719,683,850.00

SCFMP - QS13 1,290,396,090.00

SCFMP - QS2 9,878,790.00

SCFMP - QS5 1,949,666,000.00



(CONTD.)


SCFMP - QS6 1,450,071,188.00SCFMP - QS7 6,268,104,135.00SCFMP - QS8 136,197,560.00SCFMP - QS9 9,770,820.00

SCFMP 7 47,989,200.00SCFMP-1 9,449,010.00

SCFMP-10 1,245,650,890.00IDFC-FMP-EMS-1 64,207,290.00 66,273,790.82

SCFMP-HYS1 28,640,670.00SCFMP-HYS2 412,887,210.00SCFMP-QS11 2,547,514,970.00SCFMP-QS15 742,615,632.00SCFMP-QS19 2,481,588,900.00

IDFC-FMP-QS25 1,261,676,720.00 676,459,784.58IDFC-FMP-QS26 81,981,540.00 83,216,876.85IDFC-FMP-QS27 231,608,750.00 232,217,731.80IDFC-FMP-QS28 296,461,200.00 296,589,883.64IDFC-FMP-YS10 2,056,968,500.00 2,153,028,976.85IDFC-FMP-YS11 168,532,045.00 183,793,896.27IDFC-FMP-YS17 582,848,340.00 591,968,213.24IDFC-FMP-YS19 1,595,295,500.00 1,613,442,328.65IDFC-FMP-YS2 4,505,055,120.00

IDFC-FMP-YS20 1,061,268,400.00 833,055,277.05IDFC-FMP-YS21 92,235,600.00 92,788,554.24IDFC-FMP-YS3 2,283,493,494.00IDFC-FMP-YS4 860,285,970.00IDFC-FMP-YS5 3,026,125,580.00IDFC-FMP-YS6 1,073,244,950.00IDFC-FMP-YS7 1,496,042,575.00IDFC-FMP-YS8 1,500,835,170.00IDFC-FMP-YS9 904,528,390.00 984,865,250.07

IDFC-IEF 637,544,407.69 54,139,380.00IDFC-LM 818,398,990.00

IDFC-LM Plus 54,048,895,770.61 4,139,943,375.34IDFC-PEF 756,078,615.81

IDFC-SMEF 344,750,450.00IDFC-TS - I 1,552,069.78

IDFC-TSF-ELSS 59,540,638.00ICICI SECURITIES PRIMARY IDFC-CF 1,050,000,000.00DEALERSHIP LTD. GFMP 16 194,933,000.97

GFMP-22 194,993,900.86GFMP-6th Plan 98,711,400.97

GFMPP - 1 98,898,300.00IDFC-FRF - LT 5,898,365,000.82IDFC-FRF-ST 1,150,000,000.00

IDFC-AF 249,681,100.00IDFC-CEF 98,279,100.99IDFC-EEF 196,607,300.63IDFC-IEF 98,290,900.60IDFC-LM 100,000,000.00

IDFC-LM Plus 28,899,635,600.00



(CONTD.)


IDEA CELLULAR IDFC-LMP IDFC-AF 26,186,924.61

IDFC-LM IDFC-CEF 29,102,922.19

IDFC-EEF 270,116,665.40 106,077,011.15

IDFC-TS - I 367,613.72

IFCI LTD. IDFC-LM IDFC-AF 448,404,150.62 40,734,182.50

IDFC-AF-FM-S1 19,217,412.75 6,696,030.00

IDBI LTD. IDFC-FRF-LT IDFC-CF 360,027,490.00

IDFC-LMP GFMP-22 99,253,300.00

GFMP-6th Plan 131,820,560.00

IDFC-FRF - LT 668,791,040.00 404,052,400.00

IDFC-AF 437,468,450.43 165,911,990.00

IDFC-AF-FM-S1 1,016,240.00

IDFC-CEF 50,357,050.00

IDFC-EEF 498,699,310.00

IDFC-LM 440,265,400.00

IDFC-LM Plus 3,600,964,010.00 700,068,700.00

ITC LTD. IDFC-SSIF-IP GFMPP - 1 711,902.91

IDFC-LM GFMPP - II 172,986.22

IDFC-SSIF-ST GFMPP-III 651,458.81

IDFC-FRF-ST IDFC-AF 40,251,412.78

IDFC-EEF 186,537,990.44 315,919,335.00

IDFC-IEF 31,773,762.00 72,226,594.80

IDFC-TS - I 217,689.66


INDIABULLS FINANCIAL IDFC-LMP IDFC-LM 5,956,818,000.00

SERVICES LTD. IDFC-FRF-LT IDFC-LM Plus 79,840,080.00

INDIAN BANK IDFC-LM IDFC-AF 104,528,251.97 18,653,800.00

IDFC-EEF 2,207,114.00

JET AIRWAYS LTD. IDFC-CF IDFC-EEF 1,507,659.94

IDFC-LMP IDFC-PEF 187,226,755.30 105,363,680.00

IDFC-LM

L & T IDFC-SSIF-ST GFMPP - 1 420,193.38

IDFC-FRF-LT GFMPP - II 51,866.66

IDFC-LM GFMPP-III 615,106.40

IDFC-SSIF-MT IDFC-AF 218,299,133.40 144,005,837.50

IDFC-CEF 22,077,490.28 158,493,515.50

IDFC-EEF 129,843,995.52 334,619,111.75

IDFC-IEF 40,491,932.42 79,811,368.75

IDFC-TS - I 153,717.16

IDFC-TSF-ELSS 24,155,928.00 42,495,987.50

L & T FINANCE LTD. IDFC-LMP IDFC-LM Plus 248,002,500.00

MAHARASHTRA SEAMLESS LTD. IDFC-SSIF-ST IDFC-AF 90,617,948.95 26,076,330.00

IDFC-CEF 249,755,834.73

IDFC-PEF 14,514,644.00




(CONTD.)


MARUTI SUZUKI INDIA LTD. IDFC-LMP IDFC-AF 127,646,998.99

IDFC-FRF-LT IDFC-AF-FM-S1 8,466,464.00 148,420.00

IDFC-CEF 257,769,503.12 142,369,658.70

IDFC-IEF 63,883,952.45 37,105,000.00

IDFC-TS - I 912,118.02 1,058,976.70

IDFC-TSF-ELSS 39,050,977.22 28,605,728.70


IDFC-EEF 64,268,964.15 81,761,609.60

MINDTREE LIMITED IDFC-QIF IDFC-CEF 3,434,850.00

IDFC-LM IDFC-EEF 10,172,800.00

NITIN FIRE PROTECTION IND LTD. IDFC-SSIF-ST IDFC-PEF 4,224,460.00


PATNI COMPUTERS IDFC-QIF IDFC-AF 159,674,129.38

IDFC-FRF-LT

PETRONET LNG LTD. IDFC-LMP IDFC-AF 174,422,931.54 8,805,500.00

IDFC-AF-FM-S1 9,585,836.00 1,937,210.00

IDFC-PEF 29,599,304.00

RELIANCE PETROLEUM LTD. IDFC-FRF-LT GFMPP-III 1,750,113.08

IDFC-LM IDFC-AF 333,407,897.87 149,369,632.50

IDFC-LMP IDFC-AF-FM-S1 46,612,828.87 23,265,247.50

ALL IDFC-FSS IDFC-CEF 205,542,177.68 201,902,490.90

ALL GFMP IDFC-EEF 512,497,665.98 345,445,494.90

IDFC-IEF 71,736,040.50 60,505,747.50

IDFC-SMEF 79,824,709.50 81,727,800.00

IDFC-TS - I 679,771.62

IDFC-TSF-ELSS 32,813,128.10 44,083,290.90

RELIANCE POWER LTD. IDFC-LMP IDFC-EEF 71,001,000.00

IDFC-FRF-LT

STERLITE INDUSTRIES LTD. IDFC-FRF-LT IDFC-CF 2,280,000,000.00

IDFC-LM GFMPP - 1 4,006,557.50

IDFC-LMP GFMPP - II 249,112.00

IDFC-SSIF-MT GFMPP-III 1,528,587.28

IDFC-FRF - LT 1,450,000,000.00

IDFC-FRF-ST 370,000,000.00

IDFC-AF 255,001,502.55 42,325,516.80

IDFC-CEF 301,622,017.83 206,799,355.20

IDFC-EEF 522,117,101.10 233,112,166.80

IDFC-IEF 85,142,570.85 40,120,200.00

IDFC-LM 1,890,000,000.00

IDFC-LM Plus 5,620,000,000.00

IDFC-TS - I 1,232,526.55

IDFCT-SF-ELSS 27,722,613.41 36,712,140.00

HINDUSTAN ZINC LTD. IDFC-SSIF-ST IDFC-AF 14,037,714.88

IDFC-FRF-LT IDFC-IEF 40,215,086.00

IDFC-SSIF-MT

ALL IDFC-FSS

ALL GFMP



(CONTD.)


SYNDICATE BANK IDFC-LMP IDFC-AF 190,147,497.76 56,374,710.00

IDFC-FRF-LT IDFC-AF-FM-S1 22,195,512.08 16,714,110.00

STATE BANK OF MYSORE IDFC-LMP IDFC-CF 338,347,300.00

IDFC-CF IDFC-DBF 17,588,358.00

GFMP-22 21,663,810.00

GFMP-6th Plan 5,817,636.00

GFMPP - 1 98,951,800.00

IDFC-FRF - LT 5,862,373,550.00 871,037,710.50

IDFC-SSIF - MT 91,304,300.00

IDFC-SSIF-IP 59,885,937.50

IDFC-SSIF-ST 326,086,300.00

IDFC-AF 99,773,400.00

IDFC-CEF 295,032,450.00

IDFC-EEF 146,245,100.00

SCFMP-YS1 5,860,440.00

IDFC-IEF 147,116,800.00

IDFC-LM 121,294,400.00

IDFC-LM Plus 4,232,349,693.00 247,475,200.00

IDFC-SMEF 787,268,050.00


STATE BANK OF SAURASHTRA IDFC-LMP IDFC-CF 202,722,650.00

GFMP-22 19,771,060.00

IDFC-FRF - LT 8,598,703,030.00 1,773,915,913.34

IDFC-FRF-ST 48,376,800.00

IDFC-SSIF-IP 19,720,800.00

IDFC-SSIF-ST 327,120,090.00

IDFC-AF 249,506,500.00

IDFC-CEF 245,598,250.00

SCFMP - QS5 1,462,728,000.00

SCFMP-HYS2 2,866,839.00

SCFMP-QS14 44,913,811.00

SCFMP-QS28 19,825,460.00

IDFC-FMP-YS2 241,539,500.00

IDFC-LM 740,281,000.00

IDFC-LM Plus 8,350,159,400.00 49,884,464.08

IDFC-SMEF 576,180,710.00 329,245,824.30

TANLA SOLUTIONS LTD. IDFC-SSIF-MT GFMPP - II 47,700.00

IDFC-CEEF 30,015,755.00

TELEVISION EIGHTEEN INDIA LTD. IDFC-LM IDFC-PEF 114,087,726.17

TATA MOTORS LTD. IDFC-LMP IDFC-CF 550,000,000.00

GFMPP - 1 334,378.50

GFMPP - II 80,913.89

GFMPP-III 1,927,121.67

IDFC-FRF - LT 4,396,008,000.00

IDFC-AF 309,109,949.24

IDFC-CEF 177,836,708.54



(CONTD.)


IDFC-EEF 207,591,540.32 97,689,474.00IDFC-IEF 58,044,790.14IDFC-LM 300,000,000.00

IDFC-LM Plus 8,350,000,000.00IDFC-TS - I 1,318,225.56 1,139,617.50

IDFC-TSF-ELSS 9,766,408.32TISCO LTD. IDFC-LMP GFMPP - 1 271,385.11

GFMPP - II 69,330.89GFMPP-III 685,118.62IDFC-AF 726,208,043.73

IDFC-AF-FM-S1 31,436,417.51IDFC-CEF 177,935,828.73 97,494,706.50IDFC-EEF 244,300,579.50 228,132,281.10IDFC-TS - I 1,537,762.65 1,314,927.75

TATA CONSULTANCY IDFC-LM GFMPP-III 948,223.05SERVICES LIMITED ALL IDFC-FSS IDFC-AF 38,571,490.92

ALL GFMP IDFC-CEF 39,981,449.10IDFC-EEF 92,665,945.98 343,710,753.00IDFC-TS - I 1,837,428.75 1,117,173.00

UCO BANK IDFC-LMP IDFC-CF 338,212,700.00GFMP 16 14,385,795.00GFMP-22 14,385,795.00

GFMP-6th Plan 68,836,310.00IDFC-FRF - LT 3,897,454,411.00 92,865,770.67IDFC-FRF-ST 197,896,800.00

IDFC-SSIF - MT 621,295,500.00 91,941,759.55IDFC-CEF 197,880,200.00IDFC-EEF 218,785,340.00

SCFMP-HYS1 59,410,800.00IDFC-FMP-YS20 136,626,750.00 137,912,639.50IDFC-FMP-YS5 180,771,200.00IDFC-FMP-YS8 371,372,000.00 371,462,594.94

IDFC-IEF 149,451,900.00IDFC-LM 1,124,763,800.00

IDFC-LM Plus 3,954,613,850.00IDFC-PEF 178,099,360.00

IDFC-TSF-ELSS 39,607,200.00TATA COMMUNICATION LTD. IDFC-SSIF-ST GFMPP - 1 118,728.52

IDFC-LM GFMPP - II 30,660.78IDFC-AF GFMPP-III 695,775.65

IDFC-SSIF-MT IDFC-AF 12,759,617.70IDFC-EEF 147,162,003.79 54,184,906.75IDFC-IEF 24,387,401.00

IDFC-TS - I 198,804.75WIPRO LTD. IDFC-SSIF-ST GFMPP - 1 6,244,711.96

IDFC-LM GFMPP - II 426,704.06IDFC-LMP GFMPP-III 4,473,248.00

IDFC-FRF-LT IDFC-AF 27,467,133.57IDFC-CEF 166,449,776.00IDFC-EEF 701,396,818.94 272,370,111.25IDFC-IEF 111,728,332.93

IDFC-TS - I 1,379,029.38* IDBI LTD. has invested in IDFCFRF-LT & IDFCLMP during the concerned period. The Schemes which have invested in IDBI LTD. have beenincluded in the report. In case of IDFCFMP-9 & IDFCFMP-6 (not included above) where market value of investments is Rs.49,720,550/- &Rs. 99,135,600/- respectively whereas the same has been purchased prior to the date specified in Regulation 25 (11).

Note :- In the opinion of IDFC Asset Management Company Private Limited, the above investments were considered sound and are in linewith the investment objective of the Scheme.


D. PENALTIES & PENDING LITIGATIONS

S.No. SEBI Requirement Disclosure to be given

1. Cases of penalties awarded by SEBI under the There have been no penalties awarded by SEBI against IDFC Group or any

SEBI Act or any of its regulations against the company associated with IDFC Group in any capacity including the AMC,

Sponsor of the Mutual Fund or any company Trustee Company, or any of the directors or key personnel of the AMC

associated with the Sponsor in any capacity and Trustee Company.

including the Asset Management Company,

Trustee Company/Board of Trustees, or any of

the directors or key personnel (specifically the

fund managers) of the Asset Management

Company and Trustee Company.

The nature of the penalty must be disclosed.

For Sponsor and its associates, other than the Nil

penalties as mentioned above, the penalties

awarded by any financial regulatory body,

including stock exchanges, for defaults in respect

of shareholders, debenture holders and

depositors shall also be disclosed.

(All disclosures on penalties and action taken NIL

against foreign entities may be limited to the

jurisdiction of the country where the principal

activities (in terms of income / revenue) of the

sponsors / associate companies are carried out or

the where the head quarter is situated. Top 10

monetary penalties in case of foreign entities and

all monetary penalties in case of Indian entities,

imposed against the AMC / Trustee Company /

Sponsor or any associate of the sponsor

(for irregularities / violations in the financial services

sector or for defaults in respect of share holders /

debenture holders and depositors, in jurisdiction

country as determined in the above clause, by any

financial regulatory body or government authority

or settlement arrived with any financial regulatory

body during the last five years and details thereof)

Additionally, penalties awarded for any economic Penalties awarded for violation of any securities laws to be disclosed

offence and violation of any securities laws shall IDFC Group and associates including the AMC and Trustee

be for disclosed. (Penalties awarded for economic Company

offences are disclosed only in case of AMC,

sponsor and Trustee Company) Nil

Penalties awarded for economic offences in case of AMC, Sponsor and

Trustee Company.

Nil


D. PENALTIES & PENDING LITIGATIONS (Contd.,)

S.No. SEBI Requirement Disclosure to be given

1 a. Details of all cases of suspensions and Nil

cancellation of certificate of registration

(for irregularities / violations in financial

services sector or for defaults in respect of

share holders, debenture holders and

depositors) of the AMC, Trustee Company

and sponsor or any associate of the sponsor

shall be disclosed for the last 10 years

2. Any pending material litigation proceedings Pending material litigation proceedings incidental to the business of the

incidental to the business of the Mutual Fund to Mutual Fund to which IDFC Group or any company associated with IDFC

which the Sponsor of the Mutual Fund or any Group including the AMC, Trustee Company or any of the directors or

company associated with the Sponsor in any key personnel is a party.

capacity including the AMC, Board of Trustees /

Trustee Company or any of the directors or

key personnel is a party. Any pending criminal Nil

cases against the Sponsor or any company

associated with the Sponsor in any capacity

including the AMC, Board of Trustees/Trustee Pending criminal cases against IDFC Group or any company associated

Company or any of the directors or key personnel with IDFC Group including the AMC, Board of Trustees/Trustee Company

should also be disclosed separately. or any of the directors or key personnel.

As far as Group is aware it and its subsidiaries are not engaged in any

material litigation (whether as defendant or otherwise) outside India,

the results of which would have a significant material effect on their

financial position or operation.

As far as the Group is aware, there are no pending material criminal or

economic offence cases in India as described (to be confirmed), except in

a case involving one of the fund managers of the AMC, Mr. Ajay Bodke,

against whom proceedings have been initiated by the Central Bureau of

Investigation in a matter pertaining to his previous employment. The

matter is presently under the purview of courts and the AMC is closely

monitoring the developments in the matter.

3. Any deficiency in the systems and operations of Nil

the Sponsor of the Mutual Fund or any company

associated with the sponsor in any capacity

including the AMC or the Trustee Company

which SEBI has specifically advised to be disclosed

in the offer document, or which has been

notified by any other regulatory agency, shall

be disclosed

4. Any enquiry/adjudication proceedings under Nil

the SEBI Act and the Regulations made there

under, that are in progress against the

Sponsor of the Mutual Fund or any company

associated with the Sponsor in any capacity

including the AMC, Board of Trustees/Trustee

Company or any of the Directors or key personnel

of the Asset Management Company shall

be disclosed


E. BORROWING BY THE MUTUAL FUND

Under the Regulations, the Fund is allowed to borrow to

meet its temporary liquidity needs of the Fund for the

purpose of repurchase, redemption of Units or payment of

interest or dividend to the Unitholders. Further, as per the

Regulations, the Fund shall not borrow more than 20% of

the Net Assets of the Scheme and the duration of such

borrowing shall not exceed a period of six months. The

Fund may raise such borrowings after approval by the Trustee

from any of its Sponsors/Associate/Group companies/

Commercial Banks in India or any other entity at market

related rates prevailing at the time and applicable to similar

borrowings. The security for such borrowings, if required,

will be as determined by the Trustee. Such borrowings, if

raised, may result in a cost, which would be dealt with in

consultation with the Trustees.

Till November 30, 2005, no borrowings had been made by

the Fund. However during the months of December, 2005

and January, 2006 there were borrowing in IDFC Cash Fund

(IDFCCF) for meeting the redemption requirements.

No Borrowings were made from the month of February 2006

till February 2007. During the month of March, 2007, there

were borrowing in IDFC Liquidity Manager Plus (IDFCLMP)

for meeting the redemption requirements. No borrowing

were made during the months of April 2007 till December

2007. During the month of January, 2008, there were

borrowing in IDFC Floating Rate Fund – Long Term (IDFCFRF-

LT) for meeting the redemption requirements. No Borrowings

were made in the month of February, 2008, March, 2008

and April, 2008.

F. INTER-SCHEME TRANSFERS

Transfer of investments from one Scheme to another Scheme

under the Mutual Fund shall be allowed only if such transfers are

done in conformity with Regulations. In case of securities which

are not traded on the Principal Stock Exchange / any other

exchange, the inter-Scheme transfers will be effected based on

fair valuation to be arrived at by the AMC with the approval of

the Trustee.

G. STOCK LENDING

"If permitted by SEBI under extant regulations/guidelines, the

Scheme may also engage in stock lending. The Scheme may also

enter into 'Repo / Reverse Repo' transactions, as may be permitted

from time to time. Stock lending means the lending of stock to

another person or entity for a fixed period of time, at a negotiated

compensation. The securities lent will be returned by the borrower

on expiry of the stipulated period.

The risks in lending portfolio securities consists of counterparty

risk - inability to return the securities deposited by the lender and

the possible loss of any income accruing to the lender. Besides,

there can also be temporary illiquidity of the securities that are

lent out and the Scheme may not be able to sell such lent out

securities. It may be noted this activity would have the inherent

probability of collateral value drastically falling in tim times of

strong downward market trends.

Subject to the SEBI Regulations, the Mutual Fund may, engage

in Securities Lending. Such investments shall be made when in

view of the Fund Manager, such investments could provide

reasonable returns commensurate with risks associated with such

investments and shall be made in accordance with the investment

objective of the Scheme. Securities Lending means the lending

of Securities to another person or entity for a fixed period of

time, at a negotiated compensation in order to enhance returns

of the portfolio. The securities lent will be returned by the borrower

on the expiry of the stipulated period. The lending transactions

may require procurement of collateral which would exceed in

value, the value of the securities lent. The collateral can be in the

form of cash, bank guarantee, government securities or certificate

of deposits or other securities as may be agreed. As with other

modes of extensions of credit, there are risks inherent to securities

lending, including the risk of failure of the other party, in this

case the approved intermediary, to comply with the terms of the

agreement entered into between the lender of securities i.e. the

scheme and the approved intermediary. Such failure can result in

the possible loss of rights to the collateral put up by the borrower

of the securities, the inability of the approved intermediary to

return the securities deposited by the lender and the possible

loss of any corporate benefits accruing to the lender from the

securities deposited with the approved intermediary.

The Mutual Fund may not be able to sell such lent out securities

and this can lead to temporary illiquidity.

Under normal circumstances, the Scheme shall not have exposure

of more than 100% of its equity investments of the scheme in

stock lending activities. However the AMC with a view to protecting

the interests of the investors, may increase exposure in stock

lending activities as deemed fit from time to time.

H. DIVIDENDS AND DISTRIBUTIONS

The Trustee proposes to adopt the following dividend distribution

policy:

Dividends, if declared, will be paid out of the net surplus of the

Scheme / Plan to those Unitholders whose names appear in the

Register of Unitholders on the record date. The investors may

obtain information on the exact record date from the office of

the Mutual Fund/ the Registrar. Unitholders are entitled to receive

dividend within 30 days of the date of declaration of the dividend.

However, the Mutual Fund will endeavour to make dividend

payments sooner to Unitholders. There is no assurance or


guarantee to Unitholders as to the rate of dividend distribution

nor that dividends will be regularly paid, though it is the intention

of the Mutual Fund to make regular dividend distributions under

the respective investment option.

I. GENERAL INFORMATION

1. Power to make Rules

Subject to the Regulations, the Trustee may, from time

to time, prescribe such terms and make such rules for

the purpose of giving effect to the Scheme with power

to the AMC to add to, alter or amend all or any of the

terms and rules that may be framed from time to time.

2. Power to remove Difficulties

If any difficulties arise in giving effect to the provisions

of the Scheme, the Trustee may, subject to the

Regulations, do anything not inconsistent with such

provisions, which appears to it to be necessary, desirable

or expedient, for the purpose of removing such difficulty.

3. Scheme to be binding on the Unitholders

Subject to the Regulations, the Trustee may, from time

to time, add or otherwise vary or alter all or any of the

features of investment options and terms of the Scheme

after obtaining the prior permission of SEBI and

Unitholders (where necessary), and the same shall be

binding on all the Unitholders of the Scheme and any

person or persons claiming through or under them as

if each Unitholder or such person expressly had agreed

that such features and terms shall be so binding.

4. Documents available for inspection

1. Memorandum and Articles of Association of the

Trustee Company and the AMC

2. Custodian Agreement between Trustee and

Deutsche Bank

3. Investment Management Agreement

4. Trust Deed and amendments thereto

5. Mutual Fund Registration Certificate

6. Consent of Registrar to act in the said capacity

7. Consent of Auditors to act in the said capacity

8. Securities and Exchange Board of India (Mutual

Funds) Regulations, 1996 and amendments thereof

from time to time

9. Indian Trust Act, 1882

10. Annual Report of the AMC.

Note : The offer document containing details of the schemes of

IDFC Mutual Fund , had been approved by the Board of IDFC

AMC Trustee Company Private Limited (formerly known as

Standard Chartered Trustee Company Private Limited) on October

13, 2006. The Board of Directors of IDFC AMC Trustee Company

Private Limited (formerly known as Standard Chartered Trustee

Company Private Limited) have ensured that the scheme approved

by them is a new product offered by the Mutual Fund and is not

a minor modification of the existing scheme/fund/product. The

updation of offer documents for changing in sponsor of the

Mutual Fund was approved on May 24, 2008.

Notwithstanding anything contained in the Offer Document

the provisions of SEBI (Mutual Funds) Regulations 1996 and

Guidelines thereunder shall be applicable. Further, investors

may ascertain about any further changes from the Mutual

Fund/official points of acceptance of transactions/ distributors

or brokers.

For and on behalf of the Board of Directors of

IDFC Asset Management Company Private Limited

Sd/-

Naval Bir Kumar

Managing Director

Mumbai, October 13, 2006

(When initially submited to SEBI)


CAMS TRANSACTION POINTS

AGRA No. 8, II Floor, Maruti Tower, Sanjay Place, Uttarpradesh, Agra, Pin code: 282002. Phone: 0562-324 0202, 324 2267

AKOLA Opp. Rlt Science College, Civil Lines, Akola - 444001 Phone : 724-3203830

ANANTAPUR 15-570-33, I Floor, Pallavi Towers , Anantapur - 515 001 A.P. Phone: 8554-326980/326921

ANKLESHWAR G-34, Ravi Complex, Valia Char Rasta, G.I.D.C., Ankleshwar- Bharuch -393 002. Phone: 02646-310206/310207

AJMER Shop No.S-5, Second Floor Swami Complex, Ajmer - 305 001. Phone: 0145-329 2040.

AHMEDNAGAR 203-A, Mutha Chambers, Old Vasant Talkies, Market Yard Road, Ahmednagar, Maharashtra, Pin code: 414 001

Phone: 241- 320 4221, 320 4309

ALLAHABAD No.7 Ist Floor, Bihari Bhawan, 3 , S.P. Marg, Civil Lines, Allahabad-211001. Phone:0532-3291273/3291274

ALWAR 256A, Scheme No:1, Arya Nagar, Alwar-301001. Phone:0144-3200451

ALIGARH City Enclave, Kumar Nursing Home, Ramghat Road, U.P. Aligarh-202001. Phone: 571-321 771 /321 787

AMRAVATI 81,Gulsham Tower, 2nd Floor Near Panchsheel Takies, Amaravati - 444 601. Phone: 0721 - 3291965

AMRITSAR 378-Majithia Complex, 1st Floor, M. M. Malviya Road Amritsar - 143001. Phone:0183-3257404

ANAND 101, A.P. Tower, B/H, Sardhar Gunj, Next to Nathwani Chambers, Anand-388001. Phone: 02692-325071/320704

ASANSOL Block - G 1st Floor P C Chatterjee Market Complex Rambandhu Talab P O Ushagram Asansol - 713303. Phone: 0341 - 329 5235 / 329 8306

AURANGABAD Office No. 1, 1st Floor, Amodi Complex, Juna Bazar, Aurangabad - 431 001. Phone: 0240-3295202.

BALASORE B C Sen Road, Balasore-756001. Phone: 06782-326808

BAREILLY 2-C, Radheyshyam Enclave, Behind Vikas Bhawan, Civil Lines, Bareilly - 243001. Phone: 581-3243172/3243322

BELLARY No.18A, 1st Floor, Opp. Ganesh Petrol Pump, Parvathi Nagar Main Road, Bellary-583103. Phone: 08392-326848/326065

BELGAUM Tanish Tower, CTS No.192/A, Guruwar Peth, Tilakwadi, Belgaum: 590006. Phone: 0831-329 9598

BEHRAMPUR 1st Flr., Upstairs of Aaroon Printers, Gandhi Nagar Main Road, Ganjam Dt, Berhampur-760001, Orrisa : Phone: 0680-320923/3205855

BHATINDA 2907 GH,GT Road, Near Zila Parishad, Punjab, Bhatinda, Pin code: 151001. Phone: 164-320 4511, 320 4170

BHAVNAGAR 305-306, Sterling Point, Waghawa Road, Opp. HDFC Bank Bhavnagar - 364002. Tel. No.: (Off) 0278 - 3004641

BHAGALPUR Dr R P Road ,Khalifabag Chowk, Bhagalpur-812001 Phone: 64-3209093/3209094

BHUJ Data Solution, Office No:17, I st Floor, Municipal Building Opp Hotel Prince, Station Road, Bhuj - Kutch-370001.

Phone: 02832-320762/320924

BHILAI 209, Khichariya Complex, Opp IDBI Bank, Nehru Nagar Square, Bhilai - 490 020 Phone: 0788 - 3299 040, 3299 049.

BHILWARA C/o Kodwani & Associates, F-20-21, Apsara Complex, Azad Market, Bhilwara-311001. Phone: 01482-320809/231808

BHOPAL C-12, Near City Bank, Above Delhi Prakashan Agency, Zone-I, M.P.Nagar, Bhopal - 462011 (M.P.). Phone: 0755 - 329 5878 / 329 5873.

BOKARO HC-3, Ist Floor, City Centre, Sector-4, Bokaro Steel City, Bokaro - 827004. State: - Jharkhand. Phone. 06542 - 324 881 / 326 322

BURDWAN 399, G T Road, Opposite of Talk of the Town Burdwan - 713101. Phone: 0342 -320 7001/3207077.

CALICUT 17/28, H 1st Floor, Manama Building, Mavoor Road, Calicut - 673 001. Phone: 0495 - 325 5984.

CUTTACK Near Allahabad Bank, Cantonment Road, Cuttack - 753001. Phone: 0671 - 329 9572.

DAVENEGERE 13, Ist Floor, Akkamahadevi Samaj Complex, Church Road, P.J.Extension, Devengere-577002. Phone:08192-326226/326227

DHANBAD Urmila Towers, Room No: 111(1st Floor), Bank More, Dhanbad - 826 001. Phone: 0326 - 3290217.

DHULE H. No. 1793 / A, J.B. Road, Near Tower Garden, Maharashtra Dhule-424 001. Phone: 329902/329903

DEOGHAR S S M Jalan Road, Ground floor, Opp. Hotel Ashoke, Caster Town, Deoghar-814112 Phone : 6432-320227/320827.

DEHRADUN 204/121 Nari Shilp Mandir Marg , Old Connaught Place Dehradun- 248001. Phone: 0135 - 325 1357, 325 8460

ERODE 199/1, Brough Road (Near Sivaranjani Hotel) Erod -638001. Phone - 0424 - 320 7730 / 3207733.

FARIDHABAD B-49, Ist Floor, Nehru Ground, Behind Anupam Sweet House, NIT, Faridhabad-121001. Phone:0129/3241148/3241147

GHAZIABAD 207/A-14, IInd Floor, Devika Chamber, RDC, Raj nagar, Gazhiabad-201002. Phone: 0120-3266917/3266918

GORAKHPUR Shop No.3, Second Floor, Cross Road, A.D. Chowk, Bank Road Gorakhpur - 273 001. Phone: 0551 - 329 4771.

GUNTUR Door No 5-38-44, 5/1 BRODIPET, Near Ravi Sankar Hotel Guntur - 522 002. Phone: 0863 - 325 2671.

GURGAON SCO - 17, 3rd Floor, Sector-14, Gurgoan-122001. Phone: 0124-326 3763/326 3833

GWALIOR 1st Floor, Singhal Bhavan, Daji Vitthal Ka Bada, Old High Court Road, Gwalior - 474001. Phone: 0751 - 320 2873 / 3202311

GULBARGA Pal Complex, Ist Floor, Opp. City Bus Stop,SuperMarket, Gulbarga - 585 101. Karnataka. Phone: 8472-310119/310523

GUWAHATI Old post office lane, A. K. Azad Lane Rehabari, Guwahati -781008. Phone: 0361 - 260 7771 / 213 9038.

HAZARIBAG Municipal Market, Annanda Chowk, Hazaribagh - 825301 Phone: 6546-320251/320250

HISAR 12, Opp. Bank of Baroda, d Square Market, Hisar - 125001. Haryana. Phone: 1662-329580/315546

HOSUR Shop No.8 J D Plaza, OPP TNEB Office, Royakotta Road, Hosur-635109. Phone: 04344-321002/321004

HUBLI 206 & 207, ' A ' Block 1st Floor, Kundagol Complex, Opp. Court, Club Road. Hubli - 580029. Phone: 0836 - 329 3374/320 0114.

JAMMU 660- A Near Digital Wares, Lane opposite Dushara Ground, Front Gate, Gandhi Nagar, Jammu-180004.

Phone: 0191-9906082698/2432601

JABALPUR 975, Chouksey Chambers, Near Gitanjali School, 4th Bridge, Napier Town, Jabalpur - 482 001. Phone: 0761 - 329 1921

JALANDHAR 367/8, Central Town, Opp. Gurudwara Diwan Asthan, Jalandhar - 144 001. Phone: 0181 - 325 7165, 325 7103.

JAMNAGAR 217/218, Manek Centre, P. N. Marg, Jamnagar-361001. Phone: 0288-329 9737

JALGAON Right Infotech, F-16, II ND Floor, Golani Market, Jalgaon-425001. Phone: 0257-3207118/3207119


CAMS TRANSACTION POINTS (Contd.)

JAMSHEDPUR Millennium Tower, S-4 Ground Floor, R- Road, Bistupur , Jamshedpur- 831001. Phone: 0657 - 329 4594.JODHPUR 1/5, Nirmal Tower, Ist Chopasani Road, Jodhpur - 342 003. Phone: 0291 - 325 1357JHANSI Opp SBI Credit Branch, Babu Lal Kharkana Compound, Gwalior Road, Jhansi-284001. Phone: 510-3202399JUNAGADH Circle Chowk, Near Choksi Bazar Kaman, Gujarat, Junagadh-362001. Phone: 0285-3200909/3200908KADAPA Door No.1-1625, DNR Laxmi Plaza, Opp. Rajiv Marg, Railway Station Road, Yerramukkapalli, Kadapa, Andhra Pradesh, Pin

code: 516 004 Phone: 8562- 322 469, 322 099KARIMNAGAR HNo.7-1-257, Upstairs S B H, Mangammathota, Karimnagar , A.P., Pin code: 505 001 Phone: 878- 320 5752, 320 8004KANNUR Room No.14/435, Casa Marina Shopping Centre, Talap, Kannur – 670004 Kerala. Phone: 497-324 9382/324 9147KALYANI A - 1/50, Block - A, Nadia Dt, Kalyani-741235. Phone: 033-32422712/32422711KESTOPUR AA 101, Prafulla Kanan, Sreeparna Appartment, Ground Floor, Kolkata, Kestopur-700101. Phone: 033-32415332/32415333KOTA B-33 'Kalyan Bhawan', Triangle Part, Vallabh Nagar, Kota-324 007. Phone: 0744 - 329 3202.KOLLAM Kochupilamoodu Junction, Near VLC, Beach Road, Kollam-691001. Phone: 474-3248376/3248377KOLHAPUR AMD Sofex Office No.7, 3rd Floor , Ayodhya Towers , Station Road Kolhapur - 416 001KOTTAYAM Door No. IX / 1276 , Amboorans Building, Manorama Junction, Kottayam - 686 001. Ph:- 0481 - 3207011 / 3206093KUMBAKONAM Jailani Complex, 47, Mutt Street, Tamil Nadu Kumbakonam - 612001. Phone: 435-3200912/3200911KURNOOL H.No.43/8, Upstairs, Uppini Arcade, N R Peta, Kurnool - 518 004 A.P. Phone: 8518-312 978/312 970LATUR Kore Complex, 2nd Cross Kapad Line, Near Shegau Patsanstha, Latur - 413 512 Maharashtra Phone : 2382-341927/341507MANIPAL Academy Annex, First Floor, Opposite Corporation Bank, Upendra Nagar, Manipal - 576104. Phone: 0820 - 325 5827MATHURA 159/160 Vikas Bazar, Mathura-281001. Phone: 0565-3207007/3206959MEHSANA 1st Floor, Subhadra Complex, Urban Bank Road, Mehsana - 384 002. Gujarat Phone: 2762-323985/323117MEERUT 108 Ist Floor Shivam Plaza, Opposite Eves Cinema, Hapur Road, Meerut - 250 002. Phone: 0121 - 325 7278MORADABAD B-612 'Sudhakar', Lajpat Nagar, Moradabad - 244 001. Phone: 0591 - 329 7202, 329 98412MYSORE No.1, 1st Floor, CH.26 7th Main, 5th Cross, (Above Trishakthi Medicals), Saraswati Puram, Mysore - 570 009. Phone: 0821 - 234 2182 / 329 4503.MUZZAFARPUR Brahman Toli, Durga Asthan, Gola Road, Muzaffarpur-842001. Phone: 0621-3207504/3207052NASIK "Varsha Bungalow", 1st Floor, Near Rungtha High School, 493, Ashok Stambh, Nasik - 422001. Phone: 0253 - 329 7084, 325 0202.NELLORE 97/56, I Floor, Immadisetty Towers, Ranganayakulapet Road, Santhapet, Andhra Pradesh, Nellore, Pin code: 524001

Phone: 0861-329 8154, 320 1042NAVSARI Dinesh Vasani & Associates, 103 -Harekrishna Complex, above IDBI Bank, Nr. Vasant Talkies, Chimnabai Road, Navasari-396445.

Phone: 02637-327709/329238PANIPAT 83, Devi Lal Shopping Complex, Opp ABN Amro Bank, G.T.Road, Panipat - 132 103. Phone : 0180 -325 0525 /400 9802PATIALA 35, New lal Bagh Colony, Patiala -147001. Phone: 0175 - 329 8926 / 222 9633.PONDICHERRY S-8, 100, Jawaharlal Nehru Street, (New Complex, Opp. Indian Coffee House), Pondicherry - 605 001. Ph: 0413 - 421 0030 / 329 2468PORBANDAR 1st Floor, Silver Complex, S.T. Road, Gujarat, Porbandar , Pin code: 360575 Phone: 286- 320 7767, 320 5220RAICHUR # 12 – 10 – 51 / 3C, Maram Complex, Besides State Bank of Mysore, Basaveswara Road, Raichur - 584101. Karnataka

Phone: 8532 – 323215 / 323006RAIPUR C-23, Sector 1, Devendra Nagar , Raipur - 492004. Phone: 0771 - 3296404RAJAMUNDHRY Cabin 101 D.no 7-27-4, 1st Floor Krishna Complex, Baruvari Street, T Nagar, Rajahmundry - 533101. Phone: 0883 - 325 1357RAJKOT 111, Pooja Complex , Harihar Chowk, Near GPO , Rajkot - 360001. Phone: 0281 - 329 8158, 329 8206RANCHI 223,Tirath Mansion (Near Over Bridge),1st Floor, Main Road, Ranchi - 834 001. Phone: 0651 - 329 6202, 329 8058RATLAM Dafria & Co, 81, Bajaj Khanna, Ratlam-457001. Phone: 07412-324829/324817ROURKELA 1st Floor, Mangal Bhawan Phase II, Power House Road , Rourkela - 769001. Phone : 0661 329 0575ROHTAK 205, 2ND Floor, Blg. No. 2, Munjal Complex, Delhi Road, Rohtak-124001. Phone: 01262-318687/318589SAGAR Opp. Somani Automobiles, Bhagwanganj, Sagar - 470 002. Madhya Pradesh Phone: 7582-326711/326894.SATARA 117 / A / 3 / 22, Shukrawar Peth, Sargam Apartment, Maharashtra Satara-415002. Phone: 2162-320926/320989SATNA 1st Floor, Shri Ram Market, Besides Hotel Pankaj, Birla Road, Satna - 485 001. Madhya Pradesh. Phone: 7672/320896-320756SOLAPUR 4, Lokhandwala Tower, 144, Sidheshwar Peth, Near Z.P. Opp. Pangal High School, Solapur-413001. Phone: 0217-3204201/3204200SALEM No.2, I Floor Vivekananda Street, New Fairlands, Salem-636016. Phone: 0427 - 325 2271SAMBALPUR C/o Raj Tibrewal & Associates, Opp.Town High School, Sansarak , Sambalpur - 768001. Orissa. Phone 0663 - 329 0591SILIGURI No 8, Swamiji Sarani, Ground Floor, Hakimpara , Siliguri - 734401. Phone: 0353 - 329 1103SHIMLA I Floor, Opp. Panchayat Bhawan Main gate Bus stand, Shimla - 171001. Himachal Pradesh. Phone : 177-3204944/3204945SHIMOGA Nethravathi, Near Gutti Nursing Home, Kuvempu Road, Shimoga, Karnataka, Pin code: 577 201. Phone: 8182- 322 966, 322 980SRIGANGANAGAR 18 L Block, Sri Ganganagar - 335001. Rajasthan. Phone: 154-3206580 / 3206295SURENDRANAGAR 2 M I Park, Near Commerce College, Wadhwan City, Surendranagar, Gujarat, Pin code: 363035 Phone: 2575- 320 321, 320 233TIRUPATHI Shop No14, Boligala Complex, 1st Floor, Door No. 18-8-41B, Near Leela Mahal Circle, Tirumala Byepass Road, Tirupathi-

517501. Phone: 0877-3206887/3209257THIRUPUR 1(1), Binny Compound, Iind Street, Kumaran Road, Thiruppur-641601. Phone: 0421-3201271/3201272TRICHUR Adam Bazar, Room no.49, Ground Floor, Rice Bazar (East). Trichur - 680 001. Phone: 0487 - 325 1564TRICHY No 8, I Floor, 8th Cross West Extn., Thillainagar, Trichy - 620 018. Phone: 0431 - 329 6906, 329 6909TRIVANDRUM R S Complex ,Opposite of LIC Building, Pattom PO, Trivandrum-695004. Phone: 0471 - 324 0202, 324 1357TIRUNELVELI III Floor, Nellai Plaza, 64-D, Madurai Road, Tirunelveli - 627 001. Ph:- 0462 -233 3688UDAIPUR 32, Ahinsapuri Fatehpura Circle, Udaipur - 313004. Phone: 0294 - 329 3202VARANASI C 27/249 - 22A, Vivekanand Nagar Colony, Maldhaiya, Varanasi - 221002. Phone: 0542 - 325 3264, 325 3265VASHI Mahaveer Center, Office No:17, Plot No:77, Sector 17, Vashi-400703. Phone : 022-32598154/32598155VELLORE No:54, Ist Floor, Pillaiyar Koil Street, Thotta Palayam, Vellore-632004. Phone: 0416/3209017-3209018VALSAD C/o. CAD HOUSE, Siddhivinayak Complex, F-1, First Floor, Avenue Building, Near R.J.J. School, Tithal Road, Valsad - 396001.

Phone: 02632 - 324 202 / 324 047WARANGAL F13, 1st Floor, BVSS Mayuri Complex , Opp. Public Garden, Lashkar Bazaar, Hanamkonda, Warangal - 506 001. Phone: 0870

- 320 2063 / 320 9927.

YAMUNANAGAR 124-B/R Model Town, Yamunanagar, Haryana - 135 001. Phone: 1732-316880/316770



Ahmedabad 402-406, 4th Floor - Devpath Building, Off C G Road, Behind Lal Bungalow, Ellis Bridge, Ahmedabad - 380 006.

Phone:079-30082468/30082469/30082470

Bangalore Trade Centre, 1st Floor 45, Dikensen Road (Next to Manipal Centre), Bangalore-560 042.

Phone : 080-30574709/30574710/30578004/30578006

Bhubaneswar 101/ 5, Janpath, Unit – III , Near Hotel Swosti, Bhubaneswar - 751 001. Phone : 0674-325 3307/325 3308

Chandigarh Deepak Towers, SCO 154-155, 1st Floor, Sector 17-C, Chandigarh-160 017.

Phone:0172-304 8720/304 8721/304 8722/3048723

Chennai Ground Floor No.178/10, Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai -600 034

Phone : 044-3911 5563/ 3911 5565 /3911 5567/39115561

Cochin 40 / 9633 D, Veekshanam Road, Near International Hotel, Cochin-682 035. Phone : 0484-323 4658 /323 4662

Coimbatore Old # 66 New # 86, Lokamanya Street (West), Ground Floor, R.S.Puram, Coimbatore-641 002.

Phone:0422-301 8000/301 8001.

Durgapur 4/2, Bengal Ambuja Housing Development Ltd, Ground Floor, City Centre Dist - Burdwan, West Bengal,

Durgapur-713 216 Phone : 0343/329 8890 /329 8891/6451419

Goa No.108, 1st Floor, Gurudutta Bldg, Above Weekender M G Road, Panaji (Goa) - 403 001.

Phone : 0832/325 1755-325 1640

Hyderabad 102, First Floor , Jade Arcade, Paradise Circle, Secunderabad-500 003.

Phone : 040-3918 2471/3918 2473 /3918 2468/3918 2469

Indore 101, Shalimar Corporate Centre, 8-B, South tukogunj, Opp.Greenpark, Indore-452 001.

Phone : 0731-325 3692/325 3646

Jaipur G-III, Park Saroj , Behind Ashok Nagar Police Station, R-7, Yudhisthir Marg ,C-Scheme. Jaipur-302 001

Phone – 0141/326 9126/326 9128/5104373/5104372

Kanpur G – 27,28 – Ground Floor, CITY CENTRE, 63/ 2, THE MALL, Kanpur-208 001.

Phone : 0512-3918003/3918000/3918001/3918002

Kolkata “LORDS Building”, 7/1,Lord Sinha Road, Ground Floor, Kolkata-700 071.

Phone : 033/32550760/3058 2285 /3058 2303 /30582281

Lucknow Off # 4,1st Floor,Centre Court Building, 3/c, 5 - Park Road, Hazratganj, Lucknow-226 001.

Phone : 0522/391 8000/391 8001/391 8002/3918003

Ludhiana U/ GF, Prince Market, Green Field, Near Traffic Lights, Sarabha Nagar Pulli, Pakhowal Road, Above Dr. Virdi’s Lab, P.O

Model Town, Ludhiana-141 002. Phone : 0161-301 8000/301 8001

Madurai 86/71A, Tamilsangam Road, Madurai-625 001. Phone : 0452-325 1357/325 2468

Mangalore No. G 4 & G 5, Inland Monarch, Opp. Karnataka Bank , Kadri Main Road, Kadri, Mangalore-575 003.

Phone : 0824-325 1357/325 2468

Mumbai Rajabahdur Compound, Ground Floor, Opp Allahabad Bank, Behind ICICI Bank 30, Mumbai Samachar Marg, Fort, Mumbai-

400 023. Phone : 022-30282468/30282469/30282471/65257932

Nagpur 145 Lendra, Behind Indus Ind Bank, New Ramdaspeth, Nagpur - 440 010. Phone : 0712-325 8275/2432447

New Delhi 304-305 III Floor, Kanchenjunga Building, 18, Barakhamba Road, Cannaugt Place, New Delhi - 110 001.

Phone : 011-3048 2471 /3048 1203 /3048 1205 /30482468

Patna Kamlalaye Shobha Plaza (1st Floor), Behind RBI Near Ashiana Tower, Exhibition Road, Patna-800 001.

Phone : 0612-325 5284/325 5285/3255286

Pune Nirmiti Eminence, Off No. 6, I Floor, Opp Abhishek Hotel, Mehandale Garage Road, Erandawane, Pune - 411 004.

Phone:020-30283005/30283003/30283000/30283001

Surat Office No 2 Ahura -Mazda Complex, First Floor, Sadak Street, Timalyawad, Nanpura, Surat - 395 001.

Phone : 0261/326 2267/326 2468/326 0352

Vadodara 109 - Silver Line, Besides world Trade Centre, Sayajigunj, Vadodara - 390 005

Phone :0265-301 8029/301 8031

Vijayawada 40-1-68, Rao & Ratnam Complex, Near Chennupati Petrol Pump, M.G Road, Labbipet, Vijayawada - 520 010

Phone : 0866-329 9181/329 5202

Visakhapatnam 47/ 9 / 17, 1st Floor, 3rd Lane , Dwaraka Nagar, Visakhapatnam-530016.

Phone : 0891-329 8397/329 8374/2554893

INVESTORS SHOULD NOTE THAT

This Offer Document sets forth concisely the information that a prospective investor ought to know before investing. Investors should carefully read the Offer Document before making an investment decision.

This Offer Document remains effective until a ‘material change’ (other than a change in Fundamental Attributes and within the purview of the offer document) occurs. Material change will be filed with Securities Exchange Board of India (SEBI) and circulated to the Unit holders or as may be publicly notified by advertisements in the newspapers subject to the applicable Regulations.

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 neither been approved nor disapproved by SEBI, certified the accuracy or adequacy of this Offer Document.

Please retain this Offer Document for future reference

Printed on May 24, 2008

IDFC Super Saver Income Fund (An Open Ended Income Scheme)

IDFC Cash Fund (An Open Ended Liquid Scheme)

IDFC Dynamic Bond Fund (An Open Ended Income Scheme)

IDFC Government Securities Fund (An Open Ended Dedicated Gilt Scheme)

IDFC Floating Rate Fund (An Open Ended Income Scheme)

IDFC Liquidity Manager (An Open Ended Liquid Scheme)

IDFC Loquidity Manager Plus (An Open Ended Liquid Scheme)

Offer of Unites at NAV based prices during the Continuous Offer Period

IDFC Combined Offer Document

IDFC Asset Management Company Pvt. Ltd.

IDFC AMC Offices

Ahmedabad Ground Floor, Zodiac Avenue, Opp. Mayor's Bunglow, Near Law Garden, Ahmedabad - 380 006. Tel.: 079-64505881/5857.Bangalore Raheja Point, 2nd Floor, Magrath Road, Opp. Garuda Mall, Bangalore - 25. Tel.: 080-64501951/52, 66111504/05/06.Bhubaneshwar Plot No. 3, Bapuji Nagar, Bhubaneshwar - 751 009.Chandigarh SCO 137 - 138, Sector 9C, Madhya Marg, Chandigarh - 160 017. Tel.: 0172 - 5071919 /1918.Chennai Maalavika Centre, Old no. 144/145, New No. 60, Kodambakkam High Road, Nungambakkam, Chennai - 600 034.Cochin HDFC House, 1st Floor, Ravipuram Junction, Cochin - 682 015. Tel.: 0484 - 2358639.Coimbatore Red Rose Plaza, 509, D.B. Road, R. S. Puram, Coimbatore - 641 002. Tel.: 0422-2542645, 2542678.Hyderabad #6/ 3/ 1090, TSR Towers, Raj Bhavan Road, Somajiguda, Hyderabad - 500 082. Tel.: 040 - 55329924 /25 /27.Indore 21/ 1, DM Tower, Race Course Road, Indore - 452 001. Tel.: 0731 - 4206927.Jaipur G - 7, G - 8, Anukampa Towers Church Road, Jaipur - 302 001. Tel.: 0141 -5105797, 5105798.Kanpur Office No 214, 215, IInd Floor, KAN Chambers, 14/113, Civil Lines, Kanpur - 208 001. Tel: 0512-2331071, 2331119.Kolkata Oswal Chambers, 1st Floor, 2 Church Lane, Kolkata - 700 001. Tel.: 033-2288 2048 / 3016Lucknow Narain Automobiles, 4 Shahnazaf Road, Lucknow - 226 001. Tel.: 0522-2200097.Ludhiana SCO 16-17, Basement, Feroze Gandhi Market, Ludhiana - 141 001. Tel.: 0161-5022155, 5022156.Mumbai 270, DN Road, Ground Floor, Cox Building, Fort, Mumbai - 1. Tel.: 022-66511022-26Nagpur 1st Floor, Narang Towers, 27, Palm Road, Civil Lines, Nagpur - 440 001. Tel.: 0712 - 6620714New Delhi 4th Floor, Narain Manzil, 23 Barakhamba Road, New Delhi - 110 001. Tel.: 011-41513040, 41513041, 41513042.Patna Bhagwati Dwarka Arcade, Plot No 830 P Patna - 800 001. Telefax 2223172.Pune 1st Floor, Building C, Dr. Herekar Park Apartment, Bhamburda, Shivajinagar, Pune - 411 004. Tel.: 020-66020965.Rajkot Business Empire, 5 Jagnath Plot Corner, Gymkhana Road, Rajkot - 360 001. Tel. 0281-6626012.Surat C K Tower, 1st Floor, Near Sargam Shopping Centre, Parle Point, Surat - 7. Tel. 0261-2258330.Vadodara Ground Floor, Akash Ganga Complex, Adjacent to Vanijya Bhavan, Race Course Circle, Vadodara - 390 007. Tel.: 0265 - 6620919 / 939.

SponsorInfrastructure Development Finance Company Limited (IDFC)Registered Office:ITC Centre, 3rd Floor,760, Anna Salai, Chennai - 600 002.

TrusteeIDFC AMC Trustee Company Private Limited (IDFC ATC)90 M G Road, Fort, Mumbai 400 001

Investment ManagerIDFC Asset Management Company Private Ltd. (IDFC AMC)Registered & Corporate Office:90 M G Road, Fort, Mumbai 400 001

RegistrarComputer Age Management Services Private LimitedGround floor, 178/10, Kodambakkam High Road,Opposite Hotel Palm Grove, Numgambakkam, Chennai 600 034Tel. + 91 - 44 - 2828 3606/ 07Registration No. INR 000002813

CustodianDeutsche Bank AGKodak House, 222 D N Road, Fort, Mumbai 400 001

AuditorsBSR & CoKPMG House, Kamala Mills Compound448, Senapati Bapat Marg, Lower Parel, Mumbai 400 013

www.idfcmf.com

Please note our new investor redressal email id is

[email protected]


l Ahmedabad : 402-406, 4th Floor - Devpath Building, Off C G Road, Behind Lal Bungalow, Ellis Bridge, Ahmedabad - 380 006. Phone:079-30082468/ 30082469/ 30082470 l Bangalore : Trade Centre, 1st Floor 45, Dikensen Road (Next to Manipal Centre), Bangalore-560 042. Phone : 080-30574709/ 30574710/ 30578004/30578006 l Bhubaneswar: 101/ 5, Janpath, Unit – III , Near Hotel Swosti, Bhubaneswar - 751 001. Phone : 0674-325 3307/325 3308 l Chandigarh : Deepak Towers, SCO 154-155, 1st Floor, Sector 17-C, Chandigarh-160 017.Phone:0172-304 8720/304 8721/304 8722/3048723 l Chennai : Ground Floor No.178/10, Kodambakkam High Road, Opp. Hotel Palmgrove, Nungambakkam, Chennai -600 034 Phone : 044-3911 5563/ 3911 5565 /3911 5567/39115561l Cochin : 40 / 9633 D, Veekshanam Road, Near International Hotel, Cochin-682 035. Phone : 0484-323 4658 /323 4662 l Coimbatore : Old # 66 New # 86, Lokamanya Street (West), Ground Floor, R.S.Puram, Coimbatore-641 002. Phone:0422-301 8000/301 8001. l Durgapur : 4/2, Bengal Ambuja Housing Development Ltd, Ground Floor, City Centre Dist - Burdwan, West Bengal, Durgapur-713 216 Phone : 0343/329 8890 /329 8891/6451419 l Goa : No.108, 1st Floor, Gurudutta Bldg, Above Weekender M G Road, Panaji (Goa) - 403 001. Phone : 0832/325 1755-325 1640 l Hyderabad : 102, First Floor , Jade Arcade, Paradise Circle, Secunderabad-500 003. Phone : 040-3918 2471/3918 2473 /3918 2468/3918 2469 l Indore : 101, Shalimar Corporate Centre, 8-B, South tukogunj, Opp.Greenpark, Indore-452 001. Phone : 0731-325 3692/325 3646 l Jaipur : G-III, Park Saroj , Behind Ashok Nagar Police Station, R-7, Yudhisthir Marg ,C-Scheme. Jaipur-302 001Phone - 0141/326 9126/326 9128/5104373/5104372 l Kanpur : G - 27,28 - Ground Floor, CITY CENTRE, 63/ 2, THE MALL, Kanpur-208 001. Phone : 0512-3918003/ 3918000/ 3918001/3918002 l Kolkata: “LORDS Building”, 7/1,Lord Sinha Road, Ground Floor, Kolkata-700 071. Phone : 033/32550760/3058 2285/ 3058 2303 / 30582281 l Lucknow : Off # 4,1st Floor,Centre Court Building, 3/c, 5 - Park Road, Hazratganj, Lucknow-226 001. Phone : 0522/391 8000/391 8001/391 8002/ 3918003 l Ludhiana : U/ GF, Prince Market, Green Field, Near Traffic Lights, Sarabha Nagar Pulli, Pakhowal Road, Above Dr. Virdi’s Lab, P.O Model Town, Ludhiana-141 002. Phone : 0161-301 8000/301 8001 l Madurai : 86/71A, Tamilsangam Road, Madurai-625 001. Phone : 0452-325 1357/325 2468 l Mangalore : No. G 4 & G 5, Inland Monarch, Opp. Karnataka Bank, Kadri Main Road, Kadri, Mangalore-575 003. Phone : 0824-325 1357/325 2468 l Mumbai : Rajabahdur Compound, Ground Floor, Opp Allahabad Bank, Behind ICICI Bank 30, Mumbai Samachar Marg, Fort, Mumbai-400 023.Phone : 022-30282468/ 30282469/ 30282471/ 65257932 l Nagpur : 145 Lendra, Behind Indus Ind Bank, New Ramdaspeth, Nagpur - 440 010. Phone : 0712-325 8275/2432447 l New Delhi : 304-305 III Floor, Kanchenjunga Building, 18, Barakhamba Road, Cannaugt Place, New Delhi - 110 001. Phone : 011-3048 2471 /3048 1203 /3048 1205/ 30482468 l Patna : Kamlalaye Shobha Plaza (1st Floor), Behind RBI Near Ashiana Tower, Exhibition Road, Patna-800 001. Phone : 0612-325 5284/325 5285/ 3255286 l Pune : Nirmiti Eminence, Off No. 6, I Floor, Opp Abhishek Hotel, Mehandale Garage Road, Erandawane, Pune - 411 004. Phone:020-30283005/ 30283003/30283000/30283001 l Surat : Office No 2 Ahura -Mazda Complex, First Floor, Sadak Street, Timalyawad, Nanpura, Surat - 395 001. Phone : 0261/326 2267/326 2468/326 0352 l Vadodara : 109 - Silver Line, Besides world Trade Centre, Sayajigunj, Vadodara - 390 005 Phone :0265-301 8029/301 8031 l Vijayawada: 40-1-68, Rao & Ratnam Complex, Near Chennupati Petrol Pump, M.G Road, Labbipet, Vijayawada - 520 010 Phone : 0866-329 9181/329 5202 l Visakhapatnam: 47/ 9 / 17, 1st Floor, 3rd Lane , Dwaraka Nagar, Visakhapatnam-530016. Phone : 0891-329 8397/329 8374/2554893