S yn op si s
Chapter 1:- introduction to project report
• general introduction
• objectives of the study
• research design
• valuations of nav’s
• general introduction
• objectives of the study
• research design
INDUSTRY
PERFORMANCE
3. T O K N O W A B O U T T H E S W O T A N A LY S I S O F
4. T O K N O W A B O U T T H E N A V ’ S O F M UT U A L
FUND
RESEARCH DESIGN
Descriptive research design is used for the survey.
DATA COLLECTION
secondary data
PRIMARY DATA
SECONDARY DATA
web site.
SCOPE OF STUDY
1,540bn.
a ss e ts unde r m a na ge m e nt.
Funds)
under management.
Funds)
1996.
MEANING
A Mutual Fund is a trust that pools the savings
of a number of investors who share a common
financial goal. The money thus collected is then
invested in capital market instruments such as
shares, debentures and other securities. The income
earned through these investments and the capital
appreciations realized are shared by its unit holders
in proportion to the number of units owned by them.
Thus a Mutual Fund is the most suitable investment
for the common man as it offers an opportunity to
invest in a diversified, professionally managed
basket of securities at a relatively low cost. The
flow chart below describes broadly the working of a
mutual fund:
SEBI REGULATIONS
SEBI regulations clearly state that all funds and
schemes operational under them would be bound by
their regulations. SEBI has recently taken following
steps for the regulation of mutual funds:
By Structure:-
Op e n- e nd ed Fund s
Interval Funds
By Investment Objective:
Growth Funds
Income Funds
Balanced Funds
Load Funds
No-Load Funds
OTHER SCHEMES:
Special Schemes
Index Schemes
Sectoral Schemes
Bank Sponsored
Institutions
Private Sector
Indian :-
Funds in India
Nariman Point,
India.
Website:-http://www.amfiindia.com/
COMMITTEE ON VALUATION:-
Amandeep MEMBER
A.Balasubramanian MEMBER
Nilesh MEMBER
DISTRIBUTORS:-
is the custodian.
Fund.
18 schemes.
2005) of AUM.
securities.
appreciation.
AMC is in Mumbai.
1882.
Get Focused
I will admit that investing in individual stocks
can be fun because each company has a unique
story. However, it is important for people to focus
on making money. Investing isn't a game. Your
financial future depends on where you put you hard
earned dollars and it shouldn't be taken lightly.
Diversification
There is no greater advantage to using mutual
funds than diversification. Do you honestly believe
wealthy investors purchase just a couple of stocks?
Of course not! If they are not using mutual funds
(many do), than they are purchasing a large number
of stocks. Smart investors diversify because it
greatly reduces risk without sacrificing returns. If
the idea of diversification is new to you, I
recommend this article.
Professional Management
By purchasing mutual funds, you are essentially
hiring a professional manager at an especially
inexpensive price. It would be a bit cocky to think
that you know more than mutual fund manager.
These managers have been around the industry for a
long time and have the academic credentials to back
it up. Saying you could outperform a mutual fund
manager is similar to a football fan sitting on their
couch saying "I could have made that catch"
-possible, but not likely.
Even if some of us are better at picking stocks than
a professional and their support staff, most of us
would not want to spend the amount of time it takes
to watch, research and trade the market on a daily
basis.
Efficiency
By pooling investors' monies together, mutual
fund companies can take advantage of economies of
scale. With large sums of money to invest, they
often trade commission-free and have personal
contacts at the brokerage firms.
Ease of Use
Can you imagine keeping track of a portfolio
consisting of hundreds of stocks? The bookkeeping
duties involved with stocks are much more
complicated than owning a mutual fund. If you are
Liquidity
If you find yourself in need of money in a short
amount of time, mutual funds are highly liquid.
Simply put in your order during the day and when
the market closes a check will be sent to you or you
can have it wired to a bank account. Stocks can be
much more difficult depending on what kinds of
stocks you are invested in. CD's offer no liquidity
(not without a hefty fee) and bonds can be difficult,
too. Some mutual funds also carry check writing
privileges, which means you can actually write
checks from the account, similar to your checking
account at the bank.
Cost
Mutual funds are excellent for the new
investors because you can invest small amounts of
money and you can invest at regular intervals with
no trading costs. Stock investing, however, carries
high transaction fees making it difficult for the
small investor to make money. If an investor wanted
to put in $100 a month into stocks and the broker
charged $15 per transaction, their investment is
automatically down 15 percent every time they
invest. That is not a good way to start off!
Risk
Ø Jenson Model
Ø Fama Model
Jenson Model
Ri = Rf + Bi (Rm - Rf)
Fama Model
Ri = Rf + Si/Sm*(Rm - Rf)
Risk
Suitable Benefits offered
Tolerance/Return Focus
Products by MFs
Expected
Bank/ Company
Liquidity, Better
Low Debt FD, Debt based
Post-Tax returns
Funds
Balanced Funds,
Some Diversified
Liquidity, Better
Equity Funds and
Partially Debt, Post-Tax returns,
Medium some debt
Partially Equity Better Management,
Funds, Mix of
Diversification
shares and Fixed
Deposits
PROFILE
45,000
40,000
35,000
30,000
25,000 2003-04
20,000 2004-05
15,000 2005-06
10,000
5,000
0
GROSS AMOUNT OF
MOBILISED IN (CRORES)
GROSS AMOUNT
OF MOBILISED IN
YEARS (CRORES)
2003-04 8,750
2004-05 12,800
2005-06 44,485
6,000
5,000
4,000 2003-04
3,000 2004-05
2,000 2005-06
1,000
0
AUM
L I C M u t u a l F u n d T ru s t e e s C o m p a n y
Private Limited
NAME OF THE DIRECTORS &
ADDRESS
SHRI P. N. Mehta
Chartered Accountant
607, Akash Deep,
26-A, Barakhamba Road,
New Delhi - 110 001
SHRI P. N. Shah
Chartered Accountant
Maker Bhavan - 2,
18, New Marine Lines,
Mumbai - 400 020
SHRI V. Raghavendra
SHRI T S Vijayan
Chairman
LIC of India
Central Office,
Mumbai
SHRI C. R. Thakore
Director LICMF-AMC
Mrudul-8,
Jeevan Prakash Society,
St. Xavier High School Road,
P.O: Navajeevan
Ahmedabad - 380 014
SHRI D. M. Sukthankar
Director LICMF-AMC
NO.5 , 'PRIYA', Abdul
Ghaffar Khan Marg,
Worli Sea Face ,
MUMBAI-400 025
SHRI R. M. Honavar
Director LICMF-AMC
Shri. T.S.Vishwanath
Chartered Accountant
Flat No: 10
Sankar Market,
Konnaught Circus,
New Delhi - 110 001
Shri. H.N.Motiwalla
Chartered Accountant
508, Sharada Chambers,
15 A, New Marine Lines,
Mumbai - 400 002.
1805, sector-17-A,
Gurgoan-122001,
Haryana.
Schemes
LIC Mutual fund schemes may be classified on the
basis of its structure and its investment objective.
1. Debt
Name of Open Ended schemes
I. LICMF Bond Fund
II. LICMF Children's Fund
III. LICMF Floater MIP - Plan A
IV. LICMF Floater MIP - Plan B
V. LICMF Floating Rate Fund
VI. LICMF Govt Securities Fund
VII. LICMF Liquid Fund
VIII. LICMF Monthly Income Plan
IX. LICMF Short Term Plan
Name of Close Ended schemes
I. LICMF Fixed Maturity Plan: Series - I - ONE
Year Plan
II. LICMF Fixed Maturity Plan: Series - I - SIX
Month Plan
III. LICMF Fixed Maturity Plan: Series – II
IV. LICMF Fixed Maturity Plan: Series – III
2.Balanced
Name of Open Ended schemes
I. LIC MF Balance Fund ( Formerly known as
Dhansahayog)
3.Equity
Name of Open Ended schemes
I. LIC MF Opportunities Fund
II. LIC MF Growth Fund (Formerly Known as
Dhansamriddhi)
III. LICMF Equity Fund (Formerly Known as
Dhanvikas1)
IV. LICMF Index Fund Nifty Plan
V. LICMF Index Fund Sensex Advantage Plan
VI. LICMF Tax Plan
4. Others
Name of Open Ended schemes
I. LIC MF Unit Linked Insurance Scheme
4. Redeemed
NAME OF DATE OF REDEMPTION PRICE
SCHEME REDEMPTION
(1)
(Rolled over on
01/11/1995)
1989
01/06/1996)
(6)
Option 1 - 10.00,
(2) Rs6.5619
Cummulative
Option Rs.15.4687
Monthly:Rs.10.482
Dhanvarsha 31-May-03 0
(12) Yearly:Rs.10.4820
Cumulative:Rs.16.7
160
Services
• CHANGE OF ADDRESS
• CORRECTION/CHANGE OF NAME IN THE CERTIFICATE
• NON-RECEIPT OF CERTIFICATE
• NON-RECEIPT OF
DIVIDEND/REDEMPTION/REPUTCHASE/REFUND
WARRANTS.
• REDEMPTION TRANSFER OF HOLDING
• STATEMENT OF ACCOUNTS
• REVALIDATION / CORRECTION OF WARRANTS
• CHANGE OF NOMINEE
• SPLIT OF UNIT CERTIFICATES
• REGISTRATION/CANCELLATION OF LIEN
• DEATH CLAIMS
• LOSS OF UNIT CERTIFICATES
• LOSS OF WARRANTS
• BANK MANDATE
• REPURCHASE
Tax Benefits
Tax Treatment of Investment in Mutual funds:
Taxation: The following summary outlines the tax benefits available to the Unitholders
The following information is provided for general information only. However, in view of
the individual nature of the tax benefits, each investor is advised to consult with his/her own tax
advisor with respect to the specific tax implications arising out of his/her participation in the
schemes of the fund.
Income Tax:
Consequent upon the amendments made by the Finance Act, 2002 to the Income Tax Act, 1961,
w.e.f. 1.4.2002 income in respect of units of Mutual Funds is now taxable in the hands of the
investors at their applicable rate of tax on total income. Such income will now be also subject to
deduction of tax at source.
Tax Concessions:
Accordingly, all residents and non residents (if units are bought through payment from non-
resident ordinary account) who are individuals and Hindu Undivided Families (HUFs) will enjoy
deduction under section 80L of the Act from their gross total income upto an overall limit of Rs.
9,000/- in respect of income from units of the fund.
Tax Rebate:
Under section 88 of the Act, subscriptions / contributions made in the following plans of LIC
Mutual Fund by individuals and HUFs will be eligible for tax rebate:
contribution to Dhanaraksha 1989 (being unit-linked insurance plan as notified by the
Central Government) in the name of the individual himself/herself, spouse and any child of such
individual in case of individual and in case of HUF, in the name of any member of HUF.
subscription to units of LIC Mutual Fund Tax Plan ( being a plan formulated in accordance
with the scheme notified by the Central Government) not exceeding Rs.10,000/-.
The quantum of rebate and maximum eligible amount for the same are mentioned
below:
Tax Rebate @30% if- income chargeable under the head “Salaries” (before giving deduction u/s.
16) is not more than Rs.1 lac; and such income is at least 90% of gross total income
Tax Rebate @20% if- gross total income does not exceed Rs. 1.5 lacs;
Tax Rebate @15% if- gross total income is between Rs. 1.5 lacs and Rs. 5 lacs
2. Residents:
(a) Deduction of Tax at source: Under the re-introduced section 194K, Mutual
Fund is required to deduct income tax at source @ 10% + 5% sur charge
from the income payable to investors, if such income exceeds Rs.1,000 per
scheme during the financial year.
(b) No Deduction of Tax: Investors (not being a company or a firm), desiring receipt of income
without deduction of tax at source should furnish to the Mutual Fund a declaration in writing, in
duplicate, in the prescribed Form No. 15H and verified in the prescribed manner to the effect that
the tax on his/its estimated total Income of the relevant year will be nil in accordance with the
Income tax rules. The prescribed Form No. 15H for non deduction of tax at source should be
submitted alongwith the application and for subsequent years at least three months before the
dispatch of income distribution warrants, failing which tax will be deducted at source as per
prevalent tax laws.
However, Form No. 15H will not be acceptable by the Mutual Fund if the income paid or likely to
be paid to the investor exceeds Rs. 50,000 (maximum amount not chargeable to tax) in the
financial year.
However, where the tax payable on such long-term capital gains, computed before indexation,
exceeds 10% as increased by the applicable sur charge, of the amount of capital gains, such
excess tax shall not be payable by the unit holder.
In a case, where taxable income, as reduced by long term capital gains, is below the exemption
limit, the long term capital gains will be reduced to the extent of the short fall and only the
balance long term capital gains will be charged at the flat rate 20% plus surcharge, as may be
applicable.
A specified asset has been defined to mean any bond redeemable after three years, issued on or
after April, 1 2000 by a National Bank for Agriculture and Rural
Development or by the National Highways Authority of India. The Act provides that bonds
redeemable after three years, issued on or after a April 1, 2001 by the Rural Electrification
Corporation Ltd will also qualify as a specified asset. Similarly Bonds issued after April 1, 2002 by
National Bank or by SIDBI also qualify for such investment.
3. Non-Residents:
Section 196B of the Income Tax Act 1961, provides for deduction of tax at source at the rate of
10% plus applicable surcharge on income received by Offshore Fund and FIIs as defined in
section 115AB in respect of units of the Mutual Fund.
(iii) For Overseas Financial Organization, including Overseas Corporate Body and
Foreign Institutional Investor fulfilling conditions laid down under section 115 AB
(Offshore Fund) under section 115 AB of the Act, long-term capital gains in respect of
units held for a period of more than 12 months will be chargeable at the rate of 10% plus
surcharge, as may be applicable. Such gains would be calculated without indexation of
cost of acquisition.
Under section 195 of the Act and shall be deducted at source as under:
However, recentlly Delhi High Court has held that deduction of tax at source as per the provisions
of DTAA can not be done at a concessional rate. The Court has held that the concessional rate
can apply only at the time of final assessment.
As per CBDT circular No. 728 dated October 30, 1995, in the case of remittance to a country with
which a Double Taxation Avoidance Agreement (DTAA) is in force, the tax should be deducted at
the rate provided in the Finance Act of the relevant year or at the rate provided in the DTAA
whichever is more beneficial to the assessee. In order to obtain the benefit of a lower rate
available under DTAA, the unitholder is required to provide the mutual fund with a certificate
obtained from his/her assessing officer stating his/her eligibility for the lower rate.
According to the provisions of section 54 EC of the Act, gains arising from the transfer
of long-term capital assets (including units held for a period of more than 12 months
prior to the date of transfer/redemption), are not chargeable to tax provided the said
gains are invested in specific assets within six months of such transfer.
A specified asset has been defined to mean any bond redeemable after three years,
issued on or after April, 1 2000 by a National Bank for Agriculture and Rural
Development or by the National Highways Authority of India. The Act provides that
bonds redeemable after three years, issued on or after a April 1, 2001 by the Rural
Electrification Corporation Ltd will also qualify as a specified asset. Similarly Bonds
issued after April 1, 2002 by National Bank or by SIDBI also qualify for such
investment.
Section 54 ED of the Act provides that gains arising from transfer of long-term capital assets
being listed securities or units, shall not be chargeable to income-tax, if such capital gains are
invested in equity shares by way of a public issue within six months from the date of such
transfer. However, such shares will be locked in for a period of one year and will not be entitled
to be sold or transferred during the lock-in period.
Units held under the schemes of the Mutual Fund are not treated as chargeable assets under
section 2(ea) within the meaning of the Wealth Tax Act, 1957 and therefore are not liable to
wealth tax. Similarly, gift of the units held under the schemes are also not chargeable to Gift Tax
under the Gift tax Act, 1958 after 1.10.1998.
Our Mutual Fund is duly registered with SEBI and as such the entire income of the fund is exempt
from income tax under section 10 (23D) of the Act and is entitled to receive its income without
any deduction of tax at source.
• valuations of nav’s
• brief about swot analysis
Calculating NAVs
Net worth
99,870,000
= 25
(1-0.05)
= 26.32
= 1.32
25.00
= 5.28%
What is it?
Method
Procedure
• Ability to design/innovate
• Ability to source and produce
• Ability to market and service
• Ability to finance
• Ability to manage
Opportunities Threats
Strengths Weaknesses
SWOT Analysis
Chapter 5:-
• evaluation &
• swot analysis of lic mutual
fund
Source – RBI
Mar-
Month/Year Mar-98 Mar-00 Mar-01 Mar-02 Mar-03 Sep-04 4-Dec
04
Change in
% over last 15 14 13 12 - 18 3
yr
Mar-98
Mar-00
1-Mar
2-Mar
3-Mar
4-Mar
4-Sep
4-Dec
Source - AMFI
Change in
% over last 26 13 12 25 45 9 1
yr
5%
7% Mar-98
25% Mar-00
6%
1-Mar
2-Mar
7%
3-Mar
4-Mar
6%
12% 4-Sep
4-Dec
10% 5-Mar
11% 6-Dec
11%
S W O T A N A L Y S I S O F L I C M UT U A L F U N D W I T H
OTHER MUTUAL FUND’S
Opportunities
• 20 million
shareholders
T h re a t s
• Large presence of
fii’s • 34 players in
• Many instruments Indian mutual
can be introduce fund
• Diversification • Number of
• Real estate, schemes
retailing sectors
• Further funds like
ulip
• Online ipo
Strengths Weaknesses
Network • Training
•
• Goodwill institute
• No of agents • Specified office
• Experience
• Old customers
• I n n o v a t i v e p o w er
Analysis of Survey
Others Businessman
12% 18%
Pvt Employees
26%
Govt. Employees
SRI MAATA COLLEGE BELLARY 44%
HARINAGHU.C.K
Project Report on SWOT analysis of
family.
20% 16%
22%
42%
20
20
18
16
14
12
12 11
10
6
4
4 3
0
LIC & UTI LIC& Commercial LIC & Others LIC&UTI & Othes LIC, UTI &
Bank Commercial Bank
1 2 3 4 5
financial institution.
financial institution.
12% 20%
20%
48%
important schemes
1 ULIP 12 24%
2 RBP 6 12%
3 MASTER SHARE 11 22%
4 MASTER VALUE FUND 5 10%
16
16
14
12
12 11
10
8
6
6
5
0
ULIP EQUITY GROWTH BALANC ED OTHER
FUNDS FUNDS FUNDS SC HEME
20
20
18
15
16
14
12
10 8
7
8
0
Interest Dividend Services Others
8% 12%
30%
50%
CUSTOMERS
the words of agents and friends and expect excessive return from the
from equity oriented schemes in which LIC invest 80% of fund in share
SUGGESTIONS
Educating the customer about LIC and its scheme and plans for
proper orientations and his relationship with his service tasks, rules
schemes and plans along with SEBI rules & regulations, and as well
(respondent)
QUESTIONNAIRE
1. NAME:-
2. ADDRESS:-
3. QUALIFICATION:-
4. PROFESSION
GOVT. EMPLOYEE ( )
PVT. EMPLOYEE ( )
BUSINESS MAN ( )
OTHERS ( )
5. SEX
MALE ( )
FEMALE ( )
6. MARITAL STATUS
MARRIED ( )
UNMARRIED ( )
7. MONTHLY INCOME
BELOW 6,000/- ( )
RS 6,000/-12,000/- ( )
RS 12,000/-18,000/- ( )
ABOVE 18,000/- ( )
YES ( )
NO ( )
LIC ( )
UTI ( )
COMMERCIAL BANK ( )
OTHERS ( )
SCHEMES?
ADVERTISEMENT ( )
FRIENDS ( )
AGENTS ( )
OTHER SOURCES ( )
EQUITY FUNDS ( )
GROWTH FUNDS ( )
BALANCED FUNDS ( )
ULIP ( )
OTHERS ( )
YES ( )
NO ( )
INTEREST ( )
DIVIDEND ( )
SERVICES ( )
OTHERS ( )
SERVICES OF LIC?
EXCELLENT ( )
SATISFACTORY ( )
GOOD ( )
BAD ( )
c).................................................................................
BIBLIOGRAPHY
• By: MALOTHRA