EXECUTIVE SUMMARY

KARVY is the leading financial intermediary and financial service provider in India . It has traveled success route towards building a reputation as integrated financial service provider offering a wide spectrum of services for over 20 years . They have made this journey by taking the route of quality service , path braking innovations in services versatility in service and finally totality in service .The birth of Karvy was on a modest scale in 1982. KARVY is a premier integrated financial services provider , and Ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities , and provides investor services to over 300 corporate , Comprising the who is of Corporate India. Their values and vision of attaining total competence in their Servicing has served as the building block for creating a great financial enterprise , which stands solid on their Fortresses of financial strength - their various companies. With the experience of years of holistic financial servicing behind them and Years of complete expertise in the industry to look forward to , we have now Emerged as a premier integrated financial services provider. And today ,they can look with pride at the fruits of their mastery and experience . Comprehensive financial services that are competently segregated to service and manage a diverse range of customer requirements. Karvy is well networked with 200 full-fledged branches and 350 Investor Service Centers with a workforce of over 3500 personnel drawn from various disciplines.

Karvy Investor Services Limited , a SEBI registered Merchant Banker is a 100% subsidiary of Karvy Consultants Limited and is among the top 10 Merchant Bankers in India today. It has a track record of handling 70 public/rights issues as Merchant Bankers . During the last two years they handled the share buyback issues of TTK LIG Limited , Sirpur Paper Mills Limited , Bhagyanagar Metals Limited, and A V Thomas Group. As an Investment Banker, Karvy provides; . Management of Capital Issues . Management of Buybacks, Takeovers and Delisting offers . Private Placement of Debt and Equity . Mergers and Amalgamations . Loan Syndication A decade commitment and professional integrity and vision helped Karvy achieve a leadership position in its field when it handled the largest Number if issues ever handled in the history of Indian stock market in a year. Today Karvy has access to million of Indian share holders, besides companies, banks, financial institutions and regulatory agencies. Over the past one and a half decades , Karvy has evolved as a veritable link between industry, finance and people. Today Karvy is dynamic , energetic organization with 1500 highly qualified manpower . Cutting edge technology, comprehensive infrastructure and total customer focus has helped it secure the position of an emerging financial giant enjoying the confidence and Support of an evitable clientele across diverse fields in the financial world.

COMPANY PROFILE

KARVY is the leading financial intermediary and financial service provider In India . It has traveled success route towards building a reputation as Integrated financial service provider offering a wide spectrum of services for over 20 years . They have made this journey by taking the rout of quality service , path braking innovations in services, versatility in service and finally totality in service. The birth of Karvy was on a modest scale in 1982. The letters K , A, R , V and Y stands for 5 directors names K- Mr.: V. Kutumba Rao A- Mr.: K. Ajay Kumar. R- Mr.: M .S. Ramakrishna. V- Mr.: Vikram Singh Y- Mr.: M. Yugandhar. KARVY, is a premier integrated financial services provider , and ranked. Among the top five in the country in all its business segments , services over 16 million individual investors in various capacities , and provides investor services to over 300 corporate, comprising the who is Corporate India . KARVY covers the entire spectrum of financial services such as Stock broking , Depository Participants , Distribution of financial products - mutual funds , bonds , fixed deposit , equities , Insurance Broking , Commodities Broking , Personal Finance Advisory Services, Merchant Banking & Corporate Finance , placement of equity, IPO.s, among Others . Karvy has a professional management team and rank among the Best in technology, operations and research of various industrial segments.

KARVY GROUPS AND DIRECTORS

1. KARVY CONSULTANT LTD Mr. C Parthsarathy Chairman and Managing Director Mr. M Yugandhar Managing Director Mr. M S Ramakrishna director Mr. Prasad V Potluri Director 2. KARVY STOCK BROKERING PVT LTD Mr. C Parthsarathy Chairman Mr. M Yugandhar Director Mr. M S Ramakrishna Director 3. KARVY COMPUTERSHARE PVT LTD William Stuart Crosby Chairman Mr. C Parthsarathy Managing Director Mr. M Yugandhar Managing Director Candra Balaraman Director Mark Davis Director 4. KARVY GLOBAL SERVICE PVT LTD Mr. C Parthsarathy Chairman and Managing Director Mr. M Yugandhar Managing Director Mr. M S Ramakrishna director Mr. Prasad V Potluri Director 5. KARVY COMMODITY BROKING PVT LTD Mr. C Parthsarathy Chairman Mr. M Yugandhar Director Mr. M S Ramakrishna Director 6. KARVY INSURANCE BROKING PVT LTD Mr. C Parthsarathy Chairman Mr. M Yugandhar Director Mr. M S Ramakrishna Director

7. KARVY INVESTORS PVT LTD Mr. C Parthsarathy Chairman Mr. M Yugandhar Director Mr. M S Ramakrishna Director

VISION:
Karvys aspiration of establishing itself as an integrated financial Services company is propelled by a vision that is shared by the entire work force. Towards this end Karvy has dedicated itself to: Having a single minded focus on investor services. Establishing Karvy as a house hold name for financial Services. Set industrial standards. Establishing a leadership position in all chosen areas of business. And in the process become a crucial link between industry, Finance and People.

MISSION:
Our to be a leading preferred services provider to our customers and aim to achieve this leadership position by building an innovative, enterprising and technology driven organization which will set the highest standards of service and business ethics..

CORE VALUES:
A Karvy adherence to its core values integrity , Enterprise , and Innovation Has earned it an enviable reputation amongst all the intermediaries and Regulatory authorizes of the capital and financial market.

QUALITY POLICY:
To achieve and retain leadership , Karvy shall aim for complete customer Satisfaction , by combining its human and technological resources , to provide superior quality financial services . In the process , Karvy will strive to exceed Customer's expectations. Quality Objectives as per the Quality Policy, Karvy will: Build in-house processes that will ensure transparent and harmonious Relationships with its clients and investors to provide high quality of Services. Establish a partner relationship with its investor service agents and vendors that will help in keeping up its commitments to the customers. Provide high quality of work life for all its employees and equip them with adequate knowledge & skills so as to respond to customer's needs. Continue to uphold the values of honesty & integrity and strive to establish unparalleled standards in business ethics. Use state-of-the art information technology in developing new and innovative financial products and services to meet the changing needs of investors and clients. Strive to be a reliable source of value-added financial products and services and Constantly guide the individual and institutions in making a judicious choice of it. Strive to keep all stake-holder (shareholders, clients, investors, employees, suppliers and regulatory authorities) proud and satisfied.

SYSTEMS:
The organization follows strict rules and regulations for the employee. It follows specific entry and exit timing for its employees. Each employee has to follow a specific dress code depending on his line or work or duty. All junior staff member will have to report to the designated senior staff member daily attendance register to the human resource department. This is duly processed at the end of each month. The company has its regional office in Bangalore, which is headed by a regional Manager. All branch heads and various dept heads will report to him on regular basis. Finance operations are centralized at the head office level and excess funds are regularly transferred to the head office account. Periodic fund requirement at the regional level will be sent as and when required. But the local regional manager would sign all cheques and such instruments. Requirement of fresh incumbents are made at local office at the regional level depending upon the manpower requirement. The respective departmental heads holds the HR would dispatch interviews and the appointment from the head office. Usually the employee will be on one-year probation and after successful Completion he will be made permanent employee. Operation of company is monitored by the chairman of the company and various others senior managers, operations at the junior level is largely centralized with division heads making key decisions. The company is ISO certified and follows strict register of quality maintenance with high standards of process and systems.

STYLE:
The chairman who sits at the head office in Hyderbad heads the organization. At all over the branches across the country Regional Manager has been appointed. The chairman will take decision related to the group as such. All other decisions related to the relevant to the region and regional heads will take their line of work. Managers are responsible and accountable for their decisions and subsequent implementations. By and large decision making are decentralized for day to day affair.

STAFF:
Each incumbent should have a specific academic qualification to match the position he is going to hold and also necessary skills to execute the assignment. Marketing/sales people should posses at least a degree and a management degree is preferred and should necessary posses good communication skill and flair for sales .he should have a two-wheeler for communicating purpose. All back end employees should have at leas graduation with exposure to Necessary skills. For fresher due training will be given and then will be put on the jobs. Their potentials will be monitored on a regular basis and will be suitable guidance from time to time. Annual increments are also given based on the performance predominant.

SKILLS:
A manager is viewed as a skilled person who has the ability to manage people and resources and at times finance also. He will be responsible to identify for the right job and get the work done effectively. Min wastages and maximum utilization of available resources is the key organizational behavior and culture is thought to the fellow employees and potential employees are suitable nurtured.

STRATERGY:
A company of Karvy.s stature cannot afford to work without objectives. An overall group objective is already set and all the employees are driven towards Karvy.s believes that .no individual is big as the organizational itself.. Competition is the key to survival and for giving diversification for the given product as such competition is always good. Karvy updates itself to the surroundings competition and bring out changes are services and related products to be in competition. In the distribution business KARVY enjoys40% market, this is healthy from the industry standard. Survival of the company a well as the growth of the company over the past 22years, has been effectively overcoming competition. As a leading financial services provider in the country KARVY brand name is well known. After diversifying into various services providing activities it has become KARVY.S prerogative to be leader in the business. KARVY has a network of 150 branches across the country and over 2500 employees. Today KARVY is providing services to over 100000 customers all over the country with a leadership position in over all distribution business. The following are the some of the strategies adopted by the organization: PRICE: KARVY caters to marketing service products and there is no pricing involved. I depository participant and registry department KARVY has maintained a very competitive pricing structure in the line with contemporary markets. PRODUCT DIFFERENCIATION: KARVY caters to various financial products like DP, Registry, Stock Broking, and Distribution of housing loans, Insurance and Mutual funds products. Each product is headed by a skilled manager and also made as a separate profit center. MARKETING STRATERGY: Being sales oriented organization regular sales promotion events are conducted with various principles agencies and time to time advertising releases are done depending upon the requirements. KARVY relies mostly on word of mouth publicity than advertising which is worked wonders from them.

PRODUCT AND SERVICE MIX Financial products marketed through Karvy: Initial public Offering (IPO.s)-shares and bonds Fixed Deposits Mutual Fund Schemes-Equity, income, Balanced, Gilts .MIP, Liquid. Capital Gain Exempted Bonds .U/S 54 EC (REC, NHAI) Central and State Govt Bonds Tax saving schemes .Infrastructure bonds, ELLS, Pension funds. Personal loans, auto loans, home loans Insurance .life RBI relief bond Govt SSS DP .NSDL Stock Broking .NSE, BSE, F&O. Investment services provided by the Karvy: Portfolio maintenance/advisory services Equity Advisory Comprehensive market Information and outlook NAV and fund specific information Comparative performance statement of Mutual Funds Rental financial products distribution group. Equity Debenture /bonds Fixed deposits Mutual Funds Insurance (life) Banking Products SERVICE PROFILE KARVY CONSULTANT LIMITED Transfer agency services for corporate and mutual fund

Registrar for IPO/Book building Depository Participant services Registered with both NSDL/CSDL IT enabled services- MT/call center /Data classification Karvy.com a comprehensive financial advisory site KARVY INVESTOR SERVICE LIMITED Merchant banking and corporate finance Distributed of fixed income and other financial products KARVY SECURITY LIMITED Distributor of equity and other financial products Member-Hyderbad Stock Exchange KARVY STOCK BROKING LIMITED Secondary market trading Member .National stock Exchange Trading through BSE CORPORATE SHARE HOLDER SERVICES AND IPO S Largest corporate registry in the country Reached leadership position in 1985 and retaining for over a decade and a half. Involved in implementation of new features like DE-MAT and book Building. Handled over 650 initial public offers .varied products sizes andsubscription levels Services more than 150 corporate as registrars Total corporate shareholder served 14 million Electronic registry for many corporate

DEPOSITORY SERVICES Registered as DP for both NSDL and CSDL Servicing over 2 lakh investors Online connectivity at Hyderbad, Lucknow and Bangalore Ranked among the top five Depository Participants in the country High synergy with registry and broking activities for higher services levels to the customers Web based customer information Provision of services on over 75 location STOCK BROKING SERVICES Member of NSE/BSE Dealer of OTCEI Operation presently in Ahemedabad, Bangalore Bhunvneshwara,Chennai, Cochin, Coimbatore, Dhanbad, Erode, Guntur Hyderbad, Karur. Kolkatta, Lucknow, Mumbai, Nasik, Ongole, Vadodra, Vijaywada, and Vishakpatnam. Karvy has 120 terminals across the country in more than 40 locations. Proposed to introduce if online trading.

ORGANISATIONAL STRUCTURE

ORGNISATION STRUCTURE OF REGIONAL OFFICE

DEPARTMENT WISE ORGNISATION STRUCTURE

BRANCH ORGANIZATION STRUCTURE

FUNCTIONS OF DEPARTMENTS
1 DEPOSITORY PARTICIPANT SERVISES
FRONT OFFICE In front office the following services are done. Account opening Holding enquiries Transfer of physical shares to demat form Transfer of demat shares to physical form Transformations of shares from demat to trading account etc... BACK OFFICE Maintenance of all demat account with KCL Giving intimation related to the due of AMC.s to t heir account holders Sends quarterly information to the holders related to the holdings MARKETING In this department where the demat account is marketed, marketing executives are seeks for prospective customers, they helps in opening of an account and also these executives collects AMCs and provide other door to door services.

2. RIS
BACK OFFICE Here all the records of investors are maintained and kept confidentially and identifies the customers. requirements and the department members tries to full their needs. 1. TIN. Tax information network services, this is recently introduced by the RIS Department in this service, KCL tries to give the services regarding taxation. 2. PAN opening 3. TDS return (filling) quarterly, yearly 4. MAPIN openings Etc.At this point of time Tin department is not yet established.

ADVISORY SERVICES This is the main function done by the RIS department kcl gives every financial Advisory services to investors for ex: portfolio management, equity tips, tax planning etc

3. MUTUAL FUNDS
MARKETING: KCL has mainly under taken the distribution of financial products at commission basis; part of this mutual fund marketing is also one of the functions. In these function executives sells the almost all the AMCs schemes Executives, market the mutual fund schemes by 1 direct selling 2. Telemarketing REGISTER SERVICES: KCL also give register service to AMC in this service it provide the following Benefits to AMC: such as INGVYSAY, SBI, UTI, ICICI, BIRLA, Etc. 1. KCL maintains the transaction of schemes of AMC 2. KCL markets the NFO schemes 3. It maintains the resumption and repurchase of the schemes 4. It maintains all the paper work of AMC 5. It gives the information related to AMC shames (like NAV, DATES etc) to Schemes existing investors

4 INSURANCE:
MARKETING: as already stated KCL also markets all companies. life insurances Products Such as ICICI, BIRLA SUNLIFE, TATA AIG, LIC etc. executives market the insurance products by 1. Direct marketing 2. Tele marketing

BACK OFFICE: in this department it maintains the necessary records of the clients insurance which are taken by the KCL

5. ACCOUNTS
1. Maintaining the purchases stores department 2. Internal auditing 3. Payments and receipts

6. HR & ADMINISTRATION
PAY ROLL MAINTAINANCE: maintenance of employee details like salary incentives, bonus, and performance records etc. RECRUITMENT DEPARTMENT: this department helps in assessing the needs of Labour force and recruiting the needs of Labour and giving the orientation programmes to new employees. HRD: 1. Maintain good relation ship with the employees 2. Identifying the demotivate employees and providing the necessary motivation 3. Accepting problems of the workers and helps in solving them,, PERFORMANCE EVALUATION OF DEPARTMENTS BUSINESS SNAPSHOT: Number of IPO.s handled more than 650 Financial transaction 100 million Investor serviced 16 million Corporate clients and Mutual Funds AMCs 163 DP among top 5 in India with base of over 200000 accounts Among top 5 Merchant Bankers in India (Registered category 1 among SEBI)

Emerging as a Comprehensive Personal Finance Advisor ACHIEVEMENTS Largest mobiliser of funds as per PRIME DATABASE Among the top 5 stock brokers in India (4% of NSE volumes) India's No. 1 Registrar & Securities Transfer Agents Among the to top 3 Depository Participants Largest Network of Branches & Business Associates Among top 10 Investment bankers Largest Distributor of Financial Products Adjudged as one of the top 50 IT uses in India by MIS Asia Full Fledged IT driven operations A category-1 Merchant Banker A category-1 Registrar to Public Issue Ranked as .The most Admired Registrars. by MARG Handled the largest .ever public issues .IDBI Handled over 500 public issues as registrars First DP from the Andhra Pradesh Handling the Reliance Account, this account for nearly 10million account holders.

Milestone of Karvy
INCEPTION Corporate Registry services Stock Broking & ISCs Financial Product Distribution Corporate Finance Depository Services ITES & BPO Services Personal Finance Advisory Services Secondary Debt & WDM Services Joint Venture with Computer Share Comtrade 1979 1985 1990 1993 1995 1997 2000 2001 2003 2004 2004

KARVY GROUP OFCOMPANIES Karvy Consultants Limited Karvy Stock Broking Limited Karvy Investors Services Limited Karvy computer share pvt limited Karvy Global Services Limited Karvy Insurance Broking limited

KARVY CONSULTANTS LIMITED

As the flagship company of the Karvy Group, Karvy Consultants Limited has always remained at the helm of organizational affairs, pioneering business policies, work ethic and channels of progress. Having emerged as a leader in the registry business, the first of the businesses that karvy ventured into, Karvy had now transferred this business into a joint venture with Computer share Limited of Australia, the worlds largest registrar. With the advent of depositories in the Indian capital market and the relationships that they have created in the registry business, karvy believe that they were best positioned to venture into this activity as a Depository Participant. Karvy was one of the early entrants registered as Depository Participant with NSDL (National Securities Depository Limited), the first Depository in the country and then with CDSL (Central Depository Services Limited). Today, Karvy service over 6 lakhs customer accounts in this business Spread across over 250 cities/towns in India and are ranked amongst the largest Depository Participants in the country. With a growing secondary market presence, Karvy has transferred this business to Karvy Stock Broking Limited (KSBL), they associate and a member of NSE, BSE and HSE. IT enabled services. Karvy.s Technology Services division forms the ideal Platform to unleash its technology initiatives and make our presence felt on the Internet. Its past achievements include many quality websites designed, Developed and deployed by them. It also possess its own web hosting facilities With dedicated bandwidth and a state-of-the-art server farm (data center) with services functioning on a variety of operating platforms such as Windows, Solaris Linux & Unix. The corporate website of the company, .www.karvy.com., gives access to indepth information on financial matters including Mutual Funds, IPOs, Fixed Income Schemes, Insurance, Stock Market and much more. A link called. Resource Center., devoted solely to research conducted by its team of experts on various financial aspects like .Sector Research., deals

exclusively with in -depth analysis of the key sectors of the Indian economy. Besides, a host of otherlinks like .My Portfolio. Which acts as a personalized and customized financial measure, makes this site extremely informative about investment options, market trends, news as also about our company and each of the services offered here. KARVY AS AN INVESTMENT BANKER Karvy is well networked with 200 full-fledged branches and 350 Investor Service Centers with a workforce of over 3500 personnel drawn from various disciplines. Karvy Investor Services Limited, a SEBI registered Merchant Banker is a 100% subsidiary of Karvy Consultants Limited and is among the top 10 merchant Bankers in India today. The parent Company i.e. Karvy Consultants Limited was founded by a group of professionals in 1982 and today it has evolved as integrated financial services company of repute, offering various financial services to suit every requirement/need of their customers. By virtue of its access to millions of Indian Shareholders, in addition to companies, banks and financial institutions, Karvy has in the process built up a positive reputation with regulatory authorities and other government agencies. Karvy emphasis on the quality of the services, we offer, has been instrumental in helping them to attain the leadership in the financial services sector. It has a track record of handling 70 public/rights issues as Merchant Bankers. During the last two years they handled the share buyback issues of TTK LIG Limited, Sirpur Paper Mills Limited, Bhagyanagar Metals Limited, A V Thomas Group-Nelliampathy Tea and Produce Company Limited, Cordial Food Products Limited, Heritage Foods (India) Limited, Titanor Components Ltd, Punjab Communications Limited, etc. to name a few. They have also handled/are handling the Rights/Public issues of Dhanalakshmi Bank, Dhandapani Finance, Moschip, Karur Vysya Bank, Lux Hosiery Industries Ltd, Sah Petroleums Limited, Paradyne Infotech Limited, Yash Papers Limited, SPL Industries Limited, Provogue (I) Limited, Tulip IT Services Limited, Gati Limited as lead managers to name

a few. They have also been appointed as advisor to some of the GOI disinvestments. It has actives marketed bond issues of corporations from the States of Maharashtra, Karnataka & Gujarat and debt issues of all the Financial Institutions like IDBI, ICICI, IFCI, REC, PFC, SIDBI, etc. As an Investment Banker, Karvy provides; . Management of Capital Issues . Management of Buybacks, Takeovers and Delisting offers . Private Placement of Debt and Equity . Mergers and Amalgamations . Loan Syndication

KARVY STOCK BROKING LIMITED:

Member - National Stock Exchange (NSE), The Bombay Stock Exchange (BSE), and The Hyderabad Stock Exchange (HSE). Karvy Stock Broking Limited, one of the cornerstones of the Karvy edifice, flows freely towards attaining diverse goals of the customer through varied services. Creating a plethora of opportunities for the customer by opening up investment vistas backed by Research-based advisory services. Here, growth knows no limits and success recognizes no boundaries. Helping the customer create waves in his portfolio and empowering the investor completely is the ultimate goal. Stock Broking Services. It is an undisputed fact that the stock market is unpredictable and yet enjoys a high success rate as a wealth management and wealth accumulation option. The difference between unpredictability and a safety anchor in the market is provided by in-depth knowledge of market functioning and changing trends, planning with foresight and choosing one & rescue.s options with care. This is what it provides in their Stock Broking services. It offers services that are beyond just a medium for buying and selling stocks and shares. Instead it provides services, which are multi

dimensional andmulti-focused in their scope. There are several advantages in utilizing the karvy Stock Broking services, those are the reasons why it is one of the best in the country. It offers trading on a vast platform & dash; National Stock Exchange, Bombay Stock Exchange and Hyderabad Stock Exchange. More importantly, it makes trading safe to the maximum possible extent, by accounting for several risk factors and planning accordingly. We are assisted in this task by our indepth research, constant feedback and sound advisory facilities. Karvy has highly skilled research team, comprising of technical analysts as well as fundamental specialists, secure result-oriented information on market trends, market analysis and market predictions. This crucial information is given as aconstant feedback to there customers, through daily reports delivered thrice daily ‐ The Presession Report, where market scenario for the day is predicted, The Midsession Report, timed to arrive during lunch break, where the market forecast for the rest of the day is given and The Post-session Report, the final report for the day, where the market and the report itself is reviewed. To add to this repository of information, it publishes a monthly magazine & ldquo; Karvy & dash; The Finapolis&rdquo, which analyzes the Latest stock market trends and takes a close look at the various investment options, and products available in the market, while a weekly report, called & ldquo; Karvy Bazaar Baatein & rdquo;, keeps you more informed on the immediate trends inthe stock market. In addition, it specifies industry reports give comprehensive information on various industries. Besides this, It also offer special portfolio analysis packages that provide daily technical advice on scripts for successful portfolio management and provide customized advisory services to help you make the right financial moves that are specifically suited to your portfolio. Karvy Stock Broking services are widely networked across India, with the number of their trading terminals providing retail stock broking facilities. Its services have increasingly offered customer oriented convenience, which it provides to a spectrum of investors, high-net worth or otherwise, with equal dedication and competence.

But true to its spirit, this success is not its final destination, but just a platform to launch further enhanced quality services to provide you the latest inconvenient, customer friendly stock management. Over the years karvy has ensured that the trust of its customers is its biggest returns. Factors such as its success in the Electronic custody business hashelped build on its tradition of trust even more. Consequentially its retail client base expanded very fast. To empower the investor further karvy has made serious efforts to ensure that its research calls are disseminated systematically to all its stock broking clients through various delivery channels like email, chat, SMS, phone calls etc. Karvy foray into commodities broking has been path breaking and it is in the process of converting existing traders in commodities into the more organized mainstream of trading in commodity futures, both as a trading and risk hedging mechanism. In the future, it focus will be on the emerging businesses and to meet this objective, its have enhanced manpower and revitalized its knowledge base with enhances focus on Futures and Options as well as the commodities business. Depository Participants. The onset of the technology revolution in financial services Industry saw the emergence of Karvy as an electronic custodian registered with National Securities Depository Ltd (NSDL) and Central Securities Depository Ltd (CSDL) in 1998. Karvy set standards enabling further comfort to the investor by promoting paperless trading across the country and emerged as the top 3 Depository Participants in the country in terms of customer serviced. Offering a wide trading platform with a dual membership at both NSDL and CDSL, it is a powerful medium for trading and settlement of dematerialized shares.It have established live DPMs, Internet access to accounts and an easier transaction process in order to offer more convenience to individual and corporate investors. A team of professional and the latest technological expertise allocated exclusively to it.s Demat division including technological enhancements like SPEED-e, make its response time quick and its delivery impeccable. A wide national network makes its efficiencies accessible to all.

Distribution of Financial Products. The paradigm shift from pure selling to knowledge based selling drives the business today. With its wide portfolio offerings, Karvy occupy all segments in the retail financial services industry. A 1600 team of highly qualified and dedicated professionals drawn from the best of academic and professional backgrounds are committed to maintaining high levels of client service delivery. This has propelled us to a position among the top distributors for Equity and debt issues with an estimated market share of 15% in terms of applications mobilized, besides being established as the leading procurer in all public issues. To further tap the immense growth potential in the capital markets Karvy enhanced the scope of its retail brand, Karvy . the Finapolis , thereby providing planning and advisory services to the mass affluent. Karvy understand the customer needs and lifestyle in the context of present earnings and provide adequate advisory services that will necessarily help in creating wealth. Judicious planning that is customized to meet the future needs of the customer deliver a service that is exemplary. The market-savvy and the ignorant investors, both find this service very satisfactory. The edge that karvy have over competition is its portfolio of offerings and its professional expertise. The investment planning for each customer is done with an unbiased attitude so that the service is truly customized. Its monthly magazine, Finapolis, provides up-dated market information on market trends, investment options, opinions etc. Thus empowering the investor to base every financial move on rational thought and prudent analysis and embark on the path to wealth creation. Advisory Services. Under its retail brand .Karvy . the Finapolis', Karvy deliver advisory services to a cross-section of customers. The service is backed by a team of dedicated and expert professionals with varied experience and background in handling investment portfolios. They are continually engaged in designing the right investment portfolio for each customer according to individual needs and budget considerations with a comprehensive support system that focuses on trading customers' portfolios and providing valuable inputs, monitoring and managing the portfolio through varied technological initiatives. This is made possible by the expertise karvy have gained in the business over the years. Another venture

towards being investor-friendly is the circulation of a monthly magazine called .Karvy - the Finapolis'. Covering the latest of market news, trends, investment schemes and research-based opinions from experts in various financial fields. www.the-finapolis.com Private Client Group. This specialized division was set up to cater to the high net worth individuals and institutional clients keeping in mind that they require a different kind of financial planning and management that will augment not just existing finances but their life-style as well. Karvy follow a hard-nosed business approach with the soft touch of dedicated customer care and personalized attention. For this purpose karvy offer a comprehensive and personalized service that encompasses planning and protection of finances, planning of business needs and retirement needs and a host of other services, all provided on a one-toone basis. Its research reports have been widely appreciated by this segment. The delivery and support modules have been fine tuned by giving its clients access to online portfolio information, constant updates on their portfolios as well as value-added advice on portfolio churning, sector switches etc. The investment Recommendations given by its research team in the cash market has enjoyed a high success rate.

KARVY INVESTORS SERVICES LIMITED

Merchant Banking Recognized as a leading merchant banker in the country, Karvy registered with SEBI as a Category I merchant banker. This reputation was built by capitalizing on opportunities in corporate consolidations, mergers and acquisitions and corporate restructuring, which have earned them the reputation of a merchant banker. Raising resources for corporate or Government Undertaking successfully over the past two decades have given us the confidence to renew its focus in this sector. Its quality professional team and its work-oriented dedication have propelled them to offer value-added corporate financial services and act as a professional navigator for long term growth of its clients, which include leading corporate, State Governments, foreign institutional investors, public and private sector companies and banks, in Indian and global markets.

Karvy has also emerged as a trailblazer in the arena of relationships, both at the customer and trade levels because of its unshakable integrity, seamless service and innovative solutions that are tuned to meet varied needs. Its team of committed industry specialists, having extensive experience in capital markets, further nurtures this relationship. Its financial advice and assistance in restructuring, divestitures, acquisitions, de-mergers, spin-offs, joint ventures, privatization and takeover defense mechanisms have elevated its relationship with the client to one based on unshakable trust and confidence. Karvy offerings Investment Banking Merchant banking services Advisory Market operation Issue management Financial services Reform measures were initiated in the capital market from 1992, starting with the conferring of statutory powers on the Securities and Exchange Board of India (SEBI) and the repeal of Capital Issues Control Act and the abolition of the office of the Controller of Capital Issues. These have brought about significant improvement in the functional and regulatory efficiency of the market, enabling the Merchant Bankers shoulder greater legal and moral responsibility towards the investing public.

KARVY COMPUTER SHARE PVT LIMITED

Karvy has traversed wide spaces to tie up with the world.s largest transfer agent, the leading Australian company, Computer share Limited. The company that services more than 75 million shareholders across 7000 corporate clients and makes its presence felt in over 12 countries across 5 continents has entered into a 50-50 joint venture with us. With its management team completely transferred to this new entity,

karvy will aim to enrich the financial services industry than before. The future holds new arenas of client servicing and contemporary and relevant technologies as it is geared to deliver better value and foster bigger investments in the business. The worldwide network of Computer share will hold us in good stead as we expect to adopt international standards in addition to leveraging the best of technologies from around the world. Excellence has to be the order of the day when two companies with such similar ideologies of growth, vision and competence, get together. Mutual Fund Services Karvy has attained a position of immense strength as a provider of acrosstheboard transfer agency services to AMCs, Distributors and Investors. Nearly 40% of the top-notch AMCs including prestigious clients like Deutsche AMC and UTI swear by the quality and range of services that karvy offer. Besides providing the entire back office processing, it provide the link between various Mutual Funds and the investor, including services to the distributor, the prime channel in this operation. Carrying the limitless' ideology forward, it has explored new dimensions in every aspect of Mutual Fund servicing right from volume management, cost effective pricing, delivery in the least turnaround time, efficient backoffice andfront-office operations to customized service. It has been with the AMCs everystep of the way, helping them serve their investors better by offering them a diverse and customized range of services. The .first to market' approach that is its anthem has earned them the reputation of an innovative service provider with a visionary bent of mind . Its service enhancements such as .Karvy Converse', a full-fledged call center, a top-line the .m-investor' and many more, creating a galaxy of customer advantages. Issue Registry In its voyage towards becoming the largest transaction-processing house in the Indian Corporate segment, karvy has mobilized funds for numerous

corporate, Karvy has emerged as the largest transaction-processing house for the Indian Corporate sector. With an experience of handling over 700 issues, Karvy today, has the ability to execute voluminous transactions and hardcore expertise in technology applications have gained s the No.1 slot in the business. Karvy is the first Registry Company to receive ISO 9002 certification in India that stands testimony to its stature Karvy has the backing of skilled human resources complemented by requisite technological packages to ensure a faster processing capability. Karvy has the benefit of a good synergy between depositories and registry that enables faster resolution to related customer queries. Apart from its unique investor servicing presence in all the phases of public Issue, it is actively coordinating with both the main depositories to develop special models to enable the customer to access depository (NSDL, CDSL) services during an IPO. Corporate Shareholder Services. Karvy has been a customer centric company since its inception. Karvy offers a single platform servicing multiple financial instruments in its bid to offer complete financial solutions to the varying needs of both corporate and retail investors where an extensive range of services are provided with great volume management capability. Today, Karvy is recognized as a company that can exceed customer expectations which is the reason for the loyalty of customers towards Karvy for all his financial needs. An opinion poll commissioned by . The Merchant Banker Update. and conducted by the reputed market research agency, MARG revealed that Karvy was considered the .Most Admired. in the registrar category among financial services companies. Karvy had grown from being a pure transaction processing business, to one of complete shareholder solutions.

KARVY GLOBAL SERVICES LIMITED

The specialist Business Process Outsourcing unit of the Karvy group. The legacy of expertise and experience in financial services of the Karvy Group serves us well as it enters the global arena with the confidence of being able to deliver and deliver well. Karvy offers several delivery models on the understanding that business needs are unique and therefore only a customized service could possibly fit the bill. It service matrix has permutations and combinations that create several options to choose from. Be it in re-engineering and managing processes or delivering new efficiencies, its service meets up to the most stringent of international standards. Its outsourcing models are designed for the global customer and are backed by sound corporate and operations philosophies, and domain expertise. Providing productivity, improvements, operational cost control, cost savings, improved accountability and a whole gamut of other advantages. Karvy operate in the core market segments that have emerging requirements for specialized services. It has a wide vertical market coverage includes Banking, Financial and Insurance Services (BFIS), Retail and Merchandising, Leisure and Entertainment, Energy and Utility and Healthcare. It horizontal offerings do justice to its stance as a comprehensive BPO unit and include a variety of services in Finance and Accounting Outsourcing Operations, Human Resource Outsourcing Operations, Research and Analytics Outsourcing Operations and Insurance Back Office Outsourcing Operations.

KARVY COMMODITIES BROKING PRIVATE LIMITED

At Karvy Commodities, focused on taking commodities trading to new dimensions of reliability and profitability. Karvy made commodities trading, essentially age-old practices, into a sophisticated and scientific investment option. Karvy enable trade in all goods and products of agricultural and mineral

origin that include lucrative commodities like gold and silver and popular items like oil, pulses and cotton through a well-systematized trading platform. It,s technological and infrastructure strengths and especially its streetsmart skills make them an ideal broker. Its service matrix is holistic with a gamut of advantages, the first and foremost being its legacy of human resources, technology and infrastructure that comes from being part of the Karvy Group. Its wide national network, spanning the length and breadth of India, further supports these advantages. Regular trading workshops and seminars are conducted to hone trading strategies to perfection. Every move made is a calculated one, based on reliable research that is converted into valuable information through daily, weekly and monthly newsletters, calls and intraday alerts. A dedicated team committed to giving hassle-free service while the brokerage rates offered are extremely competitive provides further, personalized service here. Karvy commitment to excel in this sector stems from the immense importance those commodities broking has to a cross-section of investors .farmers, exporters, importers, manufacturers and the Government of India itself.

KARVY INSURANCE BROKING PRIVATE LIMITED

Karvy provide, life and non-life insurance products to retail individuals, high net worth clients and corporate. With the opening up of the insurance sector and with a large number of private players in the business. Karvy is in position to provide tailor made policies for different segments of customers. In its journey to emerge as a personal finance advisor, it will be better positioned to leverage our relationships with the product providers and place the requirements of its customers appropriately with the product providers. With Indian markets seeing a sea change, both in terms of investment pattern and attitude of investors, insurance is no more seen as only a tax saving product but also as an investment product. By setting up a separate entity, karvy would be positioned to Provide the best of the products available in this business to its customers.

It is wide national network, spanning the length and breadth of India, further supports these advantages. A dedicated team committed in giving hassle-free service to the clients provides further, personalized service here. KARVY ALLIANCES Karvy Computershare Private Limited is a 50:50 joint venture of Karvy Consultants Limited and Computershare Limited, Australia. Computereshare Limited is world's largest -- and only global -- share registry, and a leading financial market services provider to the global securities industry. The joint venture with Computershare, reckoned as the largest registrar in the World, servicing over 60 million shareholder accounts for over 7,000 corporations across eleven countries spread across five continents. Computer share manages more than 70 million shareholder accounts for over 13,000 corporations around the world.

SWOT ANLYSIS:
This is an analysis of strengths, Weakness, Opportunity and Threats of Karvy consultants. Strengths Nationwide Network of branches Renowned brand name in Financial products Multi product activities in financial products 1 in top 5 broker in the country distribution Strong brand recall among retail investor Reach (mass marketing) Weakness All employees lack in multiproduct skill despites being multi product company Systems (infrastructure facility) Up graduation still not up to the mark

Opportunities Can make use of sustained growth in retail segment of financial product Due to high awareness of financial products among general public business growth could be higher Can make of technology to market product(e-selling) Threats Increased competition from contemporaries in the market Decreasing margins by way of Commission All along Karvy.s strong work ethic and professional background leveraged with IT enable it to deliver quality to the individual. There after, Karvy made in roads into a host of capital market services, corporate and retail, which provide to be a sound business synergy. A decade commitment, and professional integrity and vision helped Karvy achieve e leadership position in its field when it handled the largest number if issues ever handled in the history of Indian stock market in a year. Today Karvy has access to million of Indian share holders, besides companies, banks, financial institutions and regulatory agencies. Over the past one and a half decades, Karvy has evolved as a veritable link between industry, finance and people. Today Karvy is dynamic, energetic organization with 1500 highly qualified manpower. Cutting edge technology, comprehensive infrastructure and total customer focus has helped it secure the position of an emerging financial giant enjoying the confidence and support of an evitable clientele across diverse fields in the financial world PROBLEMS AREAS: Not yet introducing the online trading, whereas competitors are already started to introducing the online trading. For e.g.: Sharekhan.com, ICICI securities Lack of Multi work skill, Multi department skill in employee skills. Lack of infrastructure development, It may lead to demotivation of

employee for e.g.: Systems are very slow, There is need to up gradation is necessary. Lack of Publicity of TIN Facilitation service. Lack of online service such as holdings enquiry, Portfolio management advice.etc Advice related to equity market are given to HNI clients only, Lack of strategy in market of Mutual funds.

RECOMMENDATION:
There is urgent need of online trading service all the competitors started to adopt the online trading service. Giving Multi department skill, Multi work skill training to employees in order to give the tough competition to competitors and also employees become more Skilled There is urgent need of infrastructure development, like system up gradation, Franchise renovation to meet global changing model. Etc Most of the existing investors not known about the TIN Facility service, so there is urgent need to publicity of TIN service. Providing the Online services to investors such as holdings enquiry, Portfolio management advice. Etc Advising to every investors in same manner Usage of innovative strategy for marketing of mutual funds. For e.g.: Tie up with professionals, CA.s etc to market the mutual fund.

INTRODUCTION
OBJECTIVES OF THE PROJECT
The purpose of the study was to determine the saving behavior and investment preferences of customers. Customer perception will provide a way to accurately measure how the customers think about the products and services provided by the company. Todays trying economic conditions have forced difficult decisions for companies. Most are making conservative decisions that reflect a survival mode in the business operations. During these difficult times, understanding what customers on an ongoing basis is critical for survival. Executives need a 3rd party understanding on where customer loyalties stand. More than ever management needs ongoing feedback from the customers, partners and employees in order to continue to innovate and grow. The main objective of the project is to find out the needs of current and future customers. For this report , customer perception and awareness level will be measured in many important areas like: To understand all about different investment avenues available in India. To find out how the investors get information about the various financial instrument.

To find out how the investor wants to invest i.e. on his own or through a broker. To find out the saving habits of the different customers and the amount they invest in various financial instruments. In which type of financial instrument they like to invest. How long they prefer to keep their money invested. What is the return that they expect from the investment. What are the various factors that they consider before investing. To find out the risk profile of the investor. To give a recommendation to the investors that where they should invest. To give a suggestion to my company where our fund lacks in the market & how it should be rectified. After all as a management trainee I will try to get some valuable knowledge from my seniors in the organization as well as from my faculty guide which will help me in the future. To evaluate the consumer attitude towards saving and decision making regarding investments.

VALUE ADDITION TO THE COMPANY

This report will help the company to strengthen customer intimacy. The report on various investment avenues available in India will help the company in many areas like: It will help the company to understand the expectations the customer have about their company from the perspective of financial performance and corporate social responsibility. It will provide fresh insights which can help their business continue to flourish. The company can identify the particular service requirements of different types of customers. The company can understand the problem areas. The company can evaluate new services initiatives. The study will help in gaining a better understanding of what an investor looks for in an investment option. It can be used by the financial sector in designing better financial instrument customized to suit the needs of the investor. It will help agents and brokers in marketing the existing instruments. It will provide knowledge to the customer about the various financial services provided by the company to their customers. It can help the company to understand what is the requirement of the different categories of customers This report will be developed in order to empower companies with detailed primary market research needed to make well informed decisions and it will provide independent measurement and validation of the health of companys relationship with their customers. These are the various advantages which will give some value addition to the company in understanding the awareness level of the customer about the various investment options and what is the perception of the investors with regard to the investments they want to make.

LIMITATIONS OF THE STUDY

The project is based upon various financial instrument that are available in India and the perception level of the customer about these financial instruments. For which there will be the need of information from the customers about their knowledge of these financial products. The various limitations of the study are:
Total number of financial instrument in the market is so large that it

needs a lot of resources to analyze them all. There are various companies providing these financial instruments to the public. Handling and analyzing such a varied and diversified data needs a lot of time and resources . As the project is based on secondary data, possibility of unauthorized information cannot be avoided. Reluctance of the people to provide complete information about themselves can affect the validity of responses. Due to time and cost constraint study will be conducted in only selected area of Delhi. The lack of knowledge in customers about the financial instruments can be a major limitation. The information can be biased due to use of questionnaires.

MY WORK IN KARVY STOCK BROKING

During the summer internship period i.e. from 15th June to 10th August have gone through various stages of Job role. I was basically given the work to Target various Consumer Groups, Markets and Different Organizations to whom and where the company can pitch its differential financial products/services as well as to create Awareness about the company and its offerings in the regard to Promote which can create a Position in minds of the consumer. Moreover I was given some training classes about various investments available for investments which have helped me a lot in the understanding of different investment product. This project has been a great learning experience for me, at the same time it gave me enough scope to implement my analytical ability. This project as a whole can be divided into two parts:
The first part gives an insight about the different investment avenues

available in India and its various aspects. It is purely based on whatever I learned at KARVY STOCK BROKING. All the topics have been covered in a very systematic way. The language has been kept simple so that a layman could understand.
The second part will consist of data and their analysis; will be

collected through a survey done on 200 people. Hope the research findings and conclusions will be of use. It has also covered why people dont want to go in invest? The advisors can take further steps to approach more and more people and indulge them for taking their advices.

METHODOLOGY: Source of Data:Primary Data Secondary Data and magazines. Sample Size : Questionnaire, visiting organization. : Information from the Company, Websites, journals : 100.

Sampling technique : Random sampling.

SAMPLING METHODOLOGY SamplingTechnique: Initially, a rough draft was prepared keeping in mind the objective of the research. A pilot study was done in order to know the accuracy of the Questionnaire. The final Questionnaire was arrived only after certain important changes were done. Convenience sampling technique will be used for collecting the data from the Karvy Stock Broking customers. The consumers are selected by the convenience sampling method. The selection of units from the population based on their easy availability and accessibility to the researcher is known as convenience sampling. Convenience sampling is at its best in surveys dealing with an exploratory purpose for generating ideas and hypothesis.

Sampling Unit: The respondants who were asked to fill out questionnaires are the sampling units. These comprise of employees of MNCs, Govt. Employees, Self Employeds and existing customers of Karvy Stock broking Ltd.

Sample size: The sample size was restricted to only 100, which comprised of mainly peoples from different regions of U.P. due to time constraints. Sampling Area: The area of the research was Kanpur, Lucknow. The project work can only be complete after: Analyzing the data. Referring books and gathering more relevant information from the internet. Drawing detailed and careful inferences from the analysis. Data Collection: Questioning & observing are the two basic methods of collecting primary data. Questionnaire studies are more relevant than observation studies Importance of Questionnaire When information is to be collected by asking questions to people who may have the desired data, a standardized form called questionnaire is prepared which helps to bring the data as such required for the research work. The questionnaire is a list of questions to be asked to the respondents. Each question is worded exactly as it is to be asked & the questions are listed in an established sequence. Spaces in which to record answers are provided in questionnaire. Presentation of the data The collected data will be analyzed and will be represented through various charts, graphs, pie charts, tabulation and a master sheet of the surveyed data. The data will be presented to determine market shares and percentage of readers out of the total population. The same pattern will be repeated in the case of advertisers.

KARVY AS AN ORGANIZATION
KARVY, is a premier integrated financial services provider, and ranked among the top five in the country in all its business segments, services over 16 million individual investors in various capacities, and provides investor services to over 300 corporate, comprising the who is who of Corporate India. KARVY covers the entire spectrum of financial services such as Stock broking, Depository Participants, Distribution of financial products mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. Karvy has a professional management team and ranks among the best in technology, operations and research of various industrial segments. The birth of Karvy was on a modest scale in 1982. It began with the vision and enterprise of a small group of practicing Chartered Accountants who founded the flagship company. Karvy Consultants Limited. Started with consulting and financial accounting automation, and carved inroads into the field of registry and share accounting by 1985. Since then, Karvy used its experience and superlative expertise to go from strength to strength, to better services, to provide new ones, to innovate, diversify and in the process, evolved Karvy as one of Indias premier integrated financial service enterprise. Thus over the last 20 years Karvy has traveled the success route, towards building a reputation as an integrated financial services provider, offering a wide spectrum of services. And have made this journey by taking the route of quality service, path breaking innovations in service, versatility in service and finally totality in service. KARVY highly qualified manpower, cutting-edge technology, comprehensive infrastructure and total customer-focus has secured for the position of an emerging financial services giant enjoying the confidence and

support of an enviable clientele across diverse fields in the financial world. Values and vision of attaining total competence in servicing has served as the building block for creating a great financial enterprise, which stands solid on our fortresses of financial strength - various companies. With the experience of years of holistic financial servicing and years of complete expertise in the industry to look forward to, Karvy now emerged as a premier integrated financial services provider. As the flagship company of the Karvy Group, Karvy Consultants Limited has always remained at the helm of organizational affairs, pioneering business policies, work ethic and channels of progress. KARVY has been a customer centric company since its inception. Karvy offers a single platform servicing multiple financial instruments in its bid to offer complete financial solutions to the varying needs of both corporate and retail investors where an extensive range of services are provided with great volume-management capability. Today, Karvy is recognized as a company that can exceed customer expectations which is the reason for the loyalty of customers towards Karvy for all his financial needs. An opinion poll commissioned by The Merchant Banker Update and conducted by the reputed market research agency, MARG revealed that Karvy was considered the Most Admired in the registrar category among financial services companies. Karvy have grown from being a pure transaction processing business, to one of complete shareholder solutions.

The specialist Business Process Outsourcing unit of the Karvy Group. The legacy of expertise and experience in financial services of the Karvy Group serves well as enter the global arena with the confidence of being able to deliver and deliver well. Here it offers several delivery models on the understanding that business needs are unique and therefore only a customized service could possibly fit the bill. Service matrix has

permutations and combinations that create several options to choose from. Be it in re-engineering and managing processes or delivering new efficiencies, service meets up to the most stringent of international standards outsourcing models are designed for the global customer and are backed by sound corporate and operations philosophies, and domain expertise. Providing productivity improvements, operational cost control, cost savings, improved accountability and a whole gamut of other advantages. Karvy operate in the core market segments that have emerging requirements for specialized services, wide vertical market coverage includes Banking, Financial and Insurance Services (BFIS), Retail and Merchandising, Leisure and Entertainment, Energy and Utility and Healthcare. Karvy horizontal offerings do justice to our stance as a comprehensive BPO unit and include a variety of services in Finance and Accounting Outsourcing Operations, Human Resource Outsourcing Operations, Research and Analytics outsourcing Operations and Insurance Back Office Outsourcing Operations. www.karvyglobal.com

At Karvy Commodities, focused on taking commodities trading to new dimensions of reliability and profitability. Karvy have made commodities trading, an essentially age-old practice, into a sophisticated and scientific investment option .Here it enable trade in all goods and products of agricultural and mineral origin that include lucrative commodities like gold and silver and popular items like oil, pulses and cotton through a well systematized trading platform, technological and infrastructural strengths and especially street-smart skills make an ideal broker. Service matrix is holistic with a gamut of advantages, the first and foremost being legacy of human resources, technology and infrastructure that comes from being part of the Karvy Group. Karvy wide national network, spanning the length and breadth of India, further supports these advantages. Regular trading workshops and seminars are conducted to hone trading strategies to

perfection. Every move made is a calculated one, based on reliable research that is converted into valuable information through daily, weekly and monthly newsletters, calls and intraday alerts. Further, personalized service is provided here by a dedicated team committed to giving hassle-free service while the brokerage rates offered are extremely competitive. Commitment to excel in this sector stems from the immense importance that commodity broking has to a cross-section of investors & farmers, exporters, importers, manufacturers and the Government of India itself.

At Karvy Insurance Broking Pvt. Ltd. provide both life and non-life insurance products to retail individuals, high net-worth clients and corporate. With the opening up of the insurance sector and with a large number of private players in the business, they are in a position to provide tailor made policies for different segments of customers. In journey to emerge as a personal finance advisor, it will be better positioned to leverage relationships with the product providers and place the requirements of customers appropriately with the product providers. With Indian markets seeing a sea change, both in terms of investment pattern and attitude of investors, insurance is no more seen as only a tax saving product but also as an investment product. Karvys wide national network, spanning the length and breadth of India, further supports these advantages. Further, personalized service is provided here by a dedicated team committed in giving hassle-free service to the clients.

Achievements
Among the top 5 stock brokers in India (4% of NSE volumes) India's No. 1 Registrar & Securities Transfer Agents Among the top 3 Depository Participants Largest Network of Branches & Business Associates ISO 9002 certified operations by DNV Among top 10 Investment bankers Largest Distributor of Financial Products Adjudged as one of the top 50 IT uses in India by MIS Asia Fully Fledged IT driven operations

Various milestones towards success:

PROJECT DESCRIPTION
Mutual Fund:Mutual fund is a pool of money collected from investors and is invested according to stated investment objectives Mutual fund investors are like shareholders and they own the fund. Mutual fund investors are not lenders or deposit holders in a mutual fund. Everybody else associated with a mutual fund is a service provider, who earns a fee. The money in the mutual fund belongs to the investors and nobody else. Mutual funds invest in marketable securities according to the investment objective. The value of the investments can go up or down, changing the value of the investors holdings.NAV of a mutual fund fluctuates with market price movements. The market value of the investors funds is also called as net assets. Investors hold a proportionate share of the fund in the mutual fund. New investors come in and old investors can exit, at prices related to net asset value per unit. Emergence of Mutual Funds:Mutual Funds now represent perhaps the most appropriate investment opportunity for most small investors. As financial markets become more sophisticated and complex, investor need a financial intermediary who provides the required knowledge and professional expertise on successful investing. It is no wonder then that in the birthplace of mutual funds-the U.S.A.-the fund industry has already overtaken the banking industry, with more money under Mutual Fund management than deposited with banks. The Indian Mutual Fund industry has already opened up many exciting investment opportunities to Indian investors. Despite the expected continuing growth in the industry, Mutual Fund is a still new financial intermediary in India. History of Mutual Funds:-

In the second half of 19th century, investor in UK considered the stock market is good for the investment. But for small investor it is not possible to operate in the market effectively. This led to establishment of an investment company which led to the small investor to invest in equity market. The first investment company was the Scottish-American Investment Company, set up in London in 1860. Mutual Fund Industry in India:Mutual Fund is an instrument of investing money. Nowadays, bank rates have fallen down and are generally below the inflation rate. Therefore, keeping large amounts of money in bank is not a wise option, as in real terms the value of money decreases over a period of time. One of the options is to invest the money in stock market. But a common investor is not informed and competent enough to understand the intricacies of stock market. This is where mutual funds come to the rescue. A mutual fund is a group of investors operating through a fund manager own. Also, one doesn't have to figure out which stocks or bonds to buy. But the biggest advantage of mutual funds is diversification. Diversification means spreading out money across many different types of investments. When one investment is down another might be up. Diversification of investment holdings reduces the risk tremendously. In 1963, the government of India took the initiative by passing the UTI act, under which the Unit Trust of India (UTI) was set-up as a statutory body. The designated role of UTI was to set up a Mutual Fund. UTIs first scheme, called. In 1987 the other public sector institutions set up their Mutual Funds. In 1992, government allowed the private sector players to setup their funds. In 1994 the foreign Mutual Funds arrives in Indian market. In 2001 there is a crisis in UTI and in 2003 UTI splits up into UTI 1and UTI 2. The history of Indian Mutual Fund industry can be explained easily by various phases: to purchase a diverse portfolio of stocks or bonds. Mutual funds are

highly cost efficient and very easy to invest in. By pooling money

together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs.

Benefits of Investing in Mutual Funds

Professional Management: Mutual Funds provide the services of experienced and skilled professionals, backed by a dedicated investment research team that analyses the performance and prospects of companies and selects suitable investments to achieve the objectives of the scheme. Diversification: Mutual Funds invest in a number of companies across a broad cross-section of industries and sectors. This diversification reduces the risk because seldom do all stocks decline at the same time and in the same proportion. You achieve this diversification through a Mutual Fund with far less money than you can do on your own. Convenient Administration: Investing in a Mutual Fund reduces paperwork and helps you avoid many problems such as bad deliveries, delayed payments and follow up with brokers and companies. Mutual Funds save your time and make investing easy and convenient. Return Potential:Over a medium to long-term, Mutual Funds have the potential to provide a higher return as they invest in a diversified basket of selected securities. Low Costs: Mutual Funds are a relatively less expensive way to invest compared to directly investing in the capital markets because the benefits of scale in brokerage, custodial and other fees translate into lower costs for investors. Liquidity: In open-end schemes, the investor gets the money back promptly at net asset value related prices from the Mutual Fund. In closed-end schemes, the units

can be sold on a stock exchange at the prevailing market price or the investor can avail of the facility of direct repurchase at NAV related prices by the Mutual Fund.

Transparency: You get regular information on the value of your investment in addition to disclosure on the specific investments made by your scheme, the proportion invested in each class of assets and the fund manager's investment strategy and outlook. Flexibility: Through features such as regular investment plans, regular withdrawal plans and dividend reinvestment plans, you can systematically invest or withdraw funds according to your needs and convenience. Affordability: Investors individually may lack sufficient funds to invest in high-grade stocks. A mutual fund because of its large corpus allows even a small investor to take the benefit of its investment strategy. Choice of Schemes: Mutual Funds offer a family of schemes to suit your varying needs over a lifetime. Well Regulated:All Mutual Funds are registered with SEBI and they function within the provisions of strict regulations designed to protect the interests of investors. The operations of Mutual Funds are regularly monitored by SEBI.

Types of Mutual Funds

Mutual fund schemes may be classified on the basis of its structure and its objective:By Structure:Open-ended Funds:An open-end fund is one that is available for subscription all through the year. These do not have a fixed maturity. Investors can conveniently buy and sell units at Net Asset Value ("NAV") related prices. The key feature of open-end schemes is liquidity. Closed-ended Funds:A closed-end fund has a stipulated maturity period which generally ranging from 3 to 15 years. The fund is open for subscription only during a specified period. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where they are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the Mutual Fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor. Interval Funds:Interval funds combine the features of open-ended and closeended schemes. They are open for sale or redemption during pre-determined intervals at NAV related prices. Money Market Funds:-

The aim of money market funds is to provide easy liquidity, preservation of capital and moderate income. These schemes generally invest in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money. Returns on these schemes may fluctuate depending upon the interest rates prevailing in the market. These are ideal for Corporate and individual investors as a means to park their surplus funds for short periods. Load Funds:A Load Fund is one that charges a commission for entry or exit. That is, each time you buy or sell units in the fund, a commission will be payable. Typically entry and exit loads range from 1% to 2%. It could be worth paying the load, if the fund has a good performance history. No-Load Funds:A No-Load Fund is one that does not charge a commission for entry or exit. That is, no commission is payable on purchase or sale of units in the fund. The advantage of a no load fund is that the entire corpus is put to work. Tax Saving Schemes:These schemes offer tax rebates to the investors under specific provisions of the Indian Income Tax laws as the Government offers tax incentives for investment in specified avenues. Investments made in Equity Linked Savings Schemes (ELSS) and Pension Schemes are allowed as deduction u/s 88 of the Income Tax Act, 1961. The Act also provides opportunities to investors to save capital gains u/s 54EA and 54EB by investing in Mutual Funds, provided the capital asset has been sold prior to April 1, 2000 and the amount is invested before September 30, 2000.

Various types of Mutual Funds

Equity Funds: Equity funds are considered to be the more risky funds as compared to other fund types, but they also provide higher returns than other funds. It is advisable that an investor looking to invest in an equity fund should invest for long term i.e. for 3 years or more. There are different types of equity funds each falling into different risk bracket. In the order of decreasing risk level, there are following types of equity funds:-

AGGRESSIVE GROWTH FUNDS:In Aggressive Growth Funds, fund managers aspire for maximum capital appreciation and invest in less researched shares of speculative nature. Because of these speculative investments Aggressive Growth Funds become more volatile and thus, are prone to higher risk than other equity funds. GROWTH FUNDS: Growth Funds also invest for capital appreciation (with time horizon of 3 to 5 years) but they are different from Aggressive Growth Funds in the sense that they invest in companies that are expected to outperform the market in the future. Without entirely adopting speculative strategies, Growth Funds invest in those companies that are expected to post above average earnings in the future. SPECIALTY FUNDS: Specialty Funds have stated criteria for investments and their portfolio comprises of only those companies that meet their criteria. Criteria for some specialty funds could be to invest/not to invest in particular regions/companies. Specialty funds are concentrated and thus, are

comparatively riskier than diversified funds. There are following types of specialty funds:

Sector Funds:Equity funds that invest in a particular sector/industry of the market are known as Sector Funds. The exposure of these funds is limited to a particular sector (say Information Technology, Auto, Banking, Pharmaceuticals or Fast Moving Consumer Goods) which is why they are more risky than equity funds that invest in multiple sectors. Foreign Securities Funds:Foreign Securities Equity Funds have the option to invest in one or more foreign companies. Foreign securities funds achieve international diversification and hence they are less risky than sector funds. However, foreign securities funds are exposed to foreign exchange rate risk and country risk. Mid-Cap or Small-Cap Funds:Funds that invest in companies having lower market capitalization than large capitalization companies are called Mid-Cap or Small-Cap Funds. Market capitalization of Mid-Cap companies is less than that of big, blue chip companies (less than Rs. 2500 crore but more than Rs. 500 crore) and Small-Cap companies have market capitalization of less than Rs. 500 crore. Market Capitalization of a company can be calculated by multiplying the market price of the company's share by the total number of its outstanding shares in the market. The shares of Mid-Cap or Small-Cap Companies are not as liquid as of Large-Cap Companies which gives rise to volatility in share prices of these companies and consequently, investment gets risky. Option Income Funds:-

While not yet available in India, Option Income Funds write options on a large fraction of their portfolio. Proper use of options can help to reduce volatility, which is otherwise considered as a risky instrument. These funds invest in big, high dividend yielding companies, and then sell options against their stock positions, which generate stable income for investors. DIVERSIFIED EQUITY FUNDS: Except for a small portion of investment in liquid money market, diversified equity funds invest mainly in equities without any concentration on a particular sector(s). These funds are well diversified and reduce sector-specific or company-specific risk. However, like all other funds diversified equity funds too are exposed to equity market risk. One prominent type of diversified equity fund in India is Equity Linked Savings Schemes (ELSS). As per the mandate, a minimum of 90% of investments by ELSS should be in equities at all times. ELSS investors are eligible to claim deduction from taxable income (up to Rs 1 lakh) at the time of filing the income tax return. ELSS usually has a lock-in period and in case of any redemption by the investor before the expiry of the lock-in period makes him liable to pay income tax on such income(s) for which he may have received any tax exemption(s) in the past. Equity Index Funds: Equity Index Funds have the objective to match the performance of a specific stock market index. The portfolio of these funds comprises of the same companies that form the index and is constituted in the same proportion as the index. Equity index funds that follow broad indices (like S&P CNX Nifty, Sensex) are less risky than equity index funds that follow narrow sectoral indices (like BSEBANKEX or CNX Bank Index etc). Narrow indices are less diversified and therefore, are more risky. VALUE FUNDS:Value Funds invest in those companies that have sound fundamentals and whose share prices are currently under-valued. The

portfolio of these funds comprises of shares that are trading at a low Price to Earnings Ratio (Market Price per Share / Earning per Share) and a low Market to Book Value (Fundamental Value) Ratio. Value Funds may select companies from diversified sectors and are exposed to lower risk level as compared to growth funds or specialty funds. Value stocks are generally from cyclical industries (such as cement, steel, sugar etc.) which make them volatile in the short-term. Therefore, it is advisable to invest in Value funds with a long-term time horizon as risk in the long term, to a large extent, is reduced. EQUITY INCOME OR DIVIDEND YIELD FUNDS: The objective of Equity Income or Dividend Yield Equity Funds is to generate high recurring income and steady capital appreciation for investors by investing in those companies which issue high dividends (such as Power or Utility companies whose share prices fluctuate comparatively lesser than other companies' share prices). Equity Income or Dividend Yield Equity Funds are generally exposed to the lowest risk level as compared to other equity funds. DEBT / INCOME FUNDS:Funds that invest in medium to long-term debt instruments issued by private companies, banks, financial institutions, governments and other entities belonging to various sectors (like infrastructure companies etc.) are known as Debt / Income Funds. Debt funds are low risk profile funds that seek to generate fixed current income (and not capital appreciation) to investors. In order to ensure regular income to investors, debt (or income) funds distribute large fraction of their surplus to investors. Although debt securities are generally less risky than equities, they are subject to credit risk (risk of default) by the issuer at the time of interest or principal payment. To minimize the risk of default, debt funds usually invest in securities from issuers who are rated by credit rating agencies and are considered to be of "Investment Grade". Debt funds that target high returns are more risky. Based on different investment objectives, there can be following types of debt funds:-

Diversified Debt Funds: Debt funds that invest in all securities issued by entities belonging to all sectors of the market are known as diversified debt funds. The best feature of diversified debt funds is that investments are properly diversified into all sectors which results in risk reduction. Any loss incurred, on account of default by a debt issuer, is shared by all investors which further reduces risk for an individual investor. Focused Debt Funds: Unlike diversified debt funds, focused debt funds are narrow focus funds that are confined to investments in selective debt securities, issued by companies of a specific sector or industry or origin. Some examples of focused debt funds are sector, specialized and offshore debt funds, funds that invest only in Tax Free Infrastructure or Municipal Bonds. Because of their narrow orientation, focused debt funds are more risky as compared to diversified debt funds. Although not yet available in India, these funds are conceivable and may be offered to investors very soon. High Yield Debt funds: As we now understand that risk of default is present in all debt funds, and therefore, debt funds generally try to minimize the risk of default by investing in securities issued by only those borrowers who are considered to be of "investment grade". But, High Yield Debt Funds adopt a different strategy and prefer securities issued by those issuers who are considered to be of "below investment grade". The motive behind adopting this sort of risky strategy is to earn higher interest returns from these issuers. These funds are more volatile and bear higher default risk, although they may earn at times higher returns for investors. Assured Return Funds: Although it is not necessary that a fund will meet its objectives or provide assured returns to investors, but there can be funds that come with a lock-in period and offer assurance of annual returns to investors during the lock-in period. Any shortfall in returns is suffered by the sponsors or the

Asset Management Companies (AMCs). These funds are generally debt funds and provide investors with a low-risk investment opportunity. However, the security of investments depends upon the net worth of the guarantor (whose name is specified in advance on the offer document). To safeguard the interests of investors, SEBI permits only those funds to offer assured return schemes whose sponsors have adequate net-worth to guarantee returns in the future. In the past, UTI had offered assured return schemes (i.e. Monthly Income Plans of UTI) that assured specified returns to investors in the future. UTI was not able to fulfill its promises and faced large shortfalls in returns. Eventually, government had to intervene and took over UTI's payment obligations on itself. Currently, no AMC in India offers assured return schemes to investors, though possible. Fixed Term Plan Series: Fixed Term Plan Series usually are closed-end schemes having short term maturity period (of less than one year) that offer a series of plans and issue units to investors at regular intervals. Unlike closed-end funds, fixed term plans are not listed on the exchanges. Fixed term plan series usually invest in debt / income schemes and target short-term investors. The objective of fixed term plan schemes is to gratify investors by generating some expected returns in a short period. GILT FUNDS:Also known as Government Securities in India, Gilt Funds invest in government papers (named dated securities) having medium to long term maturity period. Issued by the Government of India, these investments have little credit risk (risk of default) and provide safety of principal to the investors. However, like all debt funds, gilt funds too are exposed to interest rate risk. Interest rates and prices of debt securities are inversely related and any change in the interest rates results in a change in the NAV of debt/gilt funds in an opposite direction. MONEY MARKET / LIQUID FUNDS:-

Money market / liquid funds invest in short-term (maturing within one year) interest bearing debt instruments. These securities are highly liquid and provide safety of investment, thus making money market / liquid funds the safest investment option when compared with other mutual fund types. However, even money market / liquid funds are exposed to the interest rate risk. The typical investment options for liquid funds include Treasury Bills (issued by governments), Commercial papers (issued by companies) and Certificates of Deposit (issued by banks). HYBRID FUNDS:As the name suggests, hybrid funds are those funds whose portfolio includes a blend of equities, debts and money market securities. Hybrid funds have an equal proportion of debt and equity in their portfolio. There are following types of hybrid funds in India: Balanced Funds: The portfolio of balanced funds includes assets like debt securities,convertible securities, and equity and preference shares held in a relatively equal proportion. The objectives of balanced funds are to reward investors with a regular income, moderate capital appreciation and at the same time minimizing the risk of capital erosion. Balanced funds are appropriate for conservative investors having a long term investment horizon. Growth-and-Income Funds: Funds that combine features of growth funds and income funds are known as Growth-and-Income Funds. These funds invest in companies having potential for capital appreciation and those known for issuing high dividends. The level of risks involved in these funds is lower than growth funds and higher than income funds. ASSET ALLOCATION FUNDS: Mutual funds may invest in financial assets like equity, debt, money market or non-financial (physical) assets like real estate, commodities etc..

Asset allocation funds adopt a variable asset allocation strategy that allows fund managers to switch over from one asset class to another at any time depending upon their outlook for specific markets. In other words, fund managers may switch over to equity if they expect equity market to provide good returns and switch over to debt if they expect debt market to provide better returns. It should be noted that switching over from one asset class to another is a decision taken by the fund manager on the basis of his own judgment and understanding of specific markets, and therefore, the success of these funds depends upon the skill of a fund manager in anticipating market trends. COMMODITY FUNDS:Those funds that focus on investing in different commodities (like metals, food grains, crude oil etc.) or commodity companies or commodity futures contracts are termed as Commodity Funds. A commodity fund that invests in a single commodity or a group of commodities is a specialized commodity fund and a commodity fund that invests in all available commodities is a diversified commodity fund and bears less risk than a specialized commodity fund. "Precious Metals Fund" and Gold Funds (that invest in gold, gold futures or shares of gold mines) are common examples of commodity funds. REAL ESTATE FUNDS:Funds that invest directly in real estate or lend to real estate developers or invest in shares/securitized assets of housing finance companies, are known as Specialized Real Estate Funds. The objective of these funds may be to generate regular income for investors or capital appreciation. EXCHANGE TRADED FUNDS (ETF):Exchange Traded Funds provide investors with combined benefits of a closed-end and an open-end mutual fund. Exchange Traded Funds follow stock market indices and are traded on stock exchanges like a single stock at index linked prices. The biggest advantage offered by these

funds is that they offer diversification, flexibility of holding a single share (tradable at index linked prices) at the same time. Recently introduced in India, these funds are quite popular abroad.

FUND OF FUNDS:Mutual funds that do not invest in financial or physical assets, but do invest in other Mutual Fund schemes offered by different AMCs, are known as Fund of Funds. Fund of Funds maintain a portfolio comprising of units of other mutual fund schemes, just like conventional mutual funds maintain a portfolio comprising of equity/debt/money market instruments or non financial assets. Fund of Funds provide investors with an added advantage of diversifying into different mutual fund schemes with even a small amount of investment, which further helps in diversification of risks. However, the expenses of Fund of Funds are quite high on account of compounding expenses of investments into different mutual fund schemes. FUND STRUCTURE AND CONSTITUENTS:Mutual funds in India have a 3-tier structure of Sponsor-Trustee AMC. Sponsor is the promoter of the fund. Sponsor creates the AMC and the trustee company and appoints the Boards of both these companies, with SEBI approval. A mutual fund is constituted as a Trust. A trust deed is signed by trustees and registered under the Indian Trust Act. The mutual fund is formed as trust in India, and supervised by the Board of Trustees. The trustees appoint the asset management company (AMC) to actually manage the investors money. The AMCs capital is contributed by the sponsor. The AMC is the business face of the mutual fund. Investors money is held in the Trust (the mutual fund). The AMC gets a fee for managing the funds, according to the mandate of the investors. The trustees make sure that the funds are managed according to the investors mandate. Sponsor should have atleast 5-year track record in the financial services business and should have made profit in atleast 3 out of the 5 years. Sponsor

should contribute atleast 40% of the capital of the AMC. Trustees are appointed by the sponsor with SEBI approval. Atleast 50% of trustees should be independent. Atleast 50% of the AMCs Board should be of independent members. An AMC cannot engage in any business other than portfolio advisory and management. An AMC of one fund cannot be Trustee of another fund.AMC should have a net worth of at least Rs. 10 crore at all times. AMC should be registered with SEBI AMC signs an investment management agreement with the trustees. Trustee Company and AMC are usually private limited companies. Trustees oversee the AMC and seek regular reports and information from them. Trustees are required to meet atleast 4 times a year to review the AMC the investors funds and the investments are held by the custodian. Sponsor and the custodian cannot be the same entity. R&T agents manage the sale and repurchase of units and keep the unit holder accounts. If the schemes of one fund are taken over by another fund, it is called as scheme take over. This requires SEBI and trustee approval. If two AMCs merge, the stakes of sponsors changes and the schemes of both funds come together. High court, SEBI and Trustee approval needed. If one AMC or sponsor buys out the entire stake of another sponsor in an AMC, there is a takeover of AMC. The sponsor, who has sold out, exits the AMC. This needs high court approval as well as SEBI and Trustee approval. Investors can choose to exit at NAV if they do not approve of the transfer. They have a right to be informed. No approval is required, in the case of open-ended funds. For close-ended funds the investor approval is required for all cases of merger and takes over.

EQUITY SHARES
ABOUT SHARES:At the most basic level, stock (often referred to as shares) is ownership, or equity, in a company. Investors buy stock in the form of shares, which represent a portion of a company's assets (capital) and earnings (dividends). As a shareholder, the extent of your ownership (your stake) in a company depends on the number of shares you own in relation to the total number of shares available For example, if you buy 1000 shares of stock in a company that has issued a total of 100,000 shares, you own one per cent of the company. While one per cent seems like a small holding, very few private investors are able to accumulate a shareholding of that size in publicly quoted companies, many of which have a market value running into billions of pounds. Your stake may authorize you to vote at the company's annual general meeting, where shareholders usually receive one vote per share. In theory, every stockholder, no matter how small their stake, can exercise some influence over company management at the annual general meeting. In reality, however, most private investors' stakes are insignificant. Management policy is far more likely to be influenced by the votes of large institutional investors such as pension funds.

a) STOCKS SYMBOLS:-

A stock symbol, or 'Epic' symbol, is the standard abbreviation of a stock's name. You can find stock symbols wherever stock performance information is published - for example, newspaper stock listings and investment websites. Company names also have abbreviations called ticker symbols. However, it's worth remembering that these may vary at the different exchanges where the company is quoted. b) PERFORMANCE INDICATORS:Here is a list of the standard performance indicators Performance Indicator Definition

Closing price sold High and low the previous trading day 52 week range 52 weeks

The last price at which the stock was bought or The highest and lowest price of the stock from The highest and lowest price over the previous

Volume The amount of shares traded during the previous trading day High and low Net change The difference between the closing price on the last trading day and the closing price on the trading day prior to the last

THE STOCK EXCHANGES:A marketplace in which to buy or sell something makes life a lot easier. The same applies to stocks. A stock exchange is an organization that provides a marketplace in which investors and borrowers trade stocks. Firstly, the stock exchange is a market for issuers who want to raise equity capital by selling shares to investors in an Initial Public Offering (IPO). The

stock exchange is also a market for investors who can buy and sell shares at any time. a) Trading shares on the stock exchange: As an investor in the INDIA, you can't buy or sell shares on a stock exchange yourself. You need to place your order with a stock exchange member firm (a stockbroker) who will then execute the order on your behalf. The NSE AND BSE are the leading stock exchange in the INDIA. Trading is done through computerized systems. b) The trading process:If you decide to buy or sell your shares, you need to contact a stockbroker who will buy or sell the shares on your behalf. After receiving your order, the stockbroker will input the order on the SETS or SEAQ system to match your order with that of another buyer or seller. Details of the trade are transmitted electronically to the stockbroker who is responsible for settling the trade. You will then receive confirmation of the deal.

c) Types of shares available on the stock exchange:You cannot trade all stocks on the stock exchange. To be listed on a stock exchange, a stock must meet the listing requirements laid down by that exchange in its approval process. Each exchange has its own listing requirements, and some exchanges are more particular than others. It is possible for a stock to be listed on more than one exchange. This is known as a dual listing.

INSURANCE
People need insurance in the first place.An insurance policy is primarily meant to protect the income of the familys breadearners. The idea is if any one or both die their dependents continue to live comfortably.The circle of life begins at birth follower by education , marraige and eventually after a lifetime of work we look forward to life of retirement . Our finances too tend to change as we go through the various phases of life. In the first twenty of our life, we are financially and emotionally dependents on our parents and their are no financial committments to be met.In the next twenty years we gain financial independence and provide financial independence to our families. This is also the stage when our income may be unable to meet the growing expenses of a young household. In the next twenty as we see our investments grow after our children grow and become financially independent. Insurance is a provision for the distribution of risks that is to say it is a financial provision against loss from unavoidable disasters. The protection which it affords takes form of a gurantee to indemnify the insured if certain specified losses occur. The principle of insurance so far as the undertaking of the obligation is concerned is that for the payment of a certain sum the gurantee will be given to reimburse the insured. The insurer in accepting the risks so distributes them that the total of all the amounts is paid for this insurance protection will be sufficient to meet the losses that occur. Insurance then provide divided responsibilty. This principle is introduced in most stores where a division is made between the sales clerk and the cashiers department the arrangement dividing the risks of loss. The insurance principle is similarly applied in any other cases of divided responsibilty. As a business however insurance is usually recognized as

some form of securing a promise of indemnity by the payment of premium and the fulfillment of certain other stipulations

Types of insurance
Term insurance plans Term insurance is the cheapest form of life insurance available. Since a term insurance contract only pays in the event of eventuality the life cover comes at low premium rates . Term insurance is a usefu tool to purchase against risk of early death and protection of an asset. Endowment plans Endowment plans are savins and protection plans that provide a dual benifit of protection as well as savings. Endowment plans pay a death benifit in the event of an eventuality should the customer survive the benifit period a maturity benifit is paid to the life insured. Whole of life plans A whole of life plan provides life insurance cover to an individua upto a specified age . A whole of life plan is suitable for an individual who is looking for an extended life insurance cover and /or wants to pay premium over as long as tenure as possible to reduce the amount of upfront premium payment. Pension plans Pension plans allow an individual to save in a tax deffered manner. An individual can either contribute through regular premiums or make a single premium investments. Savings accumulate over the deferment period. Once the contract reaches the vesting age , the individual has the option of choosing an annuity plan from a life insurance company. An annuity is paid

till the life the lifetime of the insured or a pre-determined period depending upon the annuity option chosen by the life insured. Unit Linked Insurance Plans Unit linked insurance plan (ULIP) is life insurance solution that provides for the benefits of risk protection and flexibility in investment. The investment is denoted as units and is represented by the value that it has attained called as Net Asset Value (NAV). The policy value at any time varies according to the value of the underlying assets at the time. In a ULIP, the invested amount of the premiums after deducting for all the charges and premium for risk cover under all policies in a particular fund as chosen by the policy holders are pooled together to form a Unit fund. A Unit is the component of the Fund in a Unit Linked Insurance Policy. The returns in a ULIP depend upon the performance of the fund in the capital market. ULIP investors have the option of investing across various schemes, i.e, diversified equity funds, balanced funds, debt funds etc. It is important to remember that in a ULIP, the investment risk is generally borne by the investor. In a ULIP, investors have the choice of investing in a lump sum (single premium) or making premium payments on an annual, half-yearly, quarterly or monthly basis. Investors also have the flexibility to alter the premium amounts during the policy's tenure. For example, if an individual has surplus funds, he can enhance the contribution in ULIP. Conversely an individual faced with a liquidity crunch has the option of paying a lower amount (the difference being adjusted in the accumulated value of his ULIP). ULIP investors can shift their investments across various plans/asset classes (diversified equity funds, balanced funds, debt funds) either at a nominal or no cost. Expenses Charged in a ULIP Premium Allocation Charge:

A percentage of the premium is appropriated towards charges initial and renewal expenses apart from commission expenses before allocating the units under the policy. Mortality Charges: These are charges for the cost of insurance coverage and depend on number of factors such as age, amount of coverage, state of health etc. Fund Management Fees: Fees levied for management of the fund and is deducted before arriving at the NAV. Administration Charges: This is the charge for administration of the plan and is levied by cancellation of units. Surrender Charges: Deducted for premature partial or full encashment of units. Fund Switching Charge: Usually a limited number of fund switches are allowed each year without charge, with subsequent switches, subject to a charge. Service Tax Deductions: Service tax is deducted from the risk portion of the premium.

GOVERNMENT SECURITIES
Government securities(G-secs) are sovereign securities which are issued by the Reserve Bank of India on behalf of Government of India,in lieu of the Central Government's market borrowing programme. The term Government Securities includes: Central Government Securities.

 State Government Securities Treasury bills The Central Government borrows funds to finance its 'fiscal deficit'.The market borrowing of the Central Government is raised through the issue of dated securities and 364 days treasury bills either by auction or by floatation of loans. In addition to the above, treasury bills of 91 days are issued for managing the temporary cash mismatches of the Government. These do not form part of the borrowing programme of the Central Government Types of Government Securities Government Securities are of the following types:Dated Securities : are generally fixed maturity and fixed coupon securities usually carrying semi-annual coupon. These are called dated securities because these are identified by their date of maturity and the coupon, e.g., 11.03% GOI 2012 is a Central Government security maturing in 2012, which carries a coupon of 11.03% payable half yearly. The key features of these securities are: They are issued at face value. Coupon or interest rate is fixed at the time of issuance, and remains constant till redemption of the security. The tenor of the security is also fixed. Interest /Coupon payment is made on a half yearly basis on its face value. The security is redeemed at par (face value) on its maturity date.

Zero Coupon bonds are bonds issued at discount to face value and redeemed at par. These were issued first on January 19, 1994 and were followed by two subsequent issues in 1994-95 and 1995-96 respectively. The key features of these securities are: They are issued at a discount to the face value. The tenor of the security is fixed. The securities do not carry any coupon or interest rate. The difference between the issue price (discounted price) and face value is the return on this security. The security is redeemed at par (face value) on its maturity date.

Partly Paid Stock is stock where payment of principal amount is made in installments over a given time frame. It meets the needs of investors with regular flow of funds and the need of Government when it does not need funds immediately. The first issue of such stock of eight year maturity was made on November 15, 1994 for Rs. 2000 crore. Such stocks have been issued a few more times thereafter. The key features of these securities are: They are issued at face value, but this amount is paid in installments over a specified period. Coupon or interest rate is fixed at the time of issuance, and remains constant till redemption of the security. The tenor of the security is also fixed. Interest /Coupon payment is made on a half yearly basis on its face value. The security is redeemed at par (face value) on its maturity date.

Floating Rate Bonds are bonds with variable interest rate with a fixed percentage over a benchmark rate. There may be a cap and a floor rate attached thereby fixing a maximum and minimum interest rate payable on it.

Floating rate bonds of four year maturity were first issued on September 29, 1995, followed by another issue on December 5, 1995. Recently RBI issued a floating rate bond, the coupon of which is benchmarked against average yield on 364 Days Treasury Bills for last six months. The coupon is reset every six months. The key features of these securities are: They are issued at face value. Coupon or interest rate is fixed as a percentage over a predefined benchmark rate at the time of issuance. The benchmark rate may be Treasury bill rate, bank rate etc. Though the benchmark does not change, the rate of interest may vary according to the change in the benchmark rate till redemption of the security. The tenor of the security is also fixed. Interest /Coupon payment is made on a half yearly basis on its face value. The security is redeemed at par (face value) on its maturity date.

Bonds with Call/Put Option: First time in the history of Government Securities market RBI issued a bond with call and put option this year. This bond is due for redemption in 2012 and carries a coupon of 6.72%. However the bond has call and put option after five years i.e. in year 2007. In other words it means that holder of bond can sell back (put option) bond to Government in 2007 or Government can buy back (call option) bond from holder in 2007. This bond has been priced in line with 5 year bonds. Capital indexed Bonds are bonds where interest rate is a fixed percentage over the wholesale price index. These provide investors with an effective hedge against inflation. These bonds were floated on December 29, 1997 on tap basis. They were of five year maturity with a coupon rate of 6 per cent over the wholesale price index. The principal redemption is linked to the Wholesale Price Index. The key features of these securities are:

 They are issued at face value. Coupon or interest rate is fixed as a percentage over the wholesale price index at the time of issuance. Therefore the actual amount of interest paid varies according to the change in the Wholesale Price Index. The tenor of the security is fixed. Interest /Coupon payment is made on a half yearly basis on its face value. The principal redemption is linked to the Wholesale Price Index.

Features of Government Securities Nomenclature The coupon rate and year of maturity identifies the government security. Example: 12.25% GOI 2008 indicates the following: 12.25% is the coupon rate, GOI denotes Government of India, which is the borrower, 2008 is the year of maturity. Eligibility All entities registered in India like banks, financial institutions, Primary Dealers, firms, companies, corporate bodies, partnership firms, institutions, mutual funds, Foreign Institutional Investors, State Governments, Provident Funds, trusts, research organizations, Nepal Rashtra bank and even individuals are eligible to purchase Government Securities. Availability Government securities are highly liquid instruments available both in the primary and secondary market. They can be purchased from Primary Dealers. PNB Gilts Ltd., is a leading Primary Dealer in the government securities market, and is actively involved in the trading of government securities. Forms of Issuance of Government Securities Banks, Primary Dealers and Financial Institutions have been allowed to

hold these securities with the Public Debt Office of Reserve Bank of India in dematerialized form in accounts known as Subsidiary General Ledger (SGL) Accounts. Entities having a Gilt Account with Banks or Primary Dealers can hold these securities with them in dematerialized form. In addition government securities can also be held in dematerialized form in demat accounts maintained with the Depository Participants of NSDL. Minimum Amount In terms of RBI regulations, government dated securities can be purchased for a minimum amount of Rs. 10,000/-only.Treasury bills can be purchased for a minimum amount of Rs 25000/- only and in multiples thereof. State Government Securities can be purchased for a minimum amount of Rs 1,000/- only. Repayment Government securities are repaid at par on the expiry of their tenor. The different repayment methods are as follows : For SGL account holders, the maturity proceeds would be credited to their current accounts with the Reserve Bank of India. For Gilt Account Holders, the Bank/Primary Dealers, would receive the maturity proceeds and they would pay the Gilt Account Holders. For entities having a demat acount with NSDL,the maturity proceeds would be collected by their DP's and they in turn would pay the demat Account Holders. Day Count For government dated securities and state government securities the day count is taken as 360 days for a year and 30 days for every completed month. However for Treasury bills it is 365 days for a year.

Example : A client purchases 7.40% GOI 2012 for face value of Rs. 10 lacs.@ Rs.101.80, i.e. the client pays Rs.101.80 for every unit of government security having a face value of Rs. 100/- The settlement is due on October 3, 2002. What is the amount to be paid by the client? The security is 7.40% GOI 2012 for which the interest payment dates are 3rd May, and 3rd November every year. The last interest payment date for the current year is 3rd May 2002. The calculation would be made as follows: Face value of Rs. 10 lacs.@ Rs.101.80%. Therefore the principal amount payable is Rs.10 lacs X 101.80% =10,18,000 Last interest payment date was May 3, 2002 and settlement date is October 3, 2002. Therefore the interest has to be paid for 150 days (including 3rd May, and excluding October 3, 2002) (28 days of May, including 3rd May, up to 30th May + 30 days of June, July, August and September + 2 days of October). Since the settlement is on October 3, 2002, that date is excluded. Interest payable = 10 lacs X 7.40% X 150 = Rs. 30833.33. 360 X 100 Total amount payable by client =10,18,000+30833.33=Rs. 10,48,833.33 Benefits of Investing in Government Securities Additional Income Tax benefit u/s 80L of the Income Tax Act for Individuals Qualifies for SLR purpose Zero default risk being sovereign paper Highly liquid. Transparency in transactions and simplified settlement procedures

through CSGL/NSDL

Methods of Issuance of Government Securities Government securities are issued by various methods, which are as follows: Auctions: Auctions for government securities are either yield based or price based. In an yield based auction, the Reserve Bank of India announces the issue size(or notified amount) and the tenor of the paper to be auctioned. The bidders submit bids in terms of the yield at which they are ready to buy the security. In a price based auction, the Reserve Bank of India announces the issue size(or notified amount), the tenor of the paper to be auctioned, as well as the coupon rate. The bidders submit bids in terms of the price. This method of auction is normally used in case of reissue of existing government securities. The basic features of the auctions are given below:

Method of auction: There are two methods of auction which are followed-

Uniform price Based or Dutch Auction procedure is used in auctions of dated government securities. The bids are accepted at the same prices as decided in the cut off. Multiple/variable Price Based or French Auction procedure is used in auctions of Government dated securities and treasury bills. Bids are accepted at different prices / yields quoted in the individual bids.

Bids: Bids are to be submitted in terms of yields to maturity/prices as announced at the time of auction. Cut off yield: is the rate at which bids are accepted. Bids at yields higher than the cut-off yield is rejected and those lower than the cut-off are accepted. The cut-off yield is set as the coupon rate for the security.

Bidders who have bid at lower than the cut-off yield pay a premium on the security, since the auction is a multiple price auction.

Cut off price: It is the minimum price accepted for the security. Bids at prices lower than the cut-off are rejected and at higher than the cut-off are accepted. Coupon rate for the security remains unchanged. Bidders who have bid at higher than the cut-off price pay a premium on the security, thereby getting a lower yield. Price based auctions lead to finer price discovery than yield based auctions. Notified amount: The amount of security to be issued is notified prior to the auction date, for information of the public. The Reserve Bank of India (RBI) may participate as a non-competitor in the auctions. The unsubscribed portion devolves on RBI or on the Primary Dealers if the auction has been underwritten by PDs. The devolvement is at the cut-off price/yield.

Underwriting in Auctions For the purpose of auctions, bids are invited from the Primary Dealers one day before the auction wherein they indicate the amount to be underwritten by them and the underwriting fee expected by them. The auction committee of Reserve Bank of India examines the bids and based on the market conditions, takes a decision in respect of the amount to be underwritten and the fee to be paid to the underwriters. Underwriting fee is paid at the rates bid by PDs , for the underwriting which has been accepted. In case of the auction being fully subscribed, the underwriters do not have to subscribe to the issue necessarily unless they have bid for it. If there is a devolvement, the successful bids put in by the Primary Dealers are set-off against the amount underwritten by them while deciding the amount of devolvement.

On-tap issue This is a reissue of existing Government securities having pre-determined yields/prices by Reserve Bank of India. After the initial primary auction of a security, the issue remains open to further subscription by the investors as and when considered appropriate by RBI. The period for which the issue is kept open may be time specific or volume specific. The coupon rate, the interest dates and the date of maturity remain the same as determined in the initial primary auction. Reserve Bank of India may sell government securities through on tap issue at lower or higher prices than the prevailing market prices. Such an action on the part of the Reserve Bank of India leads to a realignment of the market prices of government securities. Tap stock provides an opportunity to unsuccessful bidders in auctions to acquire the security at the market determined rate. Fixed coupon issue Government Securities may also be issued for a notified amount at a fixed coupon. Most State Development Loans or State Government Securities are issued on this basis. Private Placement The Central Government may also privately place government securities with Reserve Bank of India. This is usually done when the Ways and Means Advance (WMA) is near the sanctioned limit and the market conditions are not conducive to an issue. The issue is priced at market related yields. Reserve Bank of India may later offload these securities to the market through Open Market Operations (OMO). After having auctioned a loan whereby the coupon rate has been arrived at and if still the government feels the need for funds for similar tenure, it may privately place an amount with the Reserve Bank of India. RBI in turn may decide upon further selling of the security so purchased under the Open Market Operations window albeit at a different yield.

Open Market Operations (OMO) Government securities that are privately placed with the Reserve Bank of India are sold in the market through open market operations of the Reserve Bank of India. The yield at which these securities are sold may differ from the yield at which they were privately placed with Reserve Bank of India. Open market operations are used by the Reserve Bank of India to infuse or suck liquidity from the system. Whenever the Reserve Bank of India wishes to infuse the liquidity in the system, it purchases government securities from the market, and whenever it wishes to suck out the liquidity from the system, it sells government securities in the market.

National Savings Certificate

National Savings Certificate, popularly known as NSC, is a time-tested tax saving instrument that combines adequate returns with high safety. NSCs are an instrument for facilitating long-term savings. A large chunk of middle class families use NSCs for saving on their tax, getting double benefits. They not only save tax on their hard-earned income but also make an investment which are sure to give good and safe returns. How to Invest National Savings Certificates are available at all post-offices. The application can be made either in person or through an agent. Post office agents are active in nooks and corners of the country. Following types of NSC are issued: Single Holder Type Certificate: This can be issued to: (a) An adult for himself or on behalf of a minor (b) A Trust. Joint 'A' Type Certificate: Issued jointly to two adults payable to both holders jointly or to the survivor. Joint 'B' Type Certificate: Issued jointly to two adults payable to either of the holders or to the survivor.

Who can Invest An adult in his own name or on behalf of a minor A trust Two adults jointly Denomiations and Limit National Savings Certificates are available in the denominations of Rs. 100 Rs 500, Rs. 1000, Rs. 5000, & Rs. 10,000. There is no maximum limit on the purchase of the certificates. So it is for you to decide how much you want to put in the NSCs. This is of course a huge benefit for you can decide as much as your budget allows. Maturity Period of maturity of a certificate is six years. Presently interest paid is 8 % per annum half yearly compounded. Maturity value of a certificate of any other denomination is at proportionate rate. Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law. Tax Benefits Interest accrued on the certificates every year is liable to income tax but deemed to have been reinvested. Income Tax rebate is available on the amount invested and interest accruing under Section 88 of Income Tax Act, as amended from time to time. Income tax relief is also available on the interest earned as per limits fixed vide section 80L of Income Tax, as amended from time to time.

Public Provident Fund

Public Provident Fund, popularly known as PPF, is a savings cum tax saving instrument. It also serves as a retirement planning tool for many of those who do not have any structured pension plan covering them. The balances in PPF account cannot be attached by any authority normally. How to Open Account Public Provident Fund account can be opened at designated post offices throughout the country and at designated branches of Public Sector Banks throughout the country. Who can Open Account The account can be opened by an individual in his own name, on behalf of a minor of whom he is a guardian. Tabs on Investment Minimum deposit required in a PPF account is Rs. 500 in a financial year. Maximum deposit limit is Rs. 70,000 in a financial year. Maximum number of deposits is twelve in a financial year. Maturity The maturity period of the account is 15 years. Rate of interest is 8% compounded annually. One deposit with a minimum amount of Rs.500/- is mandatory in each financial year. The amount of deposit can be varied to suit the convenience of the account holders. The account holder can retain the account after maturity for any period without making any further deposits. In this case the account will continue to earn interest at normal rate as admissible till the account is closed.

The account holder also has an option to extend the PPF account for any period in a block of 5 years at each time, after the maturity period of 15 years. Lapse in Deposits If deposits are not made in a PPF account in any financial year, the account will be treated as discontinued. The discontinued account can be activated by payment of the minimum deposit of Rs.500/- with default fee of Rs.50/for each defaulted year. Premature Closure or Withdrawl Premature closure of a PPF Account is not permissible except in case of death. Nominee/legal heir of PPF Account holder cannot continue the account after the death. Premature withdrawal is permissible in the 7th year of the account subject, to a limit of 50% of the amount at credit preceding three year balance. Thereafter one withdrawal in every year is permissible. Account Transfer The Account is transferable from one post Office / bank to another and from post Office to bank or from a bank to a post office. Tax Benefits Deposits in PPF are eligible for rebate under section 80-C of Income Tax Act. The interest on deposits is totally tax free. Deposits are exempt from wealth tax.

BONDS
A bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest (the coupon) and/or to repay the principal at a later date, termed maturity. It is a formal contract to repay borrowed money with interest at fixed intervals.[1] Thus a bond is like a loan: the issuer is the borrower, the bond holder is the lender, and the coupon is the interest. Bonds provide the borrower with external funds to finance long-term investments, or, in the case of government bonds, to finance current expenditure. Certificates of deposit (CDs) or commercial paper are considered to be money market instruments and not bonds. Bonds must be repaid at fixed intervals over a period of time Bonds are issued by public authorities, credit institutions, companies and supranational institutions in the primary markets. The most common process of issuing bonds is through underwriting. In underwriting, one or more securities firms or banks, forming a syndicate, buy an entire issue of bonds from an issuer and re-sell them to investors. The security firm takes the risk of being unable to sell on the issue to end investors. However government bonds are instead typically auction. The most important features of a bond are: Nominal, principal or face amount the amount on which the issuer pays interest, and which has to be repaid at the end. Issue price The price at which investors buy the bonds when they are first issued, which will typically be approximately equal to the nominal amount. The net proceeds that the issuer receives are thus the issue price, less issuance fees. Maturity date The date on which the issuer has to repay the nominal amount. As long as all payments have been made, the issuer has no more obligations to the bond holders after the maturity date. The length of time until the maturity date is often referred to as the term or tenor or maturity of a bond. The maturity can be any length of time, although debt securities with

a term of less than one year are generally designated money market instruments rather than bonds. Most bonds have a term of up to thirty years. Some bonds have been issued with maturities of up to one hundred years, and some even do not mature at all. In early 2005, a market developed in euros for bonds with a maturity of fifty years. In the market for U.S. Treasury securities, there are three groups of bond maturities: short term (bills): maturities up to one year; medium term (notes): maturities between one and ten years; long term (bonds): maturities greater than ten years. Coupon The interest rate that the issuer pays to the bond holders. Usually this rate is fixed throughout the life of the bond. It can also vary with a money market index, such as LIBOR, or it can be even more exotic. The name coupon originates from the fact that in the past, physical bonds were issued which had coupons attached to them. On coupon dates the bond holder would give the coupon to a bank in exchange for the interest payment. The quality of the issue, which influences the probability that the bondholders will receive the amounts promised, at the due dates. This will depend on a whole range of factors. Indentures and Covenants An indenture is a formal debt agreement that establishes the terms of a bond issue, while covenants are the clauses of such an agreement. Covenants specify the rights of bondholders and the duties of issuers, such as actions that the issuer is obligated to perform or is prohibited from performing. In the U.S., federal and state securities and commercial laws apply to the enforcement of these agreements, which are construed by courts as contracts between issuers and bondholders. The terms may be changed only with great difficulty while the bonds are outstanding, with amendments to the governing document generally requiring approval by a majority (or super-majority) vote of the bondholders. High yield bonds are bonds that are rated below investment grade by the credit rating agencies. As these bonds are more risky than investment grade

bonds, investors expect to earn a higher yield. These bonds are also called junk bonds. Coupon dates the dates on which the issuer pays the coupon to the bond holders. In the U.S. and also in the U.K. and Europe, most bonds are semiannual, which means that they pay a coupon every six months. Optionality: Occasionally a bond may contain an embedded option; that is, it grants option-like features to the holder or the issuer: Callability Some bonds give the issuer the right to repay the bond before the maturity date on the call dates; see call option. These bonds are referred to as callable bonds. Most callable bonds allow the issuer to repay the bond at par. With some bonds, the issuer has to pay a premium, the so called call premium. This is mainly the case for high-yield bonds. These have very strict covenants, restricting the issuer in its operations. To be free from these covenants, the issuer can repay the bonds early, but only at a high cost. Putability Some bonds give the holder the right to force the issuer to repay the bond before the maturity date on the put dates; see put option. (Note: "Putable" denotes an embedded put option; "Puttable" denotes that it may be putted.) call dates and put datesthe dates on which callable and putable bonds can be redeemed early. There are four main categories. A Bermudan callable has several call dates, usually coinciding with coupon dates. A European callable has only one call date. This is a special case of a Bermudan callable. An American callable can be called at any time until the maturity date. A death put is an optional redemption feature on a debt instrument allowing the beneficiary of the estate of the deceased to put (sell) the bond (back to the issuer) in the event of the beneficiary's death or legal incapacitation. Also known as a "survivor's option".

sinking fund provision of the corporate bond indenture requires a certain portion of the issue to be retired periodically. The entire bond issue can be liquidated by the maturity date. If that is not the case, then the remainder is called balloon maturity. Issuers may either pay to trustees, which in turn call randomly selected bonds in the issue, or, alternatively, purchase bonds in open market, then return them to trustees. convertible bond lets a bondholder exchange a bond to a number of shares of the issuer's common stock. exchangeable bond allows for exchange to shares of a corporation other than the issuer. Fixed rate bonds have a coupon that remains constant throughout the life of the bond. Floating rate notes (FRNs) have a coupon that is linked to an index. Common indices include: money market indices, such as LIBOR or Euribor, and CPI (the Consumer Price Index). Coupon examples: three month USD LIBOR + 0.20%, or twelve month CPI + 1.50%. FRN coupons reset periodically, typically every one or three months. In theory, any Index could be used as the basis for the coupon of an FRN, so long as the issuer and the buyer can agree to terms. Zero-coupon bonds don't pay any interest. They are issued at a substantial discount to par value. The bond holder receives the full principal amount on the redemption date. An example of zero coupon bonds are Series E savings bonds issued by the U.S. government. Zero-coupon bonds may be created from fixed rate bonds by a financial institutions separating "stripping off" the coupons from the principal. In other words, the separated coupons and the final principal payment of the bond are allowed to trade independently. See IO (Interest Only) and PO (Principal Only). Inflation linked bonds, in which the principal amount and the interest payments are indexed to inflation. The interest rate is normally lower than for fixed rate bonds with a comparable maturity (this position briefly reversed itself for short-term UK bonds in December 2008). However, as the

principal amount grows, the payments increase with inflation. The government of the United Kingdom was the first to issue inflation linked Gilts in the 1980s. Treasury Inflation-Protected Securities (TIPS) and Ibonds are examples of inflation linked bonds issued by the U.S. government. Other indexed bonds, for example equity-linked notes and bonds indexed on a business indicator (income, added value) or on a country's GDP. Asset-backed securities are bonds whose interest and principal payments are backed by underlying cash flows from other assets. Examples of assetbacked securities are mortgage-backed securities (MBS's), collateralized mortgage obligations (CMOs) and collateralized debt obligations (CDOs). Subordinated bonds are those that have a lower priority than other bonds of the issuer in case of liquidation. In case of bankruptcy, there is a hierarchy of creditors. First the liquidator is paid, then government taxes, etc. The first bond holders in line to be paid are those holding what is called senior bonds. After they have been paid, the subordinated bond holders are paid. As a result, the risk is higher. Therefore, subordinated bonds usually have a lower credit rating than senior bonds. The main examples of subordinated bonds can be found in bonds issued by banks, and asset-backed securities. The latter are often issued in tranches. The senior tranches get paid back first, the subordinated tranches later. Perpetual bonds are also often called perpetuities. They have no maturity date. The most famous of these are the UK Consols, which are also known as Treasury Annuities or Undated Treasuries. Some of these were issued back in 1888 and still trade today, although the amounts are now insignificant. Some ultra long-term bonds (sometimes a bond can last centuries: West Shore Railroad issued a bond which matures in 2361 (i.e. 24th century)) are virtually perpetuities from a financial point of view, with the current value of principal near zero. Bearer bond is an official certificate issued without a named holder. In other words, the person who has the paper certificate can claim the value of the bond. Often they are registered by a number to prevent counterfeiting, but may be traded like cash. Bearer bonds are very risky because they can be

lost or stolen. Especially after federal income tax began in the United States, bearer bonds were seen as an opportunity to conceal income or assets.[2] U.S. corporations stopped issuing bearer bonds in the 1960s, the U.S. Treasury stopped in 1982, and state and local tax-exempt bearer bonds were prohibited in 1983.[3] Registered bond is a bond whose ownership (and any subsequent purchaser) is recorded by the issuer, or by a transfer agent. It is the alternative to a Bearer bond. Interest payments, and the principal upon maturity, are sent to the registered owner. Municipal bond is a bond issued by a state, U.S. Territory, city, local government, or their agencies. Interest income received by holders of municipal bonds is often exempt from the federal income tax and from the income tax of the state in which they are issued, although municipal bonds issued for certain purposes may not be tax exempt. Book-entry bond is a bond that does not have a paper certificate. As physically processing paper bonds and interest coupons became more expensive, issuers (and banks that used to collect coupon interest for depositors) have tried to discourage their use. Some book-entry bond issues do not offer the option of a paper certificate, even to investors who prefer them.[4] Lottery bond is a bond issued by a state, usually a European state. Interest is paid like a traditional fixed rate bond, but the issuer will redeem randomly selected individual bonds within the issue according to a schedule. Some of these redemptions will be for a higher value than the face value of the bond. War bond is a bond issued by a country to fund a war. Serial bond is a bond that matures in installments over a period of time. In effect, a $100,000, 5-year serial bond would mature in a $20,000 annuity over a 5-year interval. Revenue bond is a special type of municipal bond distinguished by its guarantee of repayment solely from revenues generated by a specified revenue-generating entity associated with the purpose of the bonds. Revenue

bonds are typically "non-recourse," meaning that in the event of default, the bond holder has no recourse to other governmental assets or revenues. [edit] Investing in bonds Bonds are bought and traded mostly by institutions like pension funds, insurance companies and banks. Most individuals who want to own bonds do so through bond funds. Still, in the U.S., nearly 10% of all bonds outstanding are held directly by households. Sometimes, bond markets rise (while yields fall) when stock markets fall. More relevantly, the volatility of bonds (especially short and medium dated bonds) is lower than that of shares. Thus bonds are generally viewed as safer investments than stocks, but this perception is only partially correct. Bonds do suffer from less day-to-day volatility than stocks, and bonds' interest payments are often higher than the general level of dividend payments. Bonds are liquid it is fairly easy to sell one's bond investments, though not nearly as easy as it is to sell stocks and the comparative certainty of a fixed interest payment twice per year is attractive. Bondholders also enjoy a measure of legal protection: under the law of most countries, if a company goes bankrupt, its bondholders will often receive some money back (the recovery amount), whereas the company's stock often ends up valueless. However, bonds can also be risky: Fixed rate bonds are subject to interest rate risk, meaning that their market prices will decrease in value when the generally prevailing interest rates rise. Since the payments are fixed, a decrease in the market price of the bond means an increase in its yield. When the market interest rate rises, the market price of bonds will fall, reflecting investors' ability to get a higher interest rate on their money elsewhere perhaps by purchasing a newly issued bond that already features the newly higher interest rate. Note that this drop in the bond's market price does not affect the interest payments to the bondholder at all, so long-term investors who want a specific amount at the maturity date need not worry about price swings in their bonds and do not suffer from interest rate risk.

Price changes in a bond will also immediately affect mutual funds that hold these bonds. If the value of the bonds held in a trading portfolio has fallen over the day, the value of the portfolio will also have fallen. This can be damaging for professional investors such as banks, insurance companies, pension funds and asset managers (irrespective of whether the value is immediately "marked to market" or not). If there is any chance a holder of individual bonds may need to sell his bonds and "cash out", interest rate risk could become a real problem. (Conversely, bonds' market prices would increase if the prevailing interest rate were to drop, as it did from 2001 through 2003.) One way to quantify the interest rate risk on a bond is in terms of its duration. Efforts to control this risk are called immunization or hedging. Bond prices can become volatile depending on the credit rating of the issuer - for instance if the credit rating agencies like Standard & Poor's and Moody's upgrade or downgrade the credit rating of the issuer. A downgrade will cause the market price of the bond to fall. As with interest rate risk, this risk does not affect the bond's interest payments (provided the issuer does not actually default), but puts at risk the market price, which affects mutual funds holding these bonds, and holders of individual bonds who may have to sell them. A company's bond holders may lose much or all their money if the company goes bankrupt. Under the laws of many countries (including the United States and Canada), bondholders are in line to receive the proceeds of the sale of the assets of a liquidated company ahead of some other creditors. Bank lenders, deposit holders (in the case of a deposit taking institution such as a bank) and trade creditors may take precedence. There is no guarantee of how much money will remain to repay bondholders. As an example, after an accounting scandal and a Chapter 11 bankruptcy at the giant telecommunications company World com, in 2004 its bondholders ended up being paid 35.7 cents on the dollar. In a bankruptcy involving reorganization or recapitalization, as opposed to liquidation, bondholders may end up having the value of their bonds reduced, often through an exchange for a smaller number of newly issued bonds.

Some bonds are callable, meaning that even though the company has agreed to make payments plus interest towards the debt for a certain period of time, the company can choose to pay off the bond early. This creates reinvestment risk, meaning the investor is forced to find a new place for his money, and the investor might not be able to find as good a deal, especially because this usually happens when interest rates are falling.

COMMODITIES
A commodity is a normal physical product used by everyday people during the course of their lives, or metals that are used in production or as a traditional store of wealth and a hedge against inflation. For example, these commodities include grains such as wheat, corn and rice or metals such as copper, gold and silver. The full list of commodity markets is numerous and too detailed. The best way to trade the commodity markets is by buying and selling futures contracts on local and international exchanges. Trading futures is easy, and can be accessed by using the services of any full or online futures brokerage service. Traditionally, there is an expectation when trading commodity futures of achieving higher returns compared to shares or real estate, so successful investors can expect much higher returns compared to more conventional investment products. The process of trading commodities, as mentioned above, must be facilitated by the use of trading liquid, exchangeable, and standardized futures contracts, as it is not practical to trade the physical commodities. Futures contracts give the investor ease of use and the ability to buy or sell without delay. A futures contract is used to buy or sell a fixed quantity and quality of an underlying commodity, at a fixed date and price in the future. Futures contracts can be broken by simply offsetting the transaction. For example, if you buy one futures contract to open then you sell one futures contract to close that market position.

The execution method of trading futures contracts is similar to trading physical shares, but futures contracts have an expiry date and are deliverable.Futures contracts have an expiry date and need to be occasionally rolled over from the current contract month to the following contract month. The reason is because the biggest advantage to trading commodity futures, for the private investor is the opportunity to legally short-sell these markets. Short-selling is the ability to sell commodity futures creating an open position in the expectation to buy-back at a later time to profit from a fall in the market. If you wish to trade the up-side of commodity futures, then it will simply be a buy-to-open and sell-to-close set of transactions similar to share trading. The commodity markets will always produce rising of falling trends, and with the abundance of information and trading opportunities available there is no reason for any investor to exclusively trade the share market when there is potential profits from trading commodity futures. The increased use of commodity trading vehicles in investment management has led practitioners to create investable commodity indices and products that offer unique performance opportunities for investors in physical commodities. As is true for stock and bond performance, as well as investment in managed futures and hedge fund products, commodity-based products have a variety of uses. Besides being a source of information on cash commodity and futures commodity market trends, they are used as performance benchmarks for evaluation of commodity trading advisors and provide a historical track record useful in developing asset

allocation strategies. However, the investor benefits of commodity or commodity-based products lie primarily in their ability to offer risk and return trade-offs that cannot be easily replicated through other investment alternatives. Previous research that direct stock and bond investment offers little evidence of providing returns consistent with direct commodity investment. commodity-based firms may not be exposed to the risk of commodity price movement. Thus for investors, direct commodity investment may be the principal means by which one can obtain exposure to commodity price movements.

The commodities that are traded in the market Gold Copper Silver Sugar Wheat Zeera Guar

Analysis
:-Do you know about the following financial instruments The sample size consists of 100 respondents and out of which almost all the people are fully aware about investment avenues like gold and fixed deposits and almost 95 are aware about equity shares and mutual funds.

:-How do you get information about the following investment avenues? Out of the 100 respondents about 50% of them get the information from advertisements on the television and internet and the rest from the magazines company sales executives and friends and relatives.

Rate the following according to your preference? Out of the 100 respondents asked the most preferred financial instrument is fixed deposits and the then the rest like equity shares with 70 % and insurance.

What is your age? Out of the respondents that were surveyed the maximum were of the age group of 31-40

What are the factors that you consider while investing in any financial instrument? Out of the respondents 50% were of the opinion that return and safety are the main reasons behind their investment decisions .

On what basis you invest in any particular financial instrument? The respondents were mostly of the opinion that portfolio is the most important factor before investing and then fundamental analysis done by them or by the financial advisor and then the other factors

How will you invest your money in any financial instrument? Most of the respondents surveyed that they mostly invest their money through a broker and then through sub brokers and agents

What is your annual income? 22% 15% 58% Out the total respondents around 60 %were in the income group of 1- 3lakhs and 22% in the 3-5lakhs bracket.

How much of your money you invest in financial instruments? Most of the respondents surveyed were mostly those people who invest 10 to 30 % of their money in these instruments.

How long do you prefer to keep your money invested Out of the 100 respondents mostly were of the view that they invested there for a money at least for a period of 1year to 3 years

How much return do you expect from your investments?

CONCLUTION AND RECOMMENDATIONS

The over all project is depending up on the findings that have been explained previously. All my survey findings are correlated and being explain in the above graphs. After completing the survey and watching the analysis I come to this conclusion that the before investment investors do have focus on Tax savings, Income, Capital preservation etc. They also have a predetermination of the time period of investment. According to my view the age group of 21-30 can be a great potential investors for the company as the has high risk profile, more disposable income, and the time horizon is perfect 3-5 years.

Recommendation for this category is company must follow up these high potential customers, they can be offered Equity shares because this group of people have a high risk profile and they can afford to takes risks which is usually associated with equity shares. This group of customers can also be offerd Mutual funds because in that also the exposure is in equities. ULIPS can also be offered to this group.The ULIP has a 20%-22% return which good enough for investment. The main focus should be to reach to the customer, these customers are aware of ULIPs and aware of other product. Company should try to reach them and tap the investor.

Mutual Funds can also be offered as they have high risk profile. Company should take initiative to get demat account of these customers.

The age group of 31-40 years, investors are with Moderate risk profile, most of the investors are from the 10,000-15,000 Rs per month disposible income. Company will get a good investor with diluted risk profile. Company can offer them ULIPs,and Fixed Deposits as investment instrument. Mutual funds can be an option but that must be a debt fund to invest.

The age group of 41-50 years, investors are from the Rs.15,00020,000 disposable income group. Investor in this group are invested in Insurance sector, the primary focus of these investors are retirement and time horizon is likely to be 6-9 years. This is also good potential group for the retirement plan in ULIPs. Fixed deposits can be a good option for them. For the age group of above 50 years, the rash profile would be low moderate, as the term is not more than 3 years. Investors have invested in insurance sector but in this age insurance would not be a good option for investor. Company should try to minimize the risk tolerance by offering Fixed deposits.

In the survey there were lot of people who were in the age group of above 60. For this group of people the company can target Fixed deposits which gives continues return like monthly interests so that they can keep on getting returns.

OCCUPATION If we see the survey data it will seen that respondents are majorly Service peopole and Business Class. Depending upon the data I conclude that the service class has a time horizon of 3-5 years and risk tolerence LowModerate. They invested in FDs, Equity shares, Mutual Fund and ULIPs.

Recommendation company should tap these class by innovative marketing strategies as they already invested, and offer FDs, ULIPs. Mutual fund can be a lucrative offer if the Fund is any moderate fund or debt fund. For the business class, the risk profile is high-very high. Most investor are with negative return acceptability and time horizon is < 3 years. Company should offer Mutual funds with risk profile High to very high thus investor can get a high return. Apart from this company should offer to open demat account with them.

Disposible Income

The disposable income bracket less than Rs.5000 per month are basically safe investors and have not and do not prefer investing in mutual funds and ULIP. Thus positioning of these products should be such that people are attracted towards this scheme. Emphasis on marketing of the products should be given. Respondents under disposable income bracket Rs.5,000-Rs.10,000 have mainly invested in insurance and real estate. But when survey was done and their preferences was asked these respondents strongly preferred investing in these strategies. Disposable Income Bracket of Rs.15,000-Rs.20,000 are the strong contenders for investing their money and these people have invested in real estate, insurance and fixed deposits. Moreover there is mixed preferences for their investments thus proper segmentation of the sample should be done accordingly marketing strategies should be adopted. Though there is a small percentage of respondents in disposable income bracket above Rs.20,000 who least prefer investing in mutual fund. But this is the segment which can be well targeted and their portfolio should be such that gives them more returns. The case of ULIP is different as people strongly prefer investing in this investment strategy. Thus emphasis for selling ULIP in this income bracket.

REFERENCE www.karvy.com www.icicidirect.com www.mutualfundsindia.com www.nseindia.com www.bseindia.com www.scribd.com www.mcx.com www.equitymaster.com Business Today The Economic Times The Mint Karvy Finapolis

Questionnaire

Name Occupation Contact No Email id

: : : :

1. Do you know about the following Financial Instrument?

Mutual Fund

Yes

No

Bond

Yes

No

Insurance

Yes

No

Equity Shares

Yes

No

Fixed Deposits

Yes

No

Govt. Securities

Yes

No

 Real Estate

Yes

No

IPO

Yes

No

Gold

Yes

No

If any other please specify. . . 2. How do you get information regarding these Financial Instrument? Advertisement Company Sales force Friends / Relatives Magazines /Newspaper If any other please specify . 3. Please rate the Financial Instruments as per your Preference. More preferred Mutual fund Insurance Equity Shares Bonds Fixed Deposits Moderate Less preferred

Govt.securit ies Real estate IPOs Gold

4.What is your age? 15-20 21-40 41-50 51-60 60 above

5. What are the factors which you consider while investing in any Financial Instrument? Return (capital appreciation) Tax Saving Liquidity Regular income flow Safety Risk If any other please specify . 6. On what basis you will invest in any particular Financial Instrument? Past Performance Portfolio Fund Manager Fundamental/Technical Analysis Market Sentiment

 If any other please specify 7. How will you invest your money in any Financial Instrument? Yourself Through any stock broking company. Please specify name.. Sub broker/ Agents Through Banks If any other please specify .. 8. In what type of Financial Instrument you like to invest? Equity based Debt based Balanced Fund Hybrid Fund ELSS (equity linked saving scheme) If any other please specify 9. What is your annual income? 1lac to 3 lac 3lac to 5lac 5lac to 10lac more than 10 lacs

10. How much of your money you invest in any Financial Instrument?

 10% to 20% 20% to 30% 30% to 50% More than 50% If any other please specify .. 11. How long you prefer to keep your money in any Financial Instrument? Less than 6 months 6 months to 1 year 1 year to 3 year More than 3 years If any other please specify 12. How much return you expect from any Financial Instrument? 10% to 20% 20% to 30% 30% to 50% More than 50% If any other please specify ..

13. Will you invest your money for saving the Tax in any Financial Instrument? Yes No

14. Are you satisfied with your investment decision, Please rate? Highly satisfied Satisfied Less satisfied No satisfaction 15. Any other comments.