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Study on Risk Analysis of Equity Based Tax Savings Funds of Reliance Money

A PROJECT REPORT Submitted by

[MUNTAZIR ABASS BHAT] Enrollment No. A31501911026

In partial fulfillment of the requirements of Amity University for The award of the degree of Master of Business Administration Through

AMITY GLOBAL BUSINESS SCHOOL PUNE

2011 13

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DECLARATION

I MUNTAZIR ABASS BHAT enrollment no A31501911026hereby declare that this report is a result of our intensive study during a period of 8 weeks at RELIANCE SECURITIES LTD, Pune. This work is an original one and has been submitted to AGBS Pune for fulfillment of the requirement of a course of study to the best of our knowledge.

Under the Guidance of Prof.Mrs. Ahuti Mishra

MR. abhishekshekawat RM Reliance Securities ltd Pune

Date : place Signature

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ACKNOWLEDGEMENT

It gives me great pleasure to express my sincere gratitude towards all the individuals who have directly or indirectly helped me in completing the project. First of all I am extremely grateful to Mr. AbhishekShekhawat R.M of RELIANCE SECURITIES. for providing me an opportunity to work with such an esteemed organization. I feel immense pleasure to thank Mrs. NIKETA and Mr. Ananad SharmaRegional Manager, Reliance securities I would also like to express my sincere thanks to Dr. ChaviSenhaDean, AMITY GLOBAL BUSINESS SCHOOL, PUNEProf. AHUTI MISHRA, for providing valuable guidance and inputs which helped a lot for the completion of project in a true sense. I would also like to thank the whole staff Reliance Securities., my parents and all my friends for their kind co-operation and support.

MUNTAZIR ABASS

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TABLE OF CONTENTS

S no

Topics
1) EXECUTIVE SUMMARY

Page no.

2)

COMPANY PROFILE 2.1) INTRODUCTION 2.2) VISSION AND MISSION STATEMENT 2.3) STRUCTURE OF ADA GROUP 2.4) PRODUCT OFFERINGS. 2.5) SOCIAL RESPONSIBILITIES 6 7 11 12-31 32-33 34 35-37 38-43 44-55

3) 4) 5) 6)

OBJECTIVES OF STUDY REVIEW OF LITERATURE RESEARCH METHODOLOGY DATA ANALYSIS AND INTERPRETATION

7)

CONCLUSSION, RECOMMENDATIONS AND SUGGESTIONS

56-59

8)

REFFERENCES AND BIBLIOGRAPHY

60

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Executive Summary

This is the internship report based on the two months long internship program that I had successfully completed in RELIANCE SECURITIES Limited under Finance division from 01.06.2012 to 01.08.2012 as a requirement of my MBA program on AGBS PUNE. As being completely new to practical, corporate world setting, every hour spent in the organization gave me some amount of experience all the time all of which cannot be explained in words. But nevertheless, they were all useful for my career. I worked with RELIANCE with almost three wings i.e. Stock market trading wing, marketing wing and finance wing. First three weeks of my internship program on Marketing division I have worked with the full support of Marketing wing and the next three weeks I worked with the finance wing then the next two weeks I got attached with the stock market trading wing. In this report we have analyze the risk & return of Equity Growth Fund of reliance securities. While doing the studies the movement of market is taken into consideration and how it effects the growth of fund. The fund is performing phenomenal with the growing market and dips when market slows down. The primary investment objective of the scheme is to achieve long term growth of capital by investing in equity and equity related securities through a research based investment approach. As it is equity based fund and 95% of the fund is used to invest in equity market. The return of which is totally depend on performance of market which is highly risky. The fund has grown more than 110% during 2009 as there was high growth in that year and has dipped -5% in 2012 as the first quarter was not good for equity market . While doing the studies of risk analyze of Reliance Growth Fund we came to know that fund has performed well in long run. While in short run the performance of the fund was not adequate.

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CHAPTER 1
COMPANY PROFILE

2.1 Introduction

Reliance Money is promoted by Reliance Capital; one of India's leading and fastest growing private sector financial services companies, ranking among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Money is a part of the Reliance Anil DhirubhaiAmbani Group. It is a one-stop-shop, providing end-to-end financial solutions (including mobile and web-based services). It has the largest non-banking distribution channel with over 10,000 outlets and 20,000 touch points spread across 5,165 cities/towns; catering to the diverse needs of over 3 million existing customers. Reliance Money is a comprehensive electronic transaction platform offering a wide range of asset classes. Reliance Money endeavors to change the way investors transact in financial markets and avails financial services. It provides customers with access to Equity, Equity and Commodity Derivatives, Offshore Investments, Portfolio Management Services, Wealth Management Services, Investment Banking, Mutual Funds, IPOs, Life and General Insurance product and Gold Coins. Customers can also avail Loans, Credit Card, Money Transfer and Money Changing services.

Reliance

Capital

Ltd.

has

also

interests

in

asset

management, life and general insurance, private equity and proprietary

investments,

stock broking and other financial services. In addition to the home-grown portfolio of products and services that Reliance Money has to offer, Reliance Money also distributes a variety of third party financial products. It also assists millions of investors in creating customized individual portfolios based on their diverse
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investment needs and risk profiles Reliance Money is the largest broker and distributor of financial products in India with the largest distribution network and almost over 3,174 employees. Money has increased its market share among private financial companies to nearly Convenient& effective Anytime & anywhere financial transaction

2.2 Vision

To build a global enterprise for all our stakeholders, and A great future for our country, To give millions of young Indians the power to shape their destiny, The means to realize their full potential 2.3 Mission

To create and nurture a world-class, high performance environment aimed at delighting our customers by providing endless financial products in all part of the country.

2.4 Successsutrasof Reliance Money

The success story of the company is driven by 8 success sutras adopted by it namely: 1. Trust 2. Integrity 3. Dedication

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4. Commitment 5. Enterprise 6. Hard work and Team play 7. Learning and Innovation, 8. Empathy and Humility.

These are the values that bind success with Reliance Money

2.5 Achievements 2.5.1 List of recent achievements

In two successive joint surveys by The Economic Times Brand Equity and ACNielsen, Reliance was recognized as Indias Most Trusted Mutual Fund.

The company also walked away with seven other scheme prizes five of them being outright winners in the Gulf 2007 Lipper Awards. These included the Fund House of the Year by Lipper GCC as well as ICRA Online and the Most Improved Fund House by Asia Asset Management.

It also received the NDTV Business Leadership Award 2007 in the mutual fund category and runners up recognition as the Best Fund House in the Outl ook MoneyNDTV Profit Awards.

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In addition, the company received the coveted CNBC Web18 Genius of the Web distinction for the Best Mutual Fund Website in the country. RCAM was awarded the India Onshore Fund House 2008 instituted by the Asian Investor agazine.

The company also won the India Equities award in the 5-yearPerformancecategory.

2.5.2 Other achievements

Reliance Money generated revenues of Rs. 35 billion (US$ 767 million) for the year March 31, 2009 as against Rs. 24 billion of the corresponding previous period, an increase of 48%. It also achieved a net profit of Rs. 368 million (US$ 8million) for the same period, as against a net profit of Rs. 1 million for the corresponding previous period Reliance Money is the one of the leading brokerage and distributor of financial products in India with more than 3 million customers

Reliance

Money has

tied

up

with global

partners

like

Reuters,

Vasco,

Valcambi,Webaroo, optionsXpress Holdings, Goldride Securities, World Gold Counc il,Wincor Nixdorf and DBS Vickers to facilitate better access to wider world class choices to its customers It is amongst the leading Mutual fund distributors of the country distributing products of 20 AMCs. It is the the largest private sector partner for Western Union Money Transfer in India To further improve its position in the money changing and money transfer business, Reliance Money has acquired a significant share holding in Wall Street Finance Ltd, a leading provider of money changing and money transfer services in the Country Reliance Money has tied up with Kuoni India and plans to retail its for ex products/services through the national network of over 70 Kuoni outlets Reliance Money has tied up with India Post and World Gold Council to sell gold coins through the post office network across the country Reliance Money has obtained Category I Merchant Banking License from
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the Securities and Exchange Board of India. This new license allows Reliance Money to provide a wide range of investment banking services such as Issue Management, Underwriting, Private Equity Finance Advisory/ Syndication and Corporate in

services

India Reliance Money is taking its first steps into the Commodities Exchangebusines s and is in the process of acquiring a 15 per cent stake in Hong Kong Mercantile Exchange (HKMEx). With this holding, Reliance Money becomes the second-

largest shareholder in the commodity exchange and will have a board membership. Reliance Money is the first Indian firm to acquire a stake in an international exchange It has also obtained approval from the Ministry of Consumer Affairs for acquiring10% stake in the National Multi-Commodity Exchange of India Ltd. (NMCE

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Basic structure of Reliance ADA group

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2.7 Product Offering


Reliance Money currently deals in the following financial products:

2.7.1 Trading Portal

Online trading refers to buying and selling of the shares/stocks/contracts/bonds with the use of internet. In this shares are not issued in physical form rather they are transferred in the dematerialized form in the Demat account directly

. Demat account There are many broking houses doing business in India and they charge a brokerage on every transaction made online or offline. (Buying and Selling are treated as separate transaction). Reliance Moneys advantage over others is that its charging the lowest brokerage in the market which is just 1 paisa on every executive trade irrespective of the volume traded.

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Reliance Money, the brokerage and distribution arm of Reliance ADA Group, aims to tap investors in the smaller towns and cities through a flat fee structure. The new wonder is Reliance Money's pre-paid card for stock market brokerage. Reliance Money, the financial services division of Anil DhirubhaiAmbani Group-promoted Reliance Capital, is bringing to the market pre-paid cards in denominations of Rs500, Rs1,000, Rs. 2500, Rs. 5,000 and Rs.10,000.Target low level of retail penetration in India - less than 3 per cent of house hold financing savings makes it into equity markets. Reliance Money Demat Account Holders can trade in

Equities Equity Investment generally refers to the buying and holding of shares of stock on a stock market by individuals and funds in anticipation of income from dividends and gains the value of the stock rises. It also sometimes refers to the acquisition of equity (ownership) participation in a private (unlisted) company or a startup(a company being created or newly created).

Commodities A single platform to trade on both the major commodity exchanges i.e. NCDEX and MCX. In addition In-house research desk shall provide research reports on all major commodities which shall enable in getting views for trading and diversify clients holdings. Trade Execution assistance is also provided to clients.

Offshore Investments Offshore investment is the keeping of money in a jurisdiction other than one's country of residence. Offshore jurisdictions are a commonly accepted solution to reducing excessive tax burdens levied in most countries to both large and small scale investors
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alike. The advantage to this is that such operations are both legal and less costly than the solutions offered in the investor's country or

"onshore".Offshore solutions are accessible to anyone who can meet the minimuminv estment amount or pay the obligatory fees required to open such an entity. Another reason why 'offshore' investment is superior to 'onshore' investment is because it is less regulated, and the behavior of the offshore investment provider, whether he be a banker, fund manager, trustee or stock-broker, is freer than it could be in a more regulated environment. Reliance Money has already tied-

upwith CMC Capital Plc UK to offer offshore Investment products to Indian consumers as per guide lines. How reliance money scored over others?

1) Two way authentication

Reliance offers its customers with a token (an electronic gadget) that generates a password, which are a third level of security in addition to the customer log in and a password provided. The password generated by the token is valid only for a period of 20 seconds. If the web page expires, for the fresh login, a new password generated by the token has to be keyed in by the customer.

2.) Lowest brokerage:

Reliance offers the lowest brokerage of 1 paisa whichis very less with respect to the other DPs in the market.

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3. User friendly software: The portal offered is very easy to understand anduse

4. Better research and news: Reliance offers news from the DOW JONES and REUTERS .Seeking to bring share trading closer to consumers just like ATMs, Reliance Capital's stock brokerage arm Reliance Money launched Internet trading services through web-enabled retail kiosk.

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Reliance Money Provide the kiosks (similar to ATMs) Facilities, to their customer through which the customers can trade on available kiosks at the particular Branch of Reliance Money. The company are going to open these kiosks in the market as the ATMs of the Banks

Reliance Money share trading account Reliance Money unlike other brokering houses has introduced a new prepaidsystem of brokerage for the share trading in which it provides the lowest form of brokerage charged from an investor. Following are also the main features of this share trading account provided by Reliance money:-

1. Flexibility to access Reliance money services in multiple ways throughInternet, Transaction kiosks, Call a nd transact or seek assistance throughBusiness partners.2. This is a

safeguarded account as reliance money provides an electronic token that flashes a unique security number in every thirty two seconds. This number works as a third level password (including the login ID and Password) keeping the account sage from any unauthorized access.

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Flexibility to transact in Equity, Equity and commodity Derivatives, Offshore investments, mutual funds, IPOs, Life insurance and General Insurance either through online or through channel partners.4. With the help of this A/c investors can access to their banking, trading and Demat accounts without the hassle of writing cheques. Reliance money had tied up with UTI, HDFC and IDBI bank to link this share trading account for the investors. These were some of the features of Reliance money share trading account. A customer can do the share trading through trading kiosks installed by Reliance Money, through net, through business associates of R-Money.

2.7.2 Mutual funds

A mutual fund represents a vehicle for collective investment. When you participate in a scheme of a mutual fund, you become a part-owner of the investments held under that scheme. The most important characteristic of a mutual fund is that the contributors and the beneficiaries of the fund are the same class of people, namely the investors. The term MUTUAL means that investors contribute to the pool, and also benefit from the pool. The money held in the trust is divided into shares of equal
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value called UNITS. Investors become unit-holders and are allocated units based on the amount of their investment. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. Investments in securities are spread across a wide cross-section of industries and sectors and thus the risk is reduced. Diversification reduces the risk because all stocks may not move in the same direction in the same proportion at the same time. Mutual fund issues units to the investors in accordance with quantum of money invested by them. Investors of mutual funds are known as unit holders. Thus a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

2.7.2.1 Equity/Growth Schemes The aim of growth funds is to provide capital appreciation over the medium to longterm. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options

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at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Some of the Equity/Growth schemes made available by Reliance Money are:

1) Reliance Growth Fund

2) Reliance Vision Fund

3) Reliance NRI Equity Fund

4) Reliance Equity Opportunities Fund

5) Reliance Index Fund

6) Reliance Tax Saver Fund

7) Reliance Equity Fund

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2.7.2.2 Debt/Income Schemes

The aim of income funds is to provide regular and steady income to investors.Such schemes generally invest in fixed income securities such as bonds,corp orate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations. Some of the Debt/Income schemes made available by Reliance Money are:

1 Reliance Income Fund

2. Reliance Medium Term Fund

3. Reliance Short Term Fund

4. Reliance Liquid Fund

5. Reliance Monthly Income Plan

6. Reliance Gilt Securities Fund

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7. Reliance Floating Rate Fund

8. Reliance NRI Income Fund

2.7.2.3 Sector Specific Schemes These are the funds/schemes which invest in the securities of only those sectors or industries as specified in the offer documents. e.g. Pharmaceuticals, Software, Fast Moving Consumer Goods (FMCG), Petroleum stocks, etc. The returns in these funds are dependent on the performance of the respective sectors/industries. While these funds may give higher returns, they are more risky compared to diversified funds. Investors need to keep a watch on the performance of those sectors/industries and must exit at an appropriate time. may also seek advice of an expert. Some of the sector specific schemes made available by Reliance Money are:

2 Reliance Banking Fund

3 Reliance Pharma Fund

4 Reliance Media and Entertainment Fund

5 Reliance Diversified Power Sector Fund

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2.7.3 Portfolio management services Types of portfolio management services offered are

2.7.3.1 Growth Fund

A Moderate fund with growth approach and investments predominantly in large-cap stocks. The objective is to ensure liquidity and lower impact cost leading to the construction of a relatively more stable portfolio. The portfolio management process will also focus on using cash as an investment tool and derivatives for protection of portfolio.

Investment Objective Generate capital appreciation in medium to long term through investments in equities and equity related instruments comprising of predominantly large cap companies. This scheme will be benchmarked to the Nifty 50 stocks.

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Parameters Driving Investment Decision The portfolio strives at all times to achieve an overall 70% allocation to large cap companies. Again the portfolio will limit the exposure to any sector to be less than 25% of the portfolio size and to any scrip to be less than 10%.

2.7.3.2 Value Fund A highly flexible investment option, which offers a diversified investment portfolio across both large-cap and mid-cap stocks. This option follows a moderately aggressive approach to portfolio construction. The portfolio management process will also focus on using cash as an investment tool and derivatives for protection of portfolio.

Investment Objective The objective of this scheme is wealth creation by delivering superior returns over long term (18 months) through investments in value & growth stocks. This will be benchmarked with BSE 200.

Reliance Money has launched portfolio management services (PMS), wheremanagers will create a basket of stocks for each client, based on individual needs, for amounts as low as Rs 5 lakh .Such services are popular in India but almost all the offerings of large finance companies target high net worth individuals (HNIs) with the ability to invest Rs1crore and

above.Reliance Money, which helps clients invest in equities, derivatives and

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commodities, typically offers such services for amounts between Rs5 lakh andRs75 lakh; Rs5 lakh is the smallest amount the industrys regulator mandates for PMS. Reliance Money would not take a fee unless the portfolio earns a return higher than 8%. If the client earns a return of 8-20%, the fee charged will be 10%of the absolute returns and if the client earns more than 20%, the fee will be20%.The company offer a large-cap investment portfolio (where the stocks invested in will be those of largecap companies), blue chip portfolio (blue chip companies)and an infrastructure portfolio (companies in the infrastructure sector)

2.7.4 Gold Coins

Reliance money has Introduced Pure Swiss Gold Coins, a welcome addition to Reliance Moneys large offering of Financial Investments. Gold not only acts as secure investment, but is an efficient store of value offering high security &credibility. An instrument of long term investment, Gold acts as a hedge against inflation besides providing high liquidity. Most Indians share an emotional bond with Gold nearly bordering with God. But in a highly disorganized Gold market, the purity aspect and thereby the value for ones Money during the purchase of Gold has always been a question mark .For the customer, the lack of access to a branded, affordable, reliable Gold coin has always been a matter of concern. Reliance aims to bridge this gap by giving 99.99% pure, 24 carat, Swiss

Goldcoins through its distribution network. Available in 0.5g, 1g, 5gm and 8gmdeno minations, these 24 carat, 99.99% pure, internationally certified Gold coins cater to a large segment of the society in both the retail and the corporate world. Available in tamper proof packaging, the overall look and feel of these coins is far superior & they possess a great finish. These Gold coins are Ideal for customers or corporates to be used as a gifting idea, for retail/agent contests, as employee rewards etc. Retail customers buy these coins just for the pleasure of owning it or as an investment idea.

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2.7.5 LIFE INSURANCE

"Insurance is a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premiums, to pay the other party called insured a fixed amount of money on the happening of a certain event. "Life Insurance policies have been categorized in the following manner: 1. Solution for individuals 2. solution for groups Under the head of solution for individual there are four bifurcations

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Other

than

above

mentioned

plans,

Reliance

has

tie-up

with

many

insurancecompanies like ING Vysya, Kotak, ICICI prudential, HDFC standard life insurance etc. Reliance Money also offers life insurance policies of all the above mentioned companies other than its own life insurance products
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2.7.6. GENERAL INSURANCE It has also been categorized in the following manner:

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2.7.6.3 Other miscellaneous plans 1. Money Insurance Policy 2. Burglary and House Breaking Insurance Policy 3. Fidelity Guarantee Insurance Policy The above mentioned products belong to reliance general insurance but reliance money is also engaged in selling general insurance policies of other companies like Cholamandalan, IFFCO TOKYO etc.

2.7.7.1 Personal loans

Easy and hassle-free personal loans at attractive interest rates are offered up toINR 17, 00,000 and which can be repaid in flexible EMIs. One can also avail a personal loan on the basis of his/her repayment track record of an existing loan.

2.7.7.2 Home loans

Reliance

also

offers offer

housing

finance

to fulfill

myriad

requirements.

Thesehome loans have been customized to meet individual needs and desires.Attracti ve interest rates with best-in-class features and benefits make theexperience even

more pleasant. The simple EMIs as per the tenor you choose, makes paying back your loan an absolute breeze. Whether one is a salaried professional, selfMUNTAZIR ABASS--------- AMITY GLOBAL BUSINESS SCHOOL PUNE Page 29

employed professional or a self-employed non-professional,housing designed to meet your unique requirements.

loans

are

2.7.7.3 Car loans With flexible monthly repayment option, one can repay the auto finance up to 7years for finanace taken for both new car loans and used car loans. Italsoconsider the on-road value of the vehicle for funding, i.e. it covers not just the insurance but also the road tax.

2.7.7.4 SME and Business loans 1. Business Line of Credit 2. Commercial Loans 3. Expansion of business 4. Working capital loans

2.7.8 Money Transfer and Money Changing

Reliance Money has given new brand identity for Travel mate Services and is dealing in Money Changing Services and Full-Fledged Money Transfer Business India is the largest recipient of global remittance of around $ 27 billion which is more than 10 percent of the total global remittance inflow of $ 240 billion. This is continuously rising due to labor migration Currently Reliance Money Express operates through a network of 3400 outlets spread over 800 cities and towns across India and handling

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close

to

100,000transactions per month with a daily average

inward

remittance of USD 1.4million.

2.7.9 Fixed Deposits

Reliance Money is also involved in availing its customers facility of fixed deposits.Currently, it is making available fixed deposits for the following banks:

1 HDFC Deposits

2 HDFC Premium Deposits

3 ICICI Home Finance

4 Mahindra and Mahindra Finance

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2.11 Social Responsibilities

Organizations, like individuals, depend for their survival, sustenance and growth on the support and goodwill of the communities of which they are an integral part, and must pay back this generosity in every way they can. This ethical standpoint, derived from the vision of the founder, lies at the heart of the CSR philosophy of the Reliance Group. While they strongly believe that their primary obligation or duty as corporate entities is to their shareholders they are just as mindful of the fact that this imperative does not exist in isolation; it is part of a much larger compact which they have with their entire body of stakeholders: From employees, customers and vendors to business partners, eco-system, local communities, and society at large. They evaluate and assess each critical business decision or choice from the point of view of diverse stakeholder interest, driven by the need to minimize risk and to pro-actively address long-term social, economic and environmental costs and concerns. For them, being socially responsible is not an occasional act of

charity or that one-time token financial contribution to the local school, hospital or environmental NGO. It is an ongoing year-round commitment, which is integrated into the very core of their business objectives and strategy. Because they believe that there is no contradiction between doing well and doing right. Indeed, doing right is a necessary condition for doing well. Each of Reliance Capitals different businesses vigorously implements their

ownCSR initiatives. Indeed, their CSR efforts are counted when calculating thebusine sss performance for the year. Some of the work done by them include:

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1) Blood donation camps in Mumbai, but also in other citis such as Bangalore, Chennai, and Hyderabad.

2) Donating old computers to local schools in Navi Mumbai

3) Celebrating Independence Day with the less privilegedstreet children are taken to amusement parks, donations are given to NGOs working with children or the aged or to the Missionaries of Charity. Again, this is done across the country from Raipur to Jaipur, from Kolkata to Chandigarh.

4) Similar initiatives are undertaken on Diwali or on Christmas.

5) Bihar was stuck by calamitous flooding last year. Reliance Capitalemployees working with their businesses generously donated clothes and money for the relief effort

6) Direct cash aid for paying the medical expenses of lifethreateningrequirements for some under-privileged people is also done by one of the businesses

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CHAPTER 2

OBJECTIVIES OF STUDY

To know the return pattern of the fund. To know the risks associated with the particular fund. To know about the suitability of the fund. To know about the satisfaction level among customers of Reliance Money.

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CHAPTER NO.3

REVIEW OF LITERATURE The Indian capital market has changed dramatically over the Last few years, especially since 1990. Changes have also been taking Place in government regulations and technology. The expectations of the investors are also changing. The only inherent feature of the capital Market, which has not changed is the 'risk' involved in investing in corporate securities. Managing the risk is emerging as an important function of both large scale and small-scale investors. The Indian capital market has changed dramatically over the last few years, especially since 1990. Changes have also been taking place in government regulations and technology. The expectations of the investors are also changing. The only inherent feature of the capital market, which has not changed is the 'risk' involved in investing in corporate securities. Managing the risk is emerging as an important function of both large scale and small-scale investors. Grewal S.S and NavjotGrewall (1984) revealed some basic investment rules and rules for selling shares. They warned the investors not to buy unlisted shares, as Stock Exchanges do not permit trading in unlisted shares. Another rule that they specify is not to buy inactive shares, ie, shares in which transactions take place rarely. The main reason why shares are inactive is because there are no buyers for them. They are mostly shares of companies, which are not doing well. A third rule according to them is not to buy shares in closely-held companies because these shares tend to be less active than those of widely held ones since they have a fewer number of shareholders. They caution not to hold the shares for a long period, expecting a high price, but to sell whenever one earns a reasonable reward. Jack Clark Francis2 (1986) revealed the importance of the rate of return in investments and reviewed the possibility of default and bankruptcy risk. He opined that in an uncertain world, investors cannot predict exactly what rate of return an

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investment will yield. However he suggested that the investors can formulate a probability distribution of the possible rates of return. He also opined that an investor who purchases corporate securities must face the possibility of default and bankruptcy by the issuer. Financial analysts can foresee bankruptcy. He disclosed some easily observable warnings of a firm's failure, which could be noticed by the investors to avoid such a risk.

PreethiSingh3(1986) disclosed the basic rules for selecting the company to invest in. She opined that understanding and measuring return md risk is fundamental to the investment process. According to her, most investors are 'risk averse'. To have a higher return the investor has to face greater risks. She concludes that risk is fundamental to the process of investment. Every investor should have an understanding of the various pitfalls of investments. The investor should carefully analyze the financial statements with special reference to solvency, profitability, EPS, and efficiency of the company Lewis Mandells (1992) reviewed the nature of market risk, which according to him is very much 'global'. He revealed that certain risks that are so global that they affect the entire investment market. Even the stocks and bonds of the well-managed companies face market risk. He concluded that market risk is influenced by factors that cannot be predicted accurately like economic conditions, political events, mass psychological factors, etc. Market risk is the systemic risk that affects all securities simultaneously and it cannot be reduced through diversification. Charles.P.Jonesl8 (1996) reviewed how to estimate security return and risk. To estimate returns, the investors must estimate cash flows the securities are likely to provide. Also, investors must be able to quantify and measure risk using variance or standard deviation. Variance or standard deviation is the accepted measure of variability for both realised returns and expected returns. He suggested that the investors should use it as the situation dictates.

He revealed that over the past 12 years, returns in stocks, bonds, etc. have been normal. Blue chip stocks have returned an average of more than 16% per year. He
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warned that the investors who believe that these rates will continue in the future also, will be in trouble. He also warned the investors not to allow themselves to becomevictimized by "investment gurus". V.T.Godse.19 (1996) revealed the two separate but Simultaneous processes involved in risk management. The first process is determining risk profile and the second relates to the risk management process itself. Deciding risk profile is synonymous with drawing a risk picture and involves the following steps. 1. Identifying and prioritising the inherent risks 2. Measuring and scoring inherent risks. 3. Establishing standards for each risk component 4. Evaluating and controlling the quality of managerial controls. 5. Developing risk tolerance levels. He opined that such an elaborate risk management process is relevant in the Indian context. The process would facilitate better understanding of risks and their management.

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CHAPTER NO. 4

RESEARCH METHODOLOGY MEANING OF RESEARCH: Research in a common paralance refers to a search for a knowledge. Once can also define search as a scientific and systematic search for a pertinent information on a specific topic.in fact research is an art of scientific investigation . The advance learners dictionary of current English lays down the meaning of research as a careful investigation or inquiry specially through search for new facts in any branch of knowledge Redman and mory defines research as a systemized effort to gain new knowledge Some people consider research as a movement, a movement from the known to the unknown .it is actually a yovage to discovery.

RESEARCH METHODOLOGY Research methods may be understood all those methods or techniques that are used for conducting the research. Research methods or techniques thus refer to the methods the researchers use in performing the research operations. In other words, all those methods which are used by the researcher during the course of studying his research problem are termed as research methods. Keeping in view research methods can be put into the following three groups: In the first group we include those methods which are concerned with the collection of data. These methods will be used where the data already available are not sufficient to arrive at the required solution:

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The second group consists of those statistical techniques which are used for establishing relationships between the data and the unknowns: The third group consists of those methods which are used to evalvate the accuracy of the result obtained.

Research methodology is a way to systematically solve the research problem. it may be understood as a science of studying how research is done scientifically.

In it we study the various steps that are generally adopted by a researcher in studying his research problem along with the logic behind them. It is necessary for the researcher to know not only the research methods/techniques but also the methodology. Researchers not only need to know how to develop certain indices or tests, how to calculate the mean, the mode, the median or the standard deviation or chi-square, how to apply particular research techniques, but they also need to know which of these methods or techniques, are relevant and which are not, and what would they mean and indicate and why.

SOURCES OF DATA: There are two sources of data ie Primary data and Secondary data Primary data:
Data that has been collected from first-hand-experience is known as primary data. Primary data has not been published yet and is more reliable, authentic and objective. Primary data has not been changed or altered by human beings, therefore its validity is greater than secondary data. In statistical surveys it is necessary to get information from primary sources and work on primary data: for example, the statistical records of female population in a country cannot be based on newspaper, magazine and other printed sources. One such sources are old and secondly they contain limited information as well as they can be misleading and biased.

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Sources of primary data: Experiments:


Experiments require an artificial or natural setting in which to perform logical study to collect data. Experiments are more suitable for medicine, psychological studies, nutrition and for other scientific studies. In experiments the experimenter has to keep control over the influence of any extraneous variable on the results.

Survey: Survey is most commonly used method in social sciences, management, marketing and psychology to some extent. Surveys can be conducted in different methods.

Questionnaire: is the most commonly used method in survey. Questionnaires are a list of questions either open-ended or close -ended for which the respondent give answers. Questionnaire can be conducted via telephone, mail, live in a public area, or in an institute, through electronic mail or through fax and other methods.

Interview: Interview is a face-to-face conversation with the respondent. In interview the main problem arises when the respondent deliberately hides information otherwise it is an in depth source of information. The interviewer can not only record the statements the interviewee speaks but he can observe the body language, expressions and other reactions to the questions too. This enables the interviewer to draw conclusions easily.

Observations: Observation can be done while letting the observing person know that he is being observed or without letting him know. Observations can also be made in natural settings as well as in artificially created environment.

Secondary Data:

Data collected from a source that has already been published in any form is called as secondary data. The review of literature in nay research is based on secondary data. Mostly from books, journals and periodicals. Secondary data can be less valid but its importance is still there. Sometimes it is difficult to obtain primary
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data; in these cases getting information from secondary sources is easier and possible. Sometimes primary data does not exist in such situation one has to confine the research on secondary data. Sometimes primary data is present but the respondents are not willing to reveal it in such case too secondary data can suffice: for example, if the research is on the psychology of transsexuals first it is difficult to find out transsexuals and second they may not be willing to give information you want for your research, so you can collect data from books or other published sources.

TYPES OF RESEARCH: 1. Descriptive vs. Analytical: Descriptive research includes surveys and fact-finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. In social science and business research we quite often use the term Ex post facto research for descriptive research studies. The main characteristic of this method is that the researcher has no control over the variables; he can only report what has happened or what is happening. Most ex post facto research projects are used for descriptive studies in which the researcher seeks to measure such items as, for example, frequency of shopping, preferences of people, or similar data. Ex post facto studies also include attempts by researchers to discover causes even when they cannot control the variables. The methods of research utilized in descriptive research are survey methods of all kinds, including comparative and correlational methods. In analytical research, on the other hand, the researcher has to use facts or information already available, and analyze these to make a critical evaluation of the material. 2. Applied vs. Fundamental: Applied research aims at finding a solution for an immediate problem facing a society or an industrial/business organization, whereas fundamental research is mainly concerned with generalizations and with the formulation of a theory. Gathering knowledge for knowledges sake is termed pure or basic research.
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Research concerning some natural phenomenon or relating to pure mathematics are examples of fundamental research. Similarly, research studies, concerning human behaviour carried on with a view to make generalisations about human behaviour, are also examples of fundamental research, but research aimed at certain conclusions (say, a solution) facing a concrete social or business problem is an example of applied research. Research to identify social, economic or political trends that may affect a particular institution or the copy research (research to find out whether certain communications will be read and understood) or the marketing research or evaluation research are examples of applied research. Thus, the central aim of applied research is to discover a solution for some pressing practical problem, whereas basic research is directed towards finding information that has a broad base of applications and thus, adds to the already existing organized body of scientific knowledge. 3) Quantitative vs. Qualitative: Quantitative research is based on the measurement of quantity or amount. It is applicable to phenomena that can be expressed in terms of quantity. Qualitative research, on the other hand, is concerned with qualitative phenomenon, i.e., phenomena relating to or involving quality or kind. For instance, when we are interested in investigating the reasons for human behaviour (i.e., why people think or do certain things), we quite often talk of Motivation Research, an important type of qualitative research. This type of research aims at discovering the underlying motives and desires, using in depth interviews for the purpose. Other techniques of such research are word association tests, sentence completion tests, story completion tests and similar other projective techniques. Attitude or opinion research i.e., research designed to find out how people feel or what they think about a particular subject or institution is also qualitative research. Qualitative research is especially important in the behavior sciences where the aim is to discover the underlying motives of human behavior. Through such research we can analyse the various factors which motivate people to behave in a particular manner or which make people like or dislike a particular thing. It may be stated, however, that to apply qualitative research inpractice is relatively a difficult job and therefore, while doing such research, one should seek guidance from experimental psychologists.
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Conceptual vs. Empirical: Conceptual research is that related to some abstract idea(s) or theory. It is generally used by philosophers and thinkers to develop new concepts or to reinterpret existing ones. On the other hand, empirical research relies on experience or observation alone, often without due regard for system and theory. It is data-based research, coming up with conclusions which are capable of being verified by observation or experiment. We can also call it as experimental type of research. In such a research it is necessary to get at facts firsthand, at their source, and actively to go about doing certain things to stimulate the production of desired information. In such a research, the researcher must first provide himself with a working hypothesis or guess as to the probable results. He then works to get enough facts (data) to prove or disprove his hypothesis. He then sets up experimental designs which he thinks will manipulate the persons or the materials concerned so as to bring forth the desired information. Such research is thus characterized by the experimenters control over the variables under study and his deliberate manipulation of one of them to study its effects. Empirical research is appropriate when proof is sought that certain variables affect other variables in some way. Evidence gathered through experiments or empirical studies is today considered to be the most powerful support possible for a given hypothesis.

Project research: While doing the study we only take secondary research, as we have to analyze the balance sheet and income statement of reliance money. And to analyze, we use descriptive research as we cannot change the variables. We have to only report what has happened or what is happening by analyzing the balance sheet and income statement of reliance money.

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CHAPTER NO 4
DATA ANALYSIS AND INTERPRETATION

RELIANCE GROWTH FUNDS: Launched on 8thOctober, 1995, Reliance Growth Fund focuses on companies in the mid-cap segment, while having small exposure to large-cap stocks

INVESTMENT PHILOSPHY. Aiming at consistent performance. Predominant focus on mid- size capitalization stocks. Small exposure to large size capitalization companies. Both top down and bottom up investing approaches are followed.

Risk Profile
A Moderate Mid cap Oriented Fund

Suitability Investors targeting long term absolute returns in a mutual fund format Diversified portfolio through a single scheme Invest systematically in a bouquet of value and growth stocks For investors looking to invest in a mid cap

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Portfolio & Scheme Features As on 31st July, 2012

Portfolio of reliance growth:

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Sector wise allocation of funds

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Performance of fund for last 3 years

Growth funds return in %.

Scheme return %
140 120 100 80 60 40 20 0 -20 Since March March March inception till 30, 2011 to 30, 2010 to 30, 2009 to March March March March 30, 2012 30, 2012 30, 2011 30, 2010 Scheme return %

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Balance sheet of reliance growth funds for last three years

Schedule. 31st March, 2012 Amount (Rs.) LIABILITIES Unit Capital 'A' 5,253,973,653 6,489,340,227 6 ,964,327,017 31st March, 2011 3 Amount (Rs ) 1st March, 2010 Amount (Rs )

Reserves and Surplus

'B'

53,392,854,754

65,136,362,407

65,328,363,145

Current Liabilities and Provisions 'C'

360,737,176

768,937,203

1 ,628,411,172

Total

59,007,565,583

72,394,639,837

7 3,921,101,334

ASSETS

Investments

'D'

56,829,324,457

69,558,474,476

6 6,870,462,860

Deposits

'E'

765,000,000

2,005,200,000

1 ,312,300,000

Other Current Assets

'F'

1,413,241,126

830,965,361

5 ,738,338,474

Deferred Revenue Expenses not written off 'G'

Total

59,00 7,565,583

72,394,639,837

7 3,921,101,334

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REVENUE ACCOUNT FOR THE LAST THREE YEARS

Schedule

31march 2012 amount

31march2011 Amount

31march2010 Amount

INCOME Dividend Interest 919,349,337 268,634,418 928,711,997 298,937,938 617,904,126 286,838,930

Profit on sale / redemption of investments ( Other than inter-scheme transfer / sale) 4,594,059,054 Profit on inter scheme transfer / sale of investments Writeback of Provision for Doubtful Debt Depreciation of previous year written back Other Income 2 61,090 2,682,832 51,130,425

9,464,714,371

6,686,037,013

155,192,923

18,687,032

2,391,900

4,386,412

(752,383)

Total

5 ,836,117,156

1 0,854,335,541

7,608,714,718

EXPENSES AND LOSSES

Loss on sale / redemption of investments (Other than inter-scheme transfers / sale) 2 ,962,634,319

1,001,770,203

981,846,836

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Loss on interscheme transfer / sale of investments 4 9,139,584 159,398,891 42,080,256

Management fees

6 21,106,037

768,255,011

549,033,939

Trusteeship fees

2 05,107

9 5,741

74,152

Advertisement and Publication Expenses 60,432,459 55,593,699 39,086,783

Audit fees

413,329

659,459

391,521

Custodian fees

4 ,425,915

5,854,757

5,529,174

Registrar and Transfer Agent's fees 5 3,593,062 64,083,855 51,330,552

Selling and Marketing Expenses

1 0,025,995

17,591,970

22,039,112

Commission to Agents

2 76,668,813

364,469,762

323,319,744

Service Tax on Management Fees

6 3,973,922

79,130,27

656,550,496

Other operating expenses

2 1,289,510

13,441,283

6,619,813

Deferred Revenue Expenses Written Off

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Unrealised Depreciation in the Value of Investments 8 7,011 15,278,214 _

Provision for doubtfull debts

2,391,900

Total

4 ,123,995,063

2 ,545,623,121

2,080,294,278

Net Surplus / ( Deficit ) for the period 1 ,712,122,093 8 ,308,712,420 5,528,420,441

Net Surplus brought forward from previous year 25,292,399,433 19,348,887,716 6,154,986,540

Add: Depreciation of pervious year written back __ 8,328,139,619

Add : Transferred from Equalisation Account

3,439,880,972

Less : Transferred to Equalisation Account 2,707,210,467 2 17,030,814 _

Total

2 4,297,311,059

2 7,440,569,322

23,505,427,572

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Net Available Surplus Less : Dividend distributed Net Surplus / ( Deficit ) carried forward

2 4,297,311,059 8 54,205,153

2 7,440,569,322 2,148,169,889

23,505,427,572 4,156,539,856

23,443,105,906.00

2 5,292,399,433

19,348,887,716

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Cash flow statement for last 3 years

2011-2012 A. Cash flow from Operating Activity Surplus for the period 1,712,122,093

2010 - 2011

2009 -2010

8 ,308,712,4205,

528,420,441

Adjustments for:Non-cash items in Revenue Account (174,079) 15,278,214 _

Investments (at cost) made, net (Increase) / decrease in current assets Increase / (decrease) in current Liabilities

8,288,490,038 (627,524,615) (304,532,477)

(8,020,888,672) 4 02,598,200 (793,489,655)

(7,819,101,653) _ _

Provision for net unrealized loss in value of investments Other current assets receivable _ _ (253,780,999)

Current liabilities incurred

(97,886,746)

Net cash used in operations B Cash flow from Financing Activities Proceeds from Subscriptions / Redemption of unit capital, net Unit premium received/(paid) thereon, net

9,068,380,960

(87,789,493)

(2,642,348,957)

(1,235,366,574)

(474,986,790)

973,307,070

6,920,390,533)

(1,836,577,177)

6 ,275,758,494

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Adjustments for:Sundry creditors for units redeemed byinvestors (103,667,554) (65,984,316) 2 44,237,970

Sundry debtors for units issued to investors Dividend and tax thereon paid during the year/period Net cash generated from financing activities Net Cash and cash equivalents Cash and cash equivalents, beginning of the period Cash and cash equivalents, end of the year/period Components of cash and cash equivalents Balances with banks in current accounts Collaterized Lending

15,827,229

1 97,256,762

(112,141,497)

(854,205,153)

(2,148,169,889)

( 4,156,539,856 )

(9,097,802,585) ( 29,421,625) 537,715,263

(4,328,461,410) (4,416,250,903) 4 ,953,966,166

3,224,622,181 582,273,224 4 ,488,359,608

508,293,638

537,715,263

5,070,632,832

206,359,048 301,934,590 508,293,638

5 37,715,263 _ 537,715,263

3 89,327,304 4,681,305,528 5,070,632,832

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CHAPTER NO.5

FINDINGS

The fund displayed strong performance in the long run, owing to the fund managers strong stock selection approach. The fund was ranked at first position within the Small/Mid Cap category, during the last 10-year period. The funds trailing return since inception (August 1995) was 25.69%, higher than the benchmark, which posted 11.8% return. However, in the short-term, especially during 2008, the fund lagged its benchmark as well as peers. During 2008, it registered -54.1% return, underperforming benchmark by 1.66%, primarily owing to its cash allocation. When the markets recovered during MarchJune 2009 period, the fund featured in the second quartile, particularly at the 31st position out 69 funds available in this category. The fund had 23% in cash in April 2009, however, the manager was quick enough to cut cash and fully invested in equities at the end of May 2009. Performance over calendar years was quite phenomenal since 2002 as the fund always featured in the top quartile except during 2008 and YTD period to June 2009. Overall, the fund performed well in up markets and declined less in down markets as reflected by its up capture and down capture ratios 112% and 91% respectively. The funds volatility of 33% over the last 5-years period was marginally higher than the corresponding figures turned in by its benchmark and peers at 32% each.

Over all findings

1. If we take a look to the revenue a/c all incomes are showing a dip in 2012. And this year the companys profit is also going down to 94%. 2. Dividend income which was 100% in 2009-2010 had increased to 150% during 2010-2011 and for 2011-2012 that was only 148%. 3. Interest is also shown a decline which was 100% in 2009-2010 and 104% in 2010-2011 which then reduced to 99% in 2011-2012.

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4. Profits on investment were 141% during 2010-2011 which then reduced to only 68% during 2011-2012. 5 According to the regulatory filing to the BSE, the company has made a provisioning of Rs 62 crore towards diminution in the value investment and Mark to Market (MTM) losses during the June quarter. 6 This raised the total expenses to Rs 167 crore in June quarter, from Rs. 117 crore in the same period of 2011-12. 7 The company's income from operations dipped marginally to Rs 694 crore during the June quarter, from Rs 697 crore in the corresponding period last fiscal.

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CONCLUSSION

As students, many of us are completely ignorant of the work cultures of various corporate organizations. SIP is an attempt to provide us a practical corporate exposure where we work in certain corporate organizations as interns. Working with Reliance Money is a nice opportunity by which I can explore my knowledge Goodbrand is always welcomed. Everywhere, in general, people are moreconscious w ith the brand. So they go for the brand and are ready to spend some extra bucks for the quality. The Brand image of Reliance Money is good in market but according to customer satisfaction reviews the company have to provide better services and proper follow up. dmat Account of other companies is better than other Reliance Demat account . Reliance Money have good return of investment too. It also provides a sense of security with the use of special type of key at last it can be on be concluded by that Reliance Money is still growing in the financial sector and has a huge potential for the coming times. But this project also includes prospective

investors, who can invest in stock market but presently does not invest in these markets. There are many reasons for such investors not to invest in stock market. The main reasons for the customer not to invest in stock markets are 1. High risk 2. High uncertainty 3. Lack of knowledge 4. High rate of fluctuations

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SUGGESTIONS

1) For visibility of franchisee To enhance the visibility of that franchisee, I recommend them to replace that oldtampered sign board with a new one. As an initiative step from my side, I alongwith the business associate reported the branch office for providing the newbanner for franchisee

2) For enhancing sales activities The first and foremost resource needed for enhancing the sales activities is the Human Power, that is, to recruit some business development executives to assist the sales activities of particular franchisees. The recommendation should pass through proper channel to the business associate

3) For customers satisfaction When I had a chance to meet the existing customers, I came to know that theyare not happy with the internet assistance provided by the Reliance money. Theyare reporting that the speed was very bad when compared with the

onlineplatform provided by ICICI direct. So Reliance money should take steps toupgr ade the speed of their trading platform with user friendly services too

4) Creating awareness regarding benefits of investments The most vital problem spotted is of ignorance. Investors should be made aware of the benefits. Nobody will invest until and unless he is fully convinced. Investors should be made to realize that ignorance is no longer bliss and what they are losing by not

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investing. So the advisors should try to change their mindsets. The advisors should target for more and more young investors. Young investors as well as persons at the height of their career would like to go for advisors due to lack of expertise and

5) Proper Follow up After sales services and follow up calls are important for getting new references.So trained tele-callers should be appointed for this purpose whose sole workshould be to make feedback calls Regular customer meets should be arranged to know the satisfaction level of the customers 6) Product Specialization Reliance is having too many financial products right from Demat account to General Insurance and not all the salespeople are familiar with each and every product so the work force should be segregated each group dealing in a specific product and the sales target should be given likewise 7) Suggestion Boxes There should be provision of complain suggestion boxes at each branch so that the problems of customers can be dealt with. This can be an effective system for showing hospitality towards customers 8) Customer Education The customer should be educated about the stock market to overcome his fear of uncertainty in these markets and must be assured of expert advice in case of market fluctuations. The customer should also be educated about the benefits of investment in stock markets over other investment schemes.

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CHAPTER NO.6
BIBLIOGAPHY

REFFERENCES 1) Financial management by I M PANDAY 2) Financial management by PRASANA CHANDRA

1) http://www.reliancemutual.com/Downloads/Annual-half-Yearly-Reports.aspx 2) http://marketswiki.com/mwiki/Reliance_Money 3) http://en.wikipedia.org/wiki/Reliance_Anil_Dhirubhai_Ambani_Group 4) http://wrd.mydigitalfc.com/news/reliance-capitals-net-profit-dips-94-rs-8-cr-q1031 5) http://www.morningstar.in/mutualfunds/f0gbr06r3u/reliance-growth-fundgrowth/performance.aspx 6) http://www.morningstar.in/mutualfunds/f0gbr06r3u/reliance-growth-fundgrowth/risk-ratings.aspx 7) http://profit.ndtv.com/news/earnings/article-reliance-capitals-net-profit-dips-94-tors-8-cr-in-q1-309205 8)http://www.fundsupermart.co.in/main/fundinfo/viewFund.svdo?sedolnumber=REL 0015 9) http://www.morningstar.in/posts/1069/fund-analysis-reliance-growth.aspx 10) http://en.wikipedia.org/wiki/Research_methodology 11)http://www.reliancemutual.com/RMFAdmin/UploadResources/Schemes/GF/Relia nce%20Growth%20Fund.pdf 12) http://www.scribd.com/doc/19011113/reliance-money-project-report

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