INTRODUCTION

Mutual fund industry is on a booming path right now. With 36 players in the Indian market, the competition is like never before. Every company is claiming to give the best of the returns. The structure of the industry is such that it requires a vast, yet synchronized distribution network. The presence of middle man namely the distributors makes it even more critical to not only make investors happy with good returns but keep the distributors satisfied with best of services and excellent co-ordination with the fund house. So, the quality of services offered becomes a critical area of concern. We were privileged to work on a project with the number one mutual fund house of the country, Reliance Capital Limited, with AUM (Assets Under Management) over 59,143 crores, as on 31st May, 07. The projects objective was to study how these critical services are performed. Our project entitled, Work Flow Analysis of Operations and Sales, gave us the insight as to how the services are rendered in financial service sector and what is the nitty-gritty of the flow of services. The project was for duration of 8 weeks, where the first 6 weeks were primarily focussing on operations side of the work flow. We observed how all the transactions are performed in the office and how it is processed in later stages. The last two were dedicated to understanding the sales aspect of services rendered where our main focus was to observe how the Relationship Managers are undertaking their work. The project aimed at studying the entire process and suggesting ways to improve the work flow of operations as well as of sales.

PROJECT OVERVIEW
In lieu of the given project at hand, the objectives can be categorized into two classes:

 MACRO LEVEL MICRO LEVEL

MACRO LEVEL It is always helpful to get familiar with the industry and market where operates Macro objectives To get familiar with mutual fund industry To do work flow analysis of operations and sales

MICRO LEVEL Micro objectives include the specific objective of the given project.

Phase I- Operations Work Flow Analysis To understand the operations of various verticals at RMF To study K-bolt system To suggest strategies for effective utilization of LMS (lead management system To suggest ways to improve operational processes

Phase II- Sales Work Flow Analysis To study the sales team of all the verticals and suggest ways to promote better relationship building

RATIONALE
Operations form the backbone of all organizations. The USP of successful organizations invariably is efficient and effective operations. The various processes and activities involved need to be streamlined as per requirements. Mutual fund industry operations are to be done adhering the guidelines and laws of SEBI (Securities Exchange Board of India). Workflow analysis helps in assessing the performance of various operating activities and it helps in highlighting the weak links. Strategies and models designed on the basis of analysis helps in fastening the process and minimizing the errors. These are vital for any AMC (Asset Management Company) as it benefits it in terms of increased investors satisfaction, distributors satisfaction, reduced cost, effective resource utilization etc.

SCOPE OF STUDY
The study was done during the month of July 2010. The organization selected by me to conduct the study is RELIANCE MUTUAL FUNDS. The report comprises of various suggestions, regarding the proper management of finance, at each & every step of the process that are taking place at the company. Suggestion for improving the overall efficiency of the plant, by improving use of finance has been provided.

RESEARCH METHODOLGY
The project involved the following methodology:

Observing the process flow at various touch points

Interacting with operations personnel of all verticals to understand the process flow and address their concerns

To track the leads follow up procedures and understand LMS (Lead Management Service)

Telephonic conversations with various potential investors to gain insights Collection of data through various secondary resources like K-bolt, trade magazines, industrial association magazines and interne

MUTUAL FUND INDUSTRY OVERVIEW

Introduction The significant outcome of the government policy of liberalization in industrial and financial sector has been the development of new financial instruments. The new instruments impart greater competitiveness, flexibility and efficiency to the financial sector. One such instrument has been the growth and development of mutual fund products in Indian capital market. Mutual funds also offer good investment opportunities to the investors. Like all investments, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The investors may seek advice from experts and consultants including agents and distributors of mutual funds schemes while making investment decisions.

WHAT IS A MUTUAL FUND?

Mutual fund is a trust that pools money from a group of investors (sharing common financial goals) and invest the money thus collected into asset classes that match the stated investment objectives of the scheme. Since the stated investment objective of a mutual fund scheme generally forms the basis for an investor's decision to contribute 4

money to the pool, a mutual fund can not deviate from its stated objectives at any point of time. Every Mutual Fund is managed by a fund manager, who using his investment management skills and necessary research works ensures much better return than what an investor can manage on his own. The capital appreciation and other incomes earned from these investments are passed on to the investors (also known as unit holders) in proportion of the number of units they own.

When an investor subscribes for the units of a mutual fund, he becomes part owner of the assets of the fund in the same proportion as his contribution amount put up with the corpus (the total amount of the fund). Mutual Fund investor is also known as a mutual fund shareholder or a unit holder. Any change in the value of the investments made into capital market instruments (such as shares, debentures etc) is reflected in the Net Asset Value (NAV) of the scheme. NAV is defined as the market value of the Mutual Fund scheme's assets net of its liabilities. NAV

of a scheme is calculated by dividing the market value of scheme's assets by the total number of units issued to the investors.

HISTORY OF MUTUAL FUND

1. Mutual Funds - Origin in USA & Popularity As with many other innovative financial products, Mutual Funds, as an attractive investment source started in the USA. In USA, MF is created as an investment company created under the Investment Company Act of 1940 that pools the resources of investors to buy a variety of securities, depending on the fund's stated objectives and management style.

2. Mutual Funds in India Mutual Fund Industry in its true spirit rooted in a free market and oriented towards competitive functioning with the dedicated goal of service to the investors can be said to have settled in India only in 1993. However the industry took its roots much earlier with the setting up of the Unit Trust of India (UTI) in 1964 by the Government of India.

During the last 36 years, UTI has grown to be a dominant player in the industry with assets of over Rs. 40, 070Crores as of May 31st, 2007. The UTI is governed by a special legislation, the Unit Trust of India Act, 1963. In 1987 public sector banks and insurance companies were permitted to set up mutual funds and accordingly since 1987, 6 public sector banks have set up mutual funds. Also the two Insurance companies LIC and GIC established mutual funds. Securities Exchange Board of India (SEBI) formulated the Mutual Fund (Regulation) 1993, which for the first time established a comprehensive regulatory framework for the mutual fund industry.

3. Growth of Mutual Fund Business in India The mutual fund industry can be broadly put into four phases according to the development of the sector. Each phase is briefly described as under.

First Phase - 1964-87 Unit Trust of India (UTI) was established on 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The first scheme launched by UTI was Unit Scheme 1964.

Second Phase - 1987-1993 (Entry of Public Sector Funds) Entry of non-UTI mutual funds- SBI Mutual Fund was the first followed by Can bank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). , LIC in 1989 and GIC in 1990. The end of 1993 marked Rs.47, 004 as assets under management.

.Third Phase - 1993-2003 (Entry of Private Sector Funds) With the entry of private sector funds in 1993, a new era started in the Indian mutual fund industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in which the first Mutual Fund Regulations came into being, under which all mutual funds, except UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with Franklin Templeton) was the first private sector mutual fund registered in July 1993. The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual Fund) Regulations 1996. The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India and also the industry has witnessed several mergers and acquisitions. As at the end of January 2003, there were 33 mutual funds with total assets of Rs. 1, 21,805 crores.

Fourth Phase - since February 2003 This phase had bitter experience for UTI. It was bifurcated into two separate entities. One is the Specified Undertaking of the Unit Trust of India with AUM of Rs.29, 835 crores (as on January 2003). The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed by Government of India and does not come under the purview of the Mutual Fund Regulations. The second is the UTI Mutual Fund Ltd, sponsored by SBI, PNB, BOB and LIC. It is registered with SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile UTI which had in March 2000 more than Rs.76, 000 crores of AUM and with the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with recent mergers taking place among different private sector funds, the mutual fund industry has entered its current phase of consolidation and growth.

As at the end of May, 2007, there were 36 funds, which manage assets of Rs. 4, 14, 171 Lakhs under 421 schemes.

GROWTH IN ASSETS UNDER MANAGEMENT

Note: Erstwhile UTI was bifurcated into UTI Mutual Fund and the Specified Undertaking of the Unit Trust of India effective from February 2003. The Assets under management of the Specified Undertaking of the Unit Trust of India has therefore been excluded from the total assets of the industry as a whole from February 2003 onwards.

ADVANTAGES OF INVESTING IN A MUTUAL FUND

Professional Management: The investor avails of the services of experienced and skilled professionals who are backed by a dedicated investment research team which 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 unnecessary 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.

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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-ended schemes, you can get your money back promptly at net asset value related prices from the Mutual Fund itself. With close-ended schemes, you can sell your units on a stock exchange at the prevailing market price or avail of the facility of direct repurchase at NAV related prices which some close-ended and interval schemes offer you periodically. 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. 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.

DISADVANTAGES OF MUTUAL FUNDS

No Guarantees:

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No investment is risk free. If the entire stock market declines in value, the value of mutual fund shares will go down as well, no matter how balanced the portfolio. Investors encounter fewer risks when they invest in mutual funds than when they buy and sell stocks on their own. However, anyone who invests through a mutual fund runs the risk of losing money. Fees and commissions: All funds charge administrative fees to cover their day-to-day expenses. Some funds also charge sales commissions or "loads" to compensate brokers, financial consultants, or financial planners. Even if you don't use a broker or other financial adviser, you will pay a sales commission if you buy shares in a Load Fund. Taxes: During a typical year, most actively managed mutual funds sell anywhere from 20 to 70 percent of the securities in their portfolios. If your fund makes a profit on its sales, you will pay taxes on the income you receive, even if you reinvest the money you made. Management risk: When you invest in a mutual fund, you depend on the fund's manager to make the right decisions regarding the fund's portfolio. If the manager does not perform as well as you had hoped, you might not make as much money on your investment as you expected. Of course, if you invest in Index Funds, you forego management risk, because these funds do not employ managers.

Role of SEBI in mutual funds industry

The objectives of SEBI are to protect the interest of investors in securities and to promote the development of and to regulate the securities market. As far as mutual funds are concerned, SEBI formulates policies and regulates the mutual funds to protect the interest of the investors. SEBI notified regulations for the mutual funds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter the 12

capital market. The regulations were fully revised in 1996 and have been amended thereafter from time to time. SEBI has also issued guidelines to the mutual funds from time to time to protect the interests of investors. All mutual funds whether promoted by public sector or private sector entities including those promoted by foreign entities are governed by the same set of Regulations. There is no distinction in regulatory requirements for these mutual funds and all are subject to monitoring and inspections by SEBI. It may be mentioned here that Unit Trust of India (UTI) is not registered with SEBI as a mutual fund (as on January 15, 2002).

ORGANIZATION STRUCTURE OF MUTUAL FUND

There are four constituents of a mutual fund in India, The sponsor, The board of Trustees or Trustee Company, The asset management company and The custodian

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A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset Management Company (AMC) and custodian. The trust is established by a sponsor or more than one sponsor who is like promoter of a company. The sponsor is the Settler of the Trust which holds Trust property on behalf of investors who are the beneficiaries of the Trust. The sponsor is also required to contribute at least 40% of the capital of the asset management company which is formed for managing the assets of the Trust. The trustees of the mutual fund hold its property for the benefit of the unit holders. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of SEBI Regulations by the mutual fund. SEBI Regulations require that at least two thirds of the directors of trustee company or board of trustees must be independent i.e. they should not be associated with the sponsors. Also, 50% of the directors of AMC must be independent. All mutual funds are required to be registered with SEBI before they launch any scheme. However, Unit Trust of India (UTI) is not registered with SEBI (as on January 15, 2002).

TYPES OF MUTUAL FUND SCHEMES

By Structure Open - Ended Schemes Close - Ended Schemes Interval Schemes

By Investment Objective

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Growth Schemes Income Schemes Balanced Schemes Money Market Schemes

Other Schemes Tax Saving Schemes Special Schemes Index Schemes Sector Specific Schemes

Schemes according to Maturity Period: A mutual fund scheme can be classified into open-ended scheme or close-ended scheme depending on its maturity period. Open-ended Fund/ Scheme: An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity. Close-ended Fund/ Scheme: A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. 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 the units are

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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 i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Schemes according to Investment Objective: A scheme can also be classified as growth scheme, income scheme, or balanced scheme considering its investment objective. Such schemes may be open-ended or close-ended schemes as described earlier. Such schemes may be classified mainly as follows: Growth / Equity Oriented Scheme: 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 at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time. Income / Debt Oriented Scheme: 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, corporate 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. 16

Balanced Fund: The aim of balanced funds is to provide both growth and regular income as such schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds. Money Market or Liquid Fund: These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and interbank call money, government securities, etc. Returns on these schemes fluctuate much less compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods. Gilt Fund These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as is the case with income or debt oriented schemes. Index Funds: Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known as tracking error in technical terms. Necessary disclosures in this regard are made in the offer document of the mutual fund scheme. There are also exchange traded index funds launched by the mutual funds which are traded on the stock exchanges.

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Sector specific funds/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. They may also seek advice of an expert. Offshore Funds: These funds invest in equities in one or more foreign countries thereby achieving diversification across the countrys borders. However they also have additional riskssuch as the foreign exchange rate risk- and their performance depends on the economic conditions of the countries they invest in. Commodity Funds: Commodity funds specialize in investing in different commodities directly or through shares of commodity companies or through commodity futures contracts. Specialized funds may invest in a single commodity or a commodity group such as edible oils or grains, while diversified commodity funds will spread their assets over many commodities. Tax Saving Schemes: These schemes offer tax rebates to the investors under specific provisions of the Income Tax Act, 1961 as the Government offers tax incentives for investment in specified avenues. E.g. Equity Linked Savings Schemes (ELSS). Pension schemes launched by the mutual funds also offer tax benefits. These schemes are growth oriented and invest predominantly in equities. Their growth opportunities and risks associated are like any equity-oriented scheme. Tax Exempt and Non- Tax Exempt Funds:

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Generally, when a fund invests in tax- exempt securities, it is called tax exempt fund. In India, after 1999 Union Government Budget, all of the dividend income received from any of the mutual funds is tax free in the hands of all investors. However, funds other than Equity Funds have to pay a distribution tax, before distributing income to investors. In other words, equity mutual fund schemes are tax exempt investment avenues, while other funds are taxable for distributable income. While Indian mutual funds currently offer tax free income, short term capital gains arising out of the sale of fund units are taxable.

RISK HIERARCHY OF MUTUAL FUNDS

RISK

LEVEL

MONEY MARKE T FUNDS

GILT FUNDS

DEBT FUNDS

HYBRID FUNDS

EQUITY FUNDS

AGGRESSIVE GROWTH FLEXIBLE ASSET GROWTH FUNDS HIGH YIELD DEBT

GILT FUNDS MONEY MARKET FUNDS

DIVERSIFIED FUNDS

BALANCED FUNDS

GROWTH AND INCOME FUNDS

DIVERSIFIED EQUITY FUNDS EQUITY INCOME FUNDS INDEX FUNDS VALUE FUNDS

FOCUSED DEBT

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TYPE OF FUND

CURRENT SCENARIO OF MUTUAL FUNDS IN INDIA

Penetration of Mutual Funds Mutual funds are an important vehicle for retail investors in several countries. Despite a significant growth in the number of schemes and assets under management of mutual funds in India in recent years, their level of penetration remains limited in comparison with other countries. This is reflected in the small size of assets managed by them (amounting to less than 5 per cent of GDP as against 70 per cent in the US, 61 per cent in France and 37 per cent in Brazil) and small share of household savings in units of mutual funds. Resource mobilization by mutual funds through equity-oriented schemes, in particular, has remained small, notwithstanding some increase during past two years. There is, therefore, need to enhance mutual fund penetration in the country to attract a larger share of household savings in financial assets.

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Resource Mobilization by Mutual Funds

(Rupees crore) Mutual Fund 2005-06 Net Mobilization @ 1 2 Net Assets 3 2006-07 Net Mobilization @ 4 Net Assets 5

Private Sector Public Sector UTI Total

42,977

1,81,515

79,038

2,62,079

6,379

20,829

7,621

28,725

3,424 52,780

29,519 2,31,862

7,326 93,985

35,488 3,26,292

@: Net of redemptions. Source: Securities and Exchange Board of India.

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REVIEW OF LITERATURE

An Approach to Workflow Modeling and Analysis

To understand workflow analysis, first you must understand the idea of a system. A system is anything that has interacting, interrelated or interdependent parts. Different kinds of systems might include: Human systems -Physiological systems -- like the nervous system, the endocrine system or the skeletal system Communication systems -- phone (telecommunication) systems and the postal (mail) system Channels -- the interstate highway system, Computer systems -- like desktop systems, network systems, or software applications Workflow is the process, progress, or "flow" of work within a system and the rate at which that happens. Workflow analysis refers to observing how this process takes place. The analysis also involves evaluating the process and improving it for efficiency and effectiveness. In the case of software and web based applications, we look at how people engage in and complete a process -- a purchase, for example. There are many systems we can analyze when it comes to your web site. Here are some of the most common processes: Planning your web site

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Creating your web site Redesigning your web site Updating your web site Using your web site Buying a product Searching for and sorting records Adding, editing and deleting records Moving paper-based data between people Moving electronic data between people Working with others who can help you do any of the above

Things to consider:
Do some tasks (like data entry) need to be done twice? Are there "hiccups" in any processes -- any places where you always seem to get hung up? Many organizations design workflow early in their lifetimes but don't remember to reevaluate their processes as the organization evolves. New resources often get plugged into a process without a thorough understanding of how they might work best.

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WHAT IS INVOLVED IN WORKFLOW ANALYSIS

Making a new system easy for everyone involved requires an understanding of: What is happening now What problems occur with the existing process What has been done to try to overcome the problems in the past What new ideas have been considered This knowledge is then applied to creating an application.

To perform workflow analysis:

1. I meet with the project director and the stakeholders -- the participants in the process. 2. Participants describe the workflow from his or her perspective while I record their responses on a whiteboard as a diagram 3. Everyone can see and comment on the results as I draw and label the diagram 4. I make alterations to the diagram as necessary 5. Once the group has reached agreement, I take the results and prepare a flow chart. 6. The project director and I analyze the flow chart to identify how the process can be improved, streamlined or redesigned. I prepare a revised flow chart, and from it, a prototype.

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.Workflow refers to automation of business processes, in whole or part, during which documents, information or tasks are passed from one participant to another for action, according to a set of procedural rules . . A workflow management system (WFMS) is a software package that is used to define, create and manage the execution of workflows. While designing a workflow, one describes which tasks have to be done and in what order. So process approach is given more importance. Hence it is important that a good modeling language is used to design a Workflow.

Step-by-step Workflow Analysis

Define the process The trick here is to get the level of analysis right. I think we should be aiming at quite a high level of analysis. The following is derived from Repurposing Guidelines. The RELIANCE suggests three levels; process, sub processes, tasks. In our case theseTranslate as follows Process: Repurpose i.e. build a new learning object based on materials extracted from Collections Sub processes: Identify learning object to be developed Identify available materials Storyboard Develop learning object Review and QA learning object Process: Reuse i.e. adapt and change a learning object developed by the Repurposing

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process to adapt it for a new delivery context Sub processes: Identify and obtain object Define changes required Edit object Review and QA learning object (the same sub process as in repurposing?) Process: Deposit in JORUM i.e upload a completed learning object into the national repository Sub processes: QA learning object Upload QA the upload has been successful A fourth process can be identified; delivery. However do not believe we are committed to a workflow analysis of this process in this project. These subprocesses are all quite large and involve many different tasks (especially Develop and Edit). The division also assumes a fairly linear process where the object progresses through the various subprocesses and implies that it changes hands from subprocess to subprocess. This model works well for the sorts of situations in the InfoKit, but may not be appropriate in our situation. A draft Process Document is included. The intention is to document each process and subprocess. It should be completed at the same time as Stakeholder Analysis and Process Decomposition.

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Stakeholder Analysis The stakeholders might seem pretty obvious, but it is worthwhile getting it filled in formally by each stakeholder (or representative) and for each process. The Info Kit includes this as part of a project management approach, i.e. these are the people who have to be managed throughout the process-change project. We need a different type of stakeholder analysis. The template attempts to capture who is involved in the processes and sub processes, what their roles are, and what they need to perform the tasks. The aim is to get a complete picture of who is involved in the process and I think it is important to look at this quite broadly. The Info Kit suggests identifying people by their influence on the process. Strategic - Determining the strategy which this system underpins Managerial - Executes managerial control over elements of the system being Implemented Operational - Is involved in operating the system or parts of it. Direct Influence - Is directly affected by outputs of the system but is not engaged in inputting to it. Indirect Influence - Is only indirectly affected by the system if at all. In our project we may want to expand the list, for example Operational could be Sub divided into technical and pedagogical. The Stakeholder Analysis template should be completed in consultation (or by) the Stake holders involved. With Strategic and Indirect influence groups, this level of Engagement is not necessary). A draft template is included as an example of what could be completed both now, before the workflow restructuring and after the workflows have been adapted in response to project. Assuming, that is, that there is a change in the processes.

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Process Decomposition This stage should be carried out by (or in consultation with) those identified as operational. The aim is to identify the Tasks required. In many cases the same Task will be repeated many times during the subprocess. However, at this stage in the analysis we need the complete list of discrete tasks. The list should be the shortest possible that still accurate captures what has to be done. While it is possible to subdivide tasks into ever smaller units, this should be avoided. In general, a task begins when a person receives the learning object to work on and ends when they pass it on to someone else or, recognising that the same person may do it all, when a different skillset is required. Ideally we should be able to agree on a comprehensive set of tasks (and definitions) for our analyses so we can make comparisons. The best way to achieve this consensus would be undertake the analysis locally and then compare results. A draft template is included. The Process Document and Tasks are used to perform the analysis in the next phase of the process.

Analysis The advice on analysis in the Info Kit concentrates on developing visual representations of the processes. The most powerful in our situation would appear to be the flowchart, especially enhanced with swim lanes . This combines information from the stakeholder analysis with the process and task There are 2 ways we can use this flowchart to analyse the processes

Creating a Model/Archetypal Process The aim here is to capture an abstract model of what we would expect to happen in a typical or ideal development. The principal question to answer is whether or not there is one model or rather a distinct set of models (or sub-models). The different models might be for different types of learning object, i.e. levels of multimedia/interactivity. 29

There may be different processes for different development approaches, i.e. eLearning Objects or RELOAD/Dreamweaver. It may be different for different subject specialists (experienced, ignorant, etc.). However we may find that the differences are more in terms of iterations and the length of various subprocesses rather than significantly different processes. The process is to use the information collected locally to produce an institution specific model. We can then agree a common set of archetypes.

Costing model The InfoKit has some suggestions on costing that can be adapted. Having flowcharted the model development process we will be in a position to attach cost estimates to each instance of a task in the model. Working at the archetypal model\ level, these costs will be best estimates based on the staff time and other resources consumed by the task. One way forward would be to express the cost as a typical range.

RAEW Analysis Another analytical approach suggested in Responsibility, Authority, ERAEW Analysis Another analytical approach suggested in Responsibility, Authority, Expertise and Work Analysis . In the relatively organic and unstructured environment that developments currently take place this approach may not be very relevant, however it may be useful to point out areas of weakness in the process. The approach is to analyse each task in the whole process sequence and identify which of the stakeholders have Responsibility, Authority or Expertise or who do the Work. The aim is to identify tasks where a stakeholder is in a bad situation i.e. authority with no responsibility, responsibility with no authority. A draft RAEW analysis template is included.

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PROCESS RE-ENGINEERING
The preceding stages in the workflow analysis are all to establish the benchmark state but could also be pre repeated at the end of a change process to establish what the changes have achieved. The Process Re-engineering stage is where the required changes are identified. The InfoKit has little to offer on this stage, pointing instead to the expertise of those undertaking the analysis. From a COLOSSUS perspective, this is the crux of the workflow analysis part of the project. The Process Re-engineering phase has to come after the benchmarking study. I would recommend that it is undertaken at an institutional level as not all models will work for everyone. However we should coordinate what happens to ensure that the models being implemented fit into the same broad structure the documentation generated contributes to the overall project analysis The Process Reengineering Phase is similar to the analysis phase, however it works in the opposite direction; identifying what should happen rather than what is happening. For completeness and comparability it would be good to have the complete documentation for the proposed new processes Flowchart with swim lanes RAEW chart Task analysis Process document

The Process Re-engineering should be in consultation with the stakeholders, especially as these are likely to remain the same as in the original processes. Through this consultation we should be able to achieve buy-in and support from those affected by the changes to the process. The timing of this Process Re-engineering phase should be indicated clearly in the project plan.

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Implementation This phase of the workflow analysis process involves the use of the re-engineered process to perform the same sort of work as had been done under the old process. The danger in the COLOSSUS project is that the introduction of the re-engineered process coincides with a change in the nature of the work being done. However, it is likely that the changes will largely be superficial from the workflow analysis perspective.

Evaluation and Testing This aspect of the workflow analysis will be written into Evaluation Plan. Some of the same techniques can be used to analyze the re-engineered process, in particular the Costing and RAEW analyses. However the main feature of the evaluation will be in terms of Quality Assurance, the quality of the product produced, and the speed with which product can be produced. A stakeholder analysis to capture attitudes to the reengineered process would also be valuable.

Summary The proposed Workflow Analysis approach should provide the information we require to meet the objectives of the COLOSSUS Project and should do so without a significant increase in effort. The initial analysis phases (up to the re-engineering phase) can be completed on the basis of interviews and focus groups with those involved in the current process. Additional data collection would be valuable and Would supplement this analysis. The re-engineering phase will be largely the product of discussion and analysis, and our best guess on what would work. It will also be a Good opportunity to build in a more formal structure, better documentation etc. Implementation should be more straightforward than in many projects because the Project participants are largely in charge of content development and are well placed to influence and control what happens.

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The following flowchart describes the proposed Workflow Analysis approach

33

THE COMPANY PROFILE

RELAINCE CAPITAL ASSET MANAGEMENT LIMITED

Reliance Capital Asset Management Limited (RCAM), a company registered under the Companies Act, 1956 was appointed to act as the Investment Manager of Reliance Mutual Fund. Reliance Mutual Fund schemes are managed by Reliance Capital Asset Management Ltd., a wholly owned subsidiary of Reliance Capital Ltd., the sponsor.

Reliance Mutual Fund (RMF) is one of Indias leading Mutual Funds, with Assets Under Management (AUM) of Rs. 59,143 crore (AUM as on 30th May, 07) and an investor base of over 3.1 million. Reliance Mutual Fund, a part of the Reliance - Anil Dhirubhai Ambani Group, is one of the fastest growing mutual funds in the country. RMF offers investors a well-rounded portfolio of products to meet varying investor requirements and has presence in 115 cities across the country.

Reliance Capital Ltd. is one of Indias leading and fastest growing private sector financial services companies, and ranks among the top 3 private sector financial services and banking companies, in terms of net worth. Reliance Capital Ltd. has interests in asset management, life and general insurance, private equity and proprietary investments, stock broking and other financial services.

34

RMF, has also been accorded ISO 9001:2000 certificate, making it the second AMC in the country to get this quality standard, covering all functional areas

COMPANY PROFILE
AMC Mutual Fund Setup Date Incorporation Date Sponsor Trustee Chairman CEO CIO AUM Reliance Asset Management. Ltd. Reliance Capital Mutual Fund Jun-30-1995 Feb-24-1995 Reliance Capital Limited Reliance Capital Trustee Co. Ltd. Mr. Anand Jain Mr. Amitabh Chaturvedi Mr. K Rajagopal Rs. 59143.48 crore As on May-31-2007

CORPORATE VISION & MISSION

VISION
35

A world class, diversified and transnational organization for sustainable development of hydro power and water resources with strong environment conscience

MISSION
To achieve international standards of excellence in all aspects of hydro power and diversified business. To execute and operate projects in a cost effective, environment friendly and socio-economically responsive manner. To foster competent trained and multi-disciplinary human capital. To continually develop state-of-the-art technologies thru innovative R&D and adopt best practices. To adopt the best practices of corporate governance and institutionalize value based management for a strong corporate identity. To maximize creation of wealth through generation of internal funds and effective management of resources.

Products of RMF
Equity/ Growth Schemes-The aim of growth funds is to provide capital appreciation over the medium to long- term. 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 at a later date. Growth schemes are good for investors having a longterm outlook seeking appreciation over a period of time.

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1. Reliance Equity Fund: (An open-ended diversified Equity Scheme.) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity & equity related securities of top 100 companies by market capitalization & of companies which are available in the derivatives segment from time to time and the secondary objective is to generate consistent returns by investing in debt and money market securities. 2. Reliance Tax Saver (ELSS) Fund : (An Open-ended Equity Linked Savings Scheme.) The primary objective of the scheme is to generate long-term capital appreciation from a portfolio that is invested predominantly in equity and equity related instruments.

3. Reliance Equity Opportunities Fund : (An Open-Ended Diversified Equity Scheme.) The primary investment objective of the scheme is to seek to generate capital appreciation & provide long-term growth opportunities by investing in a portfolio constituted of equity securities & equity related securities and the secondary objective is to generate consistent returns by investing in debt and money market securities.

4. Reliance Vision Fund : (An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach.

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5. Reliance Growth Fund : (An Open-ended Equity Growth Scheme.) The primary investment objective of the Scheme is to achieve long term growth of capital by investment in equity and equity related securities through a research based investment approach.

6.

Reliance Index Fund : (An Open Ended Index Linked Scheme.) The Investment Objective under the Nifty Plan is to replicate the composition of the Nifty, with a view to endeavor to generate returns, which could approximately be the same as that of Nifty. The Investment Objective under the Sensex plan is to replicate the composition of the Sensex, with a view to endeavor to generate returns, which could approximately be the same as that of Sensex.

7. Reliance NRI Equity Fund: (An open-ended Diversified Equity Scheme.) The Primary investment objective of the scheme is to generate optimal returns by investing in equity or equity related instruments primarily drawn from the Companies in the BSE 200 Index.

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, corporate 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.

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Reliance Monthly Income Plan : (An Open Ended Fund. Monthly Income is not assured & is subject to the availability of distributable surplus ) The Primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unitholders and the secondary objective is growth of capital.Primarily the investment shall be made in debt and money market securities (i.e. 80%) with a small exposure (i.e. upto 20%) in equity.

Reliance Gilt Securities Fund - Short Term Gilt Plan & Long Term Gilt Plan : Open-ended Government Securities Scheme) The primary objective of the Scheme is to generate Optimal credit risk-free returns by investing in a portfolio of securities issued and guaranteed by the central Government and State Government

Reliance Income Fund : (An Open-ended Income Scheme) The primary objective of the scheme is to generate optimal returns consistent with moderate levels of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in Debt & Money Instruments.

Reliance Medium Term Fund : (An Open End Income Scheme with no assured returns.) The primary investment objective of the Scheme is to generate regular income in order to make regular dividend payments to unitholders and the secondary objective is growth of capital.

Reliance Short Term Fund : (An Open End Income Scheme) The primary investment objective of the scheme is to generate stable returns for investors with a short investment horizon by investing in Fixed Income Securities of short term maturity.

39

Reliance Liquid Fund : (Open-ended Liquid Scheme). The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.

Reliance Fixed Term Scheme : (Close-ended Income Scheme) The primary objective of the Scheme is to seek to achieve regular returns / growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the plan with the objective of limiting interest rate volatility.

Reliance Floating Rate Fund : (An Open End Income Scheme) The primary objective of the scheme is to generate regular income through investment in a portfolio comprising substantially of Floating Rate Debt Securities (including floating rate securitised debt and Money Market Instruments and Fixed Rate Debt Instruments swapped for floating rate returns).

Reliance NRI Income Fund : (An Open-ended Income scheme) The primary investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risks. This income may be complimented by capital appreciation of the portfolio. Accordingly, investments shall predominantly be made in debt Instruments.

Reliance Fixed Maturity Fund - Series I : (A Close Ended Income Scheme) 40

The primary investment objective of the Scheme is to seek to achieve regular returns / growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the Plan with the objective of limiting interest rate volatility.

Reliance Fixed Maturity Fund - Series II : (A closed ended Income Scheme) The primary investment objective of the Scheme is to seek to achieve growth of capital by investing in a portfolio of fixed income securities normally maturing in line with the time profile of the respective plans.

Reliance Liquidity Fund : (An Open - ended Liquid Scheme) The investment objective of the Scheme is to generate optimal returns consistent with moderate levels of risk and high liquidity. Accordingly, investments shall predominantly be made in Debt and Money Market Instruments.

Reliance Regular Savings Fund : (An Open - ended scheme) The Investment Objectives :

Debt Option : The primary investment objective of this plan is to generate optimal returns consistent with moderate level of risk. This income may be complemented by capital appreciation of the portfolio. Accordingly investments shall predominantly be made in Debt & Money Market Instruments. Equity Option : The primary investment objective is to seek capital appreciation and or consistent returns by actively investing in equity / equity related securities. Hybrid Option : The primary investment objective is to generate consistent return by investing a major portion in debt & money market securities and a small portion in equity & equity related instruments. 41

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. They may also seek advice of an expert

Reliance Banking Fund Reliance Mutual Fund has an Open-Ended Banking Sector Scheme which has the primary investment objective to generate continuous returns by actively investing in equity / equity related or fixed income securities of banks.

Reliance Diversified Power Sector Fund Reliance Diversified Power Sector Scheme is an Open-ended Power Sector Scheme. The primary investment objective of the Scheme is to seek to generate consistent returns by actively investing in equity / equity related or fixed income securities of Power and other associated companies.

Reliance Pharma Fund Reliance Pharma Fund is an Open-ended Pharma Sector Scheme. The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of Pharma and other associated companies.

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Reliance Media & Entertainment Fund Reliance Media & Entertainment Fund is an Open-ended Media & Entertainment sector scheme. The The primary investment objective of the Scheme is to generate consistent returns by investing in equity / equity related or fixed income securities of media & entertainment and other associated companies.

Phase I- Operations Work Flow Analysis

To commence our project, the first objective was to get familiar with the mutual fund industry as a whole as well as understand various products and schemes of Reliance Capital. This part was covered in chapter- 3 and chapter-4 of our report. After this we divided our project in two phases as mentioned in our project overview. The first phase involved, Work Flow Analysis of Operations at RMF. To start with, we first observed the employee structure at the office, which was as follow. This was important to know the responsibility and accountability of every employee at RMF

ORGANIZATIONAL STRUCTURE

ZONAL HEAD

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BRANCH HEAD

RETAIL CHANNEL HEAD

BANKING CHANNEL HEAD

PORTFOLIO MANAGEMENT SERVICES

CORPORATE CHANNEL HEAD

ALTERNATE SEGMENT HEAD RELATIONSHIP MANAGERS RELATIONSHIP MANAGER

OPERATIONS HEAD

RELATIONSHIP MANAGER

RELATIONSHIP MANAGER

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Area operations manager

BOEs

Associate Centre Managers

The above two diagrams depict the organisation as well as operations in particulars structure at RMF.

The various processes in operations can be categorized as follows: 1. Application acceptance process commercial transaction 2. Time stamping process 3. Systematic transfer plan 4. Systematic investment plan 5. Return of undelivered documents 6. Non commercial transaction 7. Addressing employees concern 8. QRC process 45

9. LMS- Lead Management System As a part of our assignment we studied the various processes by observations, by taking feedback from the operations staff, referring to manuals, databases etc. On the basis of this we shifted the focus on areas which required attention, where there was a delay in the system or where duplications could be avoided. All this formed the basis of our suggestions and observations. The various processes involved are as discussed below:

Commercial Transactions: Application Acceptance Process

Purpose To ensure all commercial transactions are received and processed at the branches and dispatched to R&T ops Hyderabad with the pre-defined time period. Scope The scope is to ensure that the commercial transactions are processed on time and accurately without causing inconvenience to the investors. The scope should also ensure that there is minimum error and right things are done in the first place. Request forms The investor is required to fill the standard format Free letters will not be accepted. The request has to come only through the hard copy channel. No changes will be done through Email. Additional documents to be obtained from the investors. Branches need to check the following documents while accepting the form for request of purchase transactions:

Proof oLocal cheque

46

Payable at par cheque A demand draft payable locally

Any one document

Photocopy of pan card in case of transaction above INR 50000/Proof of address f identity

Checklist/control document The branches will also be provided with a detailed application completeness and verification checklist containing the details of the fields that need to be checked while accepting application form from the investor Discrepancy letter to the investors Redemptions rejection reasons Switch rejections reasons Branch checklist for commercial transactions

Scheme under liquid fund The following schemes are to be considered as liquid schemes for purchases and redemptions of funds under reliance mutual fund. Reliance liquid fund Reliance liquidity fund Reliance floating rate fund

47

Schemes under Non-liquid Fund All schemes except liquid schemes are Non-liquid for purchases and redemptions of funds in reliance mutual fund

NAV applicable Liquid schemes: all commercial transactions received and accepted for the transaction day time will be eligible for previous days NAV (T-1) and the NAV in liquid schemes will basically depend upon the utilization of funds and not on receipt of application. Non-liquid schemes: all commercial transactions received and accepted for the transaction day will be eligible for currents day NAV for all the Non liquid schemes will be based on time stamping of the application. Sub processes Purchases Redemptions Switches

Responsibility The responsibility is multiple and is defined at various stages of the process 1. Applications acceptantes process Commercial Transaction

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Receipt of application Application Processing at branches

1. Outputs: data entered for further processing 2. Customer measure: TAT (appls . to dispatch <=1 day (100%)

PURCHASES

Activity

Responsibility

Receipt of applications Executive (BOE) Receipt of application from investors

Branch Operation

Completeness of forms

The official receiving the form that the form is complete in all

has

to ensure

BOE

respects as per

ACVC (application completeness and verification 49

Checklists)

Rejections Reject incomplete application upfront

BOE

Time stamping

BOE

Time stamp the application that is complete in all respect and supported by the requisite supporting documents

Data capture

BOE

Enter the relevant data in K- Bolt (Karvy Branch online transaction module)

Separation of cheque and supporting documents

BOE

This is done after mentioning the Folio no. / Appln. no. / Bank details of the form on the cheque and

50

supporting document

High value cheque deposit

BOE

Deposit high value cheque received for the day In the local HDFC bank within the cut-off time

Deposit of transfer cheque

BOE

Deposit all transfer cheque received for the day in the respective banks within cutoff time

Scanning

BOE

Scan the inward forms and deposit slip using standard software

Control sheet generation

BOE

Generate control sheet for the applications scanned for dispatch to back office

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Generation of DTR

BOE

Generate DTR from the system at the end of the day

Dispatch to R&T ops Hyderabad

BOE

Dispatch DTR to R&T ops Hyderabad and a copy to the banking team at Mumbai corporate office. Dispatch physical application to R&T ops Hyd after attaching the supporting documents with the respective forms and control sheet.

Generation and dispatch of Excel sheet Prepare an excel sheet of all applications received before the cutoff time during the day and send it to local Karvy office for further processing

BOE

Tracking Karvy local

Local Karvy official

52

after entering all the applications will send the branch wise DTR to R&T ops Hyderabad with copy to local Reliance office.

Reconciliation Cross check karvy DTR with excel sheet prepared by RCAM in order to ensure no transaction is missed out.

BOE

Unit allocation Unit allocation will happen after cheque clearing

BOE

Service Level Agreement

Liquid scheme Application received before 12:00 noon will be eligible for previous days NAV Application received after 12:00 noon will be eligible for currents days NAV (for high value cutoff time is 10.00 am)

NON- Liquid scheme Applications received before 3:00 pm will be eligible for currents days NAV Applications received after 3:00 pm will be eligible for next days NAV 53

High value cheque for subscription should be deposited in the bank by 10:30am/ within high value cutoff timings ( whichever is earlier)

Transfer cheque for subscription should be deposited in the bank by 1:00 pm /within transfer cheque cutoff timings (whichever is earlier)

All subscription applications received should be entered into k- Bolt , scanned and sent to R&T ops Hyderabad before 3:00 pm

All redemptions applications received should be entered into K bolt , scanned and sent to R&T ops Hyderabad before 5:00 pm

Discrepancy in DTR should be reported to the local karvy office within T+1 days

TIME STAMPING PROCESS

Purpose: Time stamping of the application received based on the time of receipt of application and the cutoff time for the different schemes. Scope: The scope is to ensure that the commercial transaction received during the day are time stamped after due verification of the application form as per ACVC in order to avoid rejections from the back office. Observations: There were three time machines at reliance office at barakhamba road. They all differed in their timing by one minute. As per ISO requirement the machine should follow the IST as any difference could lead to losses or inconvenience to investors, distributors. We brought this to the notice of operations head and it was taken care of.

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STP- Systematic Transfer Plan

Product feature It is a facility wherein unit holders of designated open-ended schemes of Reliance mutual fund can opt to transfer a fixed amount or capital appreciation amount (variable amount) at regular intervals to another designated open-ended scheme of Reliance mutual fund. Purpose To ensure the systematic transfer plan requests are processed as per pre-defined TATs . Scope The scope is to ensure that the systematic transfer plan processing is done with the least inconvenience to the investor. The scope should also ensure that there is minimal error and right things are done in the first place. STP rejection reasons Option not mentioned whether fixed STP/ capital STP Amount not mentioned in fixed STP Frequency not mentioned Transferor/ transferee scheme not mentioned Enrolment period not mentioned Folio number not mentioned Source scheme plan is daily dividend plan Application form without investor signature

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SIP- Systematic Investment Plan

Product feature Systematic investment plan (SIP) is a tool to achieve long-term goals by investing a fixed amount periodically. Purpose To ensure that the systematic investment plan requests are processed as per the predefined TATs. Scope The scope is to ensure that the systematic investment plan processing is done with the least convenience to the investor. The scope should also ensure tat there is a minimal error and right things are done in the first place.

SIP rejection reasons Application not satisfying minimum amount criteria should be rejected upfront All the post dated cheque should be for the same amount. Incase of discrepancy in amounts, application should be rejected upfront. The unit holder should duly sign all PDCs. No alteration without Authorization is allowed. Application not accompanied by minimum number of cheque (4/6/12 cheque as the case may be) should be rejected upfront.

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Return of undelivered documents

Purpose: To handle the undelivered documents which were dispatched through various modes i.e. courier / postal authorities and to ensure that the documents should reach I the investor Scope The scope is to ensure that the undelivered documents are resent to investor after investigating the reason of return. Sub processes Return of ATM card

Observations: R&T ops official, Mumbai dispatch an excel sheet containing the details of all the returned ATM cards on weekly basis to all the branches. The BOE then forwards it to the branch relationship managers. The relationship manager / sales in charge job are to then procure the correct mailing address. This is generally done by calling the concerned person and then confirming his address. The whole process takes more than 15 days and investors login complaint regarding this frequently. Suggestion: To fasten the all process tracking should be done on daily basis or at a gap of one day. Address Database should be updated on a regular basis. Many investors change their mailing address, all of which is not captured by the database.

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 Return of dividend warrant

Observations R&T ops official, Mumbai dispatch an excel sheet containing the details of all the dividend warrants on weekly basis to all the branches. This primarily happens because dividend warrant is printed at a centralized location. The BOE then forwards it to the branch relationship managers. The relationship manager / sales in charge job are to then procure the correct mailing address. This is generally done by calling the concerned person and then confirming his address. The whole process takes more than 15 days and investors login complaint regarding this frequently. Suggestions The process time could be reduced significantly and investor concern could be addressed more promptly byDispatching of details should be done on daily basis or at a gap of one day. In case of return the dividend warrant could be sent back to karvy branch in respective city/town. Tracking of cheque will take less time and will help address investors concern faster.

Return of redemption warrants/ indemnity bonds

Observations R&T ops official, Hyderabad dispatch an excel sheet containing the details of all the redemption warrants/ indemnity bonds on weekly basis to all the branches. This primarily happens because redemption warrant is printed at a centralized location. The BOE then forwards it to the branch relationship managers.

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The relationship manager / sales in charge job are to then procure the correct mailing address. This is generally done by calling the concerned person and then confirming his address. The whole process takes more than 15 days and investors login complaint regarding this frequently. Suggestions The process time could be reduced significantly and investor concern could be addressed more promptly byDispatching of details should be done on daily basis or at a gap of one day. In case of return the redemption warrant could be sent back to karvy branch in respective city/town. Tracking of warrants will take less time and will help address investors concern faster.

Non commercial transactions

Non commercial transaction deals with transactions seeking change of address, details, nominations etc. All the NCT transactions undergo the same process of verification at branches, updating of query / request in NCT. This is followed by sending the scanned and hard copy. Suggestions The whole processes can be speeded if transaction like change of address after verification at the branches and entries made in NCT are sent directly by branches to R&T official, Mumbai. The sending of physical documents can be done away with where it is not required. Segregation of activities requiring documents and otherwise should be done at branch itself.

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Addressing employees concerns

Hr issues are controlled and dealt from the Mumbai office. This many a time is not sufficient and few activities go unnoticed. Employees do not get a proper channel to vent out their feelings or ideas. Someone should be appointed to look after the HR practices in the branch, do all appointment/ firing related work. Moreover, planning in terms of recruitment and project/ vertical allocation can be done beforehand, in coordination with the Mumbai hr team.

Lead management services

Reliance known for its innovation has launched the lead management services in 2007 for generation of leads. This involves the following steps:

Sending information, updates, details etc targeting prospective investors through various channels like mobiles, electronics media, and print media. This necessarily contains contact numbers for further information and SMS number for further details.

Details of persons calling on the given numbers or messaging on the number are noted in the database

They are followed by call centre executives, and if they are interested in any fund, based upon their location and category, they are assigned to various verticals.

Relationship managers in various verticals assign the leads to various distributors. Details of distributors closing on a particular lead is expected to be entered in the LMS database,

60

Suggestions After analyzing the leads closed in the last two months, it was evident that around 40% of the leads were not followed by distributors. (This is based on the telephonic conversations we had with persons entered in the database) The primary reason for not valuing these leads is that distributors doubt at times the authenticity of leads. We recommend that a proper categorization of distributors be done for each area, so that only active distributors are assigned any leads. Moreover, the moment lead is generated the relationship manager is supposed to enter the time of appointment in the database and is supposed to close it within 3 days. Both these requirements cannot be made all the time. This leads to uncalled closures.

QUERY, REQUEST AND COMPLAINT MECHANISM

Objective: To log and resolve the QRC as per stipulated TAT timeliness and in line with customer needs. Scope: All written QRC Investor /E- mail/ Distributor / Walk in

61

1. Receipt of Investor QRC/Email/Telephone/Walk-in 2. In warding of letters 3. QRC response to customer & closure.

The various modes of QRC are as follows: Over phone Through Email Walking into the branch

After observing the quantum and frequency of QRCs from various touch points, we have submitted the following suggestions To address the QRC from Walking investors, there should be an L-shaped divider at the front office which will check proper entry and exit. While exiting the investor can collect their concerned documents like statement of accounts. There should be a proper instruction and markups for various processes. Relocation of Rashmis place- To address distributors concerns, she has to shuffle in between back and front office 20-25 times a day (on an average).

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The concerned person can be at the front office and small window opening will facilitate coordination with other staffs in the office.

Phase II- Work Flow Analysis of Sales

The second phase of the project involved observing and studying the work flow of sales team of all the verticals at RMF. This phase was for two weeks i.e. from 10th Jun, 07- 23rd Jun, 07. The various verticals at RMF are: Banking Vertical Alternate Channel Corporate Vertical SME segment Retail Vertical Corporate Salary Advantage

Based upon our interaction with various officials, staff, and sales executives, we have submitted the following observations/ suggestions: Voice based training module: There should be a proper training module designed for sales executives or associates or for new entrant into the system. To meet this end, we have suggested a voice based training module for corporate salary and retail vertical.

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Code generation form: There is no HTML formatted code generation form. Every time the concerned person has to fill the hard copy of the form, get it scanned, and then mail to karvy Hyderabad. We recommend a HTML formatted form, to ease the process, and save time. A template for the same has been designed by us and a copy of the same has been provided in the annexure. Separate code for corporate salary: There is no separate code for corporate salary advantage. This makes it difficult to track its rejection entries in DTR Multiple Folios: Sales executives to meet their target number of logins, many a times break the investment under one fund into multiple logins in the same name. we recommended checking this practice as this unnecessarily puts a load on the system because of multiple folios of the same investor.

MAJOR OBSERVATIONS AND RECOMMENDATIONS

1. Operations Dividend warrants rejection process- All rejected dividend warrants are sent back to Karvy Hyderabad. We recommend that these should be sent back to Karvy branch in respective city/town. Tracking of cheque will take less time and will help address investors concern faster Code generation form- There is no HTML formatted code generation form. Every time the concerned person has to fill the hard copy of the form, get it scanned, and then mail to karvy Hyderabad. We recommend a HTML formatted form, to ease the process, and save time

64

Separate code for corporate salary- There is no separate code for corporate salary advantage. This makes it difficult to track its rejection entries in DTR

Check revalidation & indemnity warrants- Indemnity bonds/ cheque revalidation: These can be sent directly to Karvy Hyderabad, rather than being routed through Karvy Delhi. This will fasten the process

Punching machine timings should be matched. There is a difference of one and two minutes in the three machines

2. LMS- we observed that many leads get wasted due to no response from distributors who are given those leads. We recommend a proper categorization of distributors in each area, so that only active distributors are assigned any leads. 3. Distributors / Bankers should have clear information about the concerned person to contact for any information. Often calls for account statements are given to RMs; instead every RM should inform the distributors / bankers regarding the concerned persons no. They should also be informed about online facility

4. Voice based training module for banks IFAs, retail, and corporate salary advantage scheme. 5. Need for HR personnel- Some one should be appointed to look after the HR practices in the branch. Moreover, planning in terms of recruitment and project/vertical allocation can be done beforehand, in coordination with Mumbai HR dept. 6. Ms. Geetima, from research team, can be allocated the system in corporate teams room. This is because, she sits next to corporate salary advantage team, and regular DSTs interaction probably doesnt facilitate well with her work

7. L-shaped stopper in front office- An L-shaped separator for the front desk could ensure proper Entry and Exit. Investors while leaving can collect statements, if any 65

8. Relocation of place- To address distributors concerns, the lady handling (Rashmi) retail distributors as well as distributors empanelment has to shuffle in between back and front office 20-25 times a day (on an average). The concerned person can be at the front office and small window opening will facilitate coordination with other staffs in the office.

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DATA ANALYSIS AND INTERPRETATION

PRIMARY DATA COLLECTION

All responses to my questionnaire (as per Appendix "A" & "B" enclosed) were obtained through personal contacts using database of our company or visiting brokers where I met these investors. The details of proposed & actual composition are given below:Particulars Proposed composition Actual composition Questionnaire Investors Brokers/Sub-broker Total 20 5 25 25 10 35

Structured Interview
The detail of proposed & actual composition of the interviews (as per Appendix 'C' & 'D' enclosed) conducted is given below:Particulars Proposed composition Actual Composition Interview Investors Brokers/Sub-broker Total 5 5 10 6 6 12

SUMMARY OF RESPONSES FROM INVESTORS

Q.No A1 I.Q.1 14 % 56 A2 5 % 20 A3 2 % 8 A4 1 % 4 A5 1 % 4 A6 2 % Total % 8 25 100

67

I.Q.2 I.Q.3 I.Q.4 I.Q.5 I.Q.6 I.Q.7 I.Q.8 I.Q.9

11 0 5 5 13 17 1 5

44 36 20 20 52 68 4 20 4 60 28 28 20 36 20 72

12 3 14 11 3 3 6 13 4 5 2 1 4 7 4 5

48 12 56 44 12 12 24 52 16 20 8 4 16 28 16 20

2 10 4 9 3 2 13 3 20 2 1 2 1 4 1 2

8 40 16 36 12 8 52 12 80 8 4 8 4 16 4 8

1 2 6 3 5 4 2 15 15 15 5 15 -

4 8 24 12 20 16 8 60 60 60 20 60 -

2 1 -

8 4 -

25 25 25 25 25 25 25 25 25 25 25 25 25 25 25 25

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

I.Q.10 1 I.Q.11 15 I.Q.12 7 I.Q.13 7 I.Q.14 5 I.Q.15 9 I.Q.16 5 I.Q.17 18

SUMMARY OF RESPONSE FROM BROKERS/SUB-BROKERS

Q.No B.Q.1 B.Q.2 B.Q.3 B.Q.4 A1 1 1 % 10 10 A2 8 6 2 % 80 60 20 A3 1 2 6 % 10 20 60 A4 1 2 % 10 20 A5 10 % 100 Total % 10 10 10 10 100 100 100 100

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B.Q.5 B.Q.6 B.Q.7 B.Q.8 B.Q.9

3 4 4 4 4

30 40 40 40 40 30

1 6 2 3 4 2

10 60 20 30 40 20

2 2 2 2 5

20 20 20 20 50

2 2 1 --

20 20 10 -

2 10 -

20 100 -

10 10 10 10 10 10 10

100 100 100 100 100 100 100

B.Q.10 B.Q.11 3

INVESTORS DATA COLLECTION - PERSONAL PARTICULARS

Q.No Particulars Group <18 >18 & < = 30 >30 & <= 53 >53 & <=65 > 65 Respondent 2 13 6 4 %age 0% 8% 52% 24% 16%

I.P.P.1 Age of Investors (Years)

Total

25

100

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Age of investor

16%

0%

8% <18 >18 & < = 30 >30 & <= 53

24% 52%

>53 & <=65 > 65

INTERPRETATION Out of 25 respondent to my questionnaire 8% (2 Nos) are from the age group of 18 to 30 years; 52% (13 Nos) are from the age group of 30 to 53 years; 24 (6 Nos) are from the age group of 53 to 65 years; 16% (4 Nos) are from age of more than 65 years

Q.No

Particulars

Group

Respondent

%age

I.P.P.2

Income Range 1 (Rs per month) of the investors.

<5000 >5000 & <10000 >10000 & <20000 >20000 & < 50000 >50000 & < 100000 > 100000

1 4 3 6 11 25 4 16 12 24 44 100

Total

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Income range of investor

4% 44%

16% >5000 & <10000 >10000 & <20000 >20000 & < 50000 12% 24% >50000 & < 100000 > 100000

INTERPRETATION Out of 25 respondents to my questionnaire 4% (1No) are from income below 10000; 16% (4 Nos) are from income group of 10,000 and 20,000; 24% (6 Nos) are from income group of 50,000 and 100,000; 44% (11 Nos) are having income of more than 1,00,000

Q.No

Particulars

Group

Respondent

%age

I.P.P.3

Education of Investor

Under-graduate Graduate Post-graduate

2 10 13 25

8 40 52 100

Total

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Education of investors

Under-graduate 8% Under-graduate Post-graduate 52% Graduate 40% Graduate Post-graduate

INTERPRETATION Out of 25 respondents 8% (2 Nos) are of them are under-graduate; 40% (10 Nos) are of them are graduate; 52% (13 Nos) are of them are post-graduate.

INVESTORS DATA COLLECTION - MAIN QUESTIONNAIRE Q. How did you come to know about the portfolio?
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Q.No

Particulars

Group

Respondent

%age

I.Q.3

How did you come to know about the portfolio management schemes?

Advertisement in Newspapers Advertisement in Magazines Friends & acquaintance Direct Mail Others

36

12

10 1 2 25

40 4 8 100

total
Source of knowledge

Others 8% Direct Mail 4% Friends & acquaintance 40%

Advertisement in Newspapers 36%

Advertisement in Newspapers Advertisement in Magazines Friends & acquaintance Direct Mail

Advertisement in Magazines 12%

Others

INTERPRETATION Out of 25 respondents 36% (9 Nos) of them come to know about the PMS through advertisement in newspapers; 12% (3 Nos) of them come to know about the PMS through

Q. What percentage of resources you invest in shares/debenture/FDs?

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Q.No

Particulars

Group

Respondent

%age

I.Q.4

What percentage of resources you invest in shares/debenture/FDs

0 to 25% 25 to 50% 50% to 75% More than 75%

5 14 4 2

20 56 16 8

Investment in shares/debentures/fd's

More than 75% 8% 50% to 75% 16%

0 to 25% 20%

0 to 25% 25 to 50% 50% to 75% More than 75%

25 to 50% 56%

INTERPRETATION People love to be safe which reflect in this analysis that is 76% (19 Nos of them invest less than 50% of resources in shares/Debentures/FDs). So 20% (5 Nos) invest less than 25% resources in shares/Deb/FDs; 56% (4 Nos) of them between 25 to 50% of resources in shares/Deb/FDs; 16% (4 Nos) of them invest between 50 to 75%; whereas only 8% (2 Nos) invest more than 75% of resources in shares/Deb/FDs.

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Q. What is the extent of risk in investment?

Q.No Particulars Group Respondent I.Q.5 Indicate the extent of risk in investment that are you willing to take? Total Low Medium High 5 11 9 25 20 44 36 100 %age

Risk in investment

High 36%

Low 20% Low Medium High

Medium 44%

INTERPRETATION Out of 25 respondent 20% (5 Nos) opt for low risk; 44% (11 Nos) prefer medium risk; 36% (9 Nos) indulge in speculative/ high risk securities. (Ref.Graph No. E.I.Q.5)

Q. How comfortable are you investing in the stock market?

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Q.No

Particulars

Group

Respondent

%age

I.Q.6

How comfortable are you investing in the stock market?

Very Comfortable Somewhat comfortable Not very comfortable Very uncomfortable

13 3 3 6 25

52 12 12 24 100

Total

Comfort level of investor in stock market

Very uncomfortable 24% Not very comfortable 12% Somewhat comfortable 12% Very Comfortable 52%

Very Comfortable Somewhat comfortable Not very comfortable Very uncomfortable

INTERPRETATION From the ample of Investors interviewed 52% (13Nos) are very comfortable in investing in stock market; 125 (3 Nos) are somewhat comfortable; 125 (3 Nos ) are not very comfortable ; 24% (6 Nos) are not at all comfortable. 76

Q. What is the percentage of return per annum that you expect on your Investment in portfolio management services?
Q.No Particulars Group Respondent I.Q.8 What is the percentage of return per annum that you expect on your Investment in portfolio management services? Total 0 to 25% 25 to 50% 50% to 75% More than 75% 1 6 13 5 25 4 24 52 20 100 %age

Return on investment

Respo-ndent, 20%

Respo-ndent, 4% Respo-ndent, 24% 0 to 25% 25 to 50% 50% to 75% More than 75%

Respo-ndent, 52%

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INTERPRETATION Every one wants good return in their investment which is reflected on the outcome in the questionnaire. 4% (1 No) is looking at below 25 %; whereas 52% (13 Nos) desire returns Between 50 to 75%; 20% (5 Nos) also desire return above 75 %.

Q. Since how long have been investing in the stock markets?

Q.No Particulars Group Respondent I.Q.9 Since how long have been Less than 2 years 1 4 20 25 4 16 80 100 %age

investing in the stock markets? 2 to 5 years More than 5 years Total

Investment period
Respo-ndent, Less than 2 years, 4% Respo-ndent, 2 to 5 years, 16% Respo-ndent, More than 5 years, 80% Less than 2 years 2 to 5 years More than 5 years

INTERPRETATION

78

All the respondents had been investing in the stock markets, 80% (20 Nos) of them for more than 5 years; 16% (4Nos) between 2 to 5 years; 4% (1 No) have been investing for than less a year

Q. What are you paying as commission to portfolio service providers?

Q.No Particulars Group Respondent I.Q.11 What are you paying as commission to portfolio service providers? 0 - 5% 5 to 10% 10 - 20% Not applicable Total 7 2 1 15 25 28 8 4 60 100 %age

79

Commission paid to service providers of portfolio schemes

0 - 5% 28%

0 - 5% 5 to 10% 10 - 20% Not applicable

Not applicable 60%

5 to 10% 8% 10 - 20% 4%

INTERPRETATION Commission is a tricky area, Charges are up to 20 to 28% (7Nos) are paying commission up to 5% (70% of those investing in PMS); 8% (2 Nos ) are paying between 5 to 10% ( 20% of those investing in PMS); 4% ( 1Nos) paying commission between 10 to 20 % (10% of those investing in PMS); 40% Of the persons interviewed are only investing in

Q. Are/were you satisfied with the return from the PMS?

Q.No Particulars Group Respondent I.Q.12 Are/were you satisfied with the return from the PMS? Satisfied Not Satisfied 7 1 28 4 %age

80

Can't Say Not applicable Total

2 15 25

8 60 100

satisfaction with return from PMS

Satisfied, 7, 28% Not Satisfied, 1, 4% Can't Say, 2, 8%

Satisfied Not Satisfied Can't Say Not applicable

Not applicable, 15, 60%

INTERPRETATION 28% ( 7 Nos ) are satisfied about the returns from PMS (70% of those investing in PMS); 4% (1 No) are Not satisfied (10% of those investing in PMS); 8% (2 Nos) where not clear about it (20% of those investing in PMS); 40% of the persons interviewed are only investing in PMS

Q. What are the reasons in investing in portfolio?

81

Q.No

Particulars

Group

Respondent

%age

I.Q.14

What do you think are the most important reasons for people to invest in a portfolio management services? Total

Capital gains Steady income Safety Liquidity

9 7 4 5 25

36 28 16 20 100

Important reasons for invest in portfolio management

Liquidity, 5, 20% Safety, 4, 16%

Capital gains, 9, 36%

Capital gains Steady income Safety Liquidity

Steady income, 7, 28%

INTERPRETATION As far as the important reasons for people to invest in a PMS, the responses were capital gains - 36% (9 Nos); steady income - 28% (7 Nos); safety - 16% (4 Nos); liquidity - 20%

CONCLUSION

Portfolio management as a concept is catching up in India, but there are segments who are still not aware of it. Some investors have burnt their fingers on more than one

82

occasion because professional. Investment help was not available with more and more companies taping the capital market, the investor is still ill equipped to handle the complexities of stock trading while mutual funds also amount to professional help in investing portfolio services are highly customised and personalized to suit each individuals set of priorities and needs. All transactions are done in the individuals name by the portfolio manager under a power of attorney. A portfolio manager does not guarantee run away profits as profits would be generally proportionate to the risk that is undertaken. Todays investor by and large has three major choice one has the choice of the mutual funds, two he can play on the primary market if he can assess it and three he has, be shrewd enough know the secondary market information imparted to investors helps them to shuffle their choice of portfolios. If an investor has the time and ability to analyse his own portfolio, he does do. He is prepared to take the risk or else he approached somebody. In India this realisation will come once existing schemes have published their results. The existing players have not reported. Their performance as this aspect is done. A reasonable corpus to manage a portfolio has to make PMS attractive but the PMS has to create and strengthen a good research and analytical division. It will still take some time before Indian portfolio managers are able to offer schemes graded or risk like in the international markets.

LEARNING AND EXPERIENCES

1. We got an insight about the work culture of corporate

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2. We learnt to wait for the concerned person to guide us in our project and to extract information 3. We learnt that, crying babies get milk. You have to make an effort to get your work done 4. We learnt the importance of operations in a financial service sector, and how critical even a small process can be 5. We understood that to remain on top, the company needs to be on the pedestal of continuous improvement

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