reliance gold exchange traded fund-10

8/3/2019 Reliance Gold Exchange Traded Fund-10

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Reliance Gld ExchangeTraded Fund(An Open ended Gold Exchange Traded Fund Scheme)

Scheme Infrmatin Dcument

The particulars o the Scheme have been prepared in accordance with the

Securities and Exchange Board o India (Mutual Funds) Regulations 1996,

(herein ater reerred to as SEBI (MF) Regulations) as amended till date, and

fled with SEBI, along with a Due Diligence Certifcate rom the AMC. The units

being oered or public subscription have not been approved or recommended by

SEBI nor has SEBI certifed the accuracy or adequacy o the Scheme Inormation

Document.

The Scheme Information Document sets forth concisely the information about

the scheme that a prospective investor ought to know before investing. Before

investing, investors should also ascertain about any further changes to this Scheme

Information Document after the date of this Document from the Mutual Fund /

Investor Service Centres /Website / Distributors or Brokers.

The investors are advised to reer to the Statement o Additional Inormation

(SAI) or details o Reliance Mutual Fund, Tax and Legal issues and general

inormation on www.reliancemutual.com

SAI is incorporated by reerence (is legally a part o the Scheme Inormation

Document). For a ree copy o the current SAI, please contact your nearest

Investor Service Centre or log on to our website wwwreliancemutual.com.

The Scheme Inormation Document should be read in conjunction with the SAI

and not in isolation.

This Scheme Information Document is dated September 29, 2010.

NAME OF MUTUAL FUND

Reliance Mutual Fund

11th oor & 12th oor, One Indiabulls Centre, Tower 1

Jupiter Mills Compound, 841, Senapati Bapat Marg,Elphinstone Road, Mumbai - 400 013

Tel No. - 022-30994600

Fax No. - 022-30994699

NAME OF SPONSOR COMPANY

Reliance Capital Limited

Registered Ofce:

H Block, 1st Floor, Dhirubhai Ambani Knowledge City,

Koparkhairne, Navi Mumbai - 400 710.

Tel. 022 - 30327000, Fax. 022 - 30327202

Website : www.reliancecapital.co.in

NAME OF ASSET MANAGEMENT COMPANY

Reliance Capital Asset Management LimitedCorporate Ofce:


Jupiter Mills Compound, 841, Senapati Bapat Marg,

Elphinstone Road, Mumbai - 400 013

Tel No. - 022-30994600

Fax No. - 022-30994699

NAME OF TRUSTEE COMPANY

Reliance Capital Trustee Co. Limited

Corporate Ofce:


Jupiter Mills Compound, 841, Senapati Bapat Marg,

Elphinstone Road, Mumbai - 400 013Tel No. - 022-30994600

Fax No. - 022-30994699

Cntinuus ffer f the Units fr cash at NAV based prices(subject t applicable lad)


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TABLE oF CoNTENTS

HIGHLIGHTS/SUMMARY oF THE SCHEME ...........................................................................................................................................1

I. INTRoDUCTIoN ..........................................................................................................................................................................2

A. RISK FACTORS ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ ............. 2

B. REQUIREMENT OF MINIMUM INVESTORS IN THE SCHEME ................ ............... ................ ............... ................ ............... ................ ............. 4

C. SPECIAL CONSIDERATIONS .............. ................ ............... ................ ............... ................ ............... ................ ............... ................ ............... ........4

D. DEFINITIONS & ABBREVIATIONS ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ ............. 9

E. DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY ............... ................ ............... ................ ............... ................ ............... ............. 11

II. INFoRMATIoN ABoUT THE SCHEME .........................................................................................................................................12

Reliance Gld Exchange Traded Fund ...........................................................................................................................................12

A. TYPE OF THE SCHEME .............. ................ ............... ................ ............... ................ ............... ................ ............... ................ ............... ............. 12

B. WHAT IS THE INVESTMENT OBJECTIVE OF THE SCHEME? .......................................................................................................................... 12

C. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? ............... ............... ................ ............... ................ ............... ................ ............... ............. 12

D. WHERE WILL THE SCHEME INVEST? .............. ............... ................ ............... ................ ............... ................ ............... ................ ............... ..... 12

E. WHAT ARE THE INVESTMENT STRATEGIES? ............... ............... ................ ............... ................ ............... ................ ............... ................ ....... 12

F. FUNDAMENTAL ATTRIBUTES ............... ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ .. 15

G. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? ................ ............... ................ ............... ................ ............... ................ ....... 17

H. WHO MANAGES THE SCHEME? .............. ............... ................ ............... ................ ............... ................ ............... ................ ............... ............. 17

I. WHAT ARE THE INVESTMENT RESTRICTIONS? ............... ............... ................ ............... ................ ............... ................ ............... ................ .. 17

J. HOW HAS THE SCHEME PERFORMED? .............. ............... ................ ............... ................ ............... ................ ............... ................ ............... 19

III. UNITS AND oFFER .....................................................................................................................................................................20

A. NEW FUND OFFER (NFO) ............... ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ ....... 20

B. ONGOING OFFER DETAILS .............. ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ ....... 22

C. PERIODIC DISCLOSURES .............. ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ .......... 30

D. COMPUTATION OF NAV ............... ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ .......... 31

IV. FEES AND EXPENSES .................................................................................................................................................................32

A. NEW FUND OFFER (NFO) EXPENSES ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ .. 32

B. ANNUAL SCHEME RECURRING EXPENSES .............. ............... ................ ............... ................ ............... ................ ............... ................ .......... 32

C. LOAD STRUCTURE......... ................ ............... ................ ............... ................ ............... ................ ............... ................ ............... ................ .......... 32

D WAIVER OF LOAD FOR DIRECT APPLICATIONS ............... ............... ................ ............... ................ ............... ................ ............... ................ .. 32

V. RIGHTS oF UNITHoLDERS .........................................................................................................................................................33

VI. PENALTIES, PENDING LITIGATIoN oR PRoCEEDINGS, FINDINGS oF INSPECTIoNS oR INVESTIGATIoNS FoR WHICH ACTIoNMAY HAVE BEEN TAKEN oR IS IN THE PRoCESS oF BEING TAKEN BY ANY REGULAToRY AUTHoRITY ..........................................33


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HIGHLIGHTS/SUMMARY OF THE SCHEME

1. InvESTMEnT ObjECTIvE

The investment objective is to seek to provide returns that closely correspond to returns provided by price o gold through investment in physicaGold (and Gold related securities as permitted by Regulators rom time to time). However, the perormance o the scheme may dier rom thato the domestic prices o Gold due to expenses and or other related actors.

However, there can be no assurance that the investment objective o the scheme will be achieved.

2. LIqUIdITY

All investors may sell their units in the stock exchange(s) on which these units are listed on all the trading days o the stock exchange.Alternatively Authorised Participant can directly buy /sell in blocks rom the und in Creation Unit Size.

3. bEnCHMARkAs there are no indices catering to the gold sector/securities linked to Gold, currently Reliance Gold Exchange Traded Fund (RGETF) shall bebenchmarked against the price o Gold.

Purity o Gold: All gold bullion held in the schemes allocated account with the custodian shall be o neness (or purity) o 995 par ts per 1000(99.5%) or higher.

4. TRAnSpAREnCY/nAv dISCLOSURE

a) The NAV will be calculated and disclosed at the close o every working day which shall be published in at least two daily newspapers andalso uploaded on the AMFI website and Reliance Mutual Fund website i.e. www.reliancemutual.com.

b) Publication o Abridged Hal-yearly Unaudited Financial Results in the newspapers or as may be prescribed under the Regulations romtime to time.

c) Communication o Portolio on a hal-yearly basis to the Unit holders directly or through the Publications or as may be prescribed undethe Regulations rom time to time.

d) Despatch o the Annual Reports o the respective Schemes within the stipulated period as required under the Regulations.

5. LOAdSEntry & Exit Load: NIL

There will be no entry/exit load on RGETF bought or sold through the secondary market on the NSE. However, an investor would be payingcost in the orm o a bid and ask spread and brokerage, as charged by his broker or buying / selling RGETF.

As per the Regulations, the redemption price shall not be lower than 93% o NAV and the purchase price shall not be higher than 107% othe NAV and the dierence between the redemption price and purchase price shall not exceed 7% o the purchase price.

In case, there are no quotes on the NSE or ve trading days consecutively, an investor can sell directly to the und with an exit load o 5% oNAV. The payout o such redemptions will be on the respective pay-out day.

6. MInIMUM AppLICATIOn AMOUnT

Purchases directly rom the Mutual Fund would be restricted to Authorised Participants provided the value o units to be purchased is in creationunit size.

7. CHOICE OF InvESTMEnT pLAnS

Dividend Payout Option only

8. REpATRIATIOn

Full Repatriation benets would be available to NRIs and FIIs, subject to applicable conditions/regulations.

9. LISTInG

The units o RGETF is listed on the Capital Market Segment o the National Stock Exchange o India (NSE). The trading will be as per the normasettlement cycle.

The minimum number o units that can be bought or sold through the stock exchange is 1 (one) unit.

The AMC reserves the right to list the units o the Scheme on any other recognized stock exchange.

10. The aatages o RGETF oer irect iestmet i gol :

1. Investors who want a cost eective and convenient way to invest in gold can get instantaneous exposure to a physical asset viz gold.

2. Its units can be traded like a share and thereore it provides the ability to buy and sell them quickly at the ruling market price unlike goldthat can be sold only or a discount and by a cumbersome process.

3. The expenses incurred in buying and selling units and the schemes ongoing expenses will be less than the costs associated with buyingand selling o gold and storing and insuring gold bullion in a traditional gold bullion market.

4. Minimum investment in ETF in secondary markets is one unit representing approximately one gram o gold in the beginning and the weighto gold representing 1 unit keeps reducing to the extent o expenses.

5. Helps investors to diversiy across asset classes.

6. Investors get an opportunity to access to Gold Bars conorming to LBMA Good Delivery status, in a cost eective manner.

RGETF is listed on NSE and/or may be listed on any other stock exchange(s) as may be decided by the Reliance Capital Asset ManagementLtd. in the orm o Gold Exchange Traded Fund tracking the prices o Gold bullion.


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I - InTROdUCTIOn

A. RISk FACTORS

1. STAndARd RISk FACTORS

a) Mutual Funds and securities investments are subject to market risks such as trading volumes, settlement risk, liquidity risk anddeault risk including the possible loss o principal and there is no assurance or guarantee that the objectives o the Scheme will beachieved.

b) As the price / value / interest rates o the securities in which the scheme invests fuctuates, the value o your investment in thescheme may go up or down

c) Past perormance o the Sponsor/AMC/Mutual Fund does not guarantee uture perormance o the scheme.

d) Reliance Gold Exchange Traded Fund is only the name o the Scheme and does not in any manner indicate either the quality o thescheme or its uture prospects and returns.

e) The Sponsor is not responsible or liable or any loss resulting rom the operation o the Scheme beyond their initial contribution oRs.1 lakh towards the setting up o the Mutual Fund and such other accretions and additions to the corpus.

) The present scheme is not a guaranteed or assured return scheme. The Mutual Fund is not guaranteeing or assuring any dividend/bonus. The Mutual Fund is also not assuring that it will make periodical dividend/bonus distributions, though it has every intention odoing so. All dividend/bonus distributions are subject to the availability o distributable surplus o the Scheme.

2. SCHEME SpECIFIC RISk FACTORS

Riss associate with iestig i bos

Investment in Debt is subject to price, credit, and interest rate risk.

The NAV o the Scheme may be aected, inter alia, by changes in the market conditions, interest rates, trading volumes, settlementperiods and transer procedures.

Investing in Bonds and Fixed Income securities are subject to the risk o an Issuers inability to meet principal and interest paymentsobligation (credit risk) and may also be subject to price volatility due to such actors as interest rate sensitivity, market perception othe creditworthiness o the issuer and general market liquidity (market risk).

The timing o transactions in debt obligations, which will oten depend on the timing o the Purchases and Redemptions in theScheme, may result in capital appreciation or depreciation because the value o debt obligations generally varies inversely with theprevailing interest rates.

Iterest Rate Ris

As with all debt securities, changes in interest rates will aect the Schemes Net Asset Value as the prices o securities generallyincrease as interest rates decline and generally decrease as interest rates rise. Prices o longer-term securities generally fuctuate morein response to interest rate changes than do shorter-term securities. Interest rate movements in the Indian debt markets can bevolatile leading to the possibility o large price movements up or down in debt and money market securities and thereby to possiblylarge movements in the NAV.

Liuiity or Maretaility Ris

This reers to the ease at which a security can be sold at or near its true value. The primary measure o liquidity risk is the spreadbetween the bid price and the oer price quoted by a dealer. Liquidity risk is characteristic o the Indian xed income market.

Creit Ris

Credit risk or deault risk reers to the risk which may arise due to deault on the part o the issuer o the xed income security ( i.e. wilbe unable to make timely principal and interest payments on the security). Because o this risk debentures are sold at a yield spreadabove those oered on Treasury securities, which are sovereign obligations and generally considered to be ree o credit risk. Normallythe value o a xed income security will fuctuate depending upon the actual changes in the perceived level o credit risk as well asthe actual event o deault.

Reiestmet Ris

This risk reers to the interest rate levels at which cash fows received rom the securities in the Scheme or rom maturities in theScheme are reinvested. The additional income rom reinvestment is the interest on interest component. The risk reers to the all inthe rate or reinvestment o interim cashfows.

Riss associate with arious tyes o securities

CREDIT RISK LIQUIDITY RISK PRICE RISK

Listed Depends on credit quality Relatively Low Depends on duration o instrument

Unlisted Depends on credit quality Relatively High Depends on duration o instrument

Secured Relatively low Relatively Low Depends on duration o instrument

Unsecured Relatively high Relatively High Depends on duration o instrument

Rated Relatively low and depends on the rating Relatively Low Depends on duration o instrument

Unrated Relatively high Relatively High Depends on duration o instrument


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Dierent types o securities in which the scheme would invest as given in the Scheme Inormation Document carry dierent levelsand types o risk. Accordingly, the schemes risk may increase or decrease depending upon its investment pattern e.g. corporatebonds, carry a higher level o risk than Government securities. Further even among corporate bonds, bonds which are AAA rated arecomparatively less risky than bonds which are AA rated.

Ris associate with iestig i deriaties

valuatio Ris

The risk in valuing the Debt & Equity derivative products due to inadequate trading data with good volumes. Derivatives with longeduration would have higher risk viz a viz the shorter duration derivatives.

Mar to Maret Ris

The day-to-day potential or an investor to experience losses rom fuctuations in underlying stock prices and derivatives prices.

Systematic Ris

The risk inherent in the capital market is due to macro economic actors like Infation, GDP, Global events.

Liuiity Ris

The risk stemming rom the lack o availability o derivatives products across dierent maturities and with dierent risk appetite.

Imlie volatitly

The estimated volatility o an underlying securitys price and derivatives price.

Iterest Rate Ris

The risk stemming rom the movement o Interest rates in adverse direction. As with all the debt securities, changes in the interestrates will aect the valuation o the portolios.

Couterarty Ris (deault Ris)

Deault risk is the risk that losses will be incurred due to the deault by the counterparty or over the counter derivatives.

System Ris

The risk arising due to ailure o operational processes ollowed by the exchanges and OTC participants or the derivatives trading.

Ris attache with the use o eriaties

As and when the Scheme trades in the derivatives market there are risk actors and issues concerning the use o derivatives thatinvestors should understand. Derivative products are specialized instruments that require investment techniques and risk analysisdierent rom those associated with stocks and bonds. The use o a derivative requires an understanding not only o the underlyinginstrument but o the derivative itsel. Derivatives require the maintenance o adequate controls to monitor the transactions enteredinto, the ability to assess the risk that a derivative adds to the portolio and the ability to orecast price or interest rate movementscorrectly. There is a possibility that a loss may be sustained by the portolio as a result o the ailure o another party (usually reerredto as the counterparty) to comply with the terms o the derivatives contract. Other risks in using derivatives include the risk omispricing or improper valuation o derivatives and the inability o derivatives to correlate perectly with underlying assets, rates andindices.

Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investorExecution o such strategies depends upon the ability o he und manager to identiy such opportunities. Identication and executiono the strategies to be pursued by the und manager involve uncertainty and decision o und manager may not always be protableNo assurance can be given that the und manager will be able to identiy or execute such strategies.

The risks associated with the use o derivatives are dierent rom or possibly greater than, the risks associated with investing directlyin securities and other traditional investments.

Ris Associate with Securitise det

The Scheme may invest in Securitised debt including Pass through Certicates (PTCs). As with any other debt instrument, theollowing risk actors have to be taken into consideration while investing in PTCs:

Creit Ris

Since most o the PTCs are drawn rom a cherry picked pool o underlying assets, the risk o delay / deault due to poor credit qualityis low. Further more most o the PTCs enjoy additional cashfow coverage in terms o subordination by another lower class o PTCs o

in terms o excess cash collateralisation.Liuiity Ris

Since the maturity o the PTCs will be in line with the maturity o the FMP, the risk arsing rom low secondary market liquidity osuch instruments is low.

price Ris / Iterest Rate Ris

The price risk o these instruments shall be in line with the maturity / duration o such instruments. However given the act that theseinstruments will have a maturity prole upto 2 years, the duration risk is relatively less.


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domestic Securitise et

Domestic Securitised debt can have dierent underlying assets and these assets have dierent risk characteristics. These may be asgiven in the ollowing example:

Security 1 -Backed by receivables o personal loans originated by XYZ Bank, Specic Risk Factors: Loss due to deault and/or paymentdelay on Receivables, Premature Termination o Facility Agreements, Limited loss cover, Delinquency and Credit Risk, Limited Liquidityand Price Risk, Originator/Collection Agent Risk, Bankruptcy o the Originator, Co-mingling o unds.

Security2 - Senior Series Pass Through Certicates backed by commercial vehicles and two-wheeler loan and loan receivables romABC Bank Limited

b. REqUIREMEnT OF MInIMUM InvESTORS In THE SCHEME

The Scheme/Plan shall have a minimum o 20 investors and no single investor shall account or more than 25% o the corpus o the Scheme/Plan(s). However, i such limit is breached during the NFO o the Scheme, the Fund will endeavor to ensure that within a period o three monthsor the end o the succeeding calendar quarter rom the close o the NFO o the Scheme, whichever is earlier, the Scheme complies with thesetwo conditions. In case the Scheme / Plan(s) does not have a minimum o 20 investors in the stipulated period, the provisions o Regulation39(2)(c) o the SEBI (MF) Regulations would become applicable automatically without any reerence rom SEBI and accordingly the Scheme/ Plan(s) shall be wound up and the units would be redeemed at applicable NAV.

The two conditions mentioned above shall also be complied within each subsequently calendar quarter thereater, on an average basis, asspecied by SEBI. I there is a breach o the 25% limit by any investor over the quarter, a rebalancing period o one month would be allowedand thereater the investor who is in breach o the rule shall be given 15 days notice to redeem his exposure over the 25 % limit. Failure onthe part o the said investor to redeem his exposure over the 25 % limit within the aoresaid 15 days would lead to automatic redemption bythe Mutual Fund on the applicable Net Asset Value on the 15th day o the notice period. The Fund shall adhere to the requirements prescribedby SEBI rom time to time in this regard.

As per Circular number SEBI/IMD/CIR NO 10/22701/03 dated December 12, 2003, the above guidelines are not applicable or ExchangeTraded Funds. As RGETF is an exchange traded und, same is not applicable.

C. SpECIAL COnSIdERATIOnSMaret Ris

Mutual unds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives o the Schemewill be achieved. The NAV o the Scheme will react to the prices o gold, Gold Related Instruments and stock market movements. The Unitholder could lose money over short periods due to fuctuation in the NAV o the Scheme in response to actors such as economic and politicadevelopments, changes in interest rates and perceived trends in stock prices market movements, and over longer periods during marketdownturns.

Additionally, the prices o gold may be aected by several actors such as global gold supply and demand, investors expectations with respectto the rate o infation, currency exchange rates, interest rates, etc. Crises may motivate large-scale sales o gold, which could decrease thedomestic price o gold.

Some o the ey actors aectig gol rices are:

a) Central banks sale: Central banks across the world hold a part o their reserves in gold. The quantum o their sale in the market is one othe major determinants o gold prices. A higher supply than anticipated would lead to subdued gold prices and vice versa. Central banks

buy gold to augment their existing reserves and to diversiy rom other asset classes. This acts as a support actor or gold prices.b) Producer mining interest: Bringing new mines on-line is a time consuming and at times economically prohibitive process that adds

years onto potential supply increases rom mining production. On the other hand, lower production has a positive eect on gold pricesConversely excessive production capacities would lead to a downward movement in gold prices as the supply goes up.

c) Macro-economic actors: A weakening dollar, high infation, the massive US trade decits all act in avor o gold prices. The global trend orising interest rates also had a positive impact on gold prices. Gold being regarded as a physical asset would lose its luster in a defationaryenvironment as gold is used eectively as an infation hedge.

d) Geo political issues: any uncertainty on the political ront or any war-like situation always acts as a booster to gold prices. The prices startbuilding up war premiums and hence such movements. Stable situations would typically mean stable gold prices.

e) Seasonal demand: Since the demand or Gold in India is closely tied to the production o jewellery pices tend to increase during the timeso year when the demand or jewelry is the greatest, the demand or metals tends to be strong a ew months ahead o these estiveseasons, especially Dussera, Diwali, Akshaya Trithya estival and summer wedding season in in India. Christmas, Mothers Day, ValentinesDay, are also major estive and shopping or Gold.

) Change in duties & levies:The gold held by the Custodian o RGETF may be subject to loss, damage, thet or restriction o access due to natural event or humanactions. The Trustees may not have adequate sources o recovery i its gold is lost, damaged, stolen or destroyed and recovery may belimited, even in the event o raud, to the market value o gold at the time the raud is discovered.

The custodian will maintain adequate insurance or its bullion and custody business. The liability o the Custodian is limited under theagreement between the AMC and the Custodian which establish the Mutual Funds custody arrangements, or the custody agreements.

Maret Traig Riss

Absence o Prior Active Market: Although RGETF units described in this Scheme inormation document are to be listed on the Exchange, therecan be no assurance that an active secondary market will develop or be maintained.


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Lac o Maret Liuiity

Trading in RGETF on the Exchange may be halted because o market conditions or or reasons that in the view o the market authorities or SEBItrading in RGETF is not advisable. In addition, trading in RGETF is subject to trading halts caused by extraordinary market volatility and pursuantto Stock Exchange(s) and SEBI circuit lter rules. There can be no assurance that the requirements o the market necessary to maintainthe listing o RGETF will continue to be met or will remain unchanged. RGETF may suer liquidity risk rom domestic as well as internationalmarket.

Time lag i rocuremet/reemtio o hysical gol

Procurement o gold bars may take upto 1 month in case o adverse shortage o gold bars. It may not be possible to sell gold bar intentionallyand may delay redemption depending on the market conditions.

RGETF may trade at prices other than NAV

RGETF may trade above or below its NAV. The NAV o RGETF will fuctuate with changes in the market value o Schemes holdings. The tradingprices o RGETF will fuctuate in accordance with changes in their NAVs as well as market supply and demand o RGETF. However, given thatRGETF can be created and redeemed only in Creation Units directly with the und, it is expected that large discounts or premiums to the NAVso RGETF may not sustain due to arbitrage possibility available.

Oeratioal Riss

GETF are relatively new product and their value could decrease i unanticipated operational or trading problems arise.

Regulatory Ris

Any changes in trading regulations by the Exchange or SEBI may aect the ability o Authorised Participants arbitrage resulting into widepremium/ discount to NAV. Although RGETF are proposed to be listed on Exchange, the AMC and the Trustees will not be liable or delay inlisting o Units o the Scheme on Exchange / or due to connectivity problems with the depositories due to the occurrence o any event beyondtheir control.

political Riss

Whereas the Indian market was ormerly restrictive, a process o deregulation has been taking place over recent years. This process has involvedremoval o trade barriers and protectionist measures, which could adversely aect the value o investments. It is possible that the uture changesin the Indian political situation, including political, social or economic instability, diplomatic developments and changes in laws and regulationscould have an eect on the value o investments. Expropriation, conscatory taxation or other relevant developments could aect the value oinvestments.

Cometitio Riss

An investment in RGETF may be adversely aected by competition rom other methods o investing in gold. The value o the units relatesdirectly to the value o the gold held by the scheme and fuctuations in the price o gold could adversely aect investment value o the units

The RGETF is designed to mirror as closely as possible the perormance o the price o gold bullion and the value o units directly relate to thevalue o the Gold held by the Scheme less the Schemes liabilities (including accrued but unpaid expenses). Gold prices have been quite volatilehistorically. The price o gold has fuctuated rom a low o $530 to a high o $726 between Jan-06 and Feb- 07 between based on the LondonAM Fix

Seeral actors may aect the rice o gol, icluig:

Globalgoldsuppliesanddemand,whichisinuencedbyfactors suchasforward sellingbygoldproducers, purchasesmadebygoldproducers to unwind gold hedge positions, central bank purchases and sales, and productions and cost levels in major gold producingcountries such as the South Arica, the United States and Australia.

Investorsexpectationswithrespecttotherateofination;

Currencyexchangerates;

Interestrates;

Investmentandtradingactivitiesofhedgefundsandcommodityfunds;and

Globalorregionalpolitical,economicornancialeventsandsituations.

Inaddition,investorsshouldbeawarethatthereisnoassurancethatgoldwillmaintainitslong-termvalueintermsofpurchasingpowein the uture. In the event that the price o gold declines, the value o investment in units is expected to decline proportionately.

Changesinindirecttaxeslikecustomdutiesforimport,salestax,VAToranyotherlevieswillhaveanimpactonthevaluationofgoldand

consequently the NAV o the scheme. Although,theobjectiveoftheFundis toseektoprovidereturnsthatcloselycorrespondto returnsprovidedbypriceofgoldthrough

investment in physical Gold and Gold related securities, the perormance o the scheme may dier rom that o the domestic prices oGold due to expenses and or other related actors

Creit & Iterest Rate Ris

The Fund may also invest in Gold Related Instruments, money market instruments, bonds, securitised debts & other debt securities as permittedunder the Regulations which are subject to price, credit and interest rate risk. Trading volumes and settlement periods and transer proceduresmay restrict liquidity in debt investments.


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Right to Limit Reemtios

The Trustee, in the interest o the Unit holders o the Scheme oered in this Scheme inormation document and keeping in view o theunoreseen circumstances / unusual market conditions, may limit the total number o Units, which can be redeemed on any Working Daydepending on the total Underlying Stock o Gold that can be readily sold in the local market available with the und.

Reemtio Ris

The Unit Holders may note that even though this is an open-ended scheme, the Scheme would ordinarily repurchase Units in Creation Unitsize. Thus unit holdings less than the Creation Unit size can normally only be sold through the secondary market, unless no quotes are availableon the Exchange or 2 trading days consecutively. Further, the price received upon the redemption o RGETF units may be less than the valueo the gold represented by them. The result obtained by subtracting the Funds expenses and liabilities on any day rom the price o the goldowned by the und on that day is the net asset value o the und which, when divided by the number o units outstanding on that date, resultsin the net asset value per unit, or NAV.

Asset Class Ris

The domestic price o gold may vary rom time to time. Further, the returns rom the types o securities in which a Scheme invests may undeperorm returns rom the various general securities markets or dierent asset classes. Dierent types o securities tend to go through cycles oout-perormance and under perormance in comparison o the general securities markets.

passie Iestmets

As RGETF is not actively managed, the underlying investments may be aected by a general decline in the domestic price o gold and otherinstruments invested under the plan. RGETF invests in the Gold & securities mentioned in the asset allocation regardless o their investmentmerit. The AMC does not attempt to take deensive positions in declining markets. Further, the und manager does not make any judgmentabout the investment merit nor shall attempt to apply any economic, nancial or market analysis.

Tracig Error Ris

Tracking error means the variance between daily returns o the underlying benchmark (gold in this case) and the NAV o the scheme or anygiven period. NAV o the Scheme is dependant on valuation o gold. Gold has to be valued as per the ormula provided by SEBI in its circula

no. SEBI/IMD/CIR No. 2/65348/06 dated April 21, 2006. NAV so computed may vary rom the price o Gold in the domestic market.

Factors such as the ees and expenses o the Scheme, cash balance, changes to the Underlying assets and regulatory policies may aect AMCsability to achieve close correlation with the Underlying assets o the scheme. The Schemes returns may thereore deviate rom those o itsUnderlying assets.

Tracking error could be the result o a variety o actors including but not limited to:

Delayinthepurchaseorsaleofgolddueto

Illiquidityofgold,

Delayinrealisationofsaleproceeds,

Creatingalotsizetobuytherequiredamountofgold

Theschememaybuyorsellthegoldatdifferentpointsoftimeduringthetradingsessionatthethenprevailingpriceswhichmaynotcorrespond to its closing prices.

Thepotentialfortradestofail,whichmayresultintheSchemenothavingacquiredgoldatapricenecessarytotrackthebenchmarkprice.

Theholdingofacashpositionandaccruedincomepriortodistributionofincomeandpaymentofaccruedexpenses.

Disinvestmentstomeetredemptions,recurringexpenses,dividendpayoutsetc.

Executionoflargebuy/sellorders

Transactioncost(includingtaxesandinsurancepremium)andrecurringexpenses

RealisationofUnitholdersfundsTheschemewillendeavortominimisethetrackingerrorby

Settingoffofincrementalsubscriptionsagainstredemptions,duringliquiditywindow

Useofgoldrelatedderivativeinstruments,asandwhenallowedbyregulations

Rebalancingoftheportfolio

Given the structure o RGETF, the AMC expects the tracking error to be lower. The AMC will endeavor to keep the tracking error as low as

possible. Under normal circumstances, such tracking errors are not expected to exceed 2% per annum. However this may vary when themarkets are very volatile.

Tax Issues

Repurchase o RGETF by the Fund or sale o RGETF by the investor on the Stock Exchange may attract short or long term capital gain taxdepending upon the holding period o the Units. Moreover, converting RGETF units to Gold may also attract Wealth tax. The tax benetsdescribed in this Scheme inormation document are as available under the present taxation laws and are available subject to relevant conditionsThe inormation given is included only or general purpose and is based on advice received by the AMC regarding the law and practice currentlyin orce in India and the Unit holders should be aware that the relevant scal rules or their interpretation may change. As is the case with anyinvestment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time o an investment or redemptionin the Scheme will endure indenitely. In view o the individual nature o tax consequences, each investor is advised to consult his / her ownproessional tax advisor. Gold is subject to indirect tax not restricted to the ollowing: Sales Tax, Octroi, VAT, Stamp Duty, and Custom Duty.


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The Mutual Fund is not assuring or guaranteeing that it will be able to make regular periodical distributions/distribute bonus units to its Unitholders though it has every intention to manage the portolio so as to make periodical income/bonus distributions to Unit holders. Periodicaldistributions will be dependent on the returns achieved by the Asset Management Company through the active management o the portolioPeriodical distributions may thereore vary rom period to period, based on investment results o the portolio.

Past perormance o the Sponsor/ the AMC/ the Mutual Fund is not indicative o the uture perormance o the Scheme. RGETF is the nameoftheSchemeanddoesnotinanymannerindicateeitherthequalityoftheScheme;itsfutureprospectsorreturns.

All dividend distributions are subject to the availability o distributable surplus in the Scheme. When an investor switches rom this scheme toanother scheme on a uture date, the scheme specic risk actors applicable to such scheme into which he switches, will apply.

Right to Limit Reemtio

The Trustee may, in the general interest o the Unit holders o the Scheme under this Scheme Inormation Document and keeping in view the

unoreseen circumstances / unusual market conditions, limit the total number o Units which may be redeemed on any Business Day to 5%o the total number o Units then issued and outstanding under any Scheme / Plan or such other percentage as the Trustee may determineThe Trustee may, at its sole discretion in response to unoreseen circumstances or unusual market conditions including, but not limited toextreme volatility o the stock, xed income and money markets, extended suspension o trading on the stock exchanges, natural calamitiescommunication breakdowns, internal system breakdowns, strikes, bandhs, riots or other situations where the Trustee in consultation with RCAMconsiders that such suspension is necessary, limit the total number o Units which may be redeemed on any Business Day to 5% o the totanumber o Units then in issue or such higher percentage as the Trustee may determine in any particular case.

Any Units, which by virtue o these limitations are not redeemed on a particular Business Day, will be carried orward or redemption to thenext Business Day, in the order o receipt. Redemptions so carried orward will be priced on the basis o the Redemption Price o the BusinessDay on which redemption is made. Under such circumstances, to the extent multiple redemption requests are received at the same time ona single Business Day, redemptions will be made on pro-rata basis, based on the size o each redemption request, the balance amount beingcarried orward or redemption to the next Business Day(s).

The Custoia

The Trustee has appointed Deutsche Bank, who have been approved by SEBI to act as Custodian or Mutual Funds including gold exchange

traded unds vide registration no. IN/CUS/003, as the Custodian or RGETF.

The registration o the Custodian is still valid and eective. The custodian shall hold the custody and possession o the securities and investmento the Fund and will discharge all the unctions as are ordinarily discharged by a Custodian. It does not have any power or authority to sell ordispose o or deal with the securities/investment held by it on behal o the Fund except as instructed by the AMC. The Trustee reserves theright to change the custodian, i required.

In terms o Custody Agreement in accordance with SEBI Regulations, entered into with Deutsche Bank as amended rom time to time, theCustodian shall, inter alia:

Providepost-tradingandcustodialservicestotheMutualFund;

Keepgold,GoldRelatedInstruments,securitiesandotherinstrumentsbelongingtotheSchemeinsafecustody;

Ensuresmoothinow/outowofgold,GoldRelatedInstruments,securitiesandsuchotherinstrumentsasandwhennecessary,inthebestinterestsoftheUnitholders;

EnsurethatthebenetsduetotheholdingsoftheMutualFundarerecovered;and

Beresponsibleforlossofordamagetothegold,GoldRelatedInstruments,securitiesduetonegligenceonitspartoronthepartofitsapproved agents.

The Custodian will charge the Mutual Fund, portolio ee, transaction ee and out-o-pocket expenses in accordance with the terms o theCustody Agreement and as per any modication made thereo rom time to time.

Role O The Custoia

The Custodian is responsible or saekeeping o the Schemes gold deposited with it by an Authorised Participants in connection with the creationo Baskets. The Custodian is responsible or allocating specic bars o gold bullion to the scheme Allocated Account. The Custodian will providethe AMC with regular reports detailing with identiying the gold bars held in the scheme Allocated Account.

The Custodian may also rom time to time act as Authorized Participants or purchase or sell gold or units or their own account, as agent ortheir customers and or accounts over which they exercise investment discretion.

Custoy O the Schemes Gol

Custody o the gold bullion deposited with and held by the scheme is provided by the custodian at its Vaults in Mumbai and other places. The

custodian, as instructed by the AMC, is authorized to accept, on behal o the AMC, deposits o gold. On the instructions given by the AMCthe custodian allocates gold by selecting bars o gold bullion or deposit to the schemes allocated account.

The AMC and the custodian enter into the custody agreements, which establish the allocated account. The gold deposited with the scheme isheld in the scheme allocated account.

Under the agreement entered into by the AMC and the custodian, the custodian is responsible or the saekeeping o the gold held on behal othe AMC. The custodian is responsible or any loss or damage suered by the scheme as a direct result o any negligence, raud or willul deaultin the perormance o its duties. The custodians liability is limited to the market value o the gold held in the schemes allocated account atthe time such negligence, raud or willul deault is discovered by the custodian, provided that the custodian promptly noties the AMC o itsdiscovery. In the event o a loss caused by the ailure o the custodian to exercise reasonable care, the AMC has the right to seek recovery withrespect to the loss against the custodian in breach.


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Allocate Accouts

An allocated account is an account with a Bank or Custodian, to which individually identied gold bars owned by the account holder are creditedThe gold bars in an allocated gold account are specic to that account and are identied by a list which shows, or each gold bar, the rener,assay or neness, serial number and ne weight. The account holder has ull ownership o the gold bars and, except as instructed by the accountholder, the Bank or Custodian may not trade, lease or lend the bars.

Traser o Gol

At the end o each business day gold is transerred to the schemes allocated account. The custodian allocates specic bars o gold rom its goldstocks, so that allocated gold bars represent the amount o gold credited to the extent such amount is representable by whole bars. The barso gold should be held directly by the Custodian. The custodian updates its records at the end o each business day to identiy the specic barso gold allocated to the scheme. The withdrawal o gold rom the scheme or the purpose o redemption will ollow the same procedure in the

reverse order.descritio O The Custoy Agreemets

Reorts

The custodian provides the AMC with reports or each business day, no later than the ollowing business day, identiying the movements o goldin and out o the schemes allocated account.

The monthly statement contains sucient inormation to identiy each bar o gold held in the scheme allocated account and the custodian osubcustodian having possession o such bar.

Su-Custoias

The custodian may select Subcustodians to perorm any o its duties, including holding gold or it. The sub-custodians selected by the custodianswill have to be inormed by the custodians to the AMC. Any additions or deletion o subcustodians will have to be reported to the AMC on aperiodic basis.

Custodian may, with the prior written consent o AMC, entrust Gold held in the Account to a specied subcustodian that is eligible to act as acustodian o Gold under applicable laws and regulations (a Sub-Custodian) selected by Custodian with due care. The custodian shall remainresponsible in all respects to its client or saekeeping o the gold kept with such other person, including any associated risks. The custodian osecurities shall continue to ulll all duties to the clients relating to the gold so kept with the other person.

Role o Su custoia

SafekeepingandsegregationofgoldbarsbelongingtotheScheme.

Ensuringproperreceipt,safekeeping,accountinganddeliveryofthegoldbarsfromtheplaceofcollectiontosub-custodiansvaultaswelas rom sub-custodians vault to the counterparty as specied and directed by the Custodian.

Providingsecurityforthe goldbarsbelongingto theSchemeandequippingthevaultwithsecurityfeaturesasperbest InternationaStandards and requirements o the Insurer..

Facilitating safe transportationofgoldbarsbelonging tothe scheme, byprovidingarmed security, armouredvans and taking otheprecautions.

Providingallothersupportservicesandfacilitiestoensuresafecustodyofgoldbarsaswellasforuninterruptedoperationofthevaults. TheInsuranceoftheGoldbarswillbetheresponsibilityoftheCustodian.

Aoitmet o su-custoia

DeutscheBankhasappointedasub-custodianaftercarryingoutnecessaryduediligenceofthesub-custodianinlinewithRBIsOutsourcingPolicy and best International Practices.

DeutscheBankmaynotrestrictitselftooperatingthroughasinglesub-custodianbutwillexploreavailingtheservicesofmorethanonesub custodian based on the clients needs.

Loss / damage o physical Gol a Securities

Deutsche Bank will be responsible or loss o / or damage to the physical gold and securities due to raud, bad aith, negligence,willul neglectdeault, or willul deault on its part or on the part o its approved agents.

Locatio & Segregatio o Gol

Gold held or schemes allocated account by the custodian or subcustodians appointed by the custodians is held at the custodians Vaults inMumbai. The custodians books and records will identiy every bar o gold held in the schemes allocated account in its own vault by rener,assay or neness, serial number and gross and ne weight.

The AMC may upon reasonable notice, visit the custodians premises and examine the schemes gold held there and the custodians recordsconcerning the schemes allocated account. The AMCs independent auditors may also visit the custodians premises in connection with theiraudit o the nancial statements o the scheme.

Isurace

The custodian will ensure adequate insurance or its bullion and custody business. The AMC and the sponsor may subject to condentialityrestrictions, review this insurance coverage rom time to time.


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d. dEFInITIOnS And AbbREvIATIOnS

In this Scheme Inormation Document, the ollowing words and expressions shall have the meaning specied below, unless the contextotherwise requires:

Alicale net Asset value(nAv)

Applicable NAV is the Net Asset Value per Unit at the close o the Business Day on which the applicationor purchase or redemption/switch is received at the designated investor service centre and is considered

accepted on that day. An application is considered accepted on that day, subject to it being complete in all

respects and received prior to the cut-o time on that Business Day.

Asset Maagemet Comay(AMC/RCAM)/ IestmetMaager

Reliance Capital Asset Management Limited, the Asset Management Company incorporated under the

Companies Act,1956, and authorized by SEBI to act as the Investment Manager to the Schemes o

Reliance Mutual Fund.

Allotmet price Allotment price is the price at which each unit will be allotted and will be equal to the ace value oRs100/- plus premium equivalent to the dierence between the ace value and price o one gram o goldon the date o allotment.

Alicatio Form Application orm or subscribing to Units o RGETF as specied in this Scheme Inormation Document.

AMFI Association o Mutual Fund in India.

Authorise particiats Member o the National Stock Exchange or any other recognised stock exchange or any other person whois appointed by the AMC to act as Authorised Participant as decided by the AMC.

Collectig ba Branches o Banks or the time being authorized to receive application(s) or units, as mentioned in thisdocument.

Cotiuous Oer Oer o the Units when the scheme becomes open-ended ater the closure o the New Fund Oer.

Custoia Deutsche Bank, NV Mumbai, acting as Custodian to the Scheme, or any other custodian who is appointedby the Trustee.

Crore Ten Million Indian Rupees

Creatio uit Creation unit is the number o units o scheme, which is exchanged against a predened quantity and purityo physical Gold called the Portolio Deposit and a Cash Component. For redemption o units it is vice-versa

i.e. xed number o units o scheme are exchanged or Portolio Deposit and Cash Component.

Creation Unit is a xed number o RGETF, which is exchanged or Portolio Deposit which would consist

o physical Gold o dened purity and quantity and/or Cash Component. The acility o creating/redeeming

units in Creation Unit size will be available with the Authorised Participants (whose names will be available

on the website o the Fund i.e. (www.reliancemutual.com) on the ongoing basis. Each creation unit consistso 1000 units o RGETF and cash component, i any.

CdSL Central Depository Services (India) Ltd.

desigate Iestor SericeCetres (dISC) / Ofcial oito accetace or trasactio)

Any location as may be dened by the Asset Management Company rom time to time, where investors

can tender the request or subscription, redemption or switching o units, etc.

deository Depository means a body corporate as dened in the Depositories Act, 1996 (22 o 1996) and includes

National Securities Depository Ltd (NSDL) and Central Depository Services Ltd (CDSL).Etry Loa Load on subscriptions / switch in.

Exit Loa Load on redemptions / switch out.

ETF Exchange Traded Fund

Exchage The Stock Exchange Limited, Mumbai or The National Stock Exchange o India Limited or any otherexchange where the Units are listed.

Foreig Istitutioal Iestors(FII)

Foreign Institutional Investors, registered with SEBI under the Securities and Exchange Board o India

(Foreign Institutional Investors) Regulations, 1995.

Gol Relate Istrumets Instrument having gold as underlying security, as may be specied by SEBI rom time to time

Iestmet MaagemetAgreemet (IMA)

The Agreement entered into between Reliance Capital Trustee Co. Limited and Reliance Capital Asset

Management Limited by which RCAM has been appointed the Investment Manager or managing the undsraised by RMF under the various Schemes and all amendments thereo.

Lah One hundred thousand

LbMA London Bullion Market Association

Large iestor Large investor means investors who are eligible to invest in the Scheme and who would be creating unitso RGETF in creation unit size by depositing predened quantity and purity o physical gold or cash whichshould be acceptable by the Custodian or such purposes. Further large investor would also mean those

investors who would be redeeming units o RGETF in creation unit size.

However vide addendum dated February 10, 2009, this acility o creation/ redemption o units in Creation

Unit Size shall no longer be available to large investors, which may please be noted.

Loa A charge that may be levied as a percentage o NAV at the time o entry into the scheme or at the timeo exiting rom the scheme.


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Local Cheue A Cheque handled locally and drawn on any bank, which is a member o the bankers clearing house locatedat the place where the application orm is submitted.

Mutual Fu Regulatios(Regulatios)

Securities and Exchange Board o India (Mutual Funds) Regulations as amended rom time to time and suchother Regulations as may be in orce rom time to time to regulate the activities o Mutual Funds.

net Asset value (nAv) Net Asset Value o the Units in each plan o the Scheme is calculated in the manner provided in thisScheme Inormation Document or as may be prescribed by Regulations rom time to time. The NAV will be

computed upto our decimal places.

no-Resiet Iia (nRI) Non-Resident Indian.

nSdL National Securities Depository Ltd

OTC Over the counter.

perso o Iia Origi (pIO) Person o Indian Originpurchase price Purchase Price to the investor o Units o any o the plans computed in the manner indicated in this Scheme

Inormation Document.

portolio deosit These are LBMA Good Delivery physical gold bars imported by Banks authorized by RBI to deal in Goldand other securities. The value o gold and other instruments will be linked to the domestic prices o gold.Portolio Deposit can change rom time to time.

Resere ba o Iia (RbI) Reserve Bank o India, established under the Reserve Bank o India Act, 1934.

Reliace Mutual Fu (RMF)/Mutual Fu/the Fu

Reliance Mutual Fund (ormerly known as Reliance Capital Mutual Fund), a Trust under Indian Trust Act,

1882 and registered with SEBI vide registration number MF/022/95/1 dated June 30, 1995.

Reliace Caital Trustee Co.Limite (RCTC) /Trustee /Trustee Comay

Reliance Capital Trustee Co. Limited, a Company incorporated under the Companies Act, 1956, and

authorized by SEBI and by the Trust Deed to act as the Trustee o RMF.

Reliace Caital Limite (RCL)

/Sosor/Settlor

Reliance Capital Limited

Reemtio price Redemption Price to the investor o Units o any o the plans computed in the manner indicated in thisScheme Inormation Document.

Registrar /kary Karvy Computershare Pvt. Ltd., who have been appointed as the Registrar or any other Registrar who isappointed by RCAM.

Statemet o AitioalIormatio (SAI)

Statement o Additional Inormation, the document issued by Reliance Mutual Fund containing details oReliance Mutual Fund, its constitution, and certain tax, legal and general inormation. SAI is legally a parto the Scheme Inormation Document

Scheme Reliance Gold Exchange Traded Fund (RGETF), An Open - ended Gold Exchange Traded Fund.

Scheme Iormatio documet(SId)

Scheme Inormation Document issued by RMF, oering units o RGETF or Subscription.

Securities a Exchage boaro Iia (SEbI)

Securities and Exchange Board o India (Mutual Funds) Regulations, 1996 as amended rom time to time,including by way o circulars or notications issued by SEBI and the Government o India.

Trust dee The Trust Deed entered into on April 24, 1995 between the Sponsor and the Trustee, and all amendmentsthereo.

Trust Fu The corpus o the Trust, unit capital and all property belonging to and/or vested in the Trustee.

Tracig Error Tracking error means the variance between daily returns o the underlying benchmark (gold in this case) andthe NAV o the scheme or any given period.

Uit The interest o the investors in any o the plans, o the scheme which consists o each Unit representingone undivided share in the assets o the corresponding plan o the scheme.

Uitholer A person who holds Unit(s) under the scheme.

Uitholers Recor Unitholders whose names appear on the unitholders register o the concerned plan/(s) on the date odetermination o Dividend/Bonus, subject to realisation o the cheque.

Uerlyig Stoc / Securities Instruments invested in by the Fund manager, other than gold and Gold Related Instruments, or thescheme, subject to the approval o the Regulator and / or in compliance with the Regulations.

Worig day / busiess day Any day, other than a Saturday or Sunday or any day on which Banks in Mumbai are Closed or commercial

transactions or The Stock Exchange, Mumbai and/or National Stock Exchange are closed or transactions ora day on which banks are open but The Stock Exchange, Mumbai and/or The National Stock Exchange are

closed or transactions or a day on which sale o units is suspended by the AMC / Trustee or a day on which

normal business could not be transacted due to storms, foods, bandhs, strikes or any other calamities, etc,subject to modications by RCAM rom time to time.

Wors a Exressios use i this Scheme Iormatio documet a ot efe shall hae the same meaig as i the Regulatios.


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E. dUE dILIGEnCE bY THE ASSET MAnAGEMEnT COMpAnY

It is cofrme that:

1. The Scheme Inormation Document o Reliance Gold Exchange Traded Fund, orwarded to SEBI, is in accordance with the SEBI (MutuaFunds) Regulations, 1996 and the guidelines and directives issued by SEBI rom time to time.

2. All legal requirements connected with the launching o the Scheme as also the guidelines, instructions etc., issued by the Government andany other competent authority in this behal, have been duly complied with.

3. The disclosures made in the Scheme Inormation Document are true, air and adequate to enable the investors to make a well inormeddecision regarding investment in the proposed Scheme.

4. The intermediaries named in the Scheme Inormation Document and Statement o Additional Inormation are registered with SEBI andtheir registrations are valid, as on date, to the best o our knowledge and belie.

Mumai Mueesh SuSetemer 29, 2010 desigatio: Hea - Legal, Secretarial & Comliace

note: The Due Diligence Certicate as stated above was submitted to the Securities and Exchange Board o India on October 04, 2010.


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II. InFORMATIOn AbOUT THE SCHEME Reliace Gol Exchage Trae Fu

A. TYpE OF THE SCHEME

An Open ended Gold Exchange Traded Fund that tracks the domestic prices o gold through investments in physical Gold.

b. WHAT IS THE InvESTMEnT ObjECTIvE OF THE SCHEME?

The investment objective is to seek to provide returns that closely correspond to returns provided by price o gold through investment in physicaGold (and Gold related securities as permitted by Regulators rom time to time). However, the perormance o the scheme may dier rom thato the domestic prices o Gold due to expenses and or other related actors.

However, there can be no assurance that the investment objective o the scheme will be achieved.

C. HOW WILL THE SCHEME ALLOCATE ITS ASSETS?Under normal circumstances, the anticipated asset allocation would be:

Istrumets Iicatie asset allocatio (% o total assets) Ris profle

Miimum Maximum

Physical Gold or Gold Related Instruments as permitted by regulatorsrom time to time#

90% 100% Medium to High

Money Market instruments, Bonds, Debentures, GovernmentSecurities including T-Bills, Securitised Debt* & other debt securitiesas permitted by regulators rom time to time

0% 10% Low to Medium

# Presently, investment only in physical gold is allowed as per SEBI guidelines. Investment in gold or gold related instruments may be undertakenas and when permitted by SEBI.

*Upto 10% in securitised debt

Use o gold related derivative instruments, as and when allowed by regulationsThe above Asset Allocation Pattern is only indicative. The investment manager in line with the investment objective as may alter the abovepattern or short term and on deensive consideration.

d. WHERE WILL THE SCHEME InvEST?

The Fund will, in general invest a signicant part o its corpus in Physical Gold or Gold Related Instruments as permitted by regulators rom timeto time (as per the asset allocation mentioned above). Presently, investment only in physical gold is allowed as per SEBI guidelines. Investmentin gold or gold related instruments may be undertaken as and when permitted by SEBI. However pending investments, the surplus amount othe Fund shall be invested in securitized debt, other debt securities, bonds and money market instruments as permitted by regulators rom timeto time.

purchase o Gol bars

The Fund will purchase Gold Bars rom the RBI Authorised Banks and Agencies that are Rened at LBMA Registered Reners (Updated list othe Reners can be obtained rom the LBMA Website www.lbma.org.uk).

E. WHAT ARE THE InvESTMEnT STRATEGIES?The und manager would use a passive approach to try and achieve the investment objective o the scheme. The und manager shall not tryto beat the Gold Market, but aims to replicate the returns, which commensurate the returns generated, by Gold during that period. It willhowever endeavor to seek temporary deensive positions when markets decline or appear over valued to the extent o its investment in MoneyMarket or other debt securities. The und manager would not make any judgment about the investment merit o a particular security nor wilit attempt to apply any economic, nancial or market analysis. This style o Passive Fund Management would eliminate the risks involved withactive management with regard to over / underperormance vis--vis a benchmark.

The Fund will, in general invest a signicant part o its corpus in Physical Gold or Gold Related Instruments as permitted by regulators rom timeto time (as per the asset allocation mentioned above). Presently, investment only in physical gold is allowed as per SEBI guidelines. Investmentin gold or gold related instruments may be undertaken as and when permitted by SEBI. However pending investments, the surplus amount othe Fund shall be invested in securitized debt, other debt securities, bonds and money market instruments as permitted by regulators rom timeto time. Also whenever good investment opportunity is not available in the view o the Fund manager, the Fund will reduce its exposure to goldand Gold Related instruments and during that period the surplus asset o the Fund shall be invested in securitized debt, other debt securitiesbonds and money market instruments.

However there is no assurance that all such buying and selling activities would necessarily result in benet or the Fund. The allocation wilbe decided based upon the prevailing market conditions, prices o gold, macro economic environment, and the perormance o the corporatesector, the debt market and other considerations. At times, such churning could lead to higher brokerage and transaction costs. To achieve itsprimary objective as mentioned above, the Fund would invest in gold and Gold Related Instruments as permitted by regulators rom time totime. To achieve its secondary objective, the und would invest in securitized debt, other debt securities, bonds and money market securities aspermitted by regulators rom time to time.

These securities could include:

ObligationsofIndianCompanies(bothpublicandprivatesector)includingtermdepositswiththebanksaspermittedbySEBI/RBIfromtime to time and developmental nancial institutions

CerticateofDeposits(CDs)


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Commercialpaper(CPs)

InSecuritizedDebtupto10%ofthecorpus.

Thenon-convertiblepartofconvertiblesecurities

Anyotherdomesticxedincomesecurities

MoneymarketinstrumentspermittedbySEBI/RBI,havingmaturitiesupto1yearincallmoneymarketinstrumentsasmaybeprovidedby the RBI to meet the liquidity requirements

AnyotherinstrumentsasallowedbytheRegulationsfromtimetotime.

TheFundmayalsoenterintoRepo,orsuchothertransactionsasmaybeallowedtoMutualFundsfromtimetotime.

Subject to the Regulations, the investments may be in securities which are listed or unlisted, secured or unsecured, rated or unrated, havingvariable maturities, and acquired through secondary market purchases, RBI auctions, open market sales conducted by RBI etc., Initial PublicOers (IPOs), other public oers, placements, rights, oers, negotiated deals, etc

The Scheme may also enter into repurchase and reverse repurchase obligations in all securities held by it as per the guidelines andRegulations applicable to such transactions.

No investments shall be made in oreign securitised debt.

Iestmet process

The AMC will initially decide the quantity o gold to be imported / procured and kept with the Custodian (who acts as a warehouse/ custodianor the Fund). Against this quantity, AMC issues units to the investor. Thereore the entire corpus (except or some portion to meet liquidity)shall be invested upront into Gold.

Case or Iestig I Gol

The price o gold is the benchmark. All orms o investments carry some degree o risk. Holding gold directly also has risks. However, includinggold in a well-balanced portolio can help diversiy risk. Golds ability to serve as a portolio diversier is due to its historically low-to-negative

correlation with stocks and bonds. The economic orces that determine the price o gold are dierent rom the orces that determine the priceso most nancial assets. The price o gold depends upon various actors, including the supply and demand or gold, the strength or weakness omajor oreign currency especially dollar, the rate o infation, and interest rates and the current political environment. Gold is not subject to therisk o deault or bankruptcy.

Tracig Error

Tracking error means the variance between daily returns o the underlying benchmark (gold in this case) and the NAV o the scheme or anygiven period. NAV o the Scheme is dependant on valuation o gold. Gold shall be valued based on the ormula mentioned in SEBI circular noSEBI/IMD/CIR No. 2/65348/06 dated April 21, 2006. NAV so computed may vary rom the price o Gold in the domestic market. Factorssuch as the ees and expenses o the Scheme, corporate actions, cash balance, changes to the Underlying assets and regulatory policies mayaect AMCs ability to achieve close correlation with the Underlying assets o the scheme. The Schemes returns may thereore deviate romthose o its Underlying assets.

Tracking error could be the result o a variety o actors including but not limited to:

Delayinthepurchaseorsaleofgolddueto

Illiquidityofgold,

Delayinrealisationofsaleproceeds,

Creating a lot size to buy the required amount o gold

Theschememaybuyorsellthegoldatdifferentpointsoftimeduringthetradingsessionatthethenprevailingpriceswhichmaynotcorrespond to its closing prices.

Thepotentialfortradestofail,whichmayresultintheSchemenothavingacquiredgoldata pricenecessarytotrackthebenchmarkprice.

Theholdingofacashpositionandaccruedincomepriortodistributionofincomeandpaymentofaccruedexpenses.

Disinvestmentstomeetredemptions,recurringexpenses,dividendpayoutsetc.

Executionoflargebuy/sellorders

Transactioncost(includingtaxesandinsurancepremium)andrecurringexpenses

RealisationofUnitholdersfunds

The scheme will endeavor to minimise the tracking error by

Settingoffofincrementalsubscriptionsagainstredemptions,duringliquiditywindow

Useofgoldrelatedderivativeinstruments,asandwhenallowedbyregulations

Rebalancingoftheportfolio

Iestmet philosohy a Focus

India today is the worlds largest democracy with a vibrant electorate, active Judiciary and civil society groups, and a ercely independent


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media. For thousand o years, gold has been prized or its parity, its beauty, and above all its unique characteristics as a store o value. In todaysuncertain climate, many investors turn to gold because it is an important and secure asset that can be tapped at any time, under virtually anycircumstances.

But there is another side to gold that is equally important, and that is its day-to-day perormance as a stabilizing infuence or investmentportolio. These advantages are currently attracting considerable attention rom nancial proessionals and sophisticated investors worldwideRecent independent studies have revealed that traditional diversiers oten all during times o market stress or stability. On these occasionsmost asset classes (including traditional diversiers such as bonds and alternative assets) all move together in the same direction. There is nocushioning eect o a diversied portolio - leaving investors disappointed. However, a small allocation o gold has been proven to signicantlyimprove the consistency o portolio perormance, during both stable and unstable nancial periods. Greater consistency o perormance leadsto a desirable outcome - an investor whose expectations are met.

The consumers and public have realized the benets o liberalization through increase in the choice and quality o products and decrease in

prices. The business and industry have also adjusted themselves with the liberalization and globalization. The unprecedented high level o oreignexchange reserves, upward trend in FDI infows and the general growth o the economy has given more condence and encouragement tothe policy-makers to urther accelerate its economic reorms and liberalization process. Both at the central and state levels and across politicaparties, in general, there is consensus on urther economic liberalization.

The Macro iew

Indiaisamajorplayerintheglobalgoldmarket,boththroughownershipandannualowofpurchasesofgold,andthroughenormoussuccess in the labour-intensive export-oriented jewellery business.

Modernisationofthegoldmarkethasbeenalong-standingpolicygoalinIndia.Akeyelementofmodernisinganynancialmarketisshiting away rom closed clubs o dealers engaging in private transactions and bilateral negotiation, to a ramework with anonymoustrading taking place between participants rom all across the country, all o whom are on a level playing eld. An essential eature omodernisation o nance is the removal o entry barriers, so that it is easy or nance companies to enter and exit any kind o nancialactivity. RGF promises to be a step orward or the gold spot market in oering such a trading ramework, characterised by nationwideparticipation by households and without entry barriers aced by nance companies.

RGFisagoldspotinstrument,whichisdistinctfromgoldfutures.However,therearesynergiesbetweenbothinitiatives,sincetheybothstrengthen dierent aspects o the gold market. A strong gold ETF market helps to strengthen the gold utures market, and vice versa.

The Micro view

From the narrow viewpoint o a household also, the RGF oers many benets. Gold is a part o the portolio o millions o households in thecountry. For households, the gold ETF oers the ollowing advantages.

Zeroconcernsaboutphysicalsecurity,theftoradulterationwhenfacedwiththetasksofcustodyandspottransactions.

Atransparentsecondarymarket,whichwillofferreducedtransactionscostswhencomparedwithexistingOTCtransactionsonthegoldspot market. The existing unregulated spot market suers rom acute problems o wide bid -oer spreads, and penalisation o customerson questions o purity.

Oncebanksandothermoneylendersacceptthetransparencyandliquidityof theGoldETF,itwouldbecomepossibletopledgeGoldETF Units as collateral or loans. This would greatly assist many low-income households by easing the credit constraints that they aceA household which may possess physical gold today would, in comparison, obtain more limited credit access owing to concerns aboutthe purity and liquidity o the physical gold. In contrast, the Gold ETF Units will eliminate concerns about purity, and will oer assured

secondary market liquidity. RGETFislikelytotradeinUnitswhichcorrespondto0.1gramsofgold.Thiswouldmaketransactionsaccessibletoalargenumberof

households who presently nd it dicult to do transactions o 1 gram or 1 tola o gold.

det maret i Iia

The Indian Debt market is acing major shit in the recent times. The substantial growth in Mutual Fund collections in the past ew years haveprovided an easy route or the investors to channelise their savings into the debt market, which otherwise is largely dominated by Banks andother Institutional investors.

At present, the Indian debt market is dominated by issues o Central Government bonds, Coporate Debentures and PSU Bonds. The newSecuritised instruments are also very attractive in the primary market. Risk associated with securitized Debt or PTCs are credit risk, liquidityrisk and price risk/interest rate risk. The other instruments available or investment are Commercial Papers, Certicate o Deposits, Governmentguaranteed bonds, etc.

Brie details about the instruments are given below as on September 06, 2010.

Istrumets Liste/ Uliste Curret Yiel Rage Liuiity Ris rofleCentral Government Securities Listed 6.35%-8.40% High Low

Corporate Debentures / PSU Bonds Listed 7.85%-8.75% Moderate Low

CDs (short term) Unlisted 6.95%-7.85% High Low

Call Money Unlisted 2.90%-5.10% High Low

Mibor linked Papers Listed 140-155 bps Low Low


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A brie description about yields presently available on Central Govt. Securities /Bonds & Debentures o various maturities is as ollows:

Annualised yields (as on September 06, 2010) are:

Yrs =< 1yr 2-6yrs 7-10yrs 11-20 yrs

Central Government securities 6.40%-6.45% 6.96%-8.15% 8.15%-8.32% 8.21%-8.55%

Debentures / Bonds (AAA rated) 7.75%-7.85% 7.89%-8.52% 8.60%-8.75% -

THE PRICE AND YIELD ON VARIOUS DEBT INSTRUMENTS FLUCTUATE FROM TIME TO TIME DEPENDING UPON THE MACRO ECONOMICSITUATION, INFLATION RATE, OVERALL LIQUIDITY POSITION, FOREIGN EXCHANGE SCENARIO, ETC. ALSO, THE PRICE AND YIELD VARIES

ACCORDING TO MATURITY PROFILE, CREDIT RISK ETC

portolio Turoer policy

Given the nature o the scheme, the portolio turnover ratio may be high and AMC may re-allocate the portolio according to liquidityrequirements, commensurate with the investment objectives o the scheme. The eect o higher portolio turnover may result in higher

expenses and transaction costs.

F. FUndAMEnTAL ATTRIbUTES

For the purposes o this section, "undamental attributes" o the scheme shall mean:

(i) Tye o Scheme

An Open ended Gold Exchange Traded Fund that tracks the domestic prices o gold through investments in physical gold.

(ii) Iestmet Oecties

MainObjective-The investmentobjectiveis toseektoprovide returnsthatcloselycorrespondtoreturnsprovidedbypriceof

gold through investment in physical Gold (and Gold related securities as permitted by Regulators rom time to time). However, theperormance o the scheme may dier rom that o the domestic prices o Gold due to expenses and or other related actors.

InvestmentPattern-Undernormalcircumstances,theanticipatedassetallocationwouldbe:

Under normal circumstances, the anticipated asset allocation would be:

Istrumets Iicatie asset allocatio (% o total assets) Ris profle

Minimum Maximum

Physical Gold or Gold Related Instruments as permitted byregulators rom time to time#

90% 100% Medium to High

Money Market instruments, Bonds, Debentures, GovernmentSecurities including T-Bills, Securitised Debt* & other debt securitiesas permitted by regulators rom time to time

0% 10% Low to Medium

# Presently, investment only in physical gold is allowed as per SEBI guidelines. Investment in gold or gold related instruments may be

undertaken as and when permitted by SEBI.

* Upto 10% in securitised debt

Use o gold related derivative instruments, as and when allowed by regulations

The above Asset Allocation Pattern is only indicative. The investment manager in line with the investment objective as may alter the

above pattern or short term and on deensive consideration.

(iii) Terms o Issue

a) Liuiity roisios such as reurchase/reemtio o uits

As RGETF is listed on the Exchange, subsequent buying or selling by Unit holders can be made rom the secondary market. The minimum

number o Units that can be bought or sold on the exchange is 1 (one) unit. All investors may sell their units in the stock exchange(s) on

which these units are listed on all the trading days o the stock exchange.

Repurchase / redemption o units as reerred to Redemption.

) Aggregate Fees a exeses charge to the Scheme

i) new Fu Oer (nFO) Exeses

These expenses are incurred or the purpose o various activities related to the NFO like sales and distribution ees paid marketing and

advertising, registrar expenses, printing and stationary, bank charges etc.

As per SEBI circular SEBI/IMD/CIR No.1/64057/06 dated April 4, 2006, open ended schemes are not permitted to charge NFO

Expenses to the scheme.

ii) Aual Scheme Recurrig Exeses

These are the ees and expenses or operating the scheme. These expenses include Investment Management and Advisory Fee

charged by the AMC, Registrar and Transer Agents ee, marketing and selling costs etc. as given in the table below:

For the actual current expenses being charged, the investor should reer to the website o the mutual und.


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particulars % o aerage ailyet assets (estimate)

Investment Management & Advisory Fee 0.50

Custodial Fees 0.50

Registrar & Transer Agent Fees including cost related to providing accounts statement, dividend/redemption cheques/warrants etc.

0.05

Marketing & Selling Expenses including Agents Commission and statutory advertisement 1.00

Brokerage & Transaction Cost pertaining to the distribution o units 0.10

Audit Fees / Fees and expenses o trustees 0.00

Costs related to investor communications 0.15

Costs o und transer rom location to location 0.10

Listing Fees 0.01

License Fees 0.01

Other Expenses 0.08

Total Recurring Expenses 2.50

Securities And Exchange Board O India (Mutual Funds) (Amendment) Regulations, 2010 states that in case o an Exchange TradedFund, the total expenses o the scheme including the investment and advisory ees shall not exceed one and one hal percent (1.5%)o the weekly average net assets. Accordingly ollowing is the revised estimated recurring expenses o the scheme.

particulars % o aerage ailyet assets (estimate)

Investment Management & Advisory Fee 0.75

Custodial Fees 0.04

Registrar & Transer Agent Fees including cost related to providing accounts statement, dividend/

redemption cheques/warrants etc.

0.05

Marketing & Selling Expenses including Agents Commission and statutory advertisement 0.30

Brokerage & Transaction Cost pertaining to the distribution o units 0.04

Audit Fees / Fees and expenses o trustees 0.02

Costs related to investor communications 0.04

Costs o und transer rom location to location 0.04

Listing Fees 0.01

License Fees 0.01

Other Expenses 0.20

Total Recurring Expenses 1.50

These estimates have been made in good aith as per the inormation available to the Investment Manager based on past experience

and are subject to change inter-se as per actual. Types o expenses charged shall be as per the SEBI (MF) Regulations. RGETF units

will be held in dematerialized orm, as prescribed under The SEBI (Depositories and Participants) Regulations, 1996. The service

charges payable to the depository will orm part o annual recurring expenses.While the AMC ees remains the same, the other categories o recurring expenses may change inter-se and the total expenses shal

not exceed the limits permitted by SEBI. Subject to SEBI Regulations, the Trustees reserves the right to modiy the above tota

estimate or recurring expenses on a prospective basis

In terms o the Regulations, RCAM can charge Investment Management Fees @ 1.25 % o the average weekly net assets or a

corpus upto Rs.100 crores and 1% on the balance amount above Rs.100 crores, calculated on a daily basis. However, no AMC ees

can be chargeable on RCAMs investment in the Scheme. The Trustee Company, RCTC, shall be entitled to receive a sum computed

@ 0.05% o the Unit Capital o all the Schemes o RMF on 1st April each year or a sum o Rs.5,00,000/- which ever is lower o

such other sum as may be agreed upon between the Settlor (RCL) and the Trustee (RCTC) rom time to time in accordance with the

SEBI Regulations or any other authority, rom time to time.

The Fund will strive to reduce the level o these expenses so as to keep them well within the maximum limits allowed by SEBI.

Expenses on an ongoing basis Investment Management & Advisory Fee will not exceed one and one hal (1.5%) o the average

weekly net assets.

Ay saety et or guaratee roie Not Applicable

In accordance with Regulation 18(15A) o the SEBI (MF) Regulations, the Trustees shall ensure that no change in the undamenta

attributes o the Scheme(s) and the Plan(s) / Option(s) thereunder or the trust or ee and expenses payable or any other change which

would modiy the Scheme(s) and the Plan(s) / Option(s) thereunder and aect the interests o Unitholders is carried out unless:

AwrittencommunicationabouttheproposedchangeissenttoeachUnitholderandanadvertisementisgiveninoneEnglishdaily

newspaper having nationwide circulation as well as in a newspaper published in the language o the region where the Head Oce o

theMutualFundissituated;and

TheUnitholdersaregivenanoptionforaperiodof30daystoexitattheprevailingNetAssetValuewithoutanyexitload.


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G. HOW WILL THE SCHEME bEnCHMARk ITS pERFORMAnCE?

As there are no indices catering to the gold sector/securities linked to Gold, currently GETF shall be benchmarked against the price o Gold.

Purity o Gold: All gold bullion held in the schemes allocated account with the custodian shall be o neness (or purity) o 995 parts per 1000

(99.5%) or higher.

H. WHO MAnAGES THE SCHEME?

name Age Eucatioal

qualifcatio

Tye a nature o ast exeriece icluig assigmets hel

urig the ast 10 years

name o the

Scheme maage

Hiren Chandaria 29

Years

Commerce graduate

and Masters in Business

Administration (MMS/

MBA) with Finance

major

Prior to joining mutual und arena he was a commodity trader with

proprietary desk o Reliance Capital. He had also been working on

analysing various commodities and working on commodity linked

products He has been working with Reliance ADA group since

November 2005. Hiren has undertaken various commodity related

projects during the last ew years.

Reliance Gold

Exchange Traded

Fund

I. WHAT ARE THE InvESTMEnT RESTRICTIOnS?

The investment policy o the scheme comply with the rules, regulations and guidelines laid out in SEBI (Mutual Funds) Regulations, 1996.

As per the Regulations, gold exchange traded und scheme shall be subject to the ollowing investment restrictions:

1. The unds o any such scheme shall be invested only in gold or Gold Related Instruments in accordance with its investment objective

except to the extent necessary to meet the liquidity requirements or honouring repurchases or redemptions, as disclosed in the scheme

inormation document.

2. Pending deployment o unds o the scheme in securities in terms o the investment objectives and policies o the scheme, the Mutua

Fund can invest the und o the scheme in short term deposits o scheduled commercial banks subject to the guidelines as applicable rom

time to time

Further, as per the Seventh Schedule, the ollowing investment limitations are currently applicable to its investments in the Underlying Stock:

1. The scheme shall not invest more than 15% o its NAV in debt >instruments issued by a single issuer which are rated not below investmentgrade by a credit rating agency authorised to carry out such activity under the Act. Such investment limit may be extended to 20% o theNAV o the scheme with the prior >approval o the Board o Trustees and the Board o asset management com

reliance gold exchange traded fund-10

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