hsbc mutual fund - hsbc global asset …...hsbc mutual fund offer document hsbc investments sponsor:...

HSBC Mutual Fund

Offer Document

HSBC Investments

Sponsor:

Regd. Office: 52/60, Mahatma Gandhi Road, Fort, Mumbai 400 001HSBC Securities and Capital Markets (India) Private Limited

.

Trustee:

Office: 314 D. N. Road, Fort, Mumbai 400 001.Board of Trustees

,

Asset Management Company:

Corp. & Regd. Office: 314 D. N. Road, Fort, Mumbai 400 001.HSBC Asset Management (India) Private Limited

,

E mail id: [email protected]

Visit us at : www.hsbcinvestments.co.in

MK HSBC Mutual Fund OD Cover

Vancouver

London

Paris

Mexico City

Bermuda

New York

Sao Paulo

Dusseldorf

Istanbul

Mumbai

Singapore

Hong Kong

Taipei

Tokyo

Buenos Aires

North America

Bermuda

Canada

Mexico

USA

South America

Argentina

Brazil

Europe & Middle East

FranceGermanyItalySpainSwedenTurkeyUAE (Dubai)UK and Channel Islands

Asia-Pacific

ChinaHong Kong (SAR)IndiaJapanSingaporeTaiwan

Investment teamsLocal client service and marketing presence plus the HSBC Group network

This Offer Document sets forth concisely the

information about the Scheme that a prospective

investor ought to know before investing. The particulars

of the Scheme have been prepared in accordance with

the Securities and Exchange Board of India (Mutual

Funds) Regulations, 1996, as amended till date, and

filed with Securities and Exchange Board of India (SEBI).

The Units being offered for public subscription have not

been approved or disapproved by SEBI nor has SEBI

certified the accuracy or adequacy of this Offer

Document.

This Offer Document will remain effective till a 'material

change' (other than a change in Fundamental Attributes

and within the purview of this Offer Document) occurs

and thereafter the changes shall be filed with SEBI and

circulated to the Unitholders.

Investors may also like to obtain further changes after

the date of this Offer Document from the Mutual Fund /

its Investor Service Centres or distributors.

This Offer Document should be retained for future

references.

This Offer Document is dated 15 November, 2007.

Issue of Units of Rs.10/- per unit for cash plusapplicable load during the New Fund Offer

HSBC Interval Fund - Plan I (HINF-I)

A Debt Oriented Interval Scheme

The Trustees / AMC reserve the right to extend theclosing date of the New Fund Offer Period, subject tothe condition that the subscription to the New FundOffer shall not be kept open for more than 30 days.

HSBC Interval Fund (HINF) comprising

three plans viz. Plan I, II and III

New Fund Offer Opens on HSBC IntervalFund: Plan - Plan I : 21 November, 2007

New Fund Offer Closes on HSBC Interval

Fund: Plan - Plan I : 21 November, 2007

The New Fund Offer for HSBC Interval Fund havingPlan I, II and III will commence at any time within sixmonths from 21 September, 2007 i.e. the date of theSEBI clearance letter for the Offer Document.Information with respect to the New Fund Offer of thePlan II and III for HSBC Interval Fund will becommunicated to the investors / prospectiveinvestors by a notice displayed at the Investor ServiceCentres and issue of advertisements in 2 newspapers.

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Offer Document

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SPONSORHSBC Securities and Capital Markets (India) Private LimitedRegistered Office52/60, Mahatma Gandhi Road, Fort, Mumbai - 400 001.

TRUSTEEBoard of TrusteesOffice314, D.N. Road, Fort, Mumbai 400 001.

ASSET MANAGEMENT COMPANYHSBC Asset Management (India) Private LimitedRegistered & Corporate Office314, D.N. Road, Fort, Mumbai 400 001.

REGISTRAR AND TRANSFER AGENTSComputer Age Management Services (P) Ltd. (CAMS)OfficeA & B Lakshmi Bhawan, 609 Anna Salai, Chennai - 600 006.

CUSTODIANJP Morgan Chase BankOfficeMafatlal Centre, 9th Floor, Nariman Point, Mumbai - 400 021.

AUDITORSPrice WaterhouseOffice252, Veer Savarkar Marg, Shivaji Park, Dadar (West), Mumbai - 400 028.

LEGAL ADVISORSAmarchand & Mangaldas & Suresh A. Shroff & Co.OfficePeninsula Chambers, Peninsula Corporate Park,Ganpatrao Kadam Marg, Lower Parel, Mumbai - 400 013.

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TABLE OF CONTENTS

Page No. Page No.

Highlights ................................................................................................. 3

Definitions ................................................................................................ 4

Risk Factors and Special Considerations ............................................ 6

Standard Risk Factors ....................................................................... 6Scheme Specific Risk Factors .......................................................... 7Special Considerations ..................................................................... 8

Due Diligence Certificate ....................................................................... 9Scheme / Summary ............................................................................... 10

SECTION IConstitution of the Mutual Fund ....................................................... 11

Sponsor ............................................................................................ 11Board of Trustees (the Trustees) .................................................... 11Summary of Substantive Provisions of the Trust Deed ............... 12Trusteeship Fees ............................................................................. 14Investment Manager ....................................................................... 14Board of Directors of the AMC ..................................................... 15Powers, Duties and Responsibilities of the AMC ........................ 16Asset Management Fees ................................................................. 17Key Employees of the AMC and Relevant Experience ............... 17Fund Managers ............................................................................... 21Custodian ......................................................................................... 21Registrars & Transfer Agents ......................................................... 21Fund Accountant ............................................................................. 21Auditors ........................................................................................... 21Collecting Bankers .......................................................................... 21

SECTION IIInvestment Objectives & Policies ....................................................... 22

Investment Pattern .......................................................................... 22Change in Investment Pattern ........................................................ 22Listing .............................................................................................. 22Investment Approach and Risk Control ........................................ 22Portfolio Turnover .......................................................................... 23Procedure followed for Investment Decisions .............................. 23Investments by the AMC in the Scheme ....................................... 23Fundamental Attributes ................................................................... 24Special Considerations ................................................................... 24Trading in Derivatives .................................................................... 24Exposure to Derivatives ................................................................. 24Valuation of Derivative Products ................................................... 25Position of Debt Markets in India ................................................. 25Investment Restrictions for the Scheme ........................................ 26Valuation of Assets and Net Asset Value ...................................... 26Accounting Policies and Standards ................................................ 29Guidelines for Identification andProvisioning for Non-Performing Assets ...................................... 30

SECTION IIIUnits & the New Fund Offer .............................................................. 32

New Fund Offer Period .................................................................. 32New Fund Offer Price .................................................................... 32Extension of the New Fund Offer Period ..................................... 32Minimum Subscription Amount ..................................................... 32On-going Subscriptions and Redemptions .................................... 32Minimum Amount for Application ................................................ 32

Allotment and Refund .................................................................... 32Options offered under the Scheme ................................................ 32Who Can Apply? ............................................................................ 33Prevention of Money Laundering andKnow Your Customer (KYC) ........................................................ 33How to Apply? ................................................................................ 33Sales, Repurchase and Switches of Units on On-going basis ...... 35Switching Options .......................................................................... 36Account Statements ........................................................................ 36Pledge .............................................................................................. 37Application under Power of Attorney ........................................... 37Joint Applicants .............................................................................. 37Nomination Facility ........................................................................ 37Transfer & Transmission of Units ................................................. 37Master Account / Folio ................................................................... 38Fractional Units .............................................................................. 38Right to Limit Redemptions .......................................................... 38Suspension of Sale / Repurchase / Switch of Units ..................... 38NRIs / FIIs ...................................................................................... 38Redemption by NRIs / FIIs ............................................................ 38

SECTION IVLoad Structure & Recurring Expenses ............................................. 39

Load Structure ................................................................................ 39Initial Issue Expenses of Past Scheme(s) ...................................... 39Recurring Expenses ........................................................................ 40Condensed Financial Information .................................................. 41

SECTION VUnitholders’ Rights & Services ........................................................... 47

Investor Services ............................................................................. 47Ease of Transactions ....................................................................... 47Problem Resolution ........................................................................ 47Information about the Scheme ....................................................... 47Account Statements / Transaction Confirmation .......................... 47Receiving Account Statement / Correspondence by e-mail ......... 47NAV Information ............................................................................ 48Personal Identification Number (PIN) ........................................... 48Rights of Unitholders of the Scheme ............................................ 48Duration of the Scheme / Winding Up ......................................... 49Procedure and Manner of Winding Up ......................................... 49Taxation on investing in Mutual Funds ......................................... 49

SECTION VIOther Matters ........................................................................................ 52

Unitholder Grievances Redressal Mechanism ............................... 52Associate Transactions ................................................................... 52Dealing with Associate Companies ............................................... 53Dividends and Distributions ........................................................... 65Penalties and Pending Litigations .................................................. 65Borrowing by the Mutual Fund ..................................................... 67Securities Lending by the Mutual Fund ........................................ 67Underwriting ................................................................................... 67Inter-Scheme Transfers ................................................................... 67Policy on Offshore Investments by the Scheme ........................... 67General Information ....................................................................... 68Documents available for Inspection .............................................. 69

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HIGHLIGHTS

The HSBC Group

The Sponsor of HSBC Mutual Fund is HSBC Securities and CapitalMarkets (India) Private Limited, a member of the HSBC Group, oneof the largest banking and financial services organisations in theworld. As at December 2006, HSBC had total assets of US$ 1861billion. Headquartered in London, HSBC operates through long-established businesses in five regions: Europe, The Asia PacificRegion, the Americas, The Middle East and Africa. Through itsglobal network of about 10000 offices in 82 countries and territories,HSBC provides a comprehensive range of financial services to morethan 125 million customers: personal, commercial, corporate,institutional and investment and private banking clients.

HSBC Investments is the core global investment managementbusiness of the HSBC Group. With dedicated investmentprofessionals across Europe, Africa, Asia Pacific and the Americas,HSBC Investments has strong global investment capabilities thatare delivered to clients locally. For institutions, corporates andfinancial intermediaries, comprehensive ranges of investmentmanagement solutions are offered. For high net worth individuals,HSBC Investments works with the relationship managers of theindividuals to provide bespoke portfolio management services. HSBCInvestments has funds under management & distribution of US$335 billion (as at January 2007).

HSBC Asset Management (India) Private Limited, the AssetManagement Company (AMC) of HSBC Mutual Fund is a subsidiaryof HSBC Securities and Capital Markets (India) Private Limited.

HSBC Interval Fund – Plan I : New Fund OfferThe New Fund Offer is for a Debt Oriented Interval Scheme viz.HSBC Interval Fund - Plan I having an interval period of 91 days.The Plan will comprise a portfolio of securities normally maturingin line with the term of the Plan. The New Fund Offer is for issueof Units for cash plus applicable load, if any.

The New Fund Offer for HSBC Interval Fund - Plan I will commencefrom 21 November 2007 and close on 21 November 2007. The NewFund Offer for HSBC Interval Fund having Plan II and III willcommence at any time within six months from the date of the SEBIclearance letter for the Offer Document. Information with respectto the New Fund Offer for HSBC Interval Fund Plan II and III willbe communicated to the investors / prospective investors by a noticedisplayed at the Investor Service Centres and issue of advertisementsin 2 newspapers.

TransparencyThe AMC will calculate and disclose the first NAVs of the Schemenot later than 30 days from the closure of the New Fund Offer.Subsequently, the NAVs will be calculated and disclosed at the closeof every Business Day. In addition, the AMC will disclose detailsof the portfolio of the Scheme every 6 months.

LiquidityThe Scheme/ Plan(s) will offer for subscription / switch andredemption / switch out of units without any load on an intervalperiod, once a quarter / once in a interval period (91 days) on anon going basis.

In case such Interval date or payout date happens to be a non-business day, then the immediate next business day shall beconsidered as the Interval date.

The Scheme allows for purchases/redemptions during the specifiedinterval period at NAV based prices, without payment of any entry/exit load. In addition, the Scheme also provides for redemption ofunits on every Business Day on an ongoing basis subject to applicableexit load.

As per the SEBI Regulations, the Mutual Fund shall despatchRedemption proceeds within 10 Business Days of receiving theRedemption request. A penal interest of 15% per annum or suchother rate as may be prescribed by SEBI from time to time, will bepaid in case the Redemption proceeds are not despatched within 10Business Days of the date of Redemption request. However, theFund will, under normal circumstances, endeavour to despatchredemption proceeds within 1 Business Day.

Load StructureInvestors subscribing to the Units in the New Fund Offer will notbe charged any entry and exit load during the interval period. Anexit load shall be charged in case of redemptions / switch outs fromthe Scheme except the Interval period at 0.5% in the Scheme. Theload structure is subject to change from time to time and suchchanges shall be implemented prospectively. For details on loadstructure, please refer Section IV of this Offer Document.

TaxationThe following are certain taxation provisions updated as per theFinance Act, 2007 and are subject to changes from time to time.

Dividend distributed by the Fund shall be tax-free in the hands ofthe unitholders. However the Fund will have to pay tax at theapplicable rates on the amount distributed as dividend under theScheme.

Investments in the Scheme will be exempt from Wealth Tax.

There will be no TDS on redemption irrespective of amountredeemed, for Unitholders Resident in India.

Investors who redeem Units held for more than twelve months willbe taxed at a rate of 10% or entitled to the benefit of indexation whilepaying Capital Gains tax at the rate of 20%.

Investors in the Scheme are not being offered any guaranteed/ assured returns.Investors are advised to consult their Legal /Tax and otherProfessional Advisors in regard to tax / legal implications relatingto their investments in the Scheme and before making decision toinvest in or redeem the Units.

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4 HSBC Mututal Fund

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DEFINITIONS

In this Offer Document, the following words and expressions shall have the meaning specified herein, unless the context otherwise requires:

Asset Management Company or HSBC Asset Management (India) Private Limited, incorporated AMC Or Investment ManagerAMC or Investment Manager under the provisions of the Companies Act, 1956, and approved by SEBI to act as Investment

Manager for the Schemes of HSBC Mutual Fund

Applicable NAV The Net Asset Value applicable for redemptions / switches etc., based on the Business Dayand relevant cut-off times on which the application is accepted at the official points ofacceptance.

Business Day A day other than (1) Saturday and Sunday or (2) a day on which The Bombay Stock ExchangeLimited or National Stock Exchange of India Limited or Reserve Bank of India or banks inMumbai are closed or (3) a day on which there is no RBI clearing / settlement of securitiesor (4) a day on which the sale and / or redemption and / or switches of Units is suspendedby the Trustees / AMC or (5) a book closure period as may be announced by the Trustees/ AMC.

The AMC reserves the right to change the definition of Business Day(s).

Provided that the days when the banks in any location where the AMC’s Investor ServiceCentres are located, are closed due to a local holiday, such days will be treated as non BusinessDays at such centres for the purposes of accepting fresh subscriptions. However, if theInvestor Service Centre in such locations is open on such local holidays, then redemptionand switch requests will be accepted at those centres, provided it is a Business Day for theScheme(s) on an overall basis. Notwithstanding the above, the AMC may declare any dayas a Business Day / Non Business Day.

Benchmark CRISIL Liquid Fund Index

Custodian JP Morgan Chase Bank, Mumbai, registered under the SEBI (Custodian of Securities)Regulations, 1996, currently acting as Custodian to the Scheme or any other custodianapproved by the Trustees.

Designated Collection Centre Such centres as may be designated by the AMC for collection of subscriptions and / orredemptions and / or switches in the Scheme.

Depository Depository as defined in the Depositories Act, 1996.

Derivatives A financial instrument, traded on or off an exchange, the price of which is directly dependentupon (i.e., “derived from”) the value of one or more underlying securities, equity indices,debt instruments, commodities, other derivative instruments, or any agreed upon pricingindex or arrangement (e.g., the movement over time of the Consumer Price Index or freightrates) etc. is known as a derivative. Derivatives involve the trading of rights or obligationsbased on the underlying product, but do not directly transfer property.

Distributor Such persons / firms / companies / corporates as may be appointed by the AMC to distribute/ sell / market the Schemes of the Fund.

Dividend Income distributed by Scheme on the Units, where applicable.

Equity Related Securities Convertible Debentures, Equity Warrants, Convertible Preference Shares, FCCBs, EquityMutual Funds etc. are considered equity related securities.

FII Foreign Institutional Investors, registered with SEBI under Securities and Exchange Boardof India (Foreign Institutional Investors) Regulations, 1995 as amended from time to time.

Floating Rate Instruments Floating rate instruments are debt / money market instruments issued by Central / StateGovernments, Corporates, PSUs etc. with interest rates that are reset periodically. Theperiodicity of interest reset could be daily, monthly, annually or any other periodicity thatmay be mutually agreed between the issuer and the Fund.

Fund or Mutual Fund HSBC Mutual Fund, a trust set up under the provisions of the Indian Trusts Act, 1882 andregistered with SEBI under the Securities and Exchange Board of India (Mutual Funds)Regulations, 1996 vide Registration No. MF/046/02/5 dated May 27, 2002.

HINF HSBC Interval Fund including the Plans contained therein, the Scheme launched as a DebtOriented Interval Scheme.

HINF-I HSBC Interval Fund – Plan I (Quarterly Interval Period)

HINF-II HSBC Interval Fund – Plan II (Quarterly Interval Period)

HINF-III HSBC Interval Fund – Plan III (Quarterly Interval Period)

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Interval Period/ Interval date Period during which the units under the Scheme / Series would be available for redemptions(without any exit load) and subscription.

Interval Fund A Fund that is open for sale or redemption during specified transaction period.

HSCI or Sponsor or Settlor HSBC Securities and Capital Markets (India) Private Limited, a company incorporated underthe provisions of the Companies Act, 1956.

New Fund Offer or NFO or Offer for purchase of Units of HSBC Interval Fund - Plan I during the New Fund Offer Period.New Fund Offer Period

Investment Management Agreement The Agreement dated February 7, 2002 entered into between the Trustees of HSBC MutualFund and HSBC Asset Management (India) Private Limited as amended from time to time.

Investor Service Centres or ISC Such offices as are designated as Investor Service Centres by the AMC from time to time.

Load In case of repurchase / switch out of a Unit, the sum of money deducted from the applicableNAV on the repurchase / switch out (Exit Load) and in the case of sale / switch in of a Unit,a sum of money to be paid by the prospective investor on the sale / switch in of a Unit inaddition to the applicable NAV (Entry Load).

NAV Net Asset Value of the Units of the Scheme, Plan(s) (including Option(s) if any, therein)calculated in the manner provided in this Offer Document or as may be prescribed by theRegulations from time to time.

Offer Document This document issued by HSBC Mutual Fund, Offering units of HSBC Interval Fund - PlanI, a Scheme of HSBC Mutual Fund.

RBI Reserve Bank of India, established under the Reserve Bank of India Act, 1934, as amendedfrom time to time.

Registrar Computer Age Management Services (P) Ltd. (CAMS), registered under the SEBI (Registrarsto an Issue and Share Transfer Agents) Regulations, 1993, currently acting as Registrar tothe Scheme or any other registrar appointed by the AMC from time to time.

Repo / Reverse Repo Sale / purchase of Government Securities as may be allowed by RBI from time to time withsimultaneous agreement to repurchase / resell them at a later date.

Repurchase / Redemption Repurchase / redemption of Units of the Scheme.

Sale / Subscription Sale / subscription of Units of the Scheme.

Scheme HSBC Interval Fund - Plan I

SEBI Securities and Exchange Board of India established under Securities and Exchange Boardof India Act, 1992, as amended from time to time.

SEBI Regulations or Regulations Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended fromtime to time, including by way of circulars or notifications issued by SEBI, the Governmentof India or RBI.

Switch Sale of a Unit in one Scheme / Plan(s) / Option(s) against purchase of a Unit in anotherScheme / Plan(s) / Option(s).

Trustees The Board of Trustees of HSBC Mutual Fund and approved by SEBI to act as the Trusteesof the Schemes of the Fund or any other Trustee as may be appointed from time to time bythe Sponsor and as approved by SEBI including a Trustee Company.

Trust Deed The Trust Deed dated 7 February, 2002 made by and between the Sponsor and the Trusteesestablishing HSBC Mutual Fund, as amended from time to time.

Trust Fund Amounts settled / contributed by the Sponsor towards the corpus of the HSBC Mutual Fundand additions / accretions thereto.

Unit The interest of an investor which consists of one undivided share in the net assets of theScheme.

Unitholder or Investor A holder of Units in the Scheme of HSBC Mutual Fund offered under this Offer Document.

Abbreviations used:

HEF - HSBC Equity Fund, HIOF - HSBC India Opportunities Fund, HMEF - HSBC Midcap Equity Fund, HAIF – HSBC Advantage IndiaFund, HCF - HSBC Cash Fund, HIF-ST - HSBC Income Fund - Short Term Plan, HIF-IP - HSBC Income Fund - Investment Plan, HGF-ST - HSBC Gilt Fund - Short Term Plan, HMIP-R - HSBC MIP Regular Plan, HMIP-S - HSBC MIP Savings Plan, HFRF-LT - HSBC FloatingRate Fund - Long Term Plan, HFRF-ST - HSBC Floating Rate Fund - Short Term Plan, HTSF – HSBC Tax Saver Equity Fund, HLPF –HSBC Liquid Plus Fund, HUOF – HSBC Unique Opportunities Fund, HDF – HSBC Dynamic Fund, HEMF – HSBC Emerging MarketsFund, HFDF – HSBC Flexi Debt Fund, HINF – HSBC Interval Fund and HFTS – HSBC Fixed Term Series.

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6 HSBC Mututal Fund

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RISK FACTORS AND SPECIAL

CONSIDERATIONS

Standard Risk Factors

l Mutual funds and securities investments are subject to marketrisks and there is no assurance or guarantee that the objectivesof the Scheme will be achieved.

l As with any investment in securities, the NAV of the Unitsissued under the Scheme can go up or down depending on thefactors and forces affecting the capital markets.

l Past performance of the Sponsor, Mutual Fund, AMC or anyassociates of the Sponsor / AMC does not indicate the futureperformance of the Scheme of the Mutual Fund.

l HSBC Interval Fund – Plan I (HINF-I) is the name of theScheme and does not in any manner indicate either the qualityof the Scheme or its future prospects and returns.

l The Sponsor is not responsible or liable for any loss or shortfallresulting from the operation of the Scheme beyond the initialcontribution of Rs. 1,00,000 (Rupees One Lakh only) made byit towards setting up the Mutual Fund. The associates of thesponsor are not responsible or liable for any loss or shortfallresulting from the operation of the Scheme.

l Mutual funds being vehicles of securities investments are subjectto market and other risks and there can be no guarantee againstloss resulting from investing in the Scheme. The various factorswhich impact the value of the Scheme’ investments include,but are not limited to, fluctuations in the bond markets,fluctuations in interest rates, prevailing political and economicenvironment, changes in government policy, factors specific tothe issuer of the securities, tax laws, liquidity of the underlyinginstruments, settlement periods, trading volumes etc.

l Investment decisions made by the AMC may not always beprofitable.

l From time to time and subject to the Regulations, the Sponsor,their affiliates, associates, subsidiaries, the Mutual Fund andthe AMC may invest directly or indirectly in the Scheme.These entities may acquire a substantial portion of the Scheme’sUnits and collectively constitute a major investor in the Scheme.Accordingly, redemption of Units held by such entities mayhave an adverse impact on the Scheme because the timing ofsuch redemption may impact the ability of other Unitholdersto redeem their Units.

l As the liquidity of the Scheme’s investments could, at times,be restricted by trading volumes and settlement periods, thetime taken by the Fund for redemption of Units may besignificant in the event of an inordinately large number ofredemption requests or of a restructuring of the Scheme’sportfolio. In view of this, the Trustees have the right, in theirsole discretion to limit redemptions (including suspendingredemption) under certain circumstances, as described underthe section titled “Right to Limit Redemptions”.

l Redemptions due to change in the fundamental attributes of theScheme or due to any other reasons may entail tax consequences.The Trustees, the Mutual Fund, the AMC, their directors ortheir employees shall not be liable for any tax consequencesthat may arise.

l The tax benefits described in this Offer Document are asavailable under the present taxation laws and are availablesubject to conditions. The information given is included for

general purpose only and is based on advice received by theAMC regarding the law and practice in force in India and theinvestors should be aware that the relevant fiscal rules or theirinterpretation may change. As is the case with any investment,there can be no guarantee that the tax position or the proposedtax position prevailing at the time of an investment in theScheme will endure indefinitely. In view of the individualnature of tax consequences, each investor is advised to consulthis/ her own professional tax advisor.

l Neither this Offer Document nor the Units have been registeredin any jurisdiction. The distribution of this Offer Document incertain jurisdictions may be restricted or totally prohibited andaccordingly, persons who come into possession of this OfferDocument are required to inform themselves about, and toobserve, any such restrictions.

l Prospective investors should review / study this Offer Documentcarefully and in its entirety and shall not construe the contentshereof or regard the summaries contained herein as advicerelating to legal, taxation, or financial / investment matters andare advised to consult their own professional advisor(s) as tothe legal, tax, financial or any other requirements or restrictionsrelating to the subscription, gifting, acquisition, holding, disposal(sale, switch or redemption or conversion into money) of Unitsand to the treatment of income (if any), capitalisation, capitalgains, any distribution, and other tax consequences relevant totheir subscription, acquisition, holding, capitalisation, disposal(sale, transfer, switch or conversion into money) of Unitswithin their jurisdiction of nationality, residence, incorporation,domicile etc. or under the laws of any jurisdiction to whichthey or any managed funds to be used to purchase/gift Unitsare subject, and also to determine possible legal, tax, financialor other consequences of subscribing / gifting, purchasing orholding Units before making an application for Units.

l HSBC Mutual Fund / the AMC have not authorised any personto give any information or make any representations, eitheroral or written, not stated in this Offer Document in connectionwith issue of Units under the Scheme. Prospective investorsare advised not to rely upon any information or representationsnot incorporated in this Offer Document as the same have notbeen authorised by the Fund or the AMC. Any subscription,purchase or sale made by any person on the basis of statementsor representations which are not contained in this OfferDocument or which are inconsistent with the informationcontained herein shall be solely at the risk of the investor.

l To the best of the knowledge and belief of the Trustees and theAMC, information contained in this Offer Document is inaccordance with the SEBI regulations and the facts statedherein are correct and this Offer Document does not omitanything likely to have an impact on the importance of suchinformation.

l As per SEBI circular dated December 12, 2003 and June 14,2005 ref SEBI / IMD / CIR No.10 / 22701 /03 and SEBI/IMD/CIR/No.1/42529/05 respectively and AMFI Communicationhaving ref. no. 35/MEM-COR/55/04-05 dated December 31,2004, each scheme and individual plan(s) under the schemesshould have a minimum of 20 investors at the time of allotment(for New Fund Offer period & at subsequent Interval period),in case Scheme fails to assemble minimum 20 investors at thetime of allotment (for New Fund Offer period & subsequentInterval period), the Scheme shall be wound up, by followingthe guidelines prescribed by SEBI and Investor’s application

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HSBC INTERVAL FUND

money would be refunded. Further, at the time of allotment (forNew Fund Offer period & at subsequent Interval period), nosingle investor should account for more than 25% of the corpusof such scheme (i.e. at the portfolio level), accordingly Fundis constrained to reject the application by a single unitholderhaving exposure of more than 25% at the time of allotment (forNew Fund Offer period & at subsequent Interval periods),hence, such unitholder could be allotted limited units to suchextent.

Scheme Specific Risk Factors

Debt InstrumentsSubject to the stated investment objective, the Scheme proposes toinvest in debt and related instruments.l Basis Risk : As the Scheme may invest in floating rate

instruments, these instruments’ coupon will be reset periodicallyin line with the benchmark index movement. The changes inthe prevailing rates of interest will likely affect the value of theScheme’s holdings until the next reset date and thus the valueof the Scheme’s Units. The Scheme could be exposed to theinterest rate risk (i) to the extent of time gap in resetting of thebenchmark rates, and (ii) to the extent the benchmark indexfails to capture the interest rate movement.

l Price-Risk or Interest Rate Risk : As with all debt securities,changes in interest rates may affect the NAV of the Scheme asthe prices of securities increase as interest rates decline anddecrease as interest rates rise. Prices of long-term securitiesgenerally fluctuate more in response to interest rate changesthan do short-term securities. Indian debt markets can be volatileleading to the possibility of price movements up or down infixed income securities and thereby to possible movements inthe NAV.

In the case of floating rate instruments, an additional risk couldbe due to the change in the spreads of floating rate instruments.If the spreads on floating rate papers rise, then there could bea price loss on these instruments. Secondly in the case of fixedrate instruments that have been swapped for floating rates, anyadverse movement in the fixed rate yields vis-à-vis swap ratescould result in losses. However, floating rate debt instrumentswhich have periodical interest rate reset, carry a lower interestrate risk as compared to fixed rate debt instruments. In a fallinginterest rate scenario the returns on floating rate debt instrumentsmay not be better than those on fixed rate debt instruments.

l Liquidity or Marketability Risk : This refers to the ease withwhich a security can be sold at or near to its valuation yield-to-maturity (YTM). The primary measure of liquidity risk isthe spread between the bid price and the offer price quoted bya dealer. Liquidity risk is today characteristic of the Indianfixed income market.

l Credit Risk : Credit risk or default risk refers to the risk thatan issuer of a fixed income security may default (i.e. will beunable to make timely principal and interest payments on thesecurity). Because of this risk, corporate debentures are soldat a yield above those offered on Government Securities, whichare sovereign obligations. Normally, the value of a fixed incomesecurity will fluctuate depending upon the changes in theperceived level of credit risk as well as any actual event ofdefault. The greater the credit risk, the greater the yield requiredfor someone to be compensated for the increased risk.

l Reinvestment Risk : This risk refers to the interest rate levelsat which cash flows received from the securities in the Scheme

are reinvested. The additional income from reinvestment is the“interest on interest” component. The risk is that the rate atwhich interim cash flows can be reinvested may be lower thanthat originally assumed.

l Benchmark Risk : The floating rate segment of the domesticdebt market is not very developed. Currently, majority of theissuance of floating rate papers is linked to NSE MIBOR. Asthe floating rate segment develops further, more benchmarkrates for floating papers may be available in future. The fewernumber of benchmark rates could result in limited diversificationof the benchmark risk.

Different types of securities in which the scheme would investas given in the Offer Document carry different levels and typesof risk. Accordingly the scheme’s risk may increase or decreasedepending upon its investment pattern. E.g. corporate bondscarry a higher amount of risk than Government Securities.Further even among corporate bonds, bonds which are AAArated are comparatively less risky than bonds which are AArated.

l Spread Risk : Though the basis (i.e. Benchmark) gets readjustedon a regular basis, the spread (i.e. markup) over benchmarkremains (usually) constant. This can result in some volatilityto the value of floating rate instruments.

l Settlement Risk (Counterparty Risk) : To the extent thatsettlements of securities are not guaranteed by an exchange orclearing corporation, there is the risk of a counterparty to a dealdefaulting in payment (in case of sale of security) or delivery(in case or purchase of security).

l Securitised Debt : Securitised debt papers carry credit risk ofthe Obligors and are dependent on the servicing of the PTC /Contributions etc. However these are offset suitably byappropriate pool selection as well as credit enhancementsspecified by Rating Agencies. In cases where the underlyingfacilities are linked to benchmark rates, the Securitised debtpapers may be adversely impacted by adverse movements inbenchmark rates. However this risk is mitigated to an extentby appropriate credit enhancement specified by rating agencies.Securitised debt papers also carry the risks of prepayment bythe obligors. In case of prepayments of securities debt papers,it may result in reduced actual duration as compared to theexpected duration of the paper at the time of purchase, whichmay adversely impact the portfolio yield. These papers alsocarry risk associated with the collection agent who is responsiblefor collection of receivables and depositing them. TheInvestment teams evaluates the risks associated with suchinvestments before making an investment decision.

The underlying assets in the case of investment in Securitiseddebt could be mortgages or other assets like credit cardreceivables, automobile / vehicle / personal / commercial /corporate loans and any other receivables / loans / debt.

The risks associated with the underlying assets can be describedas under :

Credit card receivables are unsecured. Automobile / vehicleloan receivables are usually secured by the underlyingautomobile / vehicle and sometimes by a guarantor. Mortgagesare secured by the underlying property. Personal loans areusually unsecured. Corporate loans could be unsecured orsecured by a charge on fixed assets / receivables of the companyor a letter of comfort from the parent company or a guaranteefrom a bank / financial institution. As a rule of thumb, underlying

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8 HSBC Mututal Fund

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assets which are secured by a physical asset / guarantor areperceived to be less risky than those which are unsecured. Byvirtue of this, the risk and therefore the yield in descendingorder of magnitude would be credit card receivables, personalloans, vehicle /automobile loans, mortgages and corporate loansassuming the same rating.

Special Considerations

l Offshore investments : Will be made subject to any / allapprovals, conditions thereof as may be stipulated by SEBI /RBI and provided such investments do not result in expensesto the Fund in excess of the ceiling on expenses prescribed byand consistent with costs and expenses attendant to internationalinvesting. The Fund may, where necessary, appoint otherintermediaries of repute as advisors, custodian/sub-custodiansetc. for managing and administering such investments. Theappointment of such intermediaries shall be in accordance withthe applicable requirements of SEBI and within the permissibleceiling of expenses. The fees and expenses would illustrativelyinclude, besides the investment management fees, custody feesand costs, fees of appointed advisors and sub-managers,transaction costs and overseas regulatory costs.

l Derivatives : The Fund may use derivative instruments likeinterest rate swaps, forward rate agreements or other derivativeinstruments, as permitted under the Regulations and guidelines.

l As and when the Schemes trade in the derivatives market thereare risk factors and issues concerning the use of derivatives thatinvestors should understand. Derivative products are specialisedinstruments that require investment techniques and risk analysesdifferent from those associated with stocks and bonds. The useof a derivative requires an understanding not only of theunderlying instrument but also of the derivative itself.Derivatives require the maintenance of adequate controls tomonitor the transactions entered into, the ability to assess therisk that a derivative adds to the portfolio and the ability toforecast price or interest rate movements correctly. There is thepossibility that a loss may be sustained by the portfolio as aresult of the failure of another party (usually referred to as the“counter party”) to comply with the terms of the derivativescontract. Other risks in using derivatives include the risk ofmispricing or improper valuation of derivatives and the inabilityof derivatives to correlate perfectly with underlying assets,

rates and indices. Thus, derivatives are highly leveragedinstruments. Even a small price movement in the underlyingsecurity could have a large impact on their value. Also, themarket for derivative instruments is nascent in India.

Derivative products are leveraged instruments and can providedisproportionate gains as well as disproportionate losses to theinvestor. Execution of such strategies depends upon the abilityof the fund manager to identify such opportunities. Identificationand execution of the strategies to be pursued by the fundmanager involve uncertainty and decision of fund managermay not always be profitable. No assurance can be given thatthe fund manager will be able to identify or execute suchstrategies.

The risks associated with the use of derivatives are differentfrom or possibly greater than, the risks associated with investingdirectly in securities and other traditional investments.

l Securities Lending : The risks in lending portfolio securities,as with other extensions of credit, consist of the failure ofanother party, in this case the approved intermediary, to complywith the terms of agreement entered into between the lenderof securities i.e. the Scheme and the approved intermediary.Such failure to comply can result in the possible loss of rightsin the collateral put up by the borrower of the securities, theinability of the approved intermediary to return the securitiesdeposited by the lender and the possible loss of any corporatebenefits accruing to the lender from the securities depositedwith the approved intermediary. The Mutual Fund may not beable to sell such lent securities and this can lead to temporaryilliquidity.

Interpretation

For all purposes of this Offer Document, except as otherwiseexpressly provided or unless the context otherwise requires:

l The terms defined in this Offer Document include the pluralas well as the singular.

l Pronouns having a masculine or feminine gender shall bedeemed to include the other.

l All references to “US$” refer to United States Dollars and“Rs.” refer to Indian Rupees. A “crore” means “ten million”and a “lakh” means a “hundred thousand”.

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DUE DILIGENCE CERTIFICATE

It is confirmed that:

i) The Offer Document forwarded to SEBI is in accordance with the SEBI (Mutual Funds)Regulations, 1996 and the guidelines and directives issued by SEBI from time to time.

ii) All legal requirements connected with the launching of the Scheme as also the guidelines,instructions, etc. issued by the Government of India and any other competent authority in thisbehalf, have been duly complied with.

iii) The disclosures made in the Offer Document are true, fair and adequate to enable the investorsto make a well-informed decision regarding investment in the proposed Scheme.

iv) The intermediaries named in the Offer Document, are registered with SEBI and till date suchregistration is valid.

For HSBC Asset Management (India) Private Limited(Investment Manager to HSBC Mutual Fund)

Sd/-O. V. Ravi

Vice President & Head of Compliance

Place : Mumbai

Date : 16 July, 2007

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SCHEME SUMMARY

Name of the Scheme HSBC Interval Fund (HINF - I)

Structure A Debt Oriented Interval Scheme

Investment Objective To seek generation of returns by investing in a portfolio of fixed income instruments normallymaturing in line with the time profile of the respective Plan(s).

Plan(s) The Scheme HSBC Interval Fund - Plan I is a Quarterly Interval Plan with an interval periodof 91 days.

Option(s) / Sub-option(s) Regular & Institutional Options and sub-options of Dividend (reinvestment) & Growth.

Dividend Declaration of dividend and its frequency will inter alia depend upon the distributable surplus.Dividend may be declared from time to time at the discretion of the Trustees.

Minimum Application Amount Regular Option - Rs. 10,000 & Institutional Option - Rs. 1 crore.

Minimum Additional Investment Re. 1/-

Minimum Redemption Amount Rs. 1,000/-

Benchmark Index CRISIL Liquid Fund Index

New Fund Offer The New Fund Offer Period for HSBC Interval Fund - Plan I will commence from 21 November2007 and close on 21 November 2007. The New Fund Offer for HSBC Interval Fund Plan IIand Plan III will commence at any time within six months from the date of the SEBI clearanceletter for the Offer Document. The New Fund Offer price of Units of the Scheme will be Rs.10/- per unit. The AMC / Trustees reserve the right to extend the closing date of the New FundOffer Period, subject to the condition that the subscription to the New Fund Offer shall not bekept open for more than 30 days.

On-going Subscriptions The Scheme allows for purchases/redemptions during the specified interval period at NAVbased prices, without payment of any entry/exit load. In addition, the Scheme also provides forredemption of units on every Business Day on an ongoing basis subject to applicable exit load.

In case such Interval date or payout date happens to be a non-business day, then the immediatenext business day shall be considered as the Interval date.

Specified Transaction Period 1 business day on the date of maturity of the previous Plan i.e., all redemptions and subscriptionsof the Plan will be effected on the same day.

The AMC will calculate and disclose the first NAVs not later than30 days from the closure of the New Fund Offer Period. On anongoing basis, NAVs will be calculated and published for everyBusiness Day. NAV of the Scheme / Plan(s)/ Option(s) shall bemade available at all Investor Service Centres of the AMC. TheAMC shall have the NAV published in two daily newspapers andupdated on the AMC’s website (www.hsbcinvestments.co.in). Aspresently required by the SEBI Regulations, a complete statementof the Scheme portfolio would be published by the Mutual Fund asan advertisement in one English daily circulating in the whole ofIndia and in a newspaper published in the language of the regionwhere the head office of the mutual fund is situated, within 1 monthfrom the close of each half year (i.e. 31 March and 30 September)or mailed to the Unitholders.

The AMC and the Trustees reserve the right to introduce such otherPlans as they deem necessary from time to time, in accordance withthe SEBI Regulations. The AMC / Trustees reserve the right toincrease / decrease the New Fund Offer Period.

The AMC shall update the NAVs on the websites of Association ofMutual Funds in India - AMFI (www.amfiindia.com) and the AMCby 9.00 p.m. on every Business Day. In case of any delay, thereasons for such delay would be explained to AMFI by the next day.If the NAVs are not available before commencement of businesshours on the following day due to any reason, the Fund shall issuea press release providing reasons and explaining when the Fundwould be able to publish the NAVs.

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SECTION I

CONSTITUTION OF THE MUTUAL FUND

HSBC Mutual Fund (“the Mutual Fund” or “the Fund”) has beenconstituted as a Trust in accordance with the provisions of the IndianTrusts Act, 1882 (2 of 1882) vide a Trust Deed dated February 7,2002. The office of the Sub-Registrar of Assurances at Mumbai hasregistered the Trust Deed establishing the Fund under the RegistrationAct, 1908. The Fund was registered with SEBI vide registrationnumber MF/046/02/5 dated May 27, 2002.

The office of the Mutual Fund is at 314, D. N. Road, Fort, Mumbai- 400 001.

The Trust has been formed for the purpose of pooling of capital fromthe public for collective investment in securities / any other propertyfor the purpose of providing facilities for participation by personsas beneficiaries in such properties / investments and in the profits/ income arising therefrom.

Sponsor

HSBC Securities and Capital Markets (India) Private Limited(HSCI).HSCI is a member of the HSBC Group, one of the largest bankingand financial services organisations, in the world. Headquartered inLondon, HSBC operates through long-established businesses infive regions: Europe, Asia-Pacific region, Middle East, America andAfrica. Through its global network of some 10,000 offices in 82countries and territories, HSBC provides a comprehensive range offinancial services to personal, commercial, corporate, institutionaland investment and private banking clients.

HSCI offers integrated investment banking services, securities andcorporate finance & advisory. HSCI is a member of The BombayStock Exchange Limited and National Stock Exchange (capital andderivative market segments) and is also a category I merchantbanker and underwriter registered with Securities and ExchangeBoard of India.

Equities: HSCI is primarily an institutional stockbroker, with aclient base spanning foreign institutional investors, Indian financialinstitutions, mutual funds and select retail clients. The business is

backed by comprehensive research covering around 62 of India’slargest, actively traded securities across 13 industry groups.

Global Investment Banking: HSCI provides public and private sectorcorporates and government clients with strategic and financial advicein the areas of mergers and acquisitions, primary and secondarymarket funding, privatisations, structured financial solutions andproject export finance.

HSCI has contributed an amount of Rs. 100,000 (Rupees One LakhOnly) to the corpus of the Fund. HSCI is not responsible nor liablefor any loss or shortfall resulting from the operation of the Schemebeyond this contribution.

HSCI holds 100% of the paid up equity share capital of the AMC.

Given below is a brief summary of HSCI’s financials:

(Rs. 000)

Description 2006# 2005# 2004*

Total Income 1,040,186 670,869 698,271

Profit Before Tax 583,428 288,961 171,523

Profit After Tax 387,713 156,433 100,799

Free Reserves /(Accumulated Losses) 429,255 133,994 47,217

Net Worth 1,460,327 1,165,066 1,078,289

Earnings per Share (Rs.) 46.35 16.76 7.72

Book Value per Share(Rs.) / (Net Worth / No.of Shares) 186.96 149.16 138.05

Dividend (%) 58,580 39,054 –

Paid-Up Capital

(Equity) 781,072 781,072 781,072

(Preference) 250,000 250,000 250,000

# Year ending 31 March* 15 months period from 1 January, 2003 to 31 March, 2004

Board of Trustees (The Trustees)

The Sponsor has appointed a Board of Individual Trustees (the Trustees) for managing the HSBC Mutual Fund.

The Board presently comprises the following:

N. P. Gidwani Director92B, Embassy Apartments, 46 Napean Sea Road, Rampart Finance Private LimitedMumbai - 400 036 AFL Private LimitedChairman of the Board of Trustees Tolani Shipping Company LimitedChartered Accountant Technova Imaging Systems Private LimitedIndependent Financial / Management Consultant Technova Graphics Private Limited

Marsh (India) Private LimitedLastra Niraj Private LimitedBest Prax Private LimitedADRC (Cayman) LimitedIndia Debt Management LimitedADM Galleus Fund Limited (Cayman Islands)

Dr. Rudolf Apenbrink DirectorLevel 22, HSBC Main Building, Addendum 3, Nil1 Queen’s Road Central, Hong KongChief Executive OfficerHSBC Investments (Hongkong) Limited

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Nasser Munjee DirectorChairman ABB LimitedDevelopment Credit Bank, HDFC Limited301, Trade Plaza, Veer Savarkar Marg, Cummins India LimitedPrabhadevi, Mumbai 400 025 Gujarat Ambuja Cements LimitedEconomist / Consultant The Shipping Corporation of IndiaSenior Advisor - Infrastructure, KPMG Apollo Health Street Limited

Mahindra & Mahindra Financial Services LimitedTata Chemicals LimitedIndian Railway Finance Corporation LimitedUnichem Laboratories LimitedCiba Specialty Chemicals (India) LimitedRepro India Ltd.Bharti AXA Life Insurance Co. Ltd.Development Credit BankFomento Resorts & Hotels Limited

Manu Tandon DirectorBeck India Ltd., Beck House, Damle Path, Beck India Ltd.Off Law College Road, Pune 411 008 Bajaj Allianz Life Insurance Co. Ltd.Managing DirectorBeck India Limited

Mehli Mistri Director302, Belmont, 3rd Floor, Nil37-D, Napean Sea Road,Mumbai - 400 036ExecutiveEx-MD Saudi American Bank (Citibank affiliate),Ex-CEO ANZ Grindlays Bank

Dilip J. Thakkar DirectorJayantilal Thakkar Associates, Blueberry Trading Company Private Limited111 (A) Mahatma Gandhi Road, Chrysanthemum Investments Private LimitedFort, Mumbai - 400 023 Garware Offshore LtdChartered Accountant Essar Oil LimitedPartner - Jayantilal Thakkar & Company Hamlet Constructions (India) Private LimitedPartner - Jayantilal Thakkar Associates Himatsingka Seide Limited

Indo Count Industries Ltd.Panasonic Battery India Co. LimitedWearology LimitedOmega Management Services LimitedPremier Auto Electric LimitedRajasvi Properties Holdings Private LimitedStarrock Investments & Trading Private LimitedThirumalai Chemicals LimitedThe Ruby Mills LimitedTownship Real Estate Developers Private LimitedHinditron Consultancy Services Private LtdWalchandnagar Industries Limited, MumbaiWindmere Hospitality (India) Pvt. Ltd.

Mr. N. P. Gidwani and Dr. Rudolf Apenbrink are associated with the Sponsor. Mr. Nasser Munjee, Mr. Manu Tandon, Mr. Mehli Mistri andMr. Dilip J. Thakkar are independent Trustees. Thus, 2 out of the 6 Trustees are independent Trustees.

Summary of Substantive Provisions of theTrust Deed

Pursuant to the Trust Deed dated February 7, 2002 constituting theMutual Fund and in terms of the SEBI (Mutual Funds) Regulations,1996, the rights and obligations of the Trustees are as under:

l The Trustees shall have a right to obtain from the AMC suchinformation as is considered necessary by them.

l The Trustees shall ensure before the launch of any scheme thatthe AMC has : -

l Systems in place for its back office, dealing room andaccounting;

l Appointed all key personnel including fund manager(s)for the Scheme and submitted to the Trustees their bio-data which shall contain the educational qualifications,past experience in the securities market within 15 days oftheir appointment;

l Appointed auditors to audit the accounts of the Scheme;

l Appointed compliance officer who shall be responsiblefor monitoring the compliance of the Act, rules and

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regulations, notifications, guidelines, instructions etc.issued by the Board or the Central Government and forredressal of investors’ grievances. The compliance officerso appointed shall immediately and independently reportto the Board any non-compliance observed;

l Appointed registrars and laid down parameters for theirsupervision;

l Prepared a compliance manual and designed internalcontrol mechanisms including internal audit systems and

l Specified norms for empanelment of brokers and marketingagents.

l The Trustees shall ensure that the AMC has been diligent inempanelling brokers, in monitoring securities transactions withbrokers and avoiding undue concentration of business with anybroker.

l The Trustees are required to ensure that the AMC has not givenany undue or unfair advantage to any associate or dealt withany of the associates of the AMC in any manner detrimentalto the interests of the Unitholders.

l The Trustees are required to ensure that the transactions enteredinto by the AMC are in accordance with the SEBI (MutualFunds) Regulations, 1996 and the provisions of the Scheme.

l The Trustees are required to ensure that the AMC has beenmanaging the Scheme independently of other activities and hastaken adequate steps to ensure that the interest of investors ofone Scheme are not compromised with those of any otherScheme or of other activities of the AMC.

l The Trustees are required to ensure that all the activities of theAMC are in accordance with the provisions of SEBI (MutualFunds) Regulations, 1996.

l Where the Trustees have reason to believe that the conduct ofthe business of the Fund is not in accordance with theRegulations and the provisions of the Scheme, they are requiredto take such remedial steps as are necessary by them and toimmediately inform SEBI of the violation and the action takenby them.

l Each of the Trustees are required to file with the Fund thedetails of his securities’ transactions on a quarterly basis, inaccordance with guidelines issued by SEBI from time to time.

l The Trustees are accountable for and are required to be thecustodian of the Fund’s property of the respective Scheme andto hold the same in trust for the benefit of the Unitholders inaccordance with the SEBI (Mutual Funds) Regulations, 1996and the provisions of the Trust Deed.

l The Trustees are required to take steps to ensure that thetransactions of the Fund are in accordance with the provisionsof the Trust Deed.

l The Trustees are responsible for the calculation of any incomedue to be paid to the Fund and also of any income received inthe Mutual Fund for the holders of the Units of any Schemein accordance with the SEBI (Mutual Funds) Regulations,1996 and the Trust Deed.

l The Trustees are required to obtain the consent of the Unitholdersof a Scheme:

l When required to do so by SEBI in the interest of theUnitholders of that Scheme; or

l Upon the request of three-fourths of the Unitholders ofany Scheme under the Fund for that Scheme; or

l If a majority of the Trustees decide to wind up the Schemeor prematurely redeem the Units.

l The Trustees shall ensure that no change in the fundamentalattributes of any Scheme or the Trust or fees and expensespayable or any other change which would modify the Schemeand affect the interests of Unitholders, shall be carried outunless:

l a written communication about the proposed change issent to each Unitholder and an advertisement is given inone English daily newspaper having nationwide circulationas well as in a newspaper published in the language of theregion where the Head Office of the Mutual Fund issituated; and

l the Unitholders are given an option to exit at the prevailingNet Asset Value without any exit load.

l The Trustees are required to call for the details of transactionsin securities by the key personnel of the AMC in their ownnames or on behalf of the AMC and report the same to SEBIas and when called for.

l The Trustees are required to review quarterly, all transactionscarried out between the Fund, the AMC and its associates.

l The Trustees are required to review quarterly the net worth ofthe AMC and in case of any shortfall ensure that the AMCmakes up for the shortfall as per clause (f) of sub regulation(1) of Regulation 21 of SEBI (Mutual Funds) Regulations,1996.

l The Trustees are required to periodically review all servicecontracts such as custody arrangements, transfer agency ofsecurities and satisfy themselves that such contracts are executedin the interest of the Unitholders.

l The Trustees are required to ensure that there is no conflict ofinterest between the manner of deployment of its net worth bythe AMC and the interest of the Unitholders.

l The Trustees are required to periodically review the investorcomplaints received and the redressal of the same by the AMC.

l The Trustees are required to abide by the Code of Conduct asspecified in the Fifth Schedule of the SEBI (Mutual Funds)Regulations, 1996.

l The Trustees have to furnish to SEBI on a half yearly basis:-

l a report on the activities of the Fund;

l a certificate stating that the Trustees have satisfiedthemselves that there have been no instances of self dealingor front running by any of the Trustees, directors and keypersonnel of the AMC;

l a certificate to the effect that the AMC has been managingthe Scheme independently of any other activities and incase any activities of the nature referred to in Regulation24, sub regulation (2) of the SEBI (Mutual Funds)Regulations, 1996 have been undertaken, the AMC hastaken adequate steps to ensure that the interest of theUnitholders is protected.

l The independent Trustees are required to give their commentson the report received from the AMC regarding the investmentsby the Mutual Fund in the securities of the group companiesof the Sponsor.

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l No amendment to the Trust Deed shall be carried out withoutprior approval of SEBI and Unitholders’ approval / consentwill be obtained where it affects the interests of Unitholders asper the procedure / provisions laid down in the Regulations.

l The Trustees shall exercise due diligence as under:

A. General Due Diligence:l The Trustees shall be discerning in the appointment of the

directors of the AMC.

l The Trustees shall review the desirability of thecontinuance of the AMC if substantial irregularities areobserved in the Schemes and shall not allow the AMC tofloat any new Scheme.

l The Trustee shall ensure that the trust property is properlyprotected, held and administered by proper persons andby a proper number of such persons.

l The Trustees shall ensure that all service providers holdappropriate registrations from SEBI or the concernedregulatory authority.

l The Trustees shall arrange for test checks of servicecontracts.

l The Trustees shall immediately report to SEBI any specialdevelopments in the Mutual Fund.

B. Specific Due Diligence:The Trustees shall:

l Obtain internal / concurrent audit reports at regular intervalsfrom independent auditors appointed by the Trustees.

l Obtain compliance certificates at regular intervals fromthe AMC.

l Hold meetings of Trustees frequently and ensure that atleast 6 such meetings shall be held in each year.

l Consider the reports of the independent auditor andcompliance reports of the AMC at the meeting of theTrustees for appropriate action.

l Maintain records of the decisions of the Trustees at theirmeetings and of the minutes of the meetings.

l Prescribe and adhere to the code of ethics by the Trustees,the AMC and its personnel.

l Communicate in writing to the AMC of the deficienciesand check on the rectification of deficiencies.

l The Trustees shall maintain high standards of integrity andfairness in all their dealings and in the conduct of their business.

l The Trustees shall render at all times high standards of service,exercise due diligence, ensure proper care and exerciseindependent professional judgement.

l The independent Trustees shall pay specific attention to thefollowing as may be applicable, namely:

l The Investment Management Agreement and thecompensation paid under the Agreement.

l Service contracts with affiliates - whether the AMC hascharged higher fees than outside contractors for the sameservices.

l Selection of the AMC’s independent directors.

l Securities transactions involving affiliates to the extent

such transactions are permitted.

l Selecting and nominating individuals to fill independentdirectors’ vacancies.

l Code of ethics must be designed to prevent fraudulent,deceptive or manipulative practices by insiders inconnection with personal securities transactions.

l The reasonableness of fees paid to sponsors, AMC andany others for services provided.

l Principal underwriting contracts and renewals.

l Any service contracts with the associates of the AMC.

l Notwithstanding anything contained in sub-regulations(1) to (25) of Regulation 18 of the SEBI (Mutual Funds)Regulations, 1996, the Trustees shall not be held liable foracts done in good faith if they have exercised adequatedue diligence honestly.

l The Regulations provide that the meetings of the Trusteesshall be held at least once in every 2 calendar months andat least 6 such meetings shall be held every year. Further,as per the Regulations, for the purposes of constituting thequorum for the meetings of the Trustees, at least oneIndependent Trustee or Director should be present duringsuch meetings.

The supervisory role of the Trustees will be discharged by reviewingthe information and the operations of the Fund based on the reportssubmitted at the meetings of the Trustees, by reviewing the reportssubmitted by the Internal Auditor and the bi-monthly and half yearlycompliance reports. Presently the Board of Trustees are required tohold a meeting at least once in 2 calendar months and at least 6 suchmeetings are required to be held every year. During the period fromFebruary 2002 up to October 2007, the Board of Trustees met 34times.

No amendment to the Trust Deed shall be carried out without priorapproval of SEBI and Unitholders’ approval / consent will be obtainedwhere it affects the interests of Unitholders as per the procedure /provisions laid down in the Regulations.

The Trustees may require or give verification of identity or otherdetails regarding any subscription or related information from / ofthe Unitholders as may be required under any law, which may resultin delay in dealing with the applications, Units, benefits, distribution,etc.

Trusteeship Fees

Pursuant to the Trust Deed constituting the Fund, the Fund isauthorised to pay the Independent Trustees a fee for their servicesfor meetings of the Board of Trustees / Committee meetings attendedby such Trustees, as may be mutually agreed between the Sponsorand the Board of Trustees from time to time, subject to the SEBIRegulations.

Investment Manager

HSBC Asset Management (India) Private Limited (the InvestmentManager or the AMC), is a company incorporated under theCompanies Act, 1956, having its registered office at 314, D. N.Road, Fort, Mumbai 400 001.

The paid-up equity share capital of the AMC is Rs. 12 crores. HSBCSecurities and Capital Markets (India) Private Limited holds 100%of the paid up equity share capital of the AMC.

The AMC is appointed as the Investment Manager of HSBC MutualFund vide Investment Management Agreement (IMA) dated February

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7, 2002, executed between the Trustees and the AMC. SEBI approvedthe AMC to act as the Investment Manager of the Fund vide its letterNo. MFD/BC/163/2002 dated May 27, 2002.

The AMC will manage the Scheme of the Fund as mentioned in thisOffer Document, in accordance with the provisions of IMA, theTrust Deed, the SEBI Regulations and the objectives of the Scheme.

The AMC has received Certificate of Registration as PortfolioManager under the SEBI (Portfolio Managers) Regulations, 1993vide registration no INP000001322 with effect from 16 September,2005.

In accordance with the SEBI Regulations, an asset managementcompany, subject to certain conditions, is also permitted to undertakeactivities in the nature of portfolio management services, managementand advisory services to offshore funds, pension funds, providentfunds, venture capital funds, management of insurance funds,financial consultancy and exchange of research on commercial basisand such other activities as may be permitted by SEBI from time totime. Subject to these activities being assessed as desirable andeconomically viable, the AMC may undertake any or all of theseactivities after satisfying itself that there is no potential conflict ofinterest.

Board of Directors of the AMC

Naina Lal Kidwai Director52/60 Mahatma Gandhi Road, Fort, Mumbai 400 001. Nestle SAChairman of the Board of Directors HSBC Software Development (India) Private LimitedBank ExecutiveGroup General Manager & Chief Executive Officer, India -The Hongkong and Shanghai Banking Corporation Limited

Joanna Munro DirectorLevel 2, 78 St James’s Street, London SWIA IEJ NilBusiness ExecutiveGlobal Chief Investment Officer -HSBC Group Investment Businesses Limited

Nawshir Khurody Director12 A Darbhanga Mansion, Carmicheal Road, Mumbai - 400 026. Eureka Forbes LimitedExecutive Samrat Holdings LimitedEx-Chairman - Tata Infomedia Limited Voltas LimitedEx-CEO & MD - Voltas Limited Khurody Technical Services Pvt LtdEx-CEO & MD - Merind Limited Vantech Investments Limited

NextGen Publishing LimitedForbes Gokak Ltd.Tata Ceramics LtdForbes Infotainment LimitedMilestone Capital Advisors Pvt. Ltd.

Vithal Palekar Director415, Samudra Mahal, Worli, Mumbai - 400 018. Dextrous Solutions LimitedChartered Accountant Royen Investments LimitedEx-Chairman and Managing Director - Johnson & Johnson LimitedPartner - Borkar & Muzumdar, Chartered Accountants

Jagjit Lal Pasricha Director4B Sunny Side, Bride Street, Bangalore - 560 025 NilSocial WorkImmediate Past President - Multiple Sclerosis Society of IndiaEx-Joint Managing Director -Motor Industries Company Limited, MICO Bosch Group

Sanjay Prakash Director314, D. N. Road, Fort, Mumbai 400 001. NilChief Executive OfficerHSBC Asset Management (India) Private Limited

Ms. Naina Lal Kidwai, Ms. Joanna Munro and Mr. Sanjay Prakash are associated with the Sponsor. Mr. Nawshir Khurody, Mr. Vithal Palekarand Mr. Jagjit Lal Pasricha are independent Directors. Thus, 3 out of the 6 Directors are independent Directors.

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Powers, Duties and Responsibilities of the AMC

The powers, duties and responsibilities of the AMC shall be governedby the Regulations and the Investment Management Agreement.The AMC, in the course of managing the affairs of the Mutual Fund,has the powers, inter alia for :

l Floating Scheme of the Mutual Fund after approval of the sameby the Trustees and investing and managing the funds mobilisedunder various Scheme, in accordance with the provisions of theTrust Deed and the Regulations.

l Evaluating investment opportunities for further investments bythe Mutual Fund.

l Evaluating and issuing orders and instructions with respect tothe acquisition and disposition of investments and risk positions/ exposures.

l Issuing and ensuring due compliance of instructions to thecustodian and the Mutual Fund’s brokers, agents includingregistrars and transfer agents.

l Issuing, selling, repurchasing and cancelling the Units as perthe terms of the respective Scheme of the Mutual Fund.

l Managing the Mutual Fund Scheme independently of otheractivities and taking adequate steps to ensure that the interestsof Unitholders are not being compromised with those of anyother Scheme or any of its other activities.

l Opening and operating bank accounts in the name and onbehalf of each scheme in relation to the investments made bythe Mutual Fund.

l Fixing record dates or book closure periods for the purpose ofeffecting transfer of Units and determining eligibility fordividends, bonus, rights, privileges, preferences, reservationsor other entitlements or accretions.

l Providing information to SEBI and the Unitholders as requiredunder the Regulations or as otherwise required by SEBI.

l Receiving, holding in trust, or as agent or nominee of theTrustees, improving, developing, using, selling, transferring,exchanging, assigning, dealing, trading in and managing allassets and all accretions thereto and endeavouring to earnadequate returns on them for and on behalf of the Trust.

l Fixing sales and re-purchase prices, and calculating Net AssetValue for Units, consistent with the Regulations.

l Setting up an effective establishment for servicing of Unitholdersunder the various Scheme and also to protect the interest of theUnitholders.

l Generally doing all acts, deeds, matters and things which arenecessary for any object, purpose or in relation to the MutualFund in any manner or in relation to any scheme of the MutualFund.

Duties and Responsibilitiesl The AMC shall take all reasonable steps and exercise due

diligence to ensure that the investment of funds pertaining toany Scheme is not contrary to the provisions of the SEBIRegulations and the Trust Deed.

l The AMC shall exercise due diligence and care in all itsinvestment decisions as would be exercised by other personsengaged in the same business.

l The AMC shall be responsible for the acts of commissions oromissions by its employees or the persons whose services havebeen procured by the AMC.

l The AMC shall submit to the Trustees quarterly reports of eachyear on its activities and the compliance with the SEBIRegulations.

l The Trustees at the request of the AMC may terminate theassignment of the AMC at any time provided that suchtermination shall become effective only after the Trustees haveaccepted the termination of assignment and communicatedtheir decision in writing to the AMC.

l Notwithstanding anything contained in any contract oragreement of termination, the AMC or its directors or otherofficers shall not be absolved of liability to the Mutual Fundfor their acts of commissions or omissions, while holding suchposition or office.

l The AMC shall not through any broker associated with theSponsor, purchase or sell securities, which is average of 5% ormore of the aggregate purchases and sales of securities madeby the Mutual Fund in all its Scheme. Provided that for thesepurposes, aggregate purchase and sale of securities shall excludesale and distribution of Units issued by the Mutual Fund.Provided further that the aforesaid limit of 5% shall apply fora block of any 3 months.

l The AMC shall not purchase and sell through any broker (otherthan a broker associated with the Sponsor) which is averageof 5% or more of the aggregate purchases and sale of securitiesmade by the Mutual Fund in all its Scheme, unless the AMChas recorded in writing the justification for exceeding the limitof 5% and reports of all such investments are sent to theTrustees on a quarterly basis. Provided that the aforesaid limitshall apply for a block of 3 months.

l The AMC shall not utilise the services of the Sponsor or anyof its associates, employees or their relatives, for the purposeof any securities’ transactions and distribution and sale ofsecurities, provided that the AMC may utilise such services ifdisclosure to that effect is made to the Unitholders and thebrokerage or commission paid is also disclosed in the halfyearly annual accounts of the Mutual Fund.

l The AMC shall file with the Trustees the details of transactionsin securities by key personnel of the AMC in their own nameor on behalf of the AMC and shall also report to SEBI, as andwhen required by SEBI.

l In case the AMC enters into any securities’ transaction withany of its associates a report to that effect shall be sent to theTrustees at their next meeting.

l In case any company has invested more than 5% of the net assetvalue of a Scheme, the investment made by that Scheme or byany other Scheme of the same Mutual Fund in that companyor its subsidiaries shall be brought to the notice of the Trusteesby the AMC and be disclosed in the half yearly / annualaccounts of the respective Scheme with justification for suchinvestment provided that the latter investment has been madewithin 1 year of the date of the former investment calculatedon either side.

l The AMC shall file with the Trustees and SEBI

l Detailed bio-data of all its directors along with their interestin other companies within 15 days of their appointment;and any change in the interest of directors every 6 months.

l A quarterly report to the Trustees giving details andadequate justification about the purchase and sale of

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HSBC INTERVAL FUND

securities of the group companies of the Sponsor or theAMC as the case may be, by the Mutual Fund during thequarter.

l Each director of the AMC shall file the details of histransactions of dealing in securities with the Trustees ona quarterly basis in accordance with guidelines issued bySEBI from time to time.

l The AMC shall not appoint any person as key personnel whohas been found guilty of any economic offence or involved inviolation of securities laws.

l The AMC shall appoint registrars and share transfer agentswho are registered with SEBI. Provided if the work relating tothe transfer of Units is processed in-house, the charges atcompetitive market rates may be debited to the Scheme and forrates higher than the competitive market rates, prior approvalof the Trustees shall be obtained and reasons for charginghigher rates shall be disclosed in the annual accounts.

l The AMC shall abide by the Code of Conduct as specified inthe Fifth Schedule of the SEBI Regulations.

l The AMC shall

l Not act as a trustee of any mutual fund

l Not undertake any other business activities except activitiesin the nature of portfolio management services,management and advisory services to offshore funds,pension funds, provident funds, venture capital funds,management of insurance funds, financial consultancyand exchange of research on commercial basis if any ofsuch activities are not in conflict with the activities of theMutual Fund without the prior approval of the Trusteesand SEBI. Provided that the AMC may itself or throughits subsidiaries undertake such activities if it satisfiesSEBI that the key personnel of the AMC, the systems,back office, bank and securities accounts are segregatedactivity wise and there exists systems to prohibit accessto inside information of various activities. Provided furtherthat the AMC shall meet capital adequacy requirements,if any, separately for each such activity and obtain separateapproval, if necessary under the relevant regulations.

l Not invest in any of its Scheme unless full disclosure ofits intention to invest has been made in the Offer Document.

l Not be entitled to charge any fees on its investment in thatScheme.

l Not acquire any of the assets out of the Trust funds, whichinvolves the assumption of any liability which is unlimitedor which may result in encumbrance of the Schemeproperty in any way.

l The independent Directors of the AMC shall pay specificattention to the following as may be applicable, namely:

l The Investment Management Agreement and the compensationpaid under the Agreement.

l Service contracts with affiliates - whether the AMC has chargedhigher fees than outside contractors for the same services.

l Securities transactions involving affiliates to the extent suchtransactions are permitted.

l Code of ethics must be designed to prevent fraudulent, deceptiveor manipulative practices by insiders in connection with personalsecurities transactions.

l The reasonableness of fees paid to Sponsors, AMC and anyothers for services provided.

l Principal underwriting contracts and renewals.

l Any service contracts with the associates of the AMC.

l The Chief Executive Officer (whatever his designation maybe) of the asset management company shall ensure that themutual fund complies with all the provisions of these regulationsand the guidelines or circulars issued in relation thereto fromtime to time and that the investments made by the fund managersare in the interest of the unitholders and shall also be responsiblefor the overall risk management function of the mutual fund.

Asset Management Fees

In the terms of the Investment Management Agreement and theRegulations, the AMC is entitled to an investment management andadvisory fee at the rate of 1.25% per annum of the weekly averagenet assets outstanding in each accounting year for the Schemeconcerned, as long as the net assets do not exceed Rs. 100 crores(Rupees One Hundred Crores Only) and 1.00% of the excess amountover Rs. 100 crores (Rupees One Hundred Crores Only), where netassets so calculated exceed Rs. 100 crores (Rupees One HundredCrores). For Scheme launched on a no load basis, the AMC isentitled to collect an additional management fee not exceeding 1%of the weekly average net assets outstanding in each financial year.

Key Employees of the AMC and relevantexperience

Sanjay Prakash, Chief Executive Officer43 yearsB.A. (Hons) Economics, AMP (Harvard Business School)

Experience:Over 21 years experience in areas of banking, asset management,sales, operations, finance and technology.

l HSBC Asset Management (India) Private Limited

Chief Executive Officer from April 2003 to present


Chief Operating Officer from December 2001 to March 2003

l HSBC Securities and Capital Markets (India) Private Limited

Chief Operating Officer (Designate) - HSBC Asset Management(India) Private Limited from April 2001 to December 2001.

l ANZ Grindlays Asset Management Company Private Limited(now Standard Chartered Asset Management)

Head - Operations, India from September 1999 to March 2001

l ANZ Grindlays Bank (now Standard Chartered Bank)

Area Manager - Operations, Western India from October 1996to August 1999

Area BPR Team Leader, Western India from July 1997 toJanuary 1998

Area Manager - Operations, Eastern India from January 1996to September 1996

Branch Manager, Shakespeare Sarani, Calcutta from July 1994to December 1995

Audit Manager Retail Services, Group Audit, South Asia fromJanuary 1993 to June 1994

Computer Auditor / Auditor Systems & Research, Group Audit,South Asia from June 1991 to December 1992

Internal Auditor, ANZ Bank, Melbourne, Australia from April1990 to May 1991

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HSBC INTERVAL FUND

S. Venkatesh Iyer, Senior Vice President & Chief Operating Officer

42 years

Chartered Accountant

Experience:

Over 17 years experience in Operations, Finance, Customer Serviceetc.

l HSBC Asset Management (India) Private LimitedChief Operating Officer from August 2004 to date

l Prudential ICICI Asset Management CompanyAssociate Vice President - Operations from July 2004 to August2004

l Sundaram Asset Management Co. Ltd.Vice President - Operations, from August 2003 to July 2004

l Quintant Services LimitedLead Consultant from May 2003 to July 2003

l Capital Group International Inc.Consultant, from December 1999 to May 2003

l Birla Sun-Life Asset Management Company LimitedController Operations, June 1996 to November 1999

l Ernst & Young, Accounting Firm, KuwaitAudit Officer from December 1991 to September 1995

Shailendra Jhingan, Senior Vice President & Head of FundManagement - Fixed Income

36 years

Masters in Management Studies (Finance)

B.A. (Hons) Economics

Experience:

Over 12 years experience in research and fund management

l HSBC Asset Management (India) Private LimitedHead of Fund Management - Fixed Income from October 2007to present Fund Manager from December 2002 to October2007

l Birla SunLife Mutual FundFund Manager from February 2000 to November 2002

l JM Morgan StanleyEconomist & Fixed Income Analyst from July 1997 to February2000

l Fortress FinancialResearch Analyst from 1995 to June 1997

Mihir Vora, CFA

Senior Vice President & Head of Fund Management - Equities

38 years

B.E. (Mechanical), Post Graduate Diploma in Management

Experience:

Over 13 years experience in fund management

l HSBC Asset Management (India) Private LimitedHead of Fund Management - Equities from July 2006 to present

l ABN AMRO Asset Management (India) LimitedHead - Equities from January 2004 to June 2006

l Prudential ICICI Asset Management Company LimitedFund Manager from November 2000 to December 2003

l SBI Funds Management LimitedVarious positions including Fund Manager, Dealer, Analystfrom May 1994 to October 2000

Samit Sengupta, Senior Vice President & Head Sales andDistribution

35 years

B.E (Civil), Post Graduate Diploma in Management

Experience:

Over 11 years of experience in Sales and Operations

l HSBC Asset Management (India) Private LimitedSenior Vice President & Head Sales and Distribution from July2007 to present

l CitibankUnit Head Dubai Citibanking – Sales from April 2005 to June2007

Branch Head, Bangalore from January 2003 to March 2005

Citibank Suvidha, Regional Sales Manager, Bangalore fromJanuary 2000 to December 2003

Manager to Operation Department - Mutual Funds, Chennaifrom May 1997 to December 1999

Management Associate, Chennai from May 1996 to May 1997

O.V. Ravi, Vice President & Head of Compliance

39 years

B.L., ACS

Experience:

Over 14 years of experience in Legal, Secretarial and Compliance

l HSBC Asset Management (India) Private LimitedVice President & Head of Compliance from September 2007to present

l NV Advisory Services Private LimitedChief Compliance Officer from September 2005 to September2007

l Reliance Capital Asset Management LimitedHead – Legal & Compliance from November 2003 to September2005

l Mphasis BFL LimitedHead – Legal & Company Secretary from June 2002 to October2003

l Novell Software Development LimitedCompany Secretary from January 2001 to June 2002

l Kakatiya Textiles LimitedSecretarial Officer from January 1998 to September 2000

l Lanco Industries LimitedSecretarial Officer from January 1994 to December 1997

Deepali Naair, Vice President & Head of Marketing & ProductDevelopment

35 years

B.A., Masters of Management Studies (Marketing)

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Experience:

Over 14 years experience in Sales & Marketing, Brand Managementand Strategic Planning

l HSBC Asset Management (India) Private LimitedHead of Marketing & Product Development from April 2006to present

l Marico LimitedMarketing Manager from October 2002 to March 2005

l FCB ULKA Advertising Private LimitedConsultant – Strategic Planning from September 1998 toOctober 2002

l BPL Mobile Communications LimitedManager – Marketing from September 1995 to August 1998

l Tata Motors LimitedSenior Officer – Sales & Marketing from May 1993 toSeptember 1995

K. Sriram, Vice President & Head of Finance & Customer Service

35 years

B. Com., AICWA, ACA

Experience:

Over 11 years experience in Financial & Management Accounting.

l HSBC Asset Management (India) Private LimitedHead of Finance & Customer Service from July 2004 to present.Head of Finance from December 2001 to June 2004.

l HSBC Securities and Capital Markets (India) Private LimitedHead of Finance (Designate) - HSBC Asset Management (India)Private Limited from September 2001 to December 2001.

l Templeton Asset Management (India) Private LimitedManager, Senior Manager - Corporate Accounting from June2000 to September 2001

l Stock Holding Corporation of India LimitedExecutive, Asst. Manager from May 1996 to June 2000

Chandresh Shah, Vice President and Head of Risk Management

34 years,

Masters in Financial Management, AICWA, DBF, Passed III levelsof CFA Exams (CFA Institute), FRM (GARP)

Experience:

Over 11 years experience in area of Risk Management for Banks,Asset Management, Primary Dealer and Brokerage.

l HSBC Asset Management (India) Private Limited.Head of Risk Management from August 2006 to present

l Standard Chartered Bank.Market Risk Manager- India from April 2005- August 2006

l SBI Asset Management Private Limited.Chief Risk Officer from March 2004-April 2005

l BOB Capital Market.Vice President-Risk Management from May 2002 to February2004

l HDFC Securities Limited.Compliance Officer from October 2000-April 2002

l Securities and Exchange Board of India.Manager from February 96 to October 2000.

R. Srinivasan, Vice President & Head of Operations

34 years

B. Com., AICWA

Experience:

Over 12 years experience in Operations and Finance

l HSBC Asset Management (India) Private LimitedHead of Operations from August 2006 to present.

l Tata Consultancy Services LimitedAssociate Consultant – Asset Management and Securities Backoffice - BPO from November 2004 to July 2006

l Principal Pnb Asset Management Company Private LimitedAssistant Vice President- Operations and Finance from January2004 to November 2004

Assistant Vice President- Operations from February 2002 toJanuary 2004

l DSP Merrill Lynch Fund Managers LimitedAssistant Vice President – Operations from January 2002 toFebruary 2002

Manager – Operations from April 1998 to December 2001

l SBI Capital Markets LimitedAccounts Executive- Finance from April 1995 to April 1998

Rekha Pattnaik, Vice President & Head of Human Resources

35 years

B.Sc., Masters in Human Resource Development Management

Experience:

Over 12 years of experience in Human Resources

l HSBC Asset Management (India) Private LimitedVice President &Head of Human Resources,July 2006 onwards

l HSBC Securities & Capital Markets (India) Private LimitedSenior Manager, Human Resources, November 2004 to June2006

l JM Morgan Stanley Private limitedAssociate, Human Resources, July 2000 to November 2004

l Hinduja Group India LimitedManager, Human Resources, August 1997 to July 2000

l Mahajan & AibaraExecutive, Human Resources, February 1995 to August 1997

Alok Kumar Sahoo, CFAVice President & Fund Manager- Fixed Income

31 years

Post Graduate Diploma in Management (Finance)

Bachelor of Engineering (Mining)

Experience:

Over 7 years experience in research and fund management.

l HSBC Asset Management (India) Private LimitedFund Manager from October 2007 to present

Assistant Fund Manager from June 2006 to October 2007

l UTI Asset Management Company Private LimitedAnalyst and Assistant Fund Manager from May 2000 to May2006

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HSBC INTERVAL FUND

Jitendra Sriram, Vice President & Fund Manager

35 years

B.E. (Elect), Post Graduate Diploma in Business Management

Experience:

Over 12 years experience in Equity Research. This involved analysingvarious sectors and companies and presenting investment ideas tofund managers in India and abroad.

l HSBC Asset Management (India) Private LimitedFund Manager from May 2006 to present

l Deutsche Equities India Private LimitedVice President from August 2002 to April 2006

l HSBC Securities and Capital Markets (India) Private LimitedDeputy Head of Research from March 1997 to August 2002

l ITC Classic Share & Stock BrokingAnalyst from June 1995 to March 1997

Dhimant Shah, Vice President & Fund Manager

38 years

B.Com., CA

Experience:

Over 13 years experience in Equity Research. This involved analysingvarious sectors and companies and presenting investment ideas tofund managers in India and abroad.

l HSBC Asset Management (India) Private LimitedFund Manager from Mar 2007 to present

l Reliance Asset Management Co. LimitedVice President/ Portfolio Manager from October 2005 to Feb2007

l ASK Raymond James Securities Pvt. LimitedPortfolio Manager from September 2003 to September 2005

l IL&FS Asset Management Co. LimitedSenior Analyst from April 1997 to August 2003

Sanjay Vaid, Vice President, Dealing

42 years

B.A. (Hons) Economics, Masters in Business Administration(Finance)

Experience:

Over 18 years of experience in the financial markets.

l HSBC Asset Management (India) Private LimitedSenior Dealer since June 2006 to present.

l SBI Funds Management Private LimitedChief Manager (Equity Dealing) from December 2005 to June2006.

l Jet Age Securities LimitedHead of Institutional Sales (Equity Dealing) from January2004 to December 2005

l Unit Trust of IndiaAsst. Vice President from February 1989 to November 2003

Nilang Mehta, CFAVice President & Fund Manager

30 years

M.Com., Chartered Accountant

Experience:

Over 6 years experience in credit research and fund management.

l HSBC Asset Management (India) Pvt. LtdFund Manager from October 2007 to present

Assistant Fund Manager from July 2004 to October 2007

l Alliance Capital Asset Management (India) Pvt. Ltd.Senior Manager - Fixed Income from April 2003 to July 2004

l IDBI Principal Asset Management (India) Pvt. Ltd.Investment Analyst from April 2001 to April 2003

l Bank of America - Global Capital MarketsIndustrial Trainee from August 1998 to August 1999

Gaurav MehrotraAssociate Vice President, Investment Management

27 years

Post Graduate Diploma in Business Management

Bachelor of Engineering

Experience:

Over 3 years experience in research.

l HSBC Asset Management (India) Private LimitedAssistant Fund Manager from September 2007 to present

l JPMorgan Services India Private LimitedEquity Research from August 2005 to September 2007

l Tata Consultancy Services LimitedBusiness Analyst from June 2004 to July 2005

Niren ParekhAssociate Vice President, Investment Management

26 years

Post Graduate Diploma in Business Management

Chartered Accountant

Experience:

Over 2 years experience in research.

l HSBC Asset Management (India) Private LimitedAssistant Fund Manager from September 2007 to present

l Motilal Oswal Securities LimitedAnalyst from October 2005 to September 2007

l SBI Capital MarketsManagement Trainee from May 2005 to September 2005

Presently the AMC has one dedicated equity dealer and a total ofnine employees in the investment management department.

Presently all the key personnel are based in the corporate office ofthe AMC.

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Fund Managers

Shailendra Jhingan and Alok Sahoo

Niren Parekh will be the dedicated Fund Manager for makingoverseas investments as permitted under the Regulations, guidelinesand circulars issued from time to time.

Compliance Officer

O.V. Ravi

Vice President & Head of Compliance

HSBC Asset Management (India) Private Limited314, D. N. Road,Fort, Mumbai - 400 001

Investor Relations Officer

K. Sriram

Vice President & Head of Finance & Customer Service

HSBC Asset Management (India) Private Limited314, D. N. Road, Fort, Mumbai - 400 001

Custodian

JP Morgan Chase Bank, Mumbai has been appointed as Custodianof the Scheme of HSBC Mutual Fund. The Custodian has beenregistered with SEBI under the SEBI (Custodians of Securities)Regulations, 1996, and has been awarded registration number IN/CUS/014 dated November 10, 1998. The Mutual Fund has enteredinto a Custody Agreement dated July 4, 2002, with the Custodian,and the salient features of the said Agreement are to:

l Provide post-trading and custodial services to the Mutual Fund

l Ensure benefits due on the holdings are received

l Provide detailed information and other reports as required bythe AMC

l Maintain confidentiality of the transactions

l Be responsible for the loss or damage to the assets belongingto the Scheme due to negligence on its part or on the part ofits approved agents

l Segregate assets of each Scheme

The Custodian shall not assign, transfer, hypothecate, pledge, lend,

use or otherwise dispose any assets or property, except pursuant toinstruction from the Trustees / AMC or under the express provisionsof the Custody Agreement.

The Custodian will be entitled to remuneration for its services inaccordance with the terms of the Custody Agreement. The Trusteeshave the right to change the Custodian, if necessary.

Registrar & Transfer AgentsComputer Age Management Services (P) Ltd. (CAMS), A & BLakshmi Bhawan, 609 Anna Salai, Chennai 600 006 have beenappointed as Registrar and Transfer Agents. The Registrar isregistered with SEBI under the SEBI (Registrars to an Issue andShare Transfer Agents) Regulations, 1993 vide registration numberINR000002813. As Registrars to the Scheme, CAMS will handlecommunications with investors, perform data entry services anddespatch account statements. The AMC and the Trustees havesatisfied themselves that the Registrar have adequate capacity todischarge responsibilities with regard to processing of applicationsand despatching account statements to Unitholders within the timelimit prescribed in the Regulations and also sufficient capacity tohandle investor complaints.

Fund AccountantJP Morgan Chase Bank, Mumbai has been appointed as the FundAccountant for Scheme. The Fund Accountant provides fundaccounting, NAV calculation and other related services.

The Fund Accountant is entitled to remuneration for its services inaccordance with the terms of the Fund Administration Agreement.The Trustees / AMC have the right to change the Fund Accountant,if necessary.

AuditorsPrice Waterhouse, Chartered Accountants, shall be the Auditors forthe Scheme offered under this Offer Document. The Trustees havethe right to change the Auditors.

Collecting BankersThe collecting bankers for transactions in the NFO and on an on-going basis will be The Hongkong and Shanghai Banking CorporationLimited (SEBI registration no. INBI00000027) and such other banksregistered with SEBI as collecting bankers as may be decided by theAMC from time to time. Applications for the New Fund Offer willbe accepted at the Collection Centres designated by the AMC.

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INVESTMENT OBJECTIVES & POLICIES

HSBC Interval Fund – Plan I (HINF-I)Type of Scheme

A Debt Oriented Interval Scheme having an interval period ofquarterly basis (91 days) for subscription and redemptions withoutpayment of any entry/exit load.

Investment Objective

To seek generation of returns by investing in a portfolio of fixedincome instruments normally maturing in line with the time profileof the respective Plan(s).

Investment Pattern

The corpus of the Scheme will be invested predominantly in debtand money market instruments where interest rate risk is low tomedium. Subject to the Regulations and other prevailing laws asapplicable, the corpus of the Scheme can be invested in any (but notexclusively) of the following instruments:

l Securities issued / guaranteed by the Central, State and localgovernments (including but not limited to coupon bearingbonds, zero coupon bonds and treasury bills)

l Debt obligations of domestic government agencies and statutorybodies, which may or may not carry a Central / State Governmentguarantee

l Corporate debt (of both public and private sector undertakings)

l Debt obligations of banks (both public and private sector) andfinancial institutions

l Money market instruments permitted by SEBI and / or RBI,having residual maturities of up to 1 year

l Certificate of Deposits (CDs)

l Commercial Paper (CPs)

l Bills of Exchange / Promissory Notes

l Securitised Debt

l Call Money and Call

l Securities with Floating interest rates such as MIBOR relateddebentures / instruments

l Repurchase and reverse repurchase obligations in securities

l Derivatives such as Interest Rate Swaps, Forward RateAgreements or such other instruments, as SEBI / RBI / otherregulations may permit from time to time as permitted underthe Regulations.

l The non-convertible part of convertible securities

l Any other domestic fixed income securities

· Pass through, Pay through or other Participation Certificatesrepresenting interest in a pool of assets including receivables

l Any other instruments as may be permitted by RBI / SEBI /such other Regulatory Authorities from time to time.

The securities mentioned above could be listed, unlisted, privatelyplaced, secured, unsecured, rated or unrated and of any maturity.The securities may be acquired through Initial Public Offerings(IPOs), secondary market operations and private placement, rightsoffers or negotiated deals, subject to the limits indicated under“Investment Restrictions for the Scheme”.

SECTION II

The Scheme may participate in securities lending as permitted underthe Regulations.

The asset allocation under various plans under the Scheme will beas follows:

S. Type of Security Normal RiskNo. Allocation Profile

(% of Corpus)

1 Debt instruments 0-100% Low to(including securitised debt) Medium

2 Money Market instruments 0-100% Low toMedium

If the Plan(s) decides to invest in securitised debt, it is the intentionof the Investment Manager that such investments will not normallyexceed 50% of the corpus of the respective Plan(s). No investmentsshall be made in foreign Securitised debt.

The net notional exposure to derivatives in HINF-I shall not be morethan 50% of the net assets. These limits will be reviewed by theAMC, from time to time. Investments in derivatives would be inaccordance with the SEBI Regulations.

Under normal circumstances, the scheme shall not have an exposureof more than 30% of its net assets in foreign debt securities. However,the AMC with a view to protecting the interests of the investors, mayincrease exposure in foreign securities as deemed fit from time totime.

The Scheme may review the above pattern of investments based onviews on the debt markets and asset liability management needs andthe portfolio shall be reviewed and rebalanced on a regular basis.However, at all times the portfolio will adhere to the overallinvestment objective of the Scheme.

Change in Investment Pattern

Subject to the Regulations, the asset allocation pattern indicatedabove for the Scheme may change from time to time, keeping inview market conditions, market opportunities, applicable regulationsand political and economic factors. It must be clearly understoodthat the percentages stated above are only indicative and not absoluteand that they can vary substantially depending upon the perceptionof the Investment Manager, the intention being at all times to seekto protect the interests of the Unitholders, and meet the objectiveof the Scheme. Such changes in the investment pattern will be forshort term and defensive considerations.

Provided further and subject to the above, any change in the assetallocation affecting the investment profile of the Scheme shall beeffected in accordance with the provisions of sub regulation (15A)of Regulation 18 of the Regulations, as detailed in this OfferDocument.

Listing

Listing of the Scheme is not currently envisaged. The AMC reservesthe right to list the units of the Scheme in future, if deemed necessary.

Investment Approach and Risk Control

The HSBC Interval Fund will invest predominantly in debt andmoney market instruments where interest rate risk is relatively lowto medium.

The AMC’s view of interest rate trends will be reflected in the typeand the maturity dates of instruments in which funds are invested.In pursuing such a policy it should be recognised that the best

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overall returns are achieved by anticipating or reacting to interestrate changes rather than aiming for the highest possible returns atall times. The best resultant overall return is therefore achievedthrough both capital appreciation and income, which may result insomewhat lower yields than might otherwise normally appearobtainable from the relevant securities. The Fund aims to provideinvestors with well managed portfolios of interest bearing transferabledebt and money market instruments.

The Scheme may invest in unlisted and / or privately placed and /or unrated debt securities subject to the limits indicated under“Investment Restrictions for the Scheme” in this Offer Document,from issuers of repute and sound financial standing. If investmentis made in unrated debt securities, the approval of the Board of theAMC and the Trustees or the Investment Management Committee(within the broad parameters approved by the Board of the AMCand the Trustees) shall be obtained, as per the Regulations.

With the aim of controlling risks, a credit evaluation of the instrumentsproposed to be invested in will be carried out by the InvestmentTeam of the AMC. The credit evaluation includes a study of theoperating environment of the company, the past track record as wellas the future prospects of the issuer, the short as well as long-termfinancial health of the issuer. The AMC will also be guided by theratings of rating agencies such as CRISIL, CARE and ICRA or anyother rating agency as approved by the regulators.

In addition, the Investment Team of the AMC will study the macroeconomic conditions, including the political, economic environmentand factors affecting liquidity and interest rates. The AMC woulduse this analysis to attempt to predict the likely direction of interestrates and position the portfolio appropriately to take advantage ofthe same.

The Fund may invest a part of the portfolio in various debt securitiesissued by corporates and / or state and central government. Suchgovernment securities may include securities which are supportedby the ability to borrow from the Treasury or supported only byIndia’s sovereign guarantee or of the state government or supportedby GOI / state government in some other way.

The Scheme may invest in other Schemes managed by the AMC orin the schemes of any other mutual fund, provided it is in conformitywith the investment objectives of the respective schemes and interms of the prevailing Regulations. As per the Regulations, noinvestment management fees will be charged for such investments.

Portfolio Turnover

Portfolio turnover is defined as lesser of purchases and sales as apercentage of the average corpus of the Scheme during a specifiedperiod of time. As, the Scheme is an Interval Scheme, it is expectedthat there would be a number of Subscriptions and Redemptions atperiodic intervals. Consequently, it is difficult to estimate with anyreasonable measure of accuracy, the likely turnover in the portfolio.

Pursuant to the SEBI Regulations the cost of investments acquiredor purchased shall include brokerage, stamp charges and any chargecustomarily included in the broker’s bought note.

Procedure followed for Investment Decisions

The Fund Managers of the Scheme are responsible for making buy/ sell decisions in respect of the securities in the Scheme’s portfolioand to develop a well diversified portfolio that minimizes liquidityand credit risk. The investment decisions are made on a daily basiskeeping in view the market conditions and all relevant aspects.

The Board of the AMC has constituted an Investment Management

Committee that meets at periodic intervals. The InvestmentManagement Committee, at its meetings, reviews investments,including investments in unrated debt instruments. The approval ofunrated debt instruments is based on parameters laid down by theBoard of the AMC and the Trustees. The details of such investmentsare communicated by the AMC to the Trustees in their periodicalreports along with a disclosure regarding how the parameters havebeen complied with. Such reportings shall be in the manner prescribedby SEBI from time to time. The Committee also reviews theperformance of the Scheme and general market outlook andformulates the broad investment strategy at their meetings.

It is the responsibility of the AMC to ensure that the investmentsare made as per the internal / Regulatory guidelines, Schemeinvestment objectives and in the best interest of the Unitholders ofthe Scheme. The Fund may follow internal guidelines as approvedby the Board of the AMC and the Trustees from time to time.Internal guidelines shall be subject to change and may be amendedfrom time to time in the best interest of the Unitholders. Theamendments will be approved by the Board of the AMC and theTrustees of the Mutual Fund.

The Heads of Fund Management - Equities & Fixed Income presentto the Board of the AMC and the Trustees periodically, theperformance of the Schemes. The performance of the Scheme willbe reviewed by the Boards with reference to the appropriatebenchmarks.

In case of HINF - I, performance will be benchmarked against theCRISIL Liquid Fund Index. However, the Plans’ performance maynot be strictly comparable with the performance of the Index dueto the inherent differences in the construction of the portfolios. TheBoards may review the benchmark selection process from time totime, and make suitable changes as to use of the benchmark, orrelated to composition of the benchmark, whenever it deemsnecessary.

The Heads of Fund Management - Equities & Fixed Income willbring to the notice of the AMC Board, specific factors if any, whichare impacting the performance of the Scheme. The Board onconsideration of all relevant factors may, if necessary, give appropriatedirections to the AMC. Similarly, the performance of the Schemewill be submitted to the Trustees. The Heads of Fund Management- Equities & Fixed Income will explain to the Trustees, the detailson the Schemes’ performance vis-à-vis the benchmark returns.

The AMC will keep a record of all investment decisions.

Investment of Subscription Money

The Fund may invest subscription money received from the investingpublic in bank deposits, or money market instruments beforefinalisation of the allotment of Units. The AMC, on being satisfiedof the receipt of the minimum subscription amount, can commenceinvestment out of the funds received in accordance with theinvestment objectives of the Scheme and as per the existingRegulations. The income earned out of such investments would bemerged with the corpus of the Scheme on completion of the allotmentof the Units.

Investments by the AMC in the Scheme

The AMC may invest in the Scheme during the NFO or thereafterat any time during the continuous offer period subject to the SEBIRegulations & circulars issued by SEBI and to the extent permittedby its Board of Directors from time to time. As per the existing SEBIRegulations, the AMC will not charge investment management andadvisory fee on the investment made by it in the Scheme.

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Fundamental Attributes

The investment objective together with the investment approachand the investment pattern will comprise the principal fundamentalattributes of the Scheme. The other fundamental attributes of theScheme shall be the following:

l Type of Scheme i.e. A Debt Oriented Interval Scheme

l Terms of issue relating to listing, repurchase / redemption,fees, expenses.

In accordance with Regulation 18(15A) of the SEBIRegulations, the Trustees shall ensure that no change in thefundamental attributes of the Scheme and the Plan(s) / Option(s)thereunder or the trust or fee and expenses payable or any otherchange which would modify the Scheme and the Plan(s) /Option(s) thereunder and affect the interests of Unitholders iscarried out unless:

l A written communication about the proposed change is sent toeach Unitholder and an advertisement is given in one Englishdaily newspaper having nationwide circulation as well as in anewspaper published in the language of the region where theHead Office of the Mutual Fund is situated; and

l The Unitholders are given an option to exit at the prevailingNet Asset Value without any exit load.

Special Considerations

The Scheme may also use various derivative and hedging productsfrom time to time, as would be available and permitted by SEBI,in an attempt to protect the value of the portfolio and enhanceUnitholders’ interest.

Trading in DerivativesSEBI has permitted all mutual funds to participate in derivativestrading subject to observance of guidelines issued by it in thisbehalf. Pursuant to this, mutual funds may use various derivativeproducts from time to time, as would be available and permitted bySEBI, in an attempt to protect the value of the portfolio and enhanceUnitholders’ interest.

Accordingly, the Fund may use derivative instruments like interestrate swaps, forward rate agreements or such other derivativeinstruments as may be introduced from time to time as permittedunder the Regulations and guidelines.

Exposure to DerivativesThe net notional exposure to derivatives in HINF-I shall not be morethan 50% of the net assets. These limits will be reviewed by theAMC, from time to time. Investments in derivatives would be inaccordance with the SEBI Regulations.

The following information provides a basic idea as to the nature ofthe derivative instruments proposed to be used by the Fund and thebenefits and risks attached therewith. Please note that the exampleshave been given for illustration purposes only.

Interest Rate Swaps (IRS) and Forward Rate Agreements (FRA)BenefitsBond markets in India are not very liquid. Investors run the risk ofilliquidity in such markets. Investing for short-term periods forliquidity purposes has its own risks. Investors can benefit if the Fundremains in call market for the liquidity and at the same time takeadvantage of fixed rate by entering into a swap. It adds certainty tothe returns without sacrificing liquidity.

IRSAn IRS is an agreement between two parties (counter parties) toexchange, on particular dates in the future, one series of cash flows(fixed interest) for another series of cashflows (variable or floatinginterest) in the same currency and on the same principal for anagreed period of time. The exchange of cashflows need not occuron the same date. As floating rate instruments tend to be relativelyless liquid, swapping a fixed rate instrument into floating returnscan help in improving the liquidity of the fund.

FRAA FRA is an agreement between two counter parties to pay or toreceive the difference between an agreed fixed rate (the FRA rate)and the interest rate prevailing on a stipulated future date, based ona notional amount, for an agreed period. In short, in a FRA, interestrate is fixed now for a future period. The special feature of FRAsis that the only payment is the difference between the FRA rate andthe reference rate and hence are single settlement contracts. As inthe case of IRS, notional amounts are not exchanged.

Basic Structure of a SwapAssume that the Scheme has a Rs. 20 crore floating rate investmentlinked to MIBOR (Mumbai Inter Bank Offered Rate). Hence, theScheme is currently running an interest rate risk and stands to loseif the interest rate moves down. To hedge this interest rate risk, theScheme can enter into a 6 month MIBOR swap. Through this swap,the Scheme will receive a fixed predetermined rate (assume 12%)and pays the “benchmark rate” (MIBOR), which is fixed by theNational Stock Exchange (NSE) or any other agency such as Reuters.This swap would effectively lock-in the rate of 12% for the next 6months, eliminating the daily interest rate risk. This is usuallyrouted through an intermediary who runs a book and matches dealsbetween various counterparties.

The steps will be as follows :l Assuming the swap is for Rs. 20 crores June 1, 2001 to December

1, 2001. The Scheme is a fixed rate receiver at 12% and thecounterparty is a floating rate receiver at the overnight rate ona compounded basis (say NSE MIBOR).

l On 1 June, 2001 the Scheme and the counterparty will exchangeonly a contract of having entered this swap. This documentationwould be as per International Securities Dealers Association(ISDA).

l On a daily basis, the benchmark rate fixed by NSE will betracked.

l On December 1, 2001 the following will be calculated :

l The Scheme is entitled to receive interest on Rs. 20 crores at12% for 184 days i.e. Rs. 1.21 crores, (this amount is knownat the time the swap was concluded) and will pay thecompounded benchmark rate.

l The counterparty is entitled to receive daily compounded callrate for 184 days & pay 12% fixed.

l On December 1, 2001, if the total interest on the daily overnightcompounded benchmark rate is higher than Rs. 1.21 crores, theScheme will pay the difference to the counter party. If the dailycompounded benchmark rate is lower, then the counterpartywill pay the Scheme the difference.

l Effectively the Scheme earns interest at the rate of 12% p.a.for 6 months without lending money for 6 months fixed, whilethe counterparty pays interest @ 12% p.a. for 6 months on Rs.20 crore, without borrowing for 6 months fixed.

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RisksInterest Rate Swaps and Forward Rate Agreements have its owndrawbacks like credit risk, settlement risk and interest rate risks.However, these risks are substantially reduced as the amount involvedis interest streams and not principal.

Valuation of Derivative Productsl The traded derivatives shall be valued at market price in

conformity with the stipulations of sub clauses (i) to (v) ofclause 1 of the Eighth Schedule to the Securities and ExchangeBoard of India (Mutual Funds) Regulations, 1996, as amendedfrom time to time.

l The valuation of untraded derivatives shall be done inaccordance with the valuation method for untraded investmentsprescribed in sub clauses (i) and (ii) of clause 2 of the EighthSchedule to the Securities and Exchange Board of India (MutualFunds) Regulations, 1996 as amended from time to time.

Position of Debt Markets in IndiaThe major players in the Indian debt markets today are banks,financial institutions, insurance companies and mutual funds. Theinstruments in the market can be broadly categorised as those issuedby corporates, banks, financial institutions and those issued by state/ central governments. The risks associated with any investment are- credit risk, interest rate risk and liquidity risk. While corporate

papers carry credit risk due to changing business conditions,government securities are perceived to have zero credit risk. Interestrate risk is present in all debt securities and depends on a varietyof macroeconomic factors. The liquidity risk in the corporatesecurities market is higher as compared to that in case of governmentsecurities. Liquidity in the corporate debt market has been improvingdue to the entry of more players and due to various measures takenby the regulators in this direction over a period of time. SEBI’sdirective of a compulsory rating by a rating agency for any publicissuance over 18 months, dematerialisation, entry of private insurancecompanies, listing of debt securities and growth of fixed incomemutual funds have enhanced liquidity in the corporate debt market.The setting up of clearing corporations, real time gross settlementand electronic clearing system for government securities haveconsiderably enhanced the depth and width of the Indian debtmarkets and bringing it at par with developed markets.

The following table attempts to give a broad overview of the availableinstruments in the financial markets and their risk - return profile.The data is based on the market conditions as on the date of the OfferDocument and may vary substantially depending upon the factorsand forces affecting the securities market including the fluctuationsin the interest rates.

The indicative yields and liquidity on various securities, currently,are as under:

Issuer Instrument Maturity Yields Liquidity

GOI Treasury Bill 91 days 7.00-7.50% Medium

GOI Treasury Bill 364 days 7.25-7.75% Medium

GOI Short Dated 1-3 Yrs 7.50%-8.25% Medium to High

GOI Medium Dated 3-5 Yrs 7.75%-8.20% Medium to High

GOI Medium Dated 5-10 Yrs 7.75%-8.25% High

GOI Long Dated 10-15Yrs 7.75%-8.50% High

GOI Long Dated >15Yrs 8.00%-8.50% High

GOI Reverse Repo / CBLO 1-14 days 6.00%-8.00% High

Corporate Debt Taxable Bonds (AAA) 364 days 8.25%-9.00% Low to Medium

Corporate Debt Taxable Bonds (AAA) 1-3 Yrs 8.75%-9.50% Low to Medium

Corporate Debt Taxable Bonds (AAA) 3-5 Yrs 9.00%-9.75% Medium

Corporate Debt Taxable Bonds (AAA) 5-10 Yrs 9.25%-10.00% Medium

Corporate Debt Floating Rate Bond (AAA) 364 days NM+(1.0-2.0)% Low to Medium

Corporate Debt Floating Rate Bond (AAA) 1-3 Yrs NM+(1.5-2.5)% Low to Medium

Corporate Debt Floating Rate Bond (AAA) 3-5 Yrs NM+(1.75-2.50)% Medium

Corporate Debt CPs (P1+) 3 months 7.75%-8.75% Medium

Corporate Debt CPs (P1+) 1 Year 8.5%-9.00% Medium

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Investment Restrictions for the Scheme

All investments by the Scheme and the Mutual Fund, will alwaysbe within the investment restrictions as specified in the SEBI (MutualFunds) Regulations, 1996, as amended from time to time. Pursuantto the Regulations, the following investment and other restrictionsare presently applicable to the Scheme:

l The Scheme shall not invest more than 15% of its NAV in debtinstruments issued by a single issuer, which are rated not belowinvestment grade by a credit rating agency authorised to carryout such activity under the SEBI Act, 1992. Such investmentlimit may be extended to 20% of the NAV of the Scheme withthe prior approval of the Board of Trustees and the Board ofthe AMC. Provided that, such limit shall not be applicable forinvestments in government securities and money marketinstruments. Provided further that investment within such limitcan be made in mortgage backed securitised debt which arerated not below investment grade by a credit rating agencyregistered with SEBI.

l The Scheme shall not invest more than 10% of its NAV inunrated debt instruments issued by a single issuer and the totalinvestment in such instruments shall not exceed 25% of theNAV of the Scheme. All such investments shall be made withthe prior approval of the Board of Trustees and the Board ofthe AMC or a Committee constituted in this behalf.

l The Fund under all its Schemes shall not own more than 10%of any company’s paid up capital carrying voting rights

l Transfer of investments from one Scheme to another Schemein the Mutual Fund is permitted provided:

– Such transfers are done at the prevailing market price forquoted instruments on spot basis (spot basis shall have thesame meaning as specified by a Stock Exchange for spottransactions); and

– The securities so transferred shall be in conformity withthe investment objective of the Scheme to which suchtransfer has been made.

l The aggregate inter-scheme investment in line with theinvestment objectives, made by all the Schemes under thesame management or in schemes under management of anyother asset management company shall not exceed 5% of theNet Asset Value of the Fund. No investment management feesshall be charged for investing in other Schemes of the Fund orin the Schemes of any other Mutual Fund.

l The Fund shall get the securities purchased or transferred inthe name of the Fund on account of the concerned Scheme,wherever investments are intended to be of a long-term nature.

l The Fund may buy and sell securities on the basis of deliveriesand shall in all cases of purchases take delivery of relativesecurities and in all cases of sale, deliver the securities and willnot make any short sales or engage in carry forward transactionor badla finance. Provided that the Mutual Fund shall enter intoderivative transactions on a recognised stock exchange, inaccordance with the guidelines issued by SEBI.

l Pending deployment of funds of a scheme in terms of investmentobjectives of the scheme, a mutual fund may invest them inshort-term deposits of schedule commercial banks, subject tosuch Guidelines as may be specified by the Board. Therequirements of SEBI Circulars, SEBI/IMD/CIR No. 1/91171/07 dated 16 April 2007 and SEBI/IMD/CIR No. 8 / 107311 /07 dated 26 October 2007 will be adhered to.

l The Scheme shall not make any investment in:

– Any unlisted security of an associate or group companyof the Sponsor; or

– Any security issued by way of private placement by anassociate or group company of the Sponsor; or the listedsecurities of group companies of the Sponsor which is inexcess of 25% of the net assets of the Scheme of theMutual Fund.

l The Scheme shall not invest more than 10% of its NAV in theequity shares or equity related instruments of any Company.

l The Scheme shall not invest more than 5% of its NAV in theunlisted equity shares or equity related instruments.

l The Fund shall not borrow except to meet temporary liquidityneeds of the Fund for the purpose of repurchase / redemptionof Units or payment of interest and dividend to the Unitholders.Provided that the Fund shall not borrow more than 20% of thenet assets of any individual Scheme and the duration of theborrowing shall not exceed a period of 6 months.

l The entire Scheme’s investments will be in securities, moneymarkets instruments, privately placed debentures, securitiseddebt instruments which are either asset backed or mortgagebacked securities.

l Debentures, irrespective of any residual maturity period (aboveor below 1 year), shall attract the investment restrictions asapplicable for debt instruments as specified under Clause 1 and1A of the Seventh Schedule to the Regulations or as may bespecified by SEBI from time to time.

l No loans for any purpose shall be advanced by the Scheme.

l The Fund may lend securities in accordance with the stocklending scheme of SEBI.

l The Scheme shall not invest in a fund of funds scheme.

l The Scheme will comply with any other regulations applicableto the investments of mutual funds from time to time.

l Aggregate value of ‘illiquid securities’ of Scheme, which aredefined as non-traded, thinly traded and unlisted equity shares,shall not exceed 15% of the total assets of the Scheme. As thispercentage is not significant, in the AMC’s view, it will haveno material impact on the ability to meet redemptions within10 days of the date the Scheme’s units are tendered.

The Trustees may alter the above restrictions from time to time tothe extent that changes in the Regulations may allow and as deemedfit in the general interest of the Unitholders.

Valuation of Assets and Net Asset Value

The NAV of the Units of the Scheme will be computed by dividingthe net assets of the Scheme by the number of Units outstanding onthe valuation date. The Fund shall value its investments accordingto the valuation norms, as specified in the Eighth Schedule of theRegulations, or such norms as may be prescribed by SEBI from timeto time. The broad valuation norms are detailed below:

Traded Securitiesl Traded securities shall be valued at the last quoted closing

price on the Stock Exchange.

l When the securities are traded on more than one recognisedstock exchange, the securities shall be valued at the officialclosing price on the stock exchange where the security isprincipally traded. It would be left to the AMC to select the

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appropriate stock exchange, and the AMC shall record thereasons for the selection and change if any in writing. Thereshould, however, be no objection for all scrips being valued atthe prices quoted on the stock exchange where a majority ofthe investments are principally traded.

l When on a particular valuation day, a security has not beentraded on the principal stock exchange; the value at which itis traded on another stock exchange will be used.

When a security (other than debt securities) is not traded on anystock exchange on a particular valuation day, the value atwhich it was traded on the selected stock exchange, as the casemaybe, on the earliest previous day maybe used provided suchdate is not more than 30 days prior to valuation date.

When a debt security (other than Government Securities) is nottraded on any stock exchange on a particular valuation day, thevalue at which it was traded on the principal stock exchangeor any other stock exchange, as the case may be, on the earliestprevious day may be used, provided such date is not more than15 days prior to the valuation date.

l When a debt security (other than Government Securities) ispurchased by way of private placement, the value at which itwas bought may be used for a period of 15 days beginning fromthe date of purchase.

Thinly Traded Debt SecuritiesThinly traded securities as defined in the Regulations shall bevalued in the manner as specified in the guidelines issued by SEBI,as follows:

A debt security (other than Government Securities) shall beconsidered as a thinly traded security if on the valuation date, thereare no individual trades in that security in marketable lots (currentlyRs. 5 crores) on the principal stock exchange or any other stockexchange.

A thinly traded debt security as defined above would be valued asper the norms set for non-traded debt security.

Non-Traded SecuritiesWhen a security (other than Government Securities) is not tradedon any stock exchange for a period of 30 days prior to the valuationdate, the scrip must be treated as a ‘non-traded’ security.

Valuation of Non-Traded / Thinly Traded SecuritiesNon-traded / thinly traded securities shall be valued “in good faith”by the AMC on the basis of the valuation principles laid downbelow:

Non-Traded / Thinly Traded Debt Securities of Upto 182 Days toMaturityAs the money market securities are valued on the basis of amortisation(cost plus accrued interest till the beginning of the day plus thedifference between the redemption value and the cost spreaduniformly over the remaining maturity period of the instruments)a similar process should be adopted for non-traded debt securitieswith residual maturity of upto 182 days, in the absence of any otherstandard benchmarks in the market. Debt securities purchased withresidual maturity of upto 182 days are to be valued at cost (includingaccrued interest till the beginning of the day) plus the differencebetween the redemption value (inclusive of interest) and cost spreaduniformly over the remaining maturity period of the instrument. Incase of a debt security with maturity greater than 182 days at thetime of purchase, the last valuation price plus accrued interestshould be used instead of purchase cost. All other non-traded Non-

Government debt instruments shall be valued using the methodsuggested below.

Non-Traded / Thinly Traded Debt Securities of Over 182 Days toMaturityFor the purpose of valuation, all non traded debt securities wouldbe classified into “investment grade” and “non investment grade”securities based on their credit ratings. The non-investment gradesecurities would further be classified as “performing” and “non-performing” assets.

l All non-government investment grade debt securities, classifiedas not traded, shall be valued on yield to maturity basis asdescribed below.

l All non-government non-investment grade performing debtsecurities would be valued at a discount of 25% to the facevalue.

l All non-government non-investment grade non-performing debtsecurities would be valued based on the provisioning norms.

The approach in valuation of non traded debt securities is based onthe concept of using spreads over the benchmark rate to arrive atthe yields for pricing the non traded security.

The yields for pricing the non traded debt security would be arrivedat using the process as defined below.

Step AA risk free benchmark yield is built using the government securities(GOI Securities) as the base. GOI Securities are used as thebenchmarks as they are traded regularly, free of credit risk andtraded across different maturity spectrums every week.

Step BA matrix of spreads (based on the credit risk) are built for markingup the benchmark yields. The matrix is built based on traded corporatepaper on the wholesale debt segment of an appropriate stock exchangeand the primary market issuances. The matrix is restricted only toinvestment grade corporate paper.

Step CThe yields as calculated above are marked-up / marked-down forilliquidity risk.

Step DThe yields so arrived are used to price the portfolio.

MethodologyConstruction of Risk Free BenchmarkUsing Government of India dated securities, the benchmark shall beconstructed as below:

Government of India dated securities will be grouped into thefollowing duration buckets viz., 0.5-1 years, 1-2 years, 2-3 years,3-4 years, 4-5 years, 5-6 years and 6 years and the volume weightedyield would be computed for each bucket.

These duration buckets may be changed to reflect the market valuemore closely by any agency suggested by AMFI giving benchmarkyield / matrix of spreads over benchmark yield. Accordingly, therewill be a benchmark YTM for each duration bucket.

The benchmark as calculated above will be set at least weekly, andin the event of any significant movement of prices of Governmentsecurities on account of any event impacting interest rates on anyday such as change in the RBI policies, the benchmark will be resetto reflect any change in the market conditions.

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Note: The concept of duration over tenor has been chosen in orderto capture the reinvestment risk. It is intended to gradually movetowards a methodology that incorporates the continuous curveapproach for valuation of such securities. However, in view of thecurrent lack of liquidity in the corporate bond markets, a continuouscurve approach to valuation would be necessarily based on limiteddata points, and this would result in out of line valuations. As aninterim methodology therefore it is proposed that the DurationBucket approach be adopted and continuously tracked in order tofine-tune the duration buckets on a periodic basis. Over the next fewyears it is expected that with the deepening of the secondary markettrading, it would be possible to make a gradual move from theDuration Bucket approach towards a continuous curve approach.

Building a Matrix of Spreads for Marking-up the Benchmark YieldMark up for credit risk over the risk free benchmark YTM ascalculated in step A, will be determined using the trades of corporatedebentures / bonds of different ratings. All trades on appropriatestock exchange during the fortnight prior to the benchmark date willbe used in building the corporate YTM and spread matrices. Initiallythese matrices will be built only for corporate securities of investmentgrade. The matrices are dynamic and the spreads will be computedevery week. The matrix will be built for all duration buckets forwhich the benchmark GOI matrix is built to effectively link thecorporate matrix with the GOI securities matrix. Accordingly:

l All traded paper (with minimum traded value of Rs. 1 crore)(Rupees One Crore Only) will be classified by their ratings andgrouped into 7 duration buckets; for rated securities, the mostconservative publicly available rating will be used;

l For each rating category, average volume weighted yield willbe obtained both from trades on the appropriate stock exchangeand from the primary market issuances;

l Where there are no secondary trades on the appropriate stockexchange in a particular rating category and no primary marketissuances during the fortnight under consideration, then tradeson appropriate stock exchange during the 30 days period priorto the benchmark date will be considered for computing theaverage YTM for such rating category;

l If the matrix cannot be populated using any or all of the abovesteps, then credit spreads from trades on appropriate stockexchange of the relevant rating category over the AAA tradeswill be used to populate the matrix;

l In each rating category, all outliers will be removed forsmoothening the YTM matrix;

l Spreads will be obtained by deducting the YTM in each durationcategory from the respective YTM of the GOI securities;

l In the event of lack of trades in the secondary market and theprimary market the gaps in the matrix would be filled byextrapolation. If the spreads cannot be extrapolated for thereason of practicality, carrying the spreads from the last matrixwill fill the gaps in the matrix.

Mark-up / Mark-down YieldThe Yields calculated would be marked-up / marked-down to accountfor the ill-liquidity risk, promoter background, finance companyrisk and the issuer class risk. As the level of ill-liquidity risk wouldbe higher for non rated securities the marking process for rated andnon rated securities would be differentiated as follows:

Adjustments for Securities rated by External Rating AgenciesThe Yields so derived out of the above methodology could beadjusted to account for risk mentioned above by an appropriate

discount or premium as may be required. The range of the markupsfor both discount as well as premium is given below:

PremiumA Discretionary premium of up to -50 Basis Points for securitieshaving a duration of up to 2 years and up to - 25 Basis Points forsecurities having duration higher than 2 years will be permitted tobe provided for the above mentioned types of risks. The rationalefor the above discount structure is to take cognizance of the differentialinterest rate risk of the securities. This structure will be reviewedperiodically.

DiscountSEBI has revised the discretionary discount limits as below:

Category Discretionary discount overbenchmark yield in basis points

Rated Instruments with Discretionary Discount ofduration up to 2 years up to +100

Rated Instruments with Discretionary Discount ofduration over 2 years up to +75

Adjustments for Internally Rated SecuritiesTo value an unrated security, the fund manager has to assign aninternal credit rating, which will be used for valuation. Since unratedinstruments tend to be more illiquid than rated securities, the yieldswould be mandatorily marked up by adding +50 basis point forsecurities having a duration of up to two years and +25 basis pointfor securities having duration of higher than two years to accountfor the illiquidity risk.

The yields derived from the above methodology could be adjustedto account for risk mentioned above. SEBI has revised thediscretionary discount limits as below:

Category Discretionary discount overbenchmark yield in basis points

Unrated Instruments with Discretionary Discount of durationup to 2 years up to +50 over andabove the mandatory Discountof +50

Unrated Instruments with Discretionary Discount of up toduration over 2 years +50 over and above the mandatory

Discount of +25

The benchmark yield / matrix of spreads over benchmark yieldobtained from any agency suggested by AMFI as a provider ofbenchmark yield / matrix of spreads over benchmark yield to mutualfunds, must be applied for valuation of securities on the day onwhich the bench mark yield / matrix of spreads over benchmarkyield is released by the aforesaid agency.

Valuation of securities with Put / Call optionsThe option embedded securities would be valued as follows:

Securities with Call optionThe securities with call option shall be valued at the lower of thevalue as obtained by valuing the security to final maturity andvaluing the security to call option.

In case there are multiple call options, the lowest value obtained byvaluing to the various call dates and valuing to the maturity date isto be taken as the value of the instrument.

Securities with Put optionThe securities with put option shall be valued at the higher of the

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value as obtained by valuing the security to final maturity andvaluing the security to put option.

In case there are multiple put options, the highest value obtained byvaluing to the various put dates and valuing to the maturity date isto be taken as the value of the instruments.

Securities with both Put and Call option on the same day

The securities with both Put and Call option on the same day wouldbe deemed to mature on the Put / Call day and would be valuedaccordingly.

Government SecuritiesGovernment securities will be valued as per the prices for GovernmentSecurities released by an agency suggested by AMFI for the sakeof uniformity in calculation of NAVs.

Illiquid Securitiesl All funds shall disclose as on March 31 and September 30 the

scheme-wise total illiquid securities in value and percentage ofthe net assets while making disclosures of half yearly portfoliosto the Unitholders. In the list of investments, an asterisk markshall also be given against all such investments, which arerecognised as illiquid securities.

l The Mutual Fund is not allowed to transfer illiquid securitiesamong its Scheme.

Fixed Income and Money Market Securitiesl Debt instruments shall generally be valued on a yield to maturity

basis on the basis of the capitalisation factor for comparabletraded securities and with an appropriate discount for a lowerliquidity.

l While investments in call money, bills purchased underrediscounting scheme and short term deposits with banks shallbe valued at cost plus accrual; other money market instrumentsshall be valued at the yield at which they are currently traded.For this purpose, instruments not traded for a period of 7 dayswill be valued at cost plus interest accrued till the beginningof the day plus the difference between the redemption valueand the cost spread uniformly over the remaining maturityperiod of the instruments.

Valuation of “Repo”Where instruments have been bought on ‘repo’ basis, the instrumentmust be valued at the resale price after deduction of applicableinterest up to date of resale. Where an instrument has been sold ona ‘repo’ basis, adjustment must be made for the difference betweenthe repurchase price (after deduction of applicable interest up to dateof repurchase) and the value of the instrument. If the repurchaseprice exceeds the value, the depreciation must be provided for andif the repurchase price is lower than the value, credit must be takenfor the appreciation.

Valuation of warrantsIn respect of warrants to subscribe for shares attached to instruments,the warrants shall be valued at the value of the share which wouldbe obtained on exercise of the warrant as reduced by the amountwhich would be payable on exercise of the warrant. A discountsimilar to the discount to be determined in respect of convertibledebentures (as referred in valuation of convertible debentures andbonds above) shall be deducted to account for the period which mustelapse before the warrant can be exercised;

Valuation of Derivative Productsl The traded derivatives shall be valued at market price in

conformity with the stipulations of sub clauses (i) to (v) of

clause 1 of the Eighth Schedule to the Regulations.

l The valuation of untraded derivatives shall be done inaccordance with the valuation method for untraded investmentsprescribed in sub clauses (i) and (ii) of clause 2 of the EighthSchedule to the Regulations.

Expenses and Incomes AccruedAll expenses and incomes accrued up to the valuation date shall beconsidered for computation of NAV. For this purpose, major expenseslike management fees and other periodic expenses would be accruedon a day to day basis. The minor expenses and income will beaccrued on a periodic basis, provided the non-daily accrual does notaffect the NAV calculations by more than 1%.

Changes in securities and in number of UnitsAny changes in securities and in the number of Units will berecorded in the books not later than the first valuation date followingthe date of transaction. If this is not possible, given the frequencyof NAV disclosure, the recording may be delayed up to a period of7 days following the date of the transaction, provided as a result ofsuch non recording, the NAV calculation shall not be affected bymore than 1%.

In case the NAV of the Scheme differs by more than 1%, due to non- recording of transactions, the investors or Scheme as the case maybe, shall be paid the difference in amount as follows:-

l If the investors are allotted units at a price higher than NAVor are given a price lower than NAV at the time of sale of theirUnits, they shall be paid the difference in amount by theScheme.

l If the investors are charged lower NAV at the time of purchaseof their Units or are given higher NAV at the time of sale oftheir Units, the AMC shall pay the difference in amount to theScheme. The AMC may recover the difference from theinvestors.

The valuation guidelines as outlined above are as per prevailingRegulations and are subject to change from time to time in conformitywith changes made by SEBI.

NAV of Units under the Scheme shall be calculated as shown below:

Market or Fair Value of Scheme'sinvestments (+) Current Assets (-)Current Liabilities and Provisions

NAV (Rs.) = ____________________________________No. of Units outstanding under Scheme

The first NAV will be calculated and announced not later than 30days from the close of the NFO. Subsequently, the NAV of theScheme will be calculated as of the close of every Business Day.NAVs of the Scheme shall be disclosed up to 4 decimal places. Thevaluation of the Scheme’s assets and calculation of the Scheme’sNAV shall be subject to audit on an annual basis and such regulationsas may be prescribed by SEBI from time to time.

Accounting Policies and Standards

In accordance with the Regulations, the AMC will follow theaccounting policies and standards, as detailed below:

l The AMC, for the Scheme and its Plan(s), shall keep andmaintain proper books of account, records and documents, soas to explain its transactions and to disclose at any point of timethe financial position of the Scheme and, in particular, give atrue and fair view of the state of affairs of the Fund.

l For the purposes of the financial statements, the Scheme and

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its Plan(s) shall mark all investments to market and carryinvestments in the balance sheet at market value. However,since the unrealised gain arising out of appreciation oninvestments cannot be distributed, provision shall be made forexclusion of this item when arriving at distributable income.

l In respect of all interest-bearing investments, income shall beaccrued on a day to day basis as it is earned. Therefore, whensuch investments are purchased, interest paid for the periodfrom the last interest due date up to the date of purchase shouldnot be treated as a cost of purchase but shall be debited toInterest Recoverable Account. Similarly, interest received atthe time of sale for the period from the last interest due dateup to the date of sale must not be treated as an addition to salevalue but shall be credited to Interest Recoverable Account.

l In determining the holding cost of investments and the gainsor loss on sale of investments, the “average cost” method shallbe followed for each security.

l Transactions for purchase or sale of investments shall berecognised as of the trade date and not as of the settlement date,so that the effect of all investments traded during a financialyear are recorded and reflected in the financial statements forthat year. Where investment transactions take place outside thestock market, for example, acquisition through privateplacement or purchases or sales through private treaty, thetransaction would be recorded, in the event of a purchase, asof the date on which the Scheme obtains an enforceableobligation to pay the price or, in the event of a sale, when theScheme obtains an enforceable right to collect the proceeds ofsale or an enforceable obligation to deliver the instrumentssold.

l Where income receivable on investments has accrued but hasnot been received for a period specified in the guidelines issuedby SEBI, provision shall be made by debit to the revenueaccount the income so accrued in the manner specified byguidelines issued by SEBI.

l When Units are sold in the Scheme and its Plans, an appropriatepart of the sale proceeds shall be credited to an EqualisationAccount and when Units are repurchased an appropriate amountshall be debited to Equalisation Account. The net balance onthis account shall be credited or debited to the Revenue Account.The balance on the Equalisation Account debited or creditedto the Revenue Account shall not decrease or increase the netincome of the Fund but is only an adjustment to the distributablesurplus. It shall therefore be reflected in the Revenue Accountonly after the net income of the Fund is determined.

l When Units are sold, after considering the equalisation asabove, the difference between the sale price and the face valueof the Unit, if positive, shall be credited to reserves and ifnegative, shall be debited to reserve, the face value beingcredited to Capital Account. Similarly, when the Units arerepurchased, after considering the equalisation as above, thedifference between the purchase price and face value of theUnit, if positive, shall be debited to reserves and, if negative,shall be credited to reserves, the face value being debited to theCapital Account.

l The cost of investments acquired or purchased shall includebrokerage, stamp charges and any charge customarily includedin the broker’s bought note. In respect of privately placed debtinstruments any front-end discount offered shall be reducedfrom the cost of the investment.

l Underwriting commission shall be recognised as revenue onlywhen there is no devolvement on the Scheme and its Plans.

Where there is devolvement on the Scheme and the Plansthereunder, the full underwriting commission received and notmerely the portion applicable to the devolvement shall bereduced from the cost of the investment.

l Bonus shares to which the Scheme and the Plans thereunderbecomes entitled shall be recognized only when the originalshares on which the bonus entitlement accrues are traded onthe stock exchange on an ex-bonus basis. Similarly, rightsentitlements shall be recognized only when the original shareson which the right entitlement accrues are traded on the stockexchange on an ex-right basis.

l Dividend income earned by the Scheme and its Plans shall berecognized, not on the date the dividend is declared, but on thedate the share is quoted on an ex-dividend basis. For investments,which are not quoted on the stock exchange, dividend incomewould be recognized on the date of declaration of dividend /information about dividend / receipt of dividend proceeds.

The accounting policies and standards outlined above are as per theexisting Regulations and are subject to change as per changes in theRegulations.

Guidelines for Identification and Provisioning forNon-Performing Assets (Debt Securities)

Definition of a Non-Performing Asset (NPA)An ‘asset’ shall be classified as non-performing, if the interest and/ or principal amount have not been received or remained outstandingfor 1 quarter from the day such income / installment has fallen due.

Effective date for classification and provisioning of NPAsThe definition of NPA may be applied after a quarter past due dateof the interest. For e.g. if the due date for interest is 30.06.2001, itwill be classified as NPA from 01.10.2001.

Treatment of income accrued on the NPA and further accrualsAfter the expiry of the 1st quarter from the date the income hasfallen due, there will be no further interest accrual on the asset i.e.if for example, the due date for interest falls on 30.06.2001 and ifthe interest is not received, accrual will continue till 30.09.2001after which there will be no further accrual of income. In short,taking the above example, from the beginning of the 2nd quarterthere will be no further accrual on income.

On classification of the asset as NPA from a quarter past due dateof interest, all interest accrued and recognised in the books ofaccounts of the Fund till the date, should be provided for. For e.g.if interest income falls due on 30.06.2001, accrual will continue till30.09.2001 even if the income as on 30.06.2001 has not beenreceived. Further, no accrual will be done from 01.10.2001 onwards.Full provision will also be made for interest accrued and outstandingas on 30.06.2001.

Provision for NPAs - Debt SecuritiesBoth secured and unsecured investments once they are recognisedas NPAs call for provisioning in the same manner.

The value of the asset must be provided in the following manner orearlier at the discretion of the Fund. The Fund will not have discretionto extend the period of provisioning. The provisioning against theprincipal amount or installments should be made at the followingrates irrespective of whether the principal is due for repayment ornot.

10% of the book value of the asset should be provided for after 6months past due date of interest i.e. 3 months from the date ofclassification of the asset as NPA.

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HSBC INTERVAL FUND

20% of the book value of the asset should be provided for after 9months past due date of interest i.e. 6 months from the date ofclassification of the asset as NPA.

Another 20% of the book value of the assets should be provided forafter 12 months past due date of interest i.e. 9 months from the dateof classification of the asset as NPA.

Another 25% of the book value of the assets should be provided forafter 15 months past due date of interest i.e. 12 months from the dateof classification of the asset as NPA.

The balance 25% of the book value of the asset should be providedfor after 18 months past due date of the interest i.e. 15 months fromthe date of classification of the assets as NPA.

Book value for the purpose of provisioning for NPAs shall be takenas a value determined as per the prescribed valuation method.

This can be explained by an illustration:

Let us consider that interest income is due on a half yearly basis andthe due date falls on 30.06.2002 and the interest is not received till1st quarter after due date i.e. 30.09.2002. This provisioning will bedone in following phased manner:

10% provision 01.01.2003 6 months past due date ofinterest i.e. 3 months from thedate of classification of assetas NPA (01.10.2002)

20% provision 01.04.2003

20% provision 01.07.2003

25% provision 01.10.2003

25% provision 01.01.2004

Thus, 1 1/2 years past the due date of income or 1 1/4 year fromthe date of classification of the ‘asset’ as an NPA, the ‘asset’ willbe fully provided for. If any installment is fallen due, during theperiod of interest default, the amount of provision should beinstallment amount or above provision amount, whichever is higher.

Reclassification of assetsUpon reclassification of assets as ‘performing assets’:

l In case a company has fully cleared all the arrears of interest,the interest provisions can be written back in full.

l The asset will be reclassified as performing on clearance of allinterest arrears and if the debt is regularly serviced over thenext two quarters.

l In case the company has fully cleared all the arrears of interest,the interest not credited on accrual basis would be credited atthe time of receipt.

l The provision made for the principal amount can be writtenback in the following manner: -

l 100% of the asset provided for in the books will be writtenback at the end of the 2nd calendar quarter where theprovision of principal was made due to the interest defaultsonly.

l 50% of the asset provided for in the books will be writtenback at the end of the 2nd calendar quarter and 25% afterevery subsequent quarter where both installments andinterest were in default earlier.

l An asset is reclassified, as ‘standard asset’ only when bothoverdue interest and overdue installments are paid in full andthere is satisfactory performance for a subsequent period of 6months.

Receipt of past duesWhen the Fund has received income / principal amount after theirclassifications as NPAs:

l For the next 2 quarters, income should be recognised on cashbasis and thereafter on accrual basis. The asset will be continuedto be classified as NPA for these two quarters.

l During this period of two quarters although the asset is classifiedas NPA no provision needs to be made for the principal if thesame is not due and outstanding.

l If part payment is received towards principal, the asset continuesto be classified as NPA and provisions are continued as per thenorms set at ‘Provision for NPAs - Debt Securities’ above. Anyexcess provision will be written back.

Classification of Deep Discount Bonds as NPAsInvestments in Deep Discount Bonds can be classified as NPAs, ifany two of the following conditions are satisfied:

l If the rating of the Bond comes down to grade ‘BB’ or below.

l If the company is defaulting in their commitments in respectof other assets, if available.

l Full net worth erosion.

Provision should be made as per the norms set at ‘Provision forNPAs - Debt Securities’ above as soon as the asset is classified asNPA.

Full provision can be made if the rating comes down to grade ‘D’.

Reschedulement of an assetIn case any company defaults either interest or principal amount andthe Fund has accepted a Reschedulement of the schedule of payments,then the following practice may be adhered to:

l In case it is a first reschedulement and only interest is indefault, the status of the asset namely, ‘NPA’ may be continuedand existing provisions should not be written back. This practiceshould be continued for two quarters of regular servicing of thedebt. Thereafter, this is classified as ‘performing asset’ and theinterest provided may be written back.

l If the reschedulement is done due to default in interest andprincipal amount, the asset should be continued as non-performing for a period of 4 quarters, even though the asset iscontinued to be serviced during these 4 quarters regularly.Thereafter, this can be classified as ‘performing asset’ and allthe interest provided till such date should be written back.

l If the reschedulement is done for a second / third time orthereafter, the characteristic of NPA should be continued for 8quarters of regular servicing of the debt. The provision shouldbe written back only after it is reclassified as ‘performingasset’.

Disclosure in the Half Yearly Portfolio ReportsThe Mutual Fund shall make scripwise disclosures of NPAs on halfyearly basis along with the half yearly portfolio disclosure.

The total amount of provisions made against the NPAs shall bedisclosed in addition to the total quantum of NPAs and their proportionof the assets of the Mutual Fund Scheme. In the list of investmentsan asterisk mark shall be given against such investments which arerecognised as NPAs. Where the date of redemption of an investmenthas lapsed, the amount not redeemed shall be shown as ‘SundryDebtors’ and not investment provided that where an investment isredeemable by installments that will be shown as an investmentuntil all installments have become overdue.

Offer Document


HSBC INTERVAL FUND

SECTION III

UNITS & THE NEW FUND OFFER

New Fund Offer

The offer is being made for subscription of Units of HSBC IntervalFund - Plan I, a Debt Oriented Interval Scheme. HSBC IntervalFund comprises of Three Plans viz. HSBC Interval Fund - Plan I(HINF-I), HSBC Interval Fund - Plan II (HINF-II) and HSBCInterval Fund - Plan III (HINF - III). Each Plan will be launchedwith a distinct series number and will comprise of a portfolio ofsecurities normally maturing in line with the term of the Plan.

New Fund Offer Period

The New Fund Offer for HSBC Interval Fund: Plan I will commencefrom 21 November 2007 and close on 21 November 2007. The NewFund Offer for HSBC Interval Fund having Plan II and III willcommence at any time within six months from the date of the SEBIclearance letter for the Offer Document. Information with respectto the New Fund Offer for HSBC Interval Fund: Plan II and III willbe communicated to the investors / prospective investors by a noticedisplayed at the Investor Service Centres and issue of advertisementsin 2 newspapers.

New Fund Offer Price

The New Fund Offer price of Units of the Scheme (HINF-I) willbe Rs. 10/- per unit.

Extension of the New Fund Offer Period

The Trustees/ AMC reserve the right to extend the closing date ofthe New Fund Offer Period, subject to the condition that thesubscription to the New Fund Offer shall not be kept open for morethan 30 days.

Minimum Subscription Amount

The minimum subscription (target) amount for the Scheme shall beRs. 1 Crore for each Plan (s). In accordance with the SEBIRegulations, if the Mutual Fund fails to collect the minimumsubscription amount of Rs. 1 Crores (Rupees One Crore Only)under each Plan of the HSBC Interval Fund, the Mutual Fund andthe AMC shall be liable to refund the subscription amount withina period of 6 weeks from the date of closure of subscription list tothe applicants of the Scheme.

On-going Subscriptions and Redemptions

The Scheme allows for purchases/redemptions during the specifiedinterval period at NAV based prices, without payment of any entry/exit load. In addition, the Scheme also provides for redemption ofunits on every Business Day on an ongoing basis subject to applicableexit load.

The Scheme allows for purchases/redemptions during the specifiedinterval period corresponding to each plan at NAV based prices,without payment of any entry/exit load. In addition, the Scheme alsoprovides for redemption/ switch of units on every Business Day onan ongoing basis subject to applicable exit load.


Minimum Amount for Application

The minimum application amount per application for HINF-I willbe Rs.10,000 in the Regular Option and Rs 1 crore in the InstitutionalOption. Minimum additional investment amount shall be Re. 1/-.The AMC reserves the right to change the minimum applicationamount from time to time.

Allotment and Refund

All applicants will receive full and firm allotment of Units, providedthe applications are complete in all respects and are found to be inorder. The Trustees retain the sole and absolute discretion to rejectany application. The process of allotment of Units and mailing ofaccount statements reflecting the allotments will be completed within30 days from the date of closure of the New Fund Offer Period. Inaddition to the above, refund of subscription money to applicantswhose applications are invalid for any reason whatsoever willcommence immediately after the allotment process is completed.

No interest will be payable on any subscription money refundedwithin 6 weeks from the closure of the New Fund Offer Period.Interest on subscription amount will be payable for amounts refundedlater than 6 weeks from the closure of the New Fund Offer Periodat the rate of 15% per annum for the period in excess of 6 weeksand will be charged to the AMC. Refund orders will be marked “A/c. payee only” and will be in favour of and be despatched to the Sole/ First Applicant, by registered post.

Options offered under the Scheme

Under HINF-I, investors will have a choice of two Options undereach Plan viz. Regular & Institutional and Dividend Reinvestment& Growth sub-option.

Dividend sub-optionThe Fund may declare dividends under the Plans of HINF-I on suchdates as the Trustees may deem fit. Such declaration will be donesolely at the discretion of the Trustees.

Declaration of dividend, as indicated above is provisional and willdepend on, among other things, the availability of distributablesurplus and will entirely be at the discretion of the Trustees.

However, in respect of ongoing sales and repurchase for all validapplications received before the prescribed cut-off time during theTransaction Window, the closing NAV of the day of the receipt ofapplication shall be applied. The investors shall be eligible fordividends, declared if any, from the business day following the dayof application until the date of their redemption.

Subsequent to the declaration of Dividend, NAV of the Dividendsub-option and Growth sub-option will be different under each Plan.

Dividend Reinvestment FacilityThis facility is made available to those unitholders who are underthe Dividend sub-option. Under this, the dividend due and payableto the unitholders will be compulsorily and without any further actby the unitholders, reinvested under the Dividend sub-option of therespective Plans at their first ex-dividend NAV.

Growth sub-optionUnder this sub-option, income earned on the Scheme’s corpus willremain invested in the Scheme and will be reflected in the Net AssetValue (NAV). Unitholders who opt for this sub-option will notreceive any dividend in normal circumstances.

Investors should indicate the Scheme and / or Option / sub-optionetc., wherever applicable, for which the subscription is made byindicating the choice in the appropriate box provided for this purposein the Application Form. In case of valid applications received,without indicating the Scheme and / or Option etc. the followingdefaults will be flagged off:

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HSBC INTERVAL FUND

Indication not made Default

Scheme Name As indicated on the Cheque

Regular / Institutional Option If the amount of subscription ismore than Rs 1 Crore –Institutional, otherwise –Regular

Dividend / Growth sub-option Growth sub-option

Mode of holding (in caseswhere there are more thanone applicant) Joint

Who can apply?

The following persons are eligible and may apply for subscriptionto the Units of the Scheme (subject, wherever relevant, to purchaseof units of mutual funds being permitted and duly authorised undertheir respective constitutions, charter documents, corporate / otherauthorisations and relevant statutory provisions etc):

l Indian resident adult individuals either singly or jointly

l Minor through parent / lawful guardian

l Companies, bodies corporate, public sector undertakings,association of persons, bodies of individuals, societies registeredunder the Societies Registration Act, 1860, mutual fund schemes(so long as the purchase of units is permitted under the respectiveconstitutions)

l Religious and Charitable Trusts, Wakfs or endowments ofprivate trusts (subject to receipt of necessary approvals asrequired) and Private Trusts authorised to invest in mutual fundschemes under their trust deeds

l Partnership Firms

l Karta of Hindu Undivided Family (HUF)

l Banks (including Co-operative Banks and Regional RuralBanks) & Financial Institutions

l Non-resident Indians (NRIs) / Persons of Indian Origin on fullrepatriation basis (subject to RBI approval, if required) or onnon-repatriation basis

l Foreign Institutional Investors (FIIs) registered with SEBI onfull repatriation basis (subject to RBI approval, if required)

l Army, Air Force, Navy and other para-military funds andeligible institutions

l Scientific and Industrial Research Organisations

l Provident / Pension / Gratuity and such other Funds as andwhen permitted to invest

l International Multilateral Agencies approved by the Governmentof India / RBI

l Other Schemes of HSBC Mutual Fund subject to the conditionsand limits prescribed in SEBI Regulations

l Trustees, AMC or Sponsor or their associates (if eligible andpermitted under prevailing laws), may subscribe to the Unitsunder the Scheme.

l There is no restriction on a foreign national from acquiringIndian securities provided such Foreign National meets testslaid down by the Foreign Exchange Management Act, 1999.

l Sale proceeds of securities acquired by a foreign national may

be remitted by him outside India without approval of RBI if:(a) such proceeds are remitted by a foreign national on hisretirement from an employment in India and (b) such proceedsare not in excess of US $ 1 million in any calendar year. Ifeither (a) and (b) above is not met, approval of RBI will benecessary for the remittance. These requirements originatefrom the FEMA Remittance of Assets Regulations, 2000 whichrestrict a person, whether resident in India or not, from makinga remittance of any asset (“remittance of asset” includesremittance outside India of funds representing, amongst others,sale proceeds of shares/securities) held by him or by any otherperson except with the approval of RBI or in certain specificcases listed in Regulation 4. One such case is the remittanceof upto US $ 1 million by a foreign national on his retiring fromemployment in India.

Note:Subscriptions from residents in the United States of America andCanada shall not be accepted by the Schemes of HSBC MutualFund.

The Fund reserves the right to include / exclude new / existingcategories of investors to invest in the Scheme from time to time,subject to SEBI Regulations and other prevailing statutoryregulations, if any.

Prevention of Money Laundering and Know YourCustomer (KYC)

As per Securities and Exchange Board of India (SEBI) Circulardated 27 April 2007 and letter dated 25 June 2007, PermanentAccount Number (PAN) has been made the sole identification numberfor all participants investing in the securities market, irrespective ofthe amount of investment, effective 2 July 2007.

With effect from 2 July 2007, for all purchase applications (freshpurchases and additional purchases), investors will need to submita self-attested copy of their PAN card along with the original forverification. The PAN requirements will be applicable to all jointapplicants as well as the Guardian, in case of applications by aMinor.

Those investors not having a PAN card should apply for PANimmediately and applications for investment should be accompaniedby evidence of having applied for PAN. Such investors should, inaddition, submit a declaration in Form 60/61 and address proof, ifthe investment is for a value of Rs. 50,000 or more.

Effective 2 July 2007, all transactions without PAN verification/evidence of having applied for PAN (along with Form 60/61 whereapplicable) will be rejected. HSBC Mutual Fund will cross-verifythe details of the PAN with the Income Tax Department website, andupdate the PAN as verified. In case of a mismatch of the PANsubmitted by the investor with the details on the Income Tax website,the investment transaction is liable to be cancelled and the amountredeemed at the prevailing applicable NAV, subject to payment ofexit load, wherever applicable.

How to apply?

l The Application Form for the sale of Units of the Scheme willbe available at the Investor Service Centres / DesignatedCollection Centres / Distributors.

l Payment should be made by cheque or bank draft drawn on anybank which is situated at and is a member of the Banker’sClearing House located at the place where the application issubmitted or in a manner acceptable to the AMC, which isevidenced by receipt of credit in Bank Account of the Fund.

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HSBC INTERVAL FUND

l Outstation cheques will not be accepted and applicationsaccompanied by such cheques are liable to be rejected.

l No cash, money orders and postal orders will be accepted.

Post-dated cheques will not be accepted.l Bank charges for demand drafts will be borne by the AMC and

will be limited to the bank charges as per table below. TheAMC will not entertain any request for refund of demand draftcharges.

Amount DD Charges

Up to Rs. 10,000 At actuals, subject to a maximum ofRs. 50/-

Above Rs. 10,000 At Rs. 3.5 per Rs. 1,000/- MinimumRs. 50/- and Maximum Rs. 12,500/-

l Applications should be made in adherence to the minimumamount requirements as mentioned in the Offer Document.

l All cheques and bank drafts must be drawn in the name of theScheme / Plan(s) or their abbreviations e.g. “HSBC IntervalFund - Plan I” or “HINF-I” and crossed “Account Payee only”.A separate cheque or bank draft must accompany eachApplication.

l The Application Forms together with the cheque / demanddraft can be tendered at any of the Designated CollectionCentres.

The AMC, Mutual Fund, Registrar or any other agent or representativeof the AMC, Mutual Fund, Registrar (“Recipient”) may acceptcertain transactions via facsimile or through any electronic mode(“fax / electronic transactions”), subject to the investor fulfillingcertain terms and conditions as stipulated by the AMC from timeto time. Acceptance of fax / electronic transactions will be as permittedby SEBI or other regulatory authorities from time to time and willbe solely at the risk of the transmitter of the fax / electronic transaction(“Transmitter”) and the Recipient shall not in any way be liable orresponsible for any loss, damage caused to the Transmitter directlyor indirectly, as a result of the Transmitter sending or purporting tosend such fax / electronic transactions including where a fax /electronic transaction sent / purported to be sent is not processed onaccount of the fact that it was not received by the Recipient. TheTransmitter acknowledges that fax / electronic transaction is not asecure means of giving instructions / transaction requests and thatthe Transmitter is aware of the risks involved including those arisingout of such transmission being inaccurate, imperfect, ineffective,illegible, having a lack of quality or clarity, garbled, altered, distorted,not timely etc. and that the Transmitter’s request to the Recipientto act on any fax / electronic transaction is for the Transmitter’sconvenience and the Recipient shall not be obliged or bound to acton the same. The Transmitter authorizes the Recipient to accept andact on any fax / electronic transaction which the Recipient believesin good faith to be given by the Transmitter and the Recipient shallbe entitled to treat any such fax / electronic transaction as if the samewas given to the Recipient under the Transmitter’s original signature.The Transmitter agrees that security procedures adopted by theRecipient may include signature verification, telephone callbacks ora combination of the same. Callbacks may be recorded by taperecording device and the Transmitter consents to such recording andagrees to co-operate with the Recipient to enable confirmation ofsuch fax / electronic transaction requests. The Transmitter furtheraccepts that the fax / electronic transaction shall not be considereduntil time stamped appropriately as a valid transaction request in theScheme in line with the SEBI Regulations. In consideration of the

Recipient from time to time accepting and at its sole discretion(including but not limited to the AMC extending / discontinuingsuch facilities from time to time) acting on any fax / electronictransaction request received / purporting to be received from theTransmitter, the Transmitter agrees to indemnify and keepindemnified the AMC, Directors, employees, agents, representativesof the AMC, HSBC Mutual Fund and Trustees (indemnified parties)from and against all actions, claims, demands, liabilities, obligations,losses, damages, costs (including without limitation, interest andlegal fees) and expenses of whatever nature (whether actual orcontingent) directly or indirectly suffered or incurred sustained byor threatened against the indemnified parties whatsoever arisingfrom or in connection with or any way relating to the indemnifiedparties in good faith accepting and acting on fax / electronictransaction requests including relying upon such fax / electronictransaction requests purporting to come from the Transmitter eventhough it may not come from the Transmitter. The AMC reservesthe right to discontinue the above mentioned facilities at any pointin time.

On-line investment facility may also be available. Please visit ourwebsite at www.hsbcinvestments.co.in. Applications not completein any respect are liable to be rejected.

In order to protect the interest of investors from fraudulent encashmentof cheques, cheques specify the name of the Unitholder and the bankname and account number where payments are to be credited. SEBIRegulations make it mandatory for an investor to mention the detailsof his / her /its bank account. It is important for applicants tomention their bank name, bank account number, branch address,account type in their applications for subscription or repurchase ofUnits. Applications without this information shall be rejected.

PAN of Sole / First Applicant, Second Applicant and Third Applicantmust be mentioned if the amount invested is Rs.50,000/- or moreirrespective of mode of holding. In case a person does not have aPAN while entering such a transaction, he shall make a declarationin Form No. 60 /61 (as may be applicable). Necessary supportingdocuments required with the Forms are to be submitted by theinvestor. The investor is mandatorily required to provide a copy ofthe PAN Card / PAN Letter / Copy of assessment order/ refund orderor such other correspondence from the Income Tax departmentmentioning the PAN. In case such transaction is entered into by aminor who does not have a PAN, the parent / guardian will need tomeet with these requirements as the case may be. Applicationswithout this information will be rejected as per the presentlyapplicable regulations. It is also to be noted that furnishing anincorrect PAN or not furnishing these details could invite a penaltyof Rs. 10,000, as per the provisions of the Income Tax Act, 1961.

Dividend reinvestment, if any, of Rs. 50,000 or more, qualifies aspurchase of units. In case of non-receipt of PAN details or Form No.60/61, as applicable, from the investors / Unit holders (in case theapplication/ units are held in joint names, each of the investors/unitholders), the dividend will be compulsorily paid out to the Unitholders and not reinvested.

An application made may be accepted or rejected in the sole andabsolute discretion of the Trustees. The Trustees may reject anyapplication for purchase of Units, if in the opinion of the Trustees,increasing the size of any or all of the Scheme’s Unit capital is notin the general interest of the Unitholders, or the Trustees for anyother reason believe it would be in the best interest of the Schemeor its Unitholders to accept / reject such an application. Providedalways that the Trustees’ rights will be subject to applicable SEBIRegulations, if any.

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HSBC INTERVAL FUND

The AMC shall have the right to set-off dividend amounts, redemptionamounts or any other amounts that may be payable to an investorunder the Scheme:

(i) against redemption proceeds already paid by the AMC in respectof units created without realizing the subscription amounts,and/or

(ii) against any excess payments made (and, in the case of paymentsby cheque, whether encashed or not) to such investor, underthe Scheme or under any other scheme of the Mutual Fundmanaged by the AMC in the same folio or any other folio ofsuch investor in the Mutual Fund.

The Mutual Fund needs to use intermediaries such as post office,local and international couriers, banks and other intermediaries forcorrespondence with the investor and for making payments to theinvestor by cheques, drafts, warrants, through ECS etc. The investorexpressly agrees and authorizes the Mutual Fund to correspond withthe investor or make payments to the investor through intermediariesincluding but not limited to post office, local and internationalcouriers and banks. The investor clearly understands the mutualfund uses such intermediaries for the convenience of the investorand such intermediaries are agents of the investor and not the mutualfund. The Fund is not responsible for delayed receipt or non-receiptof any correspondence or payment through such intermediaries.

Sales, Repurchase and Switches of Units onOn-going basis

The Plans will not be open for ongoing subscriptions / switch ins.However, units can be redeemed / switched out on every BusinessDay at NAV based prices, subject to provisions of exit load, if any.

The Scheme allows for purchases/redemptions during the specifiedinterval period at NAV based prices, without payment of any entry/exit load.


The cut off times for determining Applicable NAVs for redemptionsand switch outs to be made at the Investor Service Centres /Designated Collection Centres (designated as ‘Official Points ofAcceptance’ from time to time) are as per the following table :

Scheme Redemption Switch-out

HINF-I 3.00 p.m. 3.00 p.m.

Where a request for redemption / switch out is received after the cut-off time as mentioned above, the request will be deemed to havebeen received on the next Business Day.

Repurchase of Units

The repurchase request can be made on a pre-printed form or bysuch other method(s) as may be acceptable to the Fund / AMC fromtime to time. Such request should be submitted at any of the InvestorService Centres / Designated Collection Centres.

The repurchase would be permitted to the extent of credit balancein the Unitholder’s account. The repurchase request can be made byspecifying the rupee amount or the number of Units to be repurchased.Repurchase requests can be made for a minimum amount of Rs.1000/- (Rupees One Thousand Only) and multiples of Re. 1/- (Rupee OneOnly) thereof in case of HINF-I. Where a request for a repurchaseis for both amount and number of Units, the amount requested forrepurchase will be considered as the definitive request.

If the balance in the Unitholder’s account does not cover the amount

of repurchase request, then the Mutual Fund is authorised to closethe account of the Unitholder and send the entire such (lesser)balance to the Unitholder.

Unitholders may also request for redemption of their entire holdingand close the account by indicating the same to the Fund / AMC.

Where however, the Unitholder wishes to redeem Units for a specifiedamount, then the amount to be paid on redemption will be dividedby the redemption price, and the resultant number of Units will beredeemed.

In case the Units are standing in the names of more than oneUnitholder, where mode of holding is specified as ‘Jointly’,redemption requests will have to be signed by ALL joint holders.However, in cases of holding specified as ‘Anyone or Survivor’, anyone of the Unitholders will have the power to make redemptionrequests, without it being necessary for all the Unitholders to sign.However, in all cases, the proceeds of the redemption will be paidto the first-named holder only.

Repurchase PriceInvestors may submit their redemption / switch out request on anyBusiness Day. The redemption will be processed as per the cut offtiming and desired amount/ units will be redeemed at the ApplicableNAV on such date after charging applicable Exit Load, if any.

The Redemption Price of units of the Scheme/ Plan(s) shall not belower than 95% of the NAV.

The AMC reserves the right to impose different exit loads under thevarious Plans / Options available under the Scheme.

Repurchase Price = Applicable NAV x (1 - Exit Load, if any)

Example

If the Applicable NAV is Rs.15 and the exit load applicable is 0.5%,the repurchase price is calculated as follows:

Repurchase Price = 15 x (1 - 0.005)

= 15 x 0.995

= 14.925

Applicable NAV for Repurchase of UnitsApplicable NAV for HINF-I would be the Net Asset Value per Unitat the close of the Business Day on which a valid request forredemption is accepted.

Please see ‘Right to Limit Redemptions’ and ‘Suspension of Sale/ Repurchase / Switch of Units’.

As per the Regulations, the Fund shall despatch the redemptionproceeds within 10 Business Days from the date of acceptance ofredemption request at any of the Investor Service Centres. In theevent of failure to despatch the redemption proceeds within theabove time, interest @ 15% per annum or such rate as may bespecified by SEBI, would be paid to the unitholders for the periodof delay.

Under normal circumstances, the Fund will endeavour to despatchthe redemption proceeds within 1 Business Day from the date ofreceiving a valid redemption request.

The redemption cheque will be issued in favour of the Sole / FirstUnitholder’s registered name and bank account number, and will bemailed to the registered address of the Sole / First holder as indicatedin the original Application Form. The Fund may also directly creditthe investor’s bank account with the redemption proceeds, in lieuof issue of redemption cheque. The redemption cheque will be

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HSBC INTERVAL FUND

payable at par at all the places where the Investor Service Centresare located. The bank charges for collection of cheques at all otherplaces will be borne by the AMC.

A fresh Account Statement / Transaction Confirmation will be sentto the redeeming investors, indicating the new balance to the creditin the Account.

The Fund may close a Unitholder’s account if as a consequence ofa redemption, the balance falls below Rs. 1000/-.

Further, as Units may not be held by any person in breach of theRegulations, law or requirements of any governmental, statutoryauthority including, without limitation, Exchange ControlRegulations, the Mutual Fund may mandatorily redeem all the Unitsof any Unitholder where the Units are held by a Unitholder in breachof the same.

The Trustees may mandatorily redeem Units of any Unitholder inthe event it is found that the Unitholder has submitted informationeither in the application or otherwise that is false, misleading orincomplete.

If a Unitholder makes a redemption request immediately afterpurchase of Units, the Fund shall have a right to withhold theredemption request till sufficient time has elapsed to ensure that theamount remitted by him (for purchase of Units) is realised and theproceeds have been credited to the concerned Scheme’s Account.However, this is only applicable if the value of redemption is suchthat some or all of the freshly purchased Units may have to beredeemed to effect the full redemption.

Switching Options

Switching option is available to the unitholders on a no-load basisduring the specified interval period and subject to applicable loadsduring any other period.

Where an investor seeks to move between the dividend and growthalternatives within an option of the same Scheme/ Plan, this will notbe construed as a switch. Consequently no load will apply to suchmovements.

To effect a switch, a Unitholder must provide clear instructions. Arequest for a switch may be specified either in terms of amount orin terms of the number of Units of the Scheme from which theswitch is sought. Where a request for switch is for both amount andnumber of Units, the amount requested will be considered as thedefinitive request. Such instructions may be provided in writing andlodged on any Business Day at any of the Investor Service Centres/ Designated Collection Centres. An Account Statement / TransactionConfirmation reflecting the new holding will be despatched to theUnitholders normally within 3 Business Days of completion of theswitch transaction.

The switch will be effected by redeeming units from the scheme inwhich the units are held and investing the net proceeds in the otherScheme / Plans / Options, subject to the minimum balance, minimumapplication amount and subscription / redemption criteria applicablefor the respective Scheme.

Valid requests for ‘switch out’ shall be treated as redemptions, afterconsidering any prevalent exit and entry loads or a combinationthereof for switches.

A switch by NRI / FII Unitholders will be subject to the complianceof procedures and / or final approval of the Reserve Bank of Indiaand / or and any other agency, as may be required.

The AMC reserves the right to charge different (including zero)loads on Applicable NAV on switchover as compared to the sale/repurchase as the case may be.

Account Statements

An account statement will be sent by ordinary post / courier / e-mailto each Unitholder, stating the number of units allotted, not laterthan 30 Business Days from the close of the New Fund Offer Period.As units of the Scheme will be non-transferable, the AccountStatements shall be non-transferable. If the Unitholder so desires,non-transferable unit certificates will be issued within 6 weeks ofthe receipt of request for the certificate.

An Account Statement reflecting the net balance of the Unitholderwill under normal circumstances be mailed to the Unitholder byordinary post / courier after every purchase, redemption and switchtransaction is effected except in case of dividend reinvestment, issueof bonus units, Systematic Investment Plan (SIP), SystematicEncashment Plan (SEP) and Systematic Transfer Plan (STP)transactions. The transaction advice for Dividend Reinvestmentsand Bonus units will be dispatched within the SEBI stipulatedtimelines. Account Statement for SIP, SEP and STP will be despatchedonce every quarter within 10 working days of the end of the respectivequarter. A soft copy of the Account Statement shall be mailed to theinvestors under SIP/SEP/STP to their e-mail address where providedas per SEBI requirements. However, an Account Statement for thefirst installment under SIP/SEP/STP shall be issued within 10 workingdays of the initial investment/transfer. In case of specific requestreceived from investors, Mutual Funds shall provide the accountstatement for SIP/SEP/STP to the investors within 5 working daysfrom the receipt of such request without any charges.

The Account Statement will be provided to the Unitholders whohave not transacted during the last six months prior to the date ofgeneration of account statements. The account statements in suchcases may be generated and issued along with the Portfolio Statementor Annual Report of the scheme. The Account Statement shallreflect the latest closing balance and value of the Units prior to thedate of generation of the account statement. Alternately, soft copyof the account statements shall be mailed to the investors’ e-mailaddress, where provided instead of physical statement, if so mandated.The Account Statement shall not be construed as a proof of title andis only a computer-printed statement indicating the details oftransactions under the Scheme.

Under normal circumstances on an on-going basis, AccountStatements will be mailed to the investor within 3 Business Daysof acceptance of the purchase, redemption, switch request for theScheme, provided that the Fund reserves the right to reverse thetransaction of crediting units in the Unitholder’s account, in theevent of non-realisation of any cheque or other instrument remittedby the investor. The Unit balance shown on the account statementis subject to realisation of cheque, fulfilment of regulatoryrequirements, fulfilment of requirements of the Offer Document(s)/ Addendum(s) and furnishing necessary information to thesatisfaction of the Mutual Fund.

For Dividends paid out, investors will receive a transaction advicein case of dividends paid along with instrument, where applicable.The Unitholders can also obtain an Account Statement on requestfrom any of the ISCs.

The Account Statement is a record of the transaction in the schemeof HSBC Mutual Fund. Investors are requested to review the accountstatement carefully and contact their nearest Investor Service Centrein case of any discrepancy.

All Units will rank pari passu among Units within the same Option/ Sub-Option, i.e. either the Dividend Sub-Option or the GrowthSub- Option, as to assets, earnings and the receipt of dividenddistributions, if any, as may be declared by the Trustees. Allotment

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HSBC INTERVAL FUND

of Units and despatch of Account Statements to NRIs / FIIs will besubject to RBI’s general permission dated 30 March, 1999 to mutualfunds, in terms of Notification no. FERA.195/99-RB or such othernotifications, guidelines issued by RBI from time to time.

Pledge

If in conformity with the guidelines and notifications issued bySEBI / Government of India / any other regulatory body from timeto time, Units under the Scheme may be offered as security by wayof a pledge / charge in favour of scheduled banks, financialinstitutions, non-banking finance companies (NBFCs), or any otherbody.

The AMC and / or the ISC will note and record such pledged Units.A standard form for this purpose is available on request from anyISC. Disbursement of such loans will be at the entire discretion ofthe bank / financial institution / NBFC or any other body concernedand the Mutual Fund assumes no responsibility thereof. The Pledgorwill not be able to redeem / switch Units that are pledged until theentity to which the Units are pledged provides written authorisationto the Mutual Fund that the pledge / lien charge may be removed.As long as Units are pledged, the pledgee will have completeauthority to redeem such Units.

Applications under Power of Attorney / Body Corporate /Registered Society / Trust / PartnershipThe original Power of Attorney or a duly notarised copy of thePower of Attorney shall be required to be submitted whereapplications are made under a Power of Attorney.

A company, body corporate, eligible institutions, registered society,trusts, partnership or other eligible non-individuals who apply in theScheme should furnish a certified copy of resolution or authority tomake the application as the case may be and a certified copy of theMemorandum and Articles of Association and / or bye-laws and /or Trust Deed and / or Partnership Deed and certificate of registrationor any other document as the case may be. In case of a Trust / Fund,it shall submit a certified true copy of the resolution from theTrustee(s) authorising such purchases. The officials should sign theapplication under their official designation and furnish a list ofauthorised signatories. All communications and payments shall bemade to the First Applicant only.

Joint Applicants

In the event an account has more than one registered owner, the first-named holder (as determined by reference to the original ApplicationForm) shall receive all Account Statements, notices andcorrespondence with respect to the account, as well as the proceedsof any redemption requests or dividends or other distributions. Inaddition, such Unitholder shall have voting rights associated withsuch Units, as per the applicable guidelines. Applicants can specifythe mode of holding in the Application Form as ‘Jointly’ or ‘Anyoneor Survivor’. In the case of holding specified as ‘Jointly’, alltransactions / instructions would have to be signed by all jointholders. However, in cases of holding specified as ‘Anyone orSurvivor’, any one of the Unitholders will have the power to maketransaction requests / provide instructions, without it being necessaryfor all the Unitholders to sign. However, in all cases, all distributionswill be made to the first-named holder only.

In case of death / insolvency of any one or more of the personsnamed in the register of Unitholders as the joint holders of anyUnits, the AMC shall not be bound to recognise any person(s) otherthan the remaining holders. In all such cases, redemption proceedsshall be paid to the first named of such remaining Unitholders.

Nomination Facility

The AMC will provide an option to the Unitholder to nominate aperson in whom all the Units held by the Unitholder shall vest inthe event of his death. Where the Units are held by more than oneperson jointly, all the joint Unitholders may together nominate aperson by signing the nomination form indicating the name of theperson in whom all the rights in the Units shall vest in the event ofdeath of all the joint Unitholders.

The nomination can be made only by individuals applying for /holding Units on their own behalf singly or jointly. Non-individualsincluding society, trust, body corporate, partnership firm, Karta ofHindu Undivided Family, holder of Power of Attorney cannotnominate.

A minor can be nominated and in that event, the name and addressof the Guardian of the minor Nominee shall be provided by theUnitholder.

The Nominee shall not be a society, trust (other than a religious orcharitable trust), body corporate, partnership firm, Karta of HinduUndivided Family, holder of Power of Attorney. A non-residentIndian can be a Nominee subject to the exchange controls in forcefrom time to time. Nomination can also be made in favour of theCentral Government, State Government, Local Authority, any persondesignated by virtue of his office or a religious or charitable trust.

Nomination in respect of the Units stands rescinded upon thetransmission of Units.

Transmission of Units in favour of a Nominee, shall be a validdischarge by the Mutual Fund / AMC / Trustees against the legalheirs of the Unitholder(s).

The cancellation of Nomination can be made only by those individualswho hold Units on their own behalf singly or jointly and who madethe original nomination.

On cancellation of the nomination, the nomination shall standrescinded and the Mutual Fund / AMC / Trustees shall not be underany obligation to transmit the Units in favour of the Nominee.

The nomination facility extended under the Scheme is in accordancewith SEBI regulations and subject to other applicable laws. Thesingle / joint / surviving Unitholders can subsequently write to theISC requesting for a Nomination Form in order to nominate anyperson to receive the Units upon his / her / their death, subject tocompletion of necessary formalities. Further, if either the MutualFund or the AMC incur any loss whatsoever arising out of anylitigation or harm that it may suffer in relation to the nomination,they will be entitled to be indemnified absolutely from the deceasedUnitholders’ estate. Upon the demise of the Unitholder, the Unitswould be transmitted in favour of the Nominee subject to theNominee executing suitable indemnities in favour of the MutualFund and the AMC and necessary documentation to the satisfactionof the Mutual Fund.

Investors / Unitholders are advised to read the instructions carefullybefore nominating.

The Mutual Fund can call for such documents from the Nomineeas deemed necessary.

Transfer & Transmission of Units

As the Scheme stands ready to redeem Units on a continuous basisas laid down herein, the transfer facility is found redundant. Unitsof the Scheme shall therefore be non transferable. However, if atransferee becomes a holder of Units by operation of law includingupon enforcement of a pledge, then the Trustees shall, subject to

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HSBC INTERVAL FUND

production of such evidence, which in their opinion is sufficient,proceed to effect the transfer within 30 days from the date oflodgement if the intended transferee is otherwise eligible to hold theUnits. A person becoming entitled to hold the Units in consequenceof the death, insolvency, or winding up of the sole holder or thesurvivors of joint holders, upon producing evidence anddocumentation to the satisfaction of the Fund and upon executingsuitable indemnities in favour of the Fund and the AMC, shall beregistered as a Unitholder.

Master Account / Folio

As an investor friendly measure, unless otherwise requested by theUnitholder, one Master / Folio Number may be assigned for oneinvestor investing in different Scheme(s) of the Mutual Fund. Insuch a case, one consolidated Account Statement will be provided.The number of Units allotted to a Unitholder or repurchased by aUnitholder will be reflected in his / her account and a Statement tothis effect will be issued to the Unitholder. The AMC reserves theright to assign the existing Master Account / Folio number againstmultiple applications and / or subsequent purchases under a newapplication form by an existing Unitholder, with identical mode ofholding and address.

Fractional Units

Since a request for redemption or purchase is generally made inrupee amounts and not in terms of number of Units of the Scheme,an investor may be left with fractional Units. Fractional Units willbe computed and accounted for up to three decimal places for theScheme. However, fractional Units will in no way affect the investor’sability to redeem the Units, either in part or in full, standing to theUnitholder’s credit.

Right to Limit Redemptions

The Trustees may, in the general interest of the Unitholders of theScheme offered under this Offer Document, and keeping in view theunforeseen circumstances / unusual market conditions, limit thetotal number of Units which may be redeemed on any Business Dayto 5% of the total number of Units then in issue, under the Schemeand Plan(s) thereof, or such other percentage as the Trustees maydetermine. Any Units, which by virtue of these limitations are notredeemed on a particular Business Day, will be carried forward forredemption to the next Business Day, in order of receipt. Redemptionsso carried forward will be priced on the basis of the Applicable NAV(subject to the prevailing load) of the Business Day on whichredemption is made. Under such circumstances, to the extent multipleredemption requests are received at the same time on a singleBusiness Day, redemptions will be made on pro-rata basis, based onthe size of each redemption request, the balance amount beingcarried forward for redemption to the next Business Day. In addition,the Trustees reserve the right in their sole discretion, to limitredemptions with respect to any single account to an amount of Rs.1 crore (Rupees One Crore Only) in a single day.

Suspension of Sale / Repurchase / Switch ofUnits

The Mutual Fund at its sole discretion reserves the right to withdrawsale and / or repurchase and / or switch of the Units in the Scheme(including any one of the Plan of any of the Scheme) temporarilyor indefinitely, if in the opinion of the AMC, the general marketconditions are not favourable and / or suitable investmentopportunities are not available for deployment of funds. However,the suspension of sale / repurchase / switch either temporarily orindefinitely will be with the approval of the Trustees.

The sale / repurchase / switch of the Units may be suspended underthe following conditions:

l When one or more stock exchanges or markets, which providebasis for valuation for a substantial portion of the assets of theScheme is closed otherwise than for ordinary holidays.

l When, as a result of political, economic or monetary events orany circumstances outside the control of the Trustees and theAMC, the disposal of the assets of the Scheme is not reasonable,or would not reasonably be practicable without being detrimentalto the interests of the Unitholders.

l In the event of breakdown in the means of communication usedfor the valuation of investments of the Scheme, without whichthe value of the securities of the Scheme cannot be accuratelycalculated.

l During periods of extreme volatility of markets, which in theopinion of the AMC are prejudicial to the interests of theUnitholders of the Scheme.

l In case of natural calamities, strikes, riots and bandhs.

l In the event of any force majeure or disaster that affects thenormal functioning of the AMC, ISC or the Registrar.

l If so directed by SEBI.

In the above eventualities, the time limits indicated above, forprocessing of requests for purchase, switch and redemption of Unitswill not be applicable. Further, an order to purchase Units is notbinding on and may be rejected by the Trustees, the AMC or theirrespective agents, until it has been confirmed in writing by the AMCor its agents and payment has been received.

Suspension or restriction of repurchase / redemption facility underany Scheme / Plan of the Mutual Fund shall be made applicable onlyafter the approval from the Board of Directors of the AMC and theTrustees. The approval from the AMC Board and the Trusteesgiving details of circumstances and justification for the proposedaction shall also be informed to SEBI in advance.

NRIs / FIIs

The Foreign Exchange Management (Transfer or Issue of Securityby a Person Resident Outside India) Regulations, 2000 (the “FEMARegulations”) permit a NRI to purchase on repatriation or non-repatriation basis, without limit, units of domestic mutual funds.Payment for such units must be made either by: (i) inward remittancethrough normal banking channels; or (ii) out of funds held in theNRE / FCNR account, in the case of purchases on a repatriationbasis or out of funds held in the NRE / FCNR / NRO account, inthe case of purchases on a non-repatriation basis.

The FEMA Regulations also permit a registered FII to purchase, onrepatriation basis, units of domestic mutual funds provided the FIIrestricts allocation of its total investment between equity and debtinstruments in the ratio of 70:30. Payment by the FII must be madeeither by inward remittance through normal banking channels or outof funds held in foreign currency account or non resident rupeeaccount maintained by the FII with a designated branch of anauthorised dealer with the approval of the RBI in terms of paragraph2 of Schedule 2 to the FEMA Regulations.

Redemption by NRIs / FIIs

Units held by an NRI investor and FIIs may be redeemed by suchinvestor by tendering Units to the Mutual Fund or for payment ofmaturity proceeds, subject to any procedures laid down by RBI fromtime to time.

The Fund will not be liable for any delays or for any loss on accountof any exchange fluctuations, while converting the rupee amount inforeign exchange in the case of transactions with NRIs / FIIs.

Provisions with respect to NRIs / FIIs stated above, is as per theAMC’s understanding of the laws currently prevalent in India.

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HSBC INTERVAL FUND

LOAD STRUCTURE & RECURRING EXPENSES

Load Structure (for NFO and ongoing)

Particulars(as % of NAV) HSBC Interval Fund - Plan I

Sales Load (Entry Load) Nil

Sales Load on issue ofUnits in lieu of Dividend(dividend reinvestment) Nil

Repurchase / redemption In case of exit during the specifiedLoad (Exit Load) liquidity window - Nil

In any other case: 0.5%

Switchover Fee Available on a no-load basisduring the specified interval periodand subject to applicable loads ofthe Scheme during any otherperiod.

The entry / exit load set forth above is subject to change at thediscretion of the AMC and such changes shall be implementedprospectively. Where an investor seeks to move between the dividendand growth alternatives within an option of the same Scheme/ Plan,

this will not be construed as a switch. Consequently no load willapply to such movements.

Subject to the Regulations, the Trustees reserve the right to modify/ alter the load structure and may decide to introduce a differentialload structure on the Units redeemed on any Business Day. Suchchanges will be applicable prospectively. The Addendum detailingthe changes in load structure will be attached to Offer Documentsand Abridged Offer Documents. The Addendum will also becirculated to all the distributors / brokers so that the same can beattached to all the Offer Documents and Abridged Offer Documentsin stock. The Trustees / AMC shall arrange to display a notice inthe Investor Service Centers of the AMC before the change of thethen prevalent load structure. Changes in the load structure may bestamped in the acknowledgement slip issued by the Fund after thechanges in load structure. The changes may also be disclosed in theStatements of Account issued after the introduction of such load.The load collected from the Unitholders under each Plan will becredited to a separate account in the respective Plan accounts andwill be offset against distribution and marketing expenses inaccordance with SEBI Regulations. Surplus of load, if any, chargedover planned marketing and distribution expenses to be defrayedwill be credited to the respective Plans whenever felt appropriateby the AMC.

The Redemption Price of units of the Scheme/ Plan(s) shall not belower than 95% of the NAV.

Initial issue expenses of Past Scheme(s)

HSBC Unique Opportunities Fund HSBC Tax Saver Fund

Expense Head Estimated as per Actuals ActualsOffer Document

(as a % of amount mobilised)

Advertising Expenses 1.00% 0.44% 0.95%

Agent Commissions 2.50% 3.24% 3.39%

Registrar Expenses 0.25% 0.02% 0.13%

Marketing Expenses 1.25% 0.25% 0.05%

Miscellaneous Expenses 0.25% 0.04% 0.02%

Bankers Fees 0.25% 0.01% 0.07%

Legal Fees 0.25% 0.03% 0.03%

Printing & Distribution 0.25% 0.05% 0.20%

Total 6.00% 4.08% 4.84%*

* In accordance with the guidelines issued by SEBI, HTSF being an open-ended Scheme would meet the sales, marketing and other suchexpenses connected with Sales and distribution of the Scheme from the entry load, if any and not through initial issue expenses.

SECTION IV

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HSBC INTERVAL FUND

Recurring Expenses for HINF-I

(% per annum of average net assets)

Description Regular InstitutionalOption Option

Investment Management & Advisory Fees 1.25% 1.25%

Additional Fees (if any) – –

Trustee Fees 0.01% 0.01%

Custodian Fees 0.12% 0.12%

Marketing & Selling Exp. 0.50% 0.25%

Registrar & Transfer Agent Fees 0.12% 0.12%

Transaction costs 0.02% 0.02%

Audit Fees 0.04% 0.04%

Costs related to investor communications 0.01% 0.01%

Cost of funds transfer 0.02% 0.02%

Cost of providing accountstatements, dividend,redemption warrants etc. 0.05% 0.05%

Cost of statutory advertisements 0.05% 0.05%

Other Expenses 0.06% 0.06%

Total Annual Recurring Expenses 2.25% 2.00%

The purpose of the above table is to assist the investor inunderstanding the various costs and expenses that an investor in theScheme / Plan(s) will bear directly or indirectly.

The above expenses are subject to change and may increase /decrease as per actual and / or any change in the Regulations. These

Expense Head (Rs. in lacs) HFTS 15 HLPF HTSF HUOF HFTS 21 HFTS 22 HFTS 23 HFTS 24 HFTS 25

Printing - 0.23 - - - - -

Business Promotions - - - - - - -

Advertising - - - - - - -

Brokerage 34.84 1.53 571.94 2047.05 18.29 19.94 23.52 43.59 43.45

Registrar's Fees 0.25 0.25 0.28 0.28 0.28 0.28 0.29

Legal & Professional Fees - 5.29 1.00 1.00 5.25 7.63 4.45 14.73 9.54

Miscellaneous Expenses - 2.50 - - - - -

Total 35.09 9.80 572.94 2048.05 23.82 27.85 28.25 58.60 53.28

Expense Head(Rs. in lacs) HFTS 26 HFTS 27 HFTS 28 HFTS 29 HFTS 30 HFTS 31 HFTS 32 HFTS 33 HFTS 34 HFTS 35 HFTS 36 HFTS 37 HDF HFDF

Printing - - - - 1.83 0.10 - - - 0.39 - - 17.03 0.41

Business Promotions - - 0.88 0.13 0.35 - - - - - - - 64.90 -

Advertising - - - - 8.35 - - - - - - - 58.71 -

Brokerage 0.10 16.48 44.25 - 171.24 - 22.84 - - 36.65 10.15 20.35 107.55 -

Registrar's Fees 0.28 0.28 0.28 0.28 0.31 0.28 0.28 0.28 0.28 0.28 0.28 0.28 14.69 0.28

Legal & Professional Fees 3.12 2.88 7.61 10.15 3.11 8.45 3.56 8.29 - - - - - 1.25

Miscellaneous Expenses - - - - 0.46 - - - - - - - - -

Total 3.50 19.64 52.99 10.56 185.65 8.83 26.68 8.57 0.28 37.32 10.43 20.63 262.88 1.94

* In accordance with the guidelines issued by SEBI, HTSF being an open-ended Scheme would meet the sales, marketing and other suchexpenses connected with Sales and distribution of the Scheme from the entry load, if any and not through initial issue expenses.

estimates have been made in good faith as per information availableto the AMC and the total expenses may be more than as specifiedin the table above. However, as per the Regulations, the total recurringexpenses that can be charged to the Scheme in this Offer Documentshall be subject to the applicable guidelines. Expenses over andabove the permitted limits will be borne by the AMC.

The recurring expenses of the Scheme, and the additionalmanagement fee shall be as per the limits prescribed under sub-regulation 6 of Regulation 52 of the SEBI Regulations and shall notexceed the limits prescribed thereunder. Currently, as per theRegulations, the maximum recurring expenses that can be chargedto an income Scheme shall be subject to a percentage limit ofaverage weekly net assets as in the table below:

First Next Next OverRs. 100 crores Rs. 300 crores Rs. 300 crores Rs. 700 crores

2.25% 2.00% 1.75% 1.50%

Subject to Regulations and this Offer Document, expenses over andabove the prescribed ceiling will be borne by the AMC, Trustees orthe Sponsor.

As per SEBI regulations, the AMC is entitled to an investmentmanagement and advisory fee at the rate of 1.25% per annum of theweekly average net assets outstanding in each accounting year forthe scheme concerned, as long as the net assets do not exceed Rs.100 crores (rupees one hundred crores only) and 1.00% of theexcess amount over Rs. 100 crores (rupees one hundred croresonly), where net assets so calculated exceed Rs. 100 crore (rupeesone hundred crores only). For schemes launched on a no load basis,the AMC is entitled to collect an additional management fee notexceeding 1% of the weekly average net assets outstanding in eachfinancial year.

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HSBC INTERVAL FUND

CONDENSED FINANCIAL INFORMATION

Condensed Financial Information as of 08 November, 2007

HISTORICAL PER UNIT STATISTICS HSBC- Advantage India Fund+ HSBC-Midcap Equity Fund* HSBC -Floating Rate Fund - Short Term Plan^^^^

1-Apr-07 1-Apr-06 23-Feb-06 1-Apr-07 1-Apr-06 19-May-05 1-Apr-07 1-Apr-06 1-Apr-05 16-Nov-048-Nov-07 31-Mar-07 31-Mar-06 8-Nov-07 31-Mar-07 31-Mar-06 8-Nov-07 31-Mar-07 31-Mar-06 31-Mar-05

NAV at the beginning of the period (Rs.)Dividend Option 11.7374 11.2925 10.0000 13.8256 17.3721 10.0000 NA NA NA NAGrowth Option 11.7374 11.2935 10.0000 18.1774 18.6362 10.0000 NA NA NA NARegular Option - Dividend NA NA NA NA NA NA 10.0000 10.0128 10.0128 10.0000Regular Option - Growth NA NA NA NA NA NA 11.4764 10.7486 10.2020 10.0000Regular Option - Weekly Dividend NA NA NA NA NA NA 10.0218 10.0062 NA NARegular Fortnightly Option NA NA NA NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Growth NA NA NA NA NA NA 11.5327 10.7776 10.2097 10.0000Institutional Option - Daily Dividend NA NA NA NA NA NA 10.0159 10.0132 10.0132 10.0000Institutional Option - Weekly Dividend NA NA NA NA NA NA 10.0471 10.0165 10.0232 10.0000Institutional Option - Monthly Dividend NA NA NA NA NA NA 10.1042 10.0114 10.0339 10.0000 Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Growth NA NA NA NA NA NA NA 10.2030 NA NAInstitutional Plus Option - Daily Dividend NA NA NA NA NA NA 10.0262 10.0171 NA NAInstitutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Monthly Dividend NA NA NA NA NA NA -$$ -$$ NA NANet Income Per unit (Rs.) 3.4491 1.6208 0.1336 2.6315 6.0230 2.7270 0.3946 1.1103 1.3312 0.2223Dividends Paid out (Rs.per unit) # Regular Dividend Option 1.65 - - 1.53 3.69 0.93 0.56 1.08 0.78 0.15 Regular Weekly Option NA NA NA NA NA NA 0.46 1.18 0.42 NA Regular Fortnightly Option NA NA NA NA NA NA NA NA NA NA Monthly Option - Dividend NA NA NA NA NA NA NA NA NA NA Quarterly Option - Dividend NA NA NA NA NA NA NA NA NA NA Institutional Option - Dividend NA NA NA NA NA NA NA NA NA NA Institutional Option - Daily Dividend NA NA NA NA NA NA 0.49 1.54 2.49 0.20 Institutional Option - Weekly Dividend NA NA NA NA NA NA 0.65 0.97 1.39 0.24 Institutional Option - Monthly Dividend NA NA NA NA N7A NA 0.87 1.00 1.79 0.11 Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NA NA NA NA Institutional Plus Option - Daily Dividend NA NA NA NA NA NA 0.25 0.87 1.29 NA Institutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NA Institutional Plus Option - Monthly Dividend NA NA NA NA NA NA -$$ -$$ -$$ NATransfer to Reserves (Rs. In crores) - - 204.35 - - 223.08 - - 2.00 4.14NAV at the End of the year/period (Rs.)Dividend Option 16.7396 11.7374 11.2925 18.5402 13.8256 17.3721 NA NA NA NAGrowth Option 18.2301 11.7374 11.2935 26.4630 18.1774 18.6362 NA NA NA NARegular Option - Dividend NA NA NA NA NA NA 10.0000 10.0000 10.0128 10.0128Regular Option - Growth NA NA NA NA NA NA 12.0383 11.4764 10.7486 10.2020Regular Option - Weekly Dividend NA NA NA NA NA NA 10.0134 10.0218 10.0062 NA Regular Fortnightly Option NA NA NA NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Growth NA NA NA NA NA NA 12.1157 11.5327 10.7776 10.2097Institutional Option - Daily Dividend NA NA NA NA NA NA 10.0132 10.0159 10.0132 10.0132Institutional Option - Weekly Dividend NA NA NA NA NA NA 10.0576 10.0471 10.0165 10.0232Institutional Option - Monthly Dividend NA NA NA NA NA NA 10.0873 10.1042 10.0114 10.0339 Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Growth NA NA NA NA NA NA 10.2767 NA 10.2030 NAInstitutional Plus Option - Daily Dividend NA NA NA NA NA NA 10.0262 10.0262 10.0171 NAInstitutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Monthly Dividend NA NA NA NA NA NA -$$ -$$ -$$ NANet Assets at End of Year/period (Rs. Crores) 940.00 1,157.77 1,741.27 322.21 293.14 502.40 337.33 240.14 412.33 881.23Ratio of Recurring Expenses to AverageDaily Net Assets (%) (Annualised) 2.74% 2.72% 1.75% 2.32% 2.30% 2.26% 0.54% 0.62% 0.60% 0.59%Date of Allotment 23-Feb-06 23-Feb-06 23-Feb-06 19-May-05 19-May-05 19-May-05 16-Nov-04 16-Nov-04 16-Nov-04 16-Nov-04Annualised Return(Since inception) 42.16% 15.74% 12.93% 48.20% 37.82% 86.38% 6.43% 5.99% 5.41% 5.56%Benchmark Returns (Since inception) 43.21% 19.60% 10.41% 43.58% 31.19% 64.72% 5.93% 5.48% 4.83% 4.80%Benchmark Index BSE 200 BSE 200 BSE 200 BSE Midcap BSE Midcap BSE Midcap CRISIL CRISIL CRISIL CRISIL

Liquid Liquid Liquid LiquidFund Index Fund Index Fund Index Fund Index

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HSBC INTERVAL FUND

HISTORICAL PER UNIT STATISTICS HSBC -Floating Rate Fund - Long Term Plan^^^^ HSBC-Fixed Term Series-21+ HSBC-Liquid Plus Fund+

1-Apr-07 1-Apr-06 1-Apr-05 16-Nov-04 1-Apr-07 2-Jan-07 1-Apr-07 17-Oct-068-Nov-07 31-Mar-07 31-Mar-06 31-Mar-05 8-Nov-07 31-Mar-07 8-Nov-07 31-Mar-07

NAV at the beginning of the period (Rs.)Dividend Option NA NA NA NA NA NA NA NAGrowth Option NA NA NA NA NA NA NA NARegular Option - Dividend 10.0902 10.0576 10.0299 10.0000 10.0222 10.0000 10.0122 10.0000Regular Option - Growth 11.4580 10.7500 10.2111 10.0000 10.0670 10.0000 10.3595 10.0000Regular Option - Weekly Dividend NA NA NA NA NA NA 10.0460 10.0000 Regular Fortnightly Option NA NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NA NAInstitutional Option - Dividend NA NA NA NA 10.0234 10.0000 NA NAInstitutional Option - Growth 11.5143 10.7795 10.2188 10.0000 10.0780 10.0000 10.3666 10.0000Institutional Option - Daily Dividend NA NA NA NA NA NA 10.0125 10.0000Institutional Option - Weekly Dividend 10.5684 10.0209 10.0263 10.0000 NA NA 10.0469 10.0000Institutional Option - Monthly Dividend 10.1210 10.0882 10.0247 10.0000 NA NA 10.1046 NA Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NA NAInstitutional Plus Option - Growth NA NA NA NA NA NA 10.3713 10.0000Institutional Plus Option - Daily Dividend NA NA NA NA NA NA 10.0126 10.0000Institutional Plus Option - Weekly Dividend NA NA NA NA NA NA 10.0474 10.0000Institutional Plus Option - Monthly Dividend NA NA NA NA NA NA 10.1050 10.0000Net Income Per unit (Rs.) 0.3075 1.5315 1.2790 0.1369 0.5258 0.2222 0.3830 0.5478Dividends Paid out (Rs.per unit) # Regular Dividend Option 0.48 1.06 0.84 0.14 0.51 0.04 0.32 0.30 Regular Weekly Option NA NA NA NA NA NA 0.33 0.23 Regular Fortnightly Option NA NA NA NA NA NA NA NA Monthly Option - Dividend NA NA NA NA NA NA NA NA Quarterly Option - Dividend NA NA NA NA NA NA NA NA Institutional Option - Dividend NA NA NA NA 0.53 0.05 NA NA Institutional Option - Daily Dividend NA NA NA NA NA NA 0.34 0.35 Institutional Option - Weekly Dividend - 2.23 2.90 0.17 NA NA 0.41 0.33 Institutional Option - Monthly Dividend 0.28 0.79 1.38 0.13 NA NA 0.32 0.87 Institutional Option - Fortnightly Dividend 0.06 NA NA NA NA NA NA NA Institutional Plus Option - Daily Dividend NA NA NA NA NA NA 0.47 0.50 Institutional Plus Option - Weekly Dividend NA NA NA NA NA NA 0.36 1.46 Institutional Plus Option - Monthly Dividend NA NA NA NA NA NA 1.60 1.29Transfer to Reserves (Rs. In crores) - - 10.74 8.36 - - - -NAV at the End of the year/period (Rs.)Dividend Option NA NA NA NA NA NA NA NAGrowth Option NA NA NA NA NA NA NA NARegular Option - Dividend 10.0277 10.0902 10.0576 10.0299 10.1386 10.0222 10.0122 10.0122Regular Option - Growth 12.0843 11.4580 10.7500 10.2111 10.7296 10.0670 10.8762 10.3595Regular Option - Weekly Dividend NA NA NA NA NA NA 10.0394 10.0460 Regular Fortnightly Option NA NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NA NAInstitutional Option - Dividend NA NA NA NA 10.1454 10.0234 NA NAInstitutional Option - Growth 12.1619 11.5143 10.7795 10.2188 10.7707 10.0780 10.8936 10.3666Institutional Option - Daily Dividend NA NA NA NA NA NA 10.0125 10.0125Institutional Option - Weekly Dividend 11.1637 10.5684 10.0209 10.0263 NA NA 10.0403 10.0469Institutional Option - Monthly Dividend 10.0355 10.1210 10.0882 10.0247 NA NA 10.1087 10.1046 Institutional Option - Fortnightly Dividend 10.0133Institutional Plus Option - Growth NA NA NA NA NA NA 10.9059 10.3713Institutional Plus Option - Daily Dividend NA NA NA NA NA NA 10.0126 10.0126Institutional Plus Option - Weekly Dividend NA NA NA NA NA NA 10.0407 10.0474Institutional Plus Option - Monthly Dividend NA NA NA NA NA NA 10.1043 10.1050Net Assets at End of Year/period (Rs. Crores) 174.20 60.52 368.57 648.23 187.00 175.62 7,153.57 1,251.18Ratio of Recurring Expenses to AverageDaily Net Assets (%) (Annualised) 0.65% 0.74% 0.68% 0.67% 0.43% 0.42% 0.41% 0.42%Date of Allotment 16-Nov-04 16-Nov-04 16-Nov-04 16-Nov-04 2-Jan-07 2-Jan-07 17-Oct-06 17-Oct-06Annualised Return(Since inception) 6.51% 5.85% 5.41% 2.11% 7.30% 0.67% 8.24% 3.60%Benchmark Returns (Since inception) 5.94% 5.49% 4.83% 1.75% 6.74% 0.81% 7.24% 2.93%Benchmark Index CRISIL CRISIL CRISIL CRISIL CRISIL CRISIL CRISIL CRISIL

Liquid Liquid Liquid Liquid Short-Term Short-Term Liquid LiquidFund Index Fund Index Fund Index Fund Index Bond Fund Bond Fund Fund Index Fund Index

Index Index

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HSBC INTERVAL FUND

HISTORICAL PER UNIT STATISTICS HSBC-Fixed Term Series-22+ HSBC-Fixed Term Series-23+ HSBC-Fixed Term Series-24+ HSBC-Fixed Term Series-25+ HSBC-Fixed Term Series-27+1-Apr-07 23-Jan-07 1-Apr-07 2-Mar-07 1-Apr-07 16-Mar-07 1-Apr-07 23-Mar-07 1-Apr-07 29-Mar-078-Nov-07 31-Mar-07 8-Nov-07 31-Mar-07 8-Nov-07 31-Mar-07 8-Nov-07 31-Mar-07 8-Nov-07 31-Mar-07

NAV at the beginning of the period (Rs.)Dividend Option NA NA NA NA NA NA NA NA NA NAGrowth Option NA NA NA NA NA NA NA NA NA NARegular Option - Dividend 10.0296 10.0000 10.0260 10.0000 10.0497 10.0000 10.0274 10.0000 10.0120 10.0000Regular Option - Growth 10.0479 10.0000 10.0706 10.0000 10.0497 10.0000 10.0274 10.0000 10.0120 10.0000Regular Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Dividend NA NA 10.0278 10.0000 NA NA 10.0284 10.0000 NA NAInstitutional Option - Growth 10.0543 10.0000 10.0744 10.0000 NA NA 10.0284 10.0000 10.0122 10.0000Institutional Option - Daily Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Monthly Dividend NA NA NA NA NA NA NA NA NA NA Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Growth NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Daily Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Monthly Dividend NA NA NA NA NA NA NA NA NA NANet Income Per unit (Rs.) 0.5514 0.1805 0.6039 0.0882 0.6311 0.0484 0.6381 0.0296 0.6492 0.0150Dividends Paid out (Rs.per unit) # Regular Dividend Option 0.53 0.02 0.47 0.04 - - 0.47 - 0.51 - Regular Weekly Option NA NA NA NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA NA NA NA NA NA Monthly Option - Dividend NA NA NA NA NA NA NA NA NA NA Quarterly Option - Dividend NA NA NA NA NA NA NA NA NA NA Institutional Option - Dividend NA NA 0.49 0.05 NA NA 0.49 - NA NA Institutional Option - Daily Dividend NA NA NA NA NA NA NA NA NA NA Institutional Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NA Institutional Option - Monthly Dividend NA NA NA NA NA NA NA NA NA NA Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NA NA NA NA Institutional Plus Option - Daily Dividend NA NA NA NA NA NA NA NA NA NA Institutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NA Institutional Plus Option - Monthly Dividend NA NA NA NA NA NA NA NA NA NATransfer to Reserves (Rs. In crores) - - - - - - - - - -NAV at the End of the year/period (Rs.)Dividend Option NA NA NA NA NA NA NA NA NA NAGrowth Option NA NA NA NA NA NA NA NA NA NARegular Option - Dividend 10.1539 10.0296 10.2026 10.0260 10.8260 10.0497 10.2118 10.0274 10.1834 10.0120Regular Option - Growth 10.7369 10.0479 10.7445 10.0706 10.8260 10.0497 10.7085 10.0274 10.6779 10.0120Regular Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Dividend NA NA 10.2096 10.0278 NA NA 10.2187 10.0284 NA NAInstitutional Option - Growth 10.7668 10.0543 10.7794 10.0744 NA NA 10.7389 10.0284 10.7075 10.0122Institutional Option - Daily Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Option - Monthly Dividend NA NA NA NA NA NA NA NA NA NA Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NAInstitutional Plus Option - Growth NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Daily Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NA NA NAInstitutional Plus Option - Monthly Dividend NA NA NA NA NA NA NA NA NA NANet Assets at End of Year/period (Rs. Crores) 273.40 255.71 159.03 149.37 531.48 493.50 337.18 319.13 102.10 95.98Ratio of Recurring Expenses to AverageDaily Net Assets (%) (Annualised) 0.33% 0.34% 0.55% 0.38% 0.25% 0.23% 0.44% 0.22% 0.42% 0.10%Date of Allotment 23-Jan-07 23-Jan-07 2-Mar-07 2-Mar-07 16-Mar-07 16-Mar-07 23-Mar-07 23-Mar-07 29-Mar-07 29-Mar-07Annualised Return(Since inception) 7.37% 0.48% 7.45% 0.71% 8.26% 0.50% 7.09% 0.27% 6.78% 0.12%Benchmark Returns (Since inception) 6.49% 0.57% 5.30% 0.65% 6.17% 0.26% 4.84% 0.21% 4.67% 0.04%Benchmark Index CRISIL Short- CRISIL Short- Crisil Liquid Crisil Liquid CRISIL Short- CRISIL Short- Crisil Liquid Crisil Liquid Crisil Liquid Crisil Liquid

Term Bond Term Bond Fund Index Fund Index Term Bond Term Bond Fund Index Fund Index Fund Index Fund IndexFund Index Fund Index Fund Index Fund Index

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HSBC INTERVAL FUND

HISTORICAL PER UNIT STATISTICS HSBC-Tax Saver HSBC-Unique Opportunities HSBC-Fixed HSBC-Fixed HSBC-Fixed HSBC-FixedEquity Fund+ Fund+ Term Series-29+ Term Series-28+ Term Series-30+ Term Series-32+

1-Apr-07 5-Jan-07 1-Apr-07 21-Mar-07 21-May-07 22-May-07 11-Jun-07 6-Jul-078-Nov-07 31-Mar-07 8-Nov-07 31-Mar-07 8-Nov-07 8-Nov-07 8-Nov-07 8-Nov-07

NAV at the beginning of the period (Rs.)Dividend Option 9.4098 10.0000 10.2051 10.0000 NA NA NA NAGrowth Option 9.4098 10.0000 10.2051 10.0000 NA NA NA NARegular Option - Dividend NA NA NA NA 10.0000 10.0000 10.0000 10.0000Regular Option - Growth NA NA NA NA 10.0000 10.0000 10.0000 10.0000Regular Option - Weekly Dividend NA NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NA NAInstitutional Option - Dividend NA NA NA NA 10.0000 10.0000 10.0000 10.0000Institutional Option - Growth NA NA NA NA 10.0000 10.0000 10.0000 10.0000Institutional Option - Daily Dividend NA NA NA NA NA NA NA NAInstitutional Option - Weekly Dividend NA NA NA NA NA NA NA NAInstitutional Option - Monthly Dividend NA NA NA NA NA NA NA NA Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NA NAInstitutional Plus Option - Growth NA NA NA NA NA NA NA NAInstitutional Plus Option - Daily Dividend NA NA NA NA NA NA NA NAInstitutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NAInstitutional Plus Option - Monthly Dividend NA NA NA NA NA NA NA NANet Income Per unit (Rs.) 0.5012 0.0711 1.4552 0.0970 0.4831 0.5088 0.3944 0.3188Dividends Paid out (Rs.per unit) # Regular Dividend Option - - - - NA 0.33 NA NA Regular Weekly Option NA NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA NA NA NA Monthly Option - Dividend NA NA NA NA NA NA NA NA Quarterly Option - Dividend NA NA NA NA NA NA NA NA Institutional Option - Dividend NA NA NA NA NA 0.33 NA NA Institutional Option - Daily Dividend NA NA NA NA NA NA NA NA Institutional Option - Weekly Dividend NA NA NA NA NA NA NA NA Institutional Option - Monthly Dividend NA NA NA NA NA NA NA NA Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NA NA Institutional Plus Option - Daily Dividend NA NA NA NA NA NA NA NA Institutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NA Institutional Plus Option - Monthly Dividend NA NA NA NA NA NA NA NATransfer to Reserves (Rs. In crores) - - - - - - - -NAV at the End of the year/period (Rs.)Dividend Option 13.2735 9.4098 13.6203 10.2051 NA NA NA NAGrowth Option 13.2735 9.4098 13.6203 10.2051 NA NA NA NARegular Option - Dividend NA NA NA NA 10.4868 10.1941 10.6588 10.3232Regular Option - Growth NA NA NA NA 10.4868 10.5337 10.6588 10.3232Regular Option - Weekly Dividend NA NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NA NAInstitutional Option - Dividend NA NA NA NA 10.4942 10.2043 10.6588 10.3371Institutional Option - Growth NA NA NA NA 10.4942 10.5534 10.6588 10.3371Institutional Option - Daily Dividend NA NA NA NA NA NA NA NAInstitutional Option - Weekly Dividend NA NA NA NA NA NA NA NAInstitutional Option - Monthly Dividend NA NA NA NA NA NA NA NA Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NAInstitutional Plus Option - Growth NA NA NA NA NA NA NA NAInstitutional Plus Option - Daily Dividend NA NA NA NA NA NA NA NAInstitutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA NAInstitutional Plus Option - Monthly Dividend NA NA NA NA NA NA NA NANet Assets at End of Year/period (Rs. Crores) 269.38 179.38 708.61 650.24 354.77 253.19 108.59 122.37Ratio of Recurring Expenses to AverageDaily Net Assets (%) (Annualised) 2.36% 2.17% 3.23% 1.88% 0.19% 0.40% 1.14% 0.32%Date of Allotment 5-Jan-07 5-Jan-07 21-Mar-07 21-Mar-07 21-May-07 22-May-07 11-Jun-07 6-Jul-07Annualised Return(Since inception) 32.74% -5.90% 36.20% 2.05% 4.87% 5.34% 6.59% 3.23%Benchmark Returns (Since inception) 41.99% -6.42% 53.43% 1.12% 2.94% 2.90% 3.67% 1.82%Benchmark Index BSE 200 BSE 200 BSE 200 BSE 200 Crisil Liquid Crisil Liquid CRISIL Short- Crisil Liquid

Fund Index Fund Index Term Bond Fund IndexFund Index

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HSBC INTERVAL FUND

HISTORICAL PER UNIT STATISTICS HSBC-Fixed Term HSBC-Fixed Term HSBC-Fixed Term HSBC-Fixed Term HSBC-Dynami HSBC-Flexi Debt HSBC-Fixed TermSeries-33+ Series-34+ Series-35+ Series-36+ Fund+ Fund + Series-37+

30-Aug-07 26-Sep-07 13-Sep-07 26-Sep-07 23-Sep-07 8-Oct-07 18-Oct-078-Nov-07 8-Nov-07 8-Nov-07 8-Nov-07 8-Nov-07 8-Nov-07 8-Nov-07

NAV at the beginning of the period (Rs.)Dividend Option NA NA NA NA NA NA NAGrowth Option NA NA NA NA NA NA NARegular Option - Dividend 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000Regular Option - Growth 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000Regular Option - Weekly Dividend NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA NA NAMonthly Option - Dividend NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NAInstitutional Option - Dividend 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000Institutional Option - Growth 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000 10.0000Institutional Option - Daily Dividend NA NA NA NA NA NA NAInstitutional Option - Weekly Dividend NA NA NA NA NA NA NAInstitutional Option - Monthly Dividend NA NA NA NA NA NA NA Institutional Option - Fortnightly Dividend NA NA NA NA NA NA NAInstitutional Plus Option - Growth NA NA NA NA NA NA NAInstitutional Plus Option - Daily Dividend NA NA NA NA NA NA NAInstitutional Plus Option - Weekly Dividend NA NA NA NA NA NA NAInstitutional Plus Option - Monthly Dividend NA NA NA NA NA NA NANet Income Per unit (Rs.) 0.7419 0.3833 0.5842 0.3177 1.0268 0.5175 0.0989Dividends Paid out (Rs.per unit) # Regular Dividend Option NA - - - - 0.0602 - Regular Weekly Option NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA 0.0348 Monthly Option - Dividend NA NA NA NA NA 0.0602 NA Quarterly Option - Dividend NA NA NA NA NA NA NA Institutional Option - Dividend NA - NA - - - - Institutional Option - Daily Dividend NA NA NA NA NA NA NA Institutional Option - Weekly Dividend NA NA NA NA NA NA NA Institutional Option - Monthly Dividend NA NA NA NA NA 0.0702 NA Institutional Option - Fortnightly Dividend NA NA NA NA NA 0.0589 NA Institutional Plus Option - Daily Dividend NA NA NA NA NA NA NA Institutional Plus Option - Weekly Dividend NA NA NA NA NA NA NA Institutional Plus Option - Monthly Dividend NA NA NA NA NA NA NATransfer to Reserves (Rs. In crores) - - - - - - -NAV at the End of the year/period (Rs.)Dividend Option NA NA NA NA NA NA NAGrowth Option NA NA NA NA NA NA NARegular Option - Dividend 10.2042 10.0949 10.1677 10.1180 11.0680 10.0037 10.0433Regular Option - Growth 10.2042 10.0949 10.1677 10.1180 11.0680 10.0924 -Regular Option - Weekly Dividend NA NA NA NA NA NA NA Regular Fortnightly Option NA NA NA NA NA 10.01 NAMonthly Option - Dividend NA NA NA NA NA NA NAQuarterly Option - Dividend NA NA NA NA NA NA NAInstitutional Option - Dividend 10.2109 10.0967 10.1677 NA NA NA 10.0433Institutional Option - Growth 10.2109 10.0967 10.1677 10.1218 NA 10.0957 NAInstitutional Option - Daily Dividend NA NA NA NA NA NA NAInstitutional Option - Weekly Dividend NA NA NA NA NA NA NAInstitutional Option - Monthly Dividend NA NA NA NA NA 10.0251 NA Institutional Option - Fortnightly Dividend NA NA NA NA NA 10.0062 NAInstitutional Plus Option - Growth NA NA NA NA NA NA NAInstitutional Plus Option - Daily Dividend NA NA NA NA NA NA NAInstitutional Plus Option - Weekly Dividend NA NA NA NA NA NA NAInstitutional Plus Option - Monthly Dividend NA NA NA NA NA NA NANet Assets at End of Year/period (Rs. Crores) 281.35 155.16 414.11 176.39 492.35 193.90 227.14Ratio of Recurring Expenses to AverageDaily Net Assets (%) (Annualised) 0.32% 0.15% 0.25% 0.24% 3.71% 0.54% 0.24%Date of Allotment 4-Sep-07 27-Sep-07 14-Sep-07 4-Oct-07 24-Sep-07 8-Oct-07 18-Oct-07Annualised Return(Since inception) 2.04% 0.95% 1.68% 1.18% 10.68% 0.20% 0.92%Benchmark Returns (Since inception) 1.11% 0.66% 0.94% 0.48% 14.06% 0.04% 5.42%Benchmark Index Crisil Liquid Crisil Liquid CRISIL Short- Crisil Liquid Crisil Liquid Crisil Liquid Crisil Liquid

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HSBC INTERVAL FUND

Notes :

1) $ indicates values less than 0.01

2) # The dividend paid out is calculated based on the total amount of dividend declared during the period including distribution tax whereverapplicable divided by the number of units as on the last day of the relevant period.

3) ^ HSBC Cash Fund - Institutional Plus Options were launched on 02 June, 2004 and the HSBC Cash Fund - Regular Option - WeeklyDividend was launched on 20 April, 2005

4) ^^^^ HSBC -Floating Rate Fund - Short Term Plan and HSBC -Floating Rate Fund - Long Term Plan were launched on November16, 2004 and the HSBC - Floating Rate Fund Short Term Plan - Regular Option - Weekly Dividend was launched on 20 April 2005

HSBC -Floating Rate Fund - Short Term Plan - Institutional Plus-Growth Option & Institutional Plus-Daily Dividend Option werelaunched on 21 November, 2005 and the HSBC Floating Rate Fund - Short Term Plan - Institutional Plus-Monthly Dividend Optionwas launched on 22 November, 2005

5) HSBC Institutional Income Fund Short Term Plan, HSBC Institutional Income Fund Investment Plan and HSBC Gilt Fund Long TermPlan were wound up with effect from 1 July 2004, 30 December 2004 and 31 January 2005 respectively hence historic per unit statisticshave not been provided.

6) * The HSBC-MidCap Equity Fund and HSBC- Fixed Term Series I was launched on May 19, 2005 and December 05,2005 and ratioof Recurring Expenses to Average Daily Net Assets (Annualized ) is calculated w.e.f May 3, 2005 and November 29, 2005 respectively.

7) + The HSBC- Fixed Term Series II, HSBC- Fixed Term Series IV, HSBC- Fixed Term Series V,HSBC- Fixed Term SeriesVI, HSBC-Fixed Term Series XIII HSBC- Advantage India Fund, HSBC- Fixed Term Series IX, HSBC- Fixed Term Series 14, HSBC Fixed TermSeries 21, HSBC- Fixed Term Series 15, HSBC Liquid Plus Fund, HSBC Fixed Term Series 22, HSBC Fixed Term Series 23, HSBCFixed Term Series 24, HSBC Fixed Term Series 25, HSBC Fixed Term Series 26, HSBC Fixed Term Series 27, HSBC Tax Saver EquityFund and HSBC Unique Opportunities Fund,HSBC Fixed Term Series 29,HSBC Fixed Term Series 28,HSBC Fixed Term Series30,HSBC Fixed Term Series 31, HSBC Fixed Term Series 32, HSBC Fixed Term Series 33 ,HSBC Fixed Term Series 34,HSBC FixedTerm Series 35, HSBC Fixed Term Series 36, HSBC Fixed Term Series 37, HSBC Dynamic Fund and HSBC Flexi Debt Fund waslaunched on January 10, 2006, March 29,2006, February 06,2006,February 20,2006, March 31,2006, February 23,2006, June 29,2006,August 29,2006, January 02 ,2007, September 28,2006, October 17,2006, January 23, 2007, March 02 ,2007, March 16, 2007, March23, 2007, March 26, 2007, March 29, 2007, January 05, 2007, March 21, 2007, May 21, 2007,May 22, 2007,June 11, 2007, July 04,2007, July 06, 2007, August 30, 2007 ,September 26, 2007, September 13, 2007, October 03 ,2007 , October 18,2007, September 23,2007and October 08,2007 respectively.

Ratio of Recurring Expenses to Average Daily Net Assets (Annualized ) is calculated w.e.f December 15, 2005, March 4,2006, January10, 2006, February 17,2006, March 29,2006 , January 02, 2006, June 27,2006, August 28,2006, September 26,2006, October 13,2006,January 17,2007, February 22,2007, March 14,2007, March 13,2007, March 23,2007, March 26,2007, November 24,2006, February08,2007, May 16,2007 and May 16,2007 respectively.

8) ** HSBC -Floating Rate Fund - Short Term Plan - Institutional Plus-Growth Options & Institutional Plus-Daily Dividend Options werelaunched on 21 November, 2005 and the HSBC Floating Rate Fund - Short Term Plan - Institutional Plus-Monthly Dividend was launchedon 22 November, 2005

9) $$ HSBC -Floating Rate Fund - Short Term Plan Institutional Plus Option - Monthly Dividend was redeemed as on March 03, 2006.

10) HSBC Fixed Term Series VII, Fixed Term Series VIII, Fixed Term Series III, Fixed Term Series IV, Fixed Term Series 13, Fixed TermSeries I, Fixed Term Series IX, Fixed Term Series 14 and Fixed Term Series V closed on 23 May 2006, 22 June 2006 , 07 September2006, April 02, 2007, April 04, 2007, June 04, 2007, July 03, 2007, August 30, 2007 and September 05, 2007 respectively.

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HSBC INTERVAL FUND

SECTION V

UNITHOLDERS’ RIGHTS & SERVICES

Investor Services

The Fund believes in providing the investor with superior servicesto make the investor’s experience in dealing with the Fund anefficient and satisfactory one. In order to achieve these goals, theFund endeavours to continuously establish and upgrade systems tohandle transactions efficiently and resolve any investor grievancespromptly.

Ease of Transactions

The Fund intends to make every transaction for the investor a simpleand convenient one. The Fund provides the following services:

Investor Service Centres in major metrosThe Fund presently has Investor Service Centres in 15 cities. Inaddition to this, the Fund presently has a tie up with the Registrarwho has set up Investor Service Centres in various cities. The detailsof Investor Service Centres are given in the inside back cover of theOffer Document. Over a period of time, the Fund will endeavourto add further Investor Service Centres and / or sales offices in othercities. The AMC reserves the right to designate from time to time,internet sites as official points of acceptance of transactions.

Each ISC of the AMC provides investors with requisite informationand help in processing transactions in the Scheme of the MutualFund. Adequate training will be imparted to personnel managing theInvestor Service Centres, with a view to early resolution of queries.

Process transactions in a timely manner

Under the Regulations, the Fund / the Registrar / the AMC shalldespatch to the Unitholders, the dividend proceeds within 30 daysof the date of declaration of dividend and the redemption proceedswithin 10 Business Days from the date of acceptance of the requestfor redemption or repurchase proceeds, as the case may be. In theevent of failure to despatch the redemption proceeds within theabove time, interest @ 15% per annum or such rate as may bespecified by SEBI, would be paid to the unitholders for the periodof delay.

Under normal circumstances, the Fund will endeavour to dispatchredemption proceeds within 1 Business Day from the date ofacceptance of a transaction request in respect of the Scheme at theInvestor Service Centres.

Ordinarily, non-monetary transactions or requests will be processed(with the exception of issue of Unit certificates) within 7 BusinessDays under the Scheme.

Investors should note that completion of monetary / non-monetarytransactions within the respective number of Business Day(s) asindicated above, would be done on “best efforts” basis and completionof all such transactions are subject to the time limits as prescribedunder the Regulations.

Problem Resolution

The Fund will follow-up with the Investor Service Centres and theRegistrar on complaints and enquiries received from investors withan endeavour to resolve them promptly.

For this purpose, Mr. K. Sriram has been appointed the InvestorRelations Officer. He can be contacted at the Corporate Office ofthe AMC. The address and phone numbers are:

314, D. N. Road, Fort, Mumbai 400 001.Tel.: (91) (22) 66668819. Fax : (91) (22) 40029600E-mail: [email protected]

Information about the Scheme

A schemewise Annual Report of the Fund or an abridged summarythereof shall be mailed to all Unitholders as soon as may be but notlater than 6 months from 31 March of each year. The abridgedannual report shall contain such details as are required under theRegulations. A full copy of the annual report shall be made availablefor inspection at the Head Office of the Fund and a copy shall bemade available to the Unitholders on request, on payment of nominalfees, if any.

The Fund shall before the expiry of 1 month from the close of eachhalf year, that is as on 31 March and 30 September, publish itsunaudited financial results in one English daily newspaper circulatingin the whole of India and in a newspaper published in the languageof the region where the Head Office of the Fund is situated andupdate the same on the AMC’s website atwww.hsbcinvestments.co.in and on AMFI’s website atwww.amfiindia.com, within 1 month from the close of each halfyear, in the formats as prescribed by SEBI.

The AMC will disclose the NAV of each Plan of every Scheme ofthe Fund on every Business Day.

The Fund shall before the expiry of 1 month from the close of eachhalf year (31 March and 30 September) send to the Unitholders acomplete statement of the Scheme’s portfolios or if such statementis not sent to the Unitholders, it will be published by way of anadvertisement in one English daily newspaper circulating in thewhole of India and in a newspaper published in the language of theregion where the Head Office of the Mutual Fund is situated. TheScheme’s portfolios shall also be displayed on the AMC’s websiteat www.hsbcinvestments.co.in, 1 month from the close of each halfyear. The statement shall be in the format as prescribed by SEBI.

The Mutual Fund will produce and mail to existing Unitholders(with unit balances), quarterly reports on the functioning of theMutual Fund and the Scheme. The same will also be placed on theAMC’s website to provide existing and potential investors with asummary of the current thinking of the AMC and outline theinvestment strategy with respect to the Scheme.

The Mutual Fund shall disclose large unitholdings in the Scheme,which are over 25% of the NAV. The information on the number ofsuch investors and total holdings by them in percentage terms, shallbe disclosed in the allotment letters after the New Fund Offer andin the annual and the half yearly results.

The annual report containing accounts of the AMC shall be displayedon the website of the AMC. Unitholders, if they so desire, mayrequest for the annual report of the AMC.

Account Statements / Transaction Confirmation

The AMC shall endeavour to mail Account Statements / TransactionConfirmations within 3 Business Days for purchases, redemptionsand switches.

Receiving Account Statement / Correspondenceby e-mail

The Mutual Fund will encourage the investors to provide their e-mail addresses for all correspondence. The Mutual Fund’s websitemay facilitate request for Account Statement by Unitholders. TheMutual Fund will endeavour to send Account Statements and anyother correspondence including Annual Reports using e-mail as themode for communication as may be decided from time to time.

The Unitholder will be required to download and print the Account

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Statement after receiving the e-mail from the Mutual Fund. Shouldthe Unitholder experience any difficulty in accessing theelectronically delivered Account Statement, the Unitholder shallpromptly advise the Mutual Fund to enable the Mutual Fund tomake the delivery through alternate means. Failure to advise theMutual Fund of such difficulty within 24 hours after receiving thee-mail will serve as an affirmation regarding the acceptance by theUnitholder of the Account Statement.

It is deemed that the Unitholder is aware of all security risks includingpossible third party interception of the Account Statements andcontent of the Account Statements becoming known to third parties.

Under no circumstances, including negligence, shall the MutualFund or anyone involved in creating, producing, delivering ormanaging the Account Statements of the Unitholders, be liable forany direct, indirect, incidental, special or consequential damagesthat may result from the use of or inability to use the service or outof the breach of any warranty. The use and storage of any informationincluding, without limitation, the password, account information,transaction activity, account balances and any other informationavailable on the Unitholder’s personal computer is at the risk andsole responsibility of the Unitholder.

NAV Information

The NAV of the Scheme will be calculated daily and announced bythe Fund on each Business Day. The Unitholders may obtain theinformation on NAV on any day, by calling the office of the AMCor any of the Investor Service Centres or on the website of the AMCat www.hsbcinvestments.co.in. The Fund will publish NAVs daily,in at least two daily newspapers. Further, the AMC shall publish thepurchase and redemption prices of Units daily in a newspaper withall India circulation.

The AMC shall update the NAVs on the websites of Association ofMutual Funds in India - AMFI (www.amfiindia.com) and the AMCby 9.00 p.m. on every Business Day. In case of any delay, thereasons for such delay would be explained to AMFI by the next day.If the NAVs are not available before commencement of businesshours on the following day due to any reason, the Fund shall issuea press release providing reasons and explaining when the Fundwould be able to publish the NAVs.

Personal Identification Number (PIN)

The PIN facility may be made available to the Unitholders.Unitholders will be required to indicate their desire to avail of thisfacility and also indicate their bank account number, name of thebank and branch in the application for purchasing Units at a futuredate. A Form together with detailed terms and conditions will bemailed to such Unitholders subject to which usage of the PIN willbe permitted. On receipt of the Form duly signed, the PIN will bemailed to each Unitholder.

Unitholders may use the PIN to carry out one or more of thefollowing types of transactions (as may be enabled by the MutualFund) by calling the ISCs / Call centre only:

l purchase

l redemption

l switch

l static data changes viz. address change, change of bank mandateetc.

The Unitholder will be asked for the PIN before the request isaccepted. In the interest of the Unitholder, the ISC reserves the rightto ask for a fax confirmation of the request and any other additional

information about the account of the Unitholder. The PIN shouldnever be disclosed to any person or written down where any otherperson may discover it. All transactions conducted with use of thisPIN will be the responsibility of the Unitholder and the Unitholderwill abide by the record of the transactions generated. The MutualFund and the ISC / Registrar shall not accept any responsibility forthe unauthorised use of the PIN.

Rights of Unitholders of the Scheme

l Unitholders of the Scheme have a proportionate right in thebeneficial ownership of the assets of the Scheme and in caseof Dividend sub-option(s), wherever applicable, to the dividenddeclared, if any, by the Fund under the Scheme.

l When the Fund declares a dividend under the Scheme, theFund shall despatch the dividend proceeds to the Unitholderswithin 30 days from the date of declaration of dividend.

l The Fund shall despatch the redemption proceeds to theUnitholders within 10 Business Days from the date of acceptanceof the request for the same. In the event of failure to despatchthe redemption proceeds within the above time, interest @15% per annum or such rate as may be specified by SEBI,would be paid to the unitholders for the period of delay.

l The Trustees are bound to make such disclosures to theUnitholders as are essential in order to keep them informedabout any information known to Trustees which may have anadverse bearing on their investments.

l The appointment of the AMC for the Fund can be terminatedby a majority of the Trustees or by 75% of the Unitholders ofany one or more of the Scheme of the Fund and any changein the appointment of the AMC shall be subject to the priorapproval of SEBI and the Unitholders of the respective Schemes.

l The Trustees are obliged to convene a meeting on a requisitionof 75% of the Unitholders of a Scheme.

l 75% of the Unitholders of a Scheme can pass a resolution towind up the Scheme.

l Unitholders have the right to inspect all the documents listedunder “Documents Available for Inspection” in this OfferDocument.

l The Trustees shall obtain the consent of the Unitholders:

l Whenever required to do so by SEBI, in the interest of theUnitholders

l Whenever required to do so on a requisition made by three-fourths of the Unitholders of the Scheme

l When the Trustees decide to wind-up or prematurely redeemthe Units.

l The Trustees shall ensure that no change in the fundamentalattributes of any Scheme or the Trust or fees and expensespayable or any other change which would modify the Schemeand affect the interests of Unitholders is carried out unless:

l A written communication about the proposed change is sent toeach Unitholder and

l An advertisement is given in one English daily newspaperhaving nationwide circulation as well as in newspaper publishedin the language of the region where the Head Office of theMutual Fund is situated and

l Unitholders are given an option to exit at the prevailing NetAsset Value without any exit load.

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HSBC INTERVAL FUND

l Subject to the Regulations and the guidelines issued by SEBI,the consent of the Unitholders of the Scheme will be obtainedthrough voting by mail. Detailed modalities of the same,including the principles for entitlement of votes for eachUnitholder will be finalised in consultation with and afterobtaining the approval of SEBI and the Trustees.

l The annual report containing accounts of the AMC would bedisplayed on the website of the AMC (i.e.www.hsbcinvestments.co.in). Unitholders, if they so desire,may request for the annual report of the AMC.

Minimum Number of Investors in Schemes / Plansof Mutual Funds

As per SEBI circular dated December 12, 2003 and June 14, 2005ref SEBI / IMD / CIR No.10 / 22701 /03 and SEBI/IMD/CIR/No.1/42529/05 respectively and AMFI Communication having ref. no.35/MEM-COR/55/04-05 dated December 31, 2004, each schemeand individual plan(s) under the schemes should have a minimumof 20 investors at the time of allotment (for New Fund Offer period& at subsequent Interval period), in case Scheme fails to assembleminimum 20 investors at the time of allotment (for New Fund Offerperiod & subsequent Interval period), the Scheme shall be woundup, by following the guidelines prescribed by SEBI and Investor’sapplication money would be refunded. Further, at the time ofallotment (for New Fund Offer period & at subsequent Intervalperiod), no single investor should account for more than 25% of thecorpus of such scheme (i.e. at the portfolio level), accordingly Fundis constrained to reject the application by a single unitholder havingexposure of more than 25% at the time of allotment (for New FundOffer period & at subsequent Interval periods), hence, such unitholdercould be allotted limited units to such extent.

Duration of the Scheme / Winding up

The AMC, the Fund and the Trustees reserve the right to make suchchanges / alterations to all or any of the Scheme (including thecharging of fees and expenses) offered under this Offer Documentto the extent permitted by the applicable Regulations. However, interms of the Regulations a scheme may be wound up after repayingthe amount due to the Unitholders:

l On the happening of any event, which in the opinion of theTrustees, requires the Scheme to be wound up

l If seventy five per cent (75%) of the Unitholders of the Schemepass a resolution that the Scheme be wound up

l If SEBI so directs in the interest of the Unitholders.

Where the Scheme is so wound up, the Trustees shall give noticeof the circumstances leading to the winding up of the Scheme to:

l SEBI and

l In two daily newspapers having a circulation all over India andin one vernacular newspaper with circulation in Mumbai.

On and from the date of the publication of notice of winding up, theTrustees or the AMC, as the case may be, shall:

l Cease to carry on any business activities in respect of theScheme so wound up

l Cease to create or cancel Units in the Scheme

l Cease to issue or redeem Units in the Scheme

Procedure and Manner of Winding up

The Trustees shall call a meeting of the Unitholders of the relevantScheme to approve by simple majority of the Unitholders present

and voting at the meeting, resolution for authorising the Trustees orany other person to take steps for the winding up of the Scheme.

The Trustees or the person authorised as above, shall dispose of theassets of the Scheme concerned in the best interest of the Unitholdersof the Scheme.

The proceeds of sale realised in pursuance of the above, shall be firstutilised towards discharge of such liabilities as are due and payableunder the Scheme, and after meeting the expenses connected withsuch winding up, the balance shall be paid to the Unitholders inproportion to their respective interest in the assets of the Scheme,as on the date the decision for winding up was taken.

On completion of the winding up, the Trustees shall forward toSEBI and the Unitholders, a report on the winding up, detailing thecircumstances leading to the winding up, the steps taken for disposalof the assets of the Scheme before winding up, expenses of theScheme for winding up, net assets available for distribution to theUnitholders and a certificate from the auditors of the Fund.

Notwithstanding anything contained herein above, the provisions ofthe Regulations in respect of disclosures of half-yearly reports andannual reports shall continue to be applicable, until winding up iscompleted or the Scheme cease to exist.

After the receipt of the report referred to above, if SEBI is satisfiedthat all measures for winding up of the Scheme have been compliedwith, the Scheme shall cease to exist.

Tax Benefits of Investing in the Mutual Fund

As per the taxation laws in force as amended by the Finance Act,2007 (“the FA”) the tax benefits that are available to the investorsinvesting in the Units of the Schemes are stated herein below. Theinformation so stated is based on the Mutual Fund’s understandingof such tax laws in force as of the date of this Offer Document,which have been vetted by the tax consultants.

The following information is provided for only generalinformation purposes. In view of the individual nature of taxbenefits, each investor is advised to consult with his or her owntax consultant with respect to the specific tax implications arisingout of their participation in the scheme.

The following benefits may accrue to the Unitholders with effectfrom the financial year commencing from April 1, 2007 (unlessotherwise stated).

A. INCOME TAX

1. Exemption u/s. 10(35):

Under the provisions of Section 10(35) of the Act income receivedin respect of the units of a mutual fund specified u/s. 10(23D) willbe exempt from income tax in the hands of all unitholders. In viewof this position, no tax needs to be deducted at source from suchdistribution by the fund. However, by virtue of the proviso to section10(35), this exemption does not apply to income arising on “transfer”of units of a mutual fund.

2. Long Term Capital Gains

i. On units of equity oriented funds:

Section 10(38) exempts long term capital gains arising from thetransfer of units of an equity oriented fund provided the transactionof sale is entered into on or after the date on which the securitiestransaction tax is made applicable and such transaction is chargeableto the securities transaction tax.

However such long term capital gains arising to a company shall betaken into account in computing the book profit and income taxpayable under section 115JB.

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HSBC INTERVAL FUND

ii. On units of funds other than the equity oriented funds:

l For Individuals and Hindu Undivided Families (“HUF”s):Long-term capital gains in respect of units held for a period ofmore than 12 months will be chargeable u/s.112 at the rate of20% (plus surcharge), as applicable. Capital gains would becomputed after reducing the aggregate of cost of acquisition(as adjusted by cost inflation index notified by the CentralGovernment) and expenditure incurred wholly and exclusivelyin connection with transfer.

An assessee will have an option to apply concessional rate oftax of 10% (plus surcharge) provided the long term capitalgains are computed without substituting indexed cost in placeof cost of acquisition.

Further, in the case of Individuals and HUFs, being resident,where taxable income as reduced by long-term capital gains,is below the basic exemption limit, the long-term capital gainswill be reduced to the extent of the shortfall and only thebalance long-term capital gains will be subjected to income taxat 20% (plus surcharge) or 10% (plus surcharge) as the casemay be.

l For Partnership firms, Indian Companies and other residents:Long term capital gains will be subjected to the income tax atthe rate of 20% (plus surcharge) or 10% (plus surcharge) as thecase may be.

l For Non-residents and foreign companies:Long-term capital gains will be subjected to the income tax atthe rate of 20% (plus surcharge). However, no benefit of CostInflation Indexation is available.

l For Non-resident Indians : Under section 115E of the Act fornon-resident Indians, income by way of long-term capital gainsin respect of Units is chargeable at the rate of 10% (plussurcharge). However, no benefit of Cost Inflation Indexationis available.

Non-resident Indians may opt for computation of long-termcapital gains as per section 112, if it is more beneficial.

l For Overseas Financial Organizations, including OverseasCorporate Bodies fulfilling conditions laid down under section115AB (Offshore Funds) :

Under section 115AB of the Act, long term capital gains inrespect of units held for a period of more than 12 months willbe chargeable at the rate of 10% (plus surcharge). Such gainswould be calculated without indexation of cost of acquisition.

l For Foreign Institutional Investors (“FIIs”):

Under section 115AD of the Act, long term capital gains inrespect of units held for more than 12 months would be taxedat the rate of 10% plus surcharge. Such gains would be calculatedwithout indexation of cost of acquisition.

Tax on long term capital gains in all the above cases will befurther increased by the Education Cess (“EC”) calculated@ 2% on tax plus surcharge and Secondary and HigherSecondary Cess calculated @ 1% on tax plus surcharge as perthe FA.

3. Short Term Capital Gainsi. On units of equity oriented funds:Section 111A provides that the short term capital gains arising fromthe transfer of units of an equity oriented fund will be taxed at 10%(plus applicable surcharge) provided the transaction of sale is entered

into on or after the date on which the securities transaction tax ismade applicable and such transaction is chargeable to the securitiestransaction tax.

ii. On units of funds other than equity oriented funds:

Short term Capital Gains in respect of Units held for a period of notmore than 12 months is added to the total income. Total incomeincluding short-term capital gains is chargeable to tax as per therelevant slab rates. The maximum tax rates applicable to differentcategories of assesses are as follows:

Resident Individuals and HUF 30% plus surcharge,as applicable

Partnership Firms 30% plus surcharge

Indian companies 30% plus surcharge

Non Resident Indians 30% plus surcharge

Foreign Companies 40% plus surcharge

Overseas financial Organisations 30% plus surcharge

FIIs 30% plus surcharge

Tax on short term capital gains in all the above cases will be furtherincreased by the EC calculated @ 2% on tax plus surcharge andSecondary and Higher Secondary Cess calculated @ 1% on tax plussurcharge as per the FA.

4. Capital Loss:

l Section 94(7) disallows any capital loss, arising to a unitholderif he acquires units of a mutual fund within a period of threemonths prior to the record date fixed for declaration of dividendor distribution of income and sells or transfers such unitswithin a period of nine months from such record date, to theextent of dividend or income received or receivable on suchunits.

l Section 94(8) provides that if a person buys or acquires units(“the original units”) of a mutual fund within a period of threemonths prior to the record date fixed for allotment of bonusunits and sells the original units within nine months from thedate of allotment of bonus units then the loss arising on suchsale or transfer shall be ignored. Further, such loss shall bedeemed to be the cost of acquisition or purchase of the bonusunits.

5. Tax deduction at source on Capital Gains

(i) No tax is required to be deducted at source on capital gainsarising to any resident unit holder.

(ii) Under section 195 of Act, tax shall be deducted at source inrespect of capital gains as under:

a. In case of a non-resident other than a company -

l Long term capital gains on units ofequity oriented funds nil

l Long term capital gains on units of 20% plusfunds other than equity oriented funds surcharge

l Short term capital gains on units of 10% plusequity oriented funds surcharge

l Short term capital gains on units of 30% plusfunds other than equity oriented funds surcharge

b. In case of a foreign company -

l Long term capital gains on units of nilequity oriented funds

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HSBC INTERVAL FUND

l Long term capital gains on units of 20% plusfunds other than equity oriented funds surcharge

l Short term capital gains on units of 10% plusequity oriented funds surcharge

l Short term capital gains on units of 40% plusfunds other than equity oriented funds surcharge

Tax Deducted At Source on short term and long term capitalgains in all the above cases will be further increased by the ECcalculated @ 2% on tax plus surcharge and Secondary andHigher Secondary Cess calculated @ 1% on tax plus surchargeas per the FA.

(iii) Under section 196B of the Act tax at 10% plus surcharge andEC calculated @ 2% on tax plus surcharge and Secondary andHigher Secondary Cess calculated @ 1% on tax plus surchargeas per the FA shall be deducted at source from long term capitalgains on units other than the units of equity-oriented mutualfunds earned by Overseas Financial Organisation.

(iv) Under Section 196D of the Act, no deduction shall be madefrom any income by way of capital gains, in respect of transferof securities referred to in Section 115AD of the Act.

As per circular no. 728 dated October 1995 by CBDT, in thecase of a remittance to a country with which a Double TaxationAvoidance Agreement (DTAA) is in force, tax should bededucted at the rate provided in the Finance Act of the relevantyear or at the rate provided in DTAA whichever is morebeneficial to the assessee.

In order for the unitholder to obtain the benefit of a lower rateunder the DTAA, the unitholder would be required to providethe fund with a certificate obtained from his Assessing Officerstating his eligibility for the lower rate.

6. Investments by Charitable and Religious Trusts

Units of Mutual Fund Schemes referred to in clause 23D ofsection 10 of the Act constitute an eligible avenue for investmentby charitable or religious trusts per rule 17C of the Income TaxRules, 1962, read with clause (xii) of sub-section (5) of section11 of the Income Tax Act, 1961.

B. WEALTH TAX

Units held under the Schemes of Mutual Fund are not treated asassets within the meaning of section 2(ea) of the Wealth Tax Act,1957 and are, therefore, not liable to Wealth-Tax

C. GIFT TAX

If units of Mutual Fund Scheme are gifted, no gift tax shall bepayable either by the donor or the donee as the Gift Tax has beenabolished.

Notes:

(i) All tax benefits will be available to the Sole Unitholder or thefirst named holder in case the Units are held in the names ofmore than one person, as the case may be.

(ii) HSBC AMC also confirms that the Income Tax/Wealth Tax/Capital Gains Tax and investment by NRIs/FIIs/OCBs aresubject to relevant requirements under the Income Tax, FEMAand RBI Directions.

(iii) As per Section 54ED capital gains arising before April 1, 2006from a transfer of a long term capital asset being listed securitiesor units of UTI/mutual funds, shall be exempt from tax, if suchcapital gains are invested in equity shares by way of a publicissue. The section provides for a lock-in period of one year andif the newly acquired shares are sold or transferred during theperiod, the capital gains earlier claimed exempt, would becometaxable in the year of sale of the newly acquired shares

(iv) With effect from June 1, 2006 an investor who sells units ofan equity oriented fund to the mutual fund will have to pay0.25% of the sale price of the units as securities transaction taxwhich tax would be collected by the prescribed person in caseof every mutual fund.

(v) Section 88E provides that where the total income of a personincludes income chargeable under the head “Profits and gainsof business or profession” arising from sale of units of equityoriented funds, he shall get rebate equal to the securitiestransaction tax paid by him in the course of his business. Suchrebate is to be allowed from the amount of income tax inrespect of such transactions calculated by applying averagerate of income tax.

(vi) Section 80C provides that an individual or HUF shall getdeduction, in respect of contribution to any units of any MutualFunds notified under clause 10(23D) of section 10 or from theAdministrator or the specified company under any planformulated in accordance with such scheme as the CentralGovernment may, by notification in the Official gazette, specifyin this behalf and in respect of contribution by an individualto any pension fund set up by the Mutual Fund notified underclause (23D) of section 10 or by the Administrator or thespecified company, as the Central Government may, bynotification in the Official Gazette, specify in this behalf, outof his income chargeable to tax provided the aggregate sumdoes not exceed one lakh rupees.

Unclaimed Redemption / Dividend Amount

The unclaimed redemption amounts and dividend amounts may bedeployed by the mutual fund in call money market or money marketinstruments and the investors who claim these amounts during aperiod of 3 years from the due date shall be paid at the prevailingnet asset value. After a period of 3 years, this amount may betransferred to a pool account and the investors can claim the amountat the NAV prevailing at the end of the third year. The income earnedon such funds will be used for the purpose of investor education.The AMC will make continuous efforts to remind the investorsthrough letters to take their unclaimed amounts. Further, theinvestment management fee charged by the AMC for managingunclaimed amounts shall not exceed 50 basis points.

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SECTION VI

OTHER MATTERS

Unitholder Grievances Redressal Mechanism

Investor grievances are normally received at the Corporate Office of the AMC or at the Investor Service Centres or directly by the Registrar.All grievances are generally forwarded to the Registrar for their necessary action. The complaints are closely followed up with the Registrarto ensure timely redressal and prompt investor service.

Given below is the status of complaints received From April 1, 2004 to November 8, 2007.

HSBC Mutual Fund - Consolidated Report for all schemes

Name of Complaint / Queries Opening Total Queries / Queries resolved within PendingBalance Complaints 24 Hrs. 48 Hrs. 72 Hrs. Above 72 Hrs.

T+0 T+1 T+2 > T+2

Complaints Received from SEBI 0 54 11 4 2 37 0Correction in Investor Details 0 3651 3340 79 95 137 0Non Allotment of Units 0 0 0 0 0 0 0Non receipt of Account Statement 0 405 347 25 9 21 0Non receipt of Dividend Warrant 0 76 46 5 5 20 0Non receipt of Redemption Warrant 0 75 50 1 1 23 0

Total 0 4261 3794 114 112 238 0

Associate Transactions

INVESTMENT IN ASSOCIATE COMPANIES

During the period 14 November 2002 to 08 November 2007, HSBC Mutual Fund had invested in the following associate companiesof the Sponsor

(Rs. in crores)

Name of the Investing Scheme Name of the Associate Particulars Amount ofInvestment

HSBC Equity Fund HSBC Fixed Deposit 28.00HSBC Income Fund Investment Plan HSBC Fixed Deposit -HSBC Income Fund Short Term Plan HSBC Fixed Deposit 57.65HSBC Cash Fund HSBC Fixed Deposit 646.29HSBC Institutional Income Fund Investment Plan HSBC Fixed Deposit 1.00HSBC Institutional Income Fund Short Term Plan HSBC Fixed Deposit 29.03HSBC Liquid Plus Fund HSBC Fixed Deposit 303.00HSBC Taxsaver Equity Fund HSBC Fixed Deposit 20.00HSBC MIP Regular Plan HSBC Fixed Deposit 7.32HSBC MIP Savings Plan HSBC Fixed Deposit 4.48HSBC India Opportunities Fund HSBC Fixed Deposit 20.80HSBC Floating Rate Fund Long Term Plan HSBC Fixed Deposit 95.00HSBC Advantage India Fund HSBC Fixed Deposit 36.00HSBC Midcap Equity Fund HSBC Fixed Deposit 8.80HSBC Unique Opportunities Fund HSBC Fixed Deposit 37.60

The above investments were considered sound. Before making the investments, the AMC evaluated the same on merits and on arms’ lengthbasis and in accordance with the objectives of the Scheme.

Underwriting Obligations with respect to issues of Associate Companies

The AMC has till date, not entered into any underwriting contracts in respect of any public issue made by any of its associate companies.

Subscriptions in issues lead managed by the Sponsor or any of its Associates

The Mutual Fund subscribed to the public issue of Maruti Udyog Limited during the half year ended September 30, 2003. The Fund wasallotted 62300 shares @ Rs. 125.00 per share. The Schemes of HSBC MF subscribed to public issues of Biocon Ltd. (allotted 75000 shares@ Rs 315 per share) and Gas Authority of India Limited (allotted 849520 shares @ Rs. 195 per share) during the half year ended March31, 2004. The Schemes of HSBC Mutual Fund subscribed to the public issue of National Thermal Power Corporation Limited (allotted2627100 shares @ Rs. 62 per share) and Jet Airways India Limited (allotted 63623 shares @ Rs 1100 per share) during the half year endedMarch 31, 2005. The Schemes of HSBC Mutual Fund subscribed to the public issue of Gujarat State Petronet Limited (allotted 589075 shares@ Rs.27 per share) and Bank of Baroda (allotted 205848 shares @ Rs.230 per share) during the half year ended March 31, 2006. The Schemesof HSBC Mutual Fund subscribed to the public issue of Reliance Petroleum Limited during the half year ended September 30, 2006. The

Offer Document


HSBC INTERVAL FUND

Fund was allotted 1234275 @Rs.60 per share. HSBC Securities andCapital Markets (India) Pvt. Ltd., the Sponsor was the book runninglead manager / co-book running lead manager in these issues.However, these were subscribed through merchant bankers / brokersother than the Sponsor.

Dealing with Associate Companies

The AMC has utilised the services of its associate, The Hongkongand Shanghai Banking Corporation Limited as the Collecting Bankerand for procuring Unit subscriptions for Scheme of the Fund. TheCollecting Banker’s fees and commissions payable are at similarrates offered to other collecting bankers and distributors by the

Scheme.

The Hongkong and Shanghai Banking Corporation Limited andHSBC Primary Dealership (India) Private Limited are on the panelof selected counterparties with which the Mutual Fund places moneyin fixed deposits and / or enters into transactions for purchase / saleof debt instruments.

These associates were counterparties to the Mutual Fund with respectto purchase / sale of the abovementioned instruments. The AMC hasutilised the services of the Sponsor for purchase / sale of securitieson behalf of the Mutual Fund.

DEALING WITH ASSOCIATE COMPANIES (PERIOD 14/11/02 TO 08/11/2007)

HSBC Mutual Fund has utitilised the services of the following associates for the purpose of securities transactions (aggregatepurchase and sale) & Deals with associates as counterparty:

(Rs. in crores)

Name of the Particulars HEF HIF HCF HIIF HGF HMIPAssociate IP ST IP ST LT ST R S

The Hongkong and Fixed Deposit 28.00 – 57.65 646.29 1.00 29.03 – – 7.32 4.48Shanghai Banking Discounted Instruments 73.65 – 70.44 372.95 – 19.79 – – – –Corporation Limited Government Securities – 529.91 73.86 36.33 159.66 69.90 46.12 1.79 44.97 45.24

PSU/PFI Bonds/Corporate Debt – 40.74 25.14 39.98 30.85 5.05 – – – 5.18Treasury Bills – – 9.74 230.70 1.29 14.99 – – – –Interest Rate Swaps – – – 200.00 – – – – – –

HSBC Primary Government Securities – 95.23 12.41 6.04 26.55 4.57 11.30 – 8.85 14.06Dealership (India) Treasury Bills – 11.88 2.96 265.66 – 3.32 – – – –Private Limited

HSBC Securities and Equity Shares 636.61 – – – – – – – 16.21 20.35Capital Markets Debt – 6.20 – – – – – – – –(India) Private Limited(sponsor)

Name of the Associate Particulars HIOF HFRF HMEF HFTS HFTS HAIF HTSEF HUOF HLPF HDF

LT ST I II

The Hongkong and Shanghai Fixed Deposit 20.80 95.00 – 8.80 – – 36.00 20.00 37.60 303.00 –Banking Corporation Limited Discounted Instruments – – 9.68 – – – – – – 326.88 –

Government Securities – – – – – – – – – – –PSU/PFI Bonds/Corporate Debt – – 14.97 – – – – – – 75.01 –Treasury Bills – – – – – – – – – – –Interest Rate Swaps – – 25.00 – – – – – – 150 –

HSBC Primary Dealership Government Securities – – – – – – – – – – –(India) Private Limited Treasury Bills – 14.11 – – – – – – – – –

HSBC Securities and Capital Equity Shares 236.62 – – 64.74 – – 265.04 24.20 93.42 – 21.14Markets (India) Private Limited Debt – – – – – – – – – – –(sponsor)

Investment in Shares ofVoltas Limited (Associate) Equity Shares 3.60 – – 26.80 – – 21.78 – 5.69 – –

HEF : HSBC Equity Fund, HIF-IP : HSBC Income Fund - Investment Plan, HIF-ST : HSBC Income Fund - Short Term Plan, HCF : HSBC CashFund, HIIF-IP : HSBC Institutional Income Fund - Investment Plan, HIIF-ST : HSBC Institutional Income Fund - Short Term Plan, HGF-LT :HSBC Gilt Fund - Long Term Plan, HGF-ST : HSBC Gilt Fund - Short Term Plan, HIOF : HSBC India Opportunities Fund, HMIP-R : HSBCMIP - Regular, HMIP-S : HSBC MIP - Savings, HFRF-LT : HSBC Floating Rate Fund - Long Term Plan, HFRF-ST : HSBC Floating Rate Fund- Short Term Plan, HMEF : HSBC Midcap Equity Fund, HAIF : HSBC Advantage India Fund, HTESF : HSBC Taxsaver Equity Fund, HLPF: HSBC Liquid Plus Fund, HUOF : HSBC Unique Opportunities Fund, HFTS : HSBC Fixed Term Series, and HDYF : HSBC Dynamic Fund

Offer Document


HSBC INTERVAL FUND

BORROWINGS BY HSBC MUTUAL FUND FROM ASSOCIATE COMPANIES

(Rs. in crores)

Name of the Associate Particulars HEF HIF HCF HIIF HGF HMIP HIOF HFRF

IP ST IP ST LT ST R S ST LT

The Hongkong and Shanghai Borrowings forBanking Corporation Limited redemptions /

swout-outs 12.00 – – 131.75 – – – – – – – – –

Name of the Associate Particulars HMEF HFTS -I HFTS -II HAIF HTSEF HUOF HLPF

The Hongkong and Shanghai Borrowings forBanking Corporation Limited redemptions / swout-outs – – – 7.95 – – –

Note: Schemes of HSBC Mutual Fund had subscribed to the issue of Cholamandalam Investment & Finance Company Limited lead managedby HSBC Limited to the tune of Rs. 25.00 Crores

AMOUNT PAID BY HSBC MUTUAL FUND TO ASSOCIATE COMPANIES (14/11/02 to 08/11/2007)

(Rs. in lacs)

Name of the Associate Particulars HEF HIF HCF HIIF HGF HMIP HIOF HFRF HMEF

IP ST IP ST LT ST R S LT ST

HSBC Securities and Capital Brokerage onMarkets (India) Private Limited Equity Deals 120.36 – – – – – – – 3.86 4.70 51.66 – – 13.13

The Hongkong and Shanghai Commision onBanking Corporation Limited Distribution of

units 1,719.50 283.15 82.06 443.25 11.23 18.29 0.43 0.20 151.81 95.14 1,346.24 46.35 155.33 705.91

The Hongkong and Shanghai Collection /Banking Corporation Limited Bank Charges 9.07 3.74 0.53 3.39 0.00 0.00 0.01 0.05 14.40 14.90 2.92 0.25 0.12 2.77

The Hongkong and Shanghai SettlementBanking Corporation Limited Charges 71.06#

HSBC Securities and Capital Brokerage onMarkets (India) Private Limited Debt Deals – 0.03 – – – – – – – – – – – –

HSBC Asset Management Investment(India) Private Limited Management &

Advisory Fee 4,928.42 767.29 417.23 2,790.20 148.23 114.40 13.92 1.85 511.54 478.17 2,014.73 409.26 596.43 1,052.77

The Hongkong and Shanghai Interest onBanking Corporation Limited ** borrowings for

redemptions/switch-outs 0.40 – – 2.52 – – – – – – – – – –

The Hongkong and Shanghai ClearingBanking Corporation Limited Member Fees

for F&O Trades 12.28 – – – – – – – 0.04 0.09 10.92 – – 1.10

** : Interest of Rs. 3.13 lacs on borrowings has been borne by HSBC AMC# : Charges paid by all the schemes of HSBC Mutual Fund towards settlment of Government Securities transactions through the constituent SGL account.

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HSBC INTERVAL FUND

AMOUNT PAID BY HSBC MUTUAL FUND TO ASSOCIATE COMPANIES (14/11/02 to 08/11/2007) (Contd.)(Rs. in lacs)

Name of the Associate Particulars HAIF HTSEF HUOF HLPF HDF HFDF HFTS

I II III IV V VI VII VIII XIII IX

HSBC Securities and Brokerage onCapital Markets (India) Equity Deals 53.37 4.80 18.06 4.22 – – – – – – – – – – –Private Limited

The Hongkong and Commision onShanghai Banking Distribution ofCorporation Limited units 2,005.39 33.64 515.11 92.44 313.00 0.14 – – 0.12 – 20.25 50.87 0.62 0.06 – –

The Hongkong and Collection /Shanghai Banking Bank Charges 1.53 0.03 – 0.03 0.03 – – – – – – – – – – –Corporation Limited

The Hongkong and SettlementShanghai Banking Charges 71.06#Corporation Limited

HSBC Securities and Brokerage onCapital Markets (India) Debt Deals – – – – – – – – – – – – – – – –Private Limited

HSBC Asset Management Investment(India) Private Limited Management &

Advisory Fee 2,496.27 181.56 499.08 957.31 91.54 3.27 64.79 38.32 6.58 92.25 21.21 37.29 9.18 7.99 47.83 122.24

The Hongkong and Investment onShanghai Banking borrowings forCorporation Limited ** redemptions/

switch-outs 0.21 – – – – – – – – – – – – – – –

The Hongkong and ClearingShanghai Banking Member FeesCorporation Limited for F&O Trades 13.88 1.10 6.81 – – 2.92 – – – – – – – – – –

Name of the Associate Particulars HFTS

14 15 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

HSBC Securities and Capital Brokerage onMarkets (India) Private Limited Equity Deals – – – – – – – – – – – – – – – – – – –

The Hongkong and Shanghai Commision onBanking Corporation Limited Distribution of units – – – – – – – 0.92 – – 2.96 6.73 1.43 1.47 20.37 0.05 – 0.58 20.35

The Hongkong and ShanghaiBanking Corporation Limited Collection / Bank Charges – – – – – – – – – – – – – – – – – – –

The Hongkong and ShanghaiBanking Corporation Limited Settlement Charges 71.06#

HSBC Securities and CapitalMarkets (India) Private Limited Brokerage on Debt Deals – – – – – – – – – – – – – – – – – – –

HSBC Asset Management (India) Investment Management &Private Limited Advisory Fee 27.43 54.14 57.26 53.58 43.66 63.01 73.34 1.06 20.96 40.96 11.59 19.96 8.70 3.03 9.66 0.78 6.21 2.57 0.98

The Hongkong and Shanghai Interest on borrowingsBanking Corporation Limited ** for redemptions/switch-outs – – – – – – – – – – – – – – – – – – –

The Hongkong and Shanghai Clearing MemberBanking Corporation Limited Fees for F&O Trades – – – – – – – – – – – – – – – – – – –

** : Interest of Rs. 3.13 lacs on borrowings has been borne by HSBC AMC

# : Charges paid by all the schemes of HSBC Mutual Fund towards settlment of Government Securities transactions through the constituent SGL account.

HEF : HSBC Equity Fund, HIF-IP : HSBC Income Fund - Investment Plan, HIF-ST : HSBC Income Fund - Short Term Plan, HCF : HSBCCash Fund, HIIF-IP : HSBC Institutional Income Fund - Investment Plan, HIIF-ST : HSBC Institutional Income Fund - Short Term Plan,HGF-LT : HSBC Gilt Fund - Long Term Plan, HGF-ST : HSBC Gilt Fund - Short Term Plan, HIOF : HSBC India Opportunities Fund,HMIP-R : HSBC MIP - Regular, HMIP-S : HSBC MIP - Savings, HFRF-LT : HSBC Floating Rate Fund - Long Term Plan, HFRF-ST: HSBC Floating Rate Fund - Short Term Plan, HMEF : HSBC Midcap Equity Fund, HAIF : HSBC Advantage India Fund, HLPF : HSBCLiquid Plus Fund, HTESF : HSBC Taxsaver Equity Fund, HUOF : HSBC Unique Opportunities Fund, HFTS : HSBC Fixed Term Series,HDF : HSBC Dynamic Fund and HFDF : HSBC Flexi Debt Fund

Offer Document


HSBC INTERVAL FUND

The AMC has used the designated branches of The Hongkong andShanghai Banking Corporation Limited as Collecting Centres /Investor Service Centres and Collecting / Distributing Agents. Thepercentage of brokerage paid to associate broker was in line withthe norms relating to brokerage payment for transactions of theMutual Fund.

The AMC may from time to time, for the purpose of conducting itsnormal business, use the services (including brokerage services andsecurities transactions) of the Sponsor, its subsidiaries, associates ofthe Sponsor and employees or relatives. The subsidiaries of theSponsor on the date of this Offer Document are:


The AMC may utilise the services of the Sponsor, group companiesand any other subsidiary or associate company of the Sponsorestablished or to be established at a later date, in case such acompany (including employees or relatives) is in a position toprovide the requisite services to the AMC. The AMC will conductits business with the aforesaid companies (including employees orrelatives) on commercial terms and on arms’ length basis and at

mutually agreed terms and conditions to the extent permitted underthe SEBI Regulations, after evaluation of the competitiveness of thepricing offered by the Sponsor, associate companies (includingemployees or relatives) and the services to be provided by them.

Associate transactions, if carried out, will be as per the SEBIRegulations and the limits prescribed thereunder. The Scheme shallnot make any investment in:

l Any unlisted security of an associate or group company of theSponsor

l Any security issued by way of private placement by an associateor group company of the Sponsor

l The listed securities of group companies of the Sponsor whichis in excess of 25% of the net assets.

The AMC may avail the services of the Sponsor and / or its associatesfor usage of premises as Investor Service Centres and / or to act ascollection and distribution agents. The Sponsor / associates shall bepaid a fee based on the quality of services rendered. These fees shallbe debited to the Scheme, subject to SEBI Regulations.

DISCLOSURE UNDER REGULATION 25(11) OF THE SECURITIES AND EXCHANGE BOARD OFINDIA (MUTUAL FUNDS) REGULATIONS, 1996 AS AMENDED

Investments made by the schemes of HSBC Mutual Fund in Companies or their subsidiaries that have invested more than 5% ofthe net assets of any scheme

Company Name Schemes invested Investment made by Aggregate cost of Outstanding as atin by the Company schemes of HSBC acquisition during November 08, 2007

Mutual Fund in the the period ended (At Market /company / subsidiary November 08, 2007 Fair Value)

(Rupees in Lakhs) (Rupees in Lakhs)

Akruti Nirman Limited HCF HMEF 32.62 –HLP HMIP 11.65 –

HTSEF 19.08 –

Axis Bank Ltd HCF HAIF 5,080.82 1,452.63HCF 55,954.49 –HEF 4,911.26 –HFTS14 97.03 –HFTSV 145.54 –HFTSVI 194.05 –HFRF 2,784.88 –HIF 2,430.65 –HIOF 1,800.00 –HFTS15 145.54 –HLP 77,709.50 19,715.91HUOF 842.81 –HTSEF 610.81 552.63HFTS33 2,279.50 –HDF 2,500.00 2,500.00

Bank of Baroda HIF HAIF 3,599.09 –HCF HEF 315.88 –HFRF HIOF 113.26 –

Bank of India HCF HEF 3,141.01 –HAIF 4,646.80 –HMEF 320.91 –HIOF 1,215.44 –HMIP 167.30 –HTSEF 483.78 –HUOF 1,107.31 –HDF 194.45 –

Offer Document


HSBC INTERVAL FUND

Cairn India Limited HLP HUOF 640.39 –HEF 359.71 –HDF 1,403.94 –

Dena Bank HCF HUOF 1,107.95 –

DLF Limited HCF HEF 871.86 –HLP

DSP Merrill Lynch Capital Limited HCF HAIF 2,486.93 –HCF 40,916.68 –HFTS14 228.84 –HFTSI 100.00 –HFTSIX 4,617.78 –HFTSVII 1,961.55 –HFTSVIII 2,446.05 –HFRF 6,903.22 1,399.74HIF 1,901.38 –HMIP 1,400.00 –HFTS15 5,072.05 –HLP 141,998.21 23,595.25HFTS21 1,598.04 799.02HFTS22 5,499.43 5,507.13HFTS32 2,276.98 2,352.65

Export Import Bank of India HFRF HFRF 495.75 –HLP 4,547.38 –

Global Trade Finance Limited HFRF HCF 22,000.00 –HFRF 6,700.00 –HLP 160,000.00 –

Grasim Industries Limited HFTSIV HEF 4,296.06 –HMIP 347.05 115.60HAIF 7,393.82 3,471.44HIOF 1,522.16 –HTSEF 1,530.58 960.34HUOF 1,213.13 –HDF 1,907.01 2,036.59

Gujarat Ambuja Cement HCF HAIF 2,670.25 –India Limited

HCL Technologies Limited HIF HEF 447.07 –HFTSI HIOF 598.78 –

HAIF 1,738.67 –

HDFC Bank Limited HCF HAIF 4,823.80 –HLP HCF 109,455.89 –

HEF 4,027.18 –HFRF 2,000.00 –HIOF 324.04 –HMIP 265.23 –HFTS15 3,019.98 –HLP 27,398.90 –HFTS25 2,497.63 –HFTS22 499.24 –HFTS31 2,701.00 –HUOF 600.00 600.00

Hero Honda Motors Limited HFTSIX HMIP 116.14 –HEF 1,461.48 –HIOF 24.77 –HAIF 1,466.10 –




Offer Document


HSBC INTERVAL FUND

Hero Honda Finlease Limited HCF 6,000.00 –(Subsidiary company of HLP 5,000.00 1,000.00Hero Honda Motors Limited)

Hindalco Industries Limited HFTSI HMIP 184.79 –HFTS33 HEF 4,808.08 –HLP HIOF 460.60 –HFTS29 HAIF 1,249.36 –HFTS31 HTSEF 339.50 –HFDF

Hindustan Unilever Limited HLP HMIP 358.45 –HFTSI HEF 2,604.95 –HFTSIV HIOF 973.72 –HFTS14 HAIF 4,145.64 –HFTS21HFTS22HFTS25

Hindustan Zinc Limited HFTSIX HEF 1,140.22 –HFTS13 HIOF 647.61 –HFTS15HFTS21HFTS25HFTS27HFTS29HFTS31HFTS32HFTS36HIF

H T Media Ltd HMIP HIOF 1,951.24 –HTSEF 336.12 323.89HAIF 879.79 793.31

ICICI Bank Limited HCF HCF 188,352.61 –HFRF 9,836.41 2,937.46HMIP 6,719.39 1,264.20HAIF 2,313.53 1,835.41HEF 11,991.34 –HFTSIX 4,781.67 –HIF 5,607.67 –HIOF 4,210.43 –HFTS15 7,757.99 –HLP 222,390.88 65,340.34HFTS21 3,402.14 3,666.89HTSEF 1,300.71 642.98HFTS23 6,948.89 1,686.18HFTS24 90.61 38.77HFTS25 10,517.87 6,080.34HFTS27 2,805.18 1,924.66HFTS28 4,521.99 4,747.12HFTS29 6,660.04 6,990.37HUOF 598.10 –HFTS31 2,474.32 –HFTS35 3,301.30 2,835.24HFTS36 2,207.49 –HFTS33 19.19 –HDF 1,000.00 1,000.00HFDF 1,921.60 1,000.00




Offer Document


HSBC INTERVAL FUND

ICICI Securities and Primary HLP 42,567.36 5,000.00Dealership Limited HFTS15 2,643.33 –(Subsidiary company of HCF 1,403.03 –ICICI Bank Limited) HIF 935.15 –

HFTS29 1,473.30 1,496.99HDF 5,000.00 –

ICICI Home Finance Limited HIF 924.61 –(Subsidiary company of HFTS15 4,622.03 –ICICI Bank Limited) HLP 9,155.44 5,087.02

HFRF 1,847.96 1,855.22HFTS36 3,206.74 2,312.28HFDF 916.88 –

Indian Petrochemicals HFTS15 HEF 1,903.08 –Corporation Ltd HMIP 160.36 –

IDBI Bank Limited HCF HCF 50,266.45 –HFRF 2,323.28 1,714.66HIF 1,081.72 –HMIP 619.72 101.69HLP 58,680.66 9,801.02HUOF 3,105.93 –HFTS26 2,051.76 –HFTS27 998.76 –HFTS28 4,520.83 –HFTS21 93.05 94.96HFTS33 130.70 132.94HFDF 919.83 –

IDBI Home Finance Limited HCF 1,948.68 –(Subsidiary company of HLP 1,935.03 –IDBI Bank Limited) HFTS31 980.73 –

Info Edge (India) Pvt Limited HFTS21 HIOF 73.88 –HFTS26 HMEF 26.38 –

HMIP 180.03 –HTSEF 142.73 –

Infosys Technologies Limited HCF HIOF 2,394.25 –HMIP 330.01 –HEF 11,115.54 –HAIF 14,447.39 1,158.54HMEF 61.47 –HTSEF 988.43 –HUOF 1,722.38 –HDF 1,031.03 –

Infrastructure Development Finance HFTS22 HCF 7,166.49 –Company Limited HCF HFRF 494.93 –

HIF 494.93 –HMIP 1,101.38 –HLP 35,537.94 18,125.62HFTS22 3,000.00 3,009.18HFTS14 2,491.16 –HIOF 870.66 –HFDF 1,500.00 1,495.44

ITC Limited HCF HMIP 188.26 –HFRF HEF 8,095.51 –HIF HIOF 2,009.31 –HFTSI HAIF 6,131.98 –HFTS13 HTSEF 95.17 –HFTS14 HUOF 475.85 –HFTS15 HDF 883.42 –HLP




Offer Document


HSBC INTERVAL FUND

Kotak Mahindra Bank Limited HCF HAIF 1,685.34 1,767.05HCF 6,452.81 –HFTS14 201.92 –HFTS15 24.74 –HFTS25 2,273.19 2,393.93HFTS28 5,886.38 1,954.88HFTS29 4,075.33 4,269.19HFTSI 1,667.80 –HFTSIX 59.38 –HFRF 1,000.00 –HIF 2,408.28 –HIOF 1,702.29 –HLP 40,957.24 9,835.67HMIP 1,364.22 1,298.52HFTS30 1,523.12 1,636.50HFTS32 5,291.80 5,433.03HFTS33 10,260.52 8,031.28HDF 861.86 759.29HTSEF 536.56 512.17HFTS36 5,754.94 5,813.39

Kotak Mahindra Investment Limited HCF 1,600.00 –(Subsidary of Kotak Mahindra HFRF 500.00 –Bank Limited) HLP 8,000.00 2,500.00

HFTS33 10,500.00 7,024.13HFTS36 3,000.00 2,998.29

Kotak Mahindra Prime Limited HCF 13,016.00 –(Subsidary of Kotak Mahindra HFTS13 500.00 –Bank Limited) HFTS23 1,000.00 1,005.37

HFTS24 4,500.00 4,879.51HFTS25 9,096.91 9,397.60HFTS26 2,000.00 –HFTS27 1,951.18 2,028.01HFTS28 7,505.18 4,880.72HFTS29 4,500.00 4,500.18HFTSIV 3,000.00 –HFRF 7,985.08 188.75HIF 1,000.00 –HLP 46,998.49 6,088.78HMIP 154.41 –HFTS30 1,009.22 930.63HFTS33 23.26 23.59

Kotak Securities Limited HCF 2,303.95 –(Subsidary of Kotak Mahindra HFTS29 5,000.00 5,000.64Bank Limited) HIF 299.11 –

HLP 17,150.93 2,486.38HFTS32 2,276.42 2,352.06HFTS33 5,500.00 5,518.22

Larsen & Toubro Limited HFRF HAIF 3,678.89 4,248.80HEF 1,612.92 –HIOF 1,376.19 –HTSEF 617.19 948.76HMIP 54.44 94.88HDF 811.35 –

L&T Finance Limited HCF 31,435.86 –(Subsidary of HEF 993.97 –Larsen & Toubro Limited) HFTS14 2,313.15 –

HFRF 7,165.01 988.95HIF 1,053.70 –HIOF 496.98 –HMIP 1,193.77 –




Offer Document


HSBC INTERVAL FUND

HLP 83,510.89 12,306.79HFTS24 7,200.00 7,804.94HFTS25 4,957.72 3,828.85HFTS29 4,749.79 4,981.90HFTS31 5,000.00 –HFTS33 23.74 24.08

Maharashtra Seamless Limited HIF HMEF 134.05 –

Mahindra and Mahindra Limited HIF HAIF 5,049.03 –HEF 1,460.29 –HTSEF 991.04 –HUOF 1,791.51 –

Mahindra & Mahindra Financial HAIF 1,660.99 –Services Limited HCF 40,696.80 –(Subsidary of Mahindra and HFTS14 1,500.00 –Mahindra Limited) HFTSI 499.34 –

HFTSII 2,000.00 –HFTSV 2,900.00 –HFTSVI 2,700.00 –HFRF 5,200.00 1,100.00HIF 733.58 –HIOF 117.34 –HMEF 108.99 –HMIP 1,773.88 691.20HLP 115,317.79 6,399.81HFTS21 389.24 198.06HFTS24 3,500.00 3,792.91HFTS22 4,291.84 297.09HUOF 721.44 –

Maruti Suzuki India Limited HLP HEF 8,063.05 –HFTS21 HAIF 5,691.18 –HFTS23 HTSEF 577.88 –

HUOF 682.23 –

Mindtree Consulting Ltd HFTS26 HIOF 16.18 –HMEF 14.08 –HMIP 10.90 –HTSEF 14.34 –

PTC India HFRF HAIF 1,167.48 1,890.63

Radha Madhav Investments Limited HIF HIF 982.63 –HFDF HCF 1,473.94 –

HFRF 491.90 –

Reliance Energy Limited HFTS15 HEF 2,355.19 –HIOF 931.78 –HUOF 1,921.60 –HMIP 18.36 –HLP 44,583.61 39,757.87

Reliance Industries Limited HCF HMIP 491.04 178.29HFTS15 HEF 2,728.45 –

HIOF 965.73 –HAIF 1,768.35 –HCF 500.70 –HTSEF 1,363.73 1,928.22HUOF 2,716.02 –HDF 2,016.53 –

Reliance Petroleum Limited HCF HAIF 415.76 –(Subsidary of Reliance HLP HEF 1,818.11 –Industries Limited) HFTS31 HIOF 77.87 –

HFTS33 HMIP 34.55 –




Offer Document


HSBC INTERVAL FUND

HFTS36 HTSEF 112.80 –HFDF HUOF 270.73 –

HDF 1,464.61 –

Sintex Industries Limited HFTSIX HMEF 442.97 1,713.46HAIF 1,563.36 2,241.41HIOF 1,531.81 –HTSEF 739.69 1,062.26HUOF 1,402.08 2,504.51HDF 1,345.14 1,721.48

Spicejet Limited HCF HAIF 1,852.29 1,204.07HMEF 781.53 247.75HTSEF 324.70 –HUOF 1,008.27 891.90

State Bank of Hyderabad HIF HFRF 2,332.31 –(Subsidary of State Bank of India) HLP 16,070.85 4,865.19

HCF 9,523.78 –

State Bank of India HCF HAIF 10,266.52 4,151.41HCF 47,875.06 –HEF 5,639.51 –HIF 253.73 258.97HFRF 968.36 –HIOF 3,000.74 –HMIP 1,558.93 640.30HTSEF 1,197.21 808.43HDF 2,339.75 1,769.81HUOF 1,616.41 2,556.39HLP 50,582.27 9,726.29HFDF 3,130.07 2,330.75

State Bank of Bikaner and Jaipur HCF 5,775.27 –(Subsidary of State Bank of India) HLP 9,592.56 –

State Bank of Indore HCF 9,878.26 –(Subsidary of State Bank of India) HIF 7,558.40 –

HMIP 1,870.51 –HFRF 962.01 –HLP 12,465.75 –HFTS I 48.49 –HFTSIV 1,685.55 –HFTS13 1,981.34 –

State Bank of Mysore HCF 62,178.55 –(Subsidary of State Bank of India) HFTSVIII 3,916.09 –

HAIF 1,370.94 –HEF 1,370.94 –HIOF 913.96 –HLP 108,008.93 53,091.38HUOF 6,797.16 –HFTS27 868.26 –HFTS31 2,700.00 –HFRF 3,823.86 3,881.10

State Bank of Patiala HCF 40,697.94 –(Subsidary Of State Bank Of India) HFTSIII 147.42 –

HFTSIV 2,322.25 –HFRF 5,387.30 1,406.81HFTS IX 58.41 –HFTS VI 53.62 –HFTS 15 158.27 –HFTS 14 44.44 –HLP 67,587.94 16,864.41




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HUOF 6,894.17 –HFTS26 2,049.79 –HFDF 923.47 –

State Bank of Saurashtra HCF 11,837.34 –(Subsidary of State Bank of India) HFTS13 4,145.45 –

HFRF 2,299.30 –HLP 19,470.70 –HFTS25 2,496.66 –

State Bank of Travancore HCF 20,971.00 –(Subsidary of State Bank of India) HLP 15,724.56 –

HUOF 4,910.27 –HFTS27 1,004.02 –HFRF 4,638.22 –HFTSIX 3,481.64 –HFTS31 2,987.28 –HFDF 966.70 –

Sterlite Industries Limited HLP HEF 1,785.98 –HFTS36 HIOF 809.67 –

HMIP 120.07 –HLP 10,500.00 5,000.00HTSEF 529.69 –

Sundaram Finance Limited HFRF HCF 16,374.46 –HFTSIX 3,000.00 –HFRF 3,370.90 –HIF 1,720.12 –HMIP 1,501.08 394.77HLP 2,521.13 2,048.54HFTS24 7,200.00 7,801.64HFTS25 4,000.00 4,029.02HFTS34 1,929.27 1,945.84HFTS30 1,531.80 1,598.83HFTSII – –HFTSV – –HFTSIV – –HFTSXIII – –

Tata Power Company Limited HCF HDF 929.87 158.97HAIF 49.70 –HEF 1,965.96 –HTSEF 437.00 393.38HUOF 1,018.86 865.52

Tech Mahindra Ltd HAIF 1,396.26 –(Subsidary of Mahindra and HEF 1,120.53 –Mahindra Limited) HIOF 549.65 –

HMIP 17.61 –

UCO Bank HCF HCF 17,476.74 –HFRF HFTSIV 491.88 –

HFRF 1,355.88 386.97HIF 1,121.39 –HLP 32,815.14 9,832.47HFTS13 4,442.19 –HFTS25 4,364.23 –HFTS27 998.51 145.13HFTS29 2,497.67 –HFDF 962.27 –

Ultratech Cement Limited HFTS29 HCF 502.66 –HIOF 1,127.11 –HMIP 502.54 –




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Union Bank of India HCF HAIF 13.75 –HCF 26,519.24 –HEF 313.35 –HFRF 2,001.42 1,826.15HIOF 1,612.64 –HLP 67,929.04 27,251.34HFTS34 2,380.50 –

Videsh Sanchar Nigam Limited HFTS21 HAIF 3,740.54 2,138.03HFTS29 HIOF 2,986.70 –

HTSEF 873.37 423.94HUOF 1,657.60 1,762.50

Voltas Limited HFTS26 HAIF 1,038.25 –HIOF 3.03 –HMEF 1,617.52 494.64HUOF 279.70 –

Wipro Limited HCF HAIF 4,909.86 –HFTS14 HEF 1,002.40 –HFTS23 HTSEF 913.50 –HFTS27HFTS31HFTS32HFTS33HFTS36HFRF

Yes Bank Limited HCF HCF 2,999.78 –HFTS14 1,506.17 –HFTS15 505.82 –HFTS21 2,515.93 2,513.68HFTS23 1,502.53 1,515.41HFTS25 10,532.05 7,392.09HFTS27 2,524.54 2,678.61HFTS28 901.97 955.50HFRF 1,725.25 1,551.09HIF 1,492.37 –HLP 29,082.37 5,582.75HMIP 1,123.16 173.46HUOF 404.84 –

The above investments comprise equity shares, debentrures / bonds, commercial paper, fixed deposits and other debt instruments.

These investments have been made on account of their high credit quality and competitive yield for the investment in fixed income/ moneymarket insturments and in case of equity shares because of attractive valuations of these companies.

HEF - HSBC Equity Fund, HIOF - HSBC India Opportunities Fund, HIF - HSBC Income Fund, HCF - HSBC Cash Fund, HMIP - HSBCMonthly Income Plan, HFRF - HSBC Floating Rate Fund, HMEF - HSBC Midcap Equity Fund, HAIF - HSBC Advantage India Fund,HFTSI - HSBC Fixed Term Series I, HFTSIII - HSBC Fixed Term Series III, HFTSIV - HSBC Fixed Term Series IV, HFTSVII - HSBCFixed Term Series VII, HFTSVIII - HSBC Fixed Term Series VIII, HFTSIX - HSBC Fixed Term Series IX, HFTS13 - HSBC Fixed TermSeries 13, HFTS14 - HSBC Fixed Term Series 14, HFTS15 - HSBC Fixed Term Series 15, HFTS21 - HSBC Fixed Term Series 21, HLP -HSBC Liquid Plus Fund, HTSEF - HSBC Tax Saver Equity Fund, HFTS22 - HSBC Fixed Term Series 22, HFTS23 - HSBC Fixed TermSeries 23, HFTS24 - HSBC Fixed Term Series 24, HFTS25 - HSBC Fixed Term Series 25, HFTS26 - HSBC Fixed Term Series 26, HFTS27 -HSBC Fixed Term Series 27, HUOF - HSBC Unique Opportunities Fund, HFTS28 - HSBC Fixed Term Series 28, HFTS29 - HSBC FixedTerm Series 29, HFTS30 - HSBC Fixed Term Series 30, HFTS31 - HSBC Fixed Term Series 31, HFTS32 - HSBC Fixed Term Series 32,HFTS33 - HSBC Fixed Term Series 33, HFTS33 - HSBC Fixed Term Series 34, HFTS33 - HSBC Fixed Term Series 35, HDF - HSBCDynamic Fund and HFDF - HSBC Flexi Debt Fund




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Dividends and Distributions

The Trustees propose to follow the following dividend distributionpolicy:

Declaration of dividend in the Plan(s) of HINF-I is subject to theavailability of distributable surplus. Such dividends if declared, willbe paid under normal circumstances, only to those Unitholders whohave opted for Dividend sub-options with specified sub-options.

However, it must be distinctly understood that the actual declarationof dividends under the Scheme and the frequency thereof will, inter-alia, depend upon the distributable surplus of the Scheme. TheTrustees reserve the right of dividend declaration and to change thefrequency, date of declaration and the decision of the Trustees in thisregard shall be final. There is no assurance or guarantee to unitholders as to the rate of dividend distribution nor that dividend willbe regularly paid.

The dividend will be at such rate as may be decided by the AMCin consultation with the Trustees.

The dividend proceeds may be paid by way of dividend warrants /direct credit / EFT / ECS Credit/ SEFT / RTGS / Wired Transfer /any other manner through the investor’s bank account specified inthe Registrar’s records. The AMC, at its discretion at a later date,may choose to alter or add other modes of payment. The AMC shallalso appropriately intimate the Unitholders about the dividendannouncements / payout / reinvestment within 30 days of the dateof declaration of dividend.

However, in respect of ongoing sales and repurchase for all validapplications received before the prescribed cut-off time during theTransaction Window, the closing NAV of the day of the receipt ofapplication shall be applied. The investors shall be eligible fordividends, declared if any, from the business day following the dayof application until the date of their redemption.

Penalties and Pending Litigations

l Cases of penalties awarded by SEBI under the SEBI Act or anyof its regulations against the Sponsor of the Mutual Fund orany company associated with the Sponsor in any capacityincluding the Asset Management Company, Trustee Company/Board of Trustees, or any of the directors or key personnel(specifically the fund managers) of the Asset ManagementCompany and Trustee Company. For Sponsor and its associates,other than the penalties as mentioned above, the penaltiesawarded by any financial regulatory body, including stockexchanges, for defaults in respect of shareholders,debentureholders and depositors. Additionally, penaltiesawarded for any economic offence and violation of any securitieslaws.

Except as disclosed below, no penalties have been awarded bySEBI under the SEBI Act or any of its regulations against theSponsor or any company associated with the Sponsor in anycapacity including the Asset Management Company, Board ofTrustees, or any of the directors or key personnel (specificallythe fund managers) of the Asset Management Company. Nopenalties have been awarded in the case of the Sponsor or itsassociates by any financial regulatory body, including stockexchanges, for defaults in respect of shareholders,debentureholders and depositors. No penalties have beenawarded against the Asset Management Company, Sponsor orTrustees for any economic offence.

Penalties imposed by a financial regulatory body or governmentauthority against the Sponsor and its associates carrying on

business in India, for irregularities / violations in the financialservices sector, during the last five years:

– The Sponsor was acting as a merchant banker under theSEBI (Substantial Acquisitions of Shares and Takeovers)Regulations, 1997 for an open offer made by GlobalGreen Company Limited for the shares of Saptarishi AgroIndustries Limited in the year 2000. Some of the sharesof the target company were not listed at the time of theopen offer but were stated as listed in the letter of offer.An enquiry is in progress under SEBI (Procedure forHolding Enquiry by Enquiry Officer and Imposing Penalty)Regulations 2002 for alleged contravention of SEBI(Substantial Acquisitions of Shares and Takeovers)Regulations, 1997 and SEBI (Merchant Bankers)Regulations, 1992. The Sponsor has submitted that therehas been no failure on the part of the Sponsor to complywith its obligations as a merchant banker. Subsequent tothe enquiry officer’s recommendation of a minor penaltyi.e. the Sponsor be censured, a show cause notice has beenissued by SEBI requiring the Sponsor to show cause asto why the said penalty should not be imposed. The Sponsorhas reiterated its earlier stand and submitted that there hasbeen no failure on the part of the Sponsor to comply withits obligations as a merchant banker. The Sponsor hadsought a personal hearing before the Whole Time Member,SEBI; submissions were made by Sponsor’s counsel atthe hearing held on 5 September 2006. Subsequent to thehearing, an order dated 7 March 2007 was passed by SEBIimposing a minor penalty of censure on the Sponsor. TheSponsor has filed an appeal with the Securities AppellateTribunal in this matter.

– On the Sponsor: Fines of Rs. 5000 each for 4 quartersduring 2002 to 2003, for 3 quarters in 2004 and for 2quarters in 2005 by the Bombay Stock Exchange Limited,Rs. 10,000 each for 5 quarters during 2001 to 2002 andRs. 5000 for 4 quarters during 2003 and 2004 and for 2quarters in 2005 by National Stock Exchange for not fullycomplying with the requirements of collecting marginsfrom all non-institutional clients. Exchanges/ depositorylevy fines from time to time on matters inherent to thestock broking business. Fines levied by National StockExchange in August 2006: Rs 5000- notice board requiredto be displayed by NSE trading members, was notpermanent in nature, Rs 5000/- NCFM certification forpersons operating the dealing system of the exchange hadexpired in two cases and Rs 5000/- for issuing Contractnotes with trade data on a weighted average traded pricebasis.

– Penalty of Rs. 210,000 has been levied by the Directorateof Enforcement on The Hongkong and Shanghai BankingCorporation Limited, New Delhi Branch under theprovisions of the erstwhile Foreign Exchange RegulationAct, 1973 for accepting cash deposits aggregating to Rs2.2 m into NRE account by persons other than the NREaccount holders during May 1992 to April 1994. An appealagainst the said order has been filed by the Bank beforethe Appellate Tribunal.

– National Securities Depository Limited levied a penaltyof Rs. 2,950 on The Hongkong and Shanghai BankingCorporation Limited, India for not appointing NCFMqualified personnel at two of its branches during the periodFeb-Mar, 05.

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– National Securities Depository Limited levied a charge ofINR 377.53 on account of a trade remaining in the poolaccount in Aug 05. The Bank has disputed the charge andhave sought a waiver from NSDL.

– National Securities Depository Limited levied a penaltyof INR 500 on 02 Sep 2006 for discrepant PAN detailsupdated in 5 accounts. The HongKong and ShanghaiBanking Corporation Limited, India is currently in theprocess of responding to NSDL.

Securities and Exchange Board of India (SEBI) levied apenalty of INR 1,000,000 approx USD 22,500) on HSBCInvestment Services (Netherlands) NV [formerly knownas HSBC Investment Bank (Netherlands) NV] vide orderdated 22 December 2006, for not reporting issuance ofparticipatory notes to two of its clients during August-September 2002 and for not providing certain informationrequired by SEBI in September 2003 with regard to theissuance. Pursuant to applicable Indian regulations, HSBCInvestment Services (Netherlands) NV has a period of 45days from the date of the order to decide whether tolaunch an appeal. HSBC Investment Services(Netherlands) NV had been liquidated prior to issuance ofthe SEBI order for unrelated reasons. Notwithstandingthe liquidation, filing an appeal against the order is stillbeing considered.

Penalties (considered on the basis of the top 10 monetarypenalties) imposed by a financial regulatory body orgovernment authority against associates of the Sponsorcarrying on business in the UK, for irregularities / violationsin the financial services sector, during last five years:

– HSBC Bank plc incurred a £100,000 penalty in the UKfrom the Financial Services Authority (‘FSA’) in December2005 in relation to an administrative error in establishingthe system for the regular reporting of client transactionsto the FSA. No clients or funds suffered any loss fromthese reporting errors and the reporting system has nowbeen corrected accordingly.

– In September 1998, HSBC Futures was finedapproximately US$18,000 by the London InternationalFutures and Options Exchange (LIFFE) for failing tocorrectly settle a futures trade.

– In October 1999, HSBC Investment Bank plc was finedapproximately US$15,000 by the London Stock Exchangefor failure to have adequate procedures and controls inplace when inputting orders to SETS (the automated pricedriven quotation system of the Exchange).

– In March 1999, HSBC Investment Bank plc was finedapproximately US$7,500 by the London Stock Exchangefor a breach of its rules in connection with a workedprincipal agreement (“WPA”).

– In April 1998, HSBC Investment Bank plc was finedapproximately US$7,500 by the London Stock Exchangefor failing to disclose a block trade in accordance with itsrules.

– In August 1998, HSBC Insurance Brokers Limited (INUK)was fined approximately US$3,000 by Lloyd’s of Londonfor failing to obtain prior consent from the Council ofLloyd’s for two of INUK’s directors to hold commondirectorships with insurance companies.

Suspensions / cancellation of certificate of registration(for violations in the financial services sector) of associatesof the Sponsor carrying on business outside India, duringthe last ten years:

– The Capital Markets Supervisory Board in Indonesiapenalised HSBC Securities Indonesia (“HCID”) fortransactions in September 2001 that were not in accordancewith the trading rules following a stock split. HCID paida fine of US$ 10,000 in January 2002. HCID was one ofa number of firms suspended by the Jakarta StockExchange; however, the suspension was subsequentlyretracted.

– In June 2001, HSBC Fund Administration (Guernsey)Limited dealings in various third party funds weretemporarily suspended by the regulator following anadverse auditors report.

– In May 2001, HSBC Securities Indonesia was suspendedfrom trading for one day for late submission of a regulatoryreturn, caused by an input error.

– In 1998, the Japanese authorities imposed a limited tradingban and fines totalling approximately US$70,000 on HSBCSecurities (Japan) Limited for certain discrepancies in thebooking and reporting of transactions.

– In July 2001, The Hongkong and Shanghai BankingCorporation Limited in Bangkok was suspended fromdealing in the REPO market for 10 days following abreach of Bank of Thailand’s reporting requirements.

l Any pending material litigation proceedings incidental to thebusiness of the Mutual Fund to which the Sponsor of theMutual Fund or any company associated with the Sponsor inany capacity including the AMC, Board of Trustees / TrusteeCompany or any of the directors or key personnel is a party.Any pending criminal cases against the Sponsor or any companyassociated with the Sponsor in any capacity including theAMC, Board of Trustees / Trustee Company or any of thedirectors or key personnel.

There are no pending material litigation proceedings incidentalto the business of the Mutual Fund or pending criminal casesto which the Sponsor of the Mutual Fund or any companyassociated with the Sponsor in any capacity including theAMC, Board of Trustees or any of the directors or key personnelis a party.

l Any deficiency in the systems and operations of the Sponsorof the Mutual Fund or any company associated with the sponsorin any capacity including the AMC or the Trustee Companywhich SEBI has specifically advised to be disclosed in the offerdocument, or which has been notified by any other regulatoryagency.

There are no deficiencies in the systems and operations of theSponsor of the Mutual Fund or any company associated withthe sponsor in any capacity including the AMC or the Boardof Trustees which SEBI has specifically advised to be disclosedin the offer document or which has been notified by any otherregulatory agency to be disclosed in an offer document.

l Any enquiry / adjudication proceedings under the SEBI Actand the Regulations made thereunder, that are in progressagainst the Sponsor of the Mutual Fund or any companyassociated with the Sponsor in any capacity including the

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AMC, Board of Trustees / Trustee Company or any of theDirectors or key personnel of the Asset Management Company.

There are no enquiry / adjudication proceedings under theSEBI Act and the Regulations made thereunder, that are inprogress against the Sponsor of the Mutual Fund or any companyassociated with the Sponsor in any capacity including theAMC, Board of Trustees or any of the Directors or key personnelof the Asset Management Company.

The above information has been disclosed in good faith as per theinformation available to the AMC.

Borrowing by the Mutual Fund

Under the Regulations, the Fund is allowed to borrow to meet itstemporary liquidity needs for the purpose of repurchase / redemptionof Units or payment of interest or dividend to the Unitholders.Further, as per the Regulations, the Fund shall not borrow more than20% of the Net Assets of the Scheme and the duration of suchborrowing shall not exceed a period of 6 months. The Fund mayraise such borrowings after approval by the Trustees from its Sponsor/ associates / group companies / commercial banks in India or anyother entity at market related rates prevailing at the time and applicableto similar borrowings. The security for such borrowings, if required,will be as determined by the Trustees. Such borrowings, if raised,may result in a cost, which would be dealt with in consultation withthe Trustees.

Securities Lending by the Mutual Fund

Subject to the Regulations and the applicable guidelines, the Schemeand the Plan(s) thereunder may, if the Trustees permit, engage insecurities lending. Securities lending means the lending of securitiesto another person or entity for a fixed period of time, at a negotiatedcompensation. The borrower will return the securities lent on expiryof the stipulated period. Please refer to risks attached with securitieslending. Each Scheme, under normal circumstances, shall not haveexposure of more than 50% of its net assets in securities lending.The Scheme may also not lend more than 50% of its net assets toany one intermediary to whom securities will be lent. SecuritiesLending could be considered for the purpose of generating additionalincome to unit holders on the longer term holdings of the Scheme.The AMC shall report to the Trustees on a quarterly basis as to thelevel of lending in terms of value, volume and the names of theintermediaries and the earnings / losses arising out of the transactions,the value of collateral security offered etc.

Underwriting

Subject to SEBI Regulations, the Scheme may enter into underwritingagreements after the Mutual Fund obtains the necessary registrationin terms of the Securities and Exchange Board of India (Underwriters)Regulations, 1993 and the Securities and Exchange Board of India(Underwriters) Rules, 1993 authorising it to carry on activities asunderwriters. The capital adequacy norms for the purpose ofunderwriting shall be the net assets of the Scheme and theunderwriting obligation of the Scheme shall not at any time exceedthe total Net Asset Value of the Scheme. For the purposes of theRegulations, the underwriting obligation will be deemed as ifinvestments are made in such securities.

Inter-Scheme Transfers

Transfer of investments from one Scheme to another Scheme in theMutual Fund shall be permitted provided:

l Such transfers are done at the prevailing market price forquoted instruments on spot basis;

l The securities so transferred shall be in conformity with theinvestment objective of the transferee Scheme and

l Inter-Scheme transfers shall be done in accordance with theSEBI (Mutual Fund) Regulations.

Policy on Offshore Investments by the Schemeand the Plans thereunder

SEBI Regulations permit mutual funds to invest in certain securities/ instruments viz. ADRs / GDRs issued by Indian companies, foreignsecurities, government securities of foreign countries, units / securitiesissued by overseas mutual funds or unit trusts, subject to the termsand conditions prescribed, up to a specified percentage of net assetsmanaged as on March 31 each year, subject to maximum of US$200 million. This would be revised in terms of SEBI approvals/guidelines from time to time. All the provisions of SEBI/IMD/CIRNo.7/104753/07 dated 26 September 2007 will be adhered toincluding appointment of dedicated fund manager for investment inforeign securities.

It is the Investment Manager’s belief that foreign securities offernew investment and portfolio diversification opportunities into multi-market and multi-currency products. The Fund would look to investin foreign securities in order to diversify the portfolio in terms ofvariety of instruments held and enhance returns by taking advantageof market movements in global markets, which may or may not bein sync with the Indian markets. Investment in foreign securitieswould only be looked at if they provide a return, liquidity, ease ofsettlement and valuation, transaction costs better than equivalentlocal investments. Hence only if the Fund Manager becomes cautiousor negative on the Indian markets for a reasonably long period oftime, would he consider investing in such securities. The Fund willlook to identify and capture profitable opportunities as and whenthey arise. However, such investments also entail additional risks.Such investment opportunities may be pursued by the InvestmentManager provided they are considered appropriate in terms of theoverall investment objectives of the Scheme. The Scheme may then,if necessary, seek permission from SEBI and RBI to invest abroadin accordance with the investment objectives of the Scheme and inaccordance with any guidelines issued by SEBI / RBI from time totime.

Since the Scheme would invest only partially in foreign securities,there may not be readily available and widely accepted benchmarksto measure performance of the Scheme. To manage risks associatedwith foreign currency, the Fund may use derivatives for efficientportfolio management including hedging and in accordance withconditions as may be stipulated by SEBI / RBI from time to time.

Offshore investments will be made subject to any / all approvals andconditions thereof as may be stipulated by SEBI / RBI being fulfilledand provided such investments do not result in expenses to the Fundin excess of the ceiling, if any, on expenses prescribed by SEBI foroffshore investment, and if no such ceiling is prescribed by SEBI,the expenses to the Scheme(s) shall be limited to the level which,in the opinion of the Trustees, is reasonable and consistent withcosts and expenses attendant to international investing. The Fundmay, where necessary, appoint other intermediaries of repute asadvisors, sub-custodians, etc. for managing and administering suchinvestments. The appointment of such intermediaries shall be inaccordance with the applicable requirements of SEBI and within thepermissible ceilings of expenses. The fees and expenses wouldillustratively include, besides the investment management fees,custody fees and costs, fees of appointed advisors and sub-managers,transaction costs and overseas regulatory costs.

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General Information

Power to make Rules

Subject to the Regulations, the Trustees may from time to time,prescribe such terms and make such rules for the purpose of givingeffect to the Scheme and the Plans thereunder with power to theAMC to add to, alter or amend all or any of the terms and rules thatmay be framed from time to time.

Power to remove Difficulties

If any difficulty arises in giving effect to the provisions of theScheme and the Plans thereunder, the Trustees may, subject to theRegulations, take any action not inconsistent with such provisions,which appears to be necessary, desirable or expedient, for the purposeof removing such difficulty.

Scheme to be binding on the Unitholders

Subject to the Regulations, the Trustees may from time to time, addor otherwise vary or alter all or any of the features of plans and termsof the Scheme after obtaining the prior permission of SEBI and theUnitholders (where necessary), and the same shall be binding on allthe Unitholders of the Scheme and the Plans thereunder and anyperson or persons claiming through or under them, shall do so asif each Unitholder or such person expressly had agreed that suchfeatures and terms shall be so binding.

Unambiguous and Unconditional requests

Any application for redemption, purchase or exchange or any otherinstruction must be correct, complete, clear and unambiguous in allrespects and should conform to the prescribed procedure/documentation requirements, failing which the Trustee/AMC reservethe right to reject the same and in such a case the Trustee/AMC willnot be responsible for any consequence therefrom. The Investorshall ensure that any overwriting or correction shall be countersignedby the investor, failing which the Fund/Trustee/AMC may at its solediscretion reject such transaction request. Further, any requests forpurchase / redemption / switch or other transactions must beunconditional. The Fund/Trustee/AMC shall not be bound to takecognizance of any conditions placed on the transaction request andmay at its sole discretion, reject such transaction request, or processthe same as if the condition were not mentioned.

Acts done in good faith

Any act, thing or deed done in good faith in pursuance of or withreference to the information provided in the application or othercommunications received from the investor/ unit holder will constitutegood and full discharge of the obligation of the Fund, Trustee andthe AMC.

In cases of copies of the documents / other details such as list ofauthorized signatories, that are submitted by a limited company,body corporate, registered society, trust or partnership, if the sameare not specifically authenticated to be certified true copies but areattached to the application form and / or submitted to the Fund, theonus for authentication of the documents so submitted shall be onsuch investors and the AMC/Fund will accept and act on these ingood faith wherever the documents are not expressly authenticated.Submission of these documents / details by such investors shall befull and final proof of the corporate investor’s authority to invest andthe AMC/Fund shall not be liable under any circumstances for anydefects in the documents so submitted.

In cases where there is a change in the name of such investor, sucha change will be effected by the AMC/Fund only upon receiving theduly certified copy of the revised Certificate of Incorporation issuedby the relevant Registrar of Companies / registering authority. Incases where the changed PAN Number reflecting the name change

is not submitted, such transactions accompanied by duly certifiedcopy of the revised Certificate of Incorporation with a copy of theOld Pan Card and confirmation of application made for new PANCard will be required as a documentary proof.

Lien

The fund will have a first and paramount right of lien/set-off withrespect to every unit/dividend under any scheme of the Fund for anymoney that may be owed by the unit holder, to it.

Units with Depository

Units of the Plan may, if decided by the AMC, be held with aDepository. Under such circumstances, Units will be transferable inaccordance with the provisions of Depositories Act, 1996 and theSecurities and Exchange Board of India (Depositories andParticipants) Regulations, 1996 as may be amended from time totime.

Electronic Clearing Service (ECS)

ECS is a facility offered by RBI, for facilitating better customerservice by direct credit of dividend/redemption to an investor’s bankaccount through electronic credit. This helps in avoiding loss ofdividend/redemption warrant in transit or fraudulent encashment.The Mutual Fund will endeavour to arrange such facility for paymentof dividend/redemption proceeds to the Unit holders. However, thisfacility is optional for the investors. It may be specifically noted thatthere is no commitment from the Mutual Fund that this facility willbe made available to the Unit holders for payment of dividend/redemption proceeds. While the Mutual Fund will endeavour toarrange the facility, provision of this facility will be dependent onvarious factors including sufficient demand for the facility fromUnit holders at any centre, as required by the authorities. In placeswhere such a facility is not available or if the facility is discontinuedby the Scheme for any reason, the AMC shall despatch to the Unitholders the dividend proceeds within 30 days of the declaration ofthe dividend and the redemption proceeds within 10 business days.

Client Information

The Mutual Fund shall presume that the identity of the investor andthe information disclosed by him is true and correct. It will also bepresumed that the funds invested by the investor in the Schemes ofthe Mutual Fund come from legitimate sources / manner and theinvestor is duly entitled to invest the said funds.

The Mutual Fund will not, in any way, be responsible for correctnessof the information provided by the investor to the Mutual Fund, asto his identity or any other information, and also his sources ofincome. The Mutual Fund is not under any obligation to carry outany investigation/ inquiry as to the identity of the investor and thesources of the moneys invested by the investor into the schemes ofthe Mutual Fund. The Fund shall not undertake any such investigation/inquiry since it does not possess adequate resources to undertakesuch activity.

Where the funds invested are for the benefit of a person (beneficiary)other than the person in whose name the units are issued andregistered, the Mutual Fund shall assume that the investor holdingthe Units in his name is legally authorized / entitled to invest thesaid funds in the Units of the Mutual Fund, for the benefit of thebeneficiaries.

Units of the Schemes are not offered, nor is the Fund managed orintended to serve, as a vehicle for frequent trading that seeks to takeadvantage of short-term fluctuations in the securities market. Thistype of trading activity, often referred to as “market timing”, couldresult in actual or potential harm to the Unit Holders. Accordingly,the Mutual Fund (MF) at it’s sole discretion may reject any purchase

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or exchange of Units that the MF reasonably believes may representa pattern of market timing activity involving the Schemes of the MF.

Website

The website of HSBC Mutual Fund (the said Website) is intendedsolely for the use of Resident Indians, Non Resident Indians, personsof Indian Origin and Foreign Institutional Investors registered withSecurities and Exchange Board of India. It should not be regardedas a solicitation for business in any jurisdiction other than India. Inparticular the information is not for distribution and does notconstitute an offer to sell or the solicitation of an offer to buysecurities in any jurisdiction where such activity is prohibited. Anypersons resident outside India who nevertheless intend to respondto this material must first satisfy themselves that they are not subjectto any local requirements, which restrict or prohibit them fromdoing so.

Information other than that relating specifically to HSBC AssetManagement (India) Private Limited, HSBC Mutual Fund and itsproducts, is for information purposes only and should not be reliedupon as a basis for investment decisions. HSBC Asset Management(India) Private Limited shall not be responsible, nor be held liable,for any information contained in any website linked from the saidWebsite.

The AMC makes no representations whatsoever about any suchwebsite which the user may access through the said Website. A linkto a non-HSBC website does not mean that the AMC endorses oraccepts any responsibility for the content, or the use, of such website.It is the responsibility of the user to take precautions to ensure thatwhatever is selected for use is free of such items as viruses and otheritems of a destructive nature.

The investors are requested to read the Terms and Conditions givenon the said Website carefully before using the Website. By using thesaid Website, the investor will be deemed to have agreed that theTerms and Conditions specified apply to the use of the investor ofthe said Website, any information obtained from the site, and ourproducts and services. If the investor does not agree to the specifiedTerms, the investor may not use the said Website or download anycontent from it.

Web transactions Facility

In the new era of liberalisation and modernisation, the Fund wishesto take optimum advantage of the modern techniques ofcommunication and transactions to serve its investors in a moreefficient manner.

As a step towards the same, the Fund may introduce in future certainonline transactions, including subscription and redemption /repurchase of the Units of the Fund or any other transaction suchas change in address, change in bank details, change in mode ofpayment etc., as may be specified by the Mutual Fund from timeto time. Online transactions will save cost & time of the investorand will also enable the Fund to serve its clients in a faster andefficient way.

However investors intending to take benefit of the web-basedtransaction facility should note that the investor shall use this serviceat his own risk. The Fund, the AMC, the Trustee, along with itsdirectors, employees and representatives shall not be liable for anydamages or injuries arising out of or in connection with the use ofthe website or its non-use including, without limitation, non-availability or failure of performance, loss or corruption of data, lossof or damage to property (including profit and goodwill), workstoppage, computer failure or malfunctioning, or interruption ofbusiness; error, omission, interruption, deletion, defect, delay in

operation or transmission, computer virus, communication linefailure, unauthorised access or use of information.

The Fund shall not be liable for any misuse of data placed on theInternet, by third parties “hacking” or unauthorized accessing of theserver. The Fund will not be liable for any failure to act uponelectronic instructions or to provide any facility for any cause thatis beyond the control of the Fund.

Transaction by Distributor

With a view to facilitate ease of transacting, the AMC has tied upwith certain existing distributors to report transactions on the webon behalf of their clients on the terms and conditions to be mutuallyagreed between the client and the distributor.

Brokers

The Fund intends to utilize the services of select financialintermediaries for distribution and may pay brokerage dependingupon the efficiency and other factors as may be decided by theAMC. The Investment manager is the sole authority to select suchfinancial intermediary/intermediaries who would distribute theproduct. Further, the AMC may appoint one or more exclusivedistributors, at its discretion, based on the parameters decided by theAMC.

The Fund may use the services of associate brokers or take the saleof its units into account when allocating brokerage. However, thebrokerage paid to Associate Brokers shall be at the same rate offeredto any other broker who procures subscription.

The AMC may from time to time have various contests/ loyaltyprogrammes in order to motivate its distributors. This could be inthe form of additional compensation to the distributors or couldentail gifts/ vouchers or various other privileges. The level ofcompensation in the above forms could vary from time to time anda number of factors could determine the same viz. qualifyingdistributor sales, assets and redemption rates, quality of thedistributors’ relationship with HSBC Mutual Fund. The AMC mayalso publicise its various loyalty programmes as may be launchedfrom time to time. Further, the AMC could also provide training inorder to keep the distributors abreast about the new developmentsin the securities market and facilitate educating distributors andunitholders about Schemes of HSBC Mutual Fund.

Documents Available for Inspection

The following documents will be available for inspection at theoffice of the Mutual Fund at 314 D.N. Road, Fort, Mumbai 400 001during business hours on any day (excluding Saturdays, Sundaysand public holidays):

l Memorandum and Articles of Association of the AMC

l Investment Management Agreement

l Trust Deed and amendments thereto, if any

l Mutual Fund Registration Certificate

l Agreement between the Mutual Fund and the Custodian

l Agreement with Registrar and Share Transfer Agents

l Consent of Auditors to act in the said capacity

l Consent of Legal Advisors to act in the said capacity

l Securities and Exchange Board of India (Mutual Funds)Regulations, 1996 and amendments thereof from time to time.

l Indian Trusts Act, 1882

Offer Document


HSBC INTERVAL FUND

Notwithstanding anything contained in this Offer Document, theprovisions of the SEBI (Mutual Funds) Regulations, 1996 and theguidelines thereunder shall be applicable.

Note:

The Trustees approved the Offer Document of HINF-I, II and III tovide resolution passed on 16 July 2007. The Trustees have ensuredthat the Scheme HSBC Interval Fund approved is a new productoffered by HSBC Mutual Fund and not a minor modification of theexisting scheme/ fund/ product.

For and on behalf of the Board of Directors ofHSBC Asset Management (India) Private Limited

Sd/-

Sanjay PrakashChief Executive Officer

Place : Mumbai

Date : 16 July 2007

Offer Document


HSBC INTERVAL FUND

LIST OF THE HSBC COLLECTION CENTRES AND INVESTOR SERVICE CENTRES

(During and Post New Fund Offer Period)

HSBC MUTUAL FUND INVESTOR SERVICE CENTRES

Ahmedabad : Mardia Plaza, C.G. Road, Ahmedabad 380 006. Bangalore : No. 7, HSBC Centre, M.G. Road, Bangalore 560 001. Chandigarh : SCO

- 1, Sector-9D, Madhya Marg, Chandigarh 160 017 Chennai : 96, Radhakrishnan Salai, 2nd Floor, Mylapore, Chennai 600 004. Coimbatore : 108,

"Srivari Gokul Towers", Race Course Road, Coimbatore 641 018 Hyderabad : 6-3-1107 & 1108, Raj Bhavan Road, Somajiguda, Hyderabad 500 082.

Indore : Darshan Mall, 15 / 2, Race Course Road, Indore 452 001. Jaipur : Vasanti, 61 - A, Sardar Patel Marg, C-Scheme, Jaipur 302 001. Kochi :

HSBC, II Floor, Pulikkal Estate, Pallimukku, M. G. Road, Kochi 682 016. Kolkata : Jasmine Tower, 1st Floor, 31, Shakespeare Sarani, Kolkata 700

017. Lucknow : 1, Shahnajaf Road, Lucknow 226 001 Mumbai : 314 D. N. Road, Fort, Mumbai 400 001. New Delhi : 3rd Floor, East Tower, Birla

Tower, 25, Barakhamba Road, New Delhi 110 001. Pune : Amar Avinash Corporate City, Bund Garden Road, Pune 411 001.

Vadodara : Sheel Building, 1/2 Kalpana Society, Inox Multiplex Road, Race Course Circle, Vadodara 390 007.

INVESTOR SERVICE CENTRES AND OFFICIAL POINTS OF ACCEPTANCE FOR TRANSACTIONS

(Available Post NFO and for Switch During NFO Period)

CAMS INVESTOR SERVICE CENTRES AND CAMS TRANSACTION POINTS : TEL.: 1-800-425-2267

Ahmedabad : 402-406, 4th Floor - Devpath Building, Off C G Road, Behind Lal Bungalow, Ellis Bridge, Ahmedabad - 380 006. Tel.: 079-3008 2468,

3008 2469. Bangalore : Trade Centre, 1st Floor, 45, Dikensen Road, ( Next to Manipal Centre ), Bangalore - 560 042. Tel.: 080-3057 4709, 3057

4710. Bhubaneswar : 101/ 5, Janpath, Unit – III, Near Hotel Swosti, Bhubaneswar - 751 001. Tel.: 0674-325 3307, 325 3308. Coimbatore : Old #

66 New # 86, Lokamanya Street (West), Ground Floor, R.S.Puram, Coimbatore - 641 002. Tel.: 0422-301 8000, 301 8001. Cochin : 40 / 9633 D,

Veekshanam Road, Near International hotel, Cochin - 682 035. Tel.: 0484 - 323 4651, 323 4658. Chandigarh : Deepak Towers, SCO 154-155, 1st

Floor, Sector 17-C, Chandigarh - 160 017. Tel.: 0172-304 8720, 304 8721. Chennai : Ground Floor No.178/10, Kodambakkam High Road, Opp.

Hotel Palmgrove, Nungambakkam, Chennai - 600 034. Tel.: 044-3911 5563, 3911 5565. New Delhi : 304-305 III Floor, Kanchenjunga Building, 18,

Barakhamba Road, Cannaugt Place, New Delhi - 110 001. Tel.: 011-3048 2471, 3048 1203. Durgapur : SN- 10, Ambedkar Sarani, City Centre,

Durgapur - 713 216. Tel.: 0343-329 8890, 329 8891. Goa : No.108, 1st Floor, Gurudutta Bldg, Above Weekender, M G Road, Panaji (Goa) - 403 001.

Tel.: 0832-325 1755, 325 1640. Hyderabad : 102, First Floor, Jade Arcade, Paradise Circle, Secunderabad - 500 003. Tel.: 040 - 3918 2471, 3918

2473. Indore : 101, Shalimar Corporate Centre, 8-B, South tukogunj, Opp.Greenpark, Indore - 452 001. Tel.: 0731-325 3692, 325 3646. Jaipur : G-

III, Park Saroj, Behind Ashok Nagar Police Station, R-7, Yudhisthir Marg ,C-Scheme, Jaipur - 302 001. Tel.: 0141-326 9126, 326 9128. Kanpur : G

– 27,28 – Ground Floor, CITY CENTRE, 63/ 2, THE MALL, Kanpur - 208 001. Tel.: 0512-3918003, 3918000. Kolkata : "LORDS Building", 7/1,Lord

Sinha Road, Ground Floor, Kolkata - 700 071. Tel.: 033-32550760, 3058 2285. Lucknow : Off # 4,1st Floor,Centre Court Building,, 3/c, 5 - Park

Road, Hazratganj, Lucknow - 226 001. Tel.: 0522-391 8000, 391 8001. Ludhiana : U/ GF, Prince Market, Green Field, Near Traffic Lights, Sarabha

Nagar Pulli, Pakhowal Road, Above Dr. Virdi's Lab, P.O Model Town, Ludhiana - 141 002. Tel.: 0161 - 301 8000, 301 8001. Mangalore : No. G 4 &

G 5, Inland Monarch, Opp. Karnataka Bank, Kadri Main Road, Kadri, Mangalore - 575 003. Tel.: 0824 - 325 1357, 325 2468. Mumbai : Rajabahdur

Compound, Ground Floor, Opp Allahabad Bank, Behind ICICI Bank, 30, Mumbai Samachar Marg, Fort, Mumbai - 400 023. Tel.: 022-30282468,

30282469. Madurai : 86/71A, Tamilsangam Road, Madurai - 625 001. Tel.: 0452-325 1357, 325 2468. Nagpur : 145 Lendra, Behind Indus Ind Bank,

New Ramdaspeth, Nagpur - 440 010. Tel.: 0712-325 8275. Pune : Nirmiti Eminence, Off No. 6, I Floor, Opp Abhishek Hotel Mehandale Garage

Road, Erandawane, Pune - 411 004. Tel.: 020-3028 3005, 3028 3003. Patna : Kamlalaye Shobha Plaza (1st Floor), Behind RBI Near Ashiana Tower,

Exhibition Road, Patna - 800 001. Tel.: 0612-325 5284, 325 5285. Surat : Office No 2 Ahura -Mazda Complex, First Floor, Sadak Street, Timalyawad,

Nanpura, Surat - 395 001. Tel.: 0261-326 2267, 326 2468. Vadodara : 109 - Silver Line, Besides world Trade Centre, Sayajigunj, Vadodara - 390

005. Tel.: 0265-301 8029, 301 8031. Visakhapatnam : 47/ 9 / 17, 1st Floor, 3rd Lane , Dwaraka Nagar, Visakhapatnam - 530 016. Tel.: 0891-329

8397, 329 8374. Vijayawada : 40-1-68, Rao & Ratnam Complex, Near Chennupati Petrol Pump, M.G Road, Labbipet, Vijayawada - 520 010. Tel.:

0866-329 9181, 329 5202. Agra : F-39/203, Sky Tower, Sanjay Place, Agra - 282 002. Tel.: 0562-324 0202, 324 2267. Ajmer : Shop No.S-5, Second

Floor, Swami Complex, Ajmer - 305 001. Tel.: 0145-329 2040. Allahabad : No.7 Ist Floor, Bihari Bhawan, 3, S.P. Marg, Civil Lines, Allahabad - 211

001. Tel.: 0532-329 1273, 329 1274. Amaravati : 81, Gulsham Tower, 2nd Floor, Near Panchsheel Talkies, Amaravati - 444 601. Tel.: 0721-329

1965. Amritsar : 378-Majithia Complex, 1st Floor, M. M. Malviya Road, Amritsar - 143 001. Tel.: 0183-325 7404, 9872004056. Asansol : Block –

G 1st Floor, P C Chatterjee Market Complex, Rambandhu Talab P O Ushagram, Asansol - 713 303. Tel.: 0341-329 5235, 329 8306. Aurangabad :

Office No. 1, 1st Floor, Amodi Complex, Juna Bazar, Aurangabad - 431 001. Tel.: 0240-329 5202. Belgaum : Tanish Tower, CTS No. 192/A, Guruwar

Peth, Tilakwadi, Belgaum - 590 006. Tel.: 0831-329 9598. Bhilai : 209 , Khichariya Complex, Opp IDBI Bank, Nehru Nagar Square, Bhilai - 490 020.

Tel.: 0788-3299 040, 3299 049. Bhavnagar : 305-306, Sterling Poin, Waghawadi Road, OPP. HDFC Bank, Bhavnagar - 364 002. Tel.: 0278-3004

641. Bhopal : C-12, Near City Bank, Above Delhi Prakashan Agency, Zone-I, M.P.Nagar, Bhopal - 462 011. Tel.: 0755-329 5878, 329 5873. Bokaro

: HC-3, Ist Floor, CityCentre, Sector-4, Bokaro Steel City, Bokaro - 827 004. Tel.: 06542-324 881, 326 322. Burdwan : 399, G T Road, Opposite of

Talk of the Town, Burdwan - 713 101. Tel.: 0342-320 7001, 320 7077. Calicut : 17/28, H 1st Floor, Manama Building, Mavoor Road, Calicut - 673

001. Tel.: 0495-325 5984. Cuttack : Near Allahabad Bank, Cantonment Road, Cuttack - 753 001. Tel.: 0671-329 9572. Dhanbad : Urmila Towers,

Room No: 111(1st Floor), Bank More, Dhanbad - 826 001. Tel.: 0326-329 0217. Dehradun : 204/121 Nari Shilp Mandir Marg, Old Connaught Place,

Dehradun - 248 001. Tel.: 0135-325 1357, 325 8460. Erode : 199/1, Brough Road, (Near Sivaranjani Hotel), Erode - 638 001. Tel.: 0424-320 7730,

320 7733. Gorakhpur : Shop No. 3, Second Floor, Cross Road, A.D. Chowk, Bank Road, Gorakhpur - 273 001. Tel.: 0551-329 4771. Guntur : Door

No 5-38-44, 5/1 BRODIPET, Near Ravi Sankar Hotel, Guntur - 522 002. Tel.: 0863-325 2671. Gurgoan : SCO - 17, 3rd Floor, Sector-14,, Delhi Road,

Sector 14, Gurgoan - 122 001. Tel.: 0124-326 3763, 326 3833. Gwalior : 1st Floor, Singhal Bhavan, Daji Vitthal Ka Bada, Old High Court Road,

Gwalior - 474 001. Tel.: 0751-320 2873, 320 2311. Guwahati : Old post office lane, A. K. Azad Lane, Rehabari, Guwahati - 781 008. Tel.: 0361-260

7771, 213 9038. Hubli : 206 & 207. 1st Floor, 'A' Block, Kundagol Complex, Opp Court, Club road, Hubli - 580 029. Tel.: 0836-329 3374, 320 0114.

Jabalpur : 975,Chouksey Chambers, Near Gitanjali School, 4th Bridge, Napier Town, Jabalpur - 482 001. Tel.: 0761-329 1921. Jalandhar : 367/8,

Central Town, Opp. Gurudwara Diwan Asthan, Jalandhar - 144 001. Tel.: 0181-3254883, 2222882. Jamnagar : 217/218, Manek Centre, P.N. Marg,

Jamnagar - 361 001. Tel.: 0288-329 9737. Jamshedpur : Millennium Tower, S-4 Ground Floor, R- Road, Bistupur, Jamshedpur - 831 001. Tel.: 0657-

329 4594. Jodhpur : 1/5, Nirmal Tower, Ist Chopasani Road, Jodhpur - 342 003. Tel.: 0291-325 1357. Kota : B-33 'Kalyan Bhawan, Triangle Part

,Vallabh Nagar, Kota - 324 007. Tel.: 0744-329 3202. Kottayam : Door No. IX / 1276, Amboorans Building, Manorama Junction, Kottayam - 686 001.

HSBC INTERVAL FUND

Tel.: 0481-3207 011, 320 6093. Kolhapur : AMD Sofex Office No.7, 3rd Floor, Ayodhya Towers, Station Road, Kolhapur - 416 001. Tel.: 0231-3209

732, 3209 356. Manipal : Academy Annex, First Floor, Opposite Corporation Bank, Upendra Nagar, Manipal - 576 104. Tel.: 0820-325 5827.

Meerut : 108 Ist Floor Shivam Plaza, Opposite Eves Cinema, Hapur Road, Meerut - 250 002. Tel.: 0121-325 7278. Moradabad : B-612 'Sudhakar',

Lajpat Nagar, Moradabad - 244 001. Tel.: 0591-329 7202, 329 98412. Mysore : No.1, 1st Floor, CH.26 7th Main, 5th Cross, (Above Trishakthi

Medicals), Saraswati Puram, Mysore - 570 009. Tel.: 0821-234 2182, 329 4503. Nasik : "Varsha Bungalow", 1st Floor, Near Rungtha High School,

493, Ashok Stambh, Nasik - 422 001. Tel.: 0253-329 7084, 325 0202. Nellore : Shop No.13, First Floor, KAC Plaza, R R Street, Nellore - 524 001.

Tel.: 0861-329 8154. Panipat : 83, Devi Lal Shopping Complex, Opp ABN Amro Bank, G.T.Road, Panipat - 132 103. Tel.: 0180-325 0525, 400 9802.

Patiala : 35, New lal Bagh Colony, Patiala - 147 001. Tel.: 0175-329 8926, 222 9633. Pondicherry : S-8, 100, Jawaharlal Nehru Street, (New

Complex, Opp. Indian Coffee House), Pondicherry - 605 001. Tel.: 0413-421 0030, 329 2468. Raipur : C-23, Sector 1, Devendra Nagar, Raipur - 492

004. Tel.: 0771-3296 404. Rajahmundry : Cabin 101 D.no 7-27-4, 1st Floor Krishna Complex, Baruvari Street, T Nagar, Rajahmundry - 533 101. Tel.:

0883-325 1357. Rajkot : 111, Pooja Complex, Harihar Chowk, Near GPO, Rajkot - 360 001. Tel.: 0281-329 8158, 329 8206. Ranchi : 223,Tirath

Mansion (Near Over Bridge),1st Floor, Main Road, Ranchi - 834 001. Tel.: 0651-329 6202, 329 8058. Rourkela : 1st Floor, Mangal Bhawan, Phase

II, Power House Road, Rourkela - 769 001. Tel.: 0661-329 0575. Salem : Advytha Ashram Road, Salem - 636 004. Tel.: 0427-325 2271. Sambalpur

: C/o Raj Tibrewal & Associates, Opp.Town High School,Sansarak, Sambalpur - 768 001. Tel.: 0663-329 0591. Siliguri : No 8, Swamiji Sarani,

Ground Floor, Hakimpara, Siliguri - 734 401. Tel.: 0353-329 1103. Trichur : Adam Bazar, Room no.49, Ground Floor, Rice Bazar (East), Trichur - 680

001. Tel.: 0487-325 1564. Trichy : No 8, I Floor, 8th Cross West Extn, Thillainagar, Trichy - 620 018. Tel.: 0431-329 6906, 329 6909. Trivandrum :

R S Complex, Opposite of LIC Building, Pattom PO, Trivandrum - 695 004. Tel.: 0471-324 0202, 324 1357. Udaipur : 32 Ahinsapuri, Fatehpura

Circle, Udaipur - 313 004. Tel.: 0294-329 3202. Varanasi : C 27/249 - 22A, Vivekanand Nagar Colony, Maldhaiya, Varanasi - 221 002. Tel.: 0542-325

3264, 325 3265. Valsad : C/o. CAD HOUSE, Siddhivinayak Complex, Tithal Road, F-1, First Floor, Avenue Building, Near R.J.J. School, Valsad - 396

001. Tel.: 02632-324 202, 324 047. Warangal : F13, 1st Floor, BVSS Mayuri Complex, Opp. Public Garden, Lashkar Bazaar, Hanamkonda, Warangal

- 506 001. Tel.: 0870-320 2063, 320 9927. Vellore : No:54, Ist Floor, Pillaiyar Koil Street, Thotta Palayam, Vellore - 632004. Tel.: 416-2226988.

Alwar : 256A, Scheme No:1,, Arya Nagar, Alwar - 301001. Tel.: 144-2702324. Berhampur : First Floor, Upstairs of Aaroon Printers, Gandhi Nagar

Main Road, GanjamDt, Orissa, Berhampur - 760 001. Tel.: 680-320923, 3205855. Muzzafarpur : Brahman toil,, Durga Asthan, Gola Road, Muzaffarpur

- 842001. Tel.: 621-3207504, 3207052. Ghaziabad : 207/A-14, IInd Floor, Devika Chamber, RDC, Raj nagar, Gazhiabad - 201 002. Jalgaon : 70,

Navipeth, Opp. Old Bus Stand, Golani Market, Jalgaon - 425001. Tel.: 0257-3207118, 3207119. Vashi : Mahaveer Center, Office No:17, Plot

No:77, Sector 17, Vashi - 400703. Tel.: 22-32598154, 32598155. Bhilwara : C/o Kodwani & Associates, F-20-21, Apsara Complex, Azad Market,

Bhilwara - 311 001. Tel.: 1482-226832, 231808. Davenegere : 13, Ist Floor,, Akkamahadevi Samaj Complex, Church Road, P.J.Extension, Devengere

- 577002. Tel.: 8192-326226, 326227. Thiruppur : 1(1), Binny Compound,, Iind Street,, Kumaran Road, Thiruppur - 641601. Tel.: 421-3201271,

3201272. Anand : 101, A.P. Tower,, B/H, Sardhar Gunj, Next to Nathwani Chambers, Anand - 388 001. Tel.: 2692-325071, 320704. Faridhabad :

B-49, Ist Floor, Nehru Ground, Behind Anupam Sweet House, NIT, Faridhabad - 121001. Tel.: 129-3241148, 3241147. Hosur : Shop No.8 J D Plaza,

OPP TNEB Office, Royakotta Road, Hosur - 635109. Tel.: 4344-321 002, 321 004. Tirunelveli : III Floor, Nellai Plaza, 64-D, Madurai Road, Tirunelveli

- 627 001. Tel.: 462-320 0308, 320 0102. Tirupathi : Shop No. 14, Boligala Complex, 1 Floor, Door No. 18-8-41B, Near Leela Mahal Circle, Tirumala

Bye Pass Road, Tirupati - 517501, Cell No:9848877737. Rohtak : 205, 2 Floor,, Building No. 2,, Munjal Complex,, Delhi Road, Rohtak - 124001. Tel.:

01262-318687, 318589. Balasore : B C Sen Road, Balasore - 756001. Tel.: 6782-326808. Ratlam : 81,, Bajaj Khanna, Ratlam - 45700. Tel.: 07412-

324817, 324829. Jammu : 660- A Near Digital Wares, Lane opposite Dushara Ground, Front Gate, Gandhi Nagar, Jammu - 180 004. Tel.: 990-

6082698. Navsari : Dinesh Vasani & Associates, 103 -Harekrishna Complex, above IDBI Bank,, Nr. Vasant Talkies, Chimnabai Road, Navasari -

396445. Tel.: 2637-327709, 329238. Mathura : 159/160 Vikas Bazar, Mathura - 281001. Tel.: 565-3207007, 3206959. Bhuj : Office No 17, First

Floor, Municipal Building, Opposite Hotel Prince, Station Road, Bhuj-Kutch - 370001. Tel.: 2832-320762, 320924. Solapur : 4, Lokhandwala Tower,,

144, Sidheshwar Peth,, Near Z.P. Opp. Pangal High School, Solapur - 413001. Tel.: 217-3204201, 3204200. Kalyani : A - 1/50, Block - A,, Nadia Dt,

Kalyani - 741235. Tel.: 33-32506689, 32506687. Kestopur : AA 101, Prafulla Kanan, Sreeparna Appartment, Ground Floor, Kolkata, Kestopur -

700101. Tel.: 033-32415332, 32415333. Junagadh : Circle Chowk, Near Choksi Bazar Kaman, Gujarat, Junagadh - 362001. Tel.: 0285-3200909,

3200908. Ankleshwar : G-34, Ravi Complex, Valia Char Rasta, G.I.D.C., Ankleshwar- Bharuch - 393 002. Tel.: 02646-310206, 310207. Kollam :

Kochupilamoodu Junction, Near VLC, Beach Road, Kollam - 691001. Tel.: 474-3248376, 3248377. Jhansi : Opp SBI Credit Branch, Babu Lal

Kharkana Compound, Gwalior Road, Jhansi - 284001. Tel.: 510-3202399. Dhule : H. No. 1793 / A, J.B. Road,, Near Tower Garden, Dhule - 424001.

Tel.: 2562-321771, 321787. Aligarh : City Enclave, Opp. Kumar Nursing Home, Ramghat Road, Aligarh - 202001. Tel.: 571-3200301, 3200242.

Satara : 117 / A / 3 / 22, Shukrawar Peth, Sargam Apartment, Satara - 415 002. Tel.: 2162-320926, 320989. Bhagalpur : Dr R P Road, Khalifabagh

Chowk, Bhagalpur - 812001. Tel.: 641-3209093, 3209094. Bareilly : 2-C, Radheyshyam Enclave, Behind Vikas Bhawan, Civil Lines, Bareilly -

243001. Tel.: 581-3243172, 3243322. Akola : Opp. RLT Science College, Civil Lines, Akola - 444001. Tel.: 724-3203830. Yamuna Nagar : 124-B/

R Model Town, Yamunanagar, Yamuna Nagar - 135 001. Tel.: 1732-316880, 316770. Deoghar : S S M Jalan Road, Ground floor, Opp. Hotel

Ashoke, Caster Town, Deoghar - 814112. Tel.: 6432-320227, 320827. Ahmed Nagar : 203-A, Mutha Chambers, Old Vasant Talkies, Market Yard

Road, Ahmednagar - 414001. Tel.: 241-3204221, 3204309. Porbander : 1st Floor, Silver Complex, S.T. Road, Porbandar - 360575. Tel.: 286-

3207767, 3205220. Surendranagar : 2 M I Park, Near Commerce College, Wadhwan City, Surendranagar - 363035. Tel.: 2752-320231, 320233.

Karimnagar : H.No.7-1-257, Upstairs S.B.H, Mankammathota, Karimnagar - 505 001. Tel.: 878-225594. Kadapa : Door No.1-1625, DNR Laxmi

Plaza, Opp. Rajiv Marg, Railway Station Road, Yerramukkapalli, Kadapa - 516 004. Tel.: 8562-322469, 322099. Sagar : Opp. Somani Automoblies,

Bhagwanganj, Sagar - 470 002. Tel.: 7582-326711, 326894. Shimla : 1st Floor, Opp Panchayat Bhawan Main Gate, Bus Stand, Himachal Pradesh,

Shimla. Tel.: 177-3204944

Please note that during the NFO, Switch Transactions (switch-out from an existing scheme of HSBC Mutual Fund to HSBC Interval Fund)

should be submitted only at HSBC Mutual Fund Investor Service Centres or the CAMS Centres listed above.

CAMS INVESTOR SERVICE CENTRES AND CAMS TRANSACTION POINTS : TEL.: 1-800-425-2267 (Contd.)

HSBC INTERVAL FUND

Offer Document


Blank HSBC INTERVAL FUND

HSBC Asset Management (India) Private LimitedRegistered Office314, D. N. Road, Fort, Mumbai 400 001.Tel.: (91) (22) 66668819. Fax : (91) (22) 40029600E-mail : [email protected] Website : www.hsbcinvestments.co.in

alok

graphics

HSBC INTERVAL FUND