GENERAL DUE DILIGENCE AND SPECIFIC DUE DILIGENCE BY TRUSTEES :
The trustees shall exercise due diligence as under:

(A) General Due Diligence:

(i) the trustees shall be discerning in the appointment of the directors on SEBI of the asset management  company.

(ii) trustees shall review the desirability on continuance of the asset management company if substantial  irregularities are observed in any of the schemes and shall not allow the asset management company to float new schemes.

(iii) the trustee shall ensure that the trust property is properly protected, held and administered by proper  persons and by a proper number of such persons.

(iv) the trustee shall ensure that all service providers are holding appropriate registrations from SEBI or  concerned regulatory authority.

(v) the trustees shall arrange for test checks of service contracts.

(vi) trustees shall immediately report to SEBI of any special developments in the mutual fund.

(B) Specific Due Diligence:

The trustees shall:

(i) obtain internal audit reports at regular intervals from independent auditors appointed by the trustees;

(ii) obtain compliance certificate at regular intervals from the asset management company;

(iii) hold meeting of trustee more frequently;

(iv) consider the reports of the independent auditor and compliance reports of asset management company at the meetings of trustees for appropriate action;

(v) maintain records of the decisions of the trustees at their meetings and of the minutes of the meetings;

(vi) prescribe and adhere to a code of ethics by the trustees, asset management company and its personnel;

(vii) communicate in writing to the asset management company of the deficiencies and checking on the  rectification of deficiencies.