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Deutsche Fixed Term Fund

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					                                                                    Deutsche
                                                             Fixed Term Fund           (389 days close ended fixed term fund)


                                                                                                    Offer Document
                                                          The objective of the fund is to generate regular income by
                                                          investing into high credit quality fixed/floating rate securities,
                                                          usually maturing in line with the time profile of the fund.

                                                          Initial Issue Price :
                                                          Rs. 10 per unit for cash at par

                                                            Initial Offer Opens             : March 29, 2005
                                                            Initial Offer Closes            : March 29, 2005
                                                          This Offer Document contains information necessary for an investor to make
                                                          an informed investment decision in the Scheme described herein. Investors
                                                          should carefully read the Offer Document prior to making an investment
                                                          decision and retain the Offer Document for future reference. Investors may
                                                          note that this Offer Document remains effective until a material change occurs.
                                                          Material changes shall be filed with SEBI and circulated to all Unitholders or as
                                                          may be publicly notified by advertisements in the newspapers subject to the
                                                          applicable regulations.
                                                          The particulars of Deutsche Fixed Term Fund offered under this Offer
                                                          Document, have been prepared in accordance with the Securities Exchange
                                                          Board of India (Mutual Funds) Regulations, 1996, as amended till date, and filed
                                                          with the Securities and Exchange Board of India (SEBI), and the Units being
                                                          offered for public subscription have neither been approved or disapproved by
                                                          SEBI nor has SEBI certified the accuracy and adequacy of the Offer Document.




Sponsors
Deutsche Asset Management (Asia) Limited
20 Raffles Place, #27-01 Ocean Towers, Singapore 048620
Asset Management Company
Deutsche Asset Management (India) Private Limited
DB House, Hazarimal Somani Marg, Fort, Mumbai 400 001
Trustee
Deutsche Trustee Services (India) Private Limited
DB House, Hazarimal Somani Marg, Fort, Mumbai 400 001
Important Notice                                                        Service Providers
Investing in a mutual fund scheme involves certain risks and
considerations associated generally with making investments in
                                                                        Sponsors
securities. The value of the Scheme's investments may be                Deutsche Asset Management (Asia) Limited
affected generally by factors affecting capital markets, such as
price and volume volatility in the capital markets, interest rates,     Registered Office :
currency exchange rates, changes in Government policies,
taxation, political, economic or other developments, etc.               20 Raffles Place, #27-01 Ocean Towers,
Consequently, there can be no assurance that the Scheme will
                                                                        Singapore 048620
achieve its objectives. The NAV of the Units of the Scheme may
fluctuate and can go up or down. Past performance of the mutual
funds managed by the Sponsors or their affiliates is not indicative
of the future performance of the Scheme nor will past
performance of the Scheme, following its commencement of                Asset Management Company
operations, be necessarily indicative of its future performance.
Prospective investors are advised to review this Offer Document         Deutsche Asset Management (India) Private Limited
carefully and in its entirety and consult with their legal, tax and     Registered & Corporate Office :
financial advisors to determine possible legal, tax and financial or
other consequences of subscribing to, purchasing or holding Units       DB House, Hazarimal Somani Marg,
under the Scheme, before making an application for Units.
Investors are requested to retain this Offer Document for their         Fort, Mumbai - 400 001
reference.
The Deutsche Mutual Fund ("the Fund"), Deutsche Asset
Management (India) Private Limited ("the AMC") and/or Deutsche
Trustee Services (India) Private Ltd. ("Trustee") have not authorised   Trustee
any person to give any information or make any representations,
either oral or written, not stated in this Offer Document in            Deutsche Trustee Services (India) Private Limited
connection with the issue of Units under the Scheme. Prospective
                                                                        Registered Office :
investors are advised not to rely upon any information or
representations not incorporated in this Offer Document unless          DB House, Hazarimal Somani Marg,
the same has been authorised by the Fund or the AMC or the
Sponsor. Any subscriptions, purchase or sale made by any person         Fort, Mumbai - 400 001
on the basis of statements or representations which are not
contained or which are inconsistent with the information contained
in this Offer Document shall be solely at the risk of purchaser.
The current Regulations impose certain restrictions and conditions      Custodian
on the AMC for entering into transactions with the Sponsors and
their associates. These restrictions include:                           JP Morgan Chase Bank
a)   prohibition of purchase or sale of securities through any          Mafatlal Centre, 9th floor,
     broker associated with a Sponsor that is an average of 5%
     or more of the aggregate purchases and sale of securities          Nariman Point, Mumbai - 400 021
     made by the Fund in all its schemes. The limit of 5% shall
     apply for a block of any three months.
b)   prohibition of utilisation of the services of the Sponsors or
     any of their associates, for the purpose of any securities         Registrars & Transfer Agents
     transactions and distribution and sale of securities unless a
     disclosure to this effect is made in the Offer Document.           Karvy Computershare Private Ltd.
Deutsche Bank is an associate of the AMC and will be entitled to        46, Road No. 4, Street No 1,
brokerage and trailer fee on the funds mobilised by them. The
AMC may utilise the services of Sponsor, group companies and            Banjara Hills, Hyderabad - 500 034
any other subsidiary or associate company of the Sponsor
established or to be established at a later date, in case such a
company (including their employees or relatives) is in a position
to provide the requisite services to the AMC. The AMC will              Auditors to the Fund & Tax Advisors
conduct its business with the aforesaid companies (including their
employees or relatives) on commercial terms and on arms-length          Price Waterhouse
basis and at mutually agreed terms and conditions to the extent
permitted under the SEBI Regulations, after evaluation of the           252, Veer Savarkar Marg, Shivaji Park, Dadar
competitiveness of the pricing offered by the Sponsor, associate
companies (including their employees or relatives) and the              Mumbai - 400 028. India
services to be provided by them.
In this Offer Document all references to "$" are to United States
of America Dollars and "Rs." are to Indian Rupees.
                                                                        Advocates & Solicitors to the Fund
This Offer Document is dated March 24, 2005. Investors should
ascertain about any further changes after March 24, 2005 from           Little & Co.
the AMC or any Investor Service Centre or Collection Centres or
its distributors/brokers.                                               Central Bank Building,
OFFER DOCUMENT AS ON MARCH 24, 2005                                     Mahatma Gandhi Road, Mumbai - 400 023



1
Index
Sr.                                                                                   Sr.
No. Subject                                                                    Page   No. Subject                                                                  Page

I.    Risk Factors & Special Considerations ..                                    3        C)   Fees and Expenses of the Existing Scheme .                           26

II.   Definitions .......................................................         8        D)   Condensed Financial Information ..................                   26

III. Summary of the Scheme ............................                          10   VII. Units & the Offer

IV. Constitution of the Mutual Fund                                                        A)   Units on Offer - General Information .............                   32
                                                                                           B)   Purchase of Units ..........................................         34
      A)    The Fund .......................................................    11
      B)    The Sponsors .................................................       11        C)   Redemption of Units .....................................            36

      C)    The Trustee Company                                                            D)   Facilities Offered to Investors
                                                                                                under the Scheme .........................................           38
            1)    Directors ................................................     12
                                                                                      VIII. Unit Holders' Rights and Services
            2)    Rights, Duties & Responsibilities
                  of the Trustee and the material                                          A)   Unit Holders' Rights ......................................          41
                  provisions of the Trust Deed ..................               12         B)   Voting Rights of the Unit Holders ..................                 41
            3)    Trusteeship Fees ....................................          14        C)   Account Statements and Unit Certificates ....                        41
            4)    Meetings held during the last                                            D)   NAV Information ............................................         42
                  financial year ..........................................      14
                                                                                           E)   Disclosure of Information under
      D)    The Asset Management Company                                                        the Regulations ..............................................       42
            1)    Constitution ...........................................       14        F)   Duration of the Scheme ................................             42
            2)    Directors ................................................     14        G)   Procedure and Manner of Winding Up ..........                        42
            3)    Duties and Responsibilities of the                                       H)   Services to Unit Holders ................................            42
                  AMC and the material provisions of the
                  Investment Management Agreement ...                            15   IX. Taxation
            4)    Key Employees of AMC and relevant                                        A)   To Unit Holders ..............................................       44
                  experience .............................................      17
                                                                                           B)   To the Mutual Fund .......................................           44
            5)    Fund Manager ........................................          18
                                                                                      X.   Valuation of Assets and Net Asset Value
            6)    Compliance Officer ................................            18
                                                                                           A)   Computation of Net Asset Value ...................                   45
            7)    Investors Relations Officer ....................               18
                                                                                           B)   Accounting Policies & Standards ...................                  47
      E)    The Auditors ..................................................      18
                                                                                      XI. Other Matters
      F)    The Registrar .................................................      18
                                                                                           A)   Transactions with Sponsors/Associates ........                       49
      G)    The Custodian ................................................       18
                                                                                           B)   Policy on Offshore Investments by
V.    Investment Objectives & Policies,                                                         the Scheme ...................................................      50
      Investment Pattern & Risk Profile
      and Limitations of the Scheme                                                        C)   Borrowing by Mutual Fund ............................                50

      A)    Investment Objectives, Investment Pattern                                      D)   Inter-Scheme Transfers .................................             50
            & Risk Profile .................................................     19        E)   Underwriting by a Scheme ............................                50
      B)    Procedure and recording of                                                     F)   Disclosure Under Regulation 25(11) ..............                    50
            investment decisions .....................................           21
                                                                                           G)   Other Business Activity of the AMC ..............                    52
      C)    Change in Investment Pattern .......................                 21
                                                                                           H)   General Information
      D)    Change in Fundamental Attributes ................                    22
                                                                                                1)    Power to make Rules .............................              52
      E)    Portfolio Turnover ..........................................        22
                                                                                                2)    Power to remove Difficulties .................                 52
      F)    Investment Limitations/Restrictions ..............                   22
                                                                                                3)    Penalties and Pending Litigation ............                  52
      G)    Investment of Subscription Money ...............                     23
                                                                                                4)    Scheme to be binding on the
      H)    Depository .....................................................    23                    Unit Holders ...........................................       53
      I)    Investments by Asset                                                                5)    Register of Scheme's Unit Holders ........                     53
            Management Company .................................                 23
                                                                                                6)    Website .................................................      53
      J)    Hedging Policies in connection with
            Trading in Derivatives .....................................         23             7)    Omnibus Clause .....................................           54
VI. Fees & Expenses                                                                             8)    Jurisdiction .............................................     54
      A)    Load Structure of the Scheme ......................                  25             9)    Books and Records ................................             54
      B)    Fees and Expenses of the Scheme ...............                      25             10) Documents available for Inspection .......                       54



Offer Document          Deutsche Fixed Term Fund                                                                                                                     2
I. Risk Factors &                                                   l   The Scheme(s) may also use various derivative and hedging
                                                                        products from time to time, as would be available and
   Special Considerations                                               permitted by SEBI, in an attempt to protect the value of the
                                                                        portfolio and enhance Unitholders' interest. The Risk
                                                                        associated with dealing in Derivatives trading are given below
Standard Risk Factors                                                   under "Risk factor associated with trading in derivatives".
l   Mutual funds, like securities investments, are subject to
                                                                    l   There have been times in the past, when settlements have
    market and other risks and there can be no guarantee against
                                                                        been unable to keep pace with the volume of securities
    loss resulting from an investment in the Scheme nor can
                                                                        transactions, making it difficult to conduct further
    there be any assurance that the Scheme's objectives will be
                                                                        transactions. Delays or other problems in settlement of
    achieved. As with any investment in securities, the NAV of
                                                                        transactions could result in temporary periods when the
    the Units issued under the Scheme can go up or down
                                                                        assets of the Scheme are not invested and no return is
    depending on various factors that may affect the values of
                                                                        earned thereon.
    the Scheme's investments. In addition to the factors that
    affect the value of individual securities, the NAV of the       l   The liquidity and valuation of the Scheme's investments due
    Scheme can be expected to fluctuate with movements in               to its holdings of unlisted securities may be affected if they
    the broader equity and bond markets and may be influenced           have to be sold prior to their target date of divestment.
    by factors affecting capital markets in general, such as, but
    not limited to, changes in interest rates, currency exchange    l   Currency Risk: The fund may invest in foreign securities as
    rates, changes in governmental policies, taxation, political,       permitted by the concerned regulatory authorities in India.
    economic or other developments and increased volatility in          Since the assets will be invested in securities denominated
    the stock and bond markets.                                         in foreign currencies, the Indian Rupee equivalent of the net
                                                                        assets, distributions and income may be adversely affected
    Neither the past performance of the mutual funds managed            by changes/fluctuations in the value of the foreign currencies
    by the Sponsors and their affiliates/associates nor the past        relative to the Indian Rupee. The repatriation of capital to
    performance of the Sponsors/AMC or Fund is necessarily              India may also be hampered by changes in the regulations
    indicative of future performance of the Scheme.                     concerning exchange controls or political circumstances as
                                                                        well as the application to it of other restrictions on
l   The Sponsors are not responsible or liable for any loss
                                                                        investment.
    resulting from the operation of the Scheme beyond the initial
    contribution of an amount of Rs.1 lakh collectively made by     l   Although countries have sovereign credit ratings but these
    them towards setting up the Fund or such other accretions           are an assessment of each government's ability and
    and additions to the initial corpus set up by the Sponsors.         willingness to service its debt in full and on time. A rating is
                                                                        a forward-looking estimate of default probability. Sovereign
l   Investors in the Scheme are not being offered a guaranteed
                                                                        ratings address the credit risk of national governments, but
    or assured rate of return.
                                                                        not the specific default risk of other issuers. The Sovereign
l   Deutsche Fixed Term Fund is the name of the Scheme and              ratings are either for the local currency or the foreign currency
    does not in any manner indicate the quality of the Scheme,          indicating the ability of the sovereign to service the debt
    its future prospects or returns.                                    obligations in either the local currency or the foreign currency.
                                                                        In the unlikely event of a downgrading of the sovereign credit
l   As per SEBI circular dated December 12, 2003 ref.                   rating, the fund will be adversely affected.
    SEBI/IMD/CIR No.10/22701/03, each scheme and individual
    plan(s) under the schemes should have a minimum of 20           l   Country Risk: The Country risk arises from the inability of a
    investors and no single investor should account for more            country, to meet its financial obligations. It is the risk
    than 25% of the corpus of such scheme/plan(s). In case of           encompassing economic, social and political conditions in a
    non-fulfillment with either of the above two conditions, the        foreign country, which might adversely affect foreign
    investor's money would be refunded, in full, immediately            investors' financial interests.
    after the close of the IPO.
                                                                    l   Funds investing in Government Securities may involve some
                                                                        risks, which can have adverse effect on portfolio returns and
Specific Risk Factors                                                   holdings. Such risks may include government involvement
l   Different types of securities in which the scheme would             in private sectors certain local tax laws considerations,
    invest as given in the offer document carry different levels        international and regional political and economic
    and types of risk. Accordingly the scheme's risk may increase       developments, possible imposition of exchange controls or
    or decrease depending upon its investment pattern. e.g.             other local governmental laws or restriction, the increase
    corporate bonds carry a higher amount of risk than                  risk of adverse effects from deflation and inflation, and the
    Government securities. Further even among corporate                 possibility of limited legal recourse for the fund.
    bonds, bonds which are AAA rated are comparatively less
    risky than bonds which are AA rated.                            l   Credit Risk: - A fundamental risk relating to all fixed income
                                                                        securities, is a chance that an issuer will fail to make a
l   Subject to the stated investment objectives, the Scheme(s)          principal and interest payment when due. Issuers with higher
    propose to invest a part of their portfolio in debt and debt        credit risks typically offer higher yields for this added risk.
    related securities of Indian Companies, as may be permitted         Conversely, issuers with lower credit risk offer lower credit
    by SEBI, from time to time. Trading volumes, settlement             yields. Generally government securities are considered to
    periods and transfer procedures may restrict the liquidity of       be the safest in terms of the credit risk. Changes in financial
    these investments. Different segments of Indian financial           conditions of an issuer, changes in economic and political
    markets have different settlement periods and such periods          conditions in general, or changes in economic or and political
    may be extended significantly by unforeseen circumstances.          conditions specific to an issuer, all of which are factors that
    The inability of the Scheme(s) to make intended securities'         may have an adverse impact on a firms credit quality and
    purchases due to settlement problems could cause the                security values.
    Scheme(s) to miss certain investment opportunities. The
    length of time for settlement may affect the Scheme in the      l   Certain fixed income securities give an issuer the right to
    event the Scheme has to meet an inordinately large number           call its securities, before their maturity date, in periods of
    of redemption requests. The Scheme will retain certain              declining interest rates. The possibility of such pre-payment
    investments in cash or cash equivalents for its day-to-day          risk may force the fund to re-invest the proceeds of such
    liquidity requirements.                                             investments in securities offering lower yields, thereby
                                                                        reducing the fund's interest income.



3
l    Interest Rate Risk: As with all debt securities, changes in           reliance on very small ticket size, which may result in difficult and
     interest rates may affect the Net Asset Value as the prices           costly recoveries. To illustrate, the ticket size of housing loans is
     of securities generally increase as interest rates decline and        generally higher than that of personal loans. Hence in the
     generally decrease as interest rates rise. Prices of long-term        construction of a housing loan asset pool for say Rs.1,00,00,000/-
     securities generally fluctuate more in response to interest           it may be easier to construct a pool with just 10 housing loans of
     rate changes than do short-term securities. Indian debt               Rs.10,00,000/- each rather than to construct a pool of personal
     markets can be volatile leading to the possibility of price           loans as the ticket size of personal loans may rarely exceed
     movements up or down in fixed income securities and                   Rs.5,00,000/- per individual. Also to amplify this illustration further,
     thereby to possible movements in the NAV.                             if one were to construct a pool of Rs.1,00,00,000/- consisting of
                                                                           personal loans of Rs.1,00,000/- each, the larger number of
l    Reinvestment Risk: This risk refers to the interest rate levels       contracts (100 as against one of 10 housing loans of Rs.10 lakh
     at which cash flows received from the securities in the Plans         each) automatically diversifies the risk profile of the pool as
     are reinvested. The additional income from reinvestment is            compared to a housing loan based asset pool.
     the "interest on interest" component. The risk is that the
     rate at which interim cash flows can be reinvested may be             Average original maturity of the pool: indicates the original
     lower than that originally assumed.                                   repayment period and whether the loan tenors are in line with
                                                                           industry averages and borrower's repayment capacity. To illustrate,
l    Settlement Risk: The inability of the Plan to make intended           in a car pool consisting of 60 month contracts, the original maturity
     securities purchases due to settlement problems could cause           and the residual maturity of the pool viz. number of remaining
     the Plan to miss certain investment opportunities. By the             instalments to be paid gives a better idea of the risk of default of
     same rationale, the inability to sell securities held in the Plan's   the pool itself. If in a pool of 50 car loans having original maturity
     portfolio due to the extraneous factors that may impact               of 60 months, if more than 60% of the contracts have paid more
     liquidity would result, at times, in potential losses to the Plan,    than 40% of the instalments and if no default has been observed
     in case of a subsequent decline in the value of securities            in such contracts, this is a far superior portfolio than a similar car
     held in the Plan's portfolio.                                         loan pool where 80% of the contracts have not even crossed 4
                                                                           instalments.
l    Regulatory Risk: Changes in government policy in general
     and changes in tax benefits applicable to Mutual Funds may            Borrowers Contribution vis a vis Loan: Indicates how much %
     impact the returns to investors in the Scheme.                        value of the asset is financed by borrower's own equity. The higher
                                                                           the contribution of the borrower the better it is. This Ratio stems
l    The value of the Scheme's investments may be affected                 from the principle that where the borrowers own contribution of
     generally by factors affecting capital markets, such as interest      the asset cost is high, the chances of default are lower. To illustrate
     rates, currency exchange rates, foreign investment, changes           for a House costing Rs.20 lakhs, if the borrower has himself
     in governmental policy, taxation and political, economic or           contributed Rs.10 lakh and has taken only Rs.10 lakh as a loan,
     other developments. Consequently, the net asset value of              he is going to have lesser propensity to default as he would lose
     the Scheme may fluctuate and the value of the Scheme's                an asset worth Rs.20 lakhs if he defaults in repaying an instalment.
     Units may go down as well as up. Past performance of the
     sponsors is not necessarily indicative of future performance          Repayment Discipline of the pool: indicates whether borrowers
     of the Scheme.                                                        have already displayed repayment discipline. To illustrate, in the
                                                                           case of a personal loan, if a pool of assets consist of those who
                                                                           have already repaid 80% of the instalments without default, this
Risk associated with investment in Securitised Instruments:                certainly is a superior asset pool than one where only 10% of
Generally available Asset Classes for Securitisation in India              instalments have been paid. In the former case, the portfolio has
                                                                           already demonstrated that the repayment discipline is far higher.
l    Commercial Vehicles
                                                                           Default rate distribution: Indicates how much % of the pool and
l    Auto and Two wheeler pools                                            overall portfolio of the originator is current, how much is in 0-30
l    Mortgage pools (residential housing loans)                            DPD (days past due), 30-60 DPD, 60-90 DPD and so on. The
                                                                           rationale here is very obvious, as against 0-30 DPD, the 60-90
l    Personal Loan, credit card and other retail loans                     DPD is certainly a higher risk category.

l    Corporate loans/receivables                                           Unlike in plain vanilla instruments, in securitisation transactions it
                                                                           is possible to enhance the credit rating, which could be much
Underlying Risk : Each asset class has a different underlying              higher than the originator's own credit rating. This is possible
risk, however, residential mortgages are supposed to be having             through a mechanism called 'Credit enhancement'. The purpose
lower default rates. On the other hand, repossession and                   of credit enhancement is to ensure timely payment to the
subsequent recovery of commercial vehicles and other auto assets           investors, if the actual collection from the pool of receivables for
is fairly easier and better compared to mortgages. Some of the             a given period are short of the contractual payouts on
asset classes such as personal loans, credit card receivables etc.,        securitisation. Securitisation are normally non-recourse
being unsecured credits in nature, may witness higher default              instruments and therefore, the repayment on securitisation would
rates. As regards corporate loans/receivables, depending upon              have to come from the underlying assets and the credit
the nature of the underlying security for the loan or the nature of        enhancement. Therefore, the rating criteria centrally focus on the
the receivable the risks would correspondingly fluctuate. However,         quality of the underlying assets.
the credit enhancement stipulated by rating agencies for such
asset class pools is typically much higher and hence their overall         Internationally, the quality of credit ratings is measured by default
risks are comparable to other AAA rated asset classes.                     rates and stability. In the Indian scenario, more than 95% of
                                                                           issuances have been AAA rated issuances indicating the strength
The rating agencies have an elaborate system of stipulating                of the underlying assets as well as adequacy of credit
margins, over collateralisation and guarantee to bring risk limits         enhancement.
in line with the other AAA rated securities. Please note that
predominantly the scheme intends to invest in only AAA rated               Investment exposure of the Fund with reference to Securitised
securitised debt.                                                          Debt:
                                                                           The Fund will predominantly invest only in those securitisation
Some of the factors, which are typically analyzed for any
                                                                           issuances which have AAA rating indicating the highest level of
pool are as follows:
                                                                           safety from credit risk point of view at the time of making an
Nature & Size of the loan: generally indicates the kind of assets          investment. The Fund will not invest in foreign securitised
financed with loans. Also indicates whether there is excessive             debt.



Offer Document       Deutsche Fixed Term Fund                                                                                                   4
The fund may invest in various type of securitisation issuances,          Risks due to possible prepayments:
including but not limited to Asset Backed Securitisation, Mortgage        Asset securitisation is a process whereby commercial or
Backed Securitisation, Personal Loan Backed Securitisation,               consumer credits are packaged and sold in the form of financial
Collateralized Loan Obligation / Collateralized Bond Obligation and       instruments. Full prepayment of underlying loan contract may
so on.                                                                    arise under any of the following circumstances;
The fund does not propose to limit its exposure to only one asset         l    Obligor pays the Receivable due from him at any time prior
class or to have asset class based sub-limits as it will primarily             to the scheduled maturity date of that Receivable; or
look towards the AAA rating of the offering.
                                                                          l    Receivable is required to be repurchased by the Seller
Risk Factors specific to investments in Securitised and                        consequent to its inability to rectify a material
Structured Instruments:                                                        misrepresentation with respect to that Receivable; or
Types of Securitised Debt vary and carry different levels and types       l    The Servicer recognizing a contract as a defaulted contract
of risks. Credit Risk on Securitised Bonds depends upon the                    and hence repossessing the underlying Asset and selling
Originator and varies depending on whether they are issued with                the same
Recourse to Originator or otherwise.
                                                                          In the event of prepayments, investors may be exposed to
Even within securitised debt, AAA rated securitised debt offers           changes in tenor and yield.
lesser risk of default than AA rated securitised debt. A structure
with Recourse will have a lower Credit Risk than a structure              Bankruptcy of the Originator or Seller
without Recourse.
                                                                          If originator becomes subject to bankruptcy proceedings and the
Underlying assets in Securitised Debt may assume different forms          court in the bankruptcy proceedings concludes that the sale from
and the general types of receivables include Auto Finance, Credit         originator to Trust was not a sale then an Investor could experience
Cards, Home Loans or any such receipts, Credit risks relating to          losses or delays in the payments due. All possible care is generally
these types of receivables depend upon various factors including          taken in structuring the transaction so as to minimize the risk of
macro economic factors of these industries and economies.                 the sale to Trust not being construed as a "True Sale". Legal opinion
Specific factors like nature and adequacy of property mortgaged           is normally obtained to the effect that the assignment of
against these borrowings, nature of loan agreement/ mortgage              Receivables to Trust in trust for and for the benefit of the Investors,
deed in case of Home Loan, adequacy of documentation in case              as envisaged herein, would constitute a true sale.
of Auto Finance and Home Loans, capacity of borrower to meet
its obligation on borrowings in case of Credit Cards and intentions       Bankruptcy of the Investor's Agent
of the borrower influence the risks relating to the asset borrowings      If Investor's agent, becomes subject to bankruptcy proceedings
underlying the securitised debt.                                          and the court in the bankruptcy proceedings concludes that the
Holders of the securitised assets may have low credit risk with           recourse of Investor's Agent to the assets/receivables is not in
diversified retail base on underlying assets especially when              its capacity as agent/Trustee but in its personal capacity, then an
securitised assets are created by high credit rated tranches and          Investor could experience losses or delays in the payments due
may differ depending upon the interest rate movement and speed            under the swap agreement. All possible care is normally taken in
of prepayment etc. The change in market interest rates -                  structuring the transaction and drafting the underlying documents
prepayments may not change the absolute amount of receivables             so as to provide that the assets/receivables if and when held by
for the investors, but may have an impact on the re-investment            Investor's Agent is held as agent and in Trust for the Investors
of the periodic cash flows that the investor receives in the              and shall not form part of the personal assets of Investor's Agent.
securitised paper.                                                        Legal opinion is normally obtained to the effect that the Investors
                                                                          Agent's recourse to assets/receivables is restricted in its capacity
Limited Liquidity & Price Risk                                            as agent and trustee and not in its personal capacity.

Presently, secondary market for securitised papers is not very            Credit Rating of the Transaction / Certificate
liquid. There is no assurance that a deep secondary market will
develop for such securities. This could limit the ability of the          The credit rating is not a recommendation to purchase, hold or
investor to resell them. Even if a secondary market develops and          sell the Certificate in as much as the ratings do not comment on
sales were to take place, these secondary transactions may be             the market price of the Certificate or its suitability to a particular
at a discount to the initial issue price due to changes in the interest   investor. There is no assurance by the rating agency either that
rate structure.                                                           the rating will remain at the same level for any given period of
                                                                          time or that the rating will not be lowered or withdrawn entirely
Limited Recourse, Delinquency and Credit Risk                             by the rating agency.

Securitised transactions are normally backed by pool of receivables       Risk of Co-mingling
and credit enhancement as stipulated by the rating agency, which
differ from issue to issue. The Credit Enhancement stipulated             The Servicers normally deposit all payments received from the
represents a limited loss cover to the Investors. These Certificates      Obligors into the Collection Account. However, there could be a
represent an undivided beneficial interest in the underlying              time gap between collection by a Servicer and depositing the
receivables and there is no obligation of either the Issuer or the        same into the Collection account especially considering that some
Seller or the Originator, or the parent or any affiliate of the Seller,   of the collections may be in the form of cash. In this interim period,
Issuer and Originator. No financial recourse is available to the          collections from the Loan Agreements may not be segregated
Certificate Holders against the Investors' Representative.                from other funds of the Servicer. If the Servicer fails to remit
Delinquencies and credit losses may cause depletion of the                such funds due to Investors, the Investors may be exposed to a
amount available under the Credit Enhancement and thereby the             potential loss. Due care is normally taken to ensure that the
Investor Payouts may get affected if the amount available in the          Servicer enjoys highest credit rating on stand alone basis to
Credit Enhancement facility is not enough to cover the shortfall.         minimize Co-mingling risk.
On persistent default of a Obligor to repay his obligation, the
Servicer may repossess and sell the underlying Asset.
                                                                          Risk factor associated with Trading in Derivatives:
                                                                          While Interest Rate Derivatives are powerful new tools, the
However many factors may affect, delay or prevent the                     investor should understand instrument and its risk-return profile.
repossession of such Asset or the length of time required to realize      The Derivatives unlike plain cash market instrument, requires
the sale proceeds on such sales. In addition, the price at which          greater expertise and it could cause damage if used without proper
such Asset may be sold may be lower than the amount due from              analysis. It driven by the demand & supply of money, monetary &
that Obligor.                                                             credit policy viz. Bank rate, Repo rate etc., exchange rate policy,



5
inflation, economic growth & investment avenues etc. The use              At the end of 91 days the transaction will be settled as under:-
of a derivative requires an understanding not only of the underlying
instrument but of the derivative itself. Even a small price               Deutsche Fixed Term Fund receive
movement in the underlying security could have a large impact             Fixed rate @ 6.25% for 91 days            Rs. 7,79,110
on their value.
                                                                          Deutsche Fixed Term Fund pays
SEBI vide its circular no. MFD/CIR/011/061/2000 dated February
1, 2000 has permitted all the mutual funds to participate in the          floating rate @ 5.90% for 91 days
derivatives trading subject to observance of guidelines issued by         amounting to                              Rs. 7,35,479
SEBI in this behalf. Pursuant to this, the mutual funds may use           Net Receivable / Settlement Value           Rs. 43,631
various derivative and hedging products from time to time, as
would be available and permitted by SEBI, in an attempt to protect        Please note that the above example is hypothetical in nature and
the value of the portfolio and enhance Unit holders' interest.            the figures are assumed.
Accordingly the Fund may use derivative instruments like Interest         Thus the trade off for the Fund will be the difference in call rate
Rate Swaps/Futures, Forward Rate Agreements, Forward                      and the fixed rate payment and this can vary with the call rates in
Currency Contracts, Currency Futures, Currency Options,                   the market. Please note that the above example is given for
Currency Swaps or other derivative instruments for the purpose            illustration purposes only and the actual returns may vary
of hedging and portfolio balancing or for its efficient management,       depending on the terms of swap and market conditions.
as permitted under the Regulations and guidelines.
                                                                          Risk factor associated with Overseas Investment:
As and when the Scheme(s) trades in the derivatives market there
are risk factors and issues concerning the use of derivatives that        l    Subject to necessary approvals and within the investment
investors should understand. Derivative products are specialized               objectives of the Scheme, the Scheme may invest in
instruments that require investment techniques and risk analyses               overseas markets which carry a risk on account of
different from those associated with stocks and bonds. The use                 fluctuations in the foreign exchange rates, nature of securities
of a derivative requires an understanding not only of the underlying           market of the country, repatriation of capital due to exchange
instrument but also of the derivative itself. Derivatives require              controls and political circumstances.
the maintenance of adequate controls to monitor the transactions          l    Offshore investments will be made subject to any/all
entered into, the ability to assess the risk that a derivative adds            approvals, conditions thereof as may be stipulated by SEBI/
to the portfolio and the ability to forecast price or interest rate            RBI and provided such investments do not result in expenses
movements correctly. There is the possibility that a loss may be               to the Fund in excess of the ceiling on expenses prescribed
sustained by the portfolio as a result of the failure of another               by and consistent with costs and expenses attendant to
party (usually referred to as the "counter party") to comply with              international investing. The Fund may, where necessary,
the terms of the derivatives contract. Other risks in using                    appoint other intermediaries of repute as advisors, custodian/
derivatives include the risk of improper valuation of derivatives              sub-custodians etc. for managing and administering such
and the inability of derivatives to correlate perfectly with underlying        investments. The appointment of such intermediaries shall
assets, rates and indices. Thus, derivatives are highly leveraged              be in accordance with the applicable requirements of SEBI
instruments. Even a small price movement in the underlying                     and within the permissible ceilings of expenses. The fees
security could have a large impact on their value. Also, the market            and expenses would illustratively include, besides the
for derivative instruments is nascent in India.                                investment management fees, custody fees and costs, fees
l    Since derivatives would be used as risk management tool,                  of appointed advisors and sub-managers, transaction costs
     up to 100% of the Scheme's net assets in the debt                         and overseas regulatory costs.
     component of the portfolio may be utilised for derivatives           l    To the extent that the assets of the Scheme(s) will be
     trading.                                                                  invested in securities denominated in foreign currencies, the
The following information provides a basic idea as to the nature               Indian Rupee equivalent of the net assets, distributions and
of the derivative instruments proposed to be used by the Fund                  income may be adversely affected by changes in the value
and the benefits and risks attached there with.                                of certain foreign currencies relative to the Indian Rupee.
                                                                               The repatriation of capital to India may also be hampered by
i)     Interest Rate Swaps and Forward Rate Agreements                         changes in regulations concerning exchange controls or
Benefits                                                                       political circumstances as well as the application to it of other
Bond markets in India are not very liquid. Investors run the risk of           restrictions on investment.
illiquidity in such markets. Investing for short-term periods for         At present, the scheme does not intend to make any investment
liquidity purposes has its own risks. Investors can benefit if the        in foreign securities.
Fund remains in call market for the liquidity and at the same time
take advantage of fixed rate by entering into a swap. It adds             Special Considerations :
certainty to the returns without sacrificing liquidity.
                                                                          l    Mutual funds being vehicles of securities investments are
Illustration                                                                   subject to market and other risks and there can be no
                                                                               guarantee against loss resulting from investing in the
The following are illustrations how derivatives work:                          Scheme. The various factors which impact the value of the
Basic Structure of an Interest Rate Swap                                       Schemes' investments include, but are not limited to,
                                                                               fluctuations in the equity and bond markets, fluctuations in
Say Notional Amount: Rs. 5 crores                                              interest rates, prevailing political and economic environment,
Benchmark: NSE MIBOR                                                           changes in government policy, factors specific to the issuer
                                                                               of the securities, tax laws, liquidity of the underlying
Tenor: 91 days                                                                 instruments, settlement periods, trading volumes, etc.
Documentation: International Securities Dealers Association               l    The past performance of the mutual funds managed by the
(ISDA).                                                                        Sponsors and their affiliates/associates is not indicative of
                                                                               the future performance of the Scheme.
Fixed Rate: 6.25% At the end of 91 days
                                                                          l    Investment decisions made by the AMC may not always be
The Scheme Pays: compounded call rates for 91 days, which                      profitable.
averages to say 5.90%
                                                                          l    From time to time, mutual funds managed by the affiliates /
The Scheme receives: Fixed rate at 6.25% for 91 days.



Offer Document       Deutsche Fixed Term Fund                                                                                                6
    associates of the Sponsors may invest either directly or             l    In case the Schemes undertakes stock lending under the
    indirectly in the Scheme. The funds managed by these                      SEBI Regulations, the Schemes may, at times, be exposed
    affiliates/associates may acquire a substantial portion of the            to counter party risk. As with other modes of extensions of
    Scheme's Units and collectively constitute a majority investor            credit, there are risks inherent to securities lending, including
    in the Scheme. Accordingly, redemption of Units held by                   the risk of failure of the other party, in this case the approved
    such funds may have an adverse impact on the value of the                 intermediary, to comply with the terms of the agreement
    Units of the Scheme because of the timing of any such                     entered into between the lender of securities i.e. the Scheme
    redemption's and may impact the ability of other Unit Holders             and the approved intermediary. Such failure can result in the
    to redeem their respective Units.                                         possible loss of rights to the collateral put up by the borrower
                                                                              of the securities, the inability of the approved intermediary
l   Debt securities are subject to the risk of an issuer's inability          to return the securities deposited by the lender and the
    to meet principal and interest payments on the obligations                possible loss of any corporate benefits accruing to the lender
    (credit risk). Debt securities may also be subject to price               from the securities deposited with the approved
    volatility due to such factors as interest sensitivity, market            intermediary. The Mutual Fund may not be able to sell such
    perception or the creditworthiness of the issuer and general              lent out securities and this can lead to temporary illiquidity.
    market liquidity (market risk). While it is the intent of the
    Investment Manager to invest primarily in highly rated debt          l    In case the Schemes utilizes any derivatives, under the SEBI
    securities, the Schemes may from time to time invest in                   Regulations, the Schemes may, in certain situations, be
    higher yielding, lower rated securities. This would enhance               exposed to price risks.
    the degree of risk.
                                                                         l    It is compulsory for mutual funds to dematerialise their
l   Lower rated or unrated securities are more likely to react to             holdings in certain notified securities / companies. Trading
    developments affecting the market and the credit risk than                in dematerialised securities is still at a nascent stage in India
    the highly rated securities which react primarily to                      and this may result in some illiquidity in these securities.
    movements in the general level of interest rates. Lower rated
    securities also tend to be more sensitive to economic                l    Certain focus areas are already enjoying favourable tax
    conditions than higher rated securities. The Investment                   treatment by Government of India. Other focus areas the
    Manager will consider both credit risk and market risk in                 Schemes may also receive favourable tax treatment. If these
    making investment decisions.                                              tax benefits are removed or amended, it is possible that the
                                                                              changes may have a material adverse impact on the
l   Zero coupon or deep discount bonds are debt obligations                   companies' revenue and earnings.
    that do not entitle the holder to any periodic payment of
    interest prior to maturity or a specified date when the              l    The Schemes may be narrowly focussed among sectors and
    securities begin paying current interest and therefore, are               therefore, changes in a particular industry can have
    generally issued and traded at a discount to their face values.           substantial impact on the Schemes NAV.
    The discount depends on the time remaining until maturity            l    Investors in the Schemes are not being offered a guaranteed
    or the date when securities begin paying current interest. It             or assured rate of return. The Mutual Fund is not guaranteeing
    also varies depending on the prevailing interest rates, liquidity         or assuring any dividend or that it will make any dividend
    of the security and the perceived credit risk of the Issuer.              distributions at all. In any event, dividend distributions are
    The market prices of zero coupon securities are generally                 subject to the investment performance of the Schemes.
    more volatile than the market prices of securities that pay
    interest periodically and are likely to respond to changes in        l    As the liquidity of the Scheme's investments may sometimes
    interest rates to a greater degree than other coupon bearing              be restricted by trading volumes and settlement periods,
    securities having similar maturities and credit quality.                  the time taken by the Fund for redemption of Units may be
                                                                              significant in the event of an inordinately large number of
l   The credit risk factors pertaining to lower rated securities              redemption requests or of a restructuring of the Scheme's
    also apply to lower rated zero coupon or deferred interest                portfolio. In view of this, the Trustee has the right, in its sole
    bonds. Such bonds carry an additional risk in that, unlike                discretion, to limit redemptions under certain circumstances.
    bonds that pay interest throughout the period to maturity,
    the Schemes would not realise any cash until interest                l    Neither this Offer Document nor the units have been
    payment on the bonds commence and if the issuer defaults,                 registered in any jurisdiction. The distribution of this Offer
    the Schemes may not obtain any return on its investment.                  Document in certain jurisdictions may be restricted or subject
                                                                              to registration requirements and, accordingly, persons who
l   The Schemes have the power to invest in securities which                  come into possession of this Offer Document in such
    are not quoted on a stock exchange ("unlisted securities")                jurisdictions are required to inform themselves about, and
    which in general are subject to greater price fluctuations,               to observe, any such restrictions. No person receiving a copy
    less liquidity and greater risk than those which are traded in            of this Offer Document or any accompanying application form
    the open market. Unlisted securities may lack a liquid                    in such jurisdiction may treat this Offer Document or such
    secondary market and there can be no assurance that the                   application form as constituting an invitation to them to
    Schemes will realise its investments in unlisted securities               subscribe for Units, nor should they in any event use any
    at a fair value.                                                          such application form, unless in the relevant jurisdiction such
l   As liquidity of the Schemes' investments could, at times, be              an invitation could lawfully be made to them and such
    restricted by trading volumes and settlement periods, the                 application form could lawfully be used without compliance
    time taken by the Mutual Fund for redemption of Units may                 with any registration or other legal requirements.
    be significant in the event of an inordinately large number of       l    Investment decisions made by the Investment Manager may
    redemption requests or of a restructuring of the Schemes'                 not always be profitable.
    portfolio. In view of this, the Trustee has the right, in its sole
    discretion to limit redemptions (including suspending                Investors are urged to study the terms of the offer carefully before
    redemption) under certain circumstances, as described under          investing in the Scheme, and to retain this Offer Document for
    the section titled "Right to Limit Redemptions".                     future reference.




7
II. Definitions                                                     Distributor        Such persons / firms / companies / corporates
                                                                                       as may be appointed by the AMC to distribute/
In this Offer Document, the following words and expressions                            sell / market the Scheme(s) of the Fund.
shall have the meaning specified herein, unless the context         Dividend           Income distributed by a Scheme on the Units,
otherwise requires:                                                                    where applicable.
AMC or Asset     Deutsche Asset Management (India) Private          DTAA               Double Taxation Avoidance Agreement.
Management       Limited, incorporated under the provisions of
Company or       the Companies Act, 1956, and approved by           FCNR               Foreign Currency Non-Resident Accounts.
Investment       SEBI to act as Investment Manager for the
Manager or       Scheme(s) of Deutsche Mutual Fund.                 FII                Foreign Institutional Investors, registered with
DeAM India                                                                             SEBI under Securities and Exchange Board
                                                                                       of India (Foreign Institutional Investors)
Applicable NAV   The Net Asset Value applicable for purchases /                        Regulations, 1995 as amended from time to
                 redemptions / switches, based on the                                  time.
                 Business Day and relevant cut-off times on
                                                                    Fund or            Deutsche Mutual Fund, a trust set up under
                 which the application is accepted at an
                                                                    Mutual Fund        the provisions of the Indian Trusts Act, 1882
                 Investor Service Center.
                                                                                       and registered with SEBI under the Securities
Business Day     A day other than (1) Saturday and Sunday or                           and Exchange Board of India (Mutual Funds)
                 (2) a day on which The Stock Exchange,                                Regulations, 1996 vide Registration No.
                 Mumbai or National Stock Exchange of India                            MF/047/02/10 dated 28th October 2002.
                 Limited or Reserve Bank of India or banks in       Initial Offer      The dates on or the period during which the
                 Mumbai are closed or (3) the day on which          Period             initial subscription to Units of the Scheme can
                 the money markets are closed / not accessible                         be made subject to an extension, if any.
                 or (4) a day on which there is no RBI clearing /
                 settlement of securities or (5) a day on which     Initial Public     Offer for purchase of Units of the Scheme
                 the sale and/or redemption of Units is             Offer or Initial   - Deutsche Fixed Term Fund.
                 suspended by the Trustees / AMC or (6) a book      Issue or IPO
                 closure period as may be announced by the
                 Trustees / AMC or (7) a day on which normal        Investment         The Agreement dated May 29, 2002 entered
                 business cannot be transacted due to storms,       Management         into between the Trustees of Deutsche
                 floods, bandhs, strikes or such other events       Agreement or       Mutual Fund and Deutsche Asset
                 as the AMC may specify from time to time.          IMA                Management (India) Private Limited as
                 Provided that the days when the banks in any                          amended from time to time.
                 location where the AMC's Investor Service          Investor of        An investor of record for the purpose of
                 Centers are located, are closed due to a local     record             dividend distributions is an investor who is a
                 holiday, such days will be treated as non                             Unitholder as of the date dividend is declared.
                 Business Days at such centers for the                                 In order to be a Unitholder an investor has to
                 purposes of accepting fresh subscriptions.                            be allocated Units against clear funds.
                 However, if the Investor Service Centre in
                 such locations are open on such local holidays,    Investor Service Such offices as are designated as Investor
                 then redemption and switch requests will be        Centres or ISC   Service Centres by the AMC from time to
                 accepted at those Centers, provided it is a                         time.
                 Business Day for the Scheme on an overall
                 basis. Notwithstanding the above, the AMC          Local Cheque       A cheque handled locally and drawn on any
                 may declare any day as a Business Day by                              bank which is a member of the Banker's
                 giving adequate notice to investors.                                  Clearing House located at the place where the
                                                                                       Application Form is submitted.
CDSC             Contingent Deferred Sales Charge permitted
                                                                    NAV                Net Asset Value of the Units of the Scheme/
                 under the Regulations to be borne by the Unit
                                                                                       Plans (including Options, if any, therein)
                 Holder upon exiting (whether by way of
                                                                                       calculated in the manner provided in this Offer
                 redemption or Inter-scheme switching) based
                                                                                       Document or as may be prescribed by the
                 on the amount of investment (if applicable)
                                                                                       Regulations from time to time.
                 and period of holding of Units.
                                                                    NRE Account        Non-Resident External Accounts
Custodian        JP Morgan Chase Bank, Mumbai, registered
                 under the SEBI (Custodian of Securities)           NRI                Non-Resident Indian or a person of Indian
                 Regulations, 1996, currently acting as                                origin resident outside India.
                 Custodian to the Scheme(s), or any other
                 custodian approved by the Trustees.                NRSR Account       Non-Resident Special Rupee Account

DDs              Demand Drafts                                      Offer Document This document issued by Deutsche Mutual
                                                                                   Fund, offering Units of Deutsche Fixed Term
DeAM Asia or     Deutsche Asset Management (Asia) Limited                          Fund for subscription.
Sponsor or
                                                                    Permitted          Foreign debt securities in the countries with
Settlor
                                                                    Foreign            fully convertible currencies, short term as well
DFTF             Deutsche Fixed Term Fund                           Debt Securities    as long term debt instruments with highest
                                                                                       rating (foreign currency credit rating) by
Depository       Depository as defined in the Depositories Act,                        accredited/registered credit rating agencies,
                 1996.                                                                 government securities where the countries
                                                                                       are AAA rated, overseas mutual funds or unit
Designated       Such centres including collecting bank                                trusts which invest in the aforesaid securities
Centres          branches as may be designated by the AMC                              or are rated as mentioned above and are
                 for subscriptions in the Scheme(s).                                   registered with overseas regulators.




Offer Document   Deutsche Fixed Term Fund                                                                                           8
RBI               Reserve Bank of India, established under the    SEBI MF              Securities and Exchange Board of India
                  Reserve Bank of India Act, 1934, as amended     Regulations          (Mutual Funds) Regulations, 1996 as
                  from time to time.                              1996 or              amended from time to time, including by way
                                                                  Regulations          of circulars or notifications issued by SEBI,
Redemption       A charge paid by the investor when Units are                          the Government of India or RBI.
Load / Exit Load redeemed (sold back to the Mutual Fund). This
                 load may be used in whole or in part by the      Switch               Sale of a Unit in one Scheme / Plan / Option
                 Asset Management Company in providing                                 against purchase of a Unit in another Scheme /
                 distribution related services to the Mutual                           Plan / Option.
                 Fund relating to the sales, promotion and
                 marketing of Units of the Scheme, including      Switchover Fee       A charge incurred to switch from one scheme
                 payments for services in connection with the                          to another within the same mutual fund family
                 distribution of Units.                                                or to switch from one Investment Plan (i.e.
                                                                                       Unit Class) to another within the same
Registrar         Karvy Computershare Private Ltd. (KARVY),                            Scheme.
                  registered under the SEBI (Registrars to an
                  Issue and Share Transfer Agents) Regulations,   The Act              The Income Tax Act, 1961
                  1993, currently acting as Registrar to the
                                                                  Trust Deed           The Trust Deed dated May 29, 2002 made by
                  Scheme(s) or any other registrar appointed by
                                                                                       and between the Sponsor and the Trustees
                  the AMC from time to time.
                                                                                       establishing Deutsche Mutual Fund, as
Repo /            Sale / purchase of Government Securities as                          amended from time to time.
Reverse Repo      may be allowed by RBI from time to time with
                                                                  Trust Fund           Amounts settled / contributed by the Sponsor
                  simultaneous agreement to repurchase / resell
                                                                                       towards the corpus of the Deutsche Mutual
                  them at a later date.
                                                                                       Fund and additions / accretions thereto.
Repurchase/       Repurchase / redemption of Units of the
                                                                  Trustees             Deutsche Trustee Services (India) Pvt.
Redemption        relevant Scheme(s)
                                                                                       Limited, the trustees of Deutsche Mutual
Sale /            Sale / Subscription of Units of the relevant                         Fund and approved by SEBI to act as the
Subscription      Scheme(s)                                                            Trustees of the Scheme(s) of the Fund.

Sales Load        A one time charge that the investor pays at     Unit                 The interest of an investor which consists of
                  the time of entry into the Scheme. This load                         one undivided share in the net assets of the
                  is used in whole or in part by the Asset                             relevant Scheme(s).
                  Management Company in providing
                                                                  Unitholder or        A holder of Units in any one or more
                  distribution related services to the Mutual
                                                                  Investor             Scheme(s) of Deutsche Mutual Fund offered
                  Fund relating to the sales, promotion and
                                                                                       under this Offer Document.
                  marketing of Units of the Scheme, including
                  payments for services in connection with the
                  distribution of Units.                          Interpretation
                                                                  For all purposes of this Offer Document, except as otherwise
Scheme(s)         Deutsche Fixed Term Fund (including, as the     expressly provided or unless the context otherwise requires:
                  context permits, either the Plans / Options)
                  collectively referred to as the Scheme(s) and   l      The terms defined in this Offer Document include the plural
                  individually, as the context permits, as the           as well as the singular.
                  Scheme.                                         l      Pronouns having a masculine or feminine gender shall be
SEBI              Securities and Exchange Board of India                 deemed to include the other.
                  established under Securities and Exchange       All references to "US$" refer to United States Dollars and "Rs."
                  Board of India Act, 1992, as amended from       refer to Indian Rupees. A "crore" means "ten million" and a "lakh"
                  time to time.                                   means a "hundred thousand".




9
III. Summary of the Scheme                                              Minimum
                                                                        Balance to be
                                                                                        Rs. 25,000.

Name of           Deutsche Fixed Term Fund (DFTF)                       maintained
the Scheme                                                              Initial Issue   In this Scheme, the Initial Issue Expenses will
                                                                        Expenses        be borne by the AMC.
Type              Close Ended Fixed Income Fund
                                                                        Load            No entry load for this fund. However there
Investment        The investment objective of the Scheme is                             would be an exit load of 3% if the investor
Objective         to generate regular income by investing into                          redeems within 4 months from the date of
                  high credit quality fixed/floating rate securities,                   allotment, 2% if the investor redeems after 4
                  normally maturing in line with the time profile                       months but before 8 months from the
                  of the Fund                                                           maturity date and 1% if the investor redeems
                                                                                        anytime after 8 months from the date of
Benchmark         Crisil Composite Bond Fund Index
                                                                                        allotment but before maturity date.
Options           'Dividend' (Payout / Reinvestment) & 'Growth'
                                                                        Investment by   Investment by NRIs/FIIs are allowed on a full
                  Options
                                                                        NRIs/FIIs       repatriation basis subject to RBI approvals if
Dividend Option   Under this Option dividend distribution out of                        any
                  income earned may be made. The Trustee
                                                                        Transparency    Weekly Announcement of NAV every
                  reserves the right to declare dividend under
                                                                                        Wednesday and quarterly disclosure of
                  the Scheme depending on the net
                                                                                        complete portfolio through Fund's
                  distributable surplus available under the
                                                                                        Newsletters.
                  Option. It should, however, be noted that
                  actual distribution of dividends and the              Liquidity       The Unitholders would be entitled to redeem
                  frequency of distribution will depend, inter-                         their units at any time, subject to the
                  alia, on the availability of distributable surplus                    applicable load. The Scheme would not be
                  and will be entirely at the discretion of the                         listed on any stock exchange.
                  Trustee.
                                                                        Duration of     The duration of the Scheme is 389 days from
Growth Option     All Income earned and realized profit in              the Scheme      the date of allotment. However, the scheme
                  respect of a unit issued under that will                              may be liquidated any time prior to the
                  continue to remain invested until repurchase                          expiration of the 389 days under the following
                  and shall be deemed to have remain invested                           circumstances :
                  in the option itself which will be reflected in
                                                                                        l   On the happening of any event which, in
                  the NAV.
                                                                                            the opinion of the Board, requires the
Application       Minimum Rs. 100,000 per application or                                    Scheme to be wound up.
Amount            amounts in multiples of Re.1/- thereafter.                            l   If seventy five per cent of the Unitholders
                                                                                            pass a resolution that the Scheme be
                  During the IPO period, unitholders of other
                                                                                            wound up.
                  schemes of Deutsche Mutual Fund have an
                  option to switch from the scheme to DFTF,                             l   If SEBI so directs in the interest of the Unit
                  however, the switch request should be                                     holders.
                  accompanied with the application form.                                l   If number of unit holders or the individual
                                                                                            unitholders holding in the fund breaches
Minimum           Rs. 1,000 and in multiples of Re.1/- thereafter.                          the requirement of SEBI Circular dated
Redemption                                                                                  December 12, 2003 ref SEBI/IMD/CIR
Amount                                                                                      No.10/22701/03




Offer Document    Deutsche Fixed Term Fund                                                                                            10
IV. Constitution of                                                     Deutsche Asset Management
                                                                        Deutsche Asset Management is a 100% owned subsidiary of
    the Mutual Fund                                                     Deutsche Bank AG.
                                                                        Deutsche Asset Management (DeAM), the asset management
A) The Fund                                                             division of Deutsche Bank A.G., is one of the world's foremost
Deutsche Mutual Fund ("the Mutual Fund" or "the Fund") had been         investment organisations. Their presence in the key major
constituted as a Trust in accordance with the provisions of the         investment markets allows them to leverage the expertise of
Indian Trusts Act, 1882 (2 of 1882) vide a Trust Deed dated May         more than 360 portfolio managers and analysts across the globe.
29, 2002. The office of the Sub-Registrar of Assurances at Mumbai       DeAM's investment teams benefit appreciably from the financial
has registered the Trust Deed establishing the Fund under the           and research support of one of the world's strongest financial
Registration Act, 1908. The Fund was registered with SEBI vide          institutions.
registration number MF/047/02/10 dated 28th October, 2002. The          As a leading global asset manager, Deutsche Asset Management
office of the Mutual Fund is at DB House, Hazarimal Somani Marg,        offers clients a combination of services - a truly global network, a
Fort, Mumbai - 400 001. The Trust has been formed for the               comprehensive product range, a service orientation and
purpose of pooling of capital from the public for collective            commitment to superior performance - together with the financial
investment in securities / any other property for the purpose of        strength and resources of the Deutsche Bank Group. DeAM is
providing facilities for participation by persons as beneficiaries in   dedicated to providing clients with investment solutions at all
such properties / investments and in the profits / income arising       points of the risk/return spectrum, with products specifically
therefrom as may be permitted by the regulations.                       tailored to meet individual client requirements. Strategies offered
                                                                        include active management in equities and fixed income both
B) The Sponsors                                                         domestically and internationally. DeAM's ultimate goal is to
                                                                        empower clients with innovative solutions that meet their complex
Sponsor                                                                 investment needs.
Deutsche Asset Management (Asia) Limited ("DeAM Asia") is the
sponsor for the Deutsche Mutual Fund. Deutsche Asset                    Deutsche Asset Management manages funds on behalf of a wide
Management (Asia) Limited ("DeAM Asia") was incorporated in             range of clients world-wide, including pension funds, charities
1987 and is headquartered in Singapore. DeAM Asia is responsible        and foundations, corporates and insurance companies. As at the
for marketing and sourcing new assets in the region for                 31st December 2004, Deutsche Asset Management had over
investments into Asia and Global range of equity and fixed interest     USD 730 billion of assets under management.
products. DeAM Asia has an Investment Adviser License issued            Deutsche Asset Management captures the talents and experience
by the Monetary Authority of Singapore ("MAS"). It is one of the        of over 40 years of several key market players - most notably
six fund managers granted the Enhanced Fund Manager status              'Morgan Grenfell', 'Bankers Trust' and our European Retails Fund
by MAS and is an Approved Fund Management Company under                 business - 'DWS Investments'. Since 1999 it has operated under
the Central Provident Fund Scheme.                                      one global name of 'Deutsche Asset Management'. On 4th
                                                                        December, 2001 a definitive agreement to acquire the US,
In addition to managing the funds of Asian clients, DeAM Asia
                                                                        European (excluding Threadneedle) and Asian operations of
also manages and advises the Asian assets of Deutsche Asset
                                                                        Scudder from Zurich Financial Services was signed. The addition
Management's UK and Australian pension funds, the Asian portion         of Scudder expanded Deutsche Bank's US presence significantly,
of the Group's global emerging market portfolio's and global small      enhancing the ability to deliver outstanding products and services
company portfolios. Within the Asian region, DeAM Asia has              to Deutsche Bank and Scudder investors worldwide. This
subsidiaries in Hong Kong, Korea, India and a marketing office in       transaction reflects and strengthens Deutsche Bank's
Taiwan.                                                                 commitment to Asset Management as a key strategic focus.
Given below is a brief summary of DeAM Asia's financials:
                                                                        Deutsche Bank Group
Year ended December 31 (US$ '000)                                       With more than Euro 729 billion in assets and approximately
Description              2004        2003        2002      2001         77,000 employees, Deutsche Bank offers its clients unparalleled
                         Dec.                                           financial services in around 74 countries throughout the world.
                      (Unaudited)                                       The Bank aspires to be a leading global provider of integrated
                                                                        financial solutions for demanding clients and the pre-eminent bank
Total Income             19,967      20,675     16,508     12,662       in Germany, generating exceptional value for its shareholders and
                                                                        people.
Profit Before Tax        3,394        332        1,472     1,392
                                                                        Deutsche Bank ranks among the global leaders in corporate
Profit After Tax         3,078        244        1,973     1,096        banking and securities, transaction banking, asset management,
                                                                        and private wealth management, and has a significant private &
Free Reserves /                                                         business banking franchise in Germany and other selected
(Accumulated                                                            countries in Continental Europe.
Losses)                  6,401       5,624       5,276     3,097
                                                                        Deutsche Bank in India
Net Worth                16,022      14,815     12,992     10,332
                                                                        Deutsche Bank established its first branch in India in 1980. Today,
Earnings per                                                            Deutsche Bank operates in India through its five full-fledged
Share (US$)               0.20        0.02       0.15       0.08        branches. With a staff of over four hundred people in five cities,
                                                                        Deutsche Bank India has a presence in the key geographic Indian
Book Value per                                                          locations. Armed with its in-depth knowledge of the Indian
Share (US$) (NW /                                                       economy and the business environment, as well as by leveraging
No. of Shares)            1.02        0.95       0.97       0.77        on its international network, Deutsche Bank is well positioned to
                                                                        offer its clients state-of-the-art advisory services in India.
Dividend                25.56%          0          0      27.23%
                                                                        The bank has a strong presence in Corporate Banking, International
Paid Up Capital                                                         Trade Finance, Global Markets, Custody Services, Global Cash
 (Equity)                9,621       9,191       7,716     7,235        Management, Corporate Trust & Agency Services, and, Private
                                                                        Wealth Management. The bank presently is recognized as India's
 (Preference)               --          --         --        --         leading foreign exchange dealer, ranking among the top three in




11
derivatives sales and is one of the top three foreign banks in GOI       Trust Deed. The duties and responsibilities of the Trustee
securities trading. Deutsche Bank India has also been voted by           and the material provisions of the Trust Deed, inter alia,
Finance Asia as the "The Best Foreign Investment Bank in India-          are as under:
2004"
                                                                     l   The Trustee has exclusive ownership of the Trust Fund
                                                                         and holds the same in trust and for the benefit of Unit
C) The Trustee Company (the Trustee)                                     Holders.
The Sponsor has appointed Deutsche Trustees Service (India)
                                                                     l   The Trustee reserves the right to declare dividend under
Private Limited as the Trustees for the Deutsche Mutual Fund.
                                                                         the Scheme depending on the net distributable surplus
1)   The name, addresses and other details of the Board of               available under the Option. It should, however, be noted
     Directors of Deutsche Trustees Service (India) Private              that actual distribution of dividends and the frequency
     Limited are mentioned below:                                        of distribution will depend, inter-alia, on the availability
                                                                         of distributable surplus and will be entirely at the
     Gunit Chadha                              Chairman                  discretion of the Trustee.
     B.A , MBA IIM(A),                         Deutsche Equities
     Advanced Management Programme,             (India) Pvt. Ltd.    l   The Trustee shall ensure before the launch of any
     Wharton School, USA                       Deutsche Network          Scheme that the Asset Management Company has a)
     Flat No.181, 18th Floor,                   Services Pvt. Ltd.       systems in place for its back office, dealing room and
     Maker Tower Apartment                     Deutsche                  accounting; b) appointed all key personnel including fund
     A & B, Cuffe Parade,                       Securities India         manager(s) for the Scheme and submitted to the Trustee
     Mumbai 400 005.                            Pvt. Ltd.                their resume containing particulars of their educational
     CEO - Deutsche Bank, India                Trustee -                 qualifications and past experience in the securities
                                               Sujaya Foundation         market within fifteen days of their appointment; c)
                                               Member of                 appointed auditors to audit the accounts of the Scheme;
                                               Governing Board -         d) appointed a compliance officer who shall be
                                               Infinity Business         responsible for monitoring the compliance of the SEBI
                                               School, New Delhi         Act, rules and regulations, notifications, guidelines,
                                                                         instructions etc. issued by SEBI or the Central
     M. H. Kania                               Director
                                                                         Government and for redressal of investors' grievances;
     B. A. (Hons), LL.B.
                                                                         e) appointed registrars and laid down parameters for
     6-B, SAMTA
                                                                         their supervision; f) prepared a compliance manual and
     Gen. J. Bhosale Marg,
                                                                         designed internal control mechanisms including internal
     Mumbai 400 021
                                                                         audit systems; and g) specified norms for empanelment
     Former Chief Justice -
                                                                         of brokers and marketing agents. The Trustee shall
     Supreme Court of India.
                                                                         ensure that the transactions concerning the Fund are
     Y. B. Desai                               Director                  in accordance with the Trust Deed and the Regulations.
     B.A. (Hons), CAIIB                        Dishman
     901, Dheeraj Gaurav Heights,               Pharmaceutical       l   The Trustee shall not be liable to the Mutual Fund or
     Building No. 2 'A' Wing                    & Chemicals Ltd.         the Unitholders, if the Mutual Fund suffers a decline in
     At Link Road, Andheri (West),             LIC Housing               its net asset value or if any share or other security
     Mumbai 400 053                             Finance                  comprised in the Trust Fund depreciates in its market
     Former Managing Director                   Company Ltd.             value or fails to achieve any increase therein, unless
     - Export Import Bank of India.            Kabra Extrusion           such decline, depreciation or failure is caused by the
                                                Tecnik Ltd.              willful default or gross negligence of the Trustee.

     A. S. Mitra                               Director              l   The Trustee shall not be under any liability on account
     B.A., A.C.I.I. (London)                   Avery India Ltd.          of anything done or omitted to be done or suffered to
     D5, Silver Valley No. 2,                   (Chairman-Non            be done by the Trustee in good faith, bona fide and
     Shivaji Maharaj Road,                      Executive)               after due diligence and care, in accordance with or on
     Vakola, Santacruz (E),                                              the advice of the AMC or any other professional person,
     Mumbai 400 055                                                      firm or company.
     Former Chairman &                                               l   For avoidance of doubt, it is hereby agreed and declared
     Managing Director -                                                 that references to the Trustee in this clause shall be
     New India Assurance Company.                                        deemed to include references to the officers, servants
     Debabrata Bhadury                         Director                  and delegates of the Trustee.
     B.A. (Economics Hons.),                   USV Ltd., Mumbai      l   The Trustee shall ensure that the Fund and the schemes
     Postgraduate Management Diploma                                     floated thereunder and managed by the AMC are in
     9A Belvedere Court,                                                 accordance with the Trust Deed and the Regulations,
     Sane Guruji Marg,                                                   directions and guidelines issued by SEBI, the Stock
     Mumbai 400 011                                                      Exchanges and other regulatory agencies.
     Former Managing Director
     & Vice Chairman-                                                l   The Trustee shall ensure that the transactions
     Hoechst Marion Roussell Ltd.                                        concerning the Fund are in accordance with the Trust
                                                                         Deed and the Regulations.
     Mr. Gunit Chadha is associated with the Sponsors.
                                                                     l   The Trustee shall ensure that the investment of the Trust
     Mr. M. H. Kania, Mr. Y. B. Desai, Mr. A. S. Mitra and               Fund and Unit Capital of each scheme is made only in
     Mr. Debabrata Bhadury, are independent trustees. Thus, 4            the permitted securities and within limits prescribed by
     out of the 5 trustees are independent trustees.                     the Trust Deed, the Regulations, and the offer document
                                                                         of the concerned scheme.
2)   Rights, Duties & Responsibilities of the Trustee
     and the material provisions of the Trust Deed                   l   The Trustee shall hold in safe custody and preserve the
                                                                         property of the Fund and the various schemes of the
     l    The Rights, Duties and Responsibilities of the Trustee         Fund.
          shall be consistent with the Regulations and the Trust
          Deed. The Trustee shall discharge such duties and          l   The Trustee shall ensure that the income due to be paid
          responsibilities as provided in the Regulations and the        to the Scheme is collected and properly accounted for




Offer Document      Deutsche Fixed Term Fund                                                                                     12
         and shall claim any repayment of tax and holding any           l   The Trustee shall ensure that all service providers
         income received in trust for the holders in accordance             are holding appropriate registrations from the Board
         with the Trust Deed and the Regulations.                           or concerned regulatory authority.
     l   The Trustee shall not acquire or allow the Asset               l   The Trustee shall arrange for test checks of service
         Management Company to acquire any asset out of Trust               contracts.
         Fund, which involves assumption of unlimited liability
         or results in encumbrance of Trust Fund.                       l   The Trustee shall immediately report to the Board
                                                                            of any special developments in the Fund.
     l   The Trustee shall be bound to make such disclosures
         to the Unit Holders as are essential in order to keep          The Trustee shall exercise Specific Due Diligence in the
         them informed about any information, which may have            following manner:
         an adverse bearing on their investments.
                                                                        l   Obtain internal audit reports at regular intervals from
     l   The Trustee shall provide or cause to provide such                 independent auditors appointed by the Trustee.
         information to Unit Holders and SEBI, as may be
                                                                        l   Obtain compliance certificates at regular intervals
         specified by SEBI from time to time.
                                                                            from the AMC.
     l   The Trustee shall act in the best interest of Unit Holders.
                                                                        l   Hold meeting of Trustee more frequently.
     l   The Trustee, in carrying out its responsibilities under
         the Trust Deed and Regulations, shall maintain arm's           l   Consider the reports of the independent auditor and
         length relationship with other companies, institutions             compliance reports of AMC at the meetings of
         or financial intermediaries or any body corporate with             trustees for appropriate action.
         which it is associated.                                        l   Maintain records of the decisions of the Trustee at
     l   A Director of the Trustee shall not participate in the             their meetings and of the minutes of the meetings.
         meetings of the Trustee or in any decision making              l   Prescribe and adhere to a code of ethics by the
         process in respect of any investments for the Fund in              Trustee, AMC and its personnel.
         which he may be interested.
                                                                        l   Communicate in writing to the AMC of the
     l   The Trustee shall abide by the code of conduct specified           deficiencies and checking on the rectification of
         in the Regulations.                                                deficiencies.
     l   The Trustee may amend the Trust Deed with the prior
                                                                        l   Notwithstanding the aforesaid, the Trustee shall not
         approval of SEBI and the Unit Holders where it affects
                                                                            be held liable for acts done in good faith if they have
         the interest of Unit Holders.
                                                                            exercised adequate due diligence honestly.
     l   The Trustee may, subject to the Regulations, prescribe
                                                                        l   The Independent Directors of the Trustee or AMC
         such terms and make such rules for the purpose of
                                                                            shall pay specific attention to the following, as may
         giving effect to the provisions of the Scheme with power
                                                                            be applicable, namely :
         to the Investment Manager to add to, alter or amend all
         or any of the terms and rules that may be framed from          l   The Investment Management Agreement and the
         time to time. However, the Trustee may alter / modify /            compensation paid under the agreement.
         change in the Fundamental Attributes of the Scheme
         or the trust or fees and expenses payable or any other         l   Service contracts with affiliates - whether the AMC
         change which would modify the Scheme or affect the                 has charged higher fees than outside contractors for
         interest of the Unit Holders, in accordance with the               the same services.
         applicable Regulations from time to time.
                                                                        l   Selection of the AMC's independent directors.
     l   The Trustee will call for a meeting of the Unit Holders
                                                                        l   Securities transactions involving affiliates to the
         of the Scheme, as required by the Regulations for the
                                                                            extent such transactions are permitted.
         time being in force, whenever it is required by SEBI to
         do so in the interest of the Unit Holders, or if the Trustee   l   Selecting and nominating individuals to fill
         determines to modify the Scheme or prematurely                     independent directors vacancies.
         redeem the Units or wind up the Scheme.
                                                                        l   Code of ethics must be designed to prevent
     l   If any difficulty arises in giving effect to the provisions        fraudulent, deceptive or manipulative practices by
         of this Scheme, the Trustee may do anything not                    insiders in connection with personal securities
         inconsistent with such provisions, subject to the                  transactions.
         Regulations, which appear to be necessary, desirable
         or expedient, for the purpose of removing such difficulty.     l   The reasonableness of fees paid to Sponsors, AMC
                                                                            and any others for services provided.
     l   In addition to the duties and responsibilities provided in
         the Regulations, the material provisions of SEBI (Mutual       l   Principal underwriting contracts and their renewals.
         Funds) (Amendment) Regulations, 1999 provide how
         the Trustee shall exercise due diligence and are as under.     l   Any service contract with the associates of the AMC.

     The Trustee shall exercise General Due Diligence in the            l   Notwithstanding anything contained in sub-
     following manner:                                                      regulations (1) to (25) of regulation 18 of the
                                                                            Regulations, the Trustees shall not be held liable for
     l   The Trustee shall be discerning in the appointment of              acts done in good faith if they have exercised
         the directors on the Board of the AMC.                             adequate due diligence honestly.
     l   The Trustee shall review the desirability of continuance       l   The Regulations provide that the meetings of the
         of the AMC if substantial irregularities are observed in           Trustees shall be held at least once in every 2 months
         any of the schemes and shall not allow the AMC to                  and at least 6 such meetings will be held every year.
         float new schemes.                                                 Further, as per the Regulations, for the purposes of
     l   The Trustee shall ensure that the trust property is                constituting the quorum for the meetings of the
         properly protected, held and administered by proper                Trustees, at least one Independent Trustee or
         persons and by a proper number of such persons.                    Director should be present during such meetings.



13
The supervisory role of the Trustees will be discharged by            private limited company incorporated under the Companies Act,
reviewing the information and the operations of the Fund based        1956 on March 21, 2002. Deutsche Asset Management (Asia)
on the report submitted at the meetings of the Trustees, by           Ltd. holds 75% of the paid up equity capital of the company and
reviewing the reports submitted by the Internal Auditor and the       the balance 25% is held by United Associates Holdings India
bi-monthly and half yearly compliance reports. The Trustees will      Private Limited. United Associates Holdings India Private Limited
also conduct a detailed review of half-yearly and annual accounts     is an Investment and Financial Services company incorporated in
of the Scheme of the Fund and discuss the matters arising             India under the Companies Act, 1956.The head office and the
therefrom with the Statutory Auditors of the Scheme of the Fund.      registered office of the DeAM India is DB House, Hazarimal
                                                                      Somani Marg, Fort, Mumbai - 400 001, India. The Asset
No amendment to the Trust Deed shall be carried out without           Management Company was approved to act as the Asset
prior approval of SEBI and Unitholders' approval / consent will be    Management Company for the Mutual Fund by SEBI on October
obtained where it affects the interests of Unitholders as per the     29, 2002.
procedure / provisions laid down in the Regulations.
                                                                      The Mutual Fund has entered into an Investment Management
The Trustees may require or give verification of identity or other    Agreement with the Asset Management Company dated May
details regarding any subscription or related information from / of   29, 2002 pursuant to which the Asset Management Company
the Unitholders as may be required under any law, which may           will act as investment manager of the Mutual Fund's assets.
result in delay in dealing with the applications, Units, benefits,
distribution, etc.                                                    Besides the offering and management of collective investment
                                                                      schemes, the Asset Management Company may undertake
3)   Trusteeship Fees                                                 activities in the nature of management and advisory services to
Pursuant to the Trust Deed constituting the Fund, the Fund is         offshore funds, pension funds, provident funds, venture capital
authorised to pay Deutsche Trustee Services (India) Private Limited   funds, management of insurance funds and financial consultancy
a fee for their services in such capacity or such other sum as may    and exchange of research on a commercial basis.
be mutually agreed between the Sponsor and the Board of
                                                                      The AMC will manage the Scheme(s) of the Fund, including those
Trustees from time to time, subject to the SEBI Regulations. It
                                                                      mentioned in this Offer Document, in accordance with the
has been decided to charge the Trusteeship fees in proportion to
                                                                      provisions of IMA, the Trust Deed, the SEBI Regulations and the
the net assets of each of the schemes of the fund. Trustee fees
                                                                      objectives of each of the Scheme(s).
will be charged at 0.01% of the assets of the scheme.
                                                                      In accordance with the SEBI Regulations, an asset management
4)   Meetings held during the last financial year                     company, subject to certain conditions, is also permitted to
The board of directors of the trustee company met on 9 occasions      undertake activities in the nature of portfolio management
in the financial year 2003-2004.                                      services, management and advisory services to offshore funds,
                                                                      pension funds, provident funds, venture capital funds,
D) The Asset Management Company ("AMC")                               management of insurance funds, financial consultancy and
                                                                      exchange of research on commercial basis and such other
1)   Constitution                                                     activities as may be permitted, by SEBI, from time to time. Subject
Deutsche Asset Management (India) Pvt. Ltd. (DeAM India) has          to these activities being assessed as desirable and economically
been appointed the Asset Management Company of the Mutual             viable, the AMC may undertake any or all of these activities after
Fund by the Trustees. The Asset Management Company is a               satisfying itself that there is no potential conflict of interest.


2)   Board of Directors of the AMC
Sandeep Dasgupta                                                      Director
B. Tech. (Electronics & Telecommunications),
PGDM (IIM Ahmedabad)
B-1, 12F, Harbour Heights,
N. A. Sawant Marg, Colaba,
Mumbai 400 005
Chief Executive Officer -
Deutsche Asset Management (India) Pvt. Ltd.

Kersi M. Gherda                                                       Director
B.Com., ACS, ACA, FCS (England & Wales)                               Aerospace Systems Pvt. Ltd.
9 A, Sterling Apartments,                                             Emerson Network Power India Pvt. Ltd.
38, Pedder Road,                                                      Kotak Mahindra Bank Ltd.
Mumbai 400 026                                                        KM Dastur Reinsurance Brokers Pvt. Ltd.
Chairman - Kotak Mahindra Bank Ltd.                                   Nelito Systems Ltd.
Former Vice Chairman and Managing Director                            Pallonji Leasing Pvt. Ltd.
- Tata Electric Companies.                                            Sanchez Capital Services Pvt. Ltd.
                                                                      Tata Ceramics Ltd.
                                                                      Universal Ferro & Allied Chemicals Ltd.
                                                                      WTI Advanced Technology Ltd.
                                                                      Yashmun Engineers Ltd.
                                                                      Zenta India Pvt. Ltd.

Dileep C. Choksi                                                      Director
B.Com. (Hons), LL.B., (Grad) C.W.A., F.C.A.                           CCC Services Co. Pvt. Ltd.
E-7, Sea Face Park,                                                   ICICI Lombard General Insurance Co. Ltd.
50, Bhulabhai Desai Road,                                             Aon Global Insurance Services Pvt. Ltd.
Mumbai 400 026.                                                       National Commodity & Derivatives Exchange Limited
Partner - Deloitte Haskins & Sells, Mumbai                            NSEIT




Offer Document      Deutsche Fixed Term Fund                                                                                         14
Vijay P. Gokhale                                                     Director
B.Sc., B.Sc.(Eng), London, DLC Hons (Mech.Engg)                      Carrier Aircon Ltd.
12, Usha Kiran, M.L. Dahanukar Marg,                                 Fosters India Ltd.
Mumbai 400 026                                                       Franke India Pvt. Ltd.
Former Chairman and Managing Director                                Krishvidur Services Pvt. Ltd.
- Union Carbide India Ltd.                                           Sunline Industries Ltd.
                                                                     TQM International Pvt. Ltd.
                                                                     T4T Consultants Pvt. Ltd.
                                                                     Vista Technical Services Pvt. Ltd.

Carl Saldanha                                                        Director
B. Tech (Hons.), I.I.T., Mumbai                                      United Associates Holdings India Pvt. Ltd.
M.B.M., Asian Institute of Management, Phillippines
Cool Shanagh, No. 602, N Gamadia Road,
Mumbai - 400 026
Executive Vice President - Finance
Jet Airways (India) Ltd.

l    Mr. Sandeep Dasgupta and Mr. Carl Saldanha are associated with the Sponsors.
l    Mr. Kersi M. Gherda, Mr. Dileep C. Choksi and Mr. Vijay P. Gokhale are Independent Directors.
l    Thus 3 out of the 5 directors are independent directors.


3)   Powers, Duties and Responsibilities of the AMC                      l    Fixing sales and re-purchase prices, and calculating Net
     The powers, duties and responsibilities of the AMC shall be              Asset Value for Units, consistent with the Regulations.
     governed by the Regulations and the Investment                      l    Setting up an effective establishment for servicing of
     Management Agreement. The AMC, in the course of                          Unitholders under the various Scheme(s) and also to
     managing the affairs of the Mutual Fund, has the powers,                 protect the interest of the Unitholders.
     inter alia for:
                                                                         l    Generally doing all acts, deeds, matters and things
     Powers :                                                                 which are necessary for any object, purpose or in relation
                                                                              to the Mutual Fund in any manner or in relation to any
     l   Floating Scheme(s) of the Mutual Fund after approval
                                                                              scheme of the Mutual Fund.
         of the same by the Trustees and investing and managing
         the funds mobilised under various Scheme(s), in
                                                                         Duties and Responsibilities:
         accordance with the provisions of the Trust Deed and
         the Regulations.                                                l    The AMC shall take all reasonable steps and exercise
                                                                              due diligence to ensure that the investment of funds
     l   Evaluating investment opportunities for further                      pertaining to any scheme is not contrary to the
         investments by the Mutual Fund.                                      provisions of the SEBI Regulations, and the Trust Deed.
     l   Evaluating and issuing orders and instructions with             l    The AMC shall exercise due diligence and care in all its
         respect to the acquisition and disposition of investments            investment decisions as would be exercised by other
         and risk positions/exposures.                                        persons engaged in the same business.
     l   Issuing and ensuring due compliance of instructions to          l    The AMC shall be responsible for the acts of
         the custodian and the Mutual Fund's brokers, agents                  commissions or omissions by its employees or the
         including registrars and transfer agents.                            persons whose services have been procured by the
     l   Issuing, selling, repurchasing and cancelling the Units              AMC.
         as per the terms of the respective Scheme(s) of the             l    The AMC shall submit to the Trustees quarterly reports
         Mutual Fund.                                                         of each year on its activities and the compliance with
     l   Managing the Mutual Fund Scheme(s) independently                     the SEBI Regulations.
         of other activities and taking adequate steps to ensure         l    The Trustees at the request of the AMC may terminate
         that the interests of Unitholders are not being                      the assignment of the AMC at any time provided that
         compromised with those of any other Scheme(s) or any                 such termination shall become effective only after the
         of its other activities.                                             Trustees have accepted the termination of assignment
     l   Opening and operating bank accounts in the name and                  and communicated their decision in writing to the AMC.
         on behalf of each scheme in relation to the investments         l    Notwithstanding anything contained in any contract or
         made by the Mutual Fund.                                             agreement of termination, the AMC or its directors or
     l   Fixing record dates or book closure periods for the                  other officers shall not be absolved of liability to the
         purpose of effecting transfer of Units and determining               Mutual Fund for their acts of commission or omissions,
         eligibility for dividends, bonus, rights, privileges,                while holding such position or office.
         preferences, reservations or other entitlements or              l    The AMC shall not through any broker associated with
         accretions.                                                          the Sponsor, purchase or sell securities, which is
     l   Providing information to SEBI and the Unitholders as                 average of 5% or more of the aggregate purchases and
         required under the Regulations or as otherwise required              sales of securities made by a mutual fund in all its
         by SEBI.                                                             Scheme(s). Provided that for these purposes, aggregate
                                                                              purchase and sale of securities shall exclude sale and
     l   Receiving, holding in trust, or as agent or nominee of               distribution of Units issued by the Mutual Fund. Provided
         the Trustees, improving, developing, using, selling,                 further that the aforesaid limit of 5% shall apply for a
         transferring, exchanging, assigning, dealing, trading in             block of any 3 months.
         and managing all assets and all accretions thereto and
         endeavouring to earn adequate returns on them for and           l    The AMC shall not purchase or sell securities through
         on behalf of the Trust.                                              any broker (other that a broker not associated with the




15
        sponsor) which is average of 5% or more of the                           research on commercial basis if any of such
        aggregate purchases and sale of securities made by                       activities are not in conflict with the activities of
        the mutual fund in all its Scheme(s), unless the AMC                     the mutual fund without the prior approval of the
        has recorded in writing the justification for exceeding                  Trustees and SEBI. Provided that the AMC may
        the limit of 5% and reports of all such investments are                  itself or through its subsidiaries undertake such
        sent to the Trustees of such mutual fund on a quarterly                  activities if it satisfies SEBI that the key personnel
        basis. Provided that the aforesaid limit shall apply for a               of the AMC, the systems, back office, bank and
        block of 3 months.                                                       securities accounts are segregated activity wise
                                                                                 and there exists systems to prohibit access to
    l   The AMC shall not utilize the services of the Sponsor
                                                                                 inside information of various activities. Provided
        or any of its associates, employees or their relatives,
                                                                                 further that the AMC shall meet capital adequacy
        for the purpose of any securities' transactions and
                                                                                 requirements, if any, separately for each such
        distribution and sale of securities, provided that the AMC
                                                                                 activity and obtain separate approval, if necessary
        may utilise such services if disclosure to that effect is
                                                                                 under the relevant regulations;
        made to the Unitholders and the brokerage or
        commission paid is also disclosed in the half yearly                l    Not invest in any of its Scheme(s) unless full
        annual accounts of the Mutual Fund.                                      disclosure of its intention to invest has been made
                                                                                 in the offer documents.
    l   The AMC shall file with the Trustees the details of
        transactions in securities by key personnel of the AMC              l    Not be entitled to charge any fees on its investment
        in their own name or on behalf of the AMC and shall                      in that scheme.
        also report to SEBI, as and when required by SEBI.
                                                                            l    Not acquire any of the assets out of the Trust
    l   In case the AMC enters into any securities' transaction                  Funds, which involves the assumption of any
        with any of its associates a report to that effect shall be              liability which is unlimited or which may result in
        sent to the Trustees at their next meeting.                              encumbrance of the scheme property in any way.
    l   In case any company has invested more than 5% of                    l    Not be liable to the Trustee for any error of
        the net asset value of a scheme, the investment made                     judgment or mistake of law or for any loss suffered
        by that scheme or by any other scheme of the same                        in connection with the subject matter of the IMA,
        mutual fund in that company or its subsidiaries shall be                 unless such error of judgment or mistake
        brought to the notice of the Trustees by the AMC and                     constitutes or such loss is caused by any acts of
        be disclosed in the half yearly / annual accounts of the                 commission or omission or by fraud or willful
        respective Scheme(s) with justification for such                         default or gross negligence of the AMC or any of
        investment provided that the latter investment has been                  its agents or delegates. Without prejudice of the
        made within 1 year of the date of the former investment                  generality of the foregoing, in particular (but without
        calculated on either side.                                               limitation) the AMC shall not be liable to the Mutual
                                                                                 Fund for any loss which may be sustained in the
    l   The AMC shall file with the Trustees and SEBI
                                                                                 purchase, holding or sale of any investments or
        l    Detailed bio-data of all its directors along with their             other assets by the mutual fund or on any of its
             interest in other companies within 15 days of their                 assets as a result of loss, delay, misdelivery or error
             appointment; and any change in the interest of                      in transmission of cabled, telexed, telecopied,
             directors every 6 months.                                           facsimiled, telegraphic or other communication
                                                                                 unless such loss arose by any acts of commission
        l    A quarterly report to the Trustees giving details and
                                                                                 or omission or from fraud, bad faith, willful default
             adequate justification about the purchase and sale
                                                                                 or gross negligence in the performance or non-
             of securities of the group companies of the Sponsor
                                                                                 performance of its duties as mentioned in the IMA.
             or the AMC as the case may be, by the Mutual
             Fund during the quarter.                                       l    Not be liable to the Trustee in the event that the
                                                                                 Mutual Fund suffers a decline in its net asset value
    l   Each director of the Asset Management Company shall
                                                                                 or fails to achieve any increase therein unless such
        file the details of his transactions of dealing in securities
                                                                                 decline or failure is caused by any acts of
        with the trustees on a quarterly basis in accordance
                                                                                 commission or omission or by the default or
        with guidelines issued by SEBI from time to time.
                                                                                 negligence of the AMC, a bona fide error of
    l   The AMC shall not appoint any person as key personnel                    judgment not being regarded as default or
        who has been found guilty of any economic offence or                     negligence nor as an act of commission or
        involved in violation of securities laws.                                omission.
    l   The AMC shall appoint registrars and share transfer             l   The independent directors of the AMC shall pay specific
        agents who are registered with SEBI. Provided if the                attention to the following as may be applicable, namely:
        work relating to the transfer of Units is processed in-         l   The Investment Management Agreement and the
        house, the charges at competitive market rates may                  compensation paid under the agreement.
        be debited to the Scheme and for rates higher than the
        competitive market rates, prior approval of the Trustees        l   Service contracts with affiliates - whether the AMC has
        shall be obtained and reasons for charging higher rates             charged higher fees than outside contractors for the
        shall be disclosed in the annual accounts.                          same services.

    l   The AMC shall abide by the Code of Conduct as                   l   Securities transactions involving affiliates to the extent
        specified in the Fifth Schedule of the SEBI Regulations.            such transactions are permitted.

    l   The AMC shall:                                                  l   Code of ethics must be designed to prevent fraudulent,
                                                                            deceptive or manipulative practices by insiders in
        l    Not act as a trustee of any mutual fund                        connection with personal securities transactions.
        l    Not undertake any other business activities except         l   The reasonableness of fees paid to sponsors, Asset
             activities in the nature of portfolio management               Management Company and any others for services
             services, management and advisory services to                  provided.
             offshore funds, pension funds, provident funds,
                                                                        l   Principal underwriting contracts and renewals.
             venture capital funds, management of insurance
             funds, financial consultancy and exchange of               l   Any service contracts with the associates of the AMC.



Offer Document    Deutsche Fixed Term Fund                                                                                          16
4)   Key Employees of the AMC and relevant experience
     Name & Age         Designation          Qualification             Experience
     Sandeep Dasgupta   Chief Executive      l   B. Tech.              Over 17 years of work experience in Financial
     43 Years           Officer                  (Electronics &        Services Industry
                                                 Telecommunications)   l Deutsche Asset Management (India) Private

                                             l   PGDM                    Limited - (Chief Executive Officer )
                                                 (IIM Ahmedabad)       l Alliance Capital Asset Management (India) Private

                                                                         Limited (Country Sales & Marketing Head in charge
                                                                         of National sales, distribution and marketing of
                                                                         Alliance Capital Mutual Funds, January 1997-
                                                                         February 2001)
                                                                       l ITC Financial Services Group (ITC-Peregrine Private

                                                                         Limited as General Manager- Corporate Finance
                                                                         and ITC Classic Finance Limited as Asst. Vice
                                                                         President- Investment Banking & Retail Sales,
                                                                         October 1993- January 1996)
                                                                       l Enam Financial Consultants Pvt. Limited (Senior

                                                                         Manager- Merchant Banking, July 1991-October
                                                                         1993)
                                                                       l Hongkong Bank (Account Manager-Investment

                                                                         Banking, February 1990-July 1991)
                                                                       l ICICI Limited (Senior Officer- Merchant Banking

                                                                         & Corporate Finance, March 1987- February 1990)

     Ashutosh Sharma    Compliance           l   B.Com.                Over 6 years post qualification experience in
     28 Years           Officer &            l   LL.B.                 secretarial, legal & compliance in various
                        Company Secretary    l   ACS                   industries.
                                                                       l Deutsche Asset Management (India) Private

                                                                         Limited (Senior Compliance Analyst from
                                                                         February 2004- till date)
                                                                       l ICICI Securities Limited (Assistant Vice President

                                                                         from April 2001 - January 2004)
                                                                       l Aptech Limited (Secretarial Executive from

                                                                         June 2000 - March 2001)
                                                                       l Mahindra & Mahindra Limited (Management

                                                                         Trainee from October 1998 - January 2000)

     Murali             Head -               l   B. Com.               Over 10 years of experience
     Ramasubramanian    Operations           l   LL.B.                 l Deutsche Asset Management (India) Pvt. Limited -
     33 Years                                                            Head - Fund Operations & Settlements
                                                                         (March 2003 to present)
                                                                       l Alliance Capital Asset Management (India) Pvt. Ltd.

                                                                         Asst. Vice President - Operations
                                                                         (Sept. 1998 to March 2003)
                                                                       l Birla Asset Management (India) Pvt. Ltd. -

                                                                         Executive - Operations (November 1996 to
                                                                         August 1998)
                                                                       l Datamatics Financial Services Pvt. Ltd. -

                                                                         Sr. Officer (September 1993 to September 1996)

     Suresh Soni        Head -               l   B.Sc.                 Over 11 years experience in debt market
     34 Years           Fixed Income         l   ACA                   l Deutsche Asset Management (India) Limited,
                                             l   Grad CWA                Vice President & Head, Fixed Income
                                                                         (Oct. 2002 to present)
                                                                       l Pioneer ITI AMC Limited, Fund Manager and

                                                                         Vice President (April 2000 till Sept. 2002)
                                                                       l Sundaram Newton AMC Limited,

                                                                         Fund Manager, (Sept. 96 to March 2000)
                                                                       l SBI Funds Management Limited,

                                                                         Scheme-in-Charge, (Feb. 1993 till Sept. 1996)
                                                                       l Godrej Soaps Limited, Industrial Trainee

                                                                         (1991-1992)
                                                                       l Shah and Company, Article Trainee,(1989-1991)


     Jignesh Barasara   Asst. Fund Manager   l   MBA                   Over 7 years of experience
     31 Years           - Fixed Income       l   B.Sc.                 l Deutsche Asset Management (India) Private
                                                                         Limited (Asst. FM-FI from Oct. 02 to present)
                                                                       l HDFC Bank - Fixed Income Trader (Period - October

                                                                         1998 till Sept. 2002)
                                                                       l Bank of America - Retail Assets

                                                                         (Period - 1994 - 1996)




17
     Name & Age                Designation         Qualification             Experience

     Ajay Arora                Head - Sales &      l   B.Com.                Over 10 years of experience
     38 Years                  Marketing           l   ACA                   l Deutsche Asset Management (India) Private
                                                   l   ACS                     Limited (Head - Sales & Marketing)
                                                                               (from June 04 to present)
                                                                             l ILFS Investmart India - Head- Equity

                                                                               Sales (Dec.1998 to June 2004)
                                                                             l JM Morgan Stanley - AVP & Head Eastern Region

                                                                               (from July1997 to Nov.1998)
                                                                             l Kotak Mahindra Finance (from June 1994 to

                                                                               June 1997)
                                                                             l S. R. Batliboi & Co. (from June 1993 to April 1994)



5)   Fund Manager                                                  as Auditors for the Scheme offered under this Offer Document.
     Deutsche Fixed Term Fund will be managed by Mr. Suresh        The Trustees also have appointed them as Tax Advisors. The
     Soni.                                                         Trustees have the right to change the Auditors.

     Brief Profile:                                                F) Registrar
     Mr. Suresh Soni, who is a Chartered Accountant and Cost       Karvy Computershare Private Ltd. (KARVY) 46, Road No. 4, Street
     Accountant, has around 10 years of experience in the Mutual   No. 1, Banjara Hills, Hyderabad 500 034 have been appointed as
     Fund Industry. He started his career with SBI Mutual Fund     Registrars and Transfer Agents for the Scheme. The Registrar is
     in 1993 where he was involved in research and fund            registered with SEBI under the SEBI (Registrars to an Issue and
     Management. He later managed Fixed Income funds for           Share Transfer Agents) Regulations, 1993 vide registration number
     around 4 years (Aug. - 1996 - Mar. - 2000) with Sundaram      INR000000221. As Registrars to the Scheme, KARVY will handle
     Newton AMC Ltd. Prior to joining Deutsche Asset               communications with investors, perform data entry services and
     Management, he was Vice-President and Fund Manager-           despatch account statements. The AMC and the Trustees have
     fixed Income at Pioneer ITI AMC Ltd. from April - 2000 to     satisfied themselves that the Registrars have adequate capacity
     Sept - 2002. He was responsible for managing 8 Fixed          to discharge responsibilities with regard to processing of
     Income Schemes including liquid schemes with                  applications and despatching account statements to Unitholders
     approximately Rs. 2,500 crores of Assets under                within the time limit prescribed in the Regulations and also
     Management.                                                   sufficient capacity to handle investor complaints.
     Funds Managed by Mr. Suresh Soni have won several awards
     for performance during the last 5 years.                      G) Custodian
                                                                   JP Morgan Chase Bank, Mafatlal Centre, 9th Floor, Nariman Point,
     Achievements:
                                                                   Mumbai 400 021, India has been appointed as Custodian of the
     l   Deutsche AMC was awared "ICRA Mutual Fund Silver"         Scheme mentioned in the Offer Document. The Custodian has
         (top 10) award in the Long Term Bond Fund category        been registered with SEBI under the SEBI (Custodians of
         for 1 year performance for the period ended December      Securities) Regulations, 1996, and has been awarded registration
         31, 2004.                                                 number IN/CUS/014 dated November 10,1998. The Mutual Fund
     l   Templeton India Income Builder Account (formerly          has entered into a Custodian Service Agreement dated November
         known as Pioneer ITI Income Builder Account) was          01, 2002, with the Custodian and the salient features of the said
         ranked No. 3 out of 37 Debt Funds ranked by the           Agreement are to:
         Business Standard Magazine for 2-year performance in      l   Provide post-trading and custodial services to the Mutual
         September 2002.                                               Fund
     l   Pioneer ITI Monthly Income Plan (MIP) won the best
         MIP award for the year in January 2002.                   l   Ensure benefits due on the holdings are received

     l   Sundaram Bond Saver fund won the best debt fund of        l   Provide detailed management information and other reports
         the year award for period April 99 to March 2000 by           as required by the AMC
         Economic Times / Standard & Poor.
                                                                   l   Maintain confidentiality of the transactions
6)   Compliance Officer                                            l   Be responsible for the loss or damage to the assets belonging
     Ashutosh Sharma                                                   to the Scheme(s) due to negligence on its part or on the part
     Deutsche Asset Management (India) Private Limited                 of its approved agents
     DB House, Hazarimal Somani Marg,
     Fort, Mumbai 400 001                                          l   Segregate assets of each Scheme

7)   Investors Relations Officer                                   The Custodian shall not assign, transfer, hypothecate, pledge,
     Murali Ramasubramanian                                        lend, use or otherwise dispose any assets or property, except
     Head - Fund Operations                                        pursuant to instruction from the Trustees/AMC or under the
     Deutsche Asset Management (India) Private Limited             express provisions of the Custodian Service Agreement. The
     DB House, Hazarimal Somani Marg,                              Custodian may appoint subcustodian(s) for safe keeping of the
     Fort, Mumbai 400 001                                          assets of the Scheme in any country where the Scheme decides
                                                                   to invest.
E) Auditors & Tax Advisors                                         The Custodian will be entitled to remuneration for its services in
Price Waterhouse, Chartered Accountants, 252, Veer Savarkar        accordance with the terms of the Custodian Service Agreement.
Marg, Shivaji Park, Dadar, Mumbai 400 028 have been appointed      The Trustees have the right to change the Custodian, if necessary.




Offer Document        Deutsche Fixed Term Fund                                                                                   18
V. Investment Objectives &                                                5)   Pass through, Pay through or other participation certificates
                                                                               representing interest in a pool of assets including receivables.
   Policies, Investment Pattern                                           6)   Securities created and issued by the Central and State
   & Risk Profile and                                                          Governments and/or repos/reverse repos in such
                                                                               Government Securities as may be permitted by RBI (including
   Limitations of the Scheme                                                   but not limited to coupon bearing bonds, zero coupon bonds
                                                                               and treasury bills).
A) Investment Objectives, Investment Pattern                              7)   Securities guaranteed by the Central and State Governments
   & Risk Profile                                                              (including but not limited to coupon bearing bonds, zero
                                                                               coupon bonds and treasury bills).
1.   Investment Objectives                                                8)   Debt instruments of domestic Government agencies and
     Deutsche Fixed Term Fund is a close ended fixed income                    statutory bodies, which may or may not carry a Central/State
     fund seeking to generate regular returns by investing in a                Government guarantee.
     portfolio of high credit quality fixed/floating rate securities,
     usually maturing in line with the time profile of the fund.          9)   Money market instruments permitted by SEBI, having
                                                                               maturities of up to one year, in call money market or in
     However, there can be no assurance that the investment                    alternative investment for the call money market as may be
     objectives of the Scheme launched will be realized. The                   provided by the RBI to meet the liquidity requirements.
     Scheme does not guarantee/indicate any returns.
                                                                          10) Certificate of Deposits (CDs).
2.   Investment Pattern                                                   11) Commercial Paper (CPs).
     The Scheme will invest in a diversified portfolio of debt and
     money market securities from time to time. The scheme                12) The non-convertible part of convertible securities.
     will invest in a distinct portfolio of securities maturing in line   13) Any other domestic fixed income securities like Call Money/
     with the time profile of the scheme. The scheme does not                 Repo.
     guarantee any returns and there is no assurance that the
     investment objectives of the Scheme will be achieved.                14) Derivative instruments like Interest Rate Swaps/Futures,
                                                                              Forward Rate Agreements, Forward Currency Contracts,
     Under normal circumstances, 100% of the corpus of the                    Currency Futures, Currency Options, Currency Swaps or
     Scheme will be invested in debt and money market                         other derivative instruments, permitted by SEBI, for the
     instruments including in Securitised Debt and the asset                  purpose of hedging and portfolio balancing, as permitted
     allocation of the Scheme will be as under:                               under the Regulations and guidelines.
     Asset Class                      % Max         Risk Profile**        15) Any other like instruments as may be permitted by SEBI
     Domestic Debt                     100%             Low to                from time to time.
     Instruments including                              Medium            The securities mentioned above could be fixed rate or floating
     Government Securities,                                               rate coupon bearing instruments.
     and Money Market
     Instruments and                                                      The above is only indicative and the Board of Trustees reserves
     Securitised Debt*.                                                   the right to change the above pattern in the interest of the
                                                                          investors depending on the market conditions, market
     *    Investment in Securitised Debt would be up to a                 opportunities, applicable regulations and political and economic
          maximum of 70% of the net assets of the scheme.                 factors. It must be clearly understood that the percentages stated
          The scheme will invest in derivatives only for the              above are only indicative and not absolute and that they can vary
          purpose of hedging and portfolio balancing, as permitted        substantially depending upon the perception of the Investment
          under the Regulations and guidelines and the exposure           Manager, the intention being at all times to seek to protect the
          to derivatives shall be restricted to 50% of the net assets     interests of the Unitholders. No prior intimation/indication would
          of the scheme.                                                  be given to investors when the composition/ asset allocations
                                                                          pattern under the scheme change. The Scheme may review the
     **   Risk profile refers to the price risk of the respective         above pattern of investments based on views of the markets
          asset class. Please refer risk factors for more details.        and asset liability management needs. However, at all times the
                                                                          portfolio will adhere to the overall investment objective of the
The scheme will not invest in foreign securities and foreign
                                                                          Scheme. Investors may note that securities that provide higher
securitized debt.
                                                                          returns typically display higher volatility.
Also the scheme will not engage in scrip lending.
                                                                          The Scheme could invest in Fixed/Floating rate Securities issued
Deutsche Fixed Term Fund will invest 100% of the corpus of the            by government, quasi government entities, corporate issuers,
Scheme in debt (fixed income) and money market instruments                structured notes and multilateral agencies. The securities
from time to time. The Scheme retains the flexibility to invest           mentioned above could be listed or unlisted, privately placed,
across all the securities in the debt and money markets. From             secured or unsecured, rated or un-rated and of any maturity, as
time to time it is possible that the portfolio may hold cash.             enabled under SEBI Regulations/ circulars/ RBI. The securities
                                                                          may be acquired through Initial Public Offerings (IPOs), secondary
Money Market Instruments and debt securities will include but
                                                                          market operations, private placement, rights offers or negotiated
will not be limited to:-
                                                                          deals. The Scheme may invest the funds of the Scheme in short-
1)   Corporate debt (of both public and private sector                    term deposits of scheduled commercial banks pending
     undertakings) including Bonds, Debentures, Notes, Strips             deployment. The Scheme may also enter into repurchase and
     etc.                                                                 reverse repurchase obligations in all securities held by it as per
                                                                          the guidelines and regulations applicable to such transactions.
2)   Government of India Securities, State Government Bonds,
     Government Guaranteed Bonds, Public Sector Bonds and                 The Scheme may invest in other debt Schemes managed by the
     Financial Institution & Banking Sector Bonds.                        AMC or in the debt Schemes of any other Mutual Funds, provided
                                                                          it is in conformity to the investment objectives of the Scheme
3)   Securitised Debt (Indian) up to 70% of the net assets of the
                                                                          and in terms of the prevailing Regulations. As per the Regulations,
     scheme.
                                                                          no investment management fees will be charged for such
4)   Discounted Trade Bills.                                              investments and the aggregate inter Scheme investment made



19
by all Schemes of Deutsche Mutual Fund or in the Schemes under               interest rate risk, currency risk, liquidity risk, default risk,
the management of other asset management companies shall                     reinvestment risk etc. While they cannot be done away with,
not exceed 5% of the net asset value of the Deutsche Mutual                  they can be minimized by diversification and effective use
Fund.                                                                        of hedging techniques.
For the present, the Scheme does not intend to enter into                    This innovation on issuance, trading, settlement and risk
underwriting obligations. However, if the Scheme does enter into             management side will considerably enhance the depth and
an underwriting agreement, it would do so after complying with               the width of the Indian debt markets and bring it at par with
the Regulations and with the requisite approval of the Board of              developed markets.
the AMC / Trustee.
                                                                             Investment strategy for securitised debt
Securitisation - Concept                                                     The Fund will predominantly invest only in those
Asset securitisation is a process whereby commercial or                      securitisation issuances, which have AAA rating indicating
consumer credits are packaged and sold in the form of financial              the highest level of safety from credit risk point of view at
instruments. A typical process of asset securitisation involves              the time of making an investment. The fund does not propose
sale of specific Receivables to a Special Purpose Vehicle (SPV)              to limit its exposure to only one asset class or to have asset
set up in the form of a trust or a company. The SPV in turn issues           class based sub-limits as it will primarily look towards the
financial instruments (e.g., promissory notes, pass through                  rating of the offering. The fund will conduct an independent
certificates or other debt instruments) to investors, such                   due diligence on the cash margins, collateralisation,
instruments evidencing the beneficial ownership of the investors             guarantees and other credit enhancements and the portfolio
in the Receivables. The financial instruments are rated by an                characteristic of the securitisation to ensure that the issuance
independent credit rating agency. An Investor's Agent is normally            fits in to the overall objective of the investment in high
appointed for providing trusteeship services for the transaction.            investment grade offerings irrespective of underlying asset
                                                                             class.
On the recommendation of the credit rating agency, additional
credit support (Credit Enhancement) may be provided in order            4.   Risk Control
that the instrument may receive the desired level of rating.
Typically the servicing of the Receivables is continued by the seller        Since investing requires disciplined risk management, the
in the capacity of the Servicer. Cash flows, as and when they are            AMC would incorporate adequate safeguards for controlling
received, are passed onto the investors.                                     risks in the portfolio construction process. The risk control
                                                                             process involves reducing risks through portfolio
Features of securitisation transactions include:                             diversification, taking care however not to dilute returns in
                                                                             the process. The AMC believes that this diversification would
l    Absolute true sale of assets to an SPV (with defined purposes           help achieve the desired level of consistency in returns.
     and activities) in trust for the investors;
                                                                             The AMC aims to identify securities, which offer superior
l    Reliance by the investors on the performance of the assets              levels of yield at lower levels of risks. With the aim of
     for repayment - rather than the credit of the Originator (the           controlling risks, rigorous and in-depth credit evaluation of
     seller) or the Issuer (the SPV);                                        the securities proposed to be invested in, will be carried out
l    Consequent to the above, "Bankruptcy Remoteness" from                   by the investment team of the AMC. Rated Debt instruments
     the Originator;                                                         in which the Scheme invests will be of investment grade as
                                                                             rated by a credit rating agency. The AMC will be guided but
l    Support for timely payments, inter alia, in the form of suitable        not limited by the ratings of Rating Agencies such as CRISIL,
     credit enhancements, if required;                                       CARE, ICRA and Duff and Phelps Credit Rating India Limited
                                                                             or any other rating agencies that may be registered with
l    Securitised debt paper usually achieves a high investment               SEBI from time to time. In case a debt instrument is not
     grade credit rating;                                                    rated, necessary clearance of the Investment Review
                                                                             Committee / Board as per requirements of Regulations/
l    There is a diversification of economic risks as credit risk is
                                                                             Guidelines / Circulars will be obtained for such an investment.
     spread over a diversified group of obligors.
                                                                             The Scheme may also use various derivatives and hedging
Generally available Asset Classes for securitisation in India                products from time to time, as would be available and
l    Commercial Vehicles                                                     permitted by SEBI, in an attempt to protect the value of the
                                                                             portfolio and enhance Unitholders' interest.
l    Auto and Two wheeler pools
                                                                             The Scheme may invest in other debt Schemes managed
l    Mortgage pools (residential housing loans)                              by the AMC or in the debt Schemes of any other Mutual
                                                                             Funds, provided it is in conformity to the investment
l    Personal Loan, credit card and other retail loans                       objectives of the Scheme and in terms of the prevailing
l    Corporate loans/receivables                                             Regulations. As per the Regulations, no investment
                                                                             management fees will be charged for such investments and
The fund may invest in various type of securitisation issuances              the aggregate inter Scheme investment made by all Schemes
as contained in the above table, including but not limited to Asset          of Deutsche Mutual Fund or in the Schemes under the
Backed Securitisation, Mortgage Backed Securitisation, Personal              management of other asset management companies shall
Loan Backed Securitisation, Collateralized Loan Obligation/                  not exceed 5% of the net asset value of the Deutsche Mutual
Collateralized Bond Obligation and so on.                                    Fund.

3.   Investment Strategy                                                     For the present, the Scheme does not intend to enter into
                                                                             underwriting obligations. However, if the Scheme does enter
     The fund management team will endeavor to meet the                      into an underwriting agreement, it would do so after
     investment objective while maintaining a balance between                complying with the Regulations and with the requisite
     safety and return on investments. Under normal market                   approval of the Board of the AMC/Trustee.
     conditions, the Scheme will be managed so as to maintain a
     rupee weighted average portfolio maturity of the scheme            5.   Debt Market in India
     approximately equal to its maturity.
                                                                             The Indian debt market, one of the largest in Asia, is
     Investments in debt instruments carry various risks like                developing rapidly buoyed by a multitude of factors including




Offer Document      Deutsche Fixed Term Fund                                                                                             20
     new instruments, increased liquidity, deregulation of interest      B) Procedure and Recording of Investment
     rates and improved settlement systems. The major players
     in the Indian debt markets today are banks, financial
                                                                            Decisions
     institutions, insurance companies and mutual funds. The             l   The Fund Manager for the Scheme is responsible for making
     instruments in the market can be broadly categorized as                 buy / sell decisions in respect of the securities in the
     those issued by corporates, banks, financial institutions and           respective Scheme(s)' portfolios. The investment decisions
     those issued by state/central governments. The risks                    are made on a daily basis keeping in view the market
     associated with any investments are - credit risk, interest             conditions and all relevant aspects.
     rate risk and liquidity risk. While corporate papers carry credit
                                                                         l   The Board of the AMC has constituted an Investment Review
     risk due to changing business conditions, government
                                                                             Committee that will meet at periodic intervals. The
     securities are perceived to have zero credit risk. Interest rate
                                                                             Investment Review Committee, at its meetings, will review
     risk is present in all debt securities and depends on a variety
                                                                             all investments made by the scheme. The Investment review
     of macroeconomic factors. The largest segment of the Indian
                                                                             committee will consist of Chief Executive Officer, Head Legal
     Debt market consists of the Government of India securities
                                                                             & Compliance, Head Fixed Income and Head Equities. The
     where the daily trading volume is in excess of Rs.3000 crores,
                                                                             board of the AMC may add more members to the committee
     with instrument tenors ranging from short dated Treasury
                                                                             as and when required.
     Bills to long dated securities extending beyond 20 years.
     The Corporate bond market, though relatively less liquid, is        l   Investment Review Committee will review all investments
     also fast developing with an increased participation from the           in unrated securities. The approval of unrated debt
     banks, Financial Institutions, mutual funds, insurance                  instruments will be based on parameters laid down by the
     companies and cash rich corporates. Also there are a large              Board of the AMC and the Trustees. The details of such
     number of instruments available like MIBOR linked bonds,                investments will be communicated by the AMC to the
     commercial papers and medium to long dated fixed and                    Trustees in their periodical reports along with a disclosure
     floating rate bonds. The yield curve tends to be positive               regarding how the parameters have been complied with.
     sloping i.e. yield of shorter dated securities being lower than         Such reporting shall be in the manner prescribed by SEBI
     that of longer dated ones.                                              from time to time. The Committee will also review the
                                                                             performance of the Scheme(s) and general market outlook
     The money markets in India essentially consist of call money            and assess the investment pattern of the scheme with regard
     market (i.e. market for overnight and term money between                to parameters and directions laid down in the investment
     banks and institutions), repo transactions (temporary sale              policy.
     with an agreement to buy back the securities at a future
     date at specified price), commercial papers (CPs, short term        l   It is the responsibility of the AMC to ensure that the
     unsecured promissory note, generally issued by corporates),             investments are made as per the internal / Regulatory
     certificate of deposits (CDs, issued by banks) and Treasury             guidelines, Scheme investment objectives and in the best
     Bills (issued by RBI). A predominantly institutional market,            interest of the Unitholders of the respective Scheme(s).
     the key money market players are banks, financial
     institutions, insurance companies, mutual funds, primary            l   The Fund Manager will make presentations to the Board of
     dealers and corporates.                                                 the AMC and the Trustees periodically, indicating the
                                                                             performance of the Scheme(s). The Fund will adopt Crisil
     The various instruments currently available for investments             Composite Bond Fund Index as the benchmark for the
     are:                                                                    Scheme. Among other things, the Board of AMC and Trustee
                                                                             will review the performance of the Scheme in comparison
     Instruments                  Current Yields          Liquidity          to the benchmark. The Trustees reserve the right to change
                                (as of Feb. 2005)                            the benchmark for evaluation of performance of the scheme
                                                                             from time to time in conformity with the Investment
     Central/State                 4.75%-7.15%            Very high          objectives and appropriateness of the benchmark subject to
     Government securities                                                   SEBI Regulations, and other prevailing guidelines, if any.
     PSU Bonds/Corporate            5.0%-7.50%            Medium -       l   The Fund Manager will bring to the notice of the AMC Board,
     debentures                                           High               specific factors if any, which are impacting the performance
                                                                             of any individual Scheme. The Board on consideration of all
     Securitised debt              5.45%-8.25%            Low -              relevant factors may, if necessary, give appropriate directions
                                                          Medium             to the AMC. Similarly, the performance of the Scheme(s)
                                                                             will be submitted to the Trustees. The Fund Manager will
     Commercial Papers/
                                                                             explain to the Trustees, the details on the Schemes'
     Certificate of deposits         4.90%-6%             High
                                                                             performance vis-à-vis the benchmark returns. The Trustees
     Call/Notice Money                4.50-6%             Very high          and the AMC board may also review the performance of the
                                                                             schemes in the light of performance of the mutual funds
     Repo                             4.50-6%             Very high          industry as published from time to time by independent
                                                                             research agencies and financial newspapers and journals and
     The actual yields will, however, vary in line with general levels       may take corrective action in case of unsatisfactory
     of interest rates and debt / money market conditions                    performance.
     prevailing from time to time.
                                                                         l   All investment decisions shall be recorded in terms of SEBI
     The Scheme may also invest in other fixed income                        Circular No. MFD/CIR/6/73/2000 dated July 27, 2000 or as
     instruments that may be available from time to time. The                may be revised by SEBI from time to time.
     securities above, subject to applicable SEBI regulations, could
     be listed, unlisted, privately placed, secured, unsecured and       C) Change in Investment Pattern
     of any maturity. The securities may be acquired through initial
                                                                         Subject to the Regulations, the asset allocation pattern indicated
     public offerings, secondary market operations, private
                                                                         above for the Scheme(s) may change from time to time, keeping
     placement etc.
                                                                         in view market conditions, market opportunities, applicable
     Derivatives market is rapidly developing. Instruments range         regulations and political and economic factors. It must be clearly
     form overnight interest rate swaps to complex transaction           understood that the percentages stated above are only indicative
     combining foreign exchange as well as interest rate                 and not absolute and that they can vary substantially depending
     exposure. Daily volumes in the derivatives are in the range         upon the perception of the Investment Manager, the intention
     of Rs 3000 crs.                                                     being at all times to seek to protect the interests of the



21
Unitholders, and meet the objective of the relevant Scheme/Plan.          1)   The Scheme shall not invest more than 15% of its NAV in
Such changes in the investment pattern will be for short term                  debt instruments issued by a single issuer rated not below
and defensive considerations.                                                  investment grade by a credit rating agency authorised to
                                                                               carry out such activity under the Securities and Exchange
Provided further and subject to the above, any change in the asset             Board of India Act, 1992 and this limit may be extended to
allocation affecting the investment profile of the Scheme(s) shall             20% of the NAV of the Scheme subject to prior approval of
be effected only in accordance with the provisions of sub                      the Board of the AMC and the Trustees. Investments within
regulation (15A) of Regulation 18 of the Regulations, as detailed              such limits can be made in mortgage backed securitised
below.                                                                         debts which are rated not below investment grade by a credit
                                                                               rating agency registered with SEBI.
D) Change in Fundamental Attributes
In accordance with Regulation 18(15A) of the SEBI Regulations,                 The aforementioned limits shall not be applicable for
the Trustees shall ensure that no change in the fundamental                    investment in government securities & money market
attributes of the Scheme(s) and the Plan / Options thereunder or               instruments.
the trust or fee and expenses payable or any other change which                The Scheme shall not invest more than 10% of its NAV in
would modify the Scheme(s) and the Plan / Options thereunder                   unrated debt instruments issued by a single issuer and such
and affect the interests of Unitholders is carried out unless:                 total investments shall not exceed 25% of the NAV of the
l      A written communication about the proposed change is sent               Scheme. All such investments shall be subject to the prior
       to each Unitholder and an advertisement is given in one                 approval of the Board of the AMC and the Trustee.
       English daily newspaper having nationwide circulation as well      2)   Transfers of investments from one scheme to another
       as in a newspaper published in the language of the region               scheme in the same mutual fund shall be allowed only if:
       where the Head Office of the mutual fund is situated; and
                                                                               a)   such transfers are done at the prevailing market price
l      The Unitholders are given an option to exit at the prevailing
                                                                                    for quoted instruments on spot basis (spot basis shall
       Net Asset Value without any exit load.
                                                                                    have the same meaning as specified by a Stock
Explanation : In terms of the Regulations and circular dated                        Exchange for the spot transaction); and transfers of
February 4, 1998, "Fundamental Attributes" referred above shall                     unquoted securities will be made as per the policy laid
mean:                                                                               down by the Trustee from time to time; and

i)     Type of Scheme                                                          b)   the securities so transferred shall be in conformity with
       l   Open ended / Close ended / Interval Scheme                               the investment objective of the scheme to which such
                                                                                    transfer has been made.
       l   Sectoral Fund / Equity Fund / Balanced Fund / Income
           Fund / Index Fund / Any other type of Fund.                    3)   The Scheme may invest in another scheme under the same
                                                                               AMC or any other mutual fund without charging any fees,
ii)    Investment Objectives
                                                                               provided that aggregate inter-scheme investment made by
       l   Main Objectives - Growth / Income / Both                            all schemes under the same management or in schemes
       l   Investment pattern - The tentative equity / debt / money            under the management of any other asset management
           market breakup with minimum and maximum asset                       company shall not exceed 5% of the net asset value of the
           allocation, while retaining the option to alter the asset           Fund.
           allocation for a short term period on defensive
           considerations.                                                4)   The initial issue expenses in respect of any scheme may not
                                                                               exceed 6% of the Funds raised under that scheme.
iii)   Terms of Issue
                                                                          5)   The Trustee / Scheme shall take delivery of securities
       l   Liquidity provisions such as listing, repurchase,                   purchased and give delivery in case of securities sold and in
           redemption                                                          no case shall engage in short selling or carry forward
       l   Aggregate fees and expenses charged to the Scheme                   transactions or badla finance provided that the Fund shall
                                                                               enter into derivatives transactions in a recognised stock
       l   Any safety net or guarantee provided
                                                                               exchange for the purpose of hedging and portfolio balancing
                                                                               in accordance with the guidelines issued by the SEBI.
E) Portfolio Turnover
Portfolio turnover is defined as the aggregate of purchases and           6)   The Fund shall get the securities purchased / transferred in
sales as a percentage of the corpus of the Scheme during a                     the name of the Fund on account of the concerned scheme,
specified period of time. Portfolio turnover in the Schemes will               wherever the instruments are intended to be of long term
be a function of market opportunities. The economic environment                nature.
changes on a continuous basis and exposes debt portfolio to               7)   Pending deployment of funds of the Scheme in securities in
systematic as well as non-systematic risk. Consequently, it is                 terms of investment objectives of the Scheme, the AMC
difficult to estimate with any reasonable measure of accuracy,                 can invest the funds of the Scheme in short term deposits
the likely turnover in the portfolio. The Investment Manager will              of scheduled commercial banks or in call deposits.
endeavour to optimise portfolio turnover to optimise risk adjusted
return keeping in mind the cost associated with it. A high portfolio      8)   No Scheme of the Fund shall make any investment in
turnover rate is not necessarily a drag on portfolio performance
and may be representative of arbitrage opportunities that exist                a)   any unlisted security of any associate or group company
for scrips / securities held in the portfolio rather than an indication             of the sponsor; or
of a change in AMC's view on a scrip, etc.
                                                                               b)   any security issued by way of private placement by an
                                                                                    associate or group company of the sponsor; or
F) Investment Limitations / Restrictions
As per the Trust Deed read with the Regulations, the following                 c)   the listed securities of group companies of the sponsor
investment restrictions apply in respect of the Scheme at the                       which is in excess of 25% of the net assets.
time of making investments. However, all investments by the               9)   No term loans for any purpose may be advanced by the Fund
Scheme will be made in accordance with the Investment                          and the Fund shall not borrow except to meet temporary
Objective, Investment Focus, Investment Pattern described above                liquidity needs of the Scheme for the purpose of repurchase,
as well as the Regulations, including Schedule VII thereof.                    redemption of Units or payment of interest or dividends to




Offer Document       Deutsche Fixed Term Fund                                                                                            22
     Unit Holders, provided that the Fund shall not borrow more      invest either directly or indirectly in the Scheme. The funds
     than 20% of the net assets of the Scheme and the duration       managed by these affiliates, associates, the sponsor, Subsidiaries
     of such a borrowing shall not exceed a period of six months.    of the Sponsor and / or the AMC may acquire a substantial portion
                                                                     of the Scheme's units and collectively constitute a major
10) The Fund may lend securities in accordance with "Guidelines      investment in the Scheme. Accordingly, selling of Units held by
    for Participation by Mutual Funds in Stock Lending" issued       such funds, affiliates / associates and sponsor may have an
    by SEBI or any amendments thereto.                               adverse impact on the Units of the Scheme, because the timing
11) The Scheme may also use various derivative and hedging           of such selling may impact the ability of other Unitholders to sell
    products from time to time, as are available and permitted       their units. Such investments and movement thereof shall be
    by SEBI, in an attempt to protect and enhance the interests      disclosed to the unitholders on a half yearly basis. The AMC shall
    of the Unit Holders at all times.                                not charge any fees on such Investments by the AMC in the
                                                                     units of its Schemes, in accordance with sub clause (3) of
12) If any company invests more than 5 percent of the NAV of         regulation 24 of the Regulations and shall charge fees on such
    the Scheme then investment made by any other scheme of           amounts in future only if the SEBI Regulations so permit. However,
    the Fund in that company or its subsidiaries will be disclosed   AMC shall charge fees on investment by sponsor, and investment
    in accordance with the Regulations.                              companies managed by them, their affiliates, their associate
                                                                     companies and subsidiaries.
13) Debentures, irrespective of any residual maturity period
    (above or below 1 year), shall attract the investment
    restrictions as applicable for debt instruments as specified
                                                                     J) Hedging Policies in connection with
    under Clause 1 and 1A of the Seventh Schedule to the                Trading in Derivatives
    Regulations or as may be specified by SEBI from time to          SEBI vide its circular MFD/CIR/011/061/2000 dated 01 February,
    time.                                                            2000, permitted MF's to participate in derivative trading subject
14) The Scheme will comply with any other Regulations                to the observance of guidelines issued by SEBI. The fund may
    applicable to the investments of Mutual Funds from time to       use various derivatives and hedging products/ techniques to
    time.                                                            insulate the portfolio from excessive risks, for the purpose of
                                                                     hedging and balancing the portfolio; as permitted under the
These investment limitations / parameters as expressed / linked      regulation and the guidelines. The trustees will take reasonable
to the net asset / net asset value / capital shall in the ordinary   steps to ensure that the AMC possess adequate expertise and
course apply as at the date of the most recent transaction or        infrastructure for derivative trading.
commitment to invest, and changes do not have to be effected
merely because, owing to appreciation or depreciation in value       Derivative instruments may take form of Interest Rate Swaps/
or by reason of the receipt of any rights, bonuses or benefits in    Futures, Forward Rate Agreements, Forward Currency Contracts,
the nature of capital or of any scheme of arrangement or for         Currency Futures, Currency Options, Currency Swaps or other
amalgamation, reconstruction or exchange, or at any repayment        derivative instruments, permitted by SEBI/RBI, for the purpose
or redemption or other reason outside the control of the Fund,       of hedging and portfolio balancing or for its efficient management,
any such limits would thereby be breached. If these limits are       as permitted under the Regulations and guidelines and do all such
exceeded for reasons beyond its control, AMC shall adopt as a        acts as may be incidental to the purpose.
priority objective the remedying of that situation, taking due       The risks and returns ensuring from such investments are
account of the interests of the Unit Holders.                        explained hereinbelow:
The Trustee Company / AMC may alter these above stated
limitations from time to time, and also to the extent the            Interest rate Swaps
Regulations change, so as to permit the Scheme to make its           An interest rate swap is an agreement whereby two parties agree
investments in the full spectrum of permitted investments in order   to exchange periodic interest payments. The amount of interest
to achieve its investment objective.                                 payments exchanged is based on some predetermined principal,
                                                                     called notional principal amount. The amount each counter party
G) Investment of Subscription Money                                  pays to the other is the agreed upon periodic interest rate
                                                                     multiplied by the notional principal amount. The only amount that
The Scheme may invest subscription money received from the
                                                                     is exchanged between the parties are the interest payment, not
investing public in money market instruments in addition to any
                                                                     the notional principal amount.
other permissible form of investment, before finalisation of the
allotment of Units. The AMC, on being satisfied of the receipt of    A Forward Rate Agreement, on the other hand, is an agreement
the minimum subscription amount, can commence investment             between two counter parties to pay or to receive the difference
out of the funds received in accordance with the investment          between an agreed fixed rate (the FRA rate) and the interest rate
objective of the Scheme and as per existing Regulations. The         prevailing on a stipulated future date based on a notional amount,
income earned out of such investments would be merged with           for an agreed period.
the income of the Scheme, on completion of the allotment of the
Units.                                                               In the most common type of swap one party agrees to pay the
                                                                     other party fixed interest payments at designated dates for the
H) Depository                                                        life of contract. The other party agrees to make interest rate
                                                                     payments that float with some index.
Securities of the Scheme will be held either in physical or
dematerialised form. In case the securities are held in              The interest rate benchmarks that are commonly used for floating
dematerialised (electronic) mode in India, the rules of the SEBI     rate in an interest rate swap are those on various money market
(Depositories and Participants) Regulations, 1996 would apply        instruments. In Indian markets the benchmark most commonly
and if the securities are held overseas, the relevant rules and      used is MIBOR.
regulation of the country where the securities are so held would
apply. The services charges payable to the depository participant    Swaps can be unwound by either reversing the original swap
will form a part of the annual recurring expenses.                   entered into or doing by a reverse swap with cash flows matching
                                                                     the original swap.
I) Investment by Asset Management                                    Example: Interest Rate Swap (IRS)
   Company                                                           l    Suppose the Scheme has a portion of its portfolio in cash.
AMC, its Sponsor and investment companies managed by them,                The Fund Manager has a view that the interest rate scenario
their affiliates, their associates companies and subsidiaries may         is soft and call rates are unlikely to spurt over the next three




23
     months. The fund manager would therefore prefer to receive             Reporting requirements:
     a higher rate of return on his cash, which he is lending in the        The AMC shall cover the following aspects in their reports to the
     overnight call market. In other words he would like to move            Trustees periodically, as provided for in the Regulations:
     to a 91 Day fixed interest rate from overnight floating rate
                                                                            Transactions in derivatives, both in volume and value terms.
l    In the above example
                                                                            Market value of cash or cash equivalents / securities held to cover
     Say Notional Amount : Rs.5 crores                                      the exposure.
     Benchmark : NSE MIBOR                                                  Any breach of the exposure limit laid down in the scheme offer
                                                                            document.
     Tenor : 91 days
                                                                            Shortfall, if any, in the areas covering investment in derivative
     Documentation: International Securities Dealers Association            products and the manner of bridging it.
     (ISDA).
                                                                            The Trustees shall offer their comments on the above aspects in
     Fixed Rate : 6.25% At the end of 91 days                               the report filed with SEBI under sub regulation (23) (a) of regulation
                                                                            18 of Securities and Exchange Board of India (Mutual Funds)
     The Scheme Pays : compounded call rates for 91 days which              Regulations, 1996.
     averages to say 5.90%
                                                                            Valuation of Derivative Products
     The Scheme receives : Fixed rate at 6.25% for 91 days.
                                                                            l    The traded derivatives shall be valued at market price in
     At the end of 91 days the transaction will be settled as under:-            conformity with the stipulations of sub clauses (i) to (v) of
                                                                                 clause 1 of the Eighth Schedule to the Securities and
     Deutsche Fixed Term Fund receive                                            Exchange Board of India (Mutual Funds) Regulations, 1996,
                                                                                 as amended from time to time.
     Fixed rate @ 6.25% for 91 days                       Rs. 7,79,110
                                                                            l    The valuation of untraded derivatives shall be done in
     Deutsche Fixed Term Fund                                                    accordance with the valuation method for untraded
     pays floating rate @ 5.90% for 91 days                                      investments prescribed in sub clauses (i) and (ii) of clause 2
     amounting to                                         Rs. 7,35,479           of the Eighth Schedule to the Securities and Exchange Board
                                                                                 of India (Mutual Funds) Regulations, 1996 as amended from
     Net Receivable / Settlement Value                      Rs. 43,631
                                                                                 time to time.
Please note that the above example is hypothetical in nature and
the figures are assumed.                                                    Risks associated with Derivatives Trading
                                                                            1.   Credit Risk: The credit risk is the risk that the counter party
The fixed Income derivative market has made considerable                         will default obligations and is generally negligible, as there is
progress in last two years. Interest rate swaps have become an                   no exchange of principal amounts in a derivative transaction.
integral part of Risk Management practice for most banks.
Corporate Treasury have issued Innovative instruments like                  2.   Market risk: Derivatives carry the risk of adverse changes in
floating rate debt and constant maturity swaps.                                  the market price.

This innovation on issuance, trading, settlement and risk                   3.   Illiquidity risk: The risk that a derivative cannot be sold or
management side will considerably enhance the depth and the                      purchased quickly enough at a fair price, due to lack of liquidity
width of the Indian debt markets and bring it at par with developed              in the market.
markets.                                                                    4.   The fund pays the daily compounded rate. In practice
The Scheme may use derivative instruments primarily to protect                   however there can be a difference in the actual rate at which
the value of portfolio against potential risks such as interest rate             money is lent in the call market and the benchmark, which
risk, currency risk, credit risks, reinvestment risk and liquidity risks.        appears and is used.
This protection is also known as hedge. At the same time,                   5.   The risk is to the extent that returns are limited for the
however, a properly correlated hedge will result in a gain in the                investor in case of extreme movement in call rates.
portfolio position being offset by a loss in the hedge position. As
a result, the use of derivatives could limit any potential gain from        It may be mentioned here that the guidelines issued by Reserve
an increase in value of the position hedged. In addition, an                Bank of India from time to time for forward rate agreements and
exposure to derivatives in excess of the hedging requirement                interest rate swaps and other derivative products would be
can lead to losses. IRS and FRAs do also have inherent credit and           adhered to.
settlement risks. However, these risks are substantially reduced
                                                                            Notwithstanding the foregoing investment policies, for temporary
as they are limited to the interest streams and not the notional
                                                                            defensive purposes (e.g. during periods in which the Asset
principal amounts.
                                                                            Management Company believes changes in the securities
Derivative instruments offer unique advantages like security                markets or economic or other conditions warrant), the Scheme
exposures without the attendant execution and settlement risk.              may invest substantially in Indian Government Treasury Bills and
Derivative instruments carry a high risk return ratio. It is like a         hold cash or cash equivalents and other money market
insurance policy where one has to pay the premium up-front and              instruments. The Trustees of the Mutual Fund may from time to
the benefit is contingent upon an event. Derivative instrument if           time alter these limitations in conformity with the SEBI (MF)
used on a leveraged basis could distort the risk return ratio               Regulations, 1996 and any other guidelines or notifications that
considerably even with a small price movement (the scheme will              may be issued by SEBI.
not take a leveraged exposure). It requires a high level of                 This is not a Money Market Mutual Fund scheme.
knowledge, understanding and surveillance to control risk.
                                                                            Valuation of Assets and Net Asset Value
The Indian market for derivative instruments is still evolving. The
Fund however, will use the derivative instruments very judiciously          The assets would be valued in accordance with the regulations
and keep in mind the overall objective of the scheme.                       prescribed by SEBI from time to time.




Offer Document       Deutsche Fixed Term Fund                                                                                                  24
VI. Fees, Expenses & Load                                                 date decide to change the CDSC structure (including a zero CDSC
                                                                          structure), investments made prior to that date would attract the
The information provided under this section is to assist the              CDSC structure applicable prior to that change.
unitholder to understand the expense structure of the current
Scheme and types of fees and their percentage the unitholder is           Summary of Current Load Structure & CDSC
likely to incur on subscribing the units of the Scheme.                   Maximum Sales
                                                                          (Entry) load imposed                    Present             Maximum
A) Load Structure of the Scheme                                           on purchase of units                    Charge               Charge
The units will be repurchased on an ongoing basis at applicable           At initial Offer
NAV-based prices.
                                                                               Deutsche Fixed Term
Under normal circumstances based on the Scheme's potential                     Fund (DFTF)                          0%                   6%
performance in the market environment existing as of the date
of the Offer Document, the Fund intends to charge the load under               Sales load on issue of
the scheme(s) unless mentioned otherwise or changed                            units in lieu of dividend            NA                      NA
subsequently. Investors may note that the Trustee has a right to
modify the existing Load Structure in any manner or introduce an               Contingent Deferred              Year 1 - 0%           Year 1 - 4%
Entry Load or Exit Load or CDSC or a combination of Entry Load                 Sales Charge ("CDSC")            Year 2 - 0%           Year 2 - 3%
and / or Exit Load and / or CDSC and / or any other Load subject                                                Year 3 - 0%           Year 3 - 2%
to a maximum as prescribed under the Regulations with                                                           Year 4 - 0%           Year 4 - 1%
prospective effect. Should the Trustee on any date, change the
                                                                          Redemption Load                   3% if the investor
Load structure in any manner, the investments made by the Unit
                                                                                                              redeems within
Holders prior to such date will be subject to only the Load structure
                                                                                                            4 months from the
which was prevailing/ applicable prior to such change.
                                                                                                            date of allotment,
All Loads including CDSC are intended to enable the AMC to
                                                                                                            2% if the investor
recover expenses incurred for promotion or distribution and sales
                                                                                                              redeems after
of the Scheme. All Loads including CDSC for the Scheme will be
                                                                                                           4 months but before
retained in the Scheme in a separate account and will be utilised
                                                                                                            8 months from the
to meet the selling and distribution expenses or such other
                                                                                                           date of allotment and
expenses as permitted by SEBI. Any surplus in this account may
be credited to the Scheme within one year from the end of the                                                1% if the investor
financial year in which the Loads / CDSC has been charged.                                                 redeems anytime after
                                                                                                             8 months from the
Any imposition or enhancement of Load in future shall be
                                                                                                            date of allotment but
applicable on prospective investments only. At the time of
                                                                                                            before maturity date.
changing the Load Structure:
(i)    The addendum detailing the changes will be attached to Offer                                        On Maturity Date - NIL
       Document and Abridged Offer Document. The addendum
       will be circulated to all the distributors / brokers so that the   Switchover / Exchange Fee
       same can be attached to all Offer Documents and Abridged                Inter scheme switches                0%                0.05%
       Offer Documents already in stock. The addendum will be
       sent alongwith the newsletter sent to the Unit holders                  Intra scheme switches                0%                0.05%
       immediately after the changes.
(ii)   Arrangements will be made to display the changes /                 B) Fees and Expenses of the Scheme
       modifications in the Offer Document in the form of a notice        1)     Initial Issue Expenses
       in all the Investor Service Centres and Designated Centres.
                                                                          As per the Regulations, the total Initial Issue Expenses chargeable
(iii) The introduction of the Exit Load alongwith the details will        to the Scheme are subject to maximum of 6% of the amount
      be stamped in the acknowledgement slip issued to the                collected during the Initial Offer Period. In this Scheme, the Initial
      investors on submission of the application form and will also       Issue Expenses will be borne by the AMC.
      be disclosed in the Account Statement or in the covering
      letter issued to the Unit holders after the introduction of         2)     Ongoing Expenses
      such Load.
                                                                          The fees and expenses of operating the Scheme on an annual
Investors are advised to contact the Investor Service Centres or          basis, expressed as a percentage of the amount of the Schemes'
designated centres or AMC offices to know the latest position             average weekly net assets, are estimated as follows:
on Entry Load / Exit Load / CSDC prior to Investing in the Scheme.
                                                                          Description                                         Deutsche Fixed
The Fund will ensure that the Redemption Price is not lower than                                                                Term Fund
93% of the NAV and the Purchase Price is not higher than 107%             Investment Management & Advisory fees                     0.30%
of the NAV, provided that the difference between the Redemption
Price and Purchase Price of the Units shall not exceed the                Trustee Fees                                              0.01%
permissible limit of 7% of the Purchase Price, as provided for            Custodian Fees                                            0.06%
under the Regulations.
                                                                          Distribution & Selling Exp.                               0.06%
Contingent Deferred Sales Charge (CDSC)                                   Registrar & Transfer Agent Fees                           0.06%
Under the regulations, when a Scheme is operating on a no load            Other Fund Related Expenses                               0.04%
basis, the AMC retains the right to charge CDSC to unit holder
exiting from the Scheme within 4 years of entry. The CDSC is              Investor Servicing & Bank Charges                         0.07%
intended to enable the AMC to recover expenses for promotion              Total Annual Recurring Expenses                           0.60%
of the Scheme which otherwise the Unitholders may have had
to bear. Under the Scheme, the AMC reserves the right to charge           The purpose of the above table is to assist the Unitholder in
the CDSC structure if it deems fit in the interest of the smooth          understanding the various costs and expenses that an investor in
and efficient functioning of the Fund. Should the AMC on any              the Scheme will bear directly or indirectly. Unitholders should



25
note that the information provided are estimates made on a best      weekly net assets ongoing expenses will not exceed 1.50%.
effort basis and that the actual expenses charged to the Scheme      Ongoing fees and expenses incurred beyond the stipulated
and the expenses categories may vary once the Scheme is in           amounts, if any, will be borne by the Asset Management
operation or if there is any change in Regulations. However as       Company. In accordance with SEBI (MF) Regulations, 1996 the
per Regulations the total recurring expenses that can be charged     investment management and advisory fee is included within the
to any of the Scheme(s) in this document shall be subject to the     ongoing expenses stated herein and charged to the Scheme and
applicable guidelines. Expenses over and above the permitted         is subject to the following limits: On the first Rs.100 crores of the
limits will be borne by the AMC. Unitholders should note that as     average weekly net assets 1.25% and 1% of the excess amount
the NAV is calculated weekly, expenses are also accrued weekly.      over Rs.100 crores, where net assets so calculated exceed Rs.100
                                                                     crores. The ongoing fees and expenses of the Scheme will be
As per the SEBI (MF) Regulations, 1996, ongoing expenses on          payable monthly in arrears.
the first Rs.100 crores of the Scheme's average weekly net assets
will not exceed 2.25% per annum. On the next Rs.300 crores of        The recurring expenses of the Scheme(s), and the additional
the Scheme's average weekly net assets ongoing expenses will         management fee shall be as per the limits prescribed under sub-
not exceed 2.00% per annum. On the next Rs.300 crores of the         regulation 6 of Regulation 52 of the SEBI Regulations and shall
Scheme's average weekly net assets on-going expenses will not        not exceed the limits prescribed thereunder.
exceed 1.75% and on the balance of the Scheme's average


C) Fees and Expenses of the Existing Schemes
Deutsche Mutual Fund - Most Recent Scheme Launched
Deutsche Mutual Fund launched two schemes between November 2003 and December 2004. The initial issue expenses for all the
schemes was borne by the AMC except Deutsche Alpha Equity Fund and Deutsche Investment Opportunity Fund over and above 1%,
2% respectively of the amount collected.

Deutsche Alpha Equity Fund
Initial Issue Expenses                          Estimated As Per Offer Document                                  Actuals
Target Amount Rs. 1 crore                            Rs.                   % of                       Rs.                % of Resources
                                                   (Lakhs)            Target Amount                 (Lakhs)                Mobilised
Marketing Expenses                                   0.50                  1.50%                     1.30                    0.04%
Agent Commissions                                    1.00                  1.00%                    31.18                    1.00%
Registrar's Expenses                                 0.25                  0.25%                     0.34                    0.00%
Banker's Fees                                        0.10                  0.10%                     0.00                    0.00%
Legal Fees                                           0.05                  0.05%                     0.00                    0.00%
Printing & Distribution                              0.45                  0.45%                     0.59                    0.02%
Other Expenses                                       0.40                  0.40%                     0.19                    0.00%
Total                                                2.75                  2.75%                    33.60                   1.06%
The variance in estimated versus actual initial issue expenses was due to the target amount being exceeded during the initial offering
period. The expense over and above 1% of the amount collected in Deutsche Alpha Equity Fund was borne by the AMC. In case of
Deutsche Investment Opportunity Fund, expenses incurred in excess of 2% of the amount collected was borne by the AMC.
All initial issue expenses incurred for Deutsche Premier Bond Fund, Deutsche Short Maturity Fund, Deutsche Insta Cash Plus Fund,
Deutsche Fixed Maturity Plans, Deutsche Floating Rate Fund, Deutsche Dynamic Bond Fund and Deutsche MIP Fund was borne by
the AMC.

D) Condensed Financial Information
Historical per unit Statistics
Particulars                                     DFRF                                                DDBF
                                    October 24,        April 1,          October 24, 2003                           April 1, 2004
                                       2003             2004             to March 31,2004                        to Sept. 30, 2004
                                   to March 31,      to Sept. 30,
                                       2004             2004
                                                                     Institutional        Regular        Institutional         Regular
                                      Audited          Unaudited                Audited                               Unaudited
NAV at the beginning
of the year (Rs.)#                    10.0000           10.2014        10.0000            10.0000             10.1193          10.0734
Net Income per unit (Rs.)              0.2190           0.1111                   0.1290                       (0.6286)         (0.5964)
Dividends (Rs. per unit) ^^
  Daily Dividend                        N.A.             N.A.            N.A.              N.A.                N.A.               N.A.
  Weekly Dividend                      0.0443           0.1504           N.A.              N.A.                N.A.               N.A.
  Monthly Dividend                     0.0178           0.1803            –                  –                   –                 –
  Quarterly Dividend Plan               N.A.             N.A.             –                  –                   –                 –
  Annual Dividend/Dividend Plan         N.A.             N.A.             –                  –                   –                 –




Offer Document     Deutsche Fixed Term Fund                                                                                               26
Particulars                                       DFRF                                                DDBF
                                    October 24,          April 1,         October 24, 2003                         April 1, 2004
                                       2003               2004            to March 31,2004                       to Sept. 30, 2004
                                   to March 31,        to Sept. 30,
                                       2004               2004
                                                                      Institutional         Regular       Institutional           Regular
                                     Audited             Unaudited                Audited                              Unaudited
Transfer to reserves (if any)
(Rs. In Crores)                           0.39                 –          0.92               0.03                –
NAV at the end of the
period (Rs.)                         10.2014              10.4375       10.1193             10.0734          9.9840                9.8976
Date of Allotment                                24-Oct-03                                          24-Oct-03
Absolute Return of the
Scheme (since Inception till
end of respective period) (%)         2.01%                  4.38%       1.19%              0.73%            -0.16%                -1.02%
Benchmark Performance
(since Inception till end of
respective period) (%)                1.78%                  3.72%                1.09%                                 -0.74%
Compounded Annualised
Return of the scheme (since
Inception of respective schemes
till March 31, 2004) (%)                  N.A.                N.A.        N.A.               N.A.               N.A.                N.A.
Compounded Annualised
Return of the Benchmark Index
(since Inception of respective
schemes till March 31, 2004) (%)          N.A.                N.A.        N.A.               N.A.               N.A.                N.A.
Net Assets at end of the year
(Rs. Crs.)                            23.16                  694.34      60.30               4.17               5.93                4.61
Ratio of Recurring Expenses
to net assets (%)                    0.65% @             0.65% @        1.15% @             1.99% @          1.15% @             2.00% @
NAV as on Sep. 30, 2004                   N.A.            10.4375         N.A.               N.A.            9.9840                9.8976
Compounded Annualised
Return Since Inception to
September 30, 2004                        N.A.                N.A.        N.A.               N.A.               N.A.                N.A.
Benchmark Performance                     N.A.                N.A.        N.A.               N.A.               N.A.                N.A.
NAV as on Dec. 31, 2004                                   10.5695                                                                 10.1308
Compounded Annualised
Return Since Inception to
Dec. 31, 2004 *                                              4.73%                                                               0.0018%
Benchmark Performance *                                      4.03%                                                               -0.0200%
NAV as on February 28, 2005                                  10.66                                                                10.1973
Compounded Annualised
Return Since Inception to
February 28, 2005 *                                          4.82%                                                               1.4482%
Benchmark Performance *                                      4.11%                                                               0.7142%

Particulars                                                                       DMIP A                                DMIP B
                                                                       February 5,        April 1,        February 5,           April 1,
                                                                          2004             2004              2004                2004
                                                                      to March 31,     to Sept. 30,      to March 31,        to Sept. 30,
                                                                          2004             2004              2004                2004
                                                                        Audited           Unaudited          Audited             Unaudited
NAV at the beginning of the year (Rs.)#                                 10.0000             10.0603          10.0000              10.0732
Net Income per unit (Rs.)                                                0.0324             0.1488           0.0540                0.2412
Dividends (Rs. per unit) ^^
  Daily Dividend                                                          N.A.               N.A.               N.A.                N.A.
  Weekly Dividend                                                          –                   –                 –                   –
  Monthly Dividend                                                         –                0.0620               –                 0.1664
  Quarterly Dividend Plan                                                  –                   –                 –                   –
  Annual Dividend/Dividend Plan                                            –                   –                 –                   –



27
Particulars                                                                     DMIP A                           DMIP B
                                                                      February 5,       April 1,      February 5,            April 1,
                                                                         2004            2004            2004                 2004
                                                                     to March 31,     to Sept. 30,   to March 31,         to Sept. 30,
                                                                         2004            2004            2004                 2004
                                                                       Audited         Unaudited       Audited             Unaudited

Transfer to reserves (if any) (Rs. In Crores)                            0.29                 –          0.17                  –
NAV at the end of the period (Rs.)                                     10.0603           10.2875       10.0732              10.3447
Date of Allotment                                                               05-Feb-04                        05-Feb-04
Absolute Return of the Scheme
(since Inception till end of respective period) (%)                     0.60%               2.88%       0.73%                3.45%
Benchmark Performance
(since Inception till end of respective period) (%)                     0.98%               -0.58%      0.98%                -0.58%
Compounded Annualised Return of the scheme
(since Inception of respective schemes till March 31, 2004) (%)          N.A.                N.A.        N.A.                 N.A.
Compounded Annualised Return of the Benchmark Index
(since Inception of respective schemes till March 31, 2004) (%)          N.A.                N.A.        N.A.                 N.A.
Net Assets at end of the year (Rs. Crs.)                                46.91               32.80       22.51                25.72
Ratio of Recurring Expenses to net assets (%)                          2.25% @           2.25% @       2.25% @             2.25% @
NAV as on September 30, 2004                                             N.A.            10.2875         N.A.               10.3447
Compounded Annualised Return
Since Inception to September 30, 2004                                    N.A.                N.A.        N.A.                 N.A.
Benchmark Performance                                                    N.A.                N.A.        N.A.                 N.A.
NAV as on December 31, 2004                                                              10.6420                            10.5402
Compounded Annualised Return
Since Inception to December 31, 2004 *                                                      6.42%                            5.40%
Benchmark Performance *                                                                     2.35%                            2.35%
NAV as on February 28, 2005                                                              10.7706                            10.6270
Compounded Annualised Return
Since Inception to February 28, 2005 *                                                      7.08%                            5.77%
Benchmark Performance *                                                                     3.26%                            3.26%

Particulars                                                             DAEF                                       DIOF
                                                       January 30,     April 1,         April 1,      February 5,            April 1,
                                                          2003          2003             2004            2004                 2004
                                                      to March 31,    March 31,       to Sept. 30,   to March 31,         to Sept. 30,
                                                          2003         to 2004           2004            2004                 2004
                                                        Audited        Audited         Unaudited       Audited             Unaudited
NAV at the beginning of the year (Rs.)#                  10.00           9.25               21.03       10.00                 9.95
Net Income per unit (Rs.)                                (0.38)          2.75               (0.03)      (0.08)               (0.38)
Dividends (Rs. per unit) ^^
  Daily Dividend                                          N.A.           N.A.                N.A.        N.A.                 N.A.
  Weekly Dividend                                         N.A.           N.A.                N.A.        N.A.                 N.A.
  Monthly Dividend                                        N.A.           N.A.                N.A.        N.A.                 N.A.
  Quarterly Dividend Plan                                 N.A.           N.A.                N.A.        N.A.                 N.A.
  Annual Dividend/Dividend Plan                            –             4.00                1.50        N.A.                 N.A.
Transfer to reserves (if any) (Rs. In Crores)            (1.36)         29.86                 –         (0.31)                 –
NAV at the end of the period (Rs.)                        9.25          21.03               21.96        9.95                10.44
Date of Allotment                                                     30-Jan-03                                  05-Feb-04
Absolute Return of the Scheme
(since Inception till end of respective period) (%)     -7.50%        110.30%            119.60%       -0.50%                4.40%
Benchmark Performance (since Inception
till end of respective period) (%)                      -9.25%         64.38%            61.94%        -2.05%                -2.10%
Compounded Annualised Return of the
scheme (since Inception of respective
schemes till March 31, 2004) (%)                          N.A.         86.91%                N.A.        N.A.                 N.A.




Offer Document      Deutsche Fixed Term Fund                                                                                          28
Particulars                                                                    DAEF                                              DIOF
                                                     January 30,              April 1,              April 1,      February 5,              April 1,
                                                        2003                   2003                  2004            2004                   2004
                                                    to March 31,            March 31,            to Sept. 30,    to March 31,           to Sept. 30,
                                                        2003                 to 2004                 2004            2004                   2004
                                                         Audited             Audited              Unaudited         Audited              Unaudited
Compounded Annualised Return of the
Benchmark Index (since Inception of
respective schemes till March 31, 2004) (%)                N.A.              51.92%                 N.A.             N.A.                   N.A.
Net Assets at end of the year (Rs. Crs.)                   16.61             120.75                116.59            46.86                 32.50
Ratio of Recurring Expenses to net assets (%)            2.50% @             2.48%                2.46% @          2.23% @               2.25% @
NAV as on Sep 30, 2004                                     N.A.                  N.A.               21.96            N.A.                  10.44
Compounded Annualised Return
Since Inception to September 30, 2004                      N.A.                  N.A.              59.14%            N.A.                   N.A.
Benchmark Performance                                      N.A.                  N.A.              32.94%            N.A.                   N.A.
NAV as on Dec 31, 2004                                                                              26.17                                  12.34
Compounded Annualised Return
Since Inception to Dec 31, 2004 *                                                                  63.98%                                 23.40%
Benchmark Performance *                                                                            40.22%                                 18.38%
NAV as on February 28, 2005                                                                         26.58                                  12.69
Compounded Annualised Return
Since Inception to February 28, 2005 *                                                             59.04%                                 24.56%
Benchmark Performance *                                                                            37.34%                                 18.21%

Particulars                                      DSMF                                                            DICPF
                                 January 27,    April 1,             April 1,       January 27,    April 1,             April 1,           June 26,
                                    2003         2003                 2004             2003         2003                 2004               2004
                                to March 31, to March 31,         to Sept. 30,     to March 31, to March 31,         to Sept. 30,        to Sept. 30,
                                    2003         2004                 2004             2003         2004                 2004               2004
                                                                                                                         Regular         Institutional
                                  Audited        Audited           Unaudited            Audited        Audited                     Unaudited
NAV at the beginning
of the year (Rs.)#                10.0000       10.0647            10.7782              10.0000        10.1095           10.6227          10.0000
Net Income per unit (Rs.)         0.0930         0.7730             0.6059              0.1002         0.2939            0.5570            0.1066
Dividends (Rs. per unit) ^^
  Daily Dividend                    N.A.          N.A.               N.A.                N.A.          0.2871            0.2199            0.0974
  Weekly Dividend                    –           0.4360             0.2607               N.A.          0.4492            0.1959            0.1019
  Monthly Dividend                   –           0.4400             0.2706                 –           0.3905            0.2400            0.0800
  Quarterly Dividend Plan           N.A.          N.A.               N.A.                N.A.           N.A.              N.A.              N.A.
  Annual Dividend/
  Dividend Plan                     N.A.          N.A.               N.A.                N.A.           N.A.              N.A.              N.A.
Transfer to reserves (if any)
(Rs. In Crores)                     0.74          0.55                 –                 0.74           31.56               –                  -
NAV at the end of the
period (Rs.)                      10.0647       10.7782            10.9944              10.1095        10.6227           10.8595          10.1209
Date of Allotment                               27-Jan-03                                             27-Jan-03                          26-Jun-04
Absolute Return of the
Scheme (since Inception till
end of respective period) (%)     0.65%          7.78%              9.94%               1.10%          6.23%             8.60%             1.21%
Benchmark Performance
(since Inception till end of
respective period) (%)            0.90%          6.32%              7.17%               0.90%          5.29%             7.30%             0.97%
Compounded Annualised
Return of the scheme
(since Inception of
respective schemes till
March 31, 2004) (%)                 N.A.         6.51%               N.A.                N.A.          5.21%              N.A.              N.A.




29
Particulars                                        DSMF                                                       DICPF
                                 January 27,    April 1,            April 1,     January 27,    April 1,             April 1,        June 26,
                                    2003         2003                2004           2003         2003                 2004            2004
                                to March 31, to March 31,        to Sept. 30,   to March 31, to March 31,         to Sept. 30,     to Sept. 30,
                                    2003         2004                2004           2003         2004                 2004            2004
                                                                                                                      Regular      Institutional
                                   Audited        Audited         Unaudited       Audited           Audited                     Unaudited
Compounded Annualised
Return of the Benchmark
Index (since Inception of
respective schemes till
March 31, 2004) (%)                  N.A.         5.29%                N.A.         N.A.             4.43%             N.A.              N.A.
Net Assets at end of
the year (Rs. Crs.)                  71.96        370.10              162.70       68.15            920.86            316.36         1,124.46
Ratio of Recurring Expenses
to net assets (%)                 0.90% @         0.90%           0.90% @        0.55% @             0.65%            0.65% @       0.50% @
NAV as on Sep. 30, 2004              N.A.           N.A.              10.9944       N.A.             N.A.             10.8595        10.1209
Compounded Annualised
Return Since Inception to
September 30, 2004                   N.A.           N.A.              5.76%         N.A.             N.A.             4.99%             1.21%
Benchmark Performance                N.A.           N.A.              4.17%         N.A.             N.A.             4.25%             0.97%
NAV as on Dec. 31, 2004                                               11.1072                                         10.9920        10.2485
Compounded Annualised
Return Since Inception
to Dec. 31, 2004 *                                                    5.55%                                           4.98%             2.49%
Benchmark Performance *                                               4.08%                                           4.26%             2.06%
NAV as on February 28, 2005                                           11.2204                                         11.0810        10.3341
Compounded Annualised
Return Since Inception
to February 28, 2005 *                                                5.62%                                           4.99%             3.34%
Benchmark Performance *                                               4.21%                                           4.29%             2.82%

Particulars                                                                        DPBF
                                                    January 30, 2003                 April 1, 2003                        April 1, 2004
                                                   to March 31, 2003              to March 31, 2004                    to Sept. 30, 2004
                                                Institutional         Regular   Institutional       Regular      Institutional          Regular
                                                            Audited                        Audited                           Unaudited
NAV at the beginning of the year (Rs.)#           10.0000             10.0000     9.8872            9.8749            11.2005        11.1020
Net Income per unit (Rs.)                                   -0.1532                        1.1795                      0.44             (0.07)
Dividends (Rs. per unit) ^^
  Daily Dividend                                    N.A.               N.A.         N.A.             N.A.              N.A.              N.A.
  Weekly Dividend                                   N.A.               N.A.         N.A.             N.A.              N.A.              N.A.
  Monthly Dividend                                   –                   –        0.5400            0.5320            0.3036            0.2400
  Quarterly Dividend Plan                            –                   –        0.4521            0.4386            0.3400            0.3299
  Annual Dividend/Dividend Plan                      –                   –          0.70             0.65                –                –
Transfer to reserves (if any) (Rs. In Crores)      (1.29)              (0.31)      30.30             7.36                –                –
NAV at the end of the period (Rs.)                9.8872              9.8749      11.2005          11.1020            11.1984        11.0495
Date of Allotment                                                                30-Jan-03
Absolute Return of the Scheme (since
Inception till end of respective period) (%)      -1.13%              -1.25%      12.01%            11.02%            11.98%         10.50%
Benchmark Performance (since Inception
till end of respective period) (%)                          -0.63%                         8.14%                                6.17%
Compounded Annualised Return of the
scheme (since Inception of respective
schemes till March 31, 2004) (%)                    N.A.               N.A.       10.01%             9.19%             N.A.              N.A.
Compounded Annualised Return of the
Benchmark Index (since Inception of
respective scheme till March 31, 2004) (%)          N.A.               N.A.                6.18%                       N.A.              N.A.
Net Assets at end of the year (Rs. Crs.)          113.50               24.44      336.78            104.76             44.18            27.36



Offer Document      Deutsche Fixed Term Fund                                                                                                      30
Particulars                                                                     DPBF
                                                  January 30, 2003                April 1, 2003                 April 1, 2004
                                                 to March 31, 2003             to March 31, 2004              to Sept. 30, 2004
                                              Institutional        Regular   Institutional    Regular     Institutional    Regular
                                                         Audited                        Audited                   Unaudited
Ratio of Recurring Expenses to
net assets (%)                                 1.00% @         1.75% @         1.01%              1.78%    1.11% @        2.01% @
NAV as on Sep. 30, 2004                           N.A.              N.A.         N.A.             N.A.      11.1984        11.0495
Compounded Annualised Return Since
Inception to September 30, 2004                   N.A.              N.A.         N.A.             N.A.      6.91%             6.07%
Benchmark Performance                             N.A.              N.A.         N.A.             N.A.                3.60%
NAV as on Dec. 31, 2004                                                                                     11.2648        11.0896
Compounded Annualised Return
Since Inception to Dec. 31, 2004 *                                                                          6.31%             5.46%
Benchmark Performance *                                                                                               3.44%
NAV as on February 28, 2005                                                                                 11.3070        11.1145
Compounded Annualised Return
Since Inception to February 28, 2005 *                                                                      6.00%             5.14%
Benchmark Performance *                                                                                               3.73%
#    All per unit NAV's are of Growth Option and the same have been considered for return calculations.
Past Performance may or may not be sustained in future.
^^ Per unit Dividend rate is a Gross of Dividend Distribution Tax & Education Cess for the period April 1, 2004 to Sept. 30, 2004. Post
   dividend, the NAV of the dividend option reduces to the extent of dividend payout and other applicable taxes.
@    The ratio of expenses and gross income to average daily net assets by percentage has been annualised for the respective period.
Institutional Plan of DDBF has been wound up wef Dec. 16, 2004
*    For schemes which have not completed one year the returns mentioned are absolute and for other CAGR.
The Scheme abbreviations used in this Offer Document are as follows :
DFRF : Deutsche Floating Rate Fund
DDBF : Deutsche Dynamic Bond Fund
DMIP A : Deutsche MIP Fund - Plan A
DMIP B : Deutsche MIP Fund - Plan B
DAEF : Deutsche Alpha Equity Fund
DIOF : Deutsche Investment Opportunity Fund
DSMF : Deutsche Short Maturity Fund
DICPF : Deutsche Insta Cash Plus Fund
DPBF : Deutsche Premier Bond Fund




31
VII. Units & the Offer                                                          Period. Interest on subscription amount will be payable for
                                                                                amounts refunded later than 6 weeks from the closure of
                                                                                the Initial Offer Period at the rate of 15% per annum for the
A) Units on Offer - General Information                                         period in excess of 6 weeks and will be charged to the AMC.
                                                                                Refund orders will be marked "A/c payee only" and will be in
1)   The Offer                                                                  favour of and be despatched to the sole / first applicant, by
     The Offer is being made for subscription to Deutsche Fixed                 registered post.
     Term Fund, a closed-end fixed income scheme. The scheme
     is for a fixed period of 389 days. However, if the termination/            During the ongoing subscription process, no interest will be
     maturity date falls on a non business day then the immediate               payable on any subscription money to applicants whose
     succeeding business day would be the maturity date of the                  applications are invalid for any reason whatsoever and are
     scheme.The Trustees have given their approval to this Offer                refunded to the applicant within a reasonable period of time.
     Document in terms of a resolution passed on 22nd February,                 Refund orders will be marked "A/c payee only" and will be in
     2005.                                                                      favour of and be despatched to the sole / first applicant, by
                                                                                registered post.
     Application Forms together with this Offer Document will
     be available at KARVY ISCs and with select Distributors for           7)   Initial Public Offer Expenses
     Deutsche Mutual Fund and/or at the offices of the Asset                    As per the Regulations, the total Initial Issue Expenses
     Management Company.                                                        chargeable to the Scheme are subject to maximum of 6%
                                                                                of the amount collected during the Initial Offer Period. In
     During the IPO period, unitholders of other schemes of                     this Scheme, the Initial Issue Expenses will be borne by the
     Deutsche Mutual Fund have an option to switch from the                     AMC.
     scheme to DFTF, however, the switch request should be
     accompanied with the application form.                                8)   Options available under the Scheme
                                                                                Investors in the Scheme have a choice of Growth Option for
2)   Initial Offer Price                                                        capital appreciation and Dividend Option for regular income.
     The corpus of the Scheme will be divided into Units having                 The choice of the option should be indicated by ticking the
     an initial value of Rs. 10 each. The Units can be purchased at             appropriate box on the Application Form. Revocation of any
     this price during the Initial Offer Period.                                such decision also must be made in writing and signed by
                                                                                all the registered holder(s) of the Units and also sent to the
3)   Initial Offer Period                                                       Registrar.
     The Initial Offer Period for the Scheme opens on 29th March,               The Net Asset Value would be the same for the two options
     2005 and closes on 29th March, 2005.                                       till the time the first dividend is declared by the Scheme.
                                                                                Subsequently, there would be two separate NAVs, one for
4)   Extension or Termination of Initial Offer Period                           Growth Option and the other for Dividend Option in the
     The Trustee reserves the right to extend the closing date,                 Scheme.
     subject to, however, the condition that the subscription lists
     shall not be kept open for more than 30 days. The Trustee                  A) Growth Option
     reserves the right to close the subscription list earlier by                    The Fund will not declare any dividends under this
     giving at least one day prior notice in one daily newspaper.                    Option. The income earned by the Scheme will remain
                                                                                     invested in the Scheme and will be reflected in the NAV.
5)   Minimum Amount for Application                                                  This Option is suitable for investors who are not looking
     During the initial offering period, the minimum subscription                    for current income (but who have invested with the
     amount per application is Rs. 100,000 per application and in                    intention of capital appreciation). Please refer to the para
     multiples of Re. 1/- thereafter. The minimum amount for                         on "Taxation" for tax benefits.
     application can be changed by the AMC at any time with the
     prior approval of the Trustees.                                            B)   Dividend Option
                                                                                     This Option is suited for investors seeking income
6)   Minimum Subscription Amount                                                     through Dividend declared by the Scheme. Only Unit
     The minimum subscription (target) amount for initial offer is                   Holders opting for the Dividend Option will receive
     Rs.1 Crores (Rupees One Crore Only). There is no maximum                        dividends. An investor on record for the purpose of
     target for the size of the Scheme(s) and therefore, subject                     dividend distributions is an investor who is a Unitholder
     to the applications being in accordance with the terms of                       as of the Record Date. In order to be a Unitholder, an
     this Offer, full and firm allotment will be made to all applicants.             investor has to be allocated Units representing receipt
                                                                                     of clear funds by the Scheme.
     In accordance with the SEBI Regulations, if the Mutual Fund
     fails to collect the minimum subscription amount of Rs. 1                       The Trustee intends to declare regular dividends
     Crores (Rupees One Crore Only), the Fund and the AMC                            comprising substantially of net realized income and net
     shall be liable to refund the subscription amount within a                      realized capital gains. The Trustee, in its sole discretion,
     period of 6 weeks from the date of closure of subscription                      may also declare interim dividends. It should be noted
     list to the applicants of the Scheme(s).                                        that actual distribution of Dividends and the frequency
                                                                                     of distribution indicated above, are provisional and will
     Refunds                                                                         be entirely at the discretion of the Trustee and depend,
     In accordance with the Regulations, if the Scheme fails to                      inter alia on the availability of distributable surplus. To
     collect the minimum subscription amount of One crore, the                       the extent the entire net income and realised gains are
     Fund shall be liable to refund the money to the applicants.                     not distributed, the same will remain invested in the
                                                                                     Scheme and be reflected in the NAV.
     In addition to the above, refund of subscription money to
                                                                                     This option in turn offers two sub-options i.e. "Payout
     applicants whose applications are invalid for any reason
                                                                                     Dividend" or "Reinvest Dividend".
     whatsoever will commence immediately after the allotment
     process is completed.
                                                                                     i)   Payout Dividend
     No interest will be payable on any subscription money                                As per the Regulations, the Fund shall despatch to
     refunded within 6 weeks from the closure of the Initial Offer                        the Unit Holders, the dividend proceeds within 30



Offer Document       Deutsche Fixed Term Fund                                                                                                32
                days of declaration of the Dividend. Dividends will      10) Rollover Option
                be payable to those Unit Holders whose names                 All investors will be redeemed from the fund on the maturity
                appear in the Register of Unit Holders on the date           date of the scheme at the NAV calculated on that date.
                (Record Date). Dividends will be paid by cheque,
                net of taxes as may be applicable. Unit Holders              As per the Regulations, a closed-end scheme shall be fully
                will also have the option of direct payment of               redeemed at the end of the maturity period provided that a
                dividend to the bank account. The cheques will be            closed-end scheme may be rolled over if the purpose, period
                drawn in the name of the sole / first holder and             and other terms of the roll over and all other material details
                will be posted to the Registered address of the              of the scheme including the likely composition of assets
                sole / first holder as indicated in the original             immediately before the rollover, the net assets and Net Asset
                application form. The Fund will endeavour to                 Value of the scheme are disclosed to unitholders and a copy
                despatch the dividend cheques within 30 days of              of the same has been filed with SEBI. A rollover may be
                the Record date. To safeguard the interest of Unit           permitted only in case of those unitholders who express
                Holders from loss or theft of dividend cheques,              their consent in writing and the unitholders who do not opt
                investor should provide the name of their bank,              for the rollover or have not given written consent shall be
                branch and account number in the Application                 allowed to redeem their holdings in full at Net Asset Value
                Form. Dividend cheques will be sent to the Unit              based price.
                Holder after incorporating such information.
                                                                         11) Listing
          ii)   Reinvest Dividend                                            The Units will not be listed on any stock exchange.
                Under this sub-option, Unit Holders may chose to
                reinvest all of their dividends by way of additional     12) Duration Of The Scheme
                units of the Scheme instead of receiving dividends           The duration of the Scheme is 389 days from the date of
                in cash. Such additional Units by way of                     allotment. However, the scheme may be liquidated any time
                reinvestment of dividends will be at the Applicable          prior to the expiration of the 389 days under the following
                NAV on the next day (excluding Saturday) after the           circumstances :
                Record Date. The dividend so reinvested shall be
                constructive payment of dividend to unitholders              l    On the happening of any event which, in the opinion of
                and constructive receipt of the same amount from                  the Board, requires the Scheme to be wound up.
                each unitholder for reinvestment in Units. Any such
                                                                             l    If seventy five per cent of the Unitholders pass a
                investment will be made without the payment of
                                                                                  resolution that the Scheme be wound up.
                an Entry Load, if any. Such choice may be made
                by indicating in the investor's original application         l    If SEBI so directs in the interest of the Unitholders.
                or by providing the Fund with written notice signed
                by all the registered holder(s) of the Units and sent        l    If number of unitholders or the individual unitholders
                to the Registrar at its Hyderabad office. Revocation              holding in the fund breaches the requirement of SEBI
                of any such decision also must be made in writing                 Circular dated December 12, 2003 ref SEBI/IMD/CIR
                and signed by all the registered holder(s) of the                 No. 10/22701/03.
                Units and also sent to the Registrar.
                                                                         13) Permanent Account Number (PAN)
                The additional units issued under the sub-option             If the amount invested is Rs. 50,000 or more, the applicant
                "Reinvest Dividend" under Option B and held as               or in the case of application in joint names, each of the
                capital asset would get the benefit of long-term             applicants, should mention his/her permanent account
                capital gains tax if sold after being held for one           number (PAN) allotted under the Income Tax Act, 1961 or
                year. For this purpose one year will be computed             where the same has not been allotted, the GIR number and
                from the date when such additional units are                 the income-tax Circle/Ward/District should be mentioned.
                issued.                                                      In case where neither the PAN nor the GIR number has been
                                                                             allotted, the fact of non-allotment should be mentioned in
          Effect of Dividend: The NAV of the Unit Holders in                 the application form and the form specified in lieu of the
          Dividend Option, will stand reduced by the amount of               number should be attached to the application form. Any
          dividend declared and applicable taxes / levies. The NAV           application form without these details will not be accepted
          of the Growth Option will remain unaffected.                       by the fund. Investors are also required to submit a xerox
          IMPORTANT: Investors should indicate the Option,                   copy of the PAN card/PAN allotment letter or any other
          wherever applicable, for which the subscription is made            relevant document with the application form for verification.
          by indicating the choice in the appropriate box provided
          for this purpose in the application form. In case of valid     14) Unique Identification Number (UIN)
          applications received, without indicating the Option the           Applicants mandated by SEBI to obtain UIN should state
          following defaults will be flagged off.                            the same. As per SEBI directive no specified investor
                                                                             shall buy, sell, deal or subscribe in/to units of mutual
          Indication not made                       Default                  funds unless the UIN has been allotted by the specified dates.
                                                                             For details investors may log on to www.nsdl.com,
          Dividend / Growth Options             Growth Option                www.deutschemutual.com.

          The Fund does not assure any targeted annual return /          15) Applicable NAV
          income.
                                                                             The date of receipt of a redemption request will be the actual
                                                                             Business Day of either the mail receipt at a KARVY ISC of a
9)   Sale of Units
                                                                             redemption request, or of actual receipt of an in-person
     No Public Offer Price                                                   request if before 3 p.m. closing NAV of the Day. Any in-
                                                                             person request made after 3 p.m. on a Business Day will be
     As this is a closed end Scheme and no purchases except
                                                                             deemed received as of the next Business Day.
     during initial offering periods are possible, there will be no
     Public Offer Price. As there will only be Initial Offerings units       The applicable NAV for redemptions and switches prior to
     will be allotted at par. The AMC reserves the right to change           the specified termination dates will be the next NAV
     the basis for subscription from amount basis to any other               calculated after the date of receipt of a valid redemption
     basis, subject to the SEBI Regulations.                                 request.



33
    Net Asset Value shall be calculated weekly and as of the         17) Minimum Balance
    maturity of the fund. SEBI circular no. MFD/CIR/13/087/2001           The Unitholder has to maintain a minimum balance of
    dated March 28, 2001 requires calculation of NAVs of closed-          Rs. 25,000 in the account at any point of time. The Fund
    end funds on Wednesdays. The Asset Management                         may close an investor's account if the balance falls below
    Company reserves the right to calculate NAV on other                  Rs. 25,000 due to redemption.
    Business and non-Business Days. Calculation of the
    Scheme's Net Asset Value will be subject to such rules or
    regulations that SEBI may issue from time to time and will
                                                                     B) Purchase of Units
    be subject to audit on an annual basis. The computation and      1)   Who can invest?
    disclosure of the Net Asset Value and the repurchase price
    shall be in conformance with the SEBI (MF) Regulations,               The following persons (subject to, wherever relevant,
    1996.                                                                 purchase of units of mutual funds being permitted under
                                                                          respective constitutions, and relevant statutory regulations)
16) Repurchase of Units                                                   are eligible and may apply for subscription to the Units of
                                                                          the Scheme.
    The Units can be repurchased commencing not later than
    30 days after the closure of the Initial Offer Period on every        l    Resident Adult Individuals either singly or jointly (not
    Business Day at the repurchase price. The repurchase                       exceeding three)
    request can be made on a pre - printed form that should be
                                                                          l    Minors through parent / legal guardian
    submitted at any of the Investor Service Centres / Designated
    Centres or at the offices of the AMC.                                 l    Companies, Bodies Corporate, Public Sector
                                                                               Undertakings, association of persons or bodies of
    The date of receipt of a redemption request will be the actual             individuals whether incorporated or not and societies
    Business Day of either the mail receipt at a KARVY ISC of a                registered under the Societies Registration Act, 1860
    redemption request, or of actual receipt of an in-person                   (so long as the purchase of Units is permitted under
    request if before 3 p.m. on such Business Day. Any in-person               the respective constitutions)
    request made after 3 p.m. on a Business Day will be deemed
    received as of the next Business Day.                                 l    Religious, Charitable and Private Trusts, under the
                                                                               provisions of 11(5) of Income Tax Act, 1961 read with
    The applicable NAV for redemptions prior to the specified                  Rule 17C of Income Tax Rules, 1962 (subject to receipt
    termination dates will be the next NAV calculated after to                 of necessary approvals as "Public Securities", wherever
    the date of receipt of a valid redemption request.                         required)
    The repurchase would be permitted to the extent of credit             l    Wakfs and Trustee of private trusts authorised to invest
    balance in the Unitholder's account. The repurchase request                in mutual fund scheme under the Trust Deed
    can be made by specifying the rupee amount or the number
                                                                          l    Partnership Firms
    of Units to be repurchased. Repurchase requests can be
    made for a minimum amount of Rs. 1,000 (Rupees One                    l    Karta of Hindu Undivided Family (HUF)
    thousand Only) and multiples of Re. 1 thereafter. Where a
    request for a repurchase is for both amount and number of             l    Banks (including Co-operative Banks and Regional Rural
    Units, the amount requested for repurchase will be                         Banks) and Financial Institutions
    considered as the definitive request.                                 l    Non Resident Indians (NRIs) / Persons of Indian origin
                                                                               residing abroad on full repatriation basis (subject to RBI
    If the balance in the Unit holder's account does not cover
                                                                               approval, if any) or on non-repatriation basis
    the amount of repurchase request, then the Mutual Fund is
    authorised to close the account of the Unit holder and send           l    Foreign Institutional Investors (FIIs) registered with SEBI
    the entire such (lesser) balance to the Unit holder.                       on full repatriation basis (subject to RBI approval, if any)

    In case an investor has purchased Units on more than 1                l    Army, Air Force, Navy and other para-military funds and
    Business Day (either under the Initial Offer Period or through             eligible institutions
    subsequent purchases), the Units purchased prior in time
                                                                          l    Scientific and Industrial Research Organisations
    (i.e. those Units which have been held for the longest period
    of time) will be deemed to have been redeemed first i.e. on           l    International Multilateral Agencies approved by the
    a First-in-First-Out basis.                                                Government of India

    Unit holders may also request for redemption of their entire          l    Non-Government Provident/Pension/Gratuity funds as
    holding and close the account by indicating the same at the                and when permitted to invest
    appropriate place in the Redemption Request Form.
                                                                          l    Others who are permitted to invest in the Scheme as
    Where however, the Unit holder wishes to redeem Units for                  per their respective constitutions
    a specified amount, then the amount to be paid on                     l    Trustees, AMC or Sponsor or their associates (if eligible
    redemption will be divided by the redemption price, and the                and permitted under prevailing laws), may subscribe to
    resultant number of Units will be redeemed.                                the Units under the Scheme(s)
    In case the Units are standing in the names of more than              l    Other Scheme(s) of Deutsche Mutual Fund subject to
    one Unit holder, where mode of holding is specified as                     the conditions and limits prescribed in SEBI regulations
    'Jointly', redemption requests will have to be signed by ALL
    joint holders. However, in cases of holding specified as              The Fund reserves the right to include / exclude new / existing
    'Anyone or Survivor', any one of the Unit holders will have           categories of investors to invest in the Scheme(s) from time
    the power to make redemption requests, without it being               to time, subject to SEBI Regulations, and other prevailing
    necessary for all the Unit holders to sign. However, in all           statutory regulations, if any.
    cases, the proceeds of the redemption will be paid to the
    first-named holder only.                                         2)   Purchase Price
                                                                          This is a close ended scheme. The units will not be available
    In case of DFTF the redemption proceeds shall be mailed to            for sale after the closure of the IPO period. Units will be
    the first named Unit holder at the registered address.                issued at par value of Rs. 10/- during the IPO period.




Offer Document     Deutsche Fixed Term Fund                                                                                            34
3)   How to Purchase?                                                   ii)   NRIs, PIOs and FIIs
     The application forms or transaction slips for the purchase              (a) Repatriation Basis - NRIs, PIOs
     of Units of the Scheme, will be available at the office of the
     AMC, the Designated Centres and the Investor Service                         In terms of Schedule 5 of notification No. FEMA
     Centres. New Unit Holders can purchase Units by completing                   20/2000 dated May 3, 2000 issued under the
     an Application Form. Existing Unit Holders may use the form                  Foreign Exchange Management Act, the RBI has
     attached to the bottom of their Account Statement or fill out                granted a general permission to mutual funds, as
     a deposit slip.                                                              referred to in Clause (23D) of Section 10 of the
                                                                                  Act to issue and repurchase units of their schemes
     Application must be for a minimum amount of Rs. 100,000                      which are approved by SEBI to NRIs / PIOs subject
     and in multiples of Re.1/- thereafter. The Trustee reserves                  to conditions set out in the aforesaid notification.
     the right to stipulate a different minimum amount per                        Further, general permission is also granted to send
     application for group investment plans (e.g. plans initiated                 such units to NRIs / PIOs to their place of residence
     by companies for their employees, etc.).                                     or location as the case may be.

     Applications can be made either by way of a "Regular                         NRI applications on a repatriation basis will be made
     Application" i.e. alongwith a cheque / DD or under Direct                    by submitting payment by demand drafts
     Deposit Application Facility i.e. alongwith account to account               purchased from / cheques drawn on FCNR / NRE
     transfer instruction. The Fund may introduce other newer                     bank accounts payable at a city enlisted in the last
     methods of application which will be notified as and when                    page of this document where Karvy ISC is located.
     introduced.                                                                  Such applicants would have to subsequently
                                                                                  arrange to provide a debit certificate from their
     Investors should complete the Application Form and deliver                   bankers confirming that the amount has been paid
     the same along with cheque / draft (i.e. in case of "Regular                 by debiting a NRE / FCNR account.
     Application") or account to account transfer instructions (in
     case availing of 'Direct Deposit Application Facility') at any           (b) Non-Repatriation Basis - NRIs, PIOs
     of the:                                                                      In case of NRIs / PIOs seeking to apply for Units
                                                                                  on a non-repatriation basis, payments may be made
     l    Investor Service Centres, or                                            by cheque / draft drawn out of NRO / NRSR
     l    Designated Centres, or                                                  accounts.

     l    AMC Offices                                                         (c) FIIs
                                                                                  FIIs may pay their subscription amounts by direct
     l    To the Registrar,                                                       remittance from abroad or out of their special
                                                                                  Non-Resident Rupee Accounts maintained with a
          Karvy Computershare Private Ltd.,
                                                                                  designated bank in India. The RBI has granted
          46, Road No. 4, Street No. 1, Banjara Hills,
                                                                                  mutual funds as referred to in Clause (23D) of
          Hyderabad 500 034.
                                                                                  Section 10 of the Act general permission to issue
     The addresses of the ISCs and Designated Centres                             units of SEBI approved schemes, to send such
     respectively are given on Page No. 55 of this Offer Document.                units out of India to their global custodians and to
                                                                                  repurchase units from FIIs and make payment
     The Trustee shall, have absolute discretion to reject any                    therefore in terms of Schedule 5 of notification
     application for purchase of Units, if in its opinion, increasing             No. FEMA 20 / 2000 dated May 3, 2000 issued
     the size of the Unit Capital is not in the general interest of               under the Foreign Exchange Management Act.
     the Unit Holders, or if for any other reason it does not believe
                                                                                  The Application Form must provide the FIIs Special
     it would be in the best interest of the Scheme or its Unit
                                                                                  Non-Resident Rupee Account details maintained
     Holders to accept such an application.
                                                                                  with any one of the RBI designated banks. All
     Incomplete Applications or those not specifying the Scheme /                 applications made under a Power of Attorney by
     option and / or accompanied by cheque / demand drafts /                      any of the above mentioned categories require that
     account to account transfer instructions favouring scheme/                   the Power of Attorney or a duly certified copy
     option other than that specified in the application are liable               thereof be lodged at the Registrar's office.
     to be rejected.                                                              The NRIs, PIOs and FIIs shall also be required to
                                                                                  furnish such other documents as may be necessary
     As per the directives issued by SEBI, it is mandatory for
                                                                                  and as desired by the Fund in connection with the
     applicants to mention their bank account no. in their
                                                                                  investment in the Scheme and as prescribed by
     applications for purchase of units. In case such details are
                                                                                  regulations from time to time.
     not mentioned, the application forms may be rejected.
                                                                              iii) Application under Power of Attorney / Body
4)   Mode of Payment                                                               corporate / Registered society / Trust /
     Cash will not be accepted as a mode of payment. Payment                       Partnership etc.
     by stockinvests and out-station and / or post-dated cheques
                                                                                  In case of an application under a Power of Attorney
     will not be accepted.
                                                                                  or by a limited company or a body corporate or a
                                                                                  registered society, or a trust, or a partnership or an
     i)   Resident Investors                                                      association of persons or body of individuals, the
          Investors may make payments for subscription to the                     relevant Power of Attorney or the relevant
          Units of the Scheme by bank draft / local MICR cheque                   resolution or the authority to make the application
          payable at par, in the city in which the application form               specifying the mode of operation or the partnership
          is submitted drawn on a bank, which is a member of                      deed and letter / authority given by all partners
          Bankers clearing house.                                                 specifying mode of operation as the case may be,
                                                                                  or duly certified copy thereof, along with a certified
          All cheques and drafts should be crossed "Account                       copy of the Memorandum and Articles of
          Payee Only" and made out in favour of "Deutsche                         Association, incorporation / constitution documents
          International Bond Fund".                                               and / or bye-laws / certificate of registration must



35
               be lodged at the Registrar's office within seven                     of an Account Statement. After acceptance of an
               days of the subscription. Sole proprietary firms                     Investor's request and within three Business Days the
               would require to submit a completed nomination                       Mutual Fund will endeavour to mail to investors by post /
               form to enable transmission of units in the event                    courier Account Statements confirming their Units held
               of death of the sole proprietor. In case of HUF, a                   in the Scheme. Provided that the Fund reserves the
               list of all coparceners together with their dates of                 right to reverse the transaction of crediting units in the
               birth and specimen signatures must be lodged at                      Unitholder's account, in the event of non-realization of
               the Registrar's office within seven days of the                      any cheque or other instrument remitted by the investor.
               subscription.
                                                                                    All Units will rank pari passu, among Units within the
5)   Mode of Holding                                                                same Option, i.e. either the dividend option or the
                                                                                    growth option, as to assets, earnings and the receipt of
     Applicants have to specify the 'mode of holding' in the                        dividend distributions, if any, as may be declared by the
     application form. The mode of holding may be "Single", "Joint"                 Trustees. Allotment of Units and despatch of Account
     or "Anyone or Survivor".                                                       Statements to NRIs / FIIs will be subject to RBI's general
     Where Units are jointly held, the person first-named in the                    permission dated March 30, 1999 to mutual funds, in
     Application Form will receive all notices and correspondences                  terms of Notification No. FERA195/99-RB or such other
     with respect to the Folio, as well as any distributions through                notifications, guidelines issued by RBI from time to time.
     dividends, redemptions or otherwise. Such person shall hold                    Each Unitholder will receive an Account Statement /
     the voting right, if any, associated with the Units. However,                  transaction slip (or, if requested, a Unit certificate) each
     all documentation shall necessarily be signed by all the                       time purchases during an initial offering period or
     holders. The liability of the Mutual Fund in this regard shall                 redemption of Units are made. In addition, each
     be only to the first-named holder.                                             Unitholder will also receive an annual Account
     When Units are held as anyone or survivor, the person first-                   Statement as soon as practicable after 31st March each
     named in the Application Form will receive all notices and                     year. Such annual Account Statement will detail the
     correspondences with respect to the Account, as well as                        investor's opening balance of Units held as of 1st April
     any distributions through dividends or otherwise. The first                    of the prior year, all transactions that occurred during
     named holder shall exercise the voting right, if any, associated               the preceding twelve months with respect to the
     with the Units. All documentation may be signed by any one                     Account and a closing balance of Units held and the
     of the joint holders and the Mutual Fund will act on the                       Net Asset Value of the Units as of 31st March of such
     instructions of any one of the account holders. If two or                      year or the last NAV calculated during the relevant
     more persons apply for units without specifying the mode                       financial year.
     of holding, they shall be deemed to have elected to hold the                   Unitholders may verify the contents of Account
     units jointly. Any change in the mode of holding will require                  Statements and revert to their nearest KARVY ISC
     the signature of all the holders. By following the above                       immediately in case of any discrepancy. In the event
     procedure, the Mutual Fund and the AMC shall be discharged                     the unitholder fails to inform the KARVY ISC within 15
     of all liability towards the joint / remaining unitholders.                    days from the date of the Account Statement, it shall
     Investors are requested to carefully study the provisions                      be deemed to be correct.
     pertaining to TRANSMISSION as well as NOMINATION given
     below under "D) Facilities offered to Investors under the                 d)   Receiving Account Statement /
     Scheme" before ticking the relevant box pertaining to the                      Correspondence by E-mail
     Mode of Holding in the application form.                                       The Mutual Fund will encourage the investor to provide
                                                                                    their email addresses for all correspondence. The
     Note : The Trustee, at their discretion at a later date, may
                                                                                    Mutual Fund would endeavour to send all
     choose to alter or add other modes of payment during the
                                                                                    correspondences using e-mail as the mode for
     Continuous Offer.
                                                                                    communication as may be decided from time to time.
6)   Allotment / Refunds
                                                                          C) Redemption of Units
     a)   Folio Number & Issuance of Units
                                                                          The Units can be redeemed (sold back to the Fund) at the
          Every investor will be identified by a Folio Number.            Redemption Price upon commencement of the Continuous Offer.
          Please quote your folio number in all communications
          with the Mutual Fund or the KARVY ISCs. Upon issue,             All investors will be redeemed from the fund on the final maturity
          the securities shall be credited to the demat account           date of the scheme. Unit holders also have the option of
          mentioned in the application form and an intimation will        requesting for redemption before the termination date. In such
          be sent to the Unitholder. The Trustee is entitled, in its      cases the redemption will be effected at the next calculated Net
          sole and absolute discretion, to reject any application         Asset Value and would be subject to the applicable load. Please
          for Units.                                                      refer to Ch. VI (A) "Fees, Expenses & Load".

     b)   Allotment                                                       On maturity of the scheme, the investor can switch to other
                                                                          open-end schemes of the Mutual Fund at the prevailing terms of
          All applicants will receive full and firm allotment of Units,
                                                                          those scheme(s) to which the switch is taking place (see Section
          provided the applications are complete in all respects
                                                                          (D) Facilities offered to investors under the scheme (1) Switching.
          and are found to be in order. The Trustees retain the
          sole and absolute discretion to reject any application.         The Regulations require that every closed-end scheme shall be
          The process of allotment of Units and mailing of account        listed in a recognised stock exchange within six months from the
          statements reflecting the allotments will be completed          closure of the subscription unless the scheme provides for
          within 30 days from the date of closure of the Initial          periodic repurchase facility to all unitholders with restriction, if
          Offer Period.                                                   any, on the extent of repurchase; or if the details of such
                                                                          repurchase facility are clearly disclosed in the offer document; or
          Allotment to NRIs / FIIs will be subject to RBI approval,
                                                                          if the scheme opens for repurchase within a period of six months
          if any, required.
                                                                          from the closure of subscription.
     c)   Account Statement                                               Units of the scheme shall not be listed in view of a repurchase
          Units will be issued in registered, uncertificated form         facility being offered to investors see section below on - How to
          only. Unitholders may request a Unit certificate in lieu        Redeem Units prior to the specified termination date.



Offer Document      Deutsche Fixed Term Fund                                                                                                36
The Trustees may mandatorily redeem Units of any Unitholder in          3)   Payment of Proceeds
the event it is found that the Unitholder has submitted information          All redemption requests received prior to 3 pm on any
either in the application or otherwise that is false, misleading or          Business Day at the Investor Service Centres or at the
incomplete or if the minimum balance is not maintained.                      Designated Centres or at the office of the Registrar will be
If a Unitholder makes a redemption request immediately after                 considered accepted on that Business Day, subject to the
purchase of Units, the Fund shall have a right to withhold the               redemption request being complete in all respects, and will
redemption request till sufficient time has elapsed to ensure that           be priced on the basis of the Redemption Price. (Please see
the amount remitted by him (for purchase of Units) is realized               above for cut-off times for receiving redemption request).
and the proceeds have been credited to the concerned Scheme's                Where an application is received after the specified cut-off
Account. However, this is only applicable if the value of redemption         time, then the request will be deemed to have been received
is such that some or all of the freshly purchased Units may have             on the next Business Day. (Please also see Ch VII D 6) "Right
to be redeemed to effect the full redemption.                                to Limit Redemptions" and Ch VII D 7) "Suspension of Sale
                                                                             and Redemption of Units".)
Unit Holders may also request for redemption of their entire
holding and close the account by indicating the same at an                   As per the Regulations, the Fund shall despatch the
appropriate place in the Redemption Request Form.                            redemption proceeds within 10 Business Days from the date
                                                                             of acceptance of redemption request. In the instant case
1)   Redemption Price                                                        within 10 business days of the applicable repurchase NAV
                                                                             calculation. All redemption requests received at an official
     The Redemption Price of the Units will be calculated on the
                                                                             point of acceptance of transactions of the fund on any
     basis of the Applicable NAV subject to prevailing CDSC and
                                                                             business day will be considered accepted for that applicable
     the Exit Load as mentioned in Chapter VI (A).
                                                                             NAV. In the event of delay / failure to despatch the
     With the applicable Exit Load / CDSC, Redemption Price will             redemption/repurchase proceeds within the aforesaid 10
     be calculated as under                                                  Business Days, the AMC will be liable to pay interest to the
                                                                             Unitholders @ 15% p.a. for the period of delay. However,
     Redemption Price = Applicable NAV x (1 - CDSC) or                       under normal circumstances, the Fund will endeavour to
     Redemption Price = Applicable NAV x (1 - Exit Load)                     despatch the redemption proceeds within 8 Business Days
                                                                             from the date of the Applicable NAV.
     For Example - if the applicable NAV is Rs. 10.00 and and the
     exit load is 2 percent then the redemption price will be                The redemption cheque will be issued in favour of the sole /
     Rs. 9.80.                                                               first Unit Holder's registered name and bank account number,
                                                                             if provided and will be sent to the Registered address of the
     Please refer to Ch. VI (A) "Load Structure of the Scheme".              sole / first holder as indicated in the original Application Form.
                                                                             The redemption cheque will be payable at par at all the places
     Please see VII (A)(7) "Applicable NAV"
                                                                             where the Investor Service Centres or at the Designated
                                                                             Centres are located. The bank charges for collection of
2)   How to Redeem?
                                                                             cheques at all other places will be borne by the Unit Holder.
     a)   How to Redeem Units on Maturity                                    For redemptions of amounts above Rs. 5,000 the cheques
                                                                             will be sent by courier (where such facilities are available).
          The redemption requests can be made on the pre-
                                                                             With a view to safeguarding their interest, it is desirable that
          printed forms or by using the form at the bottom of the
                                                                             the Unit Holders indicate their Bank Account No., name of
          Account Statement. The redemption request can be
                                                                             the Bank and Branch in the application for purchasing Units
          faxed to (with the original being sent subsequently) or
                                                                             of the Scheme.
          presented at any of the Investor Service Centres as
          listed in this Offer Document or at the Collection Centres         A fresh account statement will also be sent to the redeeming
          or can be sent to the Registrar, Karvy Computershare               investors, indicating the new balance to the credit in the
          Private Ltd., 46, Road No. 4, Street No. 1, Banjara Hills,         Account, along with the redemption cheque.
          Hyderabad 500 034.
                                                                             Provided that the Fund may close an investor's account if
          In case the Units are standing in the names of more                the balance falls below Rs. 25,000 due to redemption.
          than one Unit Holder, where mode of holding is specified
          as 'Jointly', redemption requests will have to be signed           If a Unit Holder makes a redemption request immediately
          by all joint holders. However, in cases of holding                 after purchase of Units, the Fund shall have a right to withhold
          specified as 'Anyone or Survivor', any one of the Unit             the redemption request until such time as the Fund has to
          Holders will have the power to make redemption                     ensure that the amount remitted by him (for purchase of
          requests, without it being necessary for all the Unit              Units) is realised and the proceeds have been credited to
          Holders to sign. However, in all cases, the proceeds of            the Scheme's Account. However, this is only applicable if
          the redemption will be paid to the first-named holder              the value of redemption is such that some or all of the freshly
          only.                                                              purchased Units may have to be redeemed to effect the full
                                                                             redemption.
          The Unit Holder may either request for mailing the
          redemption proceeds to his / her address or avail of the           Redemption by NRIs and FIIs
          Direct Deposit Application Facility. For details pertaining        Credit balances in the account of an NRI / FIIs investor, may
          to applications by way of Direct Deposit Application               be redeemed by such investors in accordance with the
          Facility. (please see "VII D) 6) Direct Deposit Application        procedure described above and subject to any procedures
          Facility for Purchase and Redemption of Units.")                   laid down by the RBI, if any. Such redemption proceeds will
                                                                             be paid by means of a Rupee cheque payable to the NRI's /
     b)   How to Redeem Units prior to the specified                         FIIs or by a foreign currency draft drawn at the then current
          termination date                                                   rates of exchange less bank charges thereof subject to RBI
          Unitholders may send a notice for redemption to the                procedures and approvals.
          Mutual Fund through the KARVY ISCs. Redemption of
          Units made on the specified termination date will be at            In terms of the Schedule 5 of Notification No. FEMA 20/
          the Net Asset Value per Unit, while redemptions before             2000 dated May 3, 2000 issued under the Foreign Exchange
          the specified termination dates will be subject to an              Management Act, 1999 (FEMA) the RBI has granted general
          exit load. ( See Ch. VI "Fees, Expenses & Load".)                  permission to NRIs and FIIs who have purchased units issued
                                                                             by mutual funds in accordance with the aforesaid notification




37
     to tender units to the mutual funds for repurchase or for the                  of the Scheme(s), without which the value of the
     payment of maturity proceeds.                                                  securities of the Scheme(s) cannot be accurately
                                                                                    calculated.
     For the purpose of this section, the term "mutual funds" is
     as referred to in Clause (23D) of Section 10 of Income-Tax                l    During periods of extreme volatility of markets, which
     Act 1961.                                                                      in the opinion of the AMC are prejudicial to the interests
                                                                                    of the Unitholders of the Scheme(s).
4)   Effect of Redemptions
                                                                               l    In case of natural calamities, strikes, riots and bandhs.
     The Unit capital and Reserves will stand reduced by an
     amount equivalent to the product of the number of Units                   l    In the event of any force majeure or disaster that affects
     redeemed and the Applicable NAV. Units once redeemed                           the normal functioning of the AMC, ISC or the Registrar.
     will be extinguished and will not be re-issued.
                                                                               l    If so directed by SEBI.
5)   Fractional Units
                                                                               In the above eventualities, the time limits indicated above,
     Since a request for redemption or purchase is generally made              for processing of requests for purchase and redemption of
     in rupee amounts and not in terms of number of Units of the               Units will not be applicable. Further, an order to purchase
     Scheme(s), an investor may be left with fractional Units.                 Units is not binding on and may be rejected by the Trustees,
     Fractional Units will be computed and accounted for up to                 the AMC or their respective agents, until it has been
     three decimal places for all Scheme(s). However, fractional               confirmed in writing by the AMC or its agents and payment
     Units will in no way affect the investor's ability to redeem              has been received.
     the Units, either in part or in full, standing to the Unitholder's
     credit.                                                                   Suspension or restriction of repurchase / redemption facility
                                                                               under any Scheme / Plan of the Mutual Fund shall be made
6)   Right to Limit Redemptions                                                applicable only after the approval from the Board of Directors
     The Trustee may, in the general interest of the Unitholders               of the AMC and the Trustees. The approval from the AMC
     of all or any of the Scheme(s) offered under this Offer                   Board and the Trustees giving details of circumstances and
     Document, and keeping in view the unforeseen                              justification for the proposed action shall also be informed
     circumstances / unusual market conditions, limit the total                to SEBI in advance.
     number of Units which may be redeemed on any Business
     Day to 5% of the total number of Units then in issue, under          8)   Unclaimed Redemption and Dividend Amount
     each Scheme and Plan(s) thereof, or such other percentage                 As per circular No. MFD/CIR/9/120/2000, dated November
     as the Trustees may determine. Any Units, which by virtue                 24, 2000 issued by SEBI, the unclaimed redemption and
     of these limitations are not redeemed on a particular Business            dividend amounts shall be deployed by the Fund in call money
     Day, will be carried forward for redemption to the next                   market or money market instruments only. The investment
     Business Day, in order of receipt. Redemptions so carried                 management fee charged by the AMC for managing such
     forward will be priced on the basis of the Applicable NAV                 unclaimed amounts shall not exceed 50 basis points. The
     (subject to the prevailing load) of the Business Day on which             circular also specifies that investors who claim these amounts
     redemption is made. Under such circumstances, to the                      during a period of three years from the due date shall be
     extent multiple redemption requests are received at the                   paid at the prevailing NAV. Thus, after a period of three years,
     same time on a single Business Day, redemptions will be                   this amount can be transferred to a pool account and the
     made on pro-rata basis, based on the size of each redemption              investors can claim the said amounts at the NAV prevailing
     request, the balance amount being carried forward for                     at the end of the third year.
     redemption to the next Business Day(s). In addition, the
     Trustees reserve the right in their sole discretion, to limit             In terms of the circular, the onus is on the AMC to make a
     redemptions with respect to any single account to an amount               continuous effort to remind investors through letters to take
     of Rs. 100 lakhs (Rupees One hundred lakhs only) in a single              their unclaimed amounts.
     day.
                                                                          D) Facilities offered to Investors under
7)   Suspension of Sale and Redemption of Units                              the Scheme
     The Mutual Fund at its sole discretion reserves the right to
     withdraw sale and / or repurchase and/or switch of the Units         1)   Switching
     in the Scheme(s) (including any one of the Plan of any of the             On an ongoing basis, the Unitholders have the option to
     Scheme(s)) temporarily or indefinitely, if in the opinion of              switch all or part of their investment from one Scheme to
     the AMC, the general market conditions are not favourable                 any of the other Scheme(s) offered by the Fund, which is
     and / or suitable investment opportunities are not available              available for investment at that time, subject to prevailing
     for deployment of funds. However, the suspension of sale /                load structure.
     repurchase / switch either temporarily or indefinitely will be
     with the approval of the Trustees.                                        A switch by NRIs / FIIs Unitholders will be subject to the
                                                                               compliance of procedures and / or final approval of the
     The sale / repurchase / switch of the Units may be suspended              Reserve Bank of India or and any other agency, as may be
     under the following conditions:                                           required.
     l    When one or more stock exchanges or markets, which                   The AMC reserves the right to charge different (including
          provide basis for valuation for a substantial portion of             zero) loads on Applicable NAV on switchover as compared
          the assets of the Scheme(s) is closed otherwise than                 to the sale / repurchase as the case may be.
          for ordinary holidays.
                                                                               A switch has the effect of a redemption from one Scheme /
     l    When, as a result of political, economic or monetary                 Option and a purchase in the other Scheme / Option to which
          events or any circumstances outside the control of the               the switching has been done and the terms and conditions
          Trustees and the AMC, the disposal of the assets of                  pertaining to same are specified below.
          the Scheme(s) is not reasonable, or would not
          reasonably be practicable without being detrimental to               To effect a switch, a Unit Holder must provide clear
          the interests of the Unitholders.                                    instructions. Such instructions may be provided in writing or
                                                                               by completing the transaction slip / form attached to the
     l    In the event of breakdown in the means of
                                                                               account statement or telephonically by providing PIN number.
          communication used for the valuation of investments



Offer Document       Deutsche Fixed Term Fund                                                                                              38
     Requests for switching can be sent to the Fund through the          2)   Pledge of Units
     Investor Service Centres / Designated Centres / Office of                The Units may be pledged in favour of approved scheduled
     the Registrar at Hyderabad. All switching requests received              commercial banks and other institutions / companies by the
     prior to 3 p.m. on any Business Day will be considered                   Unitholder as security for raising loans. Units are pledged by
     accepted on that Business Day, subject to the request being              completing a form that is available on request. The form
     complete in all respects and provided the Business Day is a              may be requested from the KARVY Investor Service Centres
     Business Day for both, the Scheme from which one is                      or from the head office of the Mutual Fund. The Mutual Fund
     switching out and the Scheme into which one is switching                 will record a pledge / charge / lien against Units pledged. If
     in. When a switching request is received after the cut off               required, the Mutual Fund will also issue a Unit certificate to
     time specified above, then the request will deemed to have               the Unitholder for the Units pledged. The Unit certificate is
     been received on the next Business Day. An account                       non-transferable as per section 4, Transfer / Transmission
     statement reflecting the new holding will be despatched to               Facility. The Unit certificate may be lodged by the Unitholder
     the Unit holder within 3 Business Days of the completion of              with the scheduled bank / institution to which the Units are
     the switch transaction.                                                  pledged as proof of a pledge / lien / charge being recorded
     The switch will be effected by redeeming Units from the                  by the Mutual Fund. Units that are pledged may not be
     Scheme in which the Units are held and investing the net                 redeemed by the pledgor until the entity to which they are
     proceeds in the other Scheme(s) / Plans / Options, subject               pledged provides written authorisation to the Mutual Fund
     to the minimum balance, minimum application amount and                   that the pledge / charge / lien may be removed. As long as
     subscription / redemption criteria applicable for the respective         the Units are pledged, the pledgee scheduled bank /
     Scheme(s).                                                               institution will have complete authority to redeem such Units.
                                                                              The Asset Management Company reserves the right to
     Applicable NAV for the switches would be the Net Asset                   change the procedure for pledges from time to time.
     Value per Unit at the close of the Business Day for both, the
     Scheme switched out of and the Scheme switched into,                3)   Listing
     after considering any prevalent exit and entry loads or a                The Regulations require that every closed-end scheme shall
     combination thereof for switches.                                        be listed in a recognised stock exchange within six months
                                                                              from the closure of the subscription, unless the scheme
     i)    Switching- Inter- Scheme                                           provides for periodic repurchase facility to all unitholders with
           Unitholders in the Scheme have the option to switch                restriction, if any, on the extent of repurchase; or if the details
           their investment to other open-end schemes of the                  of such repurchase facility are clearly disclosed in the offer
           Mutual Fund. The Scheme's Units will be redeemed at                document; or if the scheme opens for repurchase within a
           the Redemption Price and the amount shall be invested              period of six months from the closure of subscription.
           in any other open-end scheme at the prevailing terms
                                                                              Units of the scheme shall not be listed in view of a repurchase
           of the scheme to which the switch is taking place. The
                                                                              facility being offered to investors see section VII (1)(C),
           Redemption Price for the switch out will be determined
                                                                              Redemption of Units. The Fund will offer and redeem the
           in the same manner as detailed in sections VII C (1).
                                                                              Units on a continuous basis during the Continuous Offer
           The Mutual Fund shall charge a switchover or exchange
                                                                              Period. However, the Fund may at its sole discretion list the
           fee of 5% on inter-scheme switches prior to the
                                                                              Units on one or more Stock Exchanges at a later date, and
           specified termination date. The Mutual Fund reserves
                                                                              thereupon the Fund will make suitable public announcement
           the right to charge a switchover or exchange fee on
                                                                              to that effect.
           switch-outs on specified termination dates, which if
           charged, will not exceed 5%. In the event that a
                                                                         4)   Transfer / Transmission
           Unitholder is liable to pay a redemption load and the
           switchover or exchange fee due to a switch, the                    Account Statements and Unit certificates are not
           redemption load shall be applicable and the switchover             transferable. In an open-end Scheme, on any Business Day,
           or exchange fee shall be waived. In the event of winding           the Mutual Fund repurchases and issues Units on an ongoing
           up of a Scheme, Unitholders may request the Trustee                basis, as such a transfer facility is not required. In case of a
           to invest the amount payable upon termination into any             closed ended fund, either the units are listed on a stock
           other specified Deutsche Mutual Fund scheme at the                 exchange or repurchase facility is available on specified
           prevailing terms of the Scheme to which the switch is              dates / ongoing basis depending on the fund. If a transferee
           taking place. Such Unitholders who switch over to any              becomes a holder of the Units by operation of law, or upon
           other Deutsche Mutual Fund open-ended scheme, will                 enforcement of a pledge, or due to the death, insolvency or
           be governed by the terms of the offer mentioned in the             winding up of the affairs of a sole holder or the survivors of
           Offer Document of the Scheme to which the investor                 a joint holder, then subject to the production of evidence
           has switched over. No redemption load or switchover                which in the opinion of the Mutual Fund is sufficient, the
           or exchange fee will be charged in the event the Scheme            Mutual Fund will effect the transfer if the intended transferee
           is being wound up and Unitholders decide to switch.                is otherwise eligible to hold the Units. Units shall be
                                                                              transmitted in favour of the surviving jointholder(s) upon the
     ii)   Switching - Inter Option                                           execution of suitable indemnities in favour of the mutual
                                                                              fund and the Asset Management Company by the surviving
           Unitholders in the Scheme have the option to switch                jointholder(s). Transmission of units / payment of sums
           their investment from one investment option (i.e. Unit             standing to the credit of the deceased unitholder in favour
           class) to another within the same plan. The NAV                    of the surviving unitholders shall discharge the mutual fund
           applicable to the switch will be determined in the same            and the Asset Management Company of all liability towards
           manner as detailed in sections VII (7) Applicable NAV.             the estate of the deceased unitholder and his / her successors
           Unitholders will redeem their Units from the growth                and legal heirs. Further, if either the mutual fund or the Asset
           option they are exiting and will purchase at the applicable        Management Company incur any loss whatsoever arising
           NAV in to the Units of the dividend option they are                out of any litigation or harm that it may suffer in relation to
           entering. Unitholders making an intra option switch will           the transmission, they will be entitled to be indemnified
           not pay switchover or redemption load.                             absolutely from the deceased unitholder's estate.
           The Mutual Fund reserves the right to charge a
           switchover or exchange fee on inter-scheme transfers,         5)   Nomination Facility
           which if charged will not exceed 5.00% of the net asset            Applicants applying for Units singly / jointly can make a
           value of the amount being transferred.                             nomination at the time of initial investment:



39
     l    The nomination can be made only by individuals applying               list of banks through which Investors can avail of the Direct
          for / holding units on their own behalf singly or jointly.            Deposit Application Facility.
          Non-individuals including society, trust, body corporate,
          partnership firm, Karta of Hindu Undivided Family, holder             The direct deposit process would work as follows - The Fund
          of Power of Attorney cannot nominate. If the units are                at its discretion will open purchase and redemption accounts
          held jointly, all joint holders will sign the nomination form.        with various bank(s) (Designated Accounts) from time to
                                                                                time. An investor who is interested in availing of the Direct
     l    Only one person per folio can be nominated. If more                   Deposit Application Facility would have to open an account
          than one person is to be nominated, please contact the                in the same branch of the said bank unless the said bank
          AMC for the Nomination Form. A minor can be                           has the necessary online facility. If the investor has a pre-
          nominated and in that event, the name, address and                    existing account at that branch bank then the pre-existing
          PAN/GIR No. and IT Circle / Ward / District (if available)            account may suffice pending approval of the concerned bank.
          of the Guardian of the minor nominee shall be provided                The investor would then be able to instruct the bank to make
          by the Unit holder.                                                   direct deposits into the Fund's account when purchasing
                                                                                Units of the Scheme. The Fund in turn will be able to make
     l    The Nominee shall not be a trust, body corporate,                     direct deposits into the investor's account with the bank
          partnership firm, Karta of Hindu Undivided Family or a                when paying redemption proceeds. Please note that a Direct
          Power of Attorney holder. A non-resident Indian can be                Deposit Subscription/Redemption application cannot be
          a Nominee subject to the exchange controls in force,                  processed without the investor's bank details.
          from time to time. Nomination can also be made in
          favour of the Central Government, State Government,                   Investors are required to fill the same Application Form
          Local Authority, any person designated by virtue of his               irrespective of whether they are making a regular application
          office or a religious or charitable trust.                            "or a direct deposit application. Please refer to Ch. VII B) 3)
                                                                                "How to Purchase?" and Ch. VII C) "Redemption of Units".
     l    Nomination in respect of the Units stands rescinded
          upon the transmission of Units.                                  7)   Personal Identification Number (PIN)
     l    Transmission of Units in favour of a Nominee shall be                 The PIN facility is proposed to be provided to only those
          valid discharge by the AMC / Fund / Trustees against                  Unit Holders who indicate their desire to avail of this facility
          the legal heir.                                                       and who also indicate their Bank Account No., name of the
                                                                                Bank and Branch in the application for purchasing Units. As
          However, the Mutual Fund / Trustee / AMC may request
                                                                                and when this facility is offerred the Registrar will, within 30
          the nominee to execute suitable indemnities in favour
                                                                                days of allotment of Units, mail to such Unit Holders, the
          of the Fund and / or the Trustee and / or the AMC, and
                                                                                'Disclaimer Form' together with detailed terms and
          to submit necessary documentation to the satisfaction
                                                                                conditions subject to which its usage is permitted. On receipt
          of the Fund before transmitting Units to his / her favour.
                                                                                of the 'Disclaimer Form' duly signed, the PIN will be mailed
          Nominations received in the form prescribed by the
                                                                                to each Unit Holder. Unit Holders may use the PIN to request
          AMC alone shall be valid.
                                                                                a purchase, a redemption, a switch or an address change,
     l    The cancellation of nomination can be made only by                    by calling the Investor Service Centre in Mumbai, Delhi,
          those individuals who hold Units on their own behalf                  Bangalore, Calcutta and Chennai only. The Unit Holder will
          singly or jointly and who made the original nomination.               be asked for the PIN before the request is accepted. In the
                                                                                interest of the Unit Holder, the Investor Service Centre
     l    On cancellation of the nomination, the nomination shall               officials reserve the right to ask for a fax confirmation of the
          stand rescinded and the AMC / Fund / Trustees shall                   request and any other additional information about the
          not be under any obligation to transmit the Units in                  account of the Unit Holder.
          favour of the Nominee.
                                                                                This PIN should never be disclosed to any person or written
6)   Direct Deposit Application Facility for Purchase                           down where any other person may discover it. Any such
     and Redemption of Units                                                    disclosures or inadequate protection of the confidentiality
                                                                                of the PIN is entirely at the Unit Holder's risk. All transactions
     Investors can avail of the Direct Deposit Application Facility
                                                                                conducted with use of this PIN will be responsibility of the
     for the purchase and redemption of Units of the Scheme as
                                                                                Unit Holder and the Unit Holder will abide by the record of
     and when it is offered in addition to a "Regular Application"
                                                                                the transactions generated. The Fund and the Registrar shall
     and is available only to those investors who comply with the
                                                                                not accept any responsibility for the unauthorised use of the
     requirements at the time of application. The direct deposit
                                                                                PIN.
     is made through an account to account transfer. The ability
     to make account to account transfers without the need for
                                                                           8)   Multiple Folio Holdings under Single Address
     cheques or demand drafts reduces the time taken in
     obtaining use of funds thereby reducing the opportunity cost               Normally, newsletters and annual report of the funds are
     attributable to lost interest on funds in transit. The Direct              sent to each Unit holder, which results in certain households
     Deposit Application Facility is therefore an enhanced investor             with one or more members as the Unit holders of the
     service feature that the Fund is offering to investors who                 Scheme getting multiple copies. It is the intent of the AMC
     wish to avail of it. The Direct Deposit Application Facility will          to review and consolidate the database and send each such
     initially be available only in Mumbai and later may be made                "household" a single newsletter and annual report. The AMC
     available in other cities. Investors are advised to contact any            feels that this will not inconvenience the Unit holders. In
     of the Investor Service Centres or the AMC to know latest                  case it does, please write to the AMC, for additional copies
                                                                                of newsletters or annual report as required.




Offer Document      Deutsche Fixed Term Fund                                                                                                  40
VIII. Unit Holders' Rights and                                          be eligible to vote. Unitholders are entitled to one vote per Unit
                                                                        held on all matters to be voted upon by Unitholders. Issues to be
      Services                                                          put to vote will be sent out to Unitholders of record along with an
                                                                        explanation from the Trustee as to why the vote is being
                                                                        requested. A ballot paper will also be sent to Unitholders. In case
A) Unit Holders' Rights                                                 of joint holders or "anyone or survivor" the ballot paper shall be
l     Unitholders of the Scheme(s) have a proportionate right in        sent to the first named holder. Unitholders will be requested to
      the beneficial ownership of the assets of the respective          respond by mailing back their ballot paper by a specified cut-off
      Scheme(s) and in case of Dividend Option, wherever                date. Duly completed and signed ballots received on or before
      applicable, to the dividend declared, if any, by the Fund under   the close of working hours on the cut-off date would be
      the Scheme(s).                                                    considered a valid ballot. Valid ballots will be counted and if more
                                                                        than 50% of the valid ballots received vote for the proposal then
l     When the Fund declares a dividend under the Scheme(s),            the proposal will stand carried and will be made binding on all
      the Fund shall despatch the dividend warrants to the              Unitholders in the Scheme. Unitholders who oppose the proposal
      Unitholders within 30 days from the date of declaration of        will be allowed to redeem their holdings in the Scheme in the
      dividend.                                                         manner specified by SEBI Regulations. As each ballot may contain
l     The Trustees are bound to make such disclosures to the            more than one proposal, Unitholders who cast a negative vote
      Unitholders as are essential in order to keep them informed       on any one of the proposals will be allowed to redeem their
      about any information known to Trustees which may have            holdings in the Scheme as aforesaid. Unitholders will be informed
      an adverse bearing on their investments.                          of the results of the voting either by mail or through an
l     The appointment of the AMC for the Fund can be terminated         advertisement or by such other means as may be decided by the
      by a majority of the Trustees or by 75% of the Unitholders        Trustee. All proposals that have been accepted by Unitholders,
      of any one or more of the Schemes of the Fund and any             will come into effect on the next Business Day following the
      change in the appointment of the AMC shall be subject to          date on which the valid ballots were counted or any other date as
      the prior approval of SEBI and the Unitholders of the             specified in advance to Unitholders. In all matters to be voted
      respective Scheme(s).                                             upon the Unitholders will be requested to return their ballots to
                                                                        the offices of the Scheme's Transfer Agent and the Transfer Agent
l     The Trustees are obliged to convene a meeting on a                will conduct the counting of the ballots in the presence of an
      requisition of 75% of the Unitholders of a Scheme.                independent third party. Unitholders can inspect the votes cast,
l     75% of the Unitholders of a Scheme can pass a resolution          if so required by them, at the office of the Share Transfer Agent
      to wind up the Scheme.                                            in Hyderabad. The votes will be preserved for a period of one
l     Unitholders have the right to inspect all the documents listed    month after the cut-off date. The scheme shall follow any other
      under "Documents Available for Inspection" on page 43 of          voting policy specified by SEBI for seeking Unitholders' consent.
      this Offer Document.
l     The Trustees shall obtain the consent of the Unitholders:         C) Account Statements and Unit Certificates
l     Whenever required to do so by SEBI, in the interest of the        Each Unit Holder will be sent an Account Statement within 3
      Unitholders                                                       Business Days from the date of Applicable NAV or from the date
                                                                        of acceptance whichever is later in case of additional purchases
l     Whenever required to do so on a requisition made by three-        or redemptions are made. However, when additional Units are
      fourths of the Unitholders of the Scheme                          issued on account of the dividend which is to be reinvested under
l     When the Trustees decide to wind-up or prematurely redeem         the "Dividend Reinvest Option", an Account Statement will be
      the Units.                                                        despatched to all such Unit Holders within 7 Business Days of
l     The Trustees shall ensure that no change in the fundamental       declaration of dividend. In addition, the Unit Holders will also be
      attributes of any Scheme or the Trust or fees and expenses        sent an Account Statement, within 30 days after March 31 for
      payable or any other change which would modify the Scheme         transactions in his/her account from April 1 of the preceding year.
      and affect the interests of Unitholders is carried out unless:    The Account Statement will show all transactions done during
                                                                        the twelve month period from April 1 of the preceding year and
l     A written communication about the proposed change is sent
                                                                        will also indicate the closing balance of Units held and their NAV
      to each Unitholder and
                                                                        as on March 31.
l     An advertisement is given in one English daily newspaper
      having nationwide circulation as well as in a newspaper           The Account Statements shall be non-transferable. This Account
      published in the language of the region where the Head            Statement shall not be constructed as a proof of title and is only
      Office of the Mutual Fund is situated and                         a computer printed statement indicating the details of transactions
                                                                        under the Scheme during the current financial year and giving
l     Unitholders are given an option to exit at the prevailing Net     the closing balance of Units for the information of the Unit Holder.
      Asset Value without any exit load.
                                                                        Further, the Trustee also reserves the right to issue trade
Subject to the Regulations and the guidelines issued by SEBI,           Confirmation Slips on an ongoing basis in lieu of Account
the consent of the Unitholders of the Scheme(s) will be obtained        Statements, indicating the price, and the Units debited or credited
through voting, by mail. Detailed modalities of the same, including     to the Account of the Investor, along with the closing balance of
the principles for entitlement of votes for each Unitholder will be     his Account. Under this system a periodical statement of holdings
finalized in consultation with and after obtaining the approval of      of the investors in the Scheme and all other schemes of Deutsche
SEBI and the Trustees.                                                  Mutual Fund will be given.
The annual report containing accounts of the AMC would be
                                                                        Non-transferable Unit Certificates will be sent, if an applicant so
displayed on the website of the AMC. Unitholders, if they so
                                                                        desires, within six weeks of the receipt of a request of the
desire, may request for the annual report of the AMC.
                                                                        certificate. Unit Certificates will not be issued for any fractional
B) Voting Rights of the Unit Holders                                    units entitlement.

Subject to the provisions of the Regulations as amended from            Units held, either in the form of Account Statement or Unit
time to time, the consent of the Unit Holders shall be obtained, if     Certificates, are non-transferable. The Trustee reserves the right
necessary through postal ballot/mail or any other mode, in              to make the Units transferable at a later date subject to the
consultation with SEBI. Each Unit Holder shall be entitled to one       Regulations issued from time to time.
vote for each unit held by him in respect of each resolution to be      All Units will rank pari passu, among Units within the same Option
passed.                                                                 either Growth Option or Dividend Option, as to assets, earnings
Procedure for Conducting a Unitholder Vote                              and the receipt of dividend distributions, if any, as may be declared
                                                                        by the Trustee.
All issues to be voted upon will be intimated to Unitholders by
mail / courier. Unitholders of record as of the most recent month       The Mutual Fund will encourage the investors to provide their e-
end prior to the month in which a request for a vote is sent, will      mail addresses for all correspondence. The Mutual Fund's



41
proposed website would facilitate request for Account Statement          b)    If 75% of the Unit Holders of the Scheme pass a resolution
by Unitholders. The Mutual Fund will endeavour to send Account                 that the Scheme be wound up, OR
Statements and any other correspondence using e-mail as the              c) If SEBI so directs in the interests of Unit Holders.
mode for communication.
                                                                         Where the Scheme is so wound up, the Trustee shall give notice
The Unitholder will be required to download and print the Account        of the circumstances leading to the winding up of the Scheme
Statement after receiving the e-mail from the Mutual Fund. Should        to :
the Unitholder experience any difficulty in accessing the
                                                                         a) SEBI and
electronically delivered Account Statement, the Unitholder shall
promptly advise the Mutual Fund to enable the Mutual Fund to             b) in two daily newspapers having a circulation all over India, a
make the delivery through alternate means. Failure to advise the               vernacular newspaper with circulation in Mumbai.
Mutual Fund of such difficulty within 24 hours after receiving the       On and from the date of the publication of notice of winding up,
e-mail will serve as an affirmation regarding the acceptance by          the Trustee or the Investment Manager, as the case may be,
the Unitholder of the Account Statement.                                 shall
It is deemed that the Unitholder is aware of all security risks          a) cease to carry on any business activities in respect of the
including possible third party interception of the Account                     Scheme so wound up;
Statements and content of the Account Statements becoming                b) cease to create or cancel Units in the Scheme;
known to third parties.
                                                                         c) cease to issue or redeem Units in the Scheme.
Under no circumstances, including negligence, shall the Mutual
Fund or anyone involved in creating, producing, delivering or            G) Procedure and Manner of Winding Up
managing the Account Statements of the Unitholders, be liable
for any direct, indirect, incidental, special or consequential           The Trustee shall call a meeting of the Unit Holders to approve by
damages that may result from the use of or inability to use the          simple majority of the Unit Holders present and voting at the
service or out of the breach of any warranty. The use and storage        meeting for authorising the Trustee or any other person to take
of any information including, without limitation, the password,          steps for winding up of the Scheme.
account information, transaction activity, account balances and          The Trustee or the person authorised as above, shall dispose of
any other information available on the Unitholder's personal             the assets of the Scheme concerned in the best interest of Unit
computer is at the risk and sole responsibility of the Unitholder.       Holders of the Scheme.
D) NAV Information                                                       The proceeds of sale realised in pursuance of the above shall be
                                                                         first utilised towards discharge of such liabilities as are due and
The NAV of the Scheme(s) will be calculated every Wednesday              payable under the Scheme, and after meeting the expenses
and announced by the Fund on each Wednesday. The Unit holders            connected with such winding up, the balance shall be paid to the
may obtain the information on NAV on any day, by calling the             Unit Holders in proportion to their respective interest in the assets
office of the AMC or any of the Investor Service Centres or on           of the Scheme, as on the date when decision for winding up was
the proposed web site of the AMC. The Fund will publish NAVs             taken. The Unitholder may opt to switch-over to other eligible
every Wednesday, in at least two daily newspapers. Further, the          Schemes then in operation at the prevailing terms of the Scheme
AMC shall publish the purchase and redemption prices of Units            to which the Unitholder is switching to.
daily in a newspaper with all India circulation.
                                                                         On completion of the winding up, the Trustee shall forward to
The AMC shall update the NAVs on the web site of Association             SEBI and Unit Holders a report on the winding up, detailing, the
of Mutual Funds in India - AMFI (www.amfiindia.com) by 8.00              circumstances leading to the winding up, the steps taken for
p.m. In case of any delay, the reasons for such delay would be           disposal of the assets of the Scheme before winding up, net
explained to AMFI and SEBI by the next day. If the NAVs are not          assets available for distribution to the Unit Holders and a Certificate
available before commencement of business hours on the                   from the auditors of the Fund.
following day due to any reason, the Fund shall issue a press
release providing reasons and explaining when the Fund would             Notwithstanding anything contained herein above, the provisions
be able to publish the NAVs.                                             of the Regulations in respect of disclosures of half-yearly reports
                                                                         and annual reports shall continue to be applicable until winding
E) Disclosure of Information under the                                   up is completed or the Scheme ceases to exist.
   Regulations                                                           After the receipt of the report referred to above, under "Procedure
                                                                         and Manner of Winding Up", if SEBI is satisfied that all measures
The annual report of the Scheme will be prepared and the Annual          for winding up of the Scheme have been complied with, the
Report or an abridged summary of the Annual Report will be               Scheme shall cease to exist.
mailed to all Unit Holders not later than six months from the date
of the closure of the relevant financial year.
                                                                         H) Services to Unit Holders
Whenever the report is mailed in a summary form, the full Annual
Report will be available for inspection at the Registered Office of      Investor Services
the Trustee and a copy made available on request to the Unit             Deutsche Mutual Fund is committed to providing high quality
Holders on payment of a nominal fee.                                     service to its unitholders. This would encompass facilitating
The Fund shall before the expiry of one month from the close of          interactions with the unitholders with the Fund, timely
each half year, that is as on March 31 and September 30, publish         dissemination of information about the fund, schemes and the
its unaudited financial results in one national English daily            portfolios, ability to access account related information in a speedy
newspaper circulating in the whole of India and in a newspaper           manner. The Fund will strive to upgrade the quality of service
published in the language of the region where the Head office of         through implementation of appropriate technology, through
the Fund is situated. These shall also be displayed on the website       ensuring quality consciousness amongst its service personnel
of the Mutual Fund and that of AMFI.                                     and agencies associated with it. The Fund will provide high degree
Full portfolio in the prescribed format shall also be disclosed either   of convenience for the unitholders' dealing with it. Following are
by publishing it in the newspapers or by sending to the unitholders      the salient features of Investor service facilities that the fund has
within one month from the end of each half-year and it shall also        proposed to implement / proposed to implemented for the
be displayed on the website of the Fund.                                 convenience of the investors.

F) Duration of the Scheme                                                Facilitating Enquiries and Transactions
                                                                         a) Investor Service by means of Technology
The duration of the scheme is 389 days. However, the Scheme
may be wound up in the following circumstances:                               It will be the endeavour of the Fund to extensively use
                                                                              technological tools in rendering unitholder service. The fund
a) On happening of any event, which in the opinion of the
                                                                              proposes to design and operationalise a website that will be
    Trustee, requires the Scheme to be wound up, OR
                                                                              updated daily for all relevant information in the fund. All the



Offer Document      Deutsche Fixed Term Fund                                                                                                42
     unitholders will have access to Newsletters, portfolio, and       g)   Investment Grievances Redressal Mechanism
     Fund factsheets. Application Forms, Offer Documents and                The Fund will follow-up with Investor Service Centres and
     several other friendly features will be available on the               the Registrar on complaints and inquiries received from
     websites.                                                              investors with an endeavour to resolve them promptly. The
b)   Investor Service Centres in select cities                              fund will also keep a track of complaints received and
                                                                            resolved periodically.
     Unitholders' enquiries and transactions during business hours
     will be entertained at the Investor Service Centres / AMC's            The above is not an exhaustive details of services that the
     offices listed at the end of this Offer Document. Unitholders /        Fund endeavours to provide. As stated earlier the Fund shall
     investors can also write/e-mail/contact them at the AMC's              constantly strive to add more services & upgrade them for
     Corporate office at Mumbai. In addition unitholders may also           the convenience of the unitholders. The status of investor's
     contact the AMC at its corporate office for any additional             queries as of February 2005 is as under:
     service. The AMC will, in course of time, seek to add more
     designated centres at other major locations to handle                  Details of Queries and Complaints received and resolved
     unitholder enquiries and transactions besides providing a high         during January 2003 to February 2005.
     degree of convenience to the unitholders.                              Description      No. of
                                                                                             Queries         Resolved           Pending
c)   Investor Service through personal meetings                                               Recd.
     An Investor Relations personnel of the AMC will be available
     every business day during normal official hours of the AMC                                        T   T+1     T+2   >T+2
     for personal meeting with any unitholder. The purpose of               Change of
     this facility is to attend to any query related to investment          Address            709     0   587     117     5       0
     needs of a unitholder, resolve any unitholder service related          Change of
     queries and to provide such other services that the unitholder         Bank Details       731     0   605     122     4       0
     desires. Adequate sitting space has been provided for the
                                                                            SEBI Referal        0      0    0       0      0       0
     unitholders to meet with the Investor Relations Manager
     and discuss service related matters in the AMC office.                 Client Referal      0      0    0       0      0       0
                                                                            Stock
d)   Investor Service through Telecommunications                            Exchange
     The Fund intends to implement activation of rendering fund             Referal             0      0    0       0      0       0
     information through the telephone at select centres.                   Agent Queries       0      0    0       0      0       0
     Reasonable procedures need to be followed to assure that
                                                                            Non Receipt
     instructions from unitholders are genuine. The unitholder
                                                                            of Dividend        26      4    1       3      18      0
     would be liable for the loss resulting from a fraudulent
     telephone instruction that the Fund reasonably believed as             Revalidation
     genuine. The procedures include: Telephone identification              of Dividend        10      0    0       0      10      0
     number; recording all telephone instructions, requesting               Non Receipt
     personnel identification information (name, phone number,              of A/c
     I.T. permanent account number; birth date etc.) and sending            statement          22      3    14      4      1       0
     written confirmation to the unitholders address of record.             Non Receipt
     The Fund reserves the right to refuse telephone instructions           of Redemp-
     to certain unitholders.                                                tion warrant       14      2    0       7      5       0
                                                                            Revalidation
e)   Investor Relations Manager                                             of Redemp-
     Mr. Murali Ramasubramanian is the Investor Relations                   tion Warrant        0      0    0       0      0       0
     Manager and can be contacted at the office of the AMC, the             Non
     present address being as follows:                                      encashment
     Deutsche Asset Management (India) Private Limited                      of Redemption
     DB House, Hazarimal Somani Marg,                                       warrant             0      0    0       0      0       0
     Fort, Mumbai 400 001                                                   Miscellaneous     1994     0   1591    333     70      0
                                                                            Total             3506     9   2798    586    113      0
f)   Investor Service Standards
     The Fund shall endeavour to adhere to the following time          Note: Miscellaneous includes:
     schedules from date of receipt on an ongoing basis provided       1.   Request for Nominations
     the unitholder furnishes the Mutual Fund with all the required    2.   Request for procedures of Redemption/switch etc
     correct and complete supporting legal / other documents.
                                                                       3.   Addition and deletion of Joint holders/Nominees
     Service              Standard             Maximum                 4.   Change of Name due to marriage/divorce etc / Transmission
     Redemption           Within 3             Within 10               5.   Change of Dividend Option
     Cheque Mailing       Business days        Business days
                                                                       6.   Pledge / Lein
     Updated Account      Within 5             Within 30               7.   Consolidation of accounts
     Statement            Business days        Business days
                                                                       8.   Email, Date of Birth, PAN, Circle, Bank Details and Contact
     Purchase             Within 3             Within 30                    Person - Mailer
     intimations          Business days        Business days
                                                                       Compliance Officer
     Address Change       Within 10            Within 10
                          Business days        Business days           At present, Mr. Ashutosh Sharma, is the Compliance Officer of
                                                                       the AMC. He can be contacted at the Corporate office of the
     Ownership            Within 30            Within 30               AMC, presently at:
     Transmission         Business days        Business days
                                                                       Deutsche Asset Management (India) Pvt. Limited,
     The above-mentioned time Schedule does not include postal         DB House, Hazarimal Somani Marg, Fort, Mumbai 400 001.
     transit time.                                                     (Phone: +91 22 207 2211, Fax: +91 22 207 4411)




43
IX. Taxation                                                                 a period of nine months from the record date and continues
                                                                             to hold the bonus units, then the loss incurred on the original
THE INFORMATION SET FORTH BELOW IS BASED ON THE                              units shall not be allowed to be set off against other profits
MUTUAL FUND'S UNDERSTANDING OF THE TAX LAWS                                  but shall be deemed to be the cost of the bonus units.
PREVAILING AS OF DATE OF THIS OFFER DOCUMENT.                           6.   The long term capital gains on transfer of units would be
CONSIDERING THE INDIVIDUAL NATURE OF TAX                                     exempt from tax under Section 54EC and Section 54ED
CONSEQUENCES, EACH INVESTOR IS ADVISED TO CONSULT                            subject to conditions prescribed in these sections. These
HIS OR HER OWN TAX ADVISOR WITH RESPECT TO THE                               sections require investments in specified bonds or specified
SPECIFIC TAX CONSEQUENCES TO HIM OR HER.                                     capital issue. However, if the amount invested is less than
The information set out below outlines the tax implications with             the capital gains realized, only proportionate capital gains
respect to the Unitholders of the Scheme and with respect to                 would be exempt from tax.
the Mutual Fund and is based on relevant provisions of the Indian       7.   Short term capital gains arising to a unitholder will be taxed
Income Tax Act, 1961 and Wealth Tax Act, 1957 prevailing as on               at the normal rate applicable to that unitholder as per the
March 18, 2005.                                                              provisions of the Act.
Further, for this purpose the proposals of the Finance Bill, 2005            The provisions related to minimum amount not chargeable
are also considered as the same has been presented in the                    to tax, surcharge and education cess described at clause 2
Parliament and will become law after it is given assent to by the            above would also apply to such short term capital gains.
President of India. Since the information below is based on the
relevant provisions as on March 18, 2005 any subsequent changes         8.   No deduction of tax at source shall be made from income
in the relevant provisions could affect tax implications.                    credited or paid by a mutual fund to a unitholder.

A. To Unitholders                                                       9.   As per circular no. 715 dated August 8, 1995 issued by the
                                                                             CBDT in case of resident Unitholders, no tax is required to
1.   Income from Mutual Fund received by Unitholders would                   be deducted at source from capital gains arising at the time
     be tax free in the hands of the Unitholders as per the                  of repurchase or redemption of the units.
     provisions of section 10(35) of the Income-tax Act, 1961 (the
     Act).                                                              10. Under Section 195 of the Act in case of schemes other than
                                                                            equity oriented scheme, the Mutual Fund required to deduct
2.   Under Section 2(29A) of the Act, read with section 2(42A) of
                                                                            tax at source at the rate of 20% on any long term capital
     the Act, a unit of a Mutual Fund is treated as a long term
                                                                            gains chargeable to tax if the payee Unitholder is a non
     capital asset if the same is held for more than 12 months.
                                                                            resident. In respect to short-term capital gains, tax is required
     Under Section 112 of the Act, capital gains arising on the             to be deducted at source at the rate of 30% if the payee
     transfer of long term capital assets are subject to tax at the         Unitholder is a non-resident non-corporate and at the rate of
     rate of 20%. The capital gains will be computed by deducting           40% if the payee Unitholder is a foreign company. Further,
     expenditure incurred in connection with such transfer and              the surcharge and education cess as described at clause 2
     indexed cost of acquisition of the unit from the sale                  above would apply.
     consideration. However, the maximum tax payable on long
                                                                             In case the Unitholder is entitled to the benefit of a lower
     term capital gains on units is restricted to 10% of capital
                                                                             rate available under a Double Taxation Avoidance Agreement,
     gains calculated without indexation of the cost of acquisition.
                                                                             the Unitholder will be required to provide the Mutual Fund
     In case of an individual or HUF, being a resident, where the            with a certificate obtained from his Assessing Officer stating
     total income as reduced by the long term capital gains is               his eligibility for the lower rate.
     below the maximum amount not chargeable to tax
     (Rs. 50,000)1, the long term capital gains shall be reduced to     9.   Mutual Fund units are exempt from wealth tax.
     the extent of the shortfall and only the balance long term
     capital gains will be subject to the flat rate of taxation.        B.   To the Mutual Fund
                                                                        1.   Deutsche Mutual Fund is a Mutual Fund registered with SEBI
     In addition to the aforesaid tax, in the case of an individual,         and as such is eligible for benefits under Section 10(23D) of
     HUF or Association of Persons (AOP), where the income                   the Act. Accordingly, its entire income is exempt from tax.
     exceeds Rs. 850,000 a surcharge of 10%, in the case of
     companies a surcharge of 2.5% and in case of an artificial         2.   Mutual Funds are required to pay distribution tax on income
     juridical person a surcharge of 10% of such tax liability is            distributed by it at the rate of 13.06875% in the case of
     also payable. A 2% education cess on total income tax                   distributions to individuals and HUFs. An increased rate of
     (including surcharge) is payable by all categories of                   20.91% is applicable for distributions made to persons other
     taxpayers2.                                                             than an individual or a HUF3.
3.   The capital loss resulting from sale of units would be available
     for setting off against other capital gains made by the investor
                                                                        1
                                                                             As per the Budget 2005, the maximum amount not
     and would reduce the tax liability of the investor to that              chargeable to tax is increased to Rs. 100,000 in case of all
     extent. However, losses on transfer of long term capital                individuals, to Rs. 125,000 in case of women and to
     assets would be allowed to be set-off only against gains                Rs.150,000 in case of senior citizens.
     from transfer of long-term capital assets and the balance          2
                                                                             As per the Budget 2005, in the case of an individual, HUF or
     long-term capital loss shall be carried forward separately for          Association of Persons (AOP), where the income exceeds
     a period of eight assessment years to be set off only against           Rs. 1,000,000 a surcharge of 10%, in the case of domestic
     long-term capital gains.                                                companies a surcharge of 10%, in case of foreign companies
4.   Where a person buys any units within a period of three                  a surcharge of 2.5% and in case of an artificial juridical person
     months before the record date and sells such units within               a surcharge of 10% of such tax liability is also payable. A
     nine months after such date, the dividend income on such                2% education cess on total income tax (including surcharge)
     units being exempt from tax, then the capital loss, if any, on          is payable by all categories of taxpayers.
     such sale to the extent of dividend income cannot be set off       3
                                                                             As per the Budget 2005, dividend distribution tax is required
     against other gains.
                                                                             to be paid at the rate of 14.025% in the case of distributions
5.   Where a person buys units (original units) within a period of           to individuals and HUFs. An increased rate of 22.44% is
     three months before the record date, receives bonus units               applicable for distributions made to persons other than an
     on such original units, and then sells the original units within        individual or a HUF.



Offer Document      Deutsche Fixed Term Fund                                                                                              44
X. Net Asset Value and                                                  plus the difference between the redemption value and the cost
                                                                        spread uniformly over the remaining maturity period of the
   Valuation of Assets                                                  instruments) a similar process will be adopted for non-traded debt
                                                                        securities with residual maturity of upto 182 days, in the absence
                                                                        of any other standard benchmarks in the market. In case of a
A) Computation of Net Asset Value                                       debt security with maturity greater than 182 days at the time of
The NAV of the Units of the Scheme(s) will be computed by               purchase, the last valuation price should be used instead of
dividing the net assets of the Scheme(s) by the number of Units         purchase cost for valuation of the security for the period from
outstanding on the valuation date. The Fund shall value its             182 days prior to the maturity date. All other non-traded Non
investments according to the valuation norms, as specified in           Government debt instruments shall be valued using the method
the Eighth Schedule of the Regulations, or such norms as may            suggested below.
be prescribed by SEBI from time to time. The broad valuation
                                                                        Non Traded / Thinly Traded Debt Securities of over 182 Days to
norms are detailed below:
                                                                        Maturity
Traded Securities                                                       For the purpose of valuation, all non traded debt securities would
l    Securities shall be valued at the last quoted closing price on     be classified into "Investment grade" and "Non Investment grade"
     the stock exchange.                                                securities based on their credit ratings. The non-investment grade
                                                                        securities would further be classified as "Performing" and "Non
l    When the securities are traded on more than one exchange,          Performing" assets.
     the securities shall be valued at the last quoted closing price
     on the exchange where the security is principally traded. It       l    All non government investment grade debt securities,
     would be left to the AMC to select the appropriate stock                classified as not traded, shall be valued on yield to maturity
     exchange, but the reasons for the selection should be                   basis as described below.
     recorded in writing. There should however be no objection          l    All non government non-investment grade performing debt
     for all scrips being valued at the prices quoted on the stock           securities would be valued at a discount of 25% to the face
     exchange where a majority in value of the investments are               value.
     principally traded.
                                                                        l    All non government non-investment grade non-performing
l    Once a stock exchange has been selected for valuation of a              debt securities would be valued based on the provisioning
     particular security, reasons for change of the exchange shall           norms.
     be recorded in writing by the AMC.
                                                                        The approach in valuation of non traded debt securities is based
l    When on a particular valuation day, a security has not been        on the concept of using spreads over the benchmark rate to arrive
     traded on the selected stock exchange, the value at which it       at the yields for pricing the non traded security.
     is traded on another stock exchange may be used.
                                                                        The yields for pricing the non traded debt security would be arrived
l    When a debt security (other than Government Securities) is         at using the process as defined below.
     not traded on any stock exchange on a particular valuation
     day, the value at which it was traded on the principal stock       l    Step A: A risk free benchmark yield is built using the
     exchange or any other stock exchange, as the case may be,               government securities (GOI Sec) as the base. GOI Securities
     on the earliest previous day may be used, provided such                 are used as the benchmarks as they are traded regularly,
     date is not more than 15 days prior to the valuation date.              free of credit risk and traded across different maturity
                                                                             spectrums every week.
l    When a debt security (other than Government Securities) is
     purchased by way of private placement, the value at which          l    Step B: A matrix of spreads (based on the credit risk) are
     it was bought may be used for a period of 15 days beginning             built for marking up the benchmark yields. The matrix is built
     from the date of purchase.                                              based on traded corporate paper on the wholesale debt
                                                                             segment of an appropriate stock exchange and the primary
Thinly Traded Debt Securities                                                market issuances. The matrix is restricted only to investment
Thinly traded securities as defined in the Regulations shall be              grade corporate paper.
valued in the manner as specified in the guidelines issued by
                                                                        l    Step C: The yields as calculated above are marked-up/
SEBI, as follows:
                                                                             marked-down for ill-liquidity risk.
A debt security (other than Government Securities) shall be
                                                                        l    Step D: The yields so arrived are used to price the portfolio.
considered as a thinly traded security if on the valuation date,
there are no individual trades in that security in marketable lots
                                                                        Methodology
(currently Rs. 5 crore) on the principal stock exchange or any
other stock exchange.                                                   Construction of Risk Free Benchmark
A thinly traded debt security as defined above would be valued          Using Government of India dated securities, the benchmark shall
as per the norms set for non-traded debt security.                      be constructed as below:
                                                                        l    Government of India dated securities will be grouped into
Non Traded Securities
                                                                             the following duration buckets viz., 0.5-1 years, 1-2 years,
l    When a security (other than Government Securities) is not               2-3 years, 3-4 years, 4-5 years, 5-6 years and 6 years and the
     traded on any stock exchange for a period of 15 days prior to           volume weighted yield would be computed for each bucket.
     the valuation date, the scrip must be treated as a 'non traded'         These duration buckets may be changed to reflect the market
     security.                                                               value more closely by any agency suggested by AMFI giving
                                                                             benchmark yield / matrix of spreads over benchmark yield.
Valuation of Non-Traded / Thinly Traded Securities                           Accordingly, there will be a benchmark YTM for each duration
Non traded / thinly traded securities shall be valued "in good faith"        bucket.
by the Asset Management Company on the basis of the valuation
principles laid down below:                                             l    The benchmark as calculated above will be set at least
                                                                             weekly, and in the event of any significant movement of
Non Traded / Thinly Traded Debt Securities of upto 182 Days to               prices of Government securities on account of any event
maturity                                                                     impacting interest rates on any day such as change in the
As the money market securities are valued on the basis of                    RBI policies, the benchmark will be reset to reflect any
amortization (cost plus accrued interest till the end of the day             change in the market conditions.



45
Note: The concept of duration over tenor has been chosen in             discount or premium as may be required. The range of the
order to capture the reinvestment risk. It is intended to gradually     markups for both discount as well as premium is given below:
move towards a methodology that incorporates the continuous
curve approach for valuation of such securities. However, in view       Premium
of the current lack of liquidity in the corporate bond markets, a       A Discretionary premium of up to -50 Basis Points for securities
continuous curve approach to valuation would be necessarily             having a duration of up to 2 years and up to 25 Basis Points for
based on limited data points, and this would result in out of line      securities having duration higher than 2 years will be permitted
valuations. As an interim methodology therefore it is proposed          to be provided for the above mentioned types of risks. The
that the Duration Bucket approach be adopted and continuously           rationale for the above discount structure is to take cognizance
tracked in order to fine-tune the duration buckets on a periodic        of the differential interest rate risk of the securities. This structure
basis. Over the next few years it is expected that with the             will be reviewed periodically.
deepening of the secondary market trading, it would be possible
to make a gradual move from the Duration Bucket approach                Discount
towards a continuous curve approach.                                    SEBI vide circular dated 20 February, 2002, has revised the
                                                                        discretionary discount limits as below:
Building a Matrix of Spreads for Marking-up the Benchmark
                                                                        Category                          Discretionary discount over
Yield                                                                                                     benchmark yield in basis points
Mark up for credit risk over the risk free benchmark YTM as
calculated in step A, will be determined using the trades of            Rated Instruments with            Discretionary Discount of up
corporate debentures/bonds of different ratings. All trades on          duration up to 2 years            to +100
appropriate stock exchange during the fortnight prior to the
benchmark date will be used in building the corporate YTM and           Rated Instruments with            Discretionary Discount of up
spread matrices. Initially these matrices will be built only for        duration over 2 years             to +75
corporate securities of investment grade. The matrices are
dynamic and the spreads will be computed every week. The matrix         Adjustments for Internally Rated Securities
will be built for all duration buckets for which the benchmark GOI      To value an unrated security, the fund manager has to assign an
matrix is built to effectively link the corporate matrix with the       internal credit rating, which will be used for valuation. Since
GOI securities matrix. Accordingly:                                     unrated instruments tend to be more illiquid than rated securities,
                                                                        the yields would be mandatorily marked up by adding +50 basis
l    All traded paper (with minimum traded value of Rs. 1 crore)        point for securities having a duration of up to two years and +25
     (Rupees One Crore Only) will be classified by their ratings        basis point for securities having duration of higher than two years
     and grouped into 7 duration buckets; for rated securities,         to account for the illiquidity risk.
     the most conservative publicly available rating will be used;
                                                                        The yields derived from the above methodology could be adjusted
l    For each rating category, average volume weighted yield will       to account for risk mentioned above. SEBI vide circular dated 20
     be obtained both from trades on the appropriate stock              February, 2002, has revised the discretionary discount limits as
     exchange and from the primary market issuances;                    below :

l    Where there are no secondary trades on the appropriate             Category                          Discretionary discount over
     stock exchange in a particular rating category and no primary                                        benchmark yield in basis points
     market issuances during the fortnight under consideration,
     then trades on appropriate stock exchange during the 30            Unrated Instruments with          Discretionary Discount of up
     days period prior to the benchmark date will be considered         duration up to 2 years            to +50 over and above the
     for computing the average YTM for such rating category;                                              mandatory Discount of +50

l    If the matrix cannot be populated using any or all of the above    Unrated Instruments with          Discretionary Discount of up
     steps, then credit spreads from trades on appropriate stock        duration over 2 years             to +50 over and above the
     exchange of the relevant rating category over the AAA trades                                         mandatory Discount of +25
     will be used to populate the matrix;                               The benchmark yield / matrix of spreads over benchmark yield
l    In each rating category, all outliers will be removed for          obtained from any agency suggested by AMFI as a provider of
     smoothening the YTM matrix;                                        benchmark yield/matrix of spreads over benchmark yield to mutual
                                                                        funds, must be applied for valuation of securities on the day on
l    Spreads will be obtained by deducting the YTM in each              which the bench mark yield/matrix of spreads over benchmark
     duration category from the respective YTM of the GOI               yield is released by the aforesaid agency.
     securities;
                                                                        Valuation of Securities with Put / Call options
l    In the event of lack of trades in the secondary market and         The option embedded securities would be valued as follows:
     the primary market the gaps in the matrix would be filled by
     extrapolation. If the spreads cannot be extrapolated for the       Securities with Call option
     reason of practicality, carrying the spreads from the last
                                                                        The securities with call option shall be valued at the lower of the
     matrix will fill the gaps in the matrix.
                                                                        value as obtained by valuing the security to final maturity and
                                                                        valuing the security to call option.
Mark-up / Mark-down Yield
The Yields calculated would be marked-up/marked-down to                 In case there are multiple call options, the lowest value obtained
account for the ill-liquidity risk, promoter background, finance        by valuing to the various call dates and valuing to the maturity
company risk and the issuer class risk. As the level of ill-liquidity   date is to be taken as the value of the instrument.
risk would be higher for non rated securities the marking process
for rated and non rated securities would be differentiated as           Securities with Put option
follows:                                                                The securities with put option shall be valued at the higher of the
                                                                        value as obtained by valuing the security to final maturity and
Adjustments for Securities rated by External Rating                     valuing the security to put option.
Agencies                                                                In case there are multiple put options, the highest value obtained
The Yields so derived out of the above methodology could be             by valuing to the various put dates and valuing to the maturity
adjusted to account for risk mentioned above by an appropriate          date is to be taken as the value of the instruments.




Offer Document      Deutsche Fixed Term Fund                                                                                                46
Securities with both Put and Call option on the same                  Expenses and Incomes Accrued
day                                                                   All expenses and incomes accrued up to the valuation date shall
The securities with both Put and Call option on the same day          be considered for computation of NAV. For this purpose, major
would be deemed to mature on the Put/Call day and would be            expenses like management fees and other periodic expenses
valued accordingly.                                                   would be accrued on a day to day basis. The minor expenses and
                                                                      income will be accrued on a periodic basis, provided the non-
Government Securities                                                 daily accrual does not affect the NAV calculations by more than
Government securities will be valued as per the prices for            1%.
Government Securities released by an agency suggested by AMFI
for the sake of uniformity in calculation of NAVs.                    Changes in Securities and in number of Units
                                                                      Any changes in securities and in the number of Units will be
Fixed Income and Money Market Securities                              recorded in the books not later than the first valuation date
                                                                      following the date of transaction. If this is not possible, given the
l    Debt instruments shall generally be valued on a yield to
                                                                      frequency of NAV disclosure, the recording may be delayed up to
     maturity basis on the basis of the capitalization factor for
                                                                      a period of 7 days following the date of the transaction, provided
     comparable traded securities and with an appropriate
                                                                      as a result of such non recording, the NAV calculation shall not be
     discount for a lower liquidity.
                                                                      affected by more than 1%.
l    While investments in call money, bills purchased under           In case the Net Asset Value of a Scheme differs by more than
     rediscounting scheme and short term deposits with banks          1%, due to non - recording of the transactions, the investors or
     shall be valued at cost plus accrual; other money market         scheme/s as the case may be, shall be paid the difference in
     instruments shall be valued at the yield at which they are       amount as follows: -
     currently traded. For this purpose, instruments not traded
     for a period of 7 days will be valued at cost plus interest      (i)    If the investors are allotted units at a price higher than Net
     accrued till the beginning of the day plus the difference               Asset Value or are given a price lower than Net Asset Value
     between the redemption value and the cost spread uniformly              at the time of sale of their units, they shall be paid the
     over the remaining maturity period of the instruments.                  difference in amount by the Scheme.
                                                                      (ii)   If the investors are charged lower Net Asset Value at the
Valuation of "Repo"
                                                                             time of purchase of their units or are given higher Net Asset
Where instruments have been bought on 'repo' basis, the                      Value at the time of sale of their units, asset management
instrument must be valued at the resale price after deduction                company shall pay the difference in amount to the Scheme.
of applicable interest up to date of resale. Where an                        The asset management company may recover the difference
instrument has been sold on a `repo' basis, adjustment must                  from the investors.
be made for the difference between the repurchase price
(after deduction of applicable interest up to date of repurchase)     The valuation guidelines as outlined above are as per prevailing
and the value of the instrument. If the repurchase price              Regulations and are subject to change from time to time in
exceeds the value, the depreciation must be provided for and          conformity with changes made by SEBI.
if the repurchase price is lower than the value, credit must
be taken for the appreciation.                                        NAV of Units under the Scheme(s) shall be calculated as
                                                                      shown below
Valuation of Convertible Debentures and Bonds                                        Market or Fair Value of Scheme's investments (+)
In respect of convertible debentures and bonds, the non-                             Current Assets (-) Current Liabilities and Provisions
                                                                      NAV (Rs.) =
convertible and convertible components shall be valued                                     No. of Units outstanding under Scheme
separately. The non-convertible component shall be valued on
the same basis as would be applicable to a debt instrument. The       The first NAV will be calculated and announced not later than 30
convertible component shall be valued on the same basis as would      days from the close of the IPO. Subsequently, the NAV of the
be applicable to an equity instrument. If, after conversion the       Scheme(s) will be calculated every Wednesday and announced
resultant equity instrument would be traded pari passu with an        by the fund on each Wednesday. The valuation of the Scheme(s)'
existing instrument, which is traded, the value of the latter         assets and calculation of the Scheme(s)' NAV shall be subject to
instrument can be adopted after an appropriate discount for the       audit on an annual basis and such regulations as may be prescribed
non-tradability of the instrument during the period preceding the     by SEBI from time to time.
conversion. While valuing such instruments, the fact whether
the conversion is optional will also be factored in.                  B) Accounting Policies & Standards
                                                                      In accordance with the Regulations, the AMC will follow the
Valuation of Warrants                                                 accounting policies and standards, as detailed below:
In respect of warrants to subscribe for shares attached to
instruments, the warrants shall be valued at the value of the         l      The AMC, for each Scheme, shall keep and maintain proper
share which would be obtained on exercise of the warrant as                  books of accounts, records and documents, for the Scheme
reduced by the amount which would be payable on exercise                     so as to explain its transactions and to disclose at any point
of the warrant. A discount similar to the discount to be                     of time the financial position of the Scheme and in particular
determined in respect of convertible debentures (as referred                 give a true and fair view of the state of affairs of the Fund.
in valuation of convertible debentures and bonds above) shall         l      For the purposes of the financial statements, the Fund shall
be deducted to account for the period which must elapse                      mark all investments to market and carry investments in the
before the warrant can be exercised;                                         balance sheet at market value. However, since the unrealised
                                                                             gain arising out of appreciation on investments cannot be
Valuation of Derivative Products                                             distributed, provisions shall be made for exclusion of this
l    The traded derivatives shall be valued at market price in               item when arriving at distributable income.
     conformity with the stipulations of sub clauses (i) to (v) of
                                                                      l      In respect of all interest-bearing investments, income shall
     clause 1 of the Eighth Schedule to the Regulations.
                                                                             be accrued on a day to day basis as it is earned. Therefore
l    The valuation of untraded derivatives shall be done in                  when such investments are purchased, interest paid for the
     accordance with the valuation method for untraded                       period from the last interest due date up to the date of
     investments prescribed in sub clauses (i) and (ii) of clause 2          purchase should not be treated as a cost of purchase but
     of the Eighth Schedule to the Regulations.                              shall be debited to interest Recoverable Account. Similarly,



47
    interest received at the time of sale for the period from the           reserves and if negative, shall be debited to reserves, the
    last interest due date up to the date of sale must not be               face value being credited to the Capital Account. Similarly,
    treated as an addition to sale value but shall be credited to           when Units are repurchased, the difference between the
    Interest Recoverable Account.                                           Purchase Price and face value of the Unit, if positive, shall
                                                                            be debited to reserves and, if negative, shall be credited to
l   In determining the holding cost of investment and the gains
                                                                            reserves, the face value being debited to the Capital Account.
    or loss on sale of investments, the "average cost" method
    shall be followed.                                                  l   When Units are sold an appropriate part of the sale proceeds
l   Transaction for purchase or sale of investments shall be                shall be credited to an Equalisation Account and when Units
    recognised as of the trade date and not as of the settlement            are repurchased an appropriate amount shall be debited to
    date, so that the effect of all investments traded during a             Equalisation Account. The net balance on this account shall
    financial year are recorded and reflected in the financial              be credited or debited to the Revenue Account. The balance
    statements for that year. Where investment transactions take            on the Equalisation Account debited or credited to the
    place outside the stock market, for example, acquisition                Revenue Account shall not decrease or increase the net
    through private placement or purchases or sales through                 income of the Fund but is only an adjustment to the
    private treaty, the transaction would be recorded in the event          distributable surplus. It shall therefore be reflected in the
    of a purchase, as of the date on which the scheme obtains               Revenue Account only after the net income of the Fund is
    an enforceable obligation to pay the price or, in the event of          determined.
    a sale, when the Scheme obtains an enforceable right to             l   The cost of investments acquired or purchased shall include
    collect the proceeds of sale or an enforceable obligation to            all such costs incurred for effecting such acquisition /
    deliver the instruments sold.                                           purchase. In respect of privately placed debt instruments
l   Where income receivable on investments has accrued but                  any front-end discount offered shall be reduced from the
    has not been received for the period as specified in the SEBI           cost of the investment.
    guidelines for identification and provisioning for NPAs
    (referred to in clause 8 above), provision shall be made by         l   Underwriting commission shall be recognised as revenue
    debiting to the revenue account the income so accrued in                only when there is no devolvement on the Scheme. Where
    the manner specified in the SEBI guidelines for identification          there is devolvement on the Scheme, the full underwriting
    and provisioning for NPAs ( referred to in clause 8 above).             commission received and not merely the portion applicable
    Insofar as provision for the principal amount is concerned,             to the devolvement shall be reduced from the cost of the
    the same shall be provided as specified in the aforesaid                investment.
    guidelines. No further accrual of income should be made in          The accounting policies and standards as outlined above are as
    respect of such investments.                                        per the existing Regulations and are subject to changes made
l   When Units are sold, the difference between the sale price          from time to time by AMC and/or Trustees. However such
    and the face value of the Unit, if positive, shall be credited to   changes would be in conformity with the Regulations.




Offer Document     Deutsche Fixed Term Fund                                                                                           48
XI. Other Matters                                                     Associates & Group Companies as Distributors -
                                                                      The AMC has utilised the services of one of the associates namely,
                                                                      Deutsche Bank and Kotak Mahindra Bank as Distributors for
A) Transactions with the Sponsors /                                   procuring Unit subscriptions for units of Deutsche Alpha Equity
   Associates                                                         Fund, Deutsche Investment Opportunity Fund, Deutsche MIP
                                                                      Fund, Deutsche Premier Bond Fund, Deutsche Short Maturity
Investment in Group Companies                                         Fund, Deutsche Dynamic Bond Fund, Deutsche Floating Rate
The AMC has invested in following securities of Associates            Fund and Deutsche Insta Cash Plus Fund. The fees and
Companies/Group Companies since inception till September 30,          commission payable were at the same rates offered to other
2004.                                                                 distributors by the scheme(s). Further, the AMC also dealt with
                                                                      Deutsche Equity (India) Private Limited as secondary market
Name of the Associate/              Name of the Scheme
                                                                      broker in the Equity segment. The brokerage paid to the associate
Group Company                         (Rs. In Crores)
                                                                      is at the same rate offered to other brokers in the segment.
                            DPBF      DSMF       DICPF    DFRF
                                                                      Amount Paid / payable to Associates
Kotak Mahindra Bank                                                   Amount Paid / payable to Associates as of Sept. 30, 2004
(Associate Co.)
Fixed Deposit                  –           5      117       21                                                             (Amt in Lac)
Corporate Debt                 --         5.2      –         –
                                                                      Particulars                   DPBF         DSMF         DICPF
Deutsche Securities                                                   Deutsche Bank
(India) Private Limited                                               Commission on
(Group Company)                                                       Distribution of Units         31.11        41.63        21.81
Commercial Paper
(Including Interscheme)      6.32        21.36   24.6        --       Kotak Mahindra
                                                                      Bank Limited                  1.20          2.31         2.75
Underwriting Obligations with respect to issues of                    Deutsche Equity
Associate Companies                                                   (India) Pvt. Ltd.               –            –             –
The AMC has till date, not entered into any underwriting contracts
in respect of any public issue made by any of its associate
                                                                      Particulars                   DDBF         DFRF          DIOF
companies.
                                                                      Deutsche Bank
Subscription in issues lead managed by the Sponsor or                 Commission on
any of its Associates                                                 Distribution of Units         1.66          0.45        24.51
The Mutual Fund has not subscribed for allotments in any issues       Kotak Mahindra
lead managed by the Sponsor or any of its associates except for       Bank Limited                  0.00          0.00         0.09
the Initial Public Offering of Jet Airways (India) Limited wherein
Deutsche Equities India Pvt. Ltd. was one of the book running         Deutsche Equity
lead managers to the issue.                                           (India) Pvt. Ltd.               -             -          3.73

Dealing with Associate Companies
                                                                      Particulars                  DMIPA        DMIPB         DAEF
The AMC may from time to time, for the purpose of conducting
its normal business, use the services (including brokerage services   Deutsche Bank
and securities transactions) of the Sponsor, its subsidiaries,        Commission on
associates of the Sponsor and employees or relatives. The             Distribution of Units         1.02          1.04        47.44
associates of the Sponsor on the date of this Offer Document          Kotak Mahindra
are:                                                                  Bank Limited                  0.23          0.08         2.04
Deutsche Bank                                                         Deutsche Equity
Deutsche Trustee Services (India) Private Ltd.                        (India) Pvt. Ltd.             0.98          0.37        12.88

Deutsche Network Services Private Ltd.                                Associate transactions, if carried out, will be as per the SEBI
                                                                      Regulations and the limits prescribed thereunder. The Scheme(s)
Deutsche Securities (India) Private Ltd.                              shall not make any investment in:

Comfund Consulting Ltd.                                               l    Any unlisted security of an associate or group company of
                                                                           the Sponsor
Deutsche Equities (India) Private Ltd.
                                                                      l    Any security issued by way of private placement by an
The AMC may utilise the services of Sponsor, Group Companies               associate or group company of the Sponsor
and any other subsidiary or associate company of the Sponsor          l    The listed securities of group companies of the Sponsor
established or to be established at a later date, in case such a           which is in excess of 25% of the net assets.
company (including employees or relatives) is in a position to
provide the requisite services to the AMC. The AMC will conduct       Deutsche branches to act as Investor Service Centres
its business with the aforesaid companies (including employees
or relatives) on commercial terms and on arms' length basis and       The AMC may avail the services of the Sponsor and / or its
at mutually agreed terms and conditions to the extent permitted       associates for usage of designated branches as Investor Service
under the SEBI Regulations, after evaluation of the                   Centres and/or to act as collection and distribution agents. The
competitiveness of the pricing offered by the Sponsor, associate      Sponsor / associates shall be paid a fee based on the quality of
companies (including employees or relatives) and the services to      services rendered. These fees shall be debited to the Scheme(s),
be provided by them.                                                  subject to SEBI Regulations.




49
B) Policy on Offshore Investments by                                          quoted instrument on spot basis; and transfers of unquoted
                                                                              securities will be made as per the policy laid down by the
   the Scheme                                                                 Trustee from time to time; and
Offshore investments will be made subject to any / all approvals,
conditions thereof as may be stipulated by SEBI / RBI and provided      (b)   the securities so transferred shall be in conformity with the
such investments do not result in expenses to the Fund in excess              investment objective of the scheme to which such transfer
of the ceiling on expenses prescribed by and consistent with                  has been made.
costs and expenses attendant to international investing. The Fund       The Fund does not ordinarily envisage making inter-scheme
may, where necessary, appoint other intermediaries of repute as         transfers under the Scheme. However, if such inter-scheme
advisors, custodian / sub-custodians etc. for managing and              transfers are done they will be effected based on the prescribed
administering such investments. The appointment of such                 valuation norms, which may be amended by the AMC and / or
intermediaries shall be in accordance with the applicable               Trustees from time to time.
requirements of SEBI and within the permissible ceilings of
expenses. The fees and expenses would illustratively include,           E) Underwriting by a Scheme
besides the investment management fees, custody fees and
costs, fees of appointed advisors and sub-managers, transaction         In order to generate additional income, the Scheme may enter
costs and overseas regulatory costs.                                    into underwriting commitments for primary issues. In terms of
                                                                        the guidelines issued by SEBI, the Mutual Fund may make, but
At present, the scheme will not make any investment in foreign          has not yet made, an application to SEBI for registration under
securities.                                                             SEBI (Underwriters) Rules and Regulations, 1993.

C) Borrowing by Mutual Fund                                             In this connection, once granted permission by SEBI, a Scheme
                                                                        will be subject to the following underwriting restrictions :
Under the Regulations, the Fund is allowed to borrow to meet its
temporary liquidity needs of the Scheme for the purpose of              For the purposes of Regulation 7, of the SEBI (Underwriters)
repurchase, redemption of units or payment of interest or dividend      Regulations, the capital adequacy of the Mutual Fund shall be
to the Unit Holders. Further, as per Regulations, the Fund shall        the net assets of the Scheme as applicable.
not borrow more than 20% of the Net Assets of the Scheme and
the duration of such borrowing shall not exceed a period of six         The total underwriting obligations of the Mutual Fund at any time
months.                                                                 shall not exceed the total net asset value of the Scheme.

Unitholders should however note that in the normal course of            Any Underwriting commitment by the Mutual Fund will be made
the Fund's operations there might be occasional instances of            as if the Mutual Fund is actually investing the amount under the
overdraft in the collection account due to dishonor of cheque           Scheme. Accordingly, all investment restrictions and prudential
deposited by an Investor. Since this unusual instance cannot be         guidelines related to investments individually and in aggregate
apprehended in advance the AMC will endeavour to normalize              pursuant to the SEBI (MF) Regulations, 1996, insofar as they may
the account within 1 business day and AMC will also bear the            be applicable, shall apply to underwriting obligations, which may
cost incurred on such inadvertent overdraft without affecting the       be undertaken by the Scheme.
Investors of the Fund.
                                                                        No underwriting commitment may be undertaken in respect of
                                                                        any Scheme during the period of six months prior to the
D) Inter-Scheme Transfers                                               redemption of the Scheme.
Transfers of investments from one scheme to another scheme
in the same mutual fund shall be allowed only if:                       Underwriting commitments, if any, undertaken by the Scheme
                                                                        must be in accordance with the investment objectives of the
(a)   such transfers are done at the prevailing market price for        Scheme.

F) Disclosure under Regulation 25(11)
Disclosure under Regulation 25(11) of SEBI (MF) Regulations, 1996
Deutsche Mutual Fund (DeMF) has made the following investments in companies, which held units in excess of 5% of the net asset
value of any scheme of Deutsche Mutual Fund during the period ended September 30, 2004:
Disclosure under Regulation 25(11) of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended.
Investments made by the schemes of Deutsche Mutual Fund in Companies or their subsidiaries that had invested more than 5% of the
net assets of any scheme of Deutsche Mutual Fund as on September 30, 2004.
Company Name                          Scheme invested            Invetsments made               Aggregated for        Outstanding as at
                                     in by the Company             by schemes of               the period under      September 30, 2004
                                                                Deutsche Mutual Fund          Regulation 25 (11)     at Market/Fair Value
                                                                  in the company/                  At cost
                                                                      subsidiary               (Rupees in lakhs)       (Rupees in lakhs)
Bank of Baroda                    DICPF                        DAEF                                       206.01                           –
Bharti Televentures Limited       DICPF                        DICPF                                      947.56                        –
                                  DFRF                         DAEF                                       398.29                   146.10
                                                               DIOF                                       123.06                        –
                                                               DMIP-A                                      11.85                        –
                                                               DMIP-B                                       5.92                        –
Export Import Bank of India       DSMF                         DSMF                                     6,956.79                           –
                                                               DICPF                                    3,843.90                           –
                                                               DPBF                                    17,704.13                           –
                                                               DMIP-A                                     299.56                           –
                                                               DMIP-B                                     199.71                           –
Finolex Cables Limited            DSMF                         DSMF                                     2,552.65                           –
                                                               DICPF                                    1,200.00                           –
                                                               DPBF                                       519.16                           –



Offer Document      Deutsche Fixed Term Fund                                                                                           50
Company Name                     Scheme invested      Invetsments made        Aggregated for      Outstanding as at
                                in by the Company       by schemes of        the period under    September 30, 2004
                                                     Deutsche Mutual Fund   Regulation 25 (11)   at Market/Fair Value
                                                       in the company/           At cost
                                                           subsidiary        (Rupees in lakhs)    (Rupees in lakhs)
Grasim Industries Limited     DICPF                 DSMF                             1,088.04                      –
                              DSMF                  DICPF                              509.27                      –
                                                    DPBF                             1,081.70                      –
                                                    DAEF                             1,000.60                 673.97
                                                    DIOF                               265.60                 146.57
                                                    DMIP-A                              41.79                  28.69
                                                    DMIP-B                              16.89                  11.48
                                                    ^DAEF                              130.76                      –
                                                    ^DIOF                               44.12                      –
                                                    ^DMIP-A                             14.41                      –
                                                    ^DMIP-B                              9.25                      –
HCL Technologies Limited      DSMF                  DAEF                             1,132.33                 505.45
                                                    DIOF                               239.63                 115.95
                                                    DMIP-A                              28.51                      –
Hindalco Industries Limited   DSMF                  DAEF                               676.65                 269.56
                              DFRF                  DIOF                                93.52                      –
                                                    DMIP-A                              14.03                      –
                                                    DMIP-B                               9.35                      –
Hindustan Lever Limited       DICPF                 DSMF                             4,554.69                 119.88
                              DSMF                  DICF                             1,242.87                      –
                                                    DAEF                               221.96                      –
                                                    DFRF                               531.42                  45.29
Hindustan Zinc Ltd.           DFRF                  DAEF                                35.78                         –
Housing Development           DICPF                 DSMF                            14,887.35                      –
Finance Corporation                                 DICPF                           21,492.53               7,557.96
                                                    DPBF                            14,457.31                      –
                                                    DAEF                               275.45                  45.74
                                                    DFRF                             2,392.59               1,918.85
                                                    DDBF                             1,446.57                      –
                                                    DMIP-A                           1,239.83                      –
                                                    DMIP-B                             200.00                      –
Industrial Development        DICF                  DSMF                            24,095.45                 676.02
Bank of India                 DSMF                  DICPF                           28,195.18               9,699.44
                              DFRF                  DPBF                            19,157.88                 784.47
                                                    DAEF                               422.96                 360.80
                                                    DFRF                             3,420.93               3,374.05
                                                    DDBF                               754.17                  65.80
                                                    DIOF                               101.19                 104.93
                                                    DMIP-A                           1,124.91                 324.08
                                                    DMIP-B                             393.82                 377.04
                                                    ^^DSMF                           1,500.10                 995.70
                                                    ^^DICPF                          3,000.00                      –
                                                    ^^DFRF                           2,000.00                      –
Infrastructure Development    DICPF                 DICPF                            7,356.99               2,452.91
Finance Co. Ltd.              DSMF
                              DPBF
                              DDBF
ITC Limited                   DSMF                  DEF                              1,484.06                  34.14
                              DICPF                 DIOF                               178.68                      –
Larsen & Toubro Ltd           DICPF                 DSMF                               617.77                      –
                              DPBF                  DICPF                            1,884.49                      –
                              DAEF                  DAEF                             2,109.68                 314.18
                              DIOF                  DIOF                               641.54                      –
                                                    DMIP-A                             205.12                  21.15
                                                    DMIP-B                              73.72                      –
                                                    ^^^DSMF                          1,700.00               1,506.09
                                                    ^^^DICPF                         1,800.00                      –
                                                    ^^^DFRF                            100.00                      –
LIC Housing Finance Limited   DICPF                 DICPF                            4,555.99                      –
                              DFRF                  DPBF                             4,229.55                      –
                                                    DFRF                               766.63                 500.00
Mahindra & Mahindra Ltd.      DDBF                  DICPF                              500.00                         –
                                                    DAEF                               883.33                         –
                                                    DIOF                               477.02                         –
                                                    DMIP-A                              73.23                         –
                                                    DMIP-B                              22.31                         –




51
Company Name                            Scheme invested              Invetsments made              Aggregated for         Outstanding as at
                                       in by the Company               by schemes of              the period under       September 30, 2004
                                                                    Deutsche Mutual Fund         Regulation 25 (11)      at Market/Fair Value
                                                                      in the company/                 At cost
                                                                          subsidiary              (Rupees in lakhs)        (Rupees in lakhs)

Nestle India Limited                DICPF                         DAEF                                         43.01                           –
Raymond Limited                     DSMF                           DICPF                                    1,500.00                  1,000.00
                                    DICPF                          DPBF                                       487.48                         –
                                    DFRF                           DFRF                                     3,300.00                         –
                                    DDBF                           ^^^^DICPF                                  494.31                         –
Tata Chemicals Limited              DDBF                           DAEF                                        16.34                           –
                                    DSMF
Tata Motors Ltd.                    DICPF                          DAEF                                     1,413.23                    282.35
                                                                   DIOF                                       429.56                     80.67
                                                                   DMIP-A                                     135.95                         –
                                                                   DMIP-B                                      36.39                         –
The Associated Cement Cos. Ltd. DICPF                              DSMF                                     2,006.87                         –
                                                                   DICPF                                    2,482.34                         –
                                                                   DAEF                                       832.87                    453.73
                                                                   DIOF                                       221.63                    149.99
                                                                   DMIP-A                                      53.67                     53.38
                                                                   DMIP-B                                      16.18                     13.35
The Tata Iron and Steel Co. Ltd. DICPF                             DAEF                                     1,672.82                    462.32
                                                                   DIOF                                       549.28                    115.58
                                                                   DMIP-A                                     164.65                     57.79
                                                                   DMIP-B                                      76.13                     18.78
                                                                   ^^^^^DSMF                                  200.00                         –
                                                                   ^^^^^DICPF                                 100.00                         –
                                                                   ^^^^^DPBF                                  200.00                         –
UTI Bank Ltd.                       DSMF                           DSMF                                       190.29                    190.55
                                    DICPF                          DICPF                                    2,137.06                  2,140.03
                                    DFRF                           DFRF                                       112.22                    112.38

^     DAEF, DIOF, DMIP-A, DMIP-B have invested in Ultratech Cemco which is a subsidiary of Grasim Industries Limited.
^^    DSMF, DICPF, DFRF have invested in IDBI Capital Markets which is a subsidiary of IDBI.
^^^   DSMF, DICPF, DFRF have invested in L&T Finance Ltd. which is a subsidiary of Larsen & Toubro Ltd.
^^^^ DICPF have invested in Raymond Apparels which is a subsidiary of Raymond Ltd.
^^^^^ DSMF, DICPF, DFRF have invested in Tata SSL Ltd. which is a subsidiary of The Tata Iron and Steel Co. Ltd.
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/
money market insturments and in case of equity shares because of attractive valuations of these companies.



G) Other Business Activity of the AMC                                       3)   Penalties and Pending Litigation
The asset management company in the year 2004 has                                All cases of penalties awarded by SEBI under the SEBI Act
commenced advisory activity to an offshore fund and an Indian                    or any of its regulations against the Sponsor of the Mutual
Insurance Company. The advice provided by the asset                              Fund or any company associated with the Sponsor in any
management company is non discretionary and is therefore not                     capacity including the Asset Management Company, Trustee
binding on the client. AMC has obtained necessary approval from                  Company/Board of Trustees, or any of the directors or key
SEBI as required under regulation 24(2) before commencement                      personnel (specifically the fund managers) of the Asset
of the activity. The AMC hereby confirms that the advisory activity              Management Company and Trustee Company.
is not in conflict with fund management activity of the company.                 l    NONE
H) General Information                                                           For Sponsor and its associates, other than the penalties as
                                                                                 mentioned above, the penalties awarded by any financial
1)   Power to make Rules                                                         regulatory body, including stock exchanges, for defaults in
     Subject to the Regulations, the Trustee may, from time to                   respect of shareholders, debentureholders and depositors
     time, prescribe such terms and make such rules for the                      including penalties awarded for any economic offence and
     purpose of giving effect to a Scheme with power to the                      violation of any securities laws.
     AMC to add to, alter or amend all or any of the terms and                   Details of all cases of suspensions and cancellation of
     rules that may be framed from time to time.                                 certificate of registration (for irregularities / violations in
                                                                                 financial services sector or for defaults in respect of share
2)   Power to remove Difficulties                                                holders, debentureholders and depositors) of the AMC,
     If any difficulties arise in giving effect to the provisions of a           Trustee Company and sponsor or any associate of the
     Scheme, the Trustee may, subject to the Regulations, do                     sponsor shall be disclosed for the last 10 years. (Mutual funds
     anything not inconsistent with such provisions, which                       having associate companies abroad shall make the above
     appears to it to be necessary, desirable or expedient, for the              disclosures for foreign and Indian entities separately)
     purpose of removing such difficulty.
                                                                                 l    Indian: NONE




Offer Document      Deutsche Fixed Term Fund                                                                                                52
     l    Foreign                                                              of joint accounts. The banking supervisory body of Germany
                                                                               (BAFin) imposed a fine of EUR 1,000,000 against both
     Following an inspection from the Financial Service Agency                 companies (Date: June 13, 2002).
     Japan (FSA) Deutsche Trust Bank Limited (DTB), which is
     largely responsible for the management of public sector                   Any pending material litigation proceedings incidental to the
     Japanese client assets has been inter alia issued an                      business of the Mutual Fund to which the Sponsor of the
     administrative improvement order concerning DTB's internal                Mutual Fund or any company associated with the Sponsor
     administration and compliance controls. The FSA has also                  in any capacity including the AMC, Board of Trustees / Trustee
     suspended DTB from taking on new clients for a period of 3                Company or any of the directors or key personnel is a party.
     months, effective from May 27th, 2004 until August
     27th, 2004.                                                               l    NONE

     Top 10 monetary penalties in case of foreign entities and all             Any pending criminal cases against the Sponsor or any
     monetary penalties in case of Indian entities, imposed against            company associated with the Sponsor in any capacity
     the AMC / Trustee Company / Sponsor or any associate of                   including the AMC, Board of Trustees/Trustee Company or
     the sponsor (for irregularities / violations in the financial             any of the directors or key personnel.
     services sector or for defaults in respect of share holders /             l    NONE
     debentureholders and depositors, in jurisdiction country as
     determined in the above clause, by any financial regulatory               Any deficiency in the systems and operations of the Sponsor
     body or government authority or settlement arrived with any               of the Mutual Fund or any company associated with the
     financial regulatory body during the last five years and details          sponsor in any capacity including the AMC or the Trustee
     thereof :                                                                 Company which SEBI has specifically advised to be disclosed
                                                                               in the offer document, or which has been notified by any
     l    The Office of Special Director of Enforcement,                       other regulatory agency.
          Government of India, vide its order dated March 23,
          2004 levied a penalty of Rs. 25,00,000 under Section                 l    NONE
          50 of Foreign Exchange Regulation Act, 1973 in the                   Any enquiry/adjudication proceedings under the SEBI Act
          matter relating to salaries paid abroad in the earlier years.        and the Regulations made thereunder, that are in progress
          The Bank paid the penalty amount on May 5, 2004. The                 against the Sponsor of the Mutual Fund or any company
          Bank's management has filed an appeal against the                    associated with the Sponsor in any capacity such as the AMC,
          order of the Enforcement Directorate with the Appelatte              Board of Trustees/Trustee Company or any of the Directors
          Tribunal Foreign Exchange, New Delhi - 10th May, 2004.               or key personnel of the Asset Management Company.
     l    Deutsche Bank, India had defaulted in maintenance of                 A notice dated 30 June, 2004 issued by SEBI to Deutsche
          Cash Reserve Ratio (CRR) for all fortnights of the quarter           International Trust Corporation (C.I.) Limited (DITC) and
          ended June 1996 and the first fortnight (ended 5 July,               DBMGOF (Mauritius) Limited (DBMG) is pending. DITC and
          1996) of the quarter ended September 1996. In July                   DBMGOF have filed their reply to the notice. DITC and
          1999, RBI withdrew CRR interest and imposed a penalty                DBMGOF are associates of the Sponsor but are not directly
          of 5,25,000 for default in maintenance of CRR.                       associated with the Fund.
     l    In December 1999, RBI imposed a penalty of                           The above information has been disclosed in good faith as
          Rs. 2,17,000 for default in the maintenance of                       per the information available to the AMC.
          prescribed Statutory Liquidity Ratio (SLR) on 8th and
          22nd October, 1999.                                             4)   Scheme to be binding on the Unit Holders
     l    Deutsche Bank has paid Rs. 1,00,000 to the Customs                   Subject to the Regulations, the Trustee may, from time to
          Authorities towards fine for Audi Car, in the Assessment             time, add or otherwise vary or alter all or any of the features
          year 1999-2000.                                                      of investment options/Facilities and terms of a Scheme after
                                                                               obtaining the prior permission of SEBI and Unit Holders if
     Foreign Entities                                                          required, and the same shall be binding on all the Unit Holders
                                                                               of such Scheme and any person or persons claiming through
     Germany                                                                   or under them as if each Unit Holder or such person expressly
     A fine of DM 4,000,000 pronounced by the Federal Banking                  had agreed that such features, plans and terms shall be so
     Supervisory Office (BAK) on December 29, 1998 against                     binding.
     Deutsche Bank for insufficient reporting procedures in its
     anti-money laundering units.                                         5)   Register of the Scheme's Unit Holders
     Another case concerned administrative fines (not sentenced                Registers of Unit Holders under the scheme containing
     by banking regulators) for errors in reporting statistical                necessary particulars will be maintained at the office of the
     information as requested by foreign commerce rules. Such                  Registrar at Hyderabad and at such other places as the
     fines were pronounced at seven occasions during the past                  Trustee may decide.
     five years and did not exceed the amount of Euro 50,000 in
     the aggregate.                                                       6)   Website
                                                                               The AMC proposes to host a website for the benefit of the
     A fine of DM 50,000 pronounced by the former Federal
                                                                               unitholders and distributors. The website of the Fund/AMC
     Securities Trade Supervisory Agency (BAWe) on August 16,
                                                                               is intended solely for the use of Resident Indians, Non
     2001 against Deutsche Bank for insufficient organisation of
                                                                               Resident Indians, persons of Indian Origin and Foreign
     internal reporting procedures with regard to substantial
                                                                               Institutional Investors registered with Securities and
     shareholding disclosure obligations. The decision related to
                                                                               Exchange Board of India. The information provided on this
     incidents that occurred between 1998 and 2000.
                                                                               Site is not intended for distribution to, or use by, any person
     A fine of DM 110,000 pronounced by the former Federal                     or entity in any jurisdiction or country where such distribution
     Banking Supervisory Office ("BAK", now "BAFin") against the               or use would be contrary to law or regulation or which would
     former Bankers Trust Company Frankfurt branch for late filing             subject DeAM India or its affiliates to any registration
     of the statutory annual accounts for the financial year 1999.             requirement within such jurisdiction or country. This service
                                                                               does not constitute an offer to sell or a solicitation of an
     Due to system deficiencies Deutsche Bank AG and Deutsche                  offer to buy any mutual fund units, shares, securities or other
     Bank 24 AG failed to be in a position to distinguish the                  instruments to any person in any jurisdiction where it is
     individual acting person in online banking transactions in case           unlawful to make such an offer or solicitation. It shall be the



53
     sole responsibility of foreign residents including NRIs in       DOCUMENT, THE PROVISIONS OF THE SEBI (MUTUAL FUNDS)
     foreign jurisdictions to verify whether the facility can be      REGULATIONS, 1996 AND THE GUIDELINES THEREUNDER
     accessed and utilised in their respective jurisdictions. The     SHALL BE APPLICABLE.
     AMC cannot be responsible for any information contained in
     any website linked from this website.
                                                                      For DEUTSCHE ASSET MANAGEMENT (INDIA) PVT. LTD.
7)   Omnibus Clause
                                                                      Investment Managers to Deutsche Mutual Fund
     Besides the AMC, the Trustee / Sponsor may also absorb
     expenditures in addition to the limits laid down under
     Regulation 52.                                                   Sandeep Dasgupta                P. R. Shenoy
     Further, any amendment / clarification and guidelines            Chief Executive Officer         Head - Legal & Compliance
     including in the form of notes or circulars issued from time
     to time by SEBI for the operation and management of mutual       Place : Mumbai
     fund shall be applicable.                                        Date : 23rd February, 2005
8)   Jurisdiction
     The jurisdiction for any matters arising out of this Scheme      Due Diligence Certificate
     shall reside with the courts in India.
                                                                      It is confirmed that:
9)   Books and Records                                                i.     The draft Offer Document forwarded to SEBI is in accordance
     The books and records of the Mutual Fund will be maintained             with the SEBI (Mutual Funds) Regulations, 1996 and the
     at its Head Office. The fiscal year of the Mutual Fund ends             guidelines and directives issued by SEBI from time to time.
     on 31st March in each year.
                                                                      ii.    All legal requirements connected with the launching of the
10) Documents available for Inspection                                       Scheme(s) as also the guidelines, instructions, etc. issued
                                                                             by the Government of India and any other competent
     Copies of the following documents will be available for                 authority in this behalf, have been duly complied with.
     inspection by the Unit Holders during the Initial Offer Period
     on all Business Days between 10 a.m. and 3 p.m. at the           iii.   The disclosures made in the Offer Documents are true, fair
     Registered Office of the AMC at DB House, Hazarimal                     and adequate to enable the investors to make a well-informed
     Somani Marg, Fort, Mumbai 400 001.                                      decision regarding investment in the proposed Scheme(s).
     l    Copy of Memorandum and Articles of Association of           iv.    The intermediaries named in the Offer Document are
          the Trustee Company and the AMC.                                   registered with SEBI and till date such registration is valid.
     l    Copy of the Custodian Agreement between the Trustee
          and JP MORGAN.                                                     For Deutsche Asset Management (India) Private Limited
     l    Copy of the Investment Management Agreement.                                (Investment Manager to Deutsche Mutual Fund)

     l    Copy of the Trust Deed.
                                                                                                                       P. R. Shenoy
     l    Copy of Mutual Fund Registration Certificate No.                                    Compliance Officer & Company Secretary
          MF/047/02/10, 2002 dated October 28, 2002 from SEBI.
                                                                      Place : Mumbai
     l    Consent of the Auditors to act in the said capacity.        Date : 23rd February, 2005
     l    Copy of Securities and Exchange Board of India (Mutual
          Funds) Regulations, 1996.
                                                                      Note:
                                                                      1.     The offer document was approved by the Trustees on 22nd
     l    Copy of Indian Trust Act, 1882.                                    February, 2005.
NOTWITHSTANDING ANYTHING CONTAINED IN THE OFFER                       2.     The Due Diligence Certificate as stated above was submitted
                                                                             to SEBI on 23rd February, 2005.




Offer Document      Deutsche Fixed Term Fund                                                                                           54
                           Official Points for Accepting Transactions
Karvy                                                               Deutsche Asset Management
Investor Service Centres                                            (India) Private Limited
AHMEDABAD                                                           MUMBAI
201-203, Shail Building, Opp. Madhusudan House,                     DB House,
Near Navrangpura Tel. Exchange,                                     Hazarimal Somani Marg,
Off C. G. Road, Ahmedabad 380 006.                                  Fort, Mumbai - 400 001.
Tel. : 079-26420422 / 26402967                                      Tel: +91 (22) 5658 4600
BANGALORE
1st Floor, Surya Building, Rathna Avenue,
                                                                    NEW DELHI
51 / 25, Richmond Road, Bangalore 560 025.
                                                                    Tolstoy House, 15-17,
Tel. : 080-25320085 / 86
                                                                    Tolstoy Road,
BARODA                                                              New Delhi - 110 001.
31-34, Payal Complex, Beside Vadodara Stock Exchange,               Tel : +91 (11) 2372 1155
Sayajiguj, Baroda 390 005.
Tel. : 0265-2225210 / 2225168 / 69
                                                                    BANGALORE
CHENNAI                                                             Raheja Tower, 26-27, M.G. Road,
Flat 2 - B, First Floor, Wellington Estate No. 24, Ethiraj Salai,   Bangalore - 560 001.
Commander-in-Chief Road, Chennai 600 105.                           Tel : +91 (80) 2559 4488
Tel. : 044-52028858 (D) / 52028512

COCHIN
                                                                    KOLKATA
G 39, Panampally Nagar, Cochin 682 036.
Tel. : 0484-310884 / 322152                                         Brooke House,
                                                                    9 Shakespeare Sarani,
HYDERABAD                                                           Kolkata - 700 071.
21, Road No. 4, Street No.1, Banjara Hills, Hyderabad 500 034.      Tel : +91 (33) 2282 4040
Tel. : 040-23312454 Extn. 488 / 119

KOLKATA                                                             CHENNAI
49, Jatindas Road, Kolkata 700 029.                                 Suite # 121,
Tel. : 033-24659267 (D) / 24659263                                  DBS Office Business Center,
                                                                    31 A, Cathedral Garden Road,
LUCKNOW
                                                                    Near Palmgroove Hotel,
94, Mahatma Gandhi Marg, (Opp. Governor House)
                                                                    Nungambakkam,
Hazratganj, Lucknow 226 001.
Tel. : 0522-2236828 /19                                             Chennai - 600 034
                                                                    Tel : +91 (44) 2827 5191, 2827 9186 Ext; 121
MUMBAI
26/30 Fort Foundation Building, Near MSC Bank
Maharashtra Chambers of Commerce Lane
Fort , Mumbai - 400023
Tel : 022-56341967/56346513

NEW DELHI
105-108, Arunachal Building, 19, Barakhamba Road,
Connuaght Place, New Delhi 110 001.
Tel. : 011-51511627 (D)

PUNE
202, Mahadkar Chambers, Opp. Karishma Heights,
Karve Road, Pune 411 029.
Tel. : 020-25456890 / 870 / 4028431




55
Deutsche Asset Management (India)

Private Limited

Registered & Corporate Office :

DB House, Hazarimal Somani Marg

Fort, Mumbai - 400 001

Tel: +91 (22) 5658 4600

Fax: +91 (22) 2207 4411

E-mail: deutsche.mutual@db.com

Website: www.deutschemutual.com

				
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