Fixed Term Fund (389 days close ended fixed term fund)
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
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.
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
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
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
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
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
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
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
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.
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
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
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,
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.
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.
Permitted Foreign debt securities in the countries with
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".
III. Summary of the Scheme Minimum
Balance to be
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
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
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.
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 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
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
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
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
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:
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
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.
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
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-
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
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
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
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)
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
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,
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
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
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,
no investment management fees will be charged for such
4) Discounted Trade Bills. investments and the aggregate inter Scheme investment made
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
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
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
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
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
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
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
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.
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
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
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
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
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
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
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
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,
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,
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%
(since Inception till end of
respective period) (%) 1.78% 3.72% 1.09% -0.74%
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.
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
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
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
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.
Monthly Dividend 0.0620 0.1664
Quarterly Dividend Plan
Annual Dividend/Dividend Plan
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%
(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
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.
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%
(since Inception till end of
respective period) (%) 0.90% 6.32% 7.17% 0.90% 5.29% 7.30% 0.97%
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.
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
Audited Audited Unaudited Audited Audited Unaudited
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
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
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
Return Since Inception
to February 28, 2005 * 5.62% 4.99% 3.34%
Benchmark Performance * 4.21% 4.29% 2.82%
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
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
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
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.
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
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.
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 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
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.
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
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
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
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
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.
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:
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
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
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
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
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
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
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
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)
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
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:
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.
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
(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.
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.
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
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,
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
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
(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
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
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.
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
Export Import Bank of India DSMF DSMF 6,956.79
Finolex Cables Limited DSMF DSMF 2,552.65
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
DAEF 1,000.60 673.97
DIOF 265.60 146.57
DMIP-A 41.79 28.69
DMIP-B 16.89 11.48
HCL Technologies Limited DSMF DAEF 1,132.33 505.45
DIOF 239.63 115.95
Hindalco Industries Limited DSMF DAEF 676.65 269.56
DFRF DIOF 93.52
Hindustan Lever Limited DICPF DSMF 4,554.69 119.88
DSMF DICF 1,242.87
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
DAEF 275.45 45.74
DFRF 2,392.59 1,918.85
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
Infrastructure Development DICPF DICPF 7,356.99 2,452.91
Finance Co. Ltd. DSMF
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
^^^DSMF 1,700.00 1,506.09
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
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
Tata Motors Ltd. DICPF DAEF 1,413.23 282.35
DIOF 429.56 80.67
The Associated Cement Cos. Ltd. DICPF DSMF 2,006.87
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
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
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
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.
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
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
1st Floor, Surya Building, Rathna Avenue,
51 / 25, Richmond Road, Bangalore 560 025.
Tolstoy House, 15-17,
Tel. : 080-25320085 / 86
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
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
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
49, Jatindas Road, Kolkata 700 029. Suite # 121,
Tel. : 033-24659267 (D) / 24659263 DBS Office Business Center,
31 A, Cathedral Garden Road,
Near Palmgroove Hotel,
94, Mahatma Gandhi Marg, (Opp. Governor House)
Hazratganj, Lucknow 226 001.
Tel. : 0522-2236828 /19 Chennai - 600 034
Tel : +91 (44) 2827 5191, 2827 9186 Ext; 121
26/30 Fort Foundation Building, Near MSC Bank
Maharashtra Chambers of Commerce Lane
Fort , Mumbai - 400023
Tel : 022-56341967/56346513
105-108, Arunachal Building, 19, Barakhamba Road,
Connuaght Place, New Delhi 110 001.
Tel. : 011-51511627 (D)
202, Mahadkar Chambers, Opp. Karishma Heights,
Karve Road, Pune 411 029.
Tel. : 020-25456890 / 870 / 4028431
Deutsche Asset Management (India)
Registered & Corporate Office :
DB House, Hazarimal Somani Marg
Fort, Mumbai - 400 001
Tel: +91 (22) 5658 4600
Fax: +91 (22) 2207 4411