OFFER
DOCUMENT
Chola Mutual Fund
602/603, Regent Chambers, Nariman Point,
Mumbai - 400 021
Chola Fixed
Maturity Plan
An
Open Ended Umbrella Income Scheme
Initial Issue of Units at Rs.10/- per Unit for Cash at par
|
Initial Offer Opens on : |
|
Initial Offer Closes
on : |
SPONSOR
Cholamandalam Investment & Finance
Company Limited
“TIAM House”, 28 Rajaji Salai, Chennai – 600 001
INVESTMENT MANAGER
Cholamandalam AMC
Limited
Registered Office: “TIAM House”
(Annexe) V Floor, 28 Rajaji Salai, Chennai – 600 001
Head Office: 602/603, Regent Chambers, Nariman Point, Mumbai 400 021
TRUSTEE
Cholamandalam Trustee Company
Limited
“TIAM House” (Annexe) V Floor, 28 Rajaji Salai, Chennai – 600 001
The particulars of Chola
Fixed Maturity Plan, the Scheme offered under this Offer Document, has been
prepared in accordance with the Securities and Exchange Board of India (Mutual
Funds) Regulations, 1996, as amended from time to time and filed with the
Securities and Exchange Board of India and the Units being offered for public
subscription have not been approved or disapproved by the Securities and
Exchange Board of India nor has the Securities and Exchange Board of India
certified the accuracy or adequacy of the Offer Document.
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 Unit holders or may be publicly notified by advertisements in the
newspapers subject to the applicable regulations.
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Sl.
No. |
TABLE OF
CONTENTS |
Page
Nos. |
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1 |
3 | |
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2 |
Risk Factors
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4 |
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3 |
Due Diligence Certificate |
5 |
|
4 |
Summary Features |
6 |
|
5 |
Fundamental Attributes of the Scheme |
7 |
|
6 |
The Scheme- Chola Fixed Maturity Plan |
8 |
|
7 |
Investment
Pattern |
9 |
|
8 |
Valuation of Scheme Assets |
14 |
|
9 |
16 | |
|
10 |
Fees
& Expenses of the Scheme
|
17 |
|
11 |
Fees and Expenses of existing Schemes |
20 |
|
12 |
Condensed Financial Information |
20 |
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13 |
Income Options and Investment Plans |
27 |
|
14 |
Units, Offer & Allotment
|
29 |
|
15 |
Buying and Redeeming Units after Initial Offer
Period |
31 |
|
16 |
35 | |
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17 |
Tax Benefits |
36 |
|
18 |
37 | |
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19 |
Investor Services |
39 |
|
20 |
Constitution of Chola Mutual Fund |
42 |
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21 |
55 |
Investors are advised to
ascertain from the Mutual Fund / its investor service centres / distributors or
brokers about any further changes after the date of the offer
document.
In this Offer Document the following words and expressions shall have the meaning specified herein unless the context otherwise requires:
|
Asset Management
Company / AMC / Investment Manager |
Cholamandalam AMC
Ltd., the asset management company set up under the Companies Act,
1956 |
|
Business
Day |
Any day other than a
Saturday, a Sunday or a day on which any one of Banks/RBI in Mumbai or the
Stock Exchange, Mumbai or the National Stock Exchange are not required or
obliged by law of Executive Order to remain closed including the occasions
when the functioning of any of the above banks or stock exchanges is
affected due to a strike call made by a recognised Union/Management at any
part of the Country and a day on which the Sale and Redemption of units is
suspended by the Trustee / AMC. |
|
CDSC |
Contingent Deferred
Sales Charge permitted under the Regulations |
|
Custodian |
HDFC Bank Ltd., Sandoz
House, Dr. Annie Besant Road, Worli, Mumbai – 400 018 acting as the
Custodian of the Scheme. |
|
Initial Offer or Initial Issue |
Offer of Units of the
Plans of Chola Fixed Maturity Plan during the Initial Offer
Period. |
|
Initial Offer
Period |
The dates on or the
period during which the initial subscription to Units of the Plans under
the Scheme can be made i.e. _____, 2002 to ___, 2002 subject to the
earlier closure or extension, if any, such offer period not being more
than 30 days. |
|
Entry
Load |
Load on purchases
after initial offer |
|
Initial
Load |
Load during the
initial offer |
|
Investment Management
Agreement or
IMA |
The Investment
Management Agreement dated October 23,1996, executed between Cholamandalam
Cazenove Trustee Company Ltd. and Cholamandalam Cazenove AMC
Ltd. |
|
Mutual Fund or
Fund |
Chola Mutual Fund, a
Trust set up under the provisions of Indian Trusts Act, 1882 and
registered with SEBI vide Registration No.
MF/035/97/9 |
|
Applicable
NAV |
The NAV applicable for
purchases/ redemption requests as defined in this offer document based on
the time of the Business Day on which the application is
accepted. |
|
NAV |
Net Asset Value of the
Units of the Plan /Plans and Options therein, calculated on every Business
Day in the manner provided in this Offer Document or as may be prescribed
by Regulations from time to time |
|
Offer
Document |
This document issued
by Chola Mutual Fund offering Units of Chola Fixed Maturity Plan
|
|
Registrars |
Computer Age
Management Services Private Ltd., (CAMS) Chennai, performing the functions
of a Registrar. |
|
Regulations/SEBI
Regulations |
SEBI (Mutual Funds)
Regulations, 1996, as amended from time to time, regulating the operation
and management of mutual funds |
|
Repo / Reverse
Repo |
Sale / purchase of
Government securities with simultaneous agreement to repurchase/resell
them at a later date |
|
Specified Subscription
Period |
Specified Subscription
Period is one or more Business Day(s) during which an investor may
purchase the Units of a Plan at the Applicable NAV, subject to entry load,
if any. |
|
Specified Redemption
Date(s) |
Specified Redemption
Date(s) is/are the Business Day(s) on which the redemption under a Plan is
permitted at the Applicable NAV. |
|
RBI |
Reserve Bank of India,
established under the Reserve Bank of India Act,
1934 |
|
SEBI |
Securities and
Exchange Board of India established under Securities and Exchange Board of
India Act, 1992 |
|
Sponsor |
Cholamandalam
Investment & Finance Company Ltd. Tiam House, 28 Rajaji Salai,
Chennai- 600 001 |
|
The
Trustee |
Cholamandalam Trustee
Company Ltd., a company set up under the Companies Act, 1956
|
|
Trust
Deed |
The Registered Trust Deed dated October 17,1996 establishing Cholamandalam Cazenove Mutual Fund as a Trust under the Indian Trusts Act, 1882 and amended from time to time |
|
Chola Fixed Maturity Plan /Fixed Maturity Plan / The Plan/The Scheme. |
Chola Fixed Maturity
Plan (an umbrella Scheme) and the Plans launched thereunder including the
options and the different series offered under the
Plans |
|
Unit or
Units |
The interest of an
investor which consists of one undivided share in the NAV of the relevant
option of Chola Fixed Maturity Plan |
|
Unit
Holder |
A participant in Chola Fixed Maturity Plan |
Standard Risk
Factors
·
Mutual Funds and securities
investments are subject to market risks and there is no assurance that the
objective of the Scheme will be achieved.
·
As with any investment in
stocks and shares, the NAV of the Units issued under the Scheme can go up or
down, depending on the factors and forces affecting the capital markets. The NAV
of the Scheme may be affected by changes in the general level of interest rates
and trading volumes.
·
Chola Fixed Maturity Plan is
only the name of the Scheme and does not in any manner indicate the quality of
the Scheme, its future prospects or returns.
·
The past performance of the
AMC, Mutual Fund, the Sponsor or its Group affiliation is not indicative of the
future performance of the Scheme.
·
The sponsor is not
responsible or liable for any loss resulting from the operation of the Scheme
beyond the initial contribution of Rs. 1 lakh made by them towards setting up of
the Mutual Fund.
Scheme’s Specific
Risks:
·
Market
Risk:
Securities are subject to price volatility due to factors and forces affecting
the debt market, changes in interest rates and market liquidity.
·
Interest rate
Risk:
As interest rates increase or decline, the prices of individual securities will
decrease or increase thus affecting the NAV. Interest rate movements in the
Indian debt markets can be volatile leading to large price movements and hence
large movements in NAV.
·
Liquidity Risk:
As the
Indian debt market is not broad, there exists a risk that a security cannot be
sold at or near its true value.
·
Credit
Risk:
Credit risk refers to the risk of default in timely payment of principal or
interest. The value of the fixed income security may fluctuate depending on the
perception of its credit risk.
·
Re-investment
Risk:
This risk refers to the interest rate levels at which coupons or maturity
proceeds from securities can be reinvested. If interest rates fall these cash
flows may be reinvested at lower rates.
Others:
¨
The Scheme may also use
various derivatives and hedging products from time to time, as would be
available and permitted by SEBI, in an attempt to protect the value of the
portfolio and enhance Unitholders interest. In case the Scheme utilizes any
derivatives under the regulations, the Scheme may, in certain situations, be
exposed to price risks. Such use of derivatives will be subject to such
approvals as required.
¨
Changes in Government policy
in general and changes in tax benefits applicable to mutual funds may impact the
returns to investors in the Scheme and the Plans
thereunder.
¨
Investors in the Scheme are
not being offered any guaranteed returns.
¨
Investors are advised to
consult their Legal /Tax and other Professional Advisors before making decision
to invest in or redeem the Units in regard to tax/ legal issues relating to
their investments in the Plan/s.
A due diligence certificate
duly signed by the Company Secretary of Cholamandalam AMC Limited has been
submitted to SEBI, which reads as follows:
It is confirmed
that:
i.
The draft offer document
forwarded to SEBI is in accordance with the SEBI (Mutual Funds) Regulations,
1996 and the guidelines and directives issued by SEBI from time to
time.
ii.
All legal requirements
connected with the launching of the Scheme as also the guidelines, instructions,
etc., issued by the Government and any other competent authority in this behalf,
have been duly complied with.
iii.
The disclosures made in the
offer document are true, fair and adequate to enable the investors to make a
well-informed decision regarding investment in the proposed
Scheme.
iv.
The intermediaries named in
the offer document are registered with SEBI and till date such registration is
valid.
Place : Mumbai
For Cholamandalam AMC
Ltd.
(AMC
for Chola Mutual Fund)
Date : 17th
January 2002
R Ravi Sankar
Company
Secretary
|
The
Scheme |
Chola Fixed Maturity
Plan |
|
Type of
Scheme |
Open Ended Income Fund
|
|
Investment
Plans |
The Scheme is an
open-ended Umbrella Fund comprising Investment Plans each with a fixed
maturity profile. The Scheme
will have Quarterly, Half Yearly and Annual Plans with a number of series
within each plan. |
|
Investment
Objective |
The Scheme seeks to generate regular
returns and capital appreciation by investing in debt, government and
money market securities normally maturing in line with the time profile of
the respective Plans.
As each Plan will
invest in a distinct portfolio of securities with known maturity, such
portfolios are envisaged to generate more predictable returns. However, there can be
no assurance that the objectives of the Plans will be realised. The Plans do not guarantee or
assure any returns. |
|
Asset
Allocation |
Under normal
circumstances the asset allocation will be 100% in debt, government and
money market instruments. Each portfolio will comprise of high quality
fixed income securities that have maturity in line with the maturity of
the Scheme. |
|
Income
Options |
Dividend Option:
(Payout &
Reinvestment) ·
Quarterly
Plan:
Will aim to declare dividends on or before the Specified Redemption
Date. ·
Half yearly
Plan:
Will aim to declare dividends on a quarterly basis ·
Yearly
Plan:
Will aim to declare dividends on a half-yearly basis
Cumulative Option:
This Option will aim to provide capital appreciation
and will not declare any dividends. The income earned will remain invested
in the Plan itself and will be reflected in the Net Asset Value of the
respective plans. |
|
Purchase of
Units |
The
Plans or series thereof will be open for subscription on an ongoing basis
for a specified period of a maximum of 5 business days during which the
investors may purchase the units (Specified Subscription Period). No units
can be purchased after the closure of the Specified Subscription Period
and until the next Specified Subscription
Period. |
|
Redemption |
Each series of a plan
will have a Specified Redemption Date. On the Specified Redemption Date,
the Unitholders can redeem their units at the Applicable NAV (without exit
load). A notice period of 5 business days will be applicable before the
Specified Redemption date during which Unitholders seeking redemption have
to notify the Fund. Redemption cheques will be dispatched under normal
circumstances within 3 business days from the date of Specified Redemption
Date. The unitholders can also redeem their units on any other day subject
to applicable exit load. |
|
Entry
Load |
There is no entry load
during the Specific Subscription Periods, which normally, have duration of
a maximum of 3 business days.
|
|
Exit
Load |