OFFER DOCUMENT
SUN F&C G-SEC FUND
An Open-End Income Scheme dedicated to investing in
Government Securities
from
SUN F&C MUTUAL FUND
Issue of Units of Rs.10/- Per Unit for Cash
Investment Manager:
SUN F&C Asset Management (India) Pvt. Ltd.
| Scheme Opens on : *** |
|
Earliest Closing Date : ***
|
| Scheme Closes on : *** |
This Offer Document sets forth concisely the information about the Scheme that a prospective investor ought to know before investing. Prospective investors should study this Offer Document carefully in its entirety and consult with their legal, tax and investment advisors to determine possible legal, tax, financial or other considerations of subscribing for, purchasing or holding Units before making a subscription for Units and retain the Offer Document for future reference.
The Scheme particulars have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 (the SEBI Regulations) as amended till date, and filed with SEBI. The Units being offered for public subscription have not been approved or disapproved by the Securities and Exchange Board of India (SEBI) nor has the SEBI certified the accuracy or adequacy of the Offer Document.
The SUN F&C Mutual Fund (the Mutual Fund) and the SUN F&C Asset Management Company (India) Pvt. Ltd (the AMC), have not authorized any person to give any information or make any representations, either oral or written, other than as stated in this Offer Document in connection with issue of Units under the Scheme. Prospective Investors are accordingly advised not to rely upon any information or representations not incorporated in this Offer Document. Any subscription, purchase or sale made by any person on the basis of statements or representations which are not contained in this Offer Document or which are inconsistent with the information contained herein shall be solely at the risk of the Investor.
The Scheme is an open-ended perpetual scheme. This Offer Document will remain effective till a revised version is printed and circulated. In accordance with SEBI directives, this Offer Document will be revised and updated at least once in two years from the date of issue. Till the time the Offer Document is reprinted an addendum giving details of each of the changes will be attached to the Offer Document. The yearly condensed financial information of the schemes launched by SUN F&C Mutual Fund will also be included in the form of addendum to the Offer Document till the time the revised Offer Document is printed. The investors may also obtain information about any further changes after the date of this Offer Document from the Mutual Fund, Investor Service Centres, Distributors or Brokers. Material changes will be filed with SEBI and circulated to the Unitholders or as may be publicly notified by advertisements in the newspapers subject to the applicable SEBI Regulations.
All references to "Dollars" or "$" refer to United States Dollars and "Rs" to Indian Rupees. The reference exchange rate between the United States Dollar and the Indian Rupee has been taken at US$1 = Rs.47. A "crore" means "ten million" and a "lac" means a "hundred thousand".
The date of this Offer Document is ****
TABLE OF CONTENTS
I. DEFINITIONS & ABBREVIATIONS
II. SUMMARY
III. HIGHLIGHTS
IV. RISK FACTORS
V. DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY
VI. EXPENSES
A. Unitholder Transaction Expenses or Load Structure.
B. Initial Issue Expenses
·
For the Present Scheme
·
Past Schemes
C. Estimated Annual Scheme Recurring Expenses:
VII. CONDENSED FINANCIAL INFORMATION
(i) SUN F&C Value Fund
A.
Information for the Previous Fiscal Years
B.
Information for the Current Fiscal Year (2001-2002)
(ii) SUN F&C Money Value Fund
A.
Information for the Previous Fiscal Years
B.
Information for the Current Fiscal Year (2001-2002)
(iii) SUN F&C Balanced Fund
A.
Information for the Previous Fiscal Years
B.
Information for the Current Fiscal Year (2001-2002)
(iv) SUN F&C Emerging Technologies Fund
A. Information
for the Previous Fiscal Year
B. Information
for the Current Fiscal Year (2001-2002)
(v) SUN F&C Monthly Income Plan
A. Information
for the Previous Fiscal Years
B. Information
for the Current Fiscal Year (2001-2002)
(vi) SUN F&C Resurgent India Equity Fund
A. Information
for the Previous Fiscal Year
B. Information
for the Current Fiscal Year (2001-2002)
(vii) SUN F&C Performance Fund (Offshore Fund)
(viii) Information regarding borrowing (All Schemes
launched till date)
VIII. CONSTITUTION OF THE MUTUAL FUND
A. The Mutual Fund
B. Functions and Responsibilities of the Constituents
of the Mutual Fund
·
The Sponsor
·
The Asset Management Company
·
Duties and Obligations of the Asset Management Company
·
Rights and Obligations of the Trustees
·
Custodian
C. Board of Trustees
D. Summary of Substantive Provisions of the
Deed of Trust which may be of material interest to the Unitholders
E. Trusteeship Fee
IX. INVESTMENT OBJECTIVES AND POLICIES
A. Investment Objective
B. Fundamental Attributes
C. Investment Pattern
D. Position of Government Securities Market
in India
E. Asset Allocation
F. Change in Investment Pattern
G. Investment Strategy and Risk Control
H. Liquidity Support from RBI
I. Investment Process at the AMC
J. Investment of Subscription Money
K. Investment in Illiquid Securities/ Liquidity Risk
L. Investment by the AMC in the Scheme
M. Portfolio Turnover Policy
N. Hedging Policies/ Trading in Derivatives
O. Investment Restrictions
P. Underwriting Activity
Q. Investment in Other Schemes or in Schemes of Other
Mutual Funds
R. Modifications to the Scheme
X. MANAGEMENT OF THE FUND
A. Name of the AMC
B. Fund Manager(s) for the Scheme
C. Name of the Investor Relations Officer
D. Board of Directors
E. Date of entering the Investment Management Agreement
F. Experience of the AMC
G. AMC's Compensation
H. Name and Business Experience/ Exposure of the
Key Personnel of AMC
I. The Custodian
J. Statutory Auditor and Tax Consultant for the Scheme
K. Registrar
L. SEBI's Registration Numbers
M. Depository
XI. UNITS AND OFFER
A. The Offer
B. Listing and Transfer
C. Issuance of Units on Allotment and Refund
D. Transfers Between Schemes/ Between Plans of the
Scheme - Switching
E. Default Option
XII. SALE OF UNITS
A. Who can Apply
B. Availability of Application Forms and Offer Document
C. How to Apply
D. Investment Options / Plans
E. SUN F&C Personal Investment Plans (PIP)
·
Systematic Investment Facility (SIF)
·
Systematic Withdrawal Facility (SWF)
·
Systematic Switch Facility (SSF)
·
Automatic Trigger Facility (ATF)
F. Payment Procedure for the NRI/ OCBs/ PIOs
G. Application under Power of Attorney/ Body Corporate/
Registered Society/ Trust/ Partnership
H. Joint Applications
I. Brokerage
J. Subsequent Purchase of Units
K. Allotment / Lien on Units
L. Fractional Units
M. Nomination Facility
N. Split in the Face Value of Units
O. Dividend Sweep Facility
P. Issue of Bonus Units
XIII. DIVIDENDS AND DISTRIBUTIONS
· Dividend Policy
· Effect of Dividends
· Unclaimed Redemption/ Dividend Amount
XIV. INTER-SCHEME TRANSFERS OF INVESTMENTS
XV. ASSOCIATE TRANSACTIONS
· Associate Transactions (for the last three
fiscal years)
· Investment in the Scheme by Sponsors/ Associates
· Policy for Investing in Group Companies of
the Sponsor of the Mutual Fund
· Utilisation of Services of Sponsor(s)/ Associate(s)
XVI. BORROWING BY THE MUTUAL FUND
XVII. SECURITIES LENDING ACTIVITIES
XVIII. NET ASSET VALUE AND VALUATION OF ASSETS OF THE SCHEME
A. Computation of Net Asset Value
B. Valuation of Assets
·
Traded Securities
·
Non Traded / Thinly Traded Securities
·
Call / Notice Money and Bank Deposits
·
Repos
·
Expense and Income Accrued
·
Changes in Securities and in number of Units
·
SEBI Guidelines on Valuation
XIX. REDEMPTION OR REPURCHASE
A. Redemption of Units
B. Redemption Price
C. Redemption Amount
D. Payment of Redemption Proceeds
E. Redemption by NRIs, PIOs, OCBs and FIIs
F. Right to Close a Unitholder's Account
G. Notice Period for Redemptions
H. Right to Limit Redemptions
I. Suspension of Sale or Redemption of Units
J. Cheque Writing Facility
K. Sale and Redemption Price
XX. ACCOUNTING POLICIES
XXI. TAX TREATMENT OF INVESTMENTS IN MUTUAL FUNDS
XXII. INVESTORS' RIGHTS AND SERVICES
A. Rights of Unitholders
B. Documents Available For Inspection
C. Access to Information
· Net Asset
Value
· Quarterly
Reports
· Annual
Financial Reports
· Half
Yearly Disclosures
· Response
Time
· Householding
(Newsletters only)
D. Investor Services
· Account
Number
· Account
Statement
· Receiving
Account Statement / Correspondence by e-mail
· Personal
Identification Number (PIN)
· Gift
Facility
· Electronic
Clearing Service (ECS)
· Pledge
of Units
· Payment
to Alternate Payee
XXIII. INVESTOR GRIEVANCES REDRESSAL MECHANISM
· Grievance Redressal
· Investor Complaints
XXIV. PENALTIES, PENDING LITIGATION OR PROCEEDINGS, FINDINGS OF
INSPECTIONS OR INVESTIGATIONS FOR WHICH ACTION MAY HAVE BEEN TAKEN OR IS IN
THE PROCESS OF BEING
TAKEN BY ANY REGULATORY AUTHORITY
XXV. MISCELLANEOUS
· Power to Make Rules
· Power to Remove Difficulties
· Scheme to be Binding on Unitholders
· Winding Up
· Procedure and Manner of Winding Up
· Books and Records
DIRECTORY
CAMS INVESTOR SERVICE CENTRES
SUN F&C ASSET MANAGEMENT (INDIA) PVT. LTD. - List of Offices
I. DEFINITIONS & ABBREVIATIONS
AMC: Asset Management Company.
Applicable NAV: Applicable NAV is the declared NAV per Unit computed at close of each Business Day.
Auditor & Tax Consultant: The Auditor and Tax Consultant to the Mutual Fund - Price Waterhouse, Mumbai.
Bank: Any Scheduled Commercial Bank in India
Board of Directors or Board: Board of Directors of the Asset Management Company.
Business Day: A Business Day is any day other than: (1) a Saturday or a Sunday or (2) a day on which Banks or the Reserve Bank of India and/or National Stock Exchange are closed for business or (3) a day on which there is no RBI Clearing/settlement of securities or (4) a day on which the sale and redemption of Units is suspended by the Trustees/AMC.
CBDT: Central Board of Direct Taxes
Credit Risk: Risk of default in payment of principal or interest or both
Custodian: The Custodian to the Mutual Fund - ABN-AMRO Bank N.V., Mumbai.
FCEM: F&C Emerging Markets Ltd., of the U.K.
FII: Foreign Institutional Investors, registered with SEBI under SEBI (Foreign Institutional Investors) Regulations, 1995.
Fixed Maturity Series: Five maturity-wise categories of Fixed Maturity Plans to be launched under Option C - Fixed Maturity Option viz. Quarterly, Half Yearly, Yearly, 3 Yearly and 5 Yearly Series.
Fixed Maturity Plan(s)/ Plan(s)/ FMP(s): Plans launched from time to time under the Option C - Fixed Maturity Option, having a specified date of maturity and distinct serial number. Each such Plan being a distinct entity is of the nature of a Scheme under the SEBI Regulations with separate portfolio and following all disclosure requirements and other norms as specified under SEBI (Mutual Funds) Regulations, 1996.
Government Securities: Securities created and issued by the Central Government and / or a State Government (including Treasury Bills, Floating Rate Notes/Bonds) or Government Securities as defined in the Public Debt Act, 1944 as amended and re-enacted from time to time.
Investment Manager or AMC (as appropriate): The Investment Manager to the Mutual Fund - SUN F&C Asset Management (India) Pvt. Ltd.
Initial Offer Period of the Scheme: The dates on or period during which the initial subscription to Units of the Scheme can be made i.e. * ________, 2001 to * __________, 2001, subject to the earlier closure or extension, if any, such offer period not being more than 30 days.
Legal Advisor: The Legal Advisor to the Mutual Fund and the Asset Management Company - Little & Co., Mumbai.
Money Market Instruments: Commercial Papers, Commercial Bills, Treasury Bills, Government Securities having an unexpired maturity upto one year, call, notice or term money, certificate of deposit, usance bills discounting scheme, repos/reverse repos and any other like instruments as specified from time to time by RBI.
Mutual Fund: SUN F&C Mutual Fund
NAV: Net Asset Value
NRI: A Non-Resident Indian or a person of Indian origin residing outside India.
OCB: Overseas Corporate Bodies, firms and societies which are held directly or indirectly but ultimately to the extent of at least 60% by NRIs and trusts in which at least 60% of the beneficial interest is held irrevocably by such persons.
RBI: Reserve Bank of India
Registrar: The Registrar & Transfer Agent to the Mutual Fund - Computer Age Management Services Pvt. Ltd., (CAMS) Chennai.
Repo: Sale of Government Securities with a simultaneous agreement to purchase them at a later date.
Reverse Repo: Purchase of Government Securities with a simultaneous agreement to sell them at a later date.
Scheme: The offer made by the Mutual Fund through this Offer Document viz. SUN F&C G-Sec Fund.
SEBI: The Securities and Exchange Board of India, established under the Securities and Exchange Board of India Act, 1992.
SEBI Regulations: The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended from time to time and includes any Mutual Fund Guidelines, Circulars, Press Releases or Notifications that may be issued by SEBI.
SSIL: SUN Securities (India) Pvt. Ltd.
Sponsor: The sponsor of the Mutual Fund - FCEM (SSIL is the co-sponsor).
Trustees: Board of Trustees of the Mutual Fund.
Unitholder: A participant in the Scheme.
Units: The security representing the interest of the Unitholders in the Scheme. Each Unit represents one undivided share in the assets of the Plans/ Options of the Scheme.
II. SUMMARY
SUN F&C G-SEC FUND
Name of the Scheme: SUN F&C G-Sec Fund dedicated to investing in Government Securities.
Objective: The Scheme will endeavor to generate optimal returns with no credit risk by investing in a portfolio of Government Securities. However, there is no assurance that that the objective of the scheme will be met.
Structure: Open-ended Income Scheme dedicated to investment in Government Securities.
Initial Offer Price: Rs.10 per unit for cash at par.
Subsequent Subscription(s): At NAV based prices, subject to Entry Load, if any.
Features: The Scheme will have the following options available:
1. Option A - Treasury Option. The Treasury Option is specially designed for deployment of short term surpluses of investors
2. Option B - Investment Option. This Investment Option is specially designed for deployment of medium to long term surpluses of investors.
3. Option C - Fixed Maturity Option. This Option comprising Five Series viz. Quarterly, Half Yearly, Yearly, 3 Yearly and 5 Yearly Series and within each Series, various Fixed Maturity Plans (FMPs) as may be launched from time to time as detailed in the tentative schedule on Page 39. This Option is designed for investors who wish to stay invested till the maturity of the FMP to minimize interest risk. Each FMP under the Series will be identified by a distinct serial number and have a portfolio of securities normally maturing in line with the time profile of the FMP. Each FMP apart from having a separate portfolio will follow all disclosure requirements and other norms as specified under SEBI (Mutual Funds) Regulations, 1996.
Each Option offers Growth and Dividend Plans, which investors may choose from. In case of Option C, the Trustees reserve the right not to offer Dividend Plan in a particular FMP(s), if warranted.
Load : Currently, no Entry / Exit Load under Option A and B of the Scheme. With respect to Option C, no Entry Load is proposed, but an Exit Load will be levied. Please refer to Load Structure on Page 10 for further details.
Application Amount: Minimum Rs. 5,000/- for each Option , additional amounts in multiples of Re.1 thereafter.
Duration of Initial Offer of the Scheme: The Scheme will open for subscription from *____________, 2001 to *_________, 2001 during the Initial Offer Period. The earliest closing date will be *___________, 2001. The Trustees may close the subscription list earlier by giving at least one day's notice in one daily newspaper. The Trustees reserve the right to extend the closing date for the Initial Offer Period of the Scheme, subject to the condition that the Initial Offer shall not be kept open for more than 30 days.
Target Amount: Rs. 10 lacs for Option A and B during the Initial Offer Period. In case of Option C, the target amount will be Rs. 1 lac for each FMP as and when launched.
Liquidity: The Scheme is an open-ended Scheme. As far as Option A and B are concerned, Unitholders will be able to purchase and/ or redeem Units on an on-going basis not later than 30 days after the closure of the Initial Offer at NAV related prices, subject to the applicable Load, if any.
In case of Option C, each FMP will have Fixed Subscription Period(s) (FSP) during which investors may purchase Units under this Option. The Fixed Subscription Periods will have a duration of upto seven Business Days (minimum seven calendar days) during which Units may be subscribed to at the Applicable NAV subject to entry load, if any. For the present, the Trustees do not intend to charge any entry load on the purchase of units. The FSPs will be notified at the time of launch of the concerned FMP by the AMC. After the expiry of a Fixed Subscription Period (normally of upto 7 Business Days - minimum seven calendar days), the FMP will be temporarily closed for purchase of Units by the Unitholders till the commencement of the next Fixed Subscription Period, as notified. The investors may redeem part or whole of their balance of units as and when desired, subject to the existing applicable Exit Load provisions. Each FMP will have a Fixed Maturity Date, which will also be the Fixed Redemption Date. On the Fixed Maturity Date, the Unitholders can redeem their unitholdings at the Applicable NAV without any Exit Load. The Unitholders may also redeem their investments on any other Business Day, subject to payment of the applicable Exit Load.
Listing and Redemption: The Units of the Scheme are not proposed to be listed on any exchange. The Mutual Fund will, under normal circumstances, endeavor to dispatch the redemption cheques within 3 to 5 Business Days from the date of acceptance of the redemption request at any of the Investor Service Centers as notified by the AMC.
Transparency: NAV will be determined every day and declared on every Business Day. NAV of the Scheme shall be made available at all Investor Service Centers of the AMC. The AMC shall also arrange to have the NAV published daily in newspapers and displayed on website of Association of Mutual Funds in India and the Mutual Fund. The Mutual Fund shall disclose the full portfolio of the Scheme every quarter and in case if Option C, additionally on each Fixed Maturity Date(s) of the FMP.
Repatriation facility: NRIs, OCBs and FIIs may invest in the Scheme on a full repatriation basis.
III. HIGHLIGHTS
ØSUN F&C G-Sec Fund is an Open-ended
Income Scheme, which will endeavor to generate optimal returns with no credit
risk by investing in a portfolio of Government Securities.
ØInitial Offer of Units at Rs. 10/- and thereafter at NAV based prices, subject to Entry Load, if any.
ØEligible for investment by provident/ pension/ gratuity/ superannuation funds and banks, financial institutions, bodies corporate, trust and individual investors.
ØLiquidity: Redemptions available on all Business Days at NAV based prices with Exit Load, as applicable. For Option C, redemptions additionally available on Fixed Redemption Date(s) without any exit load.
ØInitial issue expenses of the Scheme to be borne by the AMC.
Ø Choice of Options: Three Options available
Option A - Treasury Option.
Option B - Investment Option.
Option C - Fixed Maturity Option
Each Option will offer a Dividend and Growth Plan. The Dividend Plan also
offers Dividend Reinvestment Facility.
Ø The Scheme is an Open-ended Fund. Unitholders in Option A and B will be able to purchase and/ or redeem Units on an on-going basis not later than 30 days after the closure of the Initial Offer at NAV related prices.
Ø Credentials: SUN F&C Mutual Fund is a mutual fund set up by F&C Emerging Markets Ltd of the U.K. (FCEM), in association with the SUN Securities (India) Pvt. Ltd. FCEM is part of the F&C Group, one of Europe's oldest and leading asset management groups. Eureko B. V., a substantial pan-European financial services group has recently taken over F&C and the total funds under management of the enlarged entity is over US$ 90 billion (Rs. 423,000 crores).
Ø Full and firm allotment to all eligible applicants. Transparency: Daily NAV disclosure. Full portfolio disclosure at least once every quarter and in the case of Option C, on each Fixed Maturity Date(s) of the FMP as well.
Ø Switching: Unitholders can switch from one Option/ Plan to another or to other Schemes of SUN F&C Mutual Fund.
Ø Tax Benefits:
· Dividend distributions by Mutual Funds are tax-exempt in the hands of the
Unitholder.
· Unitholders who redeem units held for more than 12 months will get the benefit
of long-term capital gains tax and resident and other eligible
investors will be entitled to get the benefit of indexation.
· Investments in the Scheme are exempt from Wealth Tax and Gift Tax.
· Units of the Scheme will also rank as an eligible form of investment to
the extent provided under Rule 67(2) of the Income-tax Rules,
1962 for Recognised Provident Funds, Approved Superannuation Funds and Approved
Gratuity Funds.
IV. RISK FACTORS
STANDARD RISK FACTORS
Ø Mutual funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved.
Ø As with any investment in securities, the NAV of the units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets.
Ø Past performance of the Sponsor/ AMC/ Mutual Fund does not indicate the future performance of the schemes of the mutual fund.
Ø SUN F&C G-Sec Fund is the name of the Scheme and does not in any manner indicate either the quality of the Scheme, its future prospects or returns.
Ø The sponsors are not responsible or liable for any loss or shortfall resulting from the operations of this Scheme beyond the initial contribution of Rs.5 lacs towards setting up the Mutual Fund.
Ø There is no guarantee or assurance towards the frequency or quantum of distribution of income under the Dividend Plan nor of the rate of return or actual return in the hands of the investor though there is every intention to manage the portfolio so as to make quarterly / half yearly distributions to Unitholders depending on the return of the Scheme's investments.
SCHEME SPECIFIC RISK FACTORS
Interest Rate/ Price Risk: While Government Securities carry no credit
risk since they are issued/ guaranteed by the Government, there is an interest
rate risk i.e. changes in the prevailing rates of interest are likely to affect
the value of the Scheme's holdings and in turn the value of the Scheme's Units.
Generally, when interest rates rise, which frequently accompany inflation
and / or a growing economy; there is a resultant negative effect on the value
of the Units. The prices of Government Securities will therefore generally
vary inversely with changes in the prevailing interest rates, which is termed
also as price risk. Price risk is not unique to Government Securities; it
exist for all fixed income securities. However, the credit risk in all Government
Securities remains zero. Therefore, the prices tend to be more influenced
by movement in the interest rates than by changes in the Government's credit
rating. The extent of fall or rise in the prices is a function of the existing
coupon, days to maturity, the present level of interest rates and the increase
or decrease in the level of interest rates.
Liquidity Risk: Low trading volumes, settlement periods and transfer procedures may restrict the liquidity of the Scheme's investments. Even though Government Securities Market is considered more liquid as compared to other debt instruments, transacting may become difficult due to extreme volatility in the market resulting in constriction in volumes. Additionally, changes in the RBI Guidelines may have an adverse impact on the liquidity of the Scheme. In the event of an inordinately large number of redemption requests or of a restructuring of the Scheme's portfolio, the time taken by the Scheme for redemption of Units may become significant. Please see Section 'Right to Limit Redemptions' on Page 47.
Risks associated with Derivatives: As disclosed elsewhere in this Document, the Scheme intends to invest in derivative products (only in Government Securities or interest rate related indices), as per guidelines and directives issued by concerned regulatory authorities from time to time. Derivatives are specialised instruments that require investment techniques and risk analysis different from those associated with stocks and bonds, which carry a high-risk return ratio. Derivatives require the maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and the ability to forecast price of interest rate movements correctly. There is the possibility that a loss may be sustained by the portfolio as a result of the failure of another party (usually referred to as the "counter party") to comply with the terms of the derivatives contract also called the settlement risk. Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. Also, the Indian markets for derivative instruments is untried and untested. Please also see the section on 'Derivatives' on Page 30).
Risks associated with Securities Lending: The Scheme may,
depending on the composition of its portfolio, engage in securities lending
activities in accordance with the Securities Lending Scheme, 1997, 'Guidelines
for Participation by Mutual Funds in Stock Lending' issued by SEBI and other
applicable SEBI Guidelines / Regulations.
The risks in lending portfolio consist of the failure of another party, in this case the approval intermediary, to comply with the terms of agreement entered into between the lender of securities and the approved intermediary. Such failure to comply can result in the possible loss of rights in the collateral put up by the borrower of the securities, the inability of the approved intermediary to return the securities deposited by the lender and the possible loss of any benefits accruing to the lender from the securities deposited with the approved intermediary.
In order to limit the exposure to risk on account of securities lending, a maximum of 40% of the net assets of each Option will be deployed in securities lending and the maximum single party exposure will be restricted to 10% of the net assets under each option outstanding at any point of time.
Regulatory Risk: Changes in government policy in general and changes in tax benefits applicable to Mutual Funds may impact the returns to investors in the Scheme.
Currency Risk: Investments made by Unitholders in Foreign Currency are subject to risk of fluctuation in the value of the currencies involved in the investment. Also, the Scheme intends to invest securities issued by Foreign Governments as and when the same is permitted, such investments are prone to such currency fluctuations and subject to exchange controls and political circumstances, besides applicable taxes on gains from such investments.
Special Considerations: Mutual funds being vehicles of
securities investments are subject to market and other risks and there can
be no guarantee against loss resulting from investing in the Scheme. The various
factors which impact the value of the Scheme's investments include, but are
not limited to, fluctuations in the government securities market, fluctuations
in interest rates, prevailing political and economic environment, changes
in government policy, tax laws, liquidity of the underlying instruments, settlement
periods, trading volumes, etc.
Investment decisions made by the AMC may not always be profitable.
The Sponsors are not responsible or liable for any loss resulting from the operation of the Scheme beyond the contribution of an amount of Rs.5 lacs made by them towards setting up the Mutual Fund and such other accretions and additions to the corpus set up by the Sponsors.
From time to time and subject to the Regulations, the Sponsors, the Mutual Funds and investments companies managed by them, their affiliates, their associate companies, subsidiaries of the Sponsors, and the AMC may invest either directly or indirectly in the Scheme. The funds managed by these affiliates, associates, the Sponsors, subsidiaries of the Sponsors and/or the AMC may acquire a substantial portion of the Scheme's Units and collectively constitute a major investor in the Scheme. Accordingly, redemption of Units held by such funds, affiliates, associates and Sponsors may have an adverse impact on the Units of the Scheme because the timing of such redemption may impact the ability of other Unitholders to redeem their Units.
The Scheme may invest in other schemes managed by the AMC or in the schemes of any other Mutual Funds, provided it is in conformity to the investment objectives of the Scheme and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments.
It is compulsory for mutual funds to dematerialise their holdings
in certain notified securities / companies. Trading in dematerialised securities
is still at a nascent stage in India and this may result in some illiquidity
in these securities.
Investors in the Scheme are not being offered a guaranteed or assured rate
of return.
|
V. DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY A Due Diligence Certificate duly signed by the Chief Compliance Officer of SUN F&C Asset Management (India) Pvt. Ltd. has been submitted to SEBI on 21st December, 2001, which reads as follows: DUE DILIGENCE CERTIFICATE 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; Date : 14th December, 2001
sd/- |
VI. EXPENSES
A. Unitholder Transaction Expenses or Load Structure.
|
Initial Issue
|
Subsequent Issue**
|
|
| Maximum Sales/ Entry Load imposed on purchases (as % of NAV)* |
Nil
|
Nil
Trustees reserve the right to levy an Entry Load subject to a maximum Load of 6% with prospective effect. |
| Sales/ Entry Load, if any, on issue of Units in lieu of dividends (as % of NAV) |
Nil
|
Nil
|
| Contingent Deferred Sales Load |
Nil
|
Nil
|
| Redemption/ Repurchase /Exit Load (as % of NAV) * |
Option A and B - Nil For Option C, on Premature Redemption: |
Option A and B - Nil For Option C, on Premature Redemption: |
| Switch over/Exchange Fee (as % of NAV) Inter-Scheme Intra-Scheme |
Nil
Trustees reserve the right to levy a Switch over/ Exchange Fee with prospective effect. |
Nil
Trustees reserve the right to levy a Switch over/ Exchange Fee with prospective effect. |
Under the Scheme, the Trustees reserve the right to introduce a Load or change
the Load Structure of the Scheme,
if it so deems fit in the interest of smooth and efficient functioning of
the Mutual Fund. A Load Structure introduced
by the Trustees could comprise an Entry Load, an Exit Load or any other load
subject to a maximum load of 7%,
as may be permissible under the SEBI Regulations and will be applicable on
a prospective basis.
The Trustees also reserve the right to modify/ alter the load
structure on a prospective basis and may decide to charge
an Entry Load/ Exit Load or a combination of Entry/ Exit Loads or introduce
a differential load structure on the Units subscribed / redeemed or on any
other Business Day or on the Fixed Subscription Periods/ Fixed Redemption
Dates.
Such changes will be applicable for prospective investments.
The Trustees reserve the right to waive the Entry Load and/or
Exit Load on Units of a Scheme subscribed with reinvested
and/or 'sweep dividends' or other distributions. The Trustees may also vest
with the AMC with the discretion to waive
or lower the Entry and/or Exit Load for the following:
· Death of the Unitholder
· Incapacity/disability of the Unitholder
· Transaction through Systematic Investment/ Withdrawal/ Transfer Facility.
The following measures, inter alia, will be taken to inform
the existing and prospective investors about the change(s) in load structure:
· An addendum detailing the changes will be attached to the Offer Document
and Key Information Memorandum cum Application Form. The addendum
will be circulated to all accredited distributors/brokers so that the same
can be attached on all the Offer Documents/
Key Information Memorandum to be distributed by them.
· Changes / modifications will be displayed in the form of a notice in all
the Investors Service Centres and circulated to all accredited
distributors/ brokers.
· The introduction of the load along with the details may be stamped on or
attached to the acknowledgement slip issued to the investors on
submission of the application form.
· The current load structure as applicable to an investment by a Unitholder
will also be disclosed in the Statement of Account issued
to the Unitholder by the Registrar & Transfer Agent, CAMS.
Any Entry or Exit Load (including Contingent Deferred Sales Load)
shall be maintained in a scheme wise separate
account and may be utilised towards meeting the selling and distribution expenses.
Any surplus in this account may be
credited to the Scheme whenever felt appropriate by the AMC.
On any given day the difference between the redemption price and the subscription price of the units redeemed or issued on that day shall not exceed 7% of the subscription price. The AMC, however, reserves the right to collect an additional management fee of upto 1% per annum of the average net assets till such a time as the initial issue expenses incurred under the Scheme are recovered subject to a maximum extent of 6% of the initial mobilization or as may be permitted from time to time under the SEBI Regulations.
** Applicable Entry Load, if any, will be reduced by any Entry
and/ or Exit Load already paid by the investor in the Scheme
he or she is switching out from. This facility is applicable to the determination
of the Entry Load only.
B. Initial Issue Expenses
· For the Present Scheme
SUN F&C G-Sec Fund.
The total Initial Issue Expenses chargeable to the Scheme as per the current
Regulations are subject to a maximum of 6% of the amount collected during
the Initial Offer Period. However, the initial issue expenses to be incurred
will be fully borne by the AMC.
Initial issue expenses of the Scheme are however estimated as under:
|
Category of Expenses
|
% Target Mobilisation
|
|
Advertising |
Upto 6.00%
|
| Total |
Upto 6.00
|
The above estimates are subject to change as per actuals.
· Past Schemes
Initial Issue Expenses
The following tables briefly outline the financial information relating
to the Initial Issue Expenses of Schemes
launched by SUN F&C Mutual Fund
|
SUN F&C Value Fund(%)
|
SUN F&C MoneyValue Fund(%)
|
SUN F&C Balanced Fund(%)
|
SUN F&C Emerging Technologies
Fund(%)
|
SUN F&C Monthly Income Plan(%)
|
SUN F&C Resurgent India Equity
Fund(%)
|
|||||||
|
Est.
|
Actuals
|
Est.
|
Actuals
|
Est.
|
Actuals
|
Est.
|
Actuals
|
Est.
|
Actuals
|
Est.
|
Actuals
|
|
|
Advertising Expenses
|
1.25
|
1.99
|
-
|
0.72
|
-Upto 6.00%-
|
0.48
|
-Upto 6.00%-
|
0.24
|
-Upto 6.00%-
|
0.88
|
-Upto 6.00%-
|
-
|
|
Commission
to Agents/Brokers |
3.00
|
0.44
|
3.00
|
0.06
|
0.54
|
1.02
|
0.25
|
0.81
|
||||
|
Registrars' Expenses
|
0.50
|
0.74
|
0.50
|
0.16
|
0.04
|
0.05
|
0.04
|
0.05
|
||||
|
Printing & Marketing Expenses
|
1.20
|
4.84
|
2.45
|
1.26
|
0.23
|
0.26
|
0.58
|
11.37
|
||||
|
Postage & Miscellaneous Expenses
|
0.05
|
0.14
|
0.05
|
0.37
|
0.08
|
0.04
|
0.03
|
0.15
|
||||
|
Total (% to mobilisation)
|
6.00
|
8.15*
|
6.00
|
2.57*
|
Upto 6%
|
1.37*
|
Upto 6%
|
1.61**
|
Upto 6%
|
1.78*
|
Upto 6%
|
12.38@
|
* The above initial issue expenses of the schemes were fully borne
by the AMC.
** Out of 1.61%, 1.5% was charged to the Scheme and balance 0.11% was borne
by the AMC.
@ Out of 12.38%, 4.00% was charged to the Scheme and balance 8.38% was borne
by the AMC.
C. Estimated Annual Scheme Recurring Expenses:
SUN F&C G-Sec Fund
| Investment Management & Advisory Fees |
1.25%
|
| Trustees Fees |
0.01%
|
| Custodian Fees |
0.05%
|
| Registrar & Transfer Agent Fees |
0.15%
|
| Cost relating to Investor Communication / Fund Transfer |
0.07%
|
| Audit Fees |
0.02%
|
| Marketing and Selling expenses including agents expenses |
0.70%
|
| Total Annual Recurring Expenses |
2.25%
|
The purpose of the table is to assist the investor in understanding the various
costs and expenses that an investor in the
Scheme will bear directly or indirectly. These estimates have been made in
good faith as per the information available to
the AMC at the time of preparation of this Offer Document on an estimated
corpus of upto Rs. 100 crores. The above expenses are subject to inter-se
change. The expenses also may increase/ decrease as per actuals and/ or any
change in the SEBI Regulations. Overall, as per the SEBI Regulations, the
total recurring expenses that can be charged to the Scheme is determined by
applicable guidelines as given below. Expenses over and above this limit only
will be borne by the AMC.
| On the first Rs.100 crores of the average weekly net assets |
2.25%
|
| On the next Rs.300 crores of the average weekly net assets |
2.00%
|
| On the next Rs.300 crores of the average weekly net assets |
1.75%
|
| On the balance of the assets |
1.50%
|
In terms of Regulation 52 of the SEBI Regulations, the undernoted regulatory
limits on Investment Management & Advisory fees are applicable:
As per SEBI Regulations, the AMC can charge the Mutual Fund with
investment and advisory fees subject to the following:
· Upto one and a quarter of one percent of the weekly average net assets outstanding
in each accounting year for the scheme concerned as long as the
net assets do not exceed Rs.100 crores, and
· Upto one percent of the excess amount over Rs.100 crores where net assets
so calculated exceed Rs.100 crores.
Currently, as per estimates given in the table above, the AMC
will charge 1.25% fee. The purpose of the table is to assist
the investor in understanding the various costs and expenses that an investor
in the Scheme will bear directly or indirectly.
VII. CONDENSED FINANCIAL INFORMATION
(i) SUN F&C Value Fund
A. Information for the Previous Fiscal Years
|
Historical Per Unit Statistics
|
Fiscal Year* 1997- 1998*
|
Fiscal Year 1998- 1999$
|
Fiscal Year 1999-2000
|
Fiscal Year 2000-2001
|
||
|
Dividend
|
Growth
|
Dividend
|
Growth
|
|||
|
NAV at the beginning of the year (Rs.)
|
10.00
|
11.11
|
NA
|
19.16
|
22.72
|
27.54
|
|
Net Income per unit (Rs.)
|
0.07
|
(0.32)
|
3.53
|
4.45
|
(0.46)
|
(1.08)
|
|
Dividends per Unit (Rs.) and Record Date
|
-
|
-
|
Rs.5.50
(21.03.00) |
Rs.2.50@
(31.08.99) |
Rs.3.50
(18.12.00) Rs.3.00 (22.02.01) |
-
|
|
Transfer to reserves (if any) (Rs.)
|
0.82
|
8.49
|
0.13
|
6.34
|
(6.78)
|
(23.49)
|
|
NAV at the end of the year (Rs.)
|
10.82
|
20.34
|
23.11
|
28.33
|
8.29
|
16.33
|
|
Absolute return†(Growth Plan)
|
8.20%
|
NA
|
NA
|
NA
|
NA
|
NA
|
|
Compounded Annualised return (Growth Plan)†
|
52.51%
|
53.52%@
|
17.68%@
|
|||
|
BSE 200 returns
|
-7.52%$$
|
-4.03%$$$
|
17.17%$$$
|
-2.81%$$$
|
||
|
Comparative performance vis-à-vis BSE 200
|
15.72
|
56.54
|
36.35
|
20.49
|
||
|
Net Assets end of period (Rs.Crores)
|
3.81
|
9.04
|
6.26
|
49.80
|
18.84
|
8.58
|
|
Ratio of expenses to average net assets
|
2.50%
|
2.50%
|
2.44%
|
2.50%
|
||
The Scheme was launched on 23rd May, 1997 and the
Units alloted on 25th July, 1997.
$ Figures relate to the period prior to the segregation of the Units of the
Scheme into Dividend Plan and Growth Plan.
@ Includes a one time dividend payout of Rs. 2.50 per Unit under Growth Plan
prior to segregation of the Scheme into Dividend
Plan and Growth Plan.
† Returns exclude entry load, if any.
$$ Absolute $$$ Compounded Annualised
Returns reported in the table above are calculated with the inception NAV
taken as Rs.10, the Face Value of the Unit at the time of
allotment on 25th July, 1997.
B. Information for the Current Fiscal Year (2001-2002)
|
Historical Per Unit Statistics
|
Half Yearly unaudited (1st April, 2001 to 30th September,
2001
|
|
|
Dividend
|
Growth
|
|
|
NAV at the beginning of the year (Rs.) |
8.29
|
16.33
|
| Dividend (net) per unit (Rs.) |
-
|
-
|
| NAV per unit at the end of the period (Rs.) |
6.25
|
12.84
|
| Absolute Return during half year (Growth Plan) + ( % ) |
-21.37
|
|
| BSE 200 returns during half year |
-21.27%
|
|
| Comparative performance vis-à-vis BSE 200 |
-0.10
|
|
| Net Asset end of period (Rs. Crores) |
13.48
|
6.15
|
| + Excludes entry load, if any. | ||
Latest NAV and Returns
|
Growth Plan
|
Dividend Plan
|
|
| NAV as at 29th November, 2001 |
15.43
|
7.83
|
| NAV as at 3rd April, 2001(First Business Day of the Fiscal Year) |
Rs.16.18
|
Rs.8.20
|
| Absolute Return (Growth Plan) † |
(4.64%)
|
|
| BSE 200 returns |
-5.88%
|
|
| Comparative performance vis-à-vis BSE 200 |
1.24
|
|
| † Returns exclude entry load, if any. Returns for periods less than one year are given in absolute terms only. |
||
The Benchmark for comparing performance of SUN F&C Value Fund is BSE 200.
(ii) SUN F&C Money Value Fund
A. Information for the Previous Fiscal Years
|
Historical Per Unit Statistics
|
Fiscal Year 1998-1999*@
|
|
|
Bond Option
|
Liquid Option
|
|
|
NAV at the beginning of the year (Rs.)
|
10.00
|
10.00
|
|
Net Income per unit (Rs.)
|
0.31
|
0.33
|
|
Dividends
|
-
|
-
|
|
Transfer to reserves (if any) (Rs.)
|
0.44
|
0.35
|
|
NAV at the end of the year (Rs.)
|
10.44
|
10.3522
|
|
Absolute return †
|
4.40%
|
3.52%
|
|
Net Assets end of period (Rs.Crores)
|
8.24
|
3.53
|
|
Ratio of expenses to average net assets
|
0.80%
|
0.24%
|
Historical Per Unit |
Fiscal Year 1999-2000 |
Fiscal Year 2000-2001 |
||||||
|
Statistics |
Bond Option |
Liquid Option |
Bond Option |
Liquid Option |
||||
|
|
Dividend |
Growth |
Normal |
Daily* Dividend |
Dividend |
Growth |
Normal |
Daily Dividend |
|
NAV
at the beginning of the year (Rs.) |
10.45 |
10.45 |
10.3646 |
NA |
10.13 |
11.89 |
11.2954 |
10.00 |
|
Net
Income per unit (Rs.) |
0.40 |
0.99 |
0.36 |
0.25 |
0.76 |
0.95 |
5.75 |
1.55 |
|
Net Dividends
per Unit (Rs.) and Record Date |
Re.0.75 Re.0.76 |
- |
- |
Please see note below |
Re.0.28 (26.09.00) Re.0.52 (20.03.01) |
- |
- |
Please see note below |
|
Transfer
to reserves (if any) (Rs.) |
0.06 |
1.57 |
1.55 |
- |
(0.01) |
1.29 |
(0.50) |
0.00** |
|
NAV
per unit at the end of year (Rs.) |
10.12 |
11.66 |
11.2849 |
10.00 |
10.12 |
13.08 |
12.2872 |
10.00 |
|
Compounded
Annualised return† |
12.02%$ |
9.34% |
9.03% |
12.09%$ |
9.15% |
7.96% |
||
|
Net
Assets end of period (Rs. Crores) |
109.90 |
47.10 |
19.88 |
|||||