Term Sheet CORE INFRA PORTFOLIO

Transcription

1 Term Sheet CORE INFRA PORTFOLIO

2 HIGHLIGHTS/ SUMMARY OF THE PRODUCT Product Name Objectve Investment Horzon Underlyng Asset class Instruments Usage of Dervatves Rsk Sutablty Defned Tenure Repayment Benchmark Index Core Infra Portfolo To seek long-term captal apprecaton by nvestng prmarly n lsted equty and equty related securtes of companes engaged n Infrastructure sectors whch are expected to beneft from the growth and development of economy. The Fund Manager also reserves the rght to ether nvest n debt/ fxed ncome nstruments of companes engaged n the Infrastructure sectors or reman n cash or nvest n the unts of mutual fund for extended perods of tme. Dervatve postons may also be taken by the Fund Manager for hedgng and/ or to take poston calls on the long sde months (approxmate horzon) Equty & Equty related Securtes, Debt/ Fxed Income Instruments, unts of Mutual Funds. Lsted Equty and Equty related Securtes of companes engaged n the Infrastructure sector. The Fund Manager also reserves the rght ether to nvest n debt/ fxed ncome nstruments of companes engaged n the Infrastructure sectors or reman n cash for extended perods of tme or nvest n the unts of Mutual Fund. Dervatve nstruments would be used to: a) hedge the portfolo and/ or b) take poston calls on the long sde. Moderate to Hgh Ideal for nvestors wth medum to hgh rsk appette and seekng long term captal apprecaton. 4 Years. The Clent hereby agrees and understands that Portfolo Manager reserves the sole dscreton to extend/ early termnate the Portfolo. Please note the followng n case of extenson/ early termnaton of the Portfolo: Portfolo Manager shall gve notce of 1 month to the clents, n case of extenson/ early termnaton of the Portfolo. Please note that consent of the Clent shall not be requred n case of extenson/ early termnaton of the Portfolo by the Portfolo Manager. In case of extenson of the Portfolo over defned tenure by the Portfolo Manager, the clent reserves the rght to ext the portfolo n full or n part, wthout payment of ext load. Please note that fxed management fees and performance lnked fees shall be charged by the Portfolo Manager on pro-rata bass dependng on the perod of the Portfolo. In case of early termnaton of the Portfolo by the Portfolo Manager, no ext load would be charged to the Clents. Please note that fxed management fees and performance lnked fees shall be charged by the Portfolo Manager on pro-rata bass dependng on the perod of the Portfolo. Indcatve Condtons for extenson of Portfolo by the Portfolo Manager: a) When the Portfolo Manager beleves n the nterest of the Clents to extend the defned portfolo tenure of the Portfolo and or b) When the portfolo returns are below the hurdle rate (10% CAGR) Indcatve Condton for early termnaton of the Portfolo by the Portfolo Manager: a) When the portfolo objectves are met or exceeded and the Portfolo Manager beleves t to be the opportune tme to termnate the Portfolo or b) When the Portfolo Manager beleves that the portfolo objectves are unlkely to be met durng the defned tenure of the Portfolo. Clents are requested to note that the above condtons for extenson/ early termnaton may not be exhaustve. Wthn 45 days from the end of the Portfolo tenure or early ext by the Clent (whchever s earler) CNX Infra Frst applcant Second applcant Thrd applcant 1

3 PORTFOLIO MANAGEMENT FEES & CHARGES S S S Frst Applcant Second Applcant Thrd Applcant Fees may be a fxed sum or a percentage of the quantum of funds managed or may be lnked to the portfolo returns acheved or a combnaton of any of the above as may be decded by the Portfolo Manager. 1. Upfront Fees: % (applcable servce tax & other taxes) shall be charged on the corpus on upfront bass, subject to completon of all account openng formaltes. 2. Fxed Management Fee: % p.a. (applcable servce tax & other taxes) shall be chargeable quarterly on prorata bass as per the fnancal year on the daly NAV. 3. Performance Lnked Fee: 20% proft sharng (applcable servce tax & other taxes) for returns above the hurdle rate of 10% p.a (CAGR) at the end of the Portfolo tenure or early ext by the Clent (whchever s earler). 4. Ext Load: In the event of early termnaton of the Portfolo by the Clent n wrtng, ext load wll be applcable as per below mentoned detals: a) If the Portfolo s commenced on or before February 29, 2012: Investment days Ext Load (%) % % % % > % b) If the Portfolo s commenced on or after March 1, 2012: Investment days Ext Load (%) % % % % > % Please note that, n case of extenson/ early termnaton of the Portfolo by the Portfolo Manager, no ext load would be charged to the Clents. Please note that fxed management fees and performance lnked fees would be charged on pro-rata bass dependng on the perod of the Portfolo. 5. Other Fees and Charges: The Clent shall also remburse to the Portfolo Manager such transacton fee, brokerage charges, safe custody fee, demat fee, statutory leves such as Servce Tax, Securtes Transacton Tax and/or any other fees pad n respect of the nvestments and/or dsbursements made under ths Agreement, whch shall be drectly debted to the Clent s account as and when the same becomes due for payment. The Portfolo Manager shall be enttled to recover such ncdental expenses n the form of stamp duty, regstraton charge, brokerage, commsson, compensaton, professonal fee, legal fee, consultancy charge, servce charge, etc., and any such other expenses, dutes, charges ncurred on behalf of the Clent. Such ncdental expenses shall be charged and debted to the Clents account from tme to tme at the sole dscreton of the Portfolo Manager. Frst applcant Second applcant Thrd applcant 2

4 ILLUSTRATION FOR FEES AND CHARGES (Pursuant to SEBI Crcular IMD/DF/13/2010 dated October 5, 2010) The followng computatons are for llustratve purpose only. The llustratons are provded to enable the nvestor to understand the levy of varous applcable fees and charges under dfferent market scenaros on the sample portfolo of Rs. 10 Lakhs, consderng that the frequency of computng all the fees are on annual/ actual bass. The assumptons for the llustraton are as follows: a. Sze of sample portfolo: Rs. 10 Lakhs over. b. Perod: 4 years. c. Hurdle Rate: 10% (CAGR) of amount nvested. d. Brokerage/DP charges/custody Charges/transacton charges: (e.g. 2% p.a.). e. Upfront fee (e.g. 2.5%). f. Fxed Management fee (e.g. 2% p.a.). g. Performance fee (e.g. 20% of profts over hurdle rate). Scenaro 1: Portfolo ncrease by 15% (CAGR) (Assumng that the defned tenure of the Portfolo s 4 years) Partculars Amount n Rs. Amount n Rs. Less: 2.5% upfront fees (25,000) Less: 2% p.a. Fxed Management Fees on Asset Under Management (AUM) (A) smlar charges (B) (108,960) (108,960) Total Charges durng the Product defned tenure (A + B) (217,921) Profts on nvestment durng the 4 15% (CAGR) on Investment Amount 749,006 Net portfolo value at the tme of maturty (Before Performance Fees) Less : 20% Proft Sharng (Please refer the below mentoned table on Calculaton of Performance fees for Scenaro 1 ) 1,749,006 56,981 Net portfolo value at the tme of maturty (After Performance Fees) 1,692,025 % (CAGR) return over Captal Contrbuted 14.05% Calculaton of Performance fees for Scenaro 1 Amount n Rs. Net portfolo value at the tme of maturty B 1,749,006 Less: Hurdle Rate of 10% (CAGR) at the tme of maturty (Includng nvestment Amount ) C 1,464,100 Net proft elgble for Performance Lnked Fees (B-C) 284,906 Performance fees of 20% 56,981 Frst applcant Second applcant Thrd applcant 3

5 Scenaro 2: Portfolo decrease by 15% (CAGR) (Assumng that the defned tenure of the Portfolo s 4 years) Partculars Amount n Rs. Amount n Rs. less: 2.5% upfront fees (25,000) Less: 2% p.a. Fxed Management Fees on Asset Under Management (AUM) (A) smlar charges (B) (59,880) (59,880) Total Charges durng the Product defned tenure (A + B) (119,761) Profts on nvestment durng the 4 15% (CAGR) on Investment Amount Net portfolo value at the tme of maturty (Before Performance Fees) Less : 20% Proft Sharng (Please refer the below mentoned table on Calculaton of Performance fees for Scenaro 2 ) (4,77,994) 5,22,006 Net portfolo value at the tme of maturty (After Performance Fees) 5,22,006 % (CAGR) return over Captal Contrbuted (15.00%) Calculaton of Performance fees for Scenaro 2 Amount n Rs. Net portfolo value at the tme of maturty B 5,22,006 Less: Hurdle Rate of 10% (CAGR) at the tme of maturty (Includng nvestment Amount ) C 1,464,100 Net proft elgble for Performance Lnked Fees (B-C) - Performance fees of 20% - Scenaro 3: No Change (CAGR) (Assumng that the defned tenure of the Portfolo s 4 years) Partculars Amount n Rs. Amount n Rs. Less: 2.5% upfront fees (25,000) Less: 2% p.a. Fxed Management Fees on Asset Under (78,000) Management (AUM) (A) (78,000) smlar charges (B) Total Charges durng the Product defned tenure (A + B) (156,000) Profts on nvestment durng the 4 15% (CAGR) on - Investment Amount Net portfolo value at the tme of maturty (Before Performance 1,000,000 Fees) Less : 20% Proft Sharng (Please refer the below mentoned table - on Calculaton of Performance fees for Scenaro 3 ) Net portfolo value at the tme of maturty (After Performance Fees) 1,000,000 % (CAGR) return over Captal Contrbuted (00.00%) - Frst applcant Second applcant Thrd applcant 4

6 Calculaton of Performance fees for Scenaro 3 Amount n Rs. Net portfolo value at the tme of maturty B 1,000,000 Less: Hurdle Rate of 10% (CAGR) at the tme of maturty (Includng nvestment Amount ) C 464,100 Net proft elgble for Performance Lnked Fees (B-C) - Performance fees of 20% - Scenaro 4: Portfolo ncrease by 15% (CAGR) (n case the defned tenure of the Portfolo s extended by 6 months) Partculars Amount n Rs. Amount n Rs. Less: 2.5% upfront fees (25,000) Less: 2% p.a. Fxed Management Fees on Asset Under Management (AUM) (A) smlar charges (B) (126,027) (126,027) Total Charges durng the Product defned tenure (A + B) (252,054) Profts on nvestment durng the % (CAGR) on Investment Amount 875,600 Net portfolo value at the tme of maturty (Before Performance Fees) 1,875,600 Less : 20% Proft Sharng (Please refer the below mentoned table on Calculaton of Performance fees for Scenaro 4 ) 68,008 Net portfolo value at the tme of maturty (After Performance Fees) 1,807,592 % (CAGR) return over Captal Contrbuted 14.06% Calculaton of Performance fees for Scenaro 4 Amount n Rs. Net portfolo value at the tme of maturty B 1,875,600 Less: Hurdle Rate of 10% (CAGR) at the tme of maturty (Includng nvestment Amount ) C 1,535,561 Net proft elgble for Performance Lnked Fees (B-C) 340,039 Performance fees of 20% 68,008 Frst applcant Second applcant Thrd applcant 5

7 Scenaro 5: Portfolo ncrease by 15% (CAGR) (n case early termnaton of the Portfolo at 3 years) Partculars Amount n Rs. Amount n Rs. Less: 2.5% upfront fees (25,000) Less: 2% p.a. Fxed Management Fees on Asset Under Management (AUM) (A) (74,876) smlar charges (B) (74,876) Total Charges durng the Product defned tenure (A + B) (149,753) Profts on nvestment durng the 3 15% (CAGR) on Net Investment Amount 520,875 Net portfolo value at the tme of maturty (Before Performance Fees) 1,520,875 Less : 20% Proft Sharng (Please refer the below mentoned table on Calculaton of Performance fees for Scenaro 5 ) 37,975 Net portfolo value at the tme of maturty (After Performance Fees) 1,482,900 Ext Load - % (CAGR) return over Captal Contrbuted 14.03% Calculaton of Performance fees for Scenaro 5 Amount n Rs. Net portfolo value at the tme of maturty B 1,520,875 less: Hurdle Rate of 10% (CAGR) at the tme of maturty (Includng nvestment Amount ) C 13,31,000 Net proft elgble for Performance Lnked Fees (B-C) 189,875 Performance fees of 20% 37,975 Frequency of Fees and Charges: Upfront Fee: Charged at the tme of nvestment Fxed Management Fees: Chargeable quarterly on prorata bass as per the fnancal year on the daly NAV. Ext Load: Charged at the tme of early ext by the clent STT & Brokerage: Charged as and when transacton takes place n the portfolo Servce Tax & other taxes/ leves: As applcable SIGNED SEALED AND DELIVERED by wthn named Clent(s) Clents to wrte the below mentoned complete sentence n ther own handwrtng; I/We have understood the fees/charge structure of the mentoned portfolo Frst applcant Second applcant Thrd applcant 6

8 Declaraton : The Clent hereby agrees that ths Term Sheet forms an ntegral part of the PMS Agreement executed between the Partes (Clent and the Portfolo Manager) on and that the sad Agreement/ Term Sheet shall reman n full force and effect untl the modfcaton are agreed by both the Partes. Sr No Applcant Name Sgnature (In case of frm, corporate, please affx company seal) 01 S 02 S 03 S Imples Intal sgnature of the applcant (s) requred/- S - Imples Full sgnature of the applcant (s) requred/- Rsk Factors: All servces and nvestments advces rendered by Portfolo Manager are subject to market rsks and the performance of the Product and securtes may vary depend upon the factors and forces affectng the securtes market, ncludng prce and volume volatlty n the stock markets, nterest rates, currency exchange rates, foregn nvestments, changes n government polces, taxaton, poltcal, economc or other developments and closure of the stock exchanges and that there s also rsk of loss due to lack of adequate external systems for transferrng, prcng, accountng and safekeepng or record of securtes. Investments/Dsnvestments n Products and securtes also nvolves nvestment rsks such as tradng volumes, settlement rsk, lqudty rsk, default rsk ncludng the possble loss of prncpal. Past performance of the Portfolo Manager does not guarantee future performance of the Product and the Portfolo Manager does not gve any knd of assurance of whatsoever nature, as regards the returns on ths Product. Core Infra Portfolo does not n any manner ndcate ether the performance/ qualty of ths Product or ts future prospects and returns, and s only the ndcatve name for dentfcaton and convenence. The Portfolo Manager gves no assurance on the returns or that the nvestment objectve of the Product wll be acheved. L&T Investment Management Lmted or ts Assocates / Group enttes are not responsble or lable for any loss or shortfall resultng from ths product. The value of the product offered may be affected by the performance of ndvdual companes, change n the general market condtons, factors and forces affectng captal markets n partcular, factors specfc to the ssuer of the securtes, varous other mcro and macro economc factors. Investment n the Product shall be subject to varous rsks ncludng but not lmted to rsk assocated wth nvestment/ dsnvestment n Equty and Equty related Instruments Investment n Dervatves, etc. Dervatves ncludng futures and optons are affected by varous rsks ncludng counterparty rsk, market rsk, valuaton rsk, lqudty rsk and bass rsk. Dervatve products are specalzed nstruments that requre nvestment technques and rsk analyss dfferent from those assocated wth stocks and bonds. The use of a dervatve requres an understandng not only of the underlyng nstrument but also of the dervatve tself. Dervatves requre mantenance of adequate controls to montor the transactons entered nto, the ablty to assess the rsk that a dervatve adds to the portfolo and other related capabltes. Investment decsons made by the Portfolo Manager may not always be proftable. Dsclamers: Please note that ths Term Sheet of the Products of Portfolo Manager shall be deemed to be an ntegral part of the Agreement and shall be read n conjuncton wth ths Agreement and the contents of the Term Sheet ncludng Portfolo Management Fees and Charges shall be co-termnous wth that of ths Agreement. Please read all Product related Documents ncludng Dsclosure Document/ Term Sheets/ Applcaton Form/ Clent Agreement for fees and expenses and other nformaton carefully before nvestng. Please note that the Dsclosure Document of the Portfolo Manager s uploaded on our webste The nformaton mentoned heren does not have regard to specfc nvestment objectves, fnancal stuaton and the partcular needs of any specfc person who may receve ths nformaton. The nformaton s non bndng and the recpent of ths nformaton s not oblgated to make nvestments. Investments/ Dsnvestments n Products and securtes nherently nvolve rsks and recpent should consult ther legal, tax and fnancal advsors before nvestng. Recpent of ths nformaton should understand that statements made heren regardng future prospects may not be realzed or acheved. The nformaton contaned heren nor the Products of the Portfolo Manager have been regstered n any jursdcton; hence please be guded by applcable laws before nvestng n the Products of the Portfolo Manager. No representatons or warrantes are made (express or mpled) as to the relablty, accuracy or completeness of such nformaton; L&T Investment Management Lmted or any of ts Assocates/ Group Enttes cannot be held lable for any loss arsng drectly or ndrectly from the use of, or any acton taken n on, any nformaton appearng n ths presentaton. Frst applcant Second applcant Thrd applcant 7