KARVY STOCK BROKING LTD PORTFOLIO MANAGEMENT SERVICES DISCLOSURE DOCUMENT

Transcription

1 KARVY STOCK BROKING LTD PORTFOLIO MANAGEMENT SERVICES DISCLOSURE DOCUMENT [As required under Regulation 14 of SEBI (Portfolio Managers) Regulation, 1993] 1. This document supercedes the Disclosure document dated January 31, 2013 filed with Securities and Exchange Board of India (SEBI) on February 13, This Disclosure Document has been filed with SEBI along with the certificate from independent chartered accountant in the prescribed format in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, The purpose of this Disclosure Document is to provide essential information about the portfolio management services in such manner as to assist and enable the investors in making informed decision for engaging Karvy Stock Broking Limited as a Portfolio Manager. 4. This document contains the necessary information about the Portfolio Manager required by an investor 5. Investors should carefully read this entire document before making a decision and retain it for future reference. 6. No person has been authorized to give any information or to make any representations not confirmed in this Disclosure Document in connection with the services proposed to be provided by the Portfolio Manager, and any information or representations not contained herein must not be relied upon as having been authorized by the Portfolio Manager. 7. The Principal Officer designated by Karvy Stock Broking Limited, the Portfolio Manager is: Name of the Principal Officer VARUN GOEL Tel No: Address [email protected] 701, Hallmark Business Plaza, Sant Dnyaneshwar Marg, Bandra (E), Mumbai This disclosure document is dated July 31,

2 Portfolio Management Services KARVY STOCK BROKING LIMITED SEBI Registration No. INP INDEX Sr No Contents Page Number 1 Disclaimer Clause 3 2 Definitions Description - The Portfolio Manager i ii History, Present Business and background of the Portfolio Manager. Promoters of the Portfolio Manager, Directors and their background iii Details of the top 10 group companies of the Portfolio manager based on turnover as on March 31, iv Details of Services being offered Penalties/Pending Litigations/Proceedings etc Services offered Risk Factors Client Representation i Category of clients as on June 30, ii Complete disclosure in respect of transactions with related parties as per the standards specified by the Institute of Chartered Accountants of India (as on March 31,2013) Financial Performance of Portfolio Manager, Karvy Stock Broking Limited Portfolio Management Performance of the Portfolio Manager for last 3 years 10 Nature of Expenses Taxation Accounting Policies Investor Services Grievances Redressal Dispute Settlement Mechanism General 37 2

3 1)Disclaimer clause This document has been prepared in accordance with the Securities Exchange Board of India (Portfolio Managers) Regulations, 1993, as amended from time to time and other circulars issued by SEBI from time to time and have been filed with SEBI. This Document has neither been approved nor disapproved by SEBI nor has SEBI certified the accuracy or adequacy of the contents of this Document. This information is not for public distribution and has been furnished to you solely for your information and may not be reproduced or redistributed to any other person. 2) Definitions In this Agreement, unless otherwise clearly indicated by or inconsistent with the context, the following expressions shall have the meaning assigned to them hereunder respectively: Act means the Securities and Exchange Board of India Act, Agreement includes agreement entered between Karvy Stock Broking Limited, the portfolio manager and the client for the management of funds or securities of the client in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993 and SEBI (Portfolio Managers) Amendment Regulations, 2002 issued by the Securities and Exchange Board of India and as may be modified from time to time. Board means the Securities and Exchange Board of India. Bank Account means one or more bank accounts opened, maintained and operated by the Portfolio Manager in the name of clients or a pool account in the name of the Portfolio Manager in which the funds handed over by the client shall be held by the Portfolio Manager on behalf of the Client. Chartered Accountant means a chartered accountant as defined in clause (b) of subsection (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act. 3

4 Client means any body corporate, partnership firm, individual, HUF, association of person, body of individuals, trust, statutory authority, or any other person who enters into agreement with the Portfolio Manager for the managing of his/ her/ its portfolio. Custodian means any person who carries on or proposes to carry on the business of providing custodial services in accordance with the regulations issued by SEBI from time to time. Depository means Depository as defined in the Depositories Act, 1996 (22 of 1996) and currently includes National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). Depository Account means any account of the client or for the client with an entity registered as depository participant under sub-section 1A of Section 12 of the Act or any other law for the time being relating to registration of depository participants. Discretionary Portfolio Manager means a portfolio manager who exercises or may, under a contract relating to portfolio management, exercises any degree of discretion as to the investments or management of the portfolio of securities or the funds of the client, as the case may be. Disclosure Document means this disclosure document dated January 31, 2013 for offering Portfolio Management Services. Financial year means the period of twelve months commencing on 1 st April every year an ending on 31 st march of the next year. Funds means the monies placed by the Client with the Portfolio Manager and any accretions thereto. Funds managed means the market value of the Portfolio of the Client as on date. Fund Manager (FM) means the individual/s appointed by the portfolio manager who manages, advises or directs or undertakes on behalf of the client (whether as a discretionary 4

5 portfolio manager or otherwise) the management or administration of a portfolio of securities or funds of the client, as the case may be. Initial Corpus means the value of the funds and the market value of securities brought in by the client and accepted by the Portfolio Manager at the time of registering with the Portfolio Manager for the portfolio management services. Investment Advisory Services means the services, where the Portfolio Manager advises Clients on investments in general or gives specific advice required by the Clients and agreed upon in the Agreement. Non Discretionary Portfolio Manager means a portfolio manager who manages the funds in accordance with the directions of the client. Person directly or indirectly connected means any person being an associate, subsidiary, inter connected company or a company under the same management within the meaning of section 370(1B) of the Companies Act, 1956 or in the same group. Portfolio means the total holdings of securities and / or funds belonging to the client. Portfolio Manager (PM) means Karvy Stock Broking Ltd., a company Registered under the Companies Act, 1956 and having its Registered Office at Karvy House, 46, Avenue 4, Road No.10, Banjara Hills, Hyderabad and its PMS dealing office at 701, Hallmark Business Plaza, Sant Dnyaneshwar Marg, Bandra (E), Mumbai [ but may add more dealing offices in future] Karvy Stock Broking Limited has obtained a certificate from SEBI dated 1 st November, 2005 to act as Portfolio Manager under SEBI Registration No.INP Portfolio Value means the aggregate of the Portfolio Funds and Value of Portfolio Securities. Principal Officer means a director/an employee of the portfolio manager who is responsible for the activities of portfolio management and has been designated as principal officer by the portfolio manager. 5

6 Regulations means the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993, as amended by Securities and Exchange Board of India (Portfolio Managers) Amendment Regulations, 2002, and as may be amended by SEBI from time to time including rules, guidelines or circulars issued in relation thereto from time to time. Strategy means any of the Portfolio Investment categories mentioned here or that may be introduced by the Portfolio Manager from time to time. The Term Strategy may be interchanged with Plans/Products/Options. SEBI means the Securities and Exchange Board of India established under sub-section (1) of Section 3 of the Securities and Exchange Board of India Act, Securities means shares (whether dematerialized or otherwise), derivatives (futures and options), scrip, stocks, bonds, warrants, convertible debentures, non-convertible debentures, fixed return investments, floating rate instruments linked to MIBOR/call money etc., equity shares and equity linked instruments or other marketable securities of a like nature in or of any incorporated company or other body corporate, negotiable instruments, including usage bills of exchange, trade bills, deposits or other money market instruments, derivatives, commercial paper, certificates of deposits, units issued by Unit Trust of India and units issued by Mutual Funds, mortgage backed or other asset backed securities issued by any institution or corporate, cumulative convertible preference shares issued by any incorporated Company and securities issued by the Central Government or a State Government or any other securities that may be issued from time to time and other rights or interests in securities. Securities lending means the securities lending as per the Securities Lending Scheme, 1997 and related guidelines specified by SEBI. Structured Products means products returns on which may be linked to Equity Index, Debt instruments, Non Convertible Debentures and may also be based on Basket of stock, index or stock futures with pre-defined capital protection. These are normally third party products. The terms that are used herein and not defined herein, except where the context otherwise so requires, shall have the same meanings as are assigned to them under the Act, the Regulations or the Rules. 6

7 3) Description i. History, Present Business and Background of the Portfolio Manager KARVY, is a premier integrated financial services provider, and ranked amongst the leading corporate in the country in all its business segments, servicing over millions of individual investors in various capacities, and provides investor services to many corporates, comprising the who s who of Corporate India. KARVY covers the entire spectrum of financial services such as Stock Broking, Depository Participants, Distribution of financial products mutual funds, bonds, fixed deposit, equities, Insurance Broking, Commodities Broking, Personal Finance, Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs, among others. KARVY has a professional management team and ranks among the best in technology and operations. Karvy Stock Broking Limited (KSBL) was incorporated on 30 th March 1995 having Registered Office at Karvy House 46, Avenue 4, Street No.-1, Banjara Hills, Hyderabad Karvy Stock Broking Limited (KSBL) is a member of National Stock Exchange Limited, Bombay Stock Exchange Limited and MCX Stock Exchange Limited. Karvy Stock Broking Limited has been registered as a Depository Participant with National Securities Depository Ltd (NSDL) since December 1997 and with Central Depository Securities Ltd (CDSL) since October KSBL has a large number of offices across the length and breadth of the country, thus making financial services accessible to urban, semi-urban and rural investors. We offer broking services across the entire network on a robust platform with sound technological support and risk and surveillance mechanism which are of a high order. The broking services are backed by a strong research desk which is very proactive to market feed back and analyses information that flows into the capital markets which enables us to provide quality advice to our customers. The research team comprises of technical analysts who cover market trends and stock specific movements and fundamental specialists who track various segments of industry and corporate.. Besides this, we also provide customized advisory services to help in making the right financial moves that are specifically suited to portfolio requirements of the clients. Offering a wide trading platform with a dual membership both as a stock broker registered with NSE, BSE and MCX as well as a Depository Participant registered with both NSDL and CDSL, we are a powerful medium for trading and settlement of dematerialized shares. We have established live DPMs, Internet access to accounts and an easier transaction process in order to offer more convenience to individual and corporate investors. ii. Details of Promoters, directors and their background Mr. C. Parthasarathy, Promoter, Chairman and Managing Director, aged about 58 years; a leader in the financial services industry in India is responsible for building KARVY as one of India s truly integrated Financial Service provider. He is a Fellow Member of the Institute of Company Secretaries of India, a Fellow Member of the Institute of Chartered Accountants of India and a graduate in Law. As Chairman, he oversees the group s operations and renders 7

8 vision and business direction. His passion and vision for achieving leadership in various segments of the business have transformed KARVY into a leading financial intermediary ranking amongst the top in the Registrar, Share Transfer and IPO Distribution businesses. He has about 36 years of experience in the financial services arena. He also holds directorships in various companies of the group. Mr. M. Yugandhar, Promoter cum Director, aged about 62 years, is founder of Karvy group has varied experience in the field of financial services spanning about 36 years. He is a Fellow Member of the Institute of Chartered Accountants. He also holds directorships in various companies of the group. Mr. M.S. Ramakrishna, Promoter cum Director, aged about 60 years, founder of Karvy group is orchestrator of technology initiatives such as the call center in the service of the customers. Mr.M.S Ramakrishna holds directorships in Karvy group and various other companies. He has about 33 years of experience in the financial services arena. He also holds directorships in various companies of the group. Mr. B.D. Narang, Non Promoter Director, aged about 68 years is a post graduate in Science, M.Sc. (Agr. Eco) He has held senior positions in various banks before superannuation and retiring as the Chairman and Managing Director of Oriental Bank of Commerce in the year During his illustrious career, he has handled several special assignments viz, Alternate Chairman of the Committee on Banking Procedures set up by Indian banks Association for the year , Chaired a panel on Serious Financial Frauds appointed by the RBI, Chaired a Panel on Financing Construction Industry appointed by Indian Banks Association, Appointed as Chairman of Governing Council of National Institute of Banking Studies & Corporate Management, Elected member of the Management Committee of India Banks Association, Member of the Advisory Council of Banker Training College (RBI), Mumbai, etc. Since retirement he has handled several assignments viz, Member- Expert group formed for examining problems of distressed farmers, member- Committee to Oversee the Working of National Education & Investor Fund (Nominated by the Ministry of Co. Affairs GOL), Technical Expert for Co-option in the Audit Board for Performance Audit/Reviews in respect of Housing Finance PSUs & Hudco, Advisor- DSP Merrill Lynch, Mumbai (Dec 2003 to Sept 2007). Mr. Ashish Agrawal, Non Promoter Director, aged about 40 years, holds a Bachelor s degree in Electronics Engineering from the SGS Institute of Technology & Science, Indore. He is also a Chartered Financial Analyst and an MBA from the Indian Institute of Management, Ahmadabad. Mr. Ashish Agarwal is presently serving as the Vice President of Baring Private Equity Asia- Mumbai and is responsible for its investments in India. Prior to the current assignment with Baring, Mr. Ashish was associated with Lehman Brothers- Mumbai as a Senior Vice President. He has about 19 years of experience and has been also associated with the Bank of America, JM Morgan Stanley- Mumbai, ICICI Securities and CMC Limited in his various prior assignments. 8

9 Ms. Vishakha Mulye, Non Promoter Director, aged about 44 years, holds a Bachelor s degree in commerce from the University of Bombay. She is also a Chartered Accountant from the Institute of Chartered Accountants of India. Ms. Vishakha joined the ICICI Group in 1993 and has vast experience in the areas of strategy, treasury & markets, proprietary equity investing and management of long term equity investments, structured finance and corporate & project finance. From 2002 to 2005, she was responsible for the Bank s structured finance and global markets businesses, and its financial Institutions relationships. From , she was the CFO of ICICI Bank. In October 2007, she was elevated to the Board of ICICI Bank s general insurance subsidiary. ICICI Lombard General Insurance Company. In April 2009, she took over as Managing Director & CEO of ICICI Venture Funds Management Co. Ltd. She was selected as Young Global Leader for the year 2007 by World Economic Forum. She has also been conferred the award for Most Powerful Women in Indian Business thrice (2007, 2009 & 2010) by Business Today. (iii) Details of the Top 10 Group companies/firms based on turnover as on March 31, 2013 Name of the Company Nature of Business Status Karvy Computershare Pvt. SEBI Registered Registrar and Share Group company Ltd. Transfer Agent Karvy Financial Services Ltd. Financial Services-NBFC Wholly owned subsidiary company Karvy Data Management services Ltd. Karvy Comtrade Ltd. Transaction Processing FMC/ NCDEX /MCX/NMCE/ACE / ICEX/ NCDEX Spot Exchange / National Spot Exchange registered commodity broker Wholly owned subsidiary company Wholly owned subsidiary company Karvy Holding Limited Core Investment Company Wholly owned subsidiary company Karvy Consultants Limited Consultancy and advisory services Group company Karvy Realty (India) Ltd. Realty Services Wholly owned subsidiary company Karvy Investor Services Ltd. SEBI Registered Merchant Banker and Underwriter. Wholly owned subsidiary company Karvy Capital Limited Financial Services-NBFC Wholly owned subsidiary company Karvy Middle East LLC, Dubai Commercial Broking license from the Department of Economic Development, Dubai Subsidiary company 9

10 (iv )Details of the services being offered: Portfolio Manager offers Discretionary, Non discretionary & Advisory services as per the preference and agreement with the individual client (For more details kindly refer Annexure A). 4.Penalties, pending litigation or proceedings, findings of inspection or investigations for which action may have been taken or initiated by any regulatory authority. I All cases of penalties imposed by the Board or the directions issued by Board under the Act or Rules or Regulations made there under The Whole Time Member of Securities and Exchange Board of India ( SEBI ) had passed a common final order dated June 22, 2007 ( Order ) against the KSBL Stock Broker, KSBL Depository participant and Karvy Computershare Private Limited (KCPL) in the matter of IPO irregularities. Against the appeal made by KSBL and KCPL, Hon ble SAT set aside the order and remanded the cases to SEBI with a direction to pass three separate orders on the three show causes issued by the learned whole time member. The Whole Time Member of SEBI has granted a personal hearing as per the order of Hon ble SAT which and the matter is yet to conclude. Pending Ii The nature of penalty/direction As above SEBI has initiated proceedings against the company and its directors before the additional chief metropolitan magistrate, Mumbai, with respect to the investigation conducted by SEBI in various IPOs. Iii Penalties imposed for any economic offence and/or for violation of any securities laws Iv Any pending material litigation/legal proceedings against the Portfolio Manager/key personnel with separate disclosure regarding pending criminal cases, if any None SEBI has initiated proceedings against KSBL and its directors before the additional chief metropolitan magistrate, Mumbai, with respect to the investigation conducted by SEBI in various IPOs. Pending 10

11 v Any deficiency in the systems and operations of the Portfolio Manager observed by the Board or any regulatory agency Vi Any enquiry/adjudication proceedings initiated against the Portfolio Manager or its directors, principal officer or employee or any person directly or indirectly connected with the Portfolio Manager or its directors, principal officer or employee, under the Act or Rules or Regulations made there under Not Applicable Not Applicable 5) Services Offered 5.1 The Portfolio Manager offers the following three types of Services a. Discretionary The Portfolio account of the client is managed at the full Discretion and liberty of Portfolio Manager. Under these services, the choice as well as the timings of the investment decisions rest solely with the Portfolio Manager. The Portfolio Manager may at times and at its own discretion, adhere to the views of the Client pertaining to the investment /disinvestment in the Client s Portfolio. The Portfolio Manager shall have the sole and absolute discretion to invest in respect of the Client s account in any type of security as per the Agreement and make such changes in the investments and invest some or all of funds in the Client s account in such manner and in such markets as it deems fit. The Client may give informal guidance to customize the portfolio strategies; however, the final decision rests with the Portfolio Manager. The securities invested / disinvested by the Portfolio Manager for Clients in the same Strategy may differ from one Client to another Client. The Portfolio Managers decision (taken in good faith) in deployment of the Clients account is absolute and final and can never be called in question or be open to review at any time during the currency of the agreement or any time thereafter except on the ground of malafide, fraud, conflict of interest or gross negligence. This right of the Portfolio Manager shall be exercised strictly in accordance with the relevant Acts, Rules, and Regulations, guidelines and notifications in force from time to time. Under these services, the Clients may authorize the Portfolio Manager to invest their Funds in specific financial instruments or a mix of specific financial instruments or restrict the 11

12 Portfolio Manager from investing in specific financial instruments or securities. Periodical statements in respect of Client s Portfolio shall be sent to the respective Clients. Portfolio Strategy: 1. K-Sensible Portfolio this is a long term oriented strategy with a low churn rate and ideal for investors with a two to three year investment objective 2. K-Aggressive Portfolio this strategy provides a balance between growth and safety by employing a strategy of systematic profit booking. This strategy has a medium churn rate and is ideal for investors with a one to two year investment objective. 3. K-Energetic Portfolio this strategy provides returns by following an aggressive style of investing which entails higher risks. This strategy has a high churn rate and is ideal for investors with a 12 to 15 month investment objective. 4. Alpha Portfolio this is designed for those investors who seek long-term capital appreciation from their asset allocation to equities. The portfolio manager will invest in stocks across sectors, market capitalization categories and investment themes. 5. Delta Portfolio This is designed for those investors who seek long-term capital appreciation from their asset allocation to equities and debt. The portfolio will invest in mutual funds across sectors, market capitalization categories and investment themes. 6. Omega Portfolio This is designed for those investors who seek long-term capital appreciation from their asset allocation to equities, debt, gold and other asset classes which are available through either exchange traded products or through mutual funds. 7. Theta Portfolio This is designed for those investors who seek income and longterm capital appreciation from their asset allocation to debt. 8. Alpha Plus Portfolio This is a diversified portfolio with investments in stocks across sectors, market capitalizations and investment themes. 9. Gamma Portfolio Gamma Portfolio aims to generate Capital appreciation in the medium term through investments in equities. It would aim to invest in high growth companies with sustainable business models backed by strong management capabilities. 10. PSI Portfolio This is designed for those investors who seek long-term capital appreciation from their asset allocation to equities and other investment vehicles, and to outperform the market in the long run. The portfolio will invest in equity, equity related instruments and other alternative asset classes. 11. Aurous portfolio - This is designed for those investors who seek long-term capital appreciation from their asset allocation to debt and gold and other investment vehicles as may be required. 12

13 Note: The Aurous Portfolio has been introduced with effect from February 15, Zeta portfolio - This is designed for those investors who seek long-term capital appreciation from their asset allocation to equities, debt, gold, index/ stock futures and options and other asset classes which are available through either exchange traded products, Over the counter products or through mutual funds Note: The Zeta Portfolio has been introduced with effect from February 15, 2013 b. Non Discretionary Non-Discretionary Portfolio is the Portfolio which Portfolio Manager manages in consultation with and as per the directions or consent of the client. Under these services, the Clients decide their own investments with the Portfolio Manager only facilitating the execution of transactions. The Portfolio Manager s role would include but not limited to providing research, structuring of clients portfolios, investment advice and guidance and trade execution at the Client s request. The Portfolio Manager shall execute orders as per the mandate received or consent obtained from the Client. The deployment of the Client s Funds by the Portfolio Manager shall be as per the instructions or consent of the Client. The rights and obligations of the Portfolio Manager shall be exercised strictly in accordance with the Act, Rules and/or Regulations, guidelines and notifications in force from time to time. Periodical statements in respect of Client s Portfolio shall be sent to the respective Clients. The following are illustrative, but not exhaustive, investment strategies available for client availing Non-Discretionary Portfolio Management Services. 1. Equity Portfolio: Equity Portfolio (Non discretionary) are designed for those investors who seek long-term capital appreciation from their asset allocation to equities. The portfolio manager will invest in stocks across sectors, market capitalization categories and investment themes, in consultation with and as per directions or consent of the client. 2. Non Convertible Debentures: The Non Convertible Debentures are debentures which do not get converted into equity and normally attract a fixed rate of return. The Non-convertible Debentures may be listed or unlisted. Investments will be made in the Non Convertible Debentures in consultation with and as per directions or the consent of the client. 3. Structured product: The Structured products are designed for those investors who want returns linked to price movement of any Equity index, basket of stocks, commodities, precious metals, etc., with a predefined level of capital protection. 13

14 Structured Products may be principal or non principal protected or may not have any protection at all. Investments will be made in the structured products in consultation with and as per directions or the consent of the client. 4. Non Convertible Debentures as part of Structured Products Non convertible Debentures are normally issued with a fixed rate of Interest. In case of Non convertible Debentures issued as part of a structured product, the returns on Non-convertible debentures may be linked to the price movement of an underlying or derivative thereof. Investments will be made in such products in consultation with and as per directions or consent of the client. 5. Omega Portfolio It is designed for those investors who seek long-term capital appreciation from their asset allocation to equities, debt, gold and other asset classes which are available through either exchange traded products or through mutual funds. 6. Optima Portfolio It is designed for those investors who seek capital appreciation from their asset allocation to Equities, debt and gold. 7. Alpha Portfolio It is designed for those investors who seek aggressive capital appreciation from their equity asset allocation. The portfolio will invest in stocks across sectors, market capitalization categories and investment themes. Note: The Alpha Portfolio has been introduced with effect from 1/02/2012. c. Advisory Portfolio Manager will provide advisory services, as per the Regulations, which shall be in the nature of investment advice and shall include the responsibility of advising on the portfolio strategy, investment, disinvestment of the various securities in the client s portfolio, for an agreed fee, entirely at the client s risk. This service will be purely of advisory in nature under an agreed fee structure with the client. It is up to the client to accept the recommendations/advice of Portfolio Manager and Portfolio Manager will not be held responsible for any consequence arising out of acceptance of Portfolio Manager s advice under this service. 14

15 5.2 Present Investment Objective The General Objective is to formulate and device the investment philosophy to achieve long term growth of capital by investing in assets, which generate reasonable return and to ensure liquidity. The actual portfolio management style will vary in line with profile of each client with regards to his risk tolerance levels and specific preferences or concerns. (The specific objective will be as mentioned in the agreement with the client). 5.3 Types of securities The Portfolio Manager/Fund Manager shall invest in all such types of Securities as defined (kindly refer to the definition) and in all such Securities as permissible from time to time. 5.4 Investment in Group / associate companies The Portfolio Manager/Fund Manager may invest in Securities of the associate/group companies subject to the applicable laws/ regulations/ guidelines. These investments will be carried out to achieve the investment objectives and strategies and in the normal course of investment activity subject to the applicable laws/regulations. The Portfolio Manager / Fund Manager shall not make any investments in any unlisted securities of associate/group companies of the Portfolio Manager/ promoter. The Portfolio Manager / Fund Manager will also not make investment in privately placed securities issued by Associate/Group companies of the promoter. The Portfolio Manager may invest not more than 25% of the portfolio of an individual client in the listed securities of the Group companies. 5.5 Minimum Investment Amount 6) Risk factors The Portfolio Manager shall not accept funds / securities from the new clients, cumulative value of which is less than Rupees TwentyFive Lakhs or as specified in the agreement with the Portfolio Manager or as amended/specified in the SEBI (Portfolio Managers) Regulations, Investments in securities are subject to market risks including price volatility and liquidity risk and there is no assurance or guarantee that the objectives of the strategy will be achieved. The investment may not be suited for all categories of investors. The past or present performance of these strategies does not indicate the future performance of the same strategy or any other future strategies launched subsequently by Portfolio Manager. With reference to appreciation on the portfolio, the investors are 15

16 not being offered any guaranteed or indicative returns through any of the strategies. The Portfolio Manager also does not guarantee any capital protection for any strategy. 2. There are inherent risks arising out of investment objectives, investment strategy, asset allocation and non-diversification of portfolio. The investment objective, investment strategy and asset allocation may differ from client to client. However, generally, highly concentrated portfolios with lesser number of stocks will be more volatile than a portfolio with a larger number of stocks. Portfolios with higher allocation to equities will be subject to higher volatility that portfolios with low allocation to equities. Diversified portfolios (allocated across companies and broad sectors) generally tend to be less volatile than non diversified portfolios. The names of the various strategies do not in any manner indicate their prospects or returns. 3. Investment decisions made by the Portfolio Manager may not always be profitable since actual market movement may be at variance with anticipated trends. 4. ETF may trade above or below their NAV. The NAV of ETF will fluctuate with changes in market value of scheme s holdings of underlying stocks. However, given that ETF can be created and redeemed only in creation units directly with the Mutual Fund, it is expected that large discounts or premiums to the NAVs of ETFs will not sustain due to availability of arbitrage possibility. Any changes in trading regulations by the Exchange (s) or SEBI may affect the ability of market maker to arbitrage resulting into wider premium / discount to NAV for ETFs. 5. The performances of the strategies depend on the performance of the market and the individual companies in which investment have been made under strategies relative to industry specific and macro economic factors. The Portfolio Manager does not assure or guarantee that Performance of Portfolio of the Investor shall better the Performance of any Benchmark Index. 6. The tax benefits described in this Disclosure Document are as available under the present taxation laws and are available subject to conditions. The information given is included for general purpose only and is based on advice received by the Portfolio Manager regarding the law and practice in force in India and the investors should be aware that the relevant fiscal rules or their interpretation may change. As is the case with any investment, there can be no guarantee that the current tax position or the proposed tax position prevailing at the time of an investment in the Portfolio will endure indefinitely. In view of the individual nature of tax consequences, each investor is advised to consult his/her own professional tax advisor regarding the taxation aspects of his/ her portfolio investments. 7. Prospective investors should review/ study this Disclosure Document carefully and in its entirety and shall not construe the contents hereof or regard the summaries contained herein as advice relating to legal, taxation, or financial/investment matters. Prospective investors are advised to consult their own professional advisor(s) as to the legal, tax, financial or any other requirements or restrictions relating to the subscription, gifting, acquisition, holding, disposal (sale or conversion into money) of Portfolio and to the treatment of income(if any), capitalization, capital gains, any distribution, and other tax consequences relevant to their portfolio, acquisition, holding, capitalization, disposal 16

17 (sale, transfer or conversion into money) of portfolio within their jurisdiction of nationality, residence, incorporation, domicile etc. or under the laws of any jurisdiction to which they or any managed funds to be used to purchase/gift portfolio of securities are subject, and also to determine possible legal, tax, financial or other consequences of subscribing/gifting, purchasing or holding portfolio of securities before making an investment. 8. The debt investments and other fixed income securities may be subject to interest rate risk, liquidity risk, credit risk and reinvestment risk. Liquidity in these investments may be affected by trading volume, settlement period and transfer procedures. Issuer of fixed income security may default or may be unable to make timely payments of principal and interest. Net Asset Value of portfolio may be affected due to perceived level of credit risk as well as actual event of default. 9. The corporate debt market is relatively illiquid vis-à-vis the government securities market. There could therefore be difficulties in exiting from corporate bonds in times of uncertainties. Further, liquidity may occur only in specific lot sizes. Liquidity in a security can therefore suffer. Even though the Government securities market is more liquid compared to that of other debt instruments, on occasions, there could be difficulties in transacting in the market due to extreme volatility or unusual constriction in market volumes or on occasions when an unusually large transaction has to be put through. There can be no assurance that the requirements of the securities market necessary to maintain the listing of specified debt security will continue to be met or will remain unchanged. 10. Exposure to select Sector(s) carries the performance risk of the relevant sector, which could outperform or underperform the market and/or various indices. 11. Technology and pharmaceutical stocks and some of the investments in niche sectors run the risk of volatility, high valuation, obsolescence and low liquidity. 12. Frequent rebalancing of portfolio may result in higher brokerage / transaction cost. Also the allocation to different securities can vary from 0 to 100 %, hence there can be a vast difference between the performance of the products and returns generated by underlying securities. 13. Information available on some companies in which the Portfolio manager has made investments may be limited. 14. The performance of the strategies may be affected by change in Government Policies including taxation, and certain unforeseen developments in political or general areas at the national or international level. Also, the investments are subject to external risks such as war, natural calamities and policy changes of local / international markets which affect stock markets. 15. The performance of the strategies may also be affected and investor could lose money over short periods due to fluctuation in NAV of Portfolio arising out of fluctuations of interest rates, credit risk, political and geopolitical risk, currency risk, foreign exchange risks, foreign investments, risks arising from changing business dynamics, risk associated with investment in securities debt, risk due to movement in Futures and options 17

18 markets, changes in the general market conditions, forces affecting the capital markets, closure of stock exchange due to circuit filter rules or otherwise and risks associated with trading volumes, settlement periods, transfer procedures, liquidity and settlement systems in equity and debt markets. 16. There is a possibility that loss may be sustained by the Portfolio as a result of the failure of another party (usually referred as the Counter party ) to comply with the terms of the derivative contract. 17. Portfolio Manager, subject to authorization in writing by the client, may participate in securities lending. Engaging in securities lending is subject to risks related to fluctuations in collateral value/settlement/liquidity/default from counter party, including corporate benefits accrued thereon. This may lead to the risk of Approved Intermediary unable to deliver back the securities. Portfolio Manager cannot be held liable for any loss arising out of operation of such strategies. The portfolio manager may in the course of its activities, avail the services of persons / bodies who are not employees of the portfolio manager. The portfolio manager would exercise due diligence when employing such persons, however there may be losses incurred on account of any act or omission on part of such persons or bodies. The portfolio manager disclaims liability for any loss in the portfolio on this account. All portfolios under portfolio management are subject to change at anytime at the discretion of the Portfolio Manager. 18. In the case of stock lending, risks relate to the defaults from counterparties with regard to securities lent and the corporate benefits accruing thereon, inadequacy of the collateral and settlement risks. The Portfolio Manager is not responsible or liable for any loss resulting from the operations of the strategies/options. 19. Investments in the Market Linked Debentures (MLDs) are also subject to model risk. The MLDs are created on the basis of complex mathematical models involving multiple derivative exposures which may or may not be hedged and the actual behavior of the securities selected for hedging may significantly differ from the returns predicted by the mathematical models. 20. Strategies may use derivative instrument like futures and options (index as well as individual securities), warrants, convertible securities, swap agreements, etc. for the purpose of hedging and/or portfolio balancing, as permitted under the Regulations/guidelines. Strategies using such derivative products may be affected by risks different from those associated with stock and bonds. Such derivative products are highly leveraged instruments and their use requires a high degree of skill, expertise and diligence. Small price movements in the underlying security may have a large impact on the value of the derivatives and futures and options and may also result in loss. Some of the risks relate to mis-pricing or the improper valuation of the derivatives/futures and option and the inability to correlate the positions with the underlying assets, rates and indices. The risk of loss associated with futures contracts is potentially unlimited due to 18

19 the low margin deposits required and the extremely high degree of leverage involved in futures pricing. Also, the derivatives/future and options market is nascent in India. The liquidity of the investments is guided by trading volumes in the securities in which it invests. Although securities may be listed on the Exchange(s), there can be no assurance that an active secondary market will develop or be maintained. This may limit the Portfolio Manager s ability to freely deal with securities in the Portfolio and may lead to incurring of losses till the security is finally sold. Different segments of the financial markets have different settlement periods and such periods may be extended significantly due to unforeseen circumstances. The inability of a Portfolio to make intended securities purchase due to settlement problems could cause the portfolio to miss certain investment opportunities. Similarly, the inability to sell securities held in the portfolio due to absence of a well developed and liquid secondary market would at times result in potential losses in the Portfolio, in case of a subsequent decline in the value of securities held in the Portfolio. 21. The Portfolio Manager may invest in non-publicly offered debt securities and unlisted securities. This may expose client s portfolio to liquidity risks. 22. Securities, which are not listed on the Stock Exchanges, are inherently illiquid in nature and carry a larger amount of liquidity risk, in comparison to securities that are listed on the Exchanges or offer other exit options to the investor, including a PUT option. The Portfolio Manager may, considering the overall level of risk of the Portfolio, invest in lower rated/unrated securities that offer attractive yield, which may increase the risk of the Portfolio. Such investments shall be subject to the scope of investments laid down in the executed agreement. 23. The Portfolio Manager may seek to create value by investing in stocks that trade below the estimated fair value of the Company, which shall be judged by various quantitative valuation parameters. But due to various reasons, it may so happen that such stocks continue to languish and are not able to attain the price discovery. Accordingly, this may have material adverse impact on the performance of the portfolio. 24. After accepting the corpus for management, the Portfolio Manager may not get an opportunity to deploy the same or there may be delay in deployment. In such situation the clients may suffer opportunity loss. 19

20 7) Client Representation i. Category of clients as on June 30,2013. Category of Clients No of Clients Funds Managed (Rs. In Crs) Associate/Group companies As on 30 th June As on 31 st March 2013 As on 31 st March As on 31 st March, Remarks Others As on 30 th June Discretionary, Nondiscretionary As on 31 st March Discretionary, Nondiscretionary As on 31 st March Discretionary, Nondiscretionary As on 31 st March, Discretionary, Nondiscretionary Total As on 30 th June Discretionary, Nondiscretionary As on 31 st March, Discretionary, Nondiscretionary As on 31 st March Discretionary, Nondiscretionary As on 31 st March, Discretionary, Nondiscretionary ii.complete disclosure in respect of transactions with related parties as per the standards specified by the Institute of Chartered Accountants of India (as on 31 st March 2013) Sr. No Name of the related party Nature of Transaction Amount Karvy Consultants Limited Brokerage on trading in securities 72,

21 (Group Company) Balance at year end, loans and advances 5,41,106 4,17,39,076 Balance at the year end, trade payables/ (receivables) 6,36, Karvy Computershare Pvt. Limited Brokerage on trading in securities 2,580 7,559 (Group Company) Rent (paid) / received 0 13,89,727 Reimbursement of expenses 37,25,126 35,55,672 Fees and marketing income / (expenses) Balance at year end, trade payables/ (receivables) 4,53, ,74, Karvy Investor Services Limited (Subsidiary company) Interest on advances received / (paid), net (10,98,493) (16,22,083) Loans and advances given / (refunded), maximum given at any time during the year Loans and advances taken/(repaid), maximum taken at any time during the year 0 30,00,000 3,00,00,000 3,00,00,000 Reimbursement of expenses, net 50,26,467 1,22,66,279 Fees and marketing income/ (expenses) 6,15,30,885 44,54,255 Balance at year end, loans and advances 0 2,58,947 21

22 4 Karvy Comtrade Limited (Subsidiary company) Brokerage on trading in securities 3,924 8 Interest on advances received / (paid), net (1,88,17,336) (14,78,438) Loans and advances given / (refunded),maximum at any time during the year Loans and advances taken/(repaid), maximum at any time during the year 2,00,00,000 17,00,00,000 45,45,00,000 15,00,00,000 Reimbursement of expenses, net 6,86,47,220 10,68,06,936 Fees and marketing income/ (expenses) Balance at year end, loans and advances 1,70,00,000 3,07,00, ,399 5 Karvy Insurance Broking Limited (Subsidiary company) Interest on advances received / (paid), net 26,16,518 36,62,121 Loans and advances given / (refunded),maximum at any time during the year (2,50,50,000) (29,00,000) Reimbursement of expenses, net Balance at year end, loans and advances 9,98,617 41,50,225 50,85,278 3,87,37,348 6 Karvy Data Management Services Limited 22

23 (Subsidiary company) Interest on advances received / (paid), net 2,02,05,247 74,30,110 Rent (paid) / received 50,53,464 55,21,464 Investment in equity shares 2,00,00,000 3,00,00,000 Loans and advances given / (refunded), maximum at any time during the year Loans and advances taken /(repaid), maximum at any time during the year 39,70,00,000 20,56,80, ,00,00,000 Reimbursement of expenses, net 10,59,53,065 10,42,31,433 Fees and marketing income/ (expenses) 3,87,00,000 90,00,000 Advance for investments 2,00,00,000 Balance at year end, loans and advances 0 5,48,07,483 7 Karvy Financial Services Limited (Subsidiary company) Brokerage on trading in securities 31,39,019 3,93,431 Interest on advances received / (paid), net Loans and advances given / (refunded), maximum at any time during the year 88,72,951 52,02,76,137 19,76,83, ,00,00,00 0 Loans and advances taken/ (repaid), maximum at any time during the year 37,61,10,329 0 Reimbursement of expenses 3,36,47,395 3,48,10,253 Fees and marketing income/ 23 11,21,00,000 4,00,00,000

24 (expenses) Balance at year end, loans and advances 0 2,03,486 Balance at year end, Trade payables / (receivables) 75,32,036 95,59,345 8 Karvy Forex & Currencies Private Limited (Subsidiary company) Investment in equity shares 80,00,000 0 Loans and advances given / (refunded), maximum at any time during the year 0 0 Reimbursement of expenses, net Balance at year end, loans and advances 0 33,63,922 79,934 31,96,163 9 Karvy Realty (India) Limited (Subsidiary company) Brokerage on trading in securities Loans and advances given / (refunded), maximum at any time during the year 2,75, Reimbursement of expenses, net 58,74,379 47,58,912 Fees and marketing income/(expenses) 10,53,33,833 0 Balance at year end, loans and advances 95,59,28,438 95,61,44,390 24

25 10 Karvy Capital Limited (Subsidiary company) Brokerage on trading in securities 4,45,119 7,55,440 Interest on advances received / (paid), net 14,95,293 (3,42,096) Investment in equity shares 4,00,00,000 4,00,00,000 Loans and advances given / (refunded), maximum at any time during the year Loans and advances taken/ (repaid), maximum at any time during the year 9,95,50,000 3,00,00,000 2,69,40,000 2,75,00,000 Reimbursement of expenses, net 1,09,20,833 56,96,678 Fees and marketing income/ (expenses) 30,00,000 0 Balance at year end, loans and advances Balance at year end, Trade payables / (receivables) 0 23,59,226 2,05,17,242 1,08,06, Karvy Holdings Limited (Subsidiary company) Investment in equity shares 1,95,00,000 5,00,000 Reimbursement of expenses, net 3,60,000 0 Balance at year end, loans and advances 3,96, Karvy Asia Pacific Pte Limited 25

26 (Subsidiary company) Investment in equity shares 1,10,11,748 5,15,73,040 Fees and marketing income/ (expenses) (81,15,356) 0 13 Karvy Inc., USA (Subsidiary company) Investment in equity shares 1,14,49,500 1,41,31, Karvy Middle East LLC, Dubai Investment in equity shares 21,67,604 0 (Subsidiary company) 15 Mr. M. S. Ramakrishna (Key Management Personnel) Remuneration paid 40,16,020 40,16,020 8) The Financial Performance of Portfolio Manager (based on audited financial statements) As at March 31, 2013 Rs in Lakhs As at March 31, 2012 Rs in Lakhs As at March 31, 2011 Rs in Lakhs SOURCES OF FUNDS Shareholders' Funds 35, , , Share Application Money Loan Funds 57, , , Deferred Tax Liability Total 93, , ,

27 APPLICATION OF FUNDS Net Fixed Assets 16, , , Stock Exchange Membership Cards Investments 18, , , Current Assets 73, , , Less: Current Liabilities and Provisions 14, , , Net Current Assets 58, , , Deferred Tax Asset Total , , Summarized Financial Statement - Profit and Loss Account For the year ended March 31, 2013 Rs. In Lakhs For the year ended March 31, 2012 Rs. In Lakhs For the year ended March 31, 2011 Rs. In Lakhs Total Income 26, , , Total Expenses 25, , , Profit before Depreciation and Tax 1, , , Depreciation/Amortisation 1, , , Profit before Tax , Provision for Tax (577.77) Profit After Tax , ) Portfolio Management performance of Portfolio Manager, for the last three years, and in case of discretionary Portfolio Manager disclosure of performance indicators calculated using weighted average method in terms of Regulation 14 (2)(b)(iv)of the SEBI (Portfolio Managers) Regulations, Find below the Performance of the Portfolio Manager calculated using weighted average Method for the three financial years , , and upto July31, Portfolio performance is a percentage, net of all fees and charges levied by the Portfolio Manager 27

28 Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Period Returns% Discretionary PMS- Resident K Energetic CNX Midcap K Aggressive CNX Midcap K Sensible S & P CNX Nifty Alpha S&P CNX Nifty Alpha Plus N.A. S&P CNX Nifty N.A Delta BSE 200 Index Omega BSE 200 Index Gamma N.A. CNX Midcap N.A. Theta NA N.A N.A. Crisil Composite Bond Index 0.77 NA N.A N.A. Portfolio PSI N.A N.A. 28

29 Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) S&P CNX N.A N.A. Aurous N.A N.A N.A N.A Gold Bees N.A N.A N.A N.A Zeta N.A N.A N.A N.A NSE G-Sec composite Index N.A N.A N.A N.A Discretionary PMS - Non Resident Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) Portfolio Performance (%) Benchmark Performance (%) K Sensible N.A. S&P CNX Nifty N.A. Delta N.A. BSE 200 Index N.A. Alpha N.A. S&P CNX Nifty N.A. Alpha Plus N.A. S&P CNX Nifty N.A. Gamma N.A N.A CNX Midcap N.A N.A Omega N.A. BSE 200 Index N.A. Non Discretionary PMS- Resident Portfolio Performance (%) K Series

30 Portfolio Performance (%) Structured Products Portfolio Performance (%) Portfolio Performance (%) Portfolio Performance (%) Optima N.A. Alpha N.A. N.A. Omega NA N.A N.A N.A. Non Discretionary PMS- Non Resident Portfolio Performance (%) Portfolio Performance (%) Optima N.A. Alpha 0.18 N.A. N.A. N.A. Note: Dates of inception of the below discretionary Portfolio Management strategies are as follows: Delta : November 23, 2010 ; Omega: December 22, 2010 & PSI: April, 30, 2012 Date of inception of Structured Products offered as part of Non Discretionary Portfolio Management services is as follows: G-11: July 12, 2010 ; G-16: September 13, 2010 ; G-17: October 1, 2010 Portfolio Management performance of Resident Individual and Non Resident Indian have been shown separately above effective April 1, ) Nature of Expenses The following are the general costs and expenses to be borne by the Client availing the services by the Portfolio Manager. However, the exact nature of expenses relating to each of the following services is provided in the annexure to this Risk Disclosure Document and in the Schedule of Charges signed by the client in respect of each of the services provided. (i) Portfolio Management and Advisory Fees This fee relates to the portfolio management services offered by Portfolio Manager (including advisory services) to the clients. The fee may be a Fixed Charge on the quantum of the funds being managed (or) charges linked to portfolio return (or) combination of both. For details kindly refer the annexure to this Risk Disclosure Document. 30

31 (ii) Premature Redemption Charges If the redemption is done prematurely at the option of the client, the Portfolio Manager shall levy the Premature Redemption Charges. For details kindly refer the annexure to this Risk Disclosure Document. (iii) Custodian/Depository Participant fee The charges relating to opening and operation of demat accounts, custody and transfer charges for shares, bonds and units, dematerialization and rematerialization, pledge and removal of pledge, etc. will be as per the actual charged by the Depository Participant/Custodian. For details kindly refer the annexure to this Risk Disclosure Document. (iv) Registrar and transfer agent fee Charges payable to the Registrar and Share Transfer Agents in connection with effecting transfer of securities and bonds, units, etc. including stamp charges, cost of affidavits, notary charges, postage/courier charges and other related charges will be recovered on actual. For details kindly refer the annexure to this Risk Disclosure Document. (v) Placement fee : A Placement fee not exceeding 3% on the investment value will be charged in some of the strategies over and above the fixed management fee and performance fee. For details kindly refer the annexure to this Risk Disclosure Document. (vi) Brokerage and transaction cost The Brokerage and other charges like Service tax, Stamp duty, Security Transaction Tax, SEBI Fees, Bank charges, Turnover tax, and other charges (if any), as per the rates existing from time to time, will be charged on actual. For details kindly refer the annexure to this Risk Disclosure Document. The investment by Portfolio Manager will be done through Karvy Stock Broking Limited {Stock Broker} or through any SEBI Registered stock broker only and would as per the rates negotiated between Portfolio Manager and such stock broker. The charges relating to brokerage as per the related party transactions charged by Karvy Stock Broking Limited or through any SEBI Registered stock broker will be recovered on actual by the Portfolio Manager (vii) Securities Lending and Borrowing Charges If utilized, the charges pertaining to lending of securities, cost of borrowing including interest and costs associated with transfer of securities connected with lending and borrowing transfer operations, Depository Participant Charges, Share Transfer Agent Charges, etc. would be recovered on actual. For details kindly refer the annexure to this Risk Disclosure Document. 31

32 (viii) Certification Charges or Professional Charges Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. For details kindly refer the annexure to this Risk Disclosure Document. (ix) Incidental Expenses Charges in connection with day to day operations like courier charges incurred in providing physical reports relating to client s portfolio / welcome letter / other communication to clients, stamp duty, service tax, postal, telegraphic expenses, opening and operation of bank and demat accounts or any other out of pocket expenses incurred by the Portfolio Manager, on behalf of the client, would be recovered from the client. For details kindly refer the annexure to this Risk Disclosure Document. Note: For clients who have opened their PMS account with Karvy Stock Broking Limited prior to August 1, 2012, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. However, for clients who have opened their PMS accounts on or after August 1, 2012, the performance fees will be charged on completion of 12 months from account opening date (anniversary basis) and not financial year basis. 11) Taxation General It may be noted that the information given hereinafter is only for general information purposes and is based on the advice received by the Portfolio Manager regarding the law and practice currently in force in India and the Investors should be aware that the relevant fiscal rules or their interpretation may change or it may not be acceptable to the tax authorities. As is the case with any interpretation of any law, there can be no assurance that the tax position or the proposed tax position prevailing at the time of an investment in the strategy/plan/option will be accepted by the tax authorities or will continue to be accepted by them indefinitely. Further statements with regard to tax benefits mentioned herein below are mere expressions of opinion and are not representations of the Portfolio Manager to induce any investor to invest whether directly from the Portfolio Manager or indirectly from any other persons by the secondary market operations. In view of the above, and since the individual nature of tax consequences may differ in each case on its merits and facts, each Investor is advised to consult his / her or its own professional tax advisor with respect to the specific tax implications arising out of its participation in the PMS strategy/plan/option, as an investor. In view of the above, it is advised that the investors appropriately consult their investment / tax advisors in this regard. 32

33 Portfolio Manager cannot be held responsible for assisting or completing the fulfillment of the client s tax obligations. Income arising from purchase and sale of securities under Portfolio Management Services can give rise to business income or capital gains in the hands of the Client. The issue of characterization of income is relevant as the tax computation and rates differ in either of the two situations. The said issue is essentially a question of fact and depends on whether the shares are held as business trading assets or on capital account. Based on judicial decisions, the following factors need to be considered while determining the nature of assets as above: a. Motive for the purchase of securities b. Frequency of transactions c. Length of period of holding of the securities d. Treatment of the securities and profit or loss on their sale in the accounts of the assessee and disclosure in notes thereto e. Source of funds out of which the securities were acquired - borrowed or own f. Existence of an objects clause permitting trading in securities relevant only in the case of corporate. g. Circumstances responsible for the sale of securities h. Acquisition of the securities -from primary market or secondary market Infrastructure and set - up employed for undertaking the securities transactions by the client Any single factor discussed above in isolation cannot be conclusive to determine the exact nature of the shares. All factors and principles need to be construed harmoniously. Investors may refer to CBDT instruction no dated August 31, 1989 read with CBDT Circular no. 4 dated June 15, 2007 for further guidance on the matter. Tax implications under the Income Tax Act, 1961 ("IT Act") arise in the hands of the Clients (resident as well as the non-resident) under both the scenarios, viz: a. Securities in the Portfolio held as business asset; and b. Securities in the Portfolio held on capital account. Additionally, non-residents (including Flls) are entitled to be governed by the applicable Double Tax Avoidance Agreement ("DTAA), which lndia has entered into with the country of residence of the non-resident, if that is more beneficial. The same would have to be considered on a case-to-case basis depending upon the applicable DTAA. Ordinarily, capital gains and interest income are taxable in lndia in the manner and at the rates prescribed under the relevant DTAA or the relevant rates applicable in India, whichever is beneficial to the assessee. Further, business income is normally not taxable in lndia if there is no permanent establishment of the non-resident in India. 33

34 Tax Deducted at Source Presently, tax is withheld at source for non-residents. If any tax is required to be withheld on account of any future legislation, Portfolio Manager shall be obliged to act in accordance with the regulatory requirements in this regard. Interest and dividends would be subject to tax as per the provisions of the Income Tax Act, Advance Tax installment obligations It shall be the client s responsibility to meet the advance tax obligation installments payable on the due dates under the Income Tax Act, Long Term capital Gains Any investments held for 12 months or more than 12 months would be classified as Long Term Capital Assets. Gains arising out of such assets are called Long Term Capital Gains. With effect from 1 st October 2004, in terms of Section 10(38)of The Finance (No.2) Act, 2004, Long Term capital gains, arising on transfer of long term capital asset (equity share in a company or a unit of an equity oriented fund) is exempt from capital gains tax, provided the shares are sold on a recognized stock exchanges in India and such transactions are subjected to Securities Transaction Tax in accordance with Chapter VII of the Finance (No.2) Act, 2004 and/or Income Tax Act, Clients are requested to check with their Tax Advisor on the applicable rates of tax, STT, surcharge and educational cess at any given point of time. Short Term Capital Gains Any investments held for less than 12 months would be classified as Short Term Capital asset and any gains arising out of such investment are called Short Term Capital Gains. Such gains would be added to the total income. With effect from 1 st April 2008, as per Section 111A of the Finance (No.2) Act, 2004, short term capital gains arising on transfer of short term capital asset (equity shares in a company or a unit of an equity oriented fund) are subject to 15% plus applicable surcharge and educational cess, provided the shares are sold on a recognized stock exchange in India and such transactions are subjected to Securities Transaction Tax in accordance with Chapter VII of the Finance (No.2) Act, 2004 and/or Income Tax Act, Clients are requested to check with their Tax Advisor on the applicable rates of tax, STT, surcharge and educational cess at any given point of time. Securities Transaction Tax STT is the tax leviable on the taxable securities transactions i.e. transaction of: (a) Purchase or sale of an equity share of a listed companies (whether delivery based or nondelivery based) or a derivative or a unit of an equity oriented fund, entered into in a recognized stock exchange; or 34

35 (b) Sale of a Unit of an equity oriented fund to the Unit Trust of India or Mutual Fund. The income arising from the securities transactions shall be taxed at applicable rates under the Income Tax Act, 1961 if STT is not applicable in respect of such transactions. Capital loss Losses under the head 'capital gains' cannot be set off against income under any other head. Further, within the head 'capital gains', long-term capital losses cannot be adjusted against short-term capital gains. However, short-term capital losses can be adjusted against any capital gains. Unabsorbed long-term capital loss can be carried forward and set off against the long-term capital gains arising in subsequent eight assessment years. Unabsorbed shortterm capital loss can be carried forward and set off against the income under the head capital gains in subsequent eight assessment years. 12) Accounting policies The following is the accounting policy followed by Portfolio Manager while accounting for the portfolio investments of the clients. Investment in equities will be valued on the closing price of that equity at NSE. In case of any investments done in any equity listed on BSE only, the same will be valued based on the closing price of that equity in BSE. For valuation of the derivatives contract, the open positions, as on the date of valuation, will be valued on the mark to market method. In case of Mutual Fund, the valuation will be done on the repurchase Net Asset Value (NAV) declared for the relevant plan, on the date of valuation of portfolio (or) date of the report (or) any cut off date. Investment in debt instruments will be valued at the market value of the debt instrument as on cut off date (or) the latest available price on the relevant exchange or the most recent NAV will be reckoned. Realised gains/losses will be calculated on the basis of First in First out (FIFO) basis. Transaction date will be the trade date and not the settlement or auction date. For derivatives transactions (if any), the unrealized gains/losses on open position will be calculated on the mark to market method. Unrealized gain/losses means the profit/loss not yet booked and the same will be the difference of the current market price or NAV minus the actual purchase price (or) the historical cost of the securities. 35

36 All income will be accounted on accrual or receipt basis, whichever is earlier. All expenses will be accounted on due or payment basis, whichever is earlier. Purchase and sale transactions are accounted for on contract date basis. Cost of purchase and sale includes consideration for scrip and brokerage but excludes Securities Transaction Tax, Service Tax & other charges paid on purchase/sale of securities. Other expenses like Custodian charges (Safe keeping charges, Transaction charges, Fund Accounting charges, Out of Pocket expenses) are accounted for as & when debited by the Custodian. Any corporate benefits like dividend on shares, Mutual Fund units, interest on debt instruments, stock lending fees etc. shall be accounted on accrual basis except interim dividend which would be accounted on receipt basis. Bonus shares are recorded on the ex-benefit date (ex-date) Dividend income is recorded on the ex-dividend date (ex-date) Tax deducted at source on interest on Fixed Deposits/Dividend is considered as withdrawal of corpus and debited accordingly. Portfolio Manager and the Client, on case to case basis, can mutually agree to any specific norms or methodology for valuation of investment and/or accounting The Client may contact the Portfolio Manager for the purpose of clarifying or elaborating on any of the above. 13) Investors services Investor Relations Officer IRO The below mentioned employee has been nominated as the Investor Relations Officer by Portfolio Manager who will attend to the investor queries and complaints: Mr.Dhaval P.Upadhyay Karvy Stock Broking Ltd. 701, Hallmark Business Plaza, Sant Dnyaneshwar Marg, Bandra (E), Mumbai Tel No. (B) Tel No. (D) Fax No ID 36

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41 ANNEXURE A A. Discretionary Portfolio Management Services 1. K-Sensible Introduction The K-Sensible Portfolio is designed for those investors who want steady long-term capital returns, who have patience to hold their investments over a long term horizon. Investment Objective The investment objective of the Strategy is to provide capital growth and benefits of long term investments. Investments would be made in companies which have a strong management, quality and growth oriented business. Investment Horizon and Risk Return Profile This Portfolio is recommended for investors seeking to hold a diversified equity portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Asset Allocation The Portfolio will seek to remain substantially invested in Equities or Equities related instruments at all times. The cash in the portfolio may be invested in Liquid Funds or Liquid Bees. Securities Investments will be made in Stocks, Mutual Funds and Exchange Traded Funds (ETF). The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. Clients have the below fee options: Option 1: Fixed Management Fee upto 2.50% p.a. FIXED MANAGEMENT FEE: The Fixed fees for the K-Sensible Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 2.50% p.a % at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). In case of, withdrawal before 12 months a fixed fee of 2.5% will be charged on a full year basis. 1

42 Option 2: Fixed Management Fee up to 1.00% p.a. & Performance fee of 20% FIXED MANAGEMENT FEE: The Fixed fees for the K-Sensible Portfolio (with profit sharing) charged by the Portfolio Manager will not exceed 1.00% p.a. 0.25% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fees charged will not exceed 20% of incremental gains beyond annualized hurdle rate not exceeding 10% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months, the higher of : a) 20% performance fee and 1.0% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. Option 3: Fixed Management Fee up to 1.5% p.a. & Performance fees up to 20% FIXED MANAGEMENT FEE: The Fixed fee for the K-Sensible Portfolio (with profit sharing) will not exceed 1.5% p.a. which 0.375% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 20% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months, the higher of : a) 20% performance fee and 1.5% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. Option 4: Only available if Initial Investment is greater than Rs. 1 Crore - Fixed Management Fee up to 2.0% p.a. If the initial investment is greater than Rs. 1 Crore, the investor also has an option, where Fixed management fee charged will not exceed 2.0% p.a. which 0.50% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). In case of, withdrawal before 12 months a fixed fee of 2.0% will be charged on a full year basis. Option 5: Fixed Management Fee NIL & Performance fees up to 15% on all gains The Performance fees will not exceed 15% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months: a) the higher of the 15% performance fee or b) the fixed fee of 2.5% will be charged on a full year basis. Option 6: Only available if Initial Investment is greater than Rs. 1 Crore - Fixed Management Fee up to 0.5% p.a. & Performance fees up to 15% FIXED MANAGEMENT FEE: If the initial investment is greater than Rs. 1 Crore, the investor has an option, where Fixed management fee charged will not exceed 0.5% p.a. which 0.125% at the 2

43 end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option is not exceeding 15% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months: a) the higher of the 15% performance fee and 0.5% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. Other Features Minimum investment amount is Rs. 25 Lakhs. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage not exceeding 2.50% of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Liability of a client shall not exceed client s investment with the portfolio manager. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Client will not withdraw funds given earlier than 12 months from date of providing the same and in the event of a withdrawal earlier than 12 months; the complete fixed management fee or a combination of performance fee and fixed management whichever is higher will be charged, as applicable, on the funds or securities withdrawn, on a full year basis. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. 2.K-Aggressive Introduction The K-Aggressive portfolio is designed to provide a balance between growth, safety and returns. This is achieved by investing in well-researched companies and employing a strategy of systematic profit booking. Investment Objective The investment objective of the Strategy is to provide a balance between growth, safety and returns. In our stock selection process we will continue to focus on companies which qualify in the three key attributes Management, Business and Valuation. 3

44 Investment Horizon and Risk Return Profile This Portfolio is recommended for investors seeking to hold a diversified equity portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Asset Allocation The Portfolio will seek to remain substantially invested in Equities or Equities related instruments at all times. The cash in the portfolio may be invested in Liquid Funds or Liquid Bees. Securities Investments will be made in Stocks, Mutual Funds and Exchange Traded Funds (ETF). The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Fees and Expenses A placement fee not exceeding 3% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. Option 1: Fixed Management Fee upto 2.50% p.a. The Fixed fees for the K-Aggressive Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 2.50% p.a % at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). In case of, withdrawal before 12 months a fixed fee of 2.5% will be charged on a full year basis. Option 2: Fixed Management Fee upto 1.00% p.a. & Performance fee upto 20% The Fixed fees for the K-Aggressive Portfolio (with profit sharing) charged by the Portfolio Manager will not exceed 1.00% p.a. 0.25% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fees charged will not exceed 20% of incremental gains beyond annualized hurdle rate not exceeding 10% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months, the higher of : a) 20% performance fee and 1.0% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. Option 3: Fixed Management Fee upto 1.5% p.a. & Performance fees upto 20% The Fixed fee for the K-Aggressive Portfolio (with profit sharing) will not exceed 1.5% p.a. which 0.375% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee in this option will not exceed 20% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the 4

45 investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months, the higher of : a) 20% performance fee and 1.5% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. Option 4: Only available if Initial Investment is greater than Rs. 1 Crore - Fixed Management Fee upto 2.0% p.a. If the initial investment is greater than Rs. 1 Crore, the investor also has an option, where Fixed management fee charged will not exceed 2.0% p.a. which 0.50% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). In case of, withdrawal before 12 months a fixed fee of 2.0% will be charged on a full year basis. Option 5: Fixed Management Fee NIL & Performance fees upto 15% on all gains The Performance fees will not exceed 15% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months: a) the higher of the 15% performance fee or b) the fixed fee of 2.5% will be charged on a full year basis. Option 6: Only available if Initial Investment is greater than Rs. 1 Crore - Fixed Management Fee upto 0.5% p.a. & Performance fees upto 15% If the initial investment is greater than Rs. 1 Crore, the investor has an option, where Fixed management fee charged will not exceed 0.5% p.a. which 0.125% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee in this option is not exceeding 15% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months: a) the higher of the 15% performance fee and 0.5% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. Other Features Minimum investment amount is Rs. 25 Lakhs. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage not exceeding 2.50% of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Liability of a client shall not exceed client s investment with the portfolio manager. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within 5

46 reasonable time. The Client will not withdraw funds given earlier than 12 months from providing the same and in the event of a withdrawal earlier than 12 months; the complete fixed management fee or a combination of performance fee and fixed management whichever is higher will be charged, as applicable, on the funds or securities withdrawn, on a full year basis. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. 3. K-Energetic Introduction The K-Energetic portfolio is designed to provide returns by following an aggressive style of investing which entails higher risks. Investment Objective The investment objective of the Strategy is to provide blend of absolute returns and capital appreciation with aggressive fund management. In our stock selection process we continue to focus on business, management and valuation. Investment Horizon and Risk Return Profile This Portfolio is recommended for investors seeking to hold a diversified equity portfolio with high risk appetite expecting a high return over medium term horizon. Asset Allocation The Portfolio will seek to remain substantially invested in Equities or Equities related instruments at all times. The cash in the portfolio may be invested in Liquid Funds or Liquid Bees. Securities Investments will be made in Stocks, Mutual Funds and Exchange Traded Funds (ETF). The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts Fees and Expenses A placement fee not exceeding 3% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. 6

47 Option 1: Fixed Management Fee upto 2.50% p.a. The Fixed fees for the K-Energetic Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed upto 2.50% p.a % at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). In case of, withdrawal before 12 months a fixed fee of 2.5% will be charged on a full year basis. Option 2: Fixed Management Fee upto 1.00% p.a. & Performance fee upto 20% The Fixed fees for the K-Energetic Portfolio (with profit sharing) charged by the Portfolio Manager will not exceed 1.00% p.a. 0.25% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fees charged will not exceed 20% of incremental gains beyond annualized hurdle rate not exceeding 10% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months, the higher of : a) 20% performance fee and 1.0% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. Option 3: Fixed Management Fee upto 1.5% p.a. & Performance fees upto 20% The Fixed fee for the K-Energetic Portfolio (with profit sharing) will not exceed 1.5% p.a. which 0.375% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee in this option will not exceed 20% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months, the higher of : a) 20% performance fee and 1.5% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. Option 4: Only available if Initial Investment is greater than Rs. 1 Crore - Fixed Management Fee upto 2.0% p.a. If the initial investment is greater than Rs. 1 Crore, the investor also has an option, where Fixed management fee charged will not exceed 2.0% p.a. which 0.50% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). In case of, withdrawal before 12 months a fixed fee of 2.0% will be charged on a full year basis. Option 5: Fixed Management Fee NIL & Performance fees upto 15% on all gains The Performance fees will not exceed 15% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months: a) the higher of the 15% performance fee or b) the fixed fee of 2.5% will be charged on a full year basis. Option 6: Only available if Initial Investment is greater than Rs. 1 Crore - Fixed Management Fee upto 0.5% p.a. & Performance fees upto 15% 7

48 If the initial investment is greater than Rs. 1 Crore, the investor has an option, where Fixed management fee charged will not exceed 0.5% p.a. which 0.125% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee in this option is not exceeding 15% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. The performance fee will be computed at the end of every financial year on financial year basis. However, in case of withdrawal before 12 months: a) the higher of the 15% performance fee and 0.5% flat fixed fee or b) a flat fixed fee of 2.5% will be charged on a full year basis. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Other Features Minimum investment amount is Rs. 25 Lakhs. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage not exceeding 2.50% of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Liability of a client shall not exceed client s investment with the portfolio manager. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Client will not withdraw funds given earlier than 12 months and in the event of a withdrawal earlier than 12 months; the complete fixed management fee or a combination of performance fee and fixed management whichever is higher will be charged, as applicable, on the funds or securities withdrawn, on a full year basis. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. 8

49 4.Alpha Portfolio Introduction The Alpha Portfolio is designed for those investors who seek long-term capital appreciation from their asset allocation to equities. The portfolio will invest in stocks across sectors, market capitalization categories and investment themes. Investment Objective The investment objective of the strategy is to generate growth of capital and excess returns over the benchmark index through long term investing. Investments would be made in companies which have a strong and sustainable business model and are growth oriented. Investment Horizon and Risk Return Profile This Portfolio is recommended for investors seeking to hold a diversified equity portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Asset Allocation The Portfolio will seek to remain substantially invested in Equities or Equities related instruments at all times. The cash in the portfolio may be invested in Liquid Funds or Liquid Bees. Securities Investments will be made in Stocks, Mutual Funds and Exchange Traded Funds (ETF). The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Fees and Expenses A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. The Fixed fees for the Alpha Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. The investor has the following fee options: Option 1: Fixed Management Fee upto 3.00% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Alpha Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.00% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). 9

50 Following charges shall be payable by client upon withdrawal from Alpha Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day the client exits the portfolio. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee is being computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from Alpha Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged In case of withdrawal after 24 months but before a) Performance fee up to 25% of incremental 10

51 completion of 36 months of date from which client account is activated gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Alpha Portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Alpha Portfolio under option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Additional charges payable a) Fixed management fee payable up to 3.00% p.a and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated 11 a) Fixed management fee payable up to 3.00% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and

52 b) Exit fees up to 2% will be charged In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3.00% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged When exiting, after completing a period of 36 months of date from which client account is activated a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Other Features Minimum investment amount is Rs. 25 Lakhs. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. Liability of a client shall not exceed client s investment with the portfolio manager. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. 12

53 5. Delta Portfolio The Delta Portfolio is designed for those investors who seek long-term capital appreciation from their asset allocation to equities and debt. The portfolio will invest in mutual funds across sectors, market capitalization categories and investment themes. Investment Objective The investment objective of the Strategy is to generate long term capital appreciation of wealth through a portfolio of debt and equity related mutual funds which are rebalanced regularly and the allocation between debt and equity is done on the basis of the risk profile of the investor (conservative, moderate or aggressive). Delta Conservative will have a conservative allocation towards debt and equity. Delta Moderate will have a moderate allocation towards debt and equity. Delta Aggressive will have an aggressive allocation towards debt and equity. Investment Horizon and Risk Return Profile Delta Aggressive portfolio is recommended for investors seeking to hold a diversified equity portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Delta Moderate and conservative portfolios are recommended for investors seeking to hold a diversified equity and debt portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Asset Allocation The amount of Portfolio invested in Equity related Mutual Fund will be between 0% - 100% of the Portfolio. The balance of Portfolio will be invested in debt related Mutual Funds. The idle cash will be invested in Liquid funds or Liquid bees. Note: The amount of Portfolio invested in Equity related Mutual Fund has been changed from 30% - 100% of the Portfolio to 0 to 100 with effect from February 1, The said change in asset allocation shall be applicable prospectively only for new clients subscribing to the Strategy. Asset allocation of existing clients of the Strategy shall remain unchanged. Securities Investments will be made in Mutual Funds and Exchange Traded Funds (ETF). The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in Mutual Funds will be valued on the day end s NAV. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Fees and Expenses A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. 13

54 The Fixed fees for the Delta Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance).for existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis.. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Other Features Minimum investment amount is Rs. 25 Lakhs. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. Below are the fee options available to an investor: DELTA Conservative: Option 1: Fixed Management Fee upto 3.00% p.a. The Fixed fee for the Delta Conservative Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.00% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the strategy under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% 14

55 In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated After completing 36 months of date from which client account is activated a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% The client will be charged fixed management fee up to 3% p.a. till the day client exits the strategy. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this Delta Conservative option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Delta Conservative Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated After completing 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the strategy. 15

56 Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Delta Conservative portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual..following charges shall be payable by client upon withdrawal from the Delta Conservative Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3.00% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and 16

57 After completing 36 months of date from which client account is activated c) Exit fees up to 1% will be charged. a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. DELTA Moderate: Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. FIXED MANAGEMENT FEE: The Fixed fees for the Delta Moderate Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Clients have the following fee options: Option 1: Fixed Management Fee upto 3.50% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Delta Moderate Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.50% p.a. charged upto 0.875% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Delta Moderate Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated 17 Charges payable by Client a) Fixed Management Fee up to 3.50% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 3.50% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3.50% p.a. and b) b) Exit fees up to 1%

58 When exiting, after completing a period of 36 months of date from which client account is activated Fixed management fee up to 3.50% p.a. till the day client exits the portfolio. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is beingcharged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Delta Moderate Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the portfolio. Option 3: Fixed Management Fee up to 3.50% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Delta Moderate Portfolio (with profit sharing) will not exceed 3.50% p.a. which is upto 0.875% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). 18

59 PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Following charges shall be payable by client upon withdrawal from the Delta Moderate Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3.50% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) b) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated a) Fixed management fee payable up to 3.50% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% a) Fixed management fee payable up to 3.50% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% a) Fixed Management fee upto 3.50% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. 19

60 DELTA Aggressive: Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. FIXED MANAGEMENT FEE: The Fixed fees for the Delta Aggressive Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. The investor has the following fee options: Option 1: Fixed Management Fee upto 4.00% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Delta Aggressive Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 4.00% p.a. charged upto 1.00% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Delta Aggressive Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 4% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 4% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 4% p.a. and b) Exit fees up to 1% Fixed management fee up to 4% p.a. till the day client exits the portfolio. 20

61 Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this Delta Aggressive fee option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee is being computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Delta Aggressive Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b)exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. Liability of a client shall not exceed client s investment with the portfolio manager. Option 3: Fixed Management Fee up to 4% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Delta Aggressive Portfolio (with profit sharing) will not exceed 4.00% p.a. which is upto 1.00% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the 21

62 life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Delta Aggressive Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 4.00% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Fixed management fee payable up to 4.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated a) Fixed management fee payable up to 4.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% a) Fixed Management fee upto 4% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit from the portfolio. Liability of a client shall not exceed client s investment with the portfolio manager. 22

63 For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. 6. Omega Portfolio The Omega Portfolio is designed for those investors who seek long-term capital appreciation from their asset allocation to equities, debt, gold and other asset classes which are available through either exchange traded products or through mutual funds. Investment Objective The investment objective of the Strategy is to generate long term capital appreciation of wealth through a portfolio of debt, equity, gold ETFs and other asset classes which are available through either exchange traded products or through mutual funds, which is rebalanced regularly and the allocation amongst the asset classes is done on the basis of the risk profile of the investor (moderate or aggressive). Omega Conservative will have a conservative allocation towards debt, gold and equity Omega Plus will have a dynamic allocation towards debt, gold and equity and may be fully invested in a particular asset class at a specific time depending on the investor profile. {Omega Plus strategy has replaced the erstwhile Omega Conservative strategy with effect from February 1, 2013} Omega Moderate will have a moderate allocation towards debt, gold and equity. Omega Aggressive will have an aggressive allocation towards debt, gold and equity. Omega Systematic Equity will primarily be investing into Equity and Equity related instruments {Omega Systematic Equity has been introduced with effect from February 15, 2013} Omega Systematic Multi asset will have an allocation across multiple asset classes {Omega Systematic Multi Asset has beenintroduced with effect from February 15, 2013} Investment Horizon and Risk Return Profile Omega conservative portfolio is recommended for investors seeking to hold a diversified multi asset portfolio with low risk appetite expecting a moderate return over a long term horizon. Omega moderate and Aggressive portfolios are recommended for investors seeking to hold a diversified multi asset portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Omega Plus is recommended for investors seeking to hold a diversified portfolio with moderate risk appetite expecting a moderate return over medium term horizon. 23

64 Omega Systematic Equity is recommended for investors seeking to hold a diversified equity portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Omega Systematic Multi asset portfolio is recommended for investors seeking to hold a portfolio diversified across multiple asset classes with moderate risk appetite expecting a moderate return over medium term horizon. Asset Allocation The amount of Portfolio invested in Equity will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in Debt will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in Gold ETFs will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in other asset classes of Exchange Traded Products or Mutual Funds will be between 0% - 100% of the Portfolio. Note: The asset allocation for the Omega strategy has been changed with effect from February 1, The said change in asset allocation shall be applicable prospectively only for new clients subscribing to the Strategy. Asset allocation of existing clients of the Strategy shall remain unchanged. Securities Investments will be made in Stocks, Mutual Funds, Exchange Traded Funds (ETF), Non-Convertible Debentures, and Bonds. The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day end s NAV. Investment in NCDs, bonds and other debt Instruments will be valued at closing price, if listed, or as per valuation provided by the issuer. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. FIXED MANAGEMENT FEE: The Fixed fees for the Omega Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. 24

65 Other Features Minimum investment amount is Rs. 25lakh. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. OMEGA Conservative: Option 1: Fixed Management Fee upto 3% p.a. The Fixed fee for the Omega Conservative Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). However, in case of withdrawal before 12 months of a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months of a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months, the a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% will be charged. After completing 36 months, the client will be charged fixed management fee up to 3% p.a. till the day he exits. Liability of a client shall not exceed client s investment with the portfolio manager Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains The Performance fee in this Omega Conservative option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis However, in case of withdrawal before 12 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged 25

66 (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months, the client will be charged Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% The Fixed fee for the Omega Conservative Portfolio (with profit sharing) will not exceed 3% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis However, in case of withdrawal before 12 months a) Fixed management fee payable up to 3% p.a and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months a) Fixed management fee payable up to 3% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months a) Fixed management fee payable up to 3% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months, the client will be charged Fixed Management fee upto 3% p.a. and Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. OMEGA Plus: Option 1: Fixed Management Fee upto 3% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Omega Plus Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Omega Plus Portfolio under Option 1: 26

67 Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the portfolio. Liability of a client shall not exceed client s investment with the portfolio manager. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains The Performance fee in this Omega Plus option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis Following charges shall be payable by client upon withdrawal from the Omega Plus Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b)exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% In case of withdrawal after 24 months a) Performance fee up to 25% of incremental gains 27

68 but before completion of 36 months of date from which client account is activated beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit of the Client from the Portfolio. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Omega Plus Portfolio (with profit sharing) will not exceed 3% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis Following charges shall be payable by client upon withdrawal from the Omega Plus Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Fixed management fee payable up to 3% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% 28

69 In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Liability of a client shall not exceed client s investment with the portfolio manager. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. OMEGA Moderate: Option 1: Fixed Management Fee upto 3.00% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Omega Moderate Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.00% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Omega Moderate Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3.00% p.a. and b)exit fees up to 3% 29

70 In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated a) Fixed Management Fee up to 3.00% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3.00% p.a. and b) Exit fees up to 1% Fixed management fee up to 3.00% p.a. till the day client exits the portfolio. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis Following charges shall be payable by client upon withdrawal from the Omega Moderate Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% 30

71 When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the portfolio. Option 3: Fixed Management Fee up to 3.00% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Omega Moderate Portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis Following charges shall be payable by client upon withdrawal from the Omega Moderate Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3.00% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be 31

72 charged (Performance fee payable will be calculated on the NAV on the day of exit) and When exiting, after completing a period of 36 months of date from which client account is activated c) Exit fees up to 1% a) Fixed Management fee upto 3.00% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit from the portfolio. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. OMEGA Aggressive: Option 1: Fixed Management Fee upto 3% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Omega Aggressive Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Omega Aggressive Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the portfolio. 32

73 Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this Omega Aggressive option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Omega Aggressive Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the portfolio. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Omega Aggressive Portfolio (with profit sharing) will not exceed 3% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the 33

74 life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Omega Aggressive Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% a) Fixed management fee payable up to 3% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% a) Fixed management fee payable up to 3% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) b) Exit fees up to 1% a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit from the portfolio. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. 34

75 OMEGA Systematic Equity: Option 1: Fixed Management Fee upto 3% p.a. The Fixed fee for the Omega Systematic Strategy(without profit sharing) charged by the Portfolio Manager will not exceed 3% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Omega Systematic Equity Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b)exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the portfolio. Liability of a client shall not exceed client s investment with the portfolio manager Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this Omega Systematic Strategy will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. The performance fees will be charged on completion of 12 months from date of account opening (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Omega Systematic Equity Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and 35

76 b) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and d) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the portfolio. Liability of a client shall not exceed client s investment with the portfolio manager Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Omega Systematic Strategy Portfolio (with profit sharing) will not exceed 3% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. The performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Omega Systematic Equity Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3% p.a and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b)exit fees up to 3% In case of withdrawal after 12 months a) Fixed management fee payable up to 3% p.a. and 36

77 but before completion of 24 months of date from which client account is activated Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit)and b) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated a)fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. OMEGA Systematic Multi Asset: Option 1: Fixed Management Fee upto 3% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Omega Systematic Multi Asset Strategy(without profit sharing) charged by the Portfolio Manager will not exceed 3% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Omega Systematic Multi Asset Portfolio under Option 1: 37

78 Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b)exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the portfolio. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this Omega Systematic Multi Asset Strategy will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. The performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Omega Systematic Multi Asset Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a 38 Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1%

79 period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Omega Systematic Multi Asset Strategy (with profit sharing) will not exceed 3% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. The performance fees shall be charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Omega Systematic Multi Asset Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Fixed management fee payable up to 3% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and 39

80 When exiting, after completing a period of 36 months of date from which client account is activated c) Exit fees up to 1% a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. 7. Theta Portfolio The Theta Portfolio is designed for those investors who seek income and long-term capital appreciation from their asset allocation to debt. Investment Objective The investment objective of the Strategy is to generate income and long term capital appreciation through a 100% debt portfolio investing in debt mutual funds, bonds and debentures. Investment Horizon and Risk Return Profile Theta portfolio is recommended for investors seeking to hold a diversified debt portfolio with moderate risk appetite expecting a moderate return over a long term horizon. Asset Allocation The amount of Portfolio invested in Debt will be 100% of the Portfolio. Securities Investments will be made in mutual funds, Exchange Traded Funds (ETF), listed and unlisted bonds and debentures whether listed or unlisted, rated or unrated. Investment in Mutual Funds and ETFs will be valued on the day end s NAV. Investment in Non Convertible Debentures, Certificate of Deposits, bonds and other debt instruments will be valued at closing price, if listed, or as per valuation provided by the Issuer. Other Features Minimum investment amount is Rs. 50 Lakhs. Liability of a client shall not exceed client s investment with the portfolio manager. 40

81 The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client may withdraw whole or part of the funds or securities from the portfolio account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the strategy and return the funds or securities of the strategy, as the case may be, to the client within reasonable time. The Portfolio Manager will provide periodical reports as required under the regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The portfolio account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Clients have the following fee options: Option 1: Fixed Management Fee upto 3.00% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Theta Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.00% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Theta Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and 41

82 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the strategy. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee shall be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Theta Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. 42

83 Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Theta Portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Theta Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3.00% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond 43

84 activated annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. 8.Alpha Plus Portfolio Introduction The Alpha Plus Portfolio is a diversified portfolio with investments in stocks across sectors, market capitalizations and investment themes. Investment Objective The investment objective of the strategy is to achieve growth and returns through broad based participation in equity markets with investments in companies which have sustainable business model, good corporate governance and high growth. Asset Allocation The Portfolio will seek to remain substantially invested in Equities or Equities related instruments at all times. The cash in the portfolio may be invested in Liquid Funds or Liquid Bees. Securities Investments will be made in stocks, mutual funds and Exchange Traded Funds (ETF). The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Investment Horizon and Risk Return Profile This Portfolio is recommended for investors seeking to hold a diversified equity portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. FIXED MANAGEMENT FEE: The Fixed fee for the Alpha Plus Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.00% p.a.the fixed fees for the Alpha Plus Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). 44

85 PERFORMANCE FEE: For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis.since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. The investor has the following fee options: Option 1: Fixed Management Fee upto 3.00% p.a. FIXED MANAGEMENT FEE: charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Alpha Plus Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% will be charged. a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the strategy. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Alpha Plus Portfolio under Option 2: 45

86 Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Alpha Plus Portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Alpha Plus Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client 46 Charges payable by Client a) Fixed management fee payable up to 3.00% p.a and

87 account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Other Features Minimum investment amount is Rs. 25 Lakhs. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. 47

88 The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. 9.Gamma Portfolio Investment Objective Gamma Portfolio aims to generate Capital appreciation in the medium term through investments in equities. It would aim to invest in perceived high growth companies with sustainable business models backed by apparent strong management capabilities. Asset Allocation The Portfolio will seek to remain substantially invested in Equities or Equities related instruments at all times. The cash in the portfolio may be invested in Liquid Funds or Liquid Bees. Securities Investments will be made in Stocks, Mutual Funds and Exchange Traded Funds (ETF). The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Investment Horizon and Risk Return Profile This Portfolio is recommended for investors seeking to hold a diversified equity portfolio with moderate risk appetite expecting a moderate return over medium term horizon. Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. FIXED MANAGEMENT FEE: The Fixed fees for the Gamma Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. 48

89 Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Clients have the following fee options: Option 1: Fixed Management Fee upto 3.00% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Gamma Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.00% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Gamma Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b)exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the portfolio. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the 49

90 life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Gamma Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b)exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b)exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the Portfolio. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Gamma Portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment.since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. 50

91 Following charges shall be payable by client upon withdrawal from the Gamma Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3.00% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) b) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Other Features Minimum investment amount is Rs. 25 Lakhs. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. 51

92 Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. 10.PSI Portfolio Introduction The PSI Portfolio is designed for those investors who seek long-term capital appreciation from their asset allocation to equities and other investment vehicles and attempt to outperform the market in the long run. The portfolio will invest in equity, equity related instruments and other alternative asset classes. Investment Objective The investment objective of the Strategy is to generate growth of capital and returns through short term investing. Investments will be made in stocks which look attractive on valuation and growth prospects. Additionally investments will be made in alternate asset classes based on attractiveness of the asset class. Investment Horizon and Risk Return Profile This Portfolio is recommended for investors seeking to hold a diversified equity portfolio with high risk appetite expecting a high return over medium term horizon. Asset Allocation The Portfolio will seek to remain substantially invested in Equities or Equities related instruments. Part of the portfolio might be invested in Government Bonds, Exchange Traded Funds (ETF). The cash in the portfolio may be invested in Liquid Funds or Liquid Bees. The portfolio composition will vary from time to time. Securities 52

93 Investments will be made through Stocks, Stock futures, Mutual Funds, Equity & non Equity ETFs, Gold ETFs, structures, NCDs, Government Bonds and Corporate bonds. The Portfolio will also use Stock options and Index Futures and Options for hedging and rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. FIXED MANAGEMENT FEE: The Fixed fees for the Psi Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Clients have the following fee options: Option 1: Fixed Management Fee upto 3.00% p.a. FIXED MANAGEMENT FEE: The Fixed fee for the Psi Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.00% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Psi Portfolio under Option 1: 53

94 Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b)exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the portfolio Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Psi Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b)exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and 54

95 b)exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the Portfolio. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Psi Portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Psi Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated 55 Charges payable by Client a) Fixed management fee payable up to 3.00% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% a) Fixed management fee payable up to 3.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and

96 When exiting, after completing a period of 36 months of date from which client account is activated c) Exit fees up to 1% a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Other Features Minimum investment amount is Rs. 25 Lakhs. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. 11.Aurous Portfolio Introduction Aurous Portfolio is designed for those investors who seek long-term capital appreciation from their asset allocation to debt and gold and other investment vehicles as may be required Investment Objective The investment objective of the Strategy is to attempt preservation and growth of capital primarily through investment in Gold and debt instruments. Additionally investments will be made in other asset classes based on attractiveness of the asset class. 56

97 Investment Horizon and Risk Return Profile Aurous portfolio is suitable for clients with a moderate risk appetite looking at capital appreciation over a long term horizon Asset Allocation The Portfolio will invest in Debt and instruments offering exposure to Gold. Part of the portfolio might be invested in Government Bonds, Exchange Traded Funds (ETFs) or Equity. The cash in the portfolio may be invested in Liquid Funds or Liquid ETFs. The portfolio composition will vary from 0% -100% at any point in time. Securities Investments will be made in Stocks, Stock futures, Mutual Funds, Equity & non Equity ETFs, Gold ETFs, structured products, Non Convertible Debentures, Government Bonds and Corporate bonds. The Portfolio will also use Stock options and Index Futures and Options as may be required from time to time. The exposure through futures and options will not exceed 100 percent of the portfolio value at all times. The portfolio will not invest in commodity futures. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Investment in Mutual Funds and ETFs will be valued on the day end s NAV. Investment in NCDs, bonds and other debt instruments will be valued at closing price, if listed or as per valuation provided by the issuer. Fees and Expenses A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. The Fixed fees for Aurous Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The performance fees will be computed on a High Watermark Principle over the life of the investment at the completion of 12 months (anniversary basis). The investor has the following fee options: Option 1: Fixed Management Fee upto 3% p.a. The Fixed fee for Aurous Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). 57

98 However, in case of withdrawal before 12 months of a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months of a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months, the a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% will be charged. After completing 36 months, the client will be charged fixed management fee up to 3% p.a. till the day he exits. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains The Performance fee for Aurous in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. The performance fees will be charged on completion of 12 months (anniversary basis). However, in case of withdrawal before 12 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months, the client will be charged Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% The Fixed fee for the Aurous Portfolio (with profit sharing) will not exceed 3% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. The performance fees will be charged on completion of 12 months (anniversary basis). However, in case of withdrawal before 12 months a) Fixed management fee payable up to 3% p.a and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months a) Fixed management fee payable up to 3% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months a) Fixed management fee payable up to 3% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months, the client will be charged Fixed Management fee 58

99 upto 3% p.a. and Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. 12. Zeta Portfolio Introduction Zeta Portfolio is designed for those investors who seek long-term capital appreciation from their asset allocation to equities, debt, gold, stock futures and options and other asset classes which are available through either exchange traded products, Over the counter products or through mutual funds. Investment Objective The investment objective of the Strategy is to generate long term capital appreciation of wealth through a portfolio of equities, debt, gold, index/ stock futures and options and other asset classes which are available through either exchange traded products, Over the counter products or through mutual funds. The allocation to these assets will be made in accordance with the view of the portfolio manager on the specific asset class. Investment Horizon and Risk Return Profile The strategy is recommended for clients with a moderate risk profile looking at capital appreciation of their assets over a moderate investment horizon. Asset Allocation The amount of Portfolio invested in Equity will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in Debt will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in Gold Exchange Traded Funds {ETFs} will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in other asset classes of Exchange Traded Products or Mutual Funds will be between 0% - 100% of the Portfolio. Investment in Futures and Options will be to the extent of 100% of the portfolio value at all times. Derivative Instruments shall, however, not be used in case of NRI investors. 59

100 Securities Investments will be made through stocks, stock futures, mutual funds, Equity & non Equity ETFs, Gold ETFs, market linked debentures, Non Convertible Debentures (NCDs), Government Bonds and Corporate bonds and Over the counter instruments. The Portfolio will also use stock options and index futures and options as may be required from time to time. The exposure through futures and options will not exceed 100 percent of the portfolio value at all times. The portfolio will not invest in commodity futures. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in Futures and Options shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Investment in mutual funds and ETFs will be valued on the day end s NAV. Investment in NCDs, bonds and other debt instruments will be valued at closing price, if listed or as per valuation provided by the issuer. Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. FIXED MANAGEMENT FEE: The Fixed fees for Zeta Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The performance fees will be computed on a High Watermark Principle over the life of the investment at the completion of 12 months (anniversary basis). Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Clients have the following fee options: Option 1: Fixed Management Fee upto 3% p.a. FIXED MANAGEMENT FEE: The Fixed fee for Zeta Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). 60

101 Following charges shall be payable by client upon withdrawal from the Zeta Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% Fixed management fee up to 3% p.a. till the day client exits the strategy Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains PERFORMANCE FEE: The Performance fee for Zeta portfolio in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. The performance fees will be charged on completion of 12 months (anniversary basis). Following charges shall be payable by client upon withdrawal from the Zeta Portfolio under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable 61

102 client account is activated will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the Portfolio. Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% FIXED MANAGEMENT FEE: The Fixed fee for the Zeta Portfolio (with profit sharing) will not exceed 3% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). PERFORMANCE FEE: The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. The performance fees will be charged on completion of 12 months (anniversary basis). Following charges shall be payable by client upon withdrawal from the Zeta Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 3% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Fixed management fee payable up to 3% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated a) Fixed management fee payable up to 3% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged 62

103 (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% When exiting, after completing a period of 36 months of date from which client account is activated a) Fixed Management fee upto 3% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. 63

104 B. Non - Discretionary Portfolio Management Services The following are illustrative, but not exhaustive, investment options or products available for client availing Non-Discretionary Portfolio Management Services. 1. Equity Portfolio: 2. Non Convertible Debentures: 3. Non Convertible Debentures as part of Structured Products 4. Structured product Equity Portfolio (Non discretionary) are designed for those investors who seek long-term capital appreciation from their asset allocation to equities. The portfolio manager will invest in stocks across sectors, market capitalization categories and investment themes, in consultation with and as per directions or consent of the client. Minimum investment amount: Rs. 25 lakhs The Non Convertible Debentures are debentures which do not get converted into equity and normally attract a fixed rate of return. The Non-convertible Debentures may be listed or unlisted. Investments will be made in the Non Convertible Debentures in consultation with and as per directions or the consent of the client. Minimum investment amount is Rs. 25 Lakhs. Non convertible Debentures are normally issued with a fixed rate of Interest. The Non Convertible Debentures as part of Structured Products are designed as equity linked structures, debentures, derivative instruments, swaps, swaptions, a basket of securities, options, indices, commodities linked structures, debt issuances and/or foreign currencies, Secured Premium Notes, money market instruments, etc. for those investors who want returns linked to an underlying asset with a predefined level of capital protection. These products may be principal or non principal protected. Investments may be made both in rated and unrated debentures to cater to specific Client requirement. Investments in such products will be made in consultation with and as per directions or consent of the client. Minimum investment amount is Rs. 25 Lakhs. The Structured products are designed for those investors who want returns linked to price movement of any Equity index, basket of stocks, commodities, precious metals, etc., with a predefined level of capital protection. Structured Products may be principal or non principal protected or may not have any protection at all. Investments will be made in the structured products in consultation with and as per directions or the consent of the client. Minimum investment amount is Rs. 25 Lakhs. The list of products provided here is not exhaustive and the Portfolio Manager may devise and recommend other products as per specific needs of the client. Asset Allocation The Portfolio will be invested in Equities, Mutual Funds, Exchange Traded Funds, Non Convertible Debentures, Bonds, Debt Instruments, Derivatives, Money market Instruments and Structured products in consultations with and as per directions or consent of the client. The cash in the portfolio will be invested in Liquid Funds or Liquid Bees. 64

105 Valuation of Assets Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity in BSE. Investment in NCDs, bonds and other debt Instruments will be valued at closing price, if listed, or as per valuation provided by the issuer. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Structured Products will be valued at the valuation provided by the issuer of the structured products from time to time. Fees and Expenses In case of Non-discretionary Portfolio Management Services, the Fees payable by the Client would not exceed 3% of the invested amount The Client will also have to bear brokerage not exceeding 2.5% and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. The Portfolio Manager will charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Other Features Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Client will not withdraw funds given earlier than 12 months and in the event of a withdrawal earlier than 12 months; the complete annual fund management fee as per rates agreed with the client will be levied on the funds or securities withdrawn, on a full year basis. The investments are normally for a tenor which varies from 12 Months to 60 Months The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. 65

106 Non - Discretionary Portfolio Management Services Omega Portfolio The Omega Portfolio is designed for those investors who seek long-term capital appreciation from their asset allocation to equities, debt, gold and other asset classes which are available through either exchange traded products or through mutual funds. Investment Objective The investment objective of the Strategy is to generate long term capital appreciation of wealth through a portfolio of debt, equity, gold ETFs and other asset classes which are available through either exchange traded products or through mutual funds and the allocation amongst the asset classes is done on the basis of the risk profile of the investor in consultation with and as per directions or consent of the client. Asset Allocation Assets will be allocated amongst following asset classes in consultation with and as per directions or consent of the client. The amount of Portfolio invested in Equity will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in Debt will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in Gold ETFs will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in other asset classes which are available through either exchange traded products or through mutual funds will be between 0% - 100% of the Portfolio. Investment can be made in other asset classes as per choice, consent or directions of the client. Securities Investments will be made in Stocks, Mutual Funds, Exchange Traded Funds (ETF), Non-Convertible Debentures, and Bonds. The Portfolio will also use derivative instruments Futures and Options for hedging and rebalancing of the portfolio and other investment options as per choice, consent or direction of the client. Derivative Instruments shall, however, not be used in case of NRI investors. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day end s NAV. NAV Investment in NCDs, bonds and other debt Instruments will be valued at closing price, if listed, or as per valuation provided by the issuer. Investment in Futures and Options, used for hedging, shall be valued at actual cash margins paid against F&O contracts, summed with Mark to Market profit / loss computed on the basis of closing price of such contracts. Derivative Instruments shall, however, not be used in case of NRI investors. Other Features Minimum investment amount is Rs. 25 lakhs The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. 66

107 From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. A placement fee not exceeding 3.00% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. Option 1: Fixed Management Fee upto 3.00% p.a. The Fixed fee for the Omega Portfolio (without profit sharing) charged by the Portfolio Manager will not exceed 3.00% p.a. charged upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). However, in case of withdrawal before 12 months of a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months of a) Fixed Management Fee up to 3% p.a. and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months, the a) Fixed Management Fee upto 3% p.a. and b) Exit fees up to 1% will be charged. After completing 36 months, the client will be charged fixed management fee up to 3% p.a. till the day he exits. Option 2: Fixed Management Fee NIL & Performance fees upto 25% on all gains The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. However, in case of withdrawal before 12 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months, the client will be charged Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. 67

108 Option 3: Fixed Management Fee up to 3% p.a. & Performance fees up to 25% The Fixed fee for the Omega Portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto 0.75% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee in this option will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. However, in case of withdrawal before 12 months a) Fixed management fee payable up to 3.00% p.a and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months a) Fixed management fee payable up to 3.00% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months a) Fixed management fee payable up to 3.00% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months, the client will be charged Fixed Management fee upto 3% p.a. and Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. Optima Portfolio The Optima Portfolio is designed for those investors who seek capital appreciation from their asset allocation to Equities, debt and gold. Investment Objective The investment objective of the Strategy is to generate capital appreciation of wealth through a portfolio of Debt, Equity and Gold securities which is rebalanced regularly and the allocation between Debt, Equity and Gold ETFs is done on the basis of the risk profile of the investor in consultation with and as per directions or consent of the client. 68

109 Asset Allocation Assets will be allocated amongst following asset classes in consultation with and as per directions or consent of the client. The amount of Portfolio invested in Equity will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in Debt will be between 0% - 100% of the Portfolio. The amount of Portfolio invested in Gold ETFs will be between 0% - 100% of the Portfolio. Investment can be made in other asset classes as per choice, consent or directions of the client. Securities Investments will be made in Stocks, Mutual Funds, Exchange Traded Funds (ETF), Non-Convertible Debentures, and Bonds and other investment options as per choice, consent or direction of the client. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day end s NAV Investment in NCDs, bonds and other debt Instruments will be valued at closing price, if listed, or as per valuation provided by the issuer. Fees and Expenses A placement fee not exceeding 2% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. The Fixed fees for the non discretionary Portfolio charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients, the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. The investor has the following fee options: Option 1: Fixed Management Fee up to 4.00% p.a. The Fixed fee (without profit sharing) charged by the Portfolio Manager will not exceed 4 % p.a. 1% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). However, in case of withdrawal before 12 months of a) Fixed Management Fee up to 4% p.a. and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months of a) Fixed Management Fee up to 4% p.a. and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months, the a) Fixed Management Fee upto 4% p.a. and b) Exit fees up to 1% will be charged. After completing 36 months, the client will be charged fixed management fee up to 4% p.a. till the day he exits. Option 2: Fixed Management Fee NIL & Performance fees up to 25% on all gains The Performance fee in this option is up to 25% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the 69

110 performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. However, in case of withdrawal before 12 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months, the client will be charged Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. Option 3: Fixed Management Fee up to 4% p.a. & Performance fees up to 25% The Fixed fee (with profit sharing) will not exceed 4% p.a. which 1% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. However, in case of withdrawal before 12 months a) Fixed management fee payable up to 4.00% p.a and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% will be charged. In case of withdrawal after 12 months but before completion of 24 months a) Fixed management fee payable up to 4.00% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. In case of withdrawal after 24 months but before completion of 36 months a) Fixed management fee payable up to 4.00% p.a. and Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months, the client will be charged Fixed Management fee upto 4% p.a. and Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Other Features Minimum investment amount is Rs. 25 Lakhs. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. 70

111 Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not exceeding 2.50% of the transaction value and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. In the event of a withdrawal earlier than 12 months; the complete fixed management fee or a combination of performance fee and fixed management whichever is higher will be charged, as applicable, on the funds or securities withdrawn, on a full year basis. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. Alpha Portfolio Introduction This portfolio is designed for those investors who seek aggressive capital appreciation from their equity asset allocation. The portfolio will invest in stocks across sectors, market capitalization categories and investment themes. Investment Objective The investment objective is to provide returns and capital appreciation through broad based participation in equity markets with investments in companies which have sustainable business model, good corporate governance and high growth. Asset Allocation Assets will be allocated amongst following asset classes in consultation with and as per directions or consent of the client. The amount of Portfolio invested in Equity will be between 0% - 100% of the Portfolio. Investment can be made in other asset classes like debt, Gold ETF as per choice, consent or directions of the client. Securities Investments will be made in Stocks and other investment options like Mutual Funds, Exchange Traded Funds (ETF) as per choice, consent or direction of the client. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day end s NAV Investment. 71

112 Fees and Expenses A placement fee not exceeding 3% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. The Fixed fees for the Alpha advisory charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance).for existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis.. The investor has the following fee options: Option 1: Fixed Management Fee up to 4.00% p.a. The Fixed fee (without profit sharing) charged by the Portfolio Manager will not exceed 4 % p.a. 1% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the Alpha Portfolio under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 4% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 4% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 4% p.a. and b) Exit fees up to 1% Fixed management fee up to 4% p.a. till the day client exits the strategy. Option 2: Fixed Management Fee NIL & Performance fees up to 25% on all gains The Performance fee in this option is up to 25% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Alpha Portfolio under Option 2: Withdrawal when made Charges payable by Client 72

113 In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit. Option 3: Fixed Management Fee up to 4% p.a. & Performance fees up to 25% The Fixed fee (with profit sharing) will not exceed 4% p.a. which 1% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the Alpha Portfolio under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is 73 Charges payable by Client a) Fixed management fee payable up to 4.00% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% a) Fixed management fee payable up to 4.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12%

114 activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2% a) Fixed management fee payable up to 4.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% will be charged a) Fixed Management fee upto 4% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Other Features Minimum investment amount is Rs. 25 lakhs. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client will also have to bear brokerage charges not exceeding 2.50% of the transaction value and other incidental charges/fees/duties such as audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services and taxes including Securities Transaction Tax at actual. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. Courier charges incurred in providing physical reports relating to client s portfolio / other communication to clients shall be recovered from clients on actual 74

115 Advisory Services Equity Advisory Portfolio Introduction This portfolio is designed for those investors who seek aggressive capital appreciation from their equity asset allocation. The portfolio will invest in stocks across sectors, market capitalization categories and investment themes. Investment Objective The investment objective is to provide returns and capital appreciation through broad based participation in equity markets with investments in companies which have sustainable business model and high growth. Asset Allocation Assets will be allocated amongst following asset classes in consultation with and as per directions or consent of the client. The amount of Portfolio invested in Equity will be between 0% - 100% of the Portfolio. Investment can be made in other asset classes like debt, Gold ETF as per choice, consent or directions of the client. Securities Investments will be made in Stocks and other investment options like Mutual Funds, Exchange Traded Funds (ETF) as per choice, consent or direction of the client. Investment in equities will be valued on the closing price of that equity at NSE. In case of investments in any stocks listed on BSE only, the same will be valued based on the closing price of that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day end s NAV Investment. Fees and Expenses PLACEMENT FEE: A placement fee not exceeding 3% on the investment will be charged over and above the Fixed Management Fee and Performance fee as defined below. FIXED MANAGEMENT FEE: The Fixed fees for the Alpha advisory charged by the Portfolio Manager will be charged at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. The Client will also have to bear brokerage charges not exceeding 2.50% of the transaction value and other incidental charges/fees/duties such as audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services and taxes including Securities Transaction Tax at actual Clients have the following fee options: 75

116 Option 1: Fixed Management Fee up to 4.00% p.a. The Fixed fee (without profit sharing) charged by the Portfolio Manager will not exceed 4 % p.a. 1% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). Following charges shall be payable by client upon withdrawal from the strategy under Option 1: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated Charges payable by Client a) Fixed Management Fee up to 4% p.a. and b) Exit fees up to 3% a) Fixed Management Fee up to 4% p.a. and b) Exit fees up to 2% a) Fixed Management Fee upto 4% p.a. and b) Exit fees up to 1% Fixed management fee up to 4% p.a. till the day client exits the strategy. Option 2: Fixed Management Fee NIL & Performance fees up to 25% on all gains The Performance fee in this option is up to 25% of incremental gains beyond annualized hurdle rate of 0% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the strategy under Option 2: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 3% In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated In case of withdrawal after 24 a) Performance fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 2% will be charged. a) Performance fee up to 25% of incremental gains beyond 76

117 months but before completion of 36 months of date from which client account is activated When exiting, after completing a period of 36 months of date from which client account is activated annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and b) Exit fees up to 1% will be charged. Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark Principle based on the NAV of the day of exit from the strategy. Option 3: Fixed Management Fee up to 4% p.a. & Performance fees up to 25% The Fixed fee (with profit sharing) will not exceed 4% p.a. which 1% at the end of every quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance). The Performance fee will not exceed 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle over the life of the investment. For existing clients, the performance fee will be computed on a High Watermark Principle over the life of the Investment at the end of every financial year on financial year basis. From 1 st August, 2012, for new clients the performance fees will be charged on completion of 12 months (anniversary basis) and not financial year basis. Following charges shall be payable by client upon withdrawal from the strategy under Option 3: Withdrawal when made In case of withdrawal before 12 months of date from which client account is activated Charges payable by Client a) Fixed management fee payable up to 4.00% p.a and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 3%. In case of withdrawal after 12 months but before completion of 24 months of date from which client account is activated a) Fixed management fee payable up to 4.00% p.a. and b) Performance fee payable up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 2%. In case of withdrawal after 24 months but before completion of 36 months of date from which client account is a) Fixed management fee payable up to 4.00% p.a. and b) Performance fee payable up to 25% of incremental gains 77

118 activated beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle will be charged (Performance fee payable will be calculated on the NAV on the day of exit) and c) Exit fees up to 1% will be charged. When exiting, after completing a period of 36 months of date from which client account is activated a) Fixed Management fee upto 4% p.a. and b) Performance Fee up to 25% of incremental gains beyond annualized hurdle rate not exceeding 12% on the basis of High Water Mark Principle based on the NAV of the day of exit. Other Features Minimum investment amount is Rs.25 lakhs. Liability of a client shall not exceed client s investment with the portfolio manager. For all portfolios and options provided, the Portfolio Manager shall charge audit fees, custodial/ AMC charges and other charges/costs, attributable to the Portfolio Management Services at actual. Any charges payable for outsourced professional services like accounting, taxation, auditing, and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual. The Client may withdraw whole or part of the Funds or securities from the Portfolio Account by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities held in the Strategy and return the funds or securities of the Strategy, as the case may be, to the Client within reasonable time. The Portfolio Manager will provide periodical reports as required under the Regulations at the communication address provided by the client at time of account opening. In case Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall be provided to clients via at the id registered by clients at time of account opening. The Portfolio Account will be audited by the Independent Chartered Accountant every year and copy of the Certificate issued by the Chartered Accountant will be given to the Client. The term Strategy or Strategies referred in this document is not prima facie the strategy(s) devised to organize investment portfolios, rather these are various investment categories/ frameworks on the basis of which investment portfolio of a subscriber can be tailored. Reference to the term Strategy or Strategies however helps in defining and communicating fee structure to a subscriber in a simple and transparent manner. 78

119 GLOSSARY OF TERMS USED IN THE RISK DISCLOSURE DOCUMENT AND ANNEXURE A Discretionary portfolio: A portfolio where the funds of each client are managed individually and independently by the fund manager in accordance with the needs of the client. Non discretionary Portfolio: A portfolio where the funds are managed by the fund manager in accordance with the directions of the client. Hurdle rate: The rate over which profit sharing / performance related fees are usually charged by portfolio managers. This is not a fixed number and would be specified in the agreement signed with the client. High Water Mark Principle: As defined by SEBI, High Water Mark shall be the highest value that the portfolio/account has reached. Value of the portfolio for computation of high watermark shall be taken to be the value on the date when performance fees are charged. The portfolio manager shall charge performance based fee only on increase in portfolio value in excess of the previously achieved high water mark Asset allocation: Asset allocation is an investment strategy that attempts to balance risk versus reward by adjusting the percentage of each asset in an investment portfolio according to the investors risk tolerance, goals and investment time frame. Asset Classes: A group of securities that exhibit similar characteristics, behave similarly in the marketplace, and are subject to the same laws and regulations. Asset classes include but are not limited to Equities, fixed-income and cash equivalents. Non convertible debentures: A debenture is a document that either creates a debt or acknowledges it, and it is a debt without collateral (hence, unsecured debt). Non-convertible debentures are regular debentures which cannot be converted into equity shares of the liable company. Investment vehicles: An investment vehicle is a product used by investors with the intention of having positive returns. Investment vehicles can be low-risk, such as certificates of deposit (CDs) or bonds, or can carry a greater degree of risk such as with stocks, options and futures. Alternate asset classes: Alternate asset class is a newer type of asset that was not traditionally considered to be a part of an investment portfolio. These include but would not be limited to Derivative instruments, Real Estate, Commodities (including Gold) etc. Structured Products: A market linked investment, is generally a pre-packaged investment strategy based on derivatives, such as a single security, a basket of securities, options, commodities, debt issuance etc. Over the counter products: OTC or off-exchange products are those where trading is done directly between two parties, without any supervision of an exchange. These are used primarily where customized products are required. * * * 79