KARVY STOCK BROKING LTD

Transcription

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 July 31, 2013 filed with
Securities and Exchange Board of India (SEBI) on August 6, 2013.
2. 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, 1993 as amended till date.
3. The purpose of this Disclosure Document is to provide essential information about
the portfolio management services offered by Karvy Stock Broking Limited in such
manner as to assist and enable the investors in making informed and considered
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. Karvy Stock Broking Limited is permitted to provide Portfolio Management Services
pursuant to its registration as a portfolio manager with SEBI vide Registration
number INP000001512 dated November 1, 2005.
6. Investors should carefully read this entire document before making a decision to
avail portfolio management services from Karvy Stock Broking Limited and retain
this document for future reference. Any other relevant information may be provided
upon request.
7. 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.
PAGE 1 of 41
8. The Principal Officer designated by Karvy Stock Broking Limited, the Portfolio
Manager is:
Name of the Principal Officer
VARUN GOEL
Tel No:
022 33055000
Email :
Address:
pms@karvy.com
701, Hallmark Business Plaza,
Sant Dnyaneshwar Marg,
Bandra (E), Mumbai 400 051
9. This disclosure document is dated February3, 2014.
Karvy Stock Broking Limited
Corporate Office: 701, Hallmark Business Plaza, Sant Dnyaneshwar Marg, Bandra (E)
Mumbai
400 051
Registered Office: ‘Karvy House’, 46, Avenue 4, Street No 1, Banjara Hills, Hyderabad – 500
034
PAGE 2 of 41
Portfolio Management Services
KARVY STOCK BROKING LIMITED
SEBI Registration No. INP000001512
INDEX
Contents
Sr No
1
2
3
i
ii
Disclaimer
Definitions
Description - The Portfolio Manager
History, Present Business and background of the Portfolio
Manager.
Promoters of the Portfolio Manager, Directors and their
background.
Page Number
4
4-7
7-8
8 – 10
iii
Details of the top 10 group companies of the Portfolio
manager based on turnover as on March 31, 2013
10
iv
Details of Services being offered.
11
4
Penalties/Pending Litigations/Proceedings etc
11 – 13
5
Services offered
13 – 17
6
Risk Factors
18 – 22
7
Client Representation
i
Category of clients as on December 31, 2013
22-23
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)
23 -29
8
Financial Performance of Portfolio Manager, Karvy Stock
Broking Limited
Portfolio Management Performance of the Portfolio Manager
for last 3 years
Nature of Expenses
Taxation
Accounting Policies
Investor Services
Grievances Redressal
Dispute Settlement Mechanism
General
29 – 30
9
10
11
12
13
14
15
16
PAGE 3 of 41
30 – 33
33 – 35
35 – 38
38 – 40
40
40
40-41
41
Section 1:
DISCLAIMER
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 has 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.
Section 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, 1992.
“Agreement” means the 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 and shall include all schedules and
annexures thereto and shall also include all modifications, alterations, additions or deletions
made thereto in accordance with the terms thereof.
“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.
“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 availing the Portfolio Management Services
“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.
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“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 in which the
securities comprising part of the Portfolio of the Client are kept by the Portfolio Manager.
“Discretionary Portfolio Management Services” means the discretionary portfolio
management services rendered to a Client by the Portfolio Manager pursuant to the terms
and conditions contained in the Portfolio Management Services Agreement, where under
the Portfolio Manager exercises absolute and unfettered discretion, with regards to the
investments and management of the portfolio of securities or the funds of the client, as the
case may be.
“Disclosure Document” means this disclosure document for offering Portfolio Management
Services.
“Financial year” means the period of twelve months commencing on 1st April every year and
ending on 31st March of the following year.
“Funds” means the monies placed by the Client with the Portfolio Manager and any
accretions thereto and also includes any further monies placed by the client with the
Portfolio Manager to be managed pursuant to the Agreement, the proceeds of the sale or
realization of the portfolio and any interest, dividend or other monies so long as the same is
being managed by the Portfolio Manager.
“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
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. The Initial corpus brought in by
the Client in the form of securities shall be valued at the closing market price of such
securities, prevailing on recognised stock exchange [NSE/ BSE (only if security is not listed on
NSE)] on the previous working date of activation of client’s portfolio management account
by the Portfolio Manager or of the previous working day of the transfer of such securities
from client’s account to the Depository account whichever is later. The Portfolio Manager
shall not accept from the client, funds or securities worth less than Twenty five lakh rupees.
“Investment Advisory Services” means the non exclusive, non binding services, where the
Portfolio Manager advises Clients on investments in general or gives specific advice
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required by the Clients as agreed upon in the Agreement. Advice,whether general or specific
is non-binding in nature and it is entirely at client’s discretion to follow the advice
“Non-Discretionary Portfolio Management Services” means the non-discretionary portfolio
management services to be rendered to a Client by the Portfolio Manager on the terms and
conditions pursuant to the Agreement, where under the Portfolio Manager invests and
manages the Funds of the Client based on the instructions of the Client.
“Net Asset Value” or “NAV” means the market value of the Assets managed by the
Portfolio Manager, as calculated by the Portfolio Manager from time to time, depending on
the Strategy chosen by 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 incorporated under
the Companies Act, 1956 and registered with SEBI as a Portfolio Manager in terms of SEBI
(Portfolio Managers) Regulations 1993 vide registration No.INP000001512 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 400 051[ but may add more dealing offices in future] and who pursuant to a
contract or arrangement with a client, advises or directs or undertakes on behalf of the
client (whether as a discretionary Portfolio Manager or otherwise) the management or
administration of a portfolio of securities or the funds of the client, as the case may be.
“Portfolio Management Services” means the Discretionary Portfolio Management Services,
and/or the Non-Discretionary Portfolio Management Services, and/or the Investment
Advisory Services, as the case may be.
“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.
“Regulations” – means the Securities and Exchange Board of India (Portfolio Managers)
Regulations, 1993, as amended by SEBI from time to time and includes Securities and
Exchange Board of India (Portfolio Managers) Amendment Regulations, 2012, and rules,
guidelines or circulars issued in relation thereto from time to time.
“Strategy” means any of the Portfolio Investment categories mentioned herein or that may
be introduced by the Portfolio Manager from time to time. The Term Strategy may be
interchanged with Plans/Products/Options.
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“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, 1992.
“Securities” means and includes shares (whether dematerialized or otherwise), derivatives
(futures and options), scrip, stocks, bonds, warrants, convertible debentures, nonconvertible 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.
Words importing the singular include the plural and vice-versa. Words importing a gender
include the other gender.
Section 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 Repository , Commodities Broking,
Personal Finance, Advisory Services, Merchant Banking & Corporate Finance, placement of
equity, IPOs, services related to data management and Non Banking Financial company
among others. KARVY has a professional management team and ranks among the best in
technology and operations.
PAGE 7 of 41
Karvy Stock Broking Limited (KSBL) was incorporated on 30th March 1995 having Registered
Office at Karvy House 46, Avenue 4, Street No.-1, Banjara Hills, Hyderabad – 500 034 and has
been registered with SEBI as a Portfolio Manager vide registration number
No.INP000001512 , and registration of which has been renewed for the period November
16, 2011 to November 15, 2014 . 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 1999. KSBL has a large number of offices across the
length and breadth of the country, thus making financial services accessible to urban, semiurban and rural investors. KSBL provides financial services to corporate, institutional as well
as individuals. 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:
The directors of KSBL and their background is as follows:
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
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
PAGE 8 of 41
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
2005. 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 1997-98, 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.
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
PAGE 9 of 41
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 2005-2007, 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
Karvy Computershare
Pvt. Ltd.
Nature of Business
SEBI Registered Registrar and Share Transfer
Agent
Status
Group company
Karvy Financial
Services Ltd.
Financial Services-NBFC
Karvy Data
Management services
Ltd.
Karvy Comtrade Ltd.
Transaction Processing
Wholly owned
subsidiary
company
Wholly owned
subsidiary
company
Wholly owned
subsidiary
company
Karvy Holding Limited
Core Investment Company
Karvy Consultants
Limited
Consultancy and advisory services
Karvy Realty (India)
Ltd.
Realty Services
Karvy Investor Services
Ltd.
SEBI Registered Merchant Banker and
Underwriter.
Karvy Capital Limited
Financial Services-NBFC
Karvy Middle East LLC,
Dubai
Commercial Broking license from the
Department of Economic Development,
Dubai
FMC/ NCDEX /MCX/NMCE/ACE / ICEX/
NCDEX Spot Exchange / National Spot
Exchange registered commodity broker
PAGE 10 of 41
Wholly owned
subsidiary
company
Group company
Wholly owned
subsidiary
company
Wholly owned
subsidiary
company
Wholly owned
subsidiary
company
Subsidiary
company
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).
Section 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 The Whole Time Member of Securities Pending
by the Board or the directions and Exchange Board of India (“SEBI”) had
issued by Board under the Act passed a common final order dated June
or Rules or Regulations made 22, 2007 (“Order”) against the KSBL –
there under
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. SEBI has in paragraph 20 of its
final order dated 28th January, 2014
clearly concluded that KSBL – Depository
participant has already undergone
prohibition from taking up any new
assignment for a period of 18 months and
26 days and hence there need not be any
further penalty on KSBL – Depository
Participant. Further, SEBI has in its final
order dated February 3, 2014 stated that
since KCPL has already undergone
prohibition from acting as RTI for
approximately 10 months no further
penalty is warranted. As directed by SAT,
SEBI is expected to issue one more order
pertaining to broking business .
II
The nature of penalty/direction
III
Penalties
imposed
for
As above
any As above
PAGE 11 of 41
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
SEBI had initiated proceedings under Pending
section 24 of the SEBI Act, against the
three promoter directors of KSBL viz, Mr.
C. Parthasarathy, Mr. M Yugandhar and
Mr. MS Ramakrishna and KSBL which are
pending before the additional chief
metropolitan magistrate, Mumbai. As
part of the above said proceedings, a
complaint dated 20.02.2006 was lodged
by SEBI with Central Bureau of
Investigation, Mumbai. It was stated in
the complaint by SEBI that, fraud has
been committed by certain individuals
(key operators) in connivance with
certain bank officials and other entities
including Karvy Consultants Limited (KCL),
KSBL and KCPL, in the IPOs of IDFC and
Yes Bank to obtain undue pecuniary
benefits by illegally cornering large
number of shares which were offered to
Retail Investors by opening various
fictitious / benami bank accounts and
demat accounts.
Consequent upon registering the above
complaint, the CBI, relying upon the
investigations of SEBI, had registered two
cases against the Key Operators, bearing
nos. CBI BS & FC (RC 3(E)/ 2006 and 4(E)/
2006) under Sections 120 B r/w 420, 467,
468 & 471 of IPC, under Section 68(A) of
the Companies Act 1956 and under
Section 13(2) r/w 13 (1) (d) of the PC Act,
1988, after arraying KCL, KSBL, KCPL and
other officers of these entities including
Mr. C. Parthasarathy, as co-accused.
Subsequently, the corresponding charge
sheet was filed by CBI before the Hon’ble
Special Judge, Mumbai on 26.10.2007
and the matter is pending before the said
Court.
PAGE 12 of 41
Subsequently,
the
Enforcement
Directorate, after relying on the
investigations of CBI and that of SEBI and
on the premise that Section 467 of IPC
framed against the co-accused represents
a predicate offence which is categorized
as a scheduled offence under Section 2(y)
of the Prevention of Money Laundering
Act-2002 (PMLA), has filed a prosecution
complaint bearing no.04/2013, in terms
of the provisions of PMLA. The matter is
sub-judice.
V Any deficiency in the systems Not Applicable
and operations of the Portfolio
Manager observed by the Board
or any regulatory agency
VI Any
enquiry/adjudication Same as I and IV above
Pending
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
Section 5:
SERVICES OFFERED
5.1 The Portfolio Manager offers the following three types of Services
a. Discretionary Services
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 on an ongoing basis 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 decisions 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
PAGE 13 of 41
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
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.
Currently, the Portfolio Manager offers the following strategies:
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 long-term
capital appreciation from their asset allocation to debt.
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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, optionally and fully converted debentures of listed and unlisted
companies 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.
Note: The Aurous Portfolio has been introduced with effect from February 15, 2013
12. 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 client’s
portfolio 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
PAGE 15 of 41
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.
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 Nonconvertible 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. Customised Growth 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 Customised Growth Portfolio has been introduced with effect from
1/02/2012. The portfolio was formerly known as Alpha Portfolio until January 31,
2014.
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
PAGE 16 of 41
portfolio strategy, investment, disinvestment of the various securities in the client’s
portfolio, for an agreed fee, entirely at the client’s risk. The Portfolio Manger will render the
best possible advice to the client having regard to the client’s needs and the requirements,
using his own professional skills. 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.
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
The Portfolio Manager shall not accept funds and/or securities from new clients,
cumulative value of which is less than Rupees Twenty Five Lakhs or as specified in
PAGE 17 of 41
the agreement with the Portfolio Manager or as amended/specified in the SEBI
(Portfolio Managers) Regulations, 1993.
Section 6:
RISK FACTORS
1. 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 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
PAGE 18 of 41
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 (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.
PAGE 19 of 41
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 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
PAGE 20 of 41
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 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
PAGE 21 of 41
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.
Section 7:
i.
CLIENT REPRESENTATION
Category of clients as on December 31, 2013:
Category of Clients
Associate/Group companies
As on 31st December 2013.
As on 31st March 2013
As on 31st March 2012.
As on 31st March, 2011.
No of Clients
Funds
Managed
(Rs. In Crs)
-
-
-
-
316
128.53
373
102.31
467
67.58
309
25.96
316
128.53
373
102.31
467
67.58
Remarks
Others
Total
As on 31st March, 2013
PAGE 22 of 41
Discretionary,
discretionary
Discretionary,
discretionary
Discretionary,
discretionary
Discretionary,
discretionary
Non-
Discretionary,
discretionary
Discretionary,
discretionary
Discretionary,
discretionary
Non-
NonNonNon-
NonNon-
309
25.96
Discretionary,
discretionary
Non-
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 31st March 2013)
Amount
Sr.
Name of the
Nature of Transaction
No
related party
2012-13
2011-12
1
2
3
Karvy Consultants
Limited
Brokerage on trading in securities
(Group Company)
72,754
0
Balance at year end, loans and
advances
5,41,106
4,17,39,076
Balance at the year end, trade
payables/ (receivables)
6,36,759
0
2,580
7,559
0
13,89,727
Karvy
Computershare Pvt.
Limited
(Group Company)
Rent (paid) / received
35,55,672
Reimbursement of expenses
37,25,126
Fees and marketing income /
(expenses)
4,53,995
0
Balance at year end, trade
payables/ (receivables)
3,74,652
0
Karvy Investor
Services Limited
(Subsidiary
company)
Interest on advances received /
(paid), net
PAGE 23 of 41
(10,98,493)
(16,22,083)
Loans and advances given /
(refunded), maximum given at
any time during the year
0
30,00,000
3,00,00,000
3,00,00,000
50,26,467
1,22,66,279
6,15,30,885
44,54,255
0
2,58,947
3,924
8
(1,88,17,336)
(14,78,438)
(refunded),maximum at any time
during the year
2,00,00,000
17,00,00,000
Loans and advances
taken/(repaid), maximum at any
time during the year
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)
1,70,00,000
3,07,00,000
0
5,399
Loans and advances
taken/(repaid), maximum taken
at any time during the year
(expenses)
advances
4
Karvy Comtrade
Limited
(Subsidiary
company)
(paid), net
advances
5
Karvy Investment
Advisory Services
Limited(formerly
known as Karvy
PAGE 24 of 41
Insurance Brokiing
Limited*)
(Subsidiary
company)
(paid), net
26,16,518
36,62,121
(refunded),maximum at any time
during the year
(2,50,50,000)
(29,00,000)
9,98,617
50,85,278
41,50,225
3,87,37,348
2,02,05,247
74,30,110
advances
6
Karvy Data
Management
Services Limited
(Subsidiary
company)
(paid), net
Rent (paid) / received
Investment in equity shares
(refunded), maximum at any time
during the year
Loans and advances taken
/(repaid), maximum at any time
during the year
(expenses)
50,53,464
2,00,00,000
3,00,00,000
39,70,00,000
20,56,80,000
0
4,00,00,000
10,59,53,065
10,42,31,433
3,87,00,000
90,00,000
Advance for investments
advances
PAGE 25 of 41
55,21,464
2,00,00,000
0
5,48,07,483
7
Karvy Financial
Services Limited
(Subsidiary
company)
(paid), net
31,39,019
3,93,431
88,72,951
19,76,83,848
during the year
52,02,76,137
Loans and advances taken/
(repaid), maximum at any time
during the year
37,61,10,329
Reimbursement of expenses
3,36,47,395
(expenses)
11,21,00,000
4,00,00,000
0
2,03,486
75,32,036
95,59,345
advances
Balance at year end, Trade
payables / (receivables)
272,00,00,000
0
3,48,10,253
Karvy Forex &
Currencies Private
Limited8
(Subsidiary
company)
80,00,000
0
during the year
0
0
0
79,934
33,63,922
31,96,163
advances
PAGE 26 of 41
Karvy Realty (India)
Limited9
(Subsidiary
company)
2,75,134
0
0
0
58,74,379
47,58,912
Fees and marketing
income/(expenses)
10,53,33,833
0
advances
95,59,28,438
during the year
10
95,61,44,390
Karvy Capital
Limited
(Subsidiary
company)
(paid), net
4,45,119
7,55,440
14,95,293
(3,42,096)
4,00,00,000
4,00,00,000
during the year
9,95,50,000
3,00,00,000
Loans and advances taken/
(repaid), maximum at any time
during the year
2,69,40,000
2,75,00,000
1,09,20,833
56,96,678
30,00,000
0
0
2,05,17,242
(expenses)
advances
PAGE 27 of 41
Balance at year end, Trade
payables / (receivables)
11
1,08,06,504
1,95,00,000
5,00,000
3,60,000
0
advances
3,96,406
0
Karvy Holdings
Limited
(Subsidiary
company)
12
23,59,226
Karvy Asia Pacific
Pte Limited
(Subsidiary
company)
1,10,11,748
(expenses)
13
(81,15,356)
0
1,14,49,500
1,41,31,750
21,67,604
0
Karvy Inc., USA
(Subsidiary
company)
14
5,15,73,040
Karvy Middle East
LLC, Dubai
(Subsidiary
company)
15
Mr. M. S.
Ramakrishna
(Key Management
Personnel)
Remuneration paid
40,16,020
PAGE 28 of 41
40,16,020
* The name of Karvy Insurance Broking Limited has been changed to Karvy Investment
Advisory Services Limited with effect from November 18, 2013.
Section 8:
FINANCIAL PERFORMANCE OF PORTFOLIO MANAGER (BASED ON AUDITED FINANCIAL
STATEMENTS})
As at
As at
As at
March 31, 2013
March 31, 2012
March 31, 2011
Rs in Lakhs
Rs in Lakhs
Rs in Lakhs
SOURCES OF FUNDS
Shareholders' Funds
Share Application Money
Loan Funds
35,669.78
35,248.15
34,865.56
174.23
174.23
174.23
57,861.13
56,022.84
23,030.85
Deferred Tax Liability
Total
-
-
-
93,705.14
91,445.22
58,070.64
16,575.51
15,992.06
18,149.00
10.50
15.75
21.00
Investments
18,513.84
17,392.55
18,002.92
Current Assets
73,281.30
73,824.32
44,954.71
Less: Current Liabilities and
Provisions
14,804.95
15,908.40
23,228.74
Net Current Assets
58,476.35
57,915.92
21,725.97
Deferred Tax Asset
128.94
128.94
171.76
93705.14
91,445.22
58,070.64
APPLICATION OF FUNDS
Net Fixed Assets
Stock Exchange Membership Cards
Total
Summarized Financial Statement - Profit and Loss Account
PAGE 29 of 41
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
26,938.65
25,658.97
24,105.18
Total Expenses
25,422.81
24,086.71
21,200.72
Profit before Depreciation and Tax
1,515.84
1,572.26
2,904.47
Depreciation/Amortisation
1,094.21
1,146.87
1,288.22
Profit before Tax
421.63
425.39
1,616.24
Provision for Tax
-
Profit After Tax
421.63
42.81
(577.77)
382.58
1,038.47
Section 9:
PORTFOLIO MANAGEMENT PERFORMANCE OF PORTFOLIO MANAGER FOR THE LAST
THREE YEARS. 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, 1993
Find below the Performance of the Portfolio Manager calculated using weighted average
Method for the three financial years 2010-11, 2011-12, 2012-13 and upto December 31,
2013.
Portfolio performance is a percentage, net of all fees and charges levied by the Portfolio
Manager
Period
Portfolio
Performance (%)
Benchmark
Performance (%)
Returns%
01.04.2013- 01.04.201231.12.2013
31.03.2013
Discretionary PMS- Resident
01.04.201131.03.2012
01.04.201031.03.2011
K Energetic
11.66
0.57
-32.49
-41.26
9.05
-2.68
-5.11
-16.92
10.7
4.74
PAGE 30 of 41
-0.06
-28.94
CNX Midcap
K Aggressive
Portfolio
Performance (%)
Benchmark
Performance (%)
CNX Midcap
Portfolio
Performance (%)
Benchmark
Performance (%)
K Sensible
Portfolio
Performance (%)
Benchmark
Performance (%)
Alpha
S & P CNX
Nifty
S&P CNX
Nifty
9.05
-3.99
-7.49
-1.53
11.68
-5.53
-14.62
-27.5
10.94
5.32
-11.25
13.01
14.58
11.23
-12.06
-2.84
10.11
7.78
-2.49
8.17
Portfolio
Performance (%)
Benchmark
Performance (%)
Alpha Plus
S&P CNX
Nifty
12.65
5.51
3.72
N.A.
11.28
16.5
-1.48
N.A
Portfolio
Performance (%)
Benchmark
Performance (%)
Delta
BSE 200
Index
10.47
4.29
-3.68
0.69
10.75
6.37
-4.83
7.33
Portfolio
Performance (%)
Benchmark
Performance (%)
Omega
BSE 200
Index
12.35
1.81
-3.58
-3.04
10.07
3.89
-5.97
0.74
Gamma
16.22
-5.24
37.53
N.A.
CNX Midcap
7.83
-10.74
45.28
N.A.
Theta
Crisil
Composite
Bond Index
-0.23
NA
N.A
N.A.
0.77
NA
N.A
N.A.
PSI
1.36
0.23
N.A
N.A.
S&P CNX 500
9.78
4.58
N.A
N.A.
Aurous
-3.91
N.A
N.A
N.A
Portfolio
Performance (%)
Benchmark
Performance (%)
Portfolio
Performance (%)
Benchmark
Performance (%)
Portfolio
Performance (%)
Benchmark
Performance (%)
Portfolio
Performance (%)
PAGE 31 of 41
Benchmark
Performance (%)
Portfolio
Performance (%)
Benchmark
Performance (%)
Gold Bees
-5.36
N.A
N.A
N.A
Zeta
NSE G-Sec
composite
Index
N.A
N.A
N.A
N.A
N.A
N.A
N.A
N.A
Discretionary PMS - Non Resident
Portfolio
Performance (%)
Benchmark
Performance (%)
K Sensible
S&P CNX
Nifty
Portfolio
Performance (%)
Benchmark
Performance (%)
Delta
BSE 200
Index
Portfolio
Performance (%)
Benchmark
Performance (%)
Portfolio
Performance (%)
Benchmark
Performance (%)
Portfolio
Performance (%)
Benchmark
Performance (%)
Portfolio
Performance (%)
Benchmark
Performance (%)
Portfolio
Performance (%)
Benchmark
Performance (%)
14.43
8.16
-9.74
N.A.
10.91
7.31
-9.23
N.A.
7.5
4.67
-1.6
N.A.
6.87
6.25
-3.26
N.A.
Alpha
S&P CNX
Nifty
14.88
11.68
-10.51
N.A.
10.52
7.71
-6.64
N.A.
Alpha Plus
S&P CNX
Nifty
15.05
9.73
-0.9
N.A.
10.51
7.33
4.89
N.A.
Gamma
16.89
-0.18
N.A
N.A
CNX Midcap
14.23
-0.36
N.A
N.A
Omega
BSE 200
Index
10.52
-3.1
-3.4
N.A.
10.31
-2.55
-9.13
N.A.
Aurous
-3.59
N.A
N.A
N.A
N.A
N.A
Gold Bees
-5.22
N.A
Non Discretionary PMS- Resident
PAGE 32 of 41
Portfolio
Performance (%)
K Series
-3.29
-9.04
-19.56
-17.48
Portfolio
Performance (%)
Structured
Products
5.72
2.04
-3.86
-2.5
Portfolio
Performance (%)
Optima
9.78
10.07
4.94
N.A.
Portfolio
Performance (%)
Alpha
16.48
-10.3
N.A.
N.A.
Portfolio
Performance (%)
Omega
NA
N.A
N.A
N.A.
Non Discretionary PMS- Non Resident
Portfolio
Performance (%)
Portfolio
Performance (%)
Note:
Optima
8.57
-0.43
-1.98
N.A.
Alpha
8.33
N.A.
N.A.
N.A.
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, 2011.
Section 10:
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
PAGE 33 of 41
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.
(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. The placement
fee, if charged, shall be deducted from client’s initial corpus. 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
PAGE 34 of 41
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.
(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.
Section 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
PAGE 35 of 41
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.
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. 1827 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.
PAGE 36 of 41
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.
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, 1961.
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, 1961.
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 1st 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, 1961. 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 1st 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
tax @ 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, 1961. 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.
PAGE 37 of 41
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
(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
Section 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. In case the prices are not available from NSE or BSE Stock
exchange, then any other stock exchange shall be considered. These shall include the Equity
shares including Indian Depository Receipts and other instruments, as the case may be. In
case a share is not traded on a valuation date, latest closing price of either principal /
secondary or any other stock exchange would be used.
Equity shares which are not listed on stock exhanges are included in portfolio valauation at
fair/cost value.
In case a Equity share is suspended/non-traded/ awaiting Corporate
Actions, then the Valuation of such Equity share shall be done on the basis of good faith
relying upon prevailing practices elsewhere.
In case of the warrants been traded separately they would be valued as an equity share and
valued accordingly. In case of the non traded warrants, the warrants will be valued at the
PAGE 38 of 41
value of the share which would be obtained on exercise of the warrant less the amount
payable on exercise of the warrant. On exercise of warrant, the warrants would be
transferred to the normal equity and valued accordingly.
For valuation of the derivatives contract, the open positions, as on the date of valuation,
shall be valued as per the last traded prices available from the relevant stock exchange, and
will be valued on the mark to market method.
In case of Mutual Fund,. Investments in Mutual Funds shall be valued at the latest available
NAV of the respective scheme. Investment in Exchange listed (ETF) shall be valued at the
closing price on the relevant exchange. If on a valuation date Exchange Traded Funds (ETF) is
not traded either on the primary or secondary stock exchange, ETF shall be valued at the
latest available NAVs of the ETF Scheme.
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. For illiquid securities, the valuation may be provided by the issuer on
a periodic basis and/or as required by the portfolio manager.
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.
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.
PAGE 39 of 41
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.
Section 13:
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 400 051.
Tel No. (B) 022-33055000
Tel No. (D) 022-61491621
Fax No. 022-33055033
Email ID – dhaval.upadhyay@karvy.com
Section 14:
GRIEVANCE REDRESSAL
The Portfolio Manager has dedicated an email id karvypmsig@karvy.com for all the
investors to lodge their grievance. Apart from this, the portfolio clients can get in touch with
the IRO in person, over phone or through written communication.
Portfolio Manager will ensure that the above IRO attends to all investor grievance/service
issues with promptness and Portfolio Manager will ensure that this IRO is vested with
necessary authority, independence and the means to handle investor grievance effectively
and immediately, within reasonable period of time.
Section 15:
DISPUTE SETTLEMENT MECHANISM
PAGE 40 of 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. The placement fee, if
charged, shall be deducted from client’s initial corpus
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. charged @ 0.625% at the end of every
quarter on the daily average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank
balance).
1
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 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. charged @ 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 is @ 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 is @ 0.50% at the end of every quarter on
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 is @ 0.125% at the
2
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
email at the email 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.
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
Asset Allocation
Securities
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. The placement fee, if charged, shall be
deducted from client’s initial corpus
The Fixed fees for the K-Aggressive Portfolio (without profit sharing) charged by the Portfolio
Manager will not exceed 2.50% p.a. charged @ 0.625% at the end of every quarter on the daily
average Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance).
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. charged @ 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.
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 is @
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).
4
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
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.
Option 5: Fixed Management Fee NIL & Performance fees upto 15% on all gains
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
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
5
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.
3. K-Energetic
Introduction
The K-Energetic portfolio is designed to provide returns by following an aggressive style of investing
which entails higher risks.
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.
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
Securities
closing price of such contracts
Fees and Expenses
6
deducted from client’s initial corpus.
The Fixed fees for the K-Energetic Portfolio (without profit sharing) charged by the Portfolio Manager
will not exceed upto 2.50% p.a. charged @ 0.625% at the end of every quarter on the daily average
Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance).
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. charged @ 0.25% at the end of every quarter on the daily average Net
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.
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 is @
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.
2.0% p.a.
7
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
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
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.
8
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.
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.
Asset Allocation
Securities
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
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 1st 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:
9
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
Following charges shall be payable by client upon withdrawal from Alpha Portfolio under Option 1:
Withdrawal when made
Charges payable by Client
In case of withdrawal before 12 months of date a) Fixed Management Fee up to 3% p.a. and
from which client account is activated
b) Exit fees up to 3%
In case of withdrawal after 12 months but before a) Fixed Management Fee up to 3% p.a. and
completion of 24 months of date from which
client account is activated
In case of withdrawal after 24 months but before a) Fixed Management Fee upto 3% p.a. and
When exiting, after completing a period of 36 Fixed management fee up to 3% p.a. till the day
months of date from which client account is the client exits the portfolio.
activated
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 1st 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:
In case of withdrawal before 12 months of date
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 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
10
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
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
When exiting, after completing a period of 36 Performance Fee up to 25% of incremental gains
months of date from which client account is beyond annualized hurdle rate not exceeding 0%
activated
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).
life of the investment. For existing clients, the performance fee will be computed on a High
Following charges shall be payable by client upon withdrawal from the Alpha Portfolio under option
3:
Additional charges payable
In case of withdrawal before 12 months of date
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
In case of withdrawal after 12 months but before
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%
11
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
In case of withdrawal after 24 months but before 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
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 exceeding @2.50% of the transaction value
and other incidental charges/fees/duties and taxes including Securities Transaction Tax at actual.
Other Features
reasonable time.
12
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.
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.
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, 2013. 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.
13
Fees and Expenses
The Fixed fees for the Delta Portfolio charged by the Portfolio Manager will be charged at the end of
cash/bank balance).For existing clients, the performance fee will be computed on a High Watermark
months (anniversary basis) and not financial year basis. .
Other Features
reasonable time.
Below are the fee options available to an investor:
DELTA Conservative:
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:
In case of withdrawal before 12 months of
a) Fixed Management Fee up to 3% p.a. and
14
date from which client account is activated
In case of withdrawal after 12 months but a) Fixed Management Fee up to 3% p.a. and
before completion of 24 months of date from
which client account is activated
In case of withdrawal after 24 months but a) Fixed Management Fee upto 3% p.a. and
before completion of 36 months of date from
After completing 36 months of date from The client will be charged fixed management fee up
to 3% p.a. till the day client exits the strategy.
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 1st August, 2012, for new clients the performance fees is being charged on
Following charges shall be payable by client upon withdrawal from the Delta Conservative Portfolio
under Option 2:
In case of withdrawal before a) Performance fee up to 25% of incremental gains beyond
12 months of date from which
annualized hurdle rate not exceeding 0% will be charged
(Performance fee payable will be calculated on the NAV on the
day of exit) and
In case of withdrawal after 12 a) Performance fee up to 25% of incremental gains beyond
months but before completion
annualized hurdle rate not exceeding 0% on the basis of High
of 24 months of date from
Water Mark Principle will be charged (Performance fee payable
which client account is
will be calculated on the NAV on the day of exit) and
activated
activated
15
After completing 36 months of Performance Fee up to 25% of incremental gains beyond
date from which client account annualized hurdle rate not exceeding 0% on the basis of High
is activated
Water Mark Principle based on the NAV of the day of exit from the
strategy.
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).
.Following charges shall be payable by client upon withdrawal from the Delta Conservative Portfolio
under Option 3:
In case of withdrawal before
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
activated
a) Fixed management fee payable up to 3.00% p.a. and
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
16
activated
After completing 36 months of
date from which client account
is activated
c) Exit fees up to 1% will be charged.
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. The placement fee, if charged,
shall be deducted from client’s initial corpus.
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:
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
cash/bank balance).
Following charges shall be payable by client upon withdrawal from the Delta Moderate Portfolio
under Option 1:
In case of withdrawal before 12 a) Fixed Management Fee up to 3.50% p.a. and
months of date from which client b) Exit fees up to 3%
account is activated
In case of withdrawal after 12 months a) Fixed Management Fee up to 3.50% p.a. and
17
but before completion of 24 months
of date from which client account is b) Exit fees up to 2%
activated
In case of withdrawal after 24 months
a) Fixed Management Fee upto 3.50% p.a. and
of date from which client account is
b) b) Exit fees up to 1%
activated
When exiting, after completing a Fixed management fee up to 3.50% p.a. till the day client
period of 36 months of date from exits the portfolio.
life of the investment For existing clients, the performance fee will be computed on a High
year basis. From 1st August, 2012, for new clients the performance fees is beingcharged on
under Option 2:
In case of withdrawal before 12 a) Performance fee up to 25% of incremental gains beyond
months of date from which client annualized hurdle rate not exceeding 0% will be charged
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
activated
charged (Performance fee payable will be calculated
In case of withdrawal after 24 months a) Performance fee up to 25% of incremental gains beyond
but before completion of 36 months annualized hurdle rate not exceeding 0% on the basis of
of date from which client account is High Water Mark Principle will be charged (Performance fee
activated
payable will be calculated on the NAV on the day of exit) and
When exiting, after completing a Performance Fee up to 25% of incremental gains beyond
period of 36 months of date from annualized hurdle rate not exceeding 0% on the basis of
exit from the portfolio.
18
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
under Option 3:
In case of withdrawal before 12
months of date from which client
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%
activated
12% on the basis of High Water Mark Principle will be
c)
activated
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
19
When exiting, after completing a
period of 36 months of date from
a) Fixed Management fee upto 3.50% p.a. and
b) Performance Fee up to 25% of incremental gains
the basis of High Water Mark Principle based on the
NAV of the day of exit.
DELTA Aggressive:
Fees and Expenses
charged, shall be deducted from client’s initial corpus.
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
PERFORMANCE FEE: For existing clients, the performance fee will be computed on a High
year basis. From 1st 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:
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
balance).
Following charges shall be payable by client upon withdrawal from the Delta Aggressive Portfolio
under Option 1:
activated
activated
a) Fixed Management Fee upto 4% p.a. and
20
When exiting, after completing a Fixed management fee up to 4% p.a. till the day client exits
period of 36 months of date from the portfolio.
PERFORMANCE FEE: The Performance fee in this Delta Aggressive fee option will not exceed 25% of
Principle over the life of the investment. For existing clients, the performance fee is being computed
under Option 2:
activated
a) Performance fee up to 25% of incremental gains beyond
High Water Mark Principle will be charged (Performance fee
b)Exit fees up to 2%
activated
exit.
21
FIXED MANAGEMENT FEE: The Fixed fee for the Delta Aggressive Portfolio (with profit sharing) will
year basis. From 1st August, 2012, for new clients, the performance fees is being charged on
under Option 3:
a) Fixed management fee payable up to 4.00% p.a
and
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
activated
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
c)
activated
Exit fees up to 2%
22
NAV of the day of exit from the portfolio.
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.
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.
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}
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.
23
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
Omega Plus is recommended for investors seeking to hold a diversified portfolio with moderate risk
appetite expecting a moderate return over medium term horizon.
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,
2013. 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.
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
24
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
Other Features
Minimum investment amount is Rs. 25lakh.
reasonable time.
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
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
The Performance fee in this Omega Conservative option will not exceed 25% of incremental gains
25
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
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.
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 1st 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.
OMEGA Plus:
26
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
balance).
Following charges shall be payable by client upon withdrawal from the Omega Plus Portfolio under
Option 1:
activated
activated
Fixed management fee up to 3% p.a. till the day client exits
the portfolio.
The Performance fee in this Omega Plus option will not exceed 25% of incremental gains beyond
the investment. For existing clients, the performance fee will be computed on a High Watermark
months (anniversary basis) and not financial year basis
Option 2:
27
High Water Mark Principle will be charged (Performance
activated
fee payable will be calculated on the NAV on the day of
exit) and
activated
beyond annualized hurdle rate not exceeding 0%
charged (Performance fee payable will be
period of 36 months of date from 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.
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
Option 3:
a) Fixed management fee payable up to 3% p.a and
28
activated
a) Fixed management fee payable up to 3% p.a. and
c)
activated
Exit fees up to 2%
OMEGA Moderate:
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
29
balance).
Following charges shall be payable by client upon withdrawal from the Omega Moderate Portfolio
under Option 1:
In case of withdrawal before 12 a) Fixed Management Fee up to 3.00% p.a. and
activated
activated
a) Fixed Management Fee up to 3.00% p.a. and
a) Fixed Management Fee upto 3.00% p.a. and
Fixed management fee up to 3.00% p.a. till the day client
exits the portfolio.
under Option 2:
beyond annualized hurdle rate not exceeding 0% will
be charged (Performance fee payable will be calculated
30
activated
activated
exit) and
FIXED MANAGEMENT FEE: The Fixed fee for the Omega Moderate Portfolio (with profit sharing) will
under Option 3:
activated
31
activated
a) Fixed Management fee upto 3.00% p.a. and
OMEGA Aggressive:
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
balance).
Following charges shall be payable by client upon withdrawal from the Omega Aggressive Portfolio
under Option 1:
In case of withdrawal before 12 a) Fixed Management Fee up to 3% p.a. and
In case of withdrawal after 12 months a) Fixed Management Fee up to 3% p.a. and
32
activated
activated
the portfolio.
PERFORMANCE FEE: The Performance fee in this Omega Aggressive option will not exceed 25% of
under Option 2:
activated
activated
(Performance fee payable will be calculated on the NAV
on the day of exit) and
period of 36 months of date from Performance Fee up to 25% of incremental gains beyond
33
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
under Option 2:
activated
activated
c) b) Exit fees up to 1%
34
OMEGA Systematic Equity:
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
Following charges shall be payable by client upon withdrawal from the Omega Systematic Equity
Portfolio under Option 1:
activated
activated
the portfolio.
PERFORMANCE FEE: The Performance fee in this Omega Systematic Strategy will not exceed 25% of
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.
35
activated
activated
d) Exit fees up to 1%
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
life of the investment. The performance fees will be charged on completion of 12 months
36
In case of withdrawal before 12 a) Fixed management fee payable up to 3% p.a and
months of date from which client Performance fee payable up to 25% of incremental gains
charged (Performance fee payable will be calculated on the
NAV on the day of exit) and
In case of withdrawal after 12 months a) Fixed management fee payable up to 3% p.a. and
Performance fee payable up to 25% of incremental gains
activated
the basis of High Water Mark Principle will be charged
on the day of exit)and
b)
activated
Exit fees up to 2%
Performance fee payable up to 25% of incremental gains
When exiting, after completing a a)Fixed Management fee upto 3% p.a. and
exit.
OMEGA Systematic Multi Asset:
37
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
activated
activated
the portfolio.
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
38
activated
activated
period of 36 months of date from Performance Fee up to 25% of incremental gains beyond
exit.
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
life of the investment. The performance fees shall be charged on completion of 12 months
activated
39
activated
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
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.
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.
Theta portfolio is recommended for investors seeking to hold a 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
40
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
The Client may withdraw whole or part of the funds or securities from the portfolio account by
strategy and return the funds or securities of the strategy, as the case may be, to the client within
reasonable time. In case of insufficient liquidity, the portfolio manager may choose to make in-specie
distributions of the assets.
The Portfolio Manager will provide periodical reports as required under the regulations at the
The portfolio account will be audited by the Independent Chartered Accountant every year and copy
Fees and Expenses
41
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 beginning of every
quarter on the Net Asset Value of the Portfolio (inclusive of all securities and cash/bank balance) or
the outstanding capital as detailed in the agreement between the client and the portfolio manager.
The portfolio manager may charge the management fee for the first year on an upfront basis at the
time of investment.
Following charges shall be payable by client upon withdrawal from the Theta Portfolio under Option
1:
months but before completion of
Fixed management fee up to 3% p.a. till the day client exits the
strategy.
life of the investment. For existing clients, the performance fee shall be computed on a High
year basis. Since August 1, 2012, for new clients, the performance fee is being charged on
2:
42
day of exit) and
d) Exit fees up to 5%
e) Exit fees up to 5%
Water Mark Principle based on the NAV of the day of exit.
FIXED MANAGEMENT FEE: The Fixed fee for the Theta Portfolio (without profit sharing) will not
exceed 3.00% p.a. which is upto 0.75% at the beginning of every quarter on the Net Asset Value of
the Portfolio (inclusive of all securities and cash/bank balance) or the outstanding capital as detailed
in the agreement between the client and the portfolio manager. The portfolio manager may charge
the management fee for the first year on an upfront basis at the time of investment.
43
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.
3:
In case of withdrawal after 12 a) Fixed management fee payable up to 3.00% p.a. and
24 months of date from which b) Performance fee payable up to 30% of incremental gains
c)
Exit fees up to 5%
In case of withdrawal after 36 a) Fixed management fee payable up to 3.00% p.a. and
a) Performance fee payable up to 30% of incremental gains
with catch up (beyond annualized hurdle rate not
exceeding 15%) on the basis of High Water Mark Principle
will be charged (Performance fee payable will be
c) Fixed management fee payable up to 3.00% p.a. and
d) Performance fee payable up to 30% of incremental gains
44
with catch up (beyond annualized hurdle rate not
exceeding 15%) on the basis of High Water Mark Principle
e) Exit fees up to 5%
period of 60 months of date
from which client account is
activated
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.
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
Securities
Investments will be made in stocks, mutual funds and Exchange Traded Funds (ETF). The Portfolio
45
Fees and Expenses
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
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 investor has the following fee options:
FIXED MANAGEMENT FEE: charged upto 0.75% at the end of every quarter on the daily average Net
Following charges shall be payable by client upon withdrawal from the Alpha Plus Portfolio under
Option 1:
strategy.
46
year basis. Since August 1, 2012, for new clients, the performance fees is being charged on
Option 2:
day of exit) and
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
47
Option 3:
activated
of exit.
Other Features
48
reasonable time.
9.Gamma Portfolio
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
Securities
Fees and Expenses
49
charged, shall be deducted from client’s initial corpus
FIXED MANAGEMENT FEE: The Fixed fees for the Gamma Portfolio charged by the Portfolio Manager
Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12
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
Following charges shall be payable by client upon withdrawal from the Gamma Portfolio under
Option 1:
In case of withdrawal after 12 a) Fixed Management Fee up to 3% p.a. and
24 months of date from which b) Exit fees up to 2%
In case of withdrawal after 24 a) Fixed Management Fee upto 3% p.a. and
50
When exiting, after completing a Fixed management fee up to 3% p.a. till the day client exits the
period of 36 months of date from portfolio.
Option 2:
day of exit) and
Water Mark Principle based on the NAV of the day of exit from
the Portfolio.
51
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
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.
Option 3:
c)
c)
activated
Exit fees up to 1%
of exit.
52
Other Features
reasonable time.
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, optionally and fully
converted debentures of listed and unlisted companies and other alternative asset classes.
The investment objective of the Strategy is to generate growth of capital and returns through short
term investing. Investments will be made in instrumentswhich look attractive on valuation and
growth prospects. Additionally investments will be made in alternate asset classes based on
attractiveness of the asset class.
This Portfolio is recommended for investors with high risk appetite expecting a high return over
53
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, optionally and fully converted
debentures of listed and unlisted companies, 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
Investments will be made through Stocks, Stock futures, Mutual Funds, optionally and fully
converted debentures of listed and unlisted companies, unlisted equity, 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.
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
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
Since August 1, 2012, for new clients, the performance fees is being charged on completion of 12
54
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:
portfolio
day of exit) and
55
the Portfolio.
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).
56
of exit.
Other Features
reasonable time.
11.Aurous Portfolio
57
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
The investment objective of the Strategy is to attempt preservation and growth of capital primarily
through systematic investment in Gold and debt/liquid instruments. Additionally investments will be
made in other asset classes based on attractiveness of the asset class.
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.
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
58
The Fixed fees for Aurous Portfolio charged by the Portfolio Manager will be charged at the end of
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
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
The Performance fee for Aurous in this option will not exceed 25% of incremental gains beyond
the investment. The performance fees will be charged on completion of 12 months (anniversary
basis).
The Fixed fee for the Aurous Portfolio (with profit sharing) will not exceed 3% p.a. which is upto
all securities and cash/bank balance). The Performance fee in this option will not exceed 25% of
months (anniversary basis).
59
However, in case of withdrawal before 12 months a) Fixed management fee payable up to 3% p.a
completion of 24 months a) Fixed management fee payable up to 3% p.a. and Performance fee
months but before completion of 36 months a) Fixed management fee payable up to 3% p.a. and
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.
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.
The strategy is recommended for clients with a moderate risk profile looking at capital appreciation
of their assets over a moderate investment horizon.
60
Asset Allocation
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.
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.
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
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
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).
61
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).
Following charges shall be payable by client upon withdrawal from the Zeta Portfolio under Option 1:
strategy
PERFORMANCE FEE: The Performance fee for Zeta portfolio in this option will not exceed 25% of
months (anniversary basis).
62
day of exit) and
the Portfolio.
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
life of the investment. The performance fees will be charged on completion of 12 months
(anniversary basis).
63
c)
c)
activated
Exit fees up to 2%
Exit fees up to 1%
of exit.
64
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:
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.
3. Non
Non convertible Debentures are normally issued with a fixed rate of Interest.
Convertible
The Non Convertible Debentures as part of Structured Products are designed as
Debentures as equity linked structures, debentures, derivative instruments, swaps, swaptions, a
part
of basket of securities, options, indices, commodities linked structures, debt
Structured
issuances and/or foreign currencies, Secured Premium Notes, money market
Products
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
4. 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.
65
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.
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.
Valuation of Assets
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,
Other Features
66
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
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.
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
Asset Allocation
Assets will be allocated amongst following asset classes in consultation with and as per directions or
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
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.
that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day end’s NAV. NAV
67
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
reasonable time. For existing clients, the performance fee will be computed on a High Watermark
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
investment. For existing clients, the performance fee will be computed on a High Watermark
68
The Fixed fee for the Omega Portfolio (with profit sharing) will not exceed 3.00% p.a. which is upto
all securities and cash/bank balance). The Performance fee in this option will not exceed 25% of
financial year basis. From 1st August, 2012, for new clients the performance fees will be charged on
However, in case of withdrawal before 12 months a) Fixed management fee payable up to 3.00% p.a
completion of 24 months a) Fixed management fee payable up to 3.00% p.a. and Performance fee
months but before completion of 36 months a) Fixed management fee payable up to 3.00% p.a. and
69
Optima Portfolio
The Optima Portfolio is designed for those investors who seek capital appreciation from their asset
allocation to Equities, debt and gold.
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.
Asset Allocation
Investment can be made in other asset classes as per choice, consent or directions of the client.
Securities
Debentures, and Bonds and other investment options as per choice, consent or direction of the
client.
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
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 1st 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
70
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.
charged @ 1% at the end of every quarter on the daily average Net Asset Value of the Portfolio
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.
The Fixed fee (with profit sharing) will not exceed 4% p.a. which is @ 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
completion of 24 months a) Fixed management fee payable up to 4.00% p.a. and Performance fee
71
months but before completion of 36 months a) Fixed management fee payable up to 4.00% p.a. and
Other Features
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.
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.
Customised Growth 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.The Customised Growth Portfolio was formerly known as Alpha
Portfolio uptil January 31, 2014.
72
The investment objective is to provide returns and capital appreciation through broad based
model, good corporate governance and high growth.
Asset Allocation
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.
BSE. Investment in Mutual Funds and ETFs will be valued on the day end’s NAV Investment.
Fees and Expenses
The Fixed fees for the Customised Growth 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 1st 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 charges shall be payable by client upon withdrawal from the Customised Growth Portfolio
under Option 1:
In case of withdrawal after 12 a) Fixed Management Fee up to 4% p.a. and
73
In case of withdrawal after 24 a) Fixed Management Fee upto 4% p.a. and
When exiting, after completing a Fixed management fee up to 4% p.a. till the day client exits the
period of 36 months of date from strategy.
year basis.
under Option 2:
day of exit) and
Water Mark Principle will be charged (Performance fee
balance).
74
under Option 3:
In case of withdrawal before 12 a) Fixed management fee payable up to 4.00% p.a and
In case of withdrawal after 12 months a) Fixed management fee payable up to 4.00% p.a. and
but before completion of 24 months b) Performance fee payable up to 25% of incremental
activated
c)
activated
Exit fees up to 2%
c) Exit fees up to 1% will be charged
When exiting, after completing a a) Fixed Management fee upto 4% p.a. and
of exit.
Other Features
Minimum investment amount is Rs. 25 lakhs.
75
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.
reasonable time.
email at the email 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
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.
The investment objective is to provide returns and capital appreciation through broad based
model and high growth.
Asset Allocation
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.
76
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
FIXED MANAGEMENT FEE: The Fixed fees for the Alpha advisory charged by the Portfolio Manager
(inclusive of all securities and cash/bank balance). The performance fee will be computed on a High
year basis.
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
strategy.
77
year basis.
annualized hurdle rate not exceeding 0% will be charged
Water Mark Principle will be charged (Performance fee
exit) and
period of 36 months of date annualized hurdle rate not exceeding 0% on the basis of High
from which client account is Water Mark Principle based on the NAV of the day of exit from
activated
the strategy.
balance).
78
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% .
activated
12% on the basis of High Water Mark Principle will
be charged (Performance fee payable will be
c) Exit fees up to 2% .
In case of withdrawal after 24 months a) Fixed management fee payable up to 4.00% p.a. and
of date from which client account is b) Performance fee payable up to 25% of incremental gains
activated
the basis of High Water Mark Principle will be charged
c)
Exit fees up to 1% will be charged.
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.
79
reasonable time.
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.
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.
80
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.
***
81

KARVY STOCK BROKING LTD

Transcription

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