CONFIDENTIAL DISCLOSURE

DOCUMENT

FOR PORTFOLIO MANAGEMENT SERVICES

PROVIDED BY

ARTHVEDA FUND MANAGEMENT PRIVATE LIMITED

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COVER PAGE

i The Disclosure Document has been filed with the Board along with the certificate in the prescribed format in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993 as amended from time to time.

ii The Purpose of this Document is to provide essential information about the Portfolio

services in a manner to assist and enable the Investors in making informed decision for engaging Portfolio Manager.

iii The necessary information about Portfolio Manager, required by an investor before

investing are contained in the Disclosure Document, and the investors are advised to retain the document for future reference.

iv The name, phone number, e-mail address of the principal officer as designated by the

Portfolio Manager along with the address of the Portfolio Manager are as follows:

Prinicipal Officer: Mr. Subroto Chakraborty

Address: Arthveda Fund Management Private Limited CIN : U65990MH2005PTC153219 Ground Floor, HDIL Towers, Anant Kanekar Marg, Bandra – East, Mumbai - 400051 Telephone No: 91-22-6774 8500 Email: Subroto.chakraborty@arthveda.co.in

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INDEX PAGE

Sr. No. Particulars Page No.

1. Disclaimer Clause 3 2. Definitions 4 3. Description 8-14 4. Penalties & pending litigation 14-15 5. Details of the services being offered 15-21 6. Risk Factors 21-36 7. Client Representation 36-37 8. The Financial Performance of the AMC 38 9. Performance of the Portfolio Manager for the last three years 38 10. Nature of expenses 39-41 11. Taxation 41-52 12. Accounting policies 52-54 13. Investors services 54-55 14. SEBI – Form C 56 15. Appendix I 57-80

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CONTENTS OF DOCUMENT

(1) DISCLAIMER CLAUSE

DISCLOSURE DOCUMENT FOR

ARTHVEDA FUND MANAGEMENT PRIVATE LIMITED

AS ON APRIL 11, 2014

{PURSUANT TO REGULATION 14 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (PORTFOLIO MANAGERS) REGULATIONS, 1993}

i The Disclosure Document has been filed with the Board along with the certificate in the prescribed format in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993 as amended from time to time.

ii This Document has neither been approved nor disapproved by SEBI nor has SEBI

certified the accuracy or adequacy of the contents of the Document.

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2. DEFINITIONS

In this Disclosure Document, the following words and expressions shall have the meaning specified herein, unless the context otherwise requires:

Applicable Laws Asset Management Company or AMC or AVFM or Portfolio Manager or Company

Any applicable Indian and overseas statute, law, ordinance, regulation including the SEBI Regulations, exchange control laws (including JV/WOS Regulations, LRS as may be applicable), rules, order, by law, administrative interpretation, writ, injunction, directive, judgment or decree or other instrument which has a force of law from time to time. Arthveda Fund Management Private Limited (Formerly known as DHFL Venture Capital India Private Limited),(the Asset Management Company) incorporated under the Companies Act, 1956, having CIN: U65990MH2005PTC153219 and registered with SEBI (Portfolio Managers) Regulations, 1993 as Portfolio Manager vide Registration no. INP000003567 dated July 30, 2013 (Renewed).

AUM Asset Under Management

Advisory Services Advisory Services means services whereby the Portfolio Manager provides advise to Clients on investments as described in the Agreement between the Client and the Portfolio Managers.

Client

Client or Investor

Corpus / Capital Contributed

Client means any person/entity who/which enters into the Agreement with the Portfolio Manager for availing the Portfolio Management Services.

Client or Investor means any person/entity who/which enters into the Agreement with the Portfolio Manager for availing the Portfolio Management Services

Means the value of the funds and / or the market value of securities brought in by the Client at the time of subscribing to Portfolio Management Services including additional

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investments

Discretionary Portfolio Manager

A Portfolio Manager who exercises or may, under a contract relating to portfolio management, exercises any degree of discretion as to the investments or management of the portfolio of securities or the funds of the client, as the case may be.

Disclosure Document

Equity Related Instruments / Securities

Disclosure Document means this Disclosure Document dated April 11, 2014 for offering Portfolio Management Services.

Includes convertible bonds and debentures, convertible preference shares, equity warrants, equity derivatives, FCCBs, equity mutual funds and any other like instrument issued in India or abroad.

FII

Financial year

Fund Manager

Funds

Investment Amount

Foreign Institutional Investor registered with SEBI

Financial year means year starting from 1st April and ending on 31st March of the following year

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 the funds of the client, as the case may be.

Funds means the monies managed by the Portfolio Manager on behalf of a Client pursuant to the PMS Agreement and includes the monies mentioned in the account opening form, any further monies placed by the Client with the Portfolio Manager for being managed pursuant to the PMS Agreement, the proceeds of sale or other realization of the portfolio and interest, dividend or other monies arising from the assets, so long as the same is managed by the portfolio manager.

The money or securities accepted by the Portfolio Manager from the Client in respect of which the portfolio management services are to be rendered by the Portfolio Manager.

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Investment Committee

Investment Committee means the committee constituted by the Portfolio Manager comprising of the Principal Officer, the Chief Executive Officer, Executive Vice President Traded Markets & Investment Research and such other officer selected by the Chief Executive Officer/Principal Officer.

Interested Parties

JV/WOS Regulations

Interested Parties means collectively the Clients the Portfolio Manager, directors of the Portfolio Manager or members of the Investment Committee.

Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004, as may be amended from time to time, including any notifications issued pursuant thereto.

LRS Non-discretionary Portfolio Management Services

‘Liberalized Remittance Scheme’ issued by the RBI. 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 the funds of the client, as the case may be.

PMS Agreement or Agreement Includes contract entered between the Portfolio Manager and the Client for the management of funds or securities of the Client.

Portfolio Portfolio means Securities and/or funds managed by the Portfolio Manager on behalf of the Client pursuant to the Portfolio Management Services Agreement and includes any Securities and/or funds mentioned in the account opening form, any further Securities and/or funds placed by the Client with the Portfolio Manager for being managed pursuant to the Portfolio Management Services Agreement, Securities or other realization of the portfolio acquired by the Portfolio Manager through investment of funds and bonus, dividends or other receipts and rights in respect of Securities forming part of the portfolio, so long as the same is managed by the Portfolio Manager under the Portfolio Management Services Agreement.

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Principal Officer

Portfolio Companies

Principal Officer means an Officer of the Portfolio Manager who is responsible for the activities of portfolio management and has been designated as principal officer by the Portfolio Manager.

Portfolio Companies means companies, enterprises, entities and special purpose vehicles in whose securities the Portfolio Manager will invest the Investment Amount of the Client pursuant to the Services contemplated by the Agreement.

NRI Non-Resident Indian

RBI Reserve Bank of India, established under the Reserve Bank of India Act, 1934, as amended from time to time.

SEBI or Board Securities and Exchange Board of India established under Securities and Exchange Board of India Act, 1992, as amended from time to time.

Securities

Securities Lending

Shall have its meaning ascribed to in Clause 5(b)(ii) of this Agreement.

Securities Lending means lending of the securities as per the Securities Lending Scheme, 1997 specified by SEBI, as amended from time to time.

The Regulations or SEBI Regulations

Securities and Exchange Board of India (Portfolio Managers) Rules and Regulations, 1993 as amended from time to time.

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3. DESCRIPTION

i. History, Present Business and Background of the Portfolio Manager

Arthveda Fund Management Pvt. Ltd. (AVFM) is a company registered under the Companies Act, 1956, and has been registered with SEBI as a Portfolio Manager vide registration number INP000003567 dated July 30, 2013 (Renewed). • Company was formed on 12th May 2005 • Launch of first fund – DREAM FUND I (Real Estate) on 3rd October 2005 • Final closure of DREAM FUND I ( Real Estate) on 31st March 2007 with an AUM of

Rs.101.028 crores. • Eight exits from investments achieving an IRR from 20-45% • Change of name of the Company on 12th November 2011 • PMS licence obtained on 16th February 2010 • Bikram Sen appointed as CEO of the company from April 2010 • Launch of second fund – Arthveda STAR Fund (Real Estate – Middle Income

Housing Fund)(3 year term) on 14th November 2012 under SEBI (Venture Capital Fund) Regulations with a target corpus of Rs.200 crores and a green shoe option of Rs.100 crores.

• Launch of L50 in FY 2013-14 • Approval obtained from SEBI for Alternative Investment Fund - Cat II Vide

registration no. IN/AIF2/13-14/0046 dated 17th April 2013 of infrastructure support related services obtained. Subsequently, converted to AIF - Cat I Vide registration no. IN/AIF1/13-14/0099 dated March 05, 2014.

AVFM is in the business of asset management, with a focus on alternative investment funds covering asset classes such as housing, infrastructure, fixed income, traded markets, agriculture, debt and unlisted equities. AVFM was earlier known as DHFL Venture Capital India Pvt. Ltd (DHFLVC) and is an associate company of Dewan Housing Finance Corporation Ltd (DHFL). DHFL, which owns 45.92 percent of the company, is the third largest housing finance company in India and is listed on the Bombay Stock Exchange and National Stock Exchange.

The objective of AVFM is to float funds (designed by our in-house research team) that offer ample opportunities for extracting alpha, i.e. high risk-adjusted returns. The company believes in “Value Investing” and predominantly follows this principle in all its investment-decisions across asset classes. AVFM’s investor-focused approach is guided by its belief in transparency and high standards of corporate governance.

The first 7 year fund (DREAM Fund-1) of AVFM which is registered with SEBI as a venture capital fund, focused on real estate, has seen eight exits and achieved an IRR ranging between 20 and 45 per cent despite a challenging economic scenario. The remaining five investments are slated for exit apporiximately within the next year.

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Arthveda STAR Fund which is registered with SEBI as a venture capital fund, the second fund of AVFM, is focused on mid-income housing in Tier II/III cities.

Currently, AVFM is working on several unique investment strategies for launching specially designed funds suitable for its investors across its various verticals.

ii. Promoters of the Portfolio Manager, directors and their background

(a) Promoters

Kapil Wadhawan – The Vice Chairman and Managing Director of Dewan Housing Corporation Finance Ltd. (DHFL) is one of the two promoters of the company. He has a MBA (Finance) degree from Edith Cowan University at Perth, Australia. He has indepth knowledge and understanding of real estate and financial markets in India. Sarang Wadhawan - The Vice Chairman and Managing Director of Housing Development and Infrastructure (HDIL) was the second promoter of the company. He has resigned from his directorship and holds no shares currently in the company. He has a MBA from Clarks University, Worcester, U.S.A. and is a commerce graduate from Mumbai University. Mr. Sarang Wadhawan has exposure to the real estate and housing finance industry.

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(b) Directors

Sr. No. (I)

Name of Director(s) Address &

Qualification (II)

Experience (III)

Date of Appointment

(DOA) & Previous

Position held (IV)

Other Directorships in public limited

companies (V)

1. Mr. Bikram Sen 181, Kalpataru Heights, 18th Floor, Sane Guruji Marg, Mumbai Central, Mumbai – 400011 Bachelors Degree in Arts, LLB, Masters in Philosophy from the London Business School

Over Thirty Five years of experience in investment banking and corporate finance. He has worked in senior positions in London, Paris, New York and Tokyo and has also worked as the Managing Director of Chemical Bank, Tokyo and former CEO of DHFL.

DOA 04/08/2005 Previous Position held - as per column III

• DHFL Vyasa Housing Finance Limited

• DHFL Pramerica Life Insurance Company Ltd.

• Aadhar Housing Finance Ltd

2.

Mr. Ajay Vazirani Geeta Villa, 19 Perry Cross Road, Bandra (W), Mumbai- 400050 Bachelors Degree in Commerce, LLB, Solicitor

He is a solicitor and a partner at Hariani & Co. He has substantial experience in real estate, corporate, and commercial deals related to private placement of equity and venture capital funding and has also handled matters related to dispute, court litigation and arbitration.

DOA 31/01/2008 Previous Position held - as per column III

• Dewan Housing

Finance Corporation Ltd.

• DHFL Property Services Ltd.

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3. Mr. Kapil Wadhawan

Wadhawan House, Plot No. 32/A, Union Park Road No. 5, Bandra (W), Mumbai 400050 Bachelors Degree in Commerce and MBA

He is the Chairman & Managing Director of Dewan Housing Finance Corporation Ltd, Mumbai. He has been at the forefront and has led the growth of DHFL which has become a leading mortgage lending company in India. He has in depth knowledge and understanding of real estate and the financial markets in India.

DOA 12/05/2005

Previous Position held – as per column III

• Dewan Housing Finance Corporation Ltd.

• DHFL Property Services

Ltd. • Township

Developers India Ltd.

• RKW Information Technology Ltd. • DHFL Sales and

Services Ltd. • DHFL Vysya

Housing Finance Ltd.

• Aadhar Housing Finance Ltd

• Avanse Financial Services Ltd.

• DHFL Pramerica Life Insurance Co. Ltd.

4. Mr. Narayan Seshadri Flat No. 10, 7th

Floor, Skylark CHS; Little GIBBS Road, Malabar Hill, Mumbai – 400006 Bachelors Degree in Science, Chartered Accountant.

He has more than twenty-two years of audit, consulting and industry experience and has worked in senior positions in KPMG at London, largely in the financial services and property sectors. Mr. Sheshadri has also served as a member of Forex Market Policy Committee set up by the Reserve Bank of India.

DOA 04/08/2005 Previous Position held – as per column III

• PI Industries Ltd.

• Haldy n Glass Ltd.

• Magma Fincorp Ltd. • Sundaram Investments Ltd. • Astrazenika Pharma India Ltd

• Kalpataru Power Transmission Ltd

• Wabco India Ltd. • SBI Capital Markets Ltd.

• IRIS Business Services Ltd.

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5.

Mr. Lalit Kant He has 32 years of experience in the banking industry. Initial years with SBI at various centres and was associated with Product Development at the Corporate Centre. Later with Siam Commercial Bank, PCL, (a leading bank of Thailand) for over 16 years; served as their General Manager and Country Head,India. He is Post-graduate from the Delhi School of Economics and a Certified Associate of the Indian Institute of Bankers.

DOA 02/12/2013 Previous Position held – as per column III

NA

iii. Top 10 Group companies/ firms of the Portfolio Manager on turnover basis as of

March 31, 2013 (Latest audited Financial Statement) DHFL WHPL

iv. Details of the services being offered: Discretionary / Non-Discretionary / Advisory:

The Portfolio Manager offers Discretionary, Non–discretionary and Advisory services as per individual client agreement. The offerings under the equity portfolio management services are for various investors aiming for capital appreciation over the long term (3-5) years horizon. The investments are to be deployed in India and/or abroad/global markets. (Refer Appendix – I Portfolio Details) DISCRETIONARY SERVICES:

The Portfolio Manager shall be acting in a fiduciary capacity with regard to the Client’s account consisting of investments, accruals, benefits, allotments, calls, refunds, returns, privileges, entitlements, substitutions and/or replacements or any other beneficial interest including dividend, interest, rights, bonus as well as residual cash balances, if any (represented both by quantity and in monetary value). The Portfolio Manager shall be acting both as an agent as well as a trustee of the Client’s account.

The Portfolio Manager will provide Discretionary Portfolio Management Services which shall be in the nature of investment management, and may include the responsibility of

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managing, renewing and reshuffling the portfolio, buying and selling the securities, keeping safe custody of the securities and monitoring book closures, dividend, bonus, rights etc. so that all benefits accrue to the Client’s Portfolio, for an agreed fee structure entirely at the Client’s risk; to all eligible category of investors who can invest in Indian market including NRIs, FIIs, etc.

The Portfolio Manager shall have the sole and absolute discretion to invest in respect of the Client’s account in any type of security as per executed Agreement and make such changes in the investments and invest some or all of the Client’s account in such manner and in such markets as it deems fit would benefit the Client. The Portfolio Manager’s decision (taken in good faith) in deployment of the Clients account is absolute and final and cannot 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, 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.

The offerings under the equity portfolio management services are for various investors aiming for capital appreciation over the long term (3-5) years horizon. The investments are to be deployed in India and/or abroad/global markets. (Refer Appendix – I Portfolio Details)

NON-DISCRETIONARY SERVICES:

The Portfolio Manager will provide Nondiscretionary Portfolio Management Services as per express prior instructions issued by the Client from time to time, in the nature of investment consultancy/management, and may include the responsibility of managing, renewing and reshuffling the portfolio, buying and selling the securities, keeping safe custody of the securities and monitoring book closures, dividend, bonus, rights etc. so as to ensure that all benefits accrue to the Client’s Portfolio, for an agreed fee structure entirely at the Client’s risk; to all eligible category of investors who can invest in Indian market including NRIs, FIIs, etc.

The Portfolio Manager’s decision (taken in good faith) in deployment of the Clients account is absolute and final and cannot 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 or gross negligence. The rights and obligations 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.

The offerings under the equity portfolio management services are for various investors aiming for capital appreciation over the long term (3-5) years horizon. The investments are to be deployed in India and/or abroad/global markets. (Refer Appendix – I Portfolio Details)

ADVISORY SERVICES:

The Portfolio Manager will provide Advisory Portfolio Management Services, in terms of the Regulations, which shall be in the nature of investment advisory and shall include the

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responsibility of advising on the portfolio strategy and investment and divestment of individual securities on the clients portfolio, for an agreed fee structure entirely at the Client’s risk; to all eligible category of investors who can invest in Indian market including NRIs, FIIs, etc.

The Portfolio Manager shall be solely acting as an advisor to the portfolio of the client and shall not be responsible for the investment / divestment of securities and / or an administrative activities on the Client’s portfolio. The Portfolio Manager shall, provide advisory services in accordance with such guidelines and/ or directives issued by the regulatory authorities and /or the Client, from time to time, in this regard. The portfolio manager, only if mandated by the client, may also provide the execution services along with advisory service.

The offerings under the equity portfolio management services are for various investors aiming for capital appreciation over the long term (3-5) years horizon. The investments are to be deployed in India and/or abroad/global markets. (Refer Appendix – I Portfolio Details) Minimum Investment Amount: The value of funds for which client seeks portfolio management service including Discretionary, Non-discretionary or Advisory services, as agreed between client and portfolio manager, which is subject to minimum amount as specified under SEBI Regulations or amount specified by overseas regulator, if applicable, as amended from time to time. The Client may on one or more occasion(s) or on a continual basis, make further placement of Securities and / or funds under the service. The Client shall deposit with the Portfolio Manager, an initial corpus consisting of Securities and /or funds of an amount prescribed by Portfolio Manager for a specific Discretionary/Non-discretionary Portfolio.

4. PENALTIES AND PENDING LITIGATION:

Penalties, pending litigation or proceedings, findings of inspection or investigations for which action may have been taken or initiated by any regulatory authority

All cases of penalties imposed by SEBI or the directions issued by SEBI under the Act or Rules or Regulations made thereunder. The nature of the penalty/direction

: None

Penalties imposed for any economic offence and/ or for violation of any securities laws.

: None

Any pending material litigation/legal proceedings against the portfolio manager / key personnel with separate disclosure regarding pending criminal cases, if any.

: None

Any deficiency in the systems and operations of the portfolio manager observed by SEBI or any regulatory agency.

: None

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Any enquiry/ adjudication proceedings initiated by SEBI 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 thereunder.

: None

5. DETAILS OF THE SERVICES BEING OFFERED: a. Investment Objectives and Policies: i. The present investment objectives

The Portfolio Manager provides various investment products/ services in India/abroad, based on the mandate of the Client and subject to the scope of investments as agreed upon between the Portfolio Manager and the Client in the Agreement. The investment objectives of the portfolios of the Clients depending on the Clients’ needs would be one or more of the following or any combination thereof:

a) to generate capital appreciation / regular returns by investing in equity/ derivatives / debt/ money market instruments and equity related securities and such other investment instruments as the portfolio manager deems fit in India and/or abroad/global markets.

b) to generate regular returns by primarily investing in debt and money market instruments in India and/or abroad/global markets.

c) to generate capital appreciation/ regular returns by investing in exclusively gilt securities issued by the Central/State Government securities and/or Foreign Governments, Regulators.

d) to generate capital appreciation by actively investing in equity, derivatives and equity related securities and for defensive considerations, the Portfolio Manager may invest in debt, money market instruments and derivatives in India and/or abroad/global markets.

e) to endeavour to preserve certain percentage of Investment Amount by investing in a mix of fixed income and equity derivatives in such a manner so as to secure / preserve certain percentage of Investment Amount while attempting to enhance returns by the use of equity derivatives.

f) to endeavour to earn relatively high returns by buying/selling derivatives product/ instruments in India and/or abroad/global markets.

g) to earn returns through selling options while remaining covered by an equivalent position in the underlying securities in India and/or abroad/global markets.

The Portfolio Manager will require the Client/Investor to follow all the provisions applicable to an ‘Indian Party’1 under JV/WOS Regulations or applicable to an individual under LRS.

1 Regulation 2(k) of JV/WOS Regulations defines an “Indian party” as a company incorporated in India or a body created under an Act of Parliament or a partnership firm registered under the Indian Partnership Act, 1932 making investment in a joint venture or wholly owned subsidiary abroad, and includes any other entity in India as may be notified by the Reserve Bank.

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The compliance with JV/WOS Regulations, LRS and notifications issued pursuant thereto will have to be complied with by the Portfolio Manager and the Client/Investor for making/advising investments in international securities/products.

ii. Consistent with the objective and subject to the Regulations, the corpus will be invested in any of (but not exclusively) the following securities in India and/or abroad/global market in accordance with Applicable Laws including the SEBI Regulations and laws of foreign countries:

• Equity and equity related securities including convertible bonds (including equity

linked debentures) and debentures and warrants carrying the right to obtain equity shares;

• Shares, scrips, stocks, bonds, debentures, debentures stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;

• Units or any other instrument issued by any collective investment scheme to the investors in such schemes;

• units or any other such instrument issued to the investors under any mutual fund scheme;

• Any certificate or instrument (by whatever name called), issued to any investor by any issuer being a special purposes distinct entity which possesses any debt or receivable, including mortgage debt, assigned to such entity, and acknowledging beneficial interest of such investor in such debt or receivable, including mortgage debt, as the case may be;

• Securities issued/guaranteed by the Central, State Governments, local governments and Foreign Governments (including but not limited to coupon bearing bonds, zero coupon bonds and treasury bills);

• Obligations of Banks (both public and private sector) and Development Financial Institutions like Certificate of Deposits (CDs), Coupon bearing Bonds, Zero Coupon Bonds;

• Money Market instruments permitted by SEBI/RBI and overseas regulator having jursidiction; • Certificate of Deposits (CDs); Commercial Paper (CPs); • Mutual Fund units, Fixed deposits, Bonds, debentures etc; • Derivatives including but not limited to Futures, Options, Arbitrage etc in accordance

with SEBI Regulations; • Units of venture funds and/or Alternative investement funds; • Securitisation instruments / security receipt as defined in clause (zg) of section 2 of

the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;

• Foreign securities as permissible by Regulations from time to time; • Rights or interest in securities; • Any other securities and instruments as permitted by the Regulations from time to

time; (“collectively, “Securities”) The above mentioned Securities are illustrative in nature. Investments can be made apart from the Securities in other instruments for instance, in ETFs and other eligible modes of investment as may permitted by the Regulations from time to time. Investments could also be made in listed, unlisted, convertible, non-convertible, secured, unsecured, rated or unrated securities or of any maturity and acquired through secondary market purchases,

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RBI auctions, open market sales conducted by RBI etc., Initial Public Offers (IPOs), other public offers, bilateral offers, placements, rights, offers, negotiated deals, etc. The debt category will include all types of debt securities including but not limited to Securitised Debt, Pass Through Certificates, non-convertible part of partially convertible securities, corporate debt of both public and private sector undertakings, development financial institutions, trade bills, treasury bills, floating rate debt securities and fixed income derivatives like interest rate swaps, forward rate agreements etc. as may be permitted by the Act, Rules and/or Regulations, guidelines and notifications in force from time to time (collectively “other instruments”). For the sake of ease, the terms “Securities” and “and other instruments” shall be used as a single term wherever applicable. Until such time the Portfolio Manager finds appropriate investment opportunities, the Portfolio Manager may at its discretion, in all the Portfolios, invest the Client’s funds in bank deposits, units of Mutual Funds, money market instruments and/or gilt securities issued by Central/State governments/Foreign governments. Asset Classes for deployment shall be always subject to the scope of investments as agreed upon between the Portfolio Manager and the Client in the Agreement. As stated earlier the Portfolio Manager will require the Client/Investor to follow all the provisions applicable to an ‘Indian Party’ under JV/WOS Regulations or applicable to an individual under LRS. The compliance with JV/WOS Regulations, LRS and notifications issued pursuant thereto will have to be complied with by the Portfolio Manager and the Client/Investor for making/advising investments in international securities/products.

b. Types of services / products offered:

The Portfolio Manager shall provide services to all eligible category of investors who can invest in Indian/Global Markets including resident Indians, NRIs, FIIs, etc subject to applicable laws. Investment objectives may vary from client to client. Depending on the individual Client requirements, the portfolio can also be tailor-made based on the Client’s specifications. Currently the Portfolio Manager offers following categories of different portfolios. The features of the products are given below:

i. Traded Markets Portfolio:

AVFM’s strategy for the traded markets is as follows: • To invest in various traded markets across the world in equities, debt and other securities,

including derivatives. • To invest using AVFM’s investment processes which are based on value investing

principles and are designed to generate alpha, i.e. either generate market-beating returns or providing market returns at significantly reduced risks or providing optimal returns commensurate with the liquidity requirements and investment horizon of the investors.

• To invest in index strategies, including those created by and proprietary to AVFM. • To invest in domestic valuation-weighted index strategies of large-caps, mid-caps and

small-caps. • To invest in various global valuation-weighted index strategies. • To follow an active management strategy for investing in small-and-mid-caps exploiting

the mispricing and other under-valuations in the segment due to various reasons. • To follow an active management strategy for investing in large caps exploiting various

mispriced opportunities due to idiosyncrasies of the markets.

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• To follow various valuation anomalies in the market place to design a safe portfolio which would be designed for different time durations based on the investors’ preference.

• To follow active management strategy for investing in global markets. • Please also refer Appendix -I

The investments in Traded Markets Portfolio may be made in India and/or abroad/global

markets.

ii. Debt Portfolio:

AVFM’s strategy for the Debt vertical is as follows: • To invest in AAA debt with the focus on getting optimal returns with full safety. • To invest in debt with various ratings by investing in the safest securities within a given

ratings category. The safety of the securities will be analyzed based on AVFM’s proprietary process.

• To invest in primary-issued debt of a company where AVFM’s expertise in structuring the debt would result in enhanced yield for the investors.

• To invest in listed and unlisted debt of various ratings.

The investments in Debt Portfolio may be made in India and/or abroad/global markets.

iii. Unlisted Equities Portfolio:

AVFM’s strategy for the unlisted equities is as follows: • To invest in various consumer-oriented emerging businesses with a large growth

potential, established product line, strong distribution network and brand awareness, including looking for appropriate investment opportunities in the small and medium enterprises.

• To invest in lesser known companies in the tier II/III cities of India/outside India. • To invest in upstream and downstream sectors related to housing in tier II/III cities, such

as manufacturers of construction-related materials, electrical components, bathroom fittings, kitchen fittings, home furnishings, home appliances, kitchen appliances, among others.

• To invest in service-oriented companies in emerging service sectors which are in a nascent stage but growing fast.

• To invest in promising businesses across India and other countries based on value investing principles with extensive due diligence and active monitoring of the investment until exit.

The investments in unlisted equity Portfolio may be made in India and/or abroad/global markets.

iv. Infrastructure Portfolio:

AVFM’s strategy for the infrastructure sector is as follows: • To identify small scale/short term infra investment opportunities such as in power,

roadways, telecommunication, railways, water, sewage among others.

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• To invest in infrastructure projects with a ticket size of Rs.5 crores to Rs.50 crores or its equivalent foreign currency.

• To partner with other companies for project execution or large equity deals with companies.

• In addition, to identify larger investment opportunities with larger ticket sizes and longer duration across infrastructure sub-sectors.

The investments in Infrastructure Portfolio may be made in India and/or abroad/global markets.

v. Agriculture Portfolio:

AVFM’s strategy for the agricultural sector is as follows: • To identify investment opportunities in agriculture and agri-infrastructure including urban

infrastructure, agri-corridor development. • It will include agri-industrial development, collection and storage centres, processing

centres, cold storage and logistics and supply chains, dairies, fisheries among others. • Development of agri-focused knowledge hubs, centre of excellence, enabling

infrastructure as port, road, railways, air cargo complexes. • To partner with other companies for project execution or large equity deals with

companies.

The investments in Agricultural Portfolio may be made in India and/or abroad/global markets.

vi. Housing and Real Estate Portfolio:

AVFM’s strategy for the real estate sector is as follows: • To invest in low/middle/premium and luxury segment housing projects in carefully

selected Tier I, Tier-II/III cities and metro-outskirts with target house prices ranging from Rs. 5 lacs to Rs.5 crores.

• To invest in township, commercial, mixed-use, retail, warehousing and hotels and others. • To invest in cities with large unsatisfied demand and projects with a target ticket size of

Rs.5 crores to Rs.500 crores. • Entry would be either in Greenfield stage or distressed projects which are in under

construction or completed stage, including in leased out yield-generating assets. • To invest in developmental opportunities as well as rental-yield generating opportunities. • Identify local partners who have good experience in land aggregation, obtaining

approvals required for projects from statutory agencies, construction and marketing with the help of the India sub-adviser’s contacts with the local partners.

The investments in Housing and Real Estate Portfolio may be made in India and/or abroad/global markets.

vii. Diversified Portfolio

The portfolio may have a defined tenure. The Portfolio Manager has discretion to invest in a combination of different asset classes including but not limited to listed equities, equity

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related instruments, or other unlisted securities/instruments (private equity) including but not limited to units issued by SEBI Registered Venture Capital Funds, Alternative Investment Funds, Mutual Funds and money market instruments in Indian and Global markets. The terms of tenure of the product, subscription and redemption etc. will be as per the agreement executed with the investor. The portfolio may offer third party guarantee on performance of one or more of the underlying funds/portfolios/securities /instruments.

c. Policies including the types of securities in which Portfolio Manager generally

invests / will generally invest

As mentioned above, the scope of investments shall be as agreed upon between the Portfolio Manager and the Client in the Agreement.

d. Investment Style & Philosophy Arthveda follows a value investing philosophy. This philosophy is a risk averse philosophy of investing in risky asset classes. This approach believes that markets are not always efficient and not all parts of the market are efficient at any given point of time. The objective is to identify pockets of inefficiency in the market. A highly selective process within this pocket of inefficiency through a detailed due diligence process is likely to yield investment opportunities which deliver high risk-adjusted returns or alpha. The value investing approach is a largely contrarian approach since the majority of the market is running after certain fads that are considered attractive at that point of time by the majority. However, whatever is the neglected portion of the market is likely to have the actual attractive opportunities and a rigorous selection process will yield lower risk opportunities that also yield high returns. The high returns come about because of the discount to the actual intrinsic value. The investment style would vary depending upon the specific requirements of the client and depending upon the type of the portfolio.

e. The policies for investments in associates / group companies of the Portfolio Manager and the maximum percentage of such investments therein subject to the applicable laws / regulations / guidelines The Portfolio Manager will, before investing in the securities of associate/ group companies, will evaluate such investments, the criteria for the evaluation being the same as is applied to other similar investments to be made under the Portfolio. Investments under the Portfolio in the securities of the group companies will be subject to the limits prescribed in the Agreement (if any) executed with the respective Client and the same would be subject to the applicable laws/regulations/guidelines.

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f. Minimum Investment Amount: The value of funds for which client seeks portfolio management service including Discretionary, Non-discretionary or Advisory services, as agreed between client and portfolio manager, which is subject to minimum amount as specified under SEBI Regulations or amount specified by overseas regulator, if applicable, as amended from time to time. The Client may on one or more occasion(s) or on a continual basis, make further placement of Securities and / or funds under the service. The Client shall deposit with the Portfolio Manager, an initial corpus consisting of Securities and /or funds of an amount prescribed by Portfolio Manager for a specific Discretionary/Non-discretionary Portfolio.

6. RISK FACTORS

The risk factors given below are applicable to all the portfolios offered by the Portfolio Manager. Additional portfolio specific risk factors have been separately detailed in this Document.

• Securities investments, Whether in India or abroad are subject to market risks and

there is no assurance or guarantee that the objective of investments will be achieved.

• Past performance of the Portfolio Manager does not indicate its future performance.

• Investors are not being offered any guaranteed or assured return/s i.e. either of

Principal or appreciation on the portfolio.

• Investors may note that the Portfolio Manager’s investment decisions may not be always profitable, as actual market movements may be at variance with anticipated trends.

• The liquidity of the Portfolio’s investments whether in India or abroad is

inherently restricted by trading volumes in the securities in which it invests.

• The valuation of the Portfolio’s investments whether in India or abroad, may be affected generally by factors affecting securities markets, such as price and volume volatility in the capital markets, interest rates, currency exchange rates, changes in policies of the Government, taxation laws or any other appropriate authority policies and other political and economic developments which may have an adverse bearing on individual securities, a specific sector or all sectors including equity and debt markets. There will be no prior intimation or prior indication given to the Clients when the composition/ asset allocation pattern changes.

• Trading volumes, settlement periods and transfer procedures may restrict the

liquidity of the investments made by the Portfolio. Different segments of the Indian financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances. The inability of the Portfolio Manager to make intended securities purchases due to settlement

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problems could cause the Portfolio to miss certain investment opportunities. By the same rationale, the inability to sell securities held in the Portfolio due to the absence of a well developed and liquid secondary market for debt securities would result, at times, in potential losses to the Portfolio, in case of a subsequent decline in the value of securities held in the Portfolio.

• The Portfolio Manager may, considering the overall level of risk of the

Portfolio, invest in lower rated/ unrated securities offering higher yields. This may increase the risk of the Portfolio. Such investments shall be subject to the scope of investments as laid down in the Agreement.

• In case of Dividend Yield Portfolios, returns of the Portfolio could depend on the

dividend earnings and capital appreciation, if any, from the underlying investments in various dividend yield companies. The dividend earnings of the Portfolio may, vary from year to year based on the philosophy and other consideration of each of the high-dividend yield companies. Further, it should be noted that the actual distribution of dividends and frequency thereof by the high-dividend yield companies in future would depend on the quantum of profits available for distribution by each of such companies. Dividend declaration by such companies will be entirely at the discretion of the shareholders of such companies, based on the recommendations of its board of directors. Past track record of dividend distribution may not be treated as indicative of future dividend declarations. Further, the dividend yield stocks may be relatively less liquid as compared to growth stocks.

• Securities, which are not quoted 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 choose to invest in unlisted securities that offer attractive yields. This may however increase the risk of the Portfolio. Such investments shall be subject to the scope of investments as laid down in the Agreement.

• While securities that are listed on the stock exchange carry relatively lower

liquidity risk, the ability to sell these investments is limited by the overall trading volume on the stock exchanges. Money market securities, while fairly liquid, lack a well-developed secondary market, which may restrict the selling ability of the Portfolio(s) and may lead to the investment(s) incurring losses till the security is finally sold.

• The Portfolio Manager may, subject to authorisation by the Client in writing,

participate in securities lending. The Portfolio Manager may not be able to sell/ lend out securities, which can lead to temporary illiquidity. There are risks inherent in securities lending, including the risk of failure of the other party, in this case the approved intermediary to comply with the terms of the agreement. Such failure can result in a possible loss of rights to the collateral, the inability of the Approved Intermediary to return the securities deposited by the lender and the possible loss of corporate benefits accruing thereon.

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• To the extent that the portfolio will be invested in securities denominated in foreign

currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by changes in regulations concerning exchange controls or political circumstances as well as the application to it of other restrictions on investment.

• Interest Rate Risk: As with all debt securities, changes in interest rates may affect

valuation of the Portfolios, as the prices of securities generally increase as interest rates decline and generally decrease as interest rates rise. Prices of long-term securities generally fluctuate more in response to interest rate changes than prices of short-term securities. Indian debt markets can be volatile leading to the possibility of price movements up or down in fixed income securities and thereby to possible movements in the valuations of Portfolios.

• Liquidity or Marketability Risk: This refers to the ease with which a security

can be sold at or near to its valuation yield-to-maturity (YTM). The primary measure of liquidity risk is the spread between the bid price and the offer price quoted by a dealer. Liquidity risk is today characteristic of the Indian fixed income market.

• Credit Risk: Credit risk or default risk refers to the risk that an issuer of a fixed

income security may default (i.e., will be unable to make timely principal and interest payments on the security). Because of this risk corporate debentures are sold at a higher yield above those offered on Government Securities which are sovereign obligations and free of credit risk. Normally, the value of a fixed income security will fluctuate depending upon the changes in the perceived level of credit risk as well as any actual event of default. The greater the credit risk, the greater the yield required for someone to be compensated for the increased risk.

• Reinvestment Risk: This risk refers to the interest rate levels at which cash flows

received from the securities under a particular Portfolio are reinvested. The additional income from reinvestment is the “interest on interest” component. The risk is that the rate at which interim cash flows can be reinvested may be lower than that originally assumed.

• Currency Risk: The Portfolio Manager may also invest in overseas Fixed Income

or other Securities/ instruments as permitted by the concerned regulatory authorities in India. To the extent that the portfolio of the Scheme will be invested in securities/ instruments denominated in foreign currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by changes/fluctuation in the value of certain foreign currencies relative to the Indian Rupee. The repatriation of capital to India may also be hampered by changes in regulations concerning exchange controls or political circumstances as well as the application to it of other restrictions on investment.

• Overseas Investment Risk: The Portfolio Manager may invest in overseas

securities/products in accordance with the Applicable Laws including the SEBI

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Regulations, exchange control laws and laws of overseas market in which the investment is being made. The Client would be required to follow Portfolio Manager’s instructions wherever required/needed and ensure compliance with the same in order to make such overseas investments. Such investments may be subject to several rules/regulations both Indian and overseas and in case of any non-compliance, the value of such investment may be affected. Such overseas investment carry both the regulatory/legal risks as well as risks pertaining to fluctuation in pricing/value of such investments. The currency risk, market price risk, repatriation risk, regulatory risk in India with respect to permissibility of such investments both from the perspective of SEBI and RBI are the factors attached to such overseas investments. The Portfolio Manager may have to modify its offerings from time to time keeping in view some of these risk factors. The Client while signing the portfolio management services agreement should make itself aware of the aforesaid risks.

• Risk factors specific to Fixed Defined Tenure Portfolios

The additional risk factors in this portfolio relate to lack of liquidity of instruments including units, frequency of disclosure of valuation of underlying units, valuation risks, risk of change in underlying due to changes or factors which may affect the issuer of units/ decisions of the unitholders and changes in regulation which may adversely affect the interest of the clients.Given that the Portfolio Manager may be investing in units being non- exchange traded instruments, the risks of investment in such non-exchange instruments include counterparty default risks and liquidity risks.

Some underlying sectors based on which units are issued may tend to be illiquid and the illiquidity of the sector may translate into illiquidity of the holdings and hence this portfolio may be exposed to a higher level of liquidity risks than normal portfolio risks exposed only to equity/exchange listed instruments.

• The Portfolio Manager may use various derivative products as permitted by the

Regulations. Use of derivative requires an understanding of not only the underlying instrument but also of the derivative itself. Other risks include, the risk of mispricing or improper valuation and the inability of derivatives to correlate perfectly with underlying assets, rates and indices.

• The Portfolio Manager may use derivatives instruments like Stock Index

Futures, Interest Rate Swaps, Forward Rate Agreements or other derivative instruments, as permitted under the Regulations and guidelines. Usage of derivatives will expose the Portfolio to certain risks inherent to such derivatives.

• The Portfolio and returns offered there from offered by the Investment Manager as

per Appendix – I, may compare unfavourably with benchmark indices like Nifty – Fifty index, Nifty Junior Index, CNX 200 Index, CNX Mid Cap Index, S&P BSE Mid Cap Index, CNX Small Cap Index, S&P BSE Small Cap Index, CNX 500 Index, S&P BSE 500, S&P 500 Index, Dow Jones 30 Index, S&P Midcap 400 Index Etc..on account of various domestic and global economic factors.

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• Specific Risk factors pertaining to Diversified Portfolio:

The Portfolio Manager may make substantial investment in unlisted securities/instruments (private equity). The investment in private equity may be made in the units issued by SEBI registered Venture Capital Fund, Alternative Investment Funds, Mutual Funds in Indian and Global markets or any other instrument available in the market. The major risk factors pertaining to investment in Venture Capital Fund, Alternative Investment Funds, Mutual Funds and money market instruments in Indian and Global markets are given herein below. Investors are advised to read carefully the product specific risk factors mentioned in detail, in the Agreement to be executed with Portfolio Manager, before making investment.

Nature of Investment The Portfolio Manager may invest in such Venture Funds, Alternative Investment Funds, Mutual Funds in Indian and Global markets (the Fund), which may invest in companies that are experiencing or have experienced severe financial difficulties. Many of such investments made by the Fund may be illiquid, and there can be no assurance that the Fund will be able to realize profits on its investments in a timely manner.

Since the Fund may make only a limited number of investments and these may involve a high degree of risk, poor performance by even a few of these investments could lead to adverse effects on the returns received by investors.

Restrictions on Withdrawal and Transfer Investors may not be able to voluntarily withdraw from the Fund. In addition, they may not be able to transfer any of the interests, rights, or obligations with regard to the Fund except as may be provided the agreement and the applicable regulations. Risks attached with the use of derivatives As and when the Portfolio Manager trade in the derivatives market there are risk factors and issues concerning the use of derivatives that investors should understand. Derivative products are specialized instruments that require investment techniques and risk analysis different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument but also of the derivative itself. Derivatives require the maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and the ability to forecast price or interest rate movements correctly. There is the possibility that a loss may be sustained by the portfolio as a result of the failure of another party (usually referred to as the “counter party”) to comply with the terms of the derivatives contract. Other risks in using derivatives include the risk of mis pricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indices.

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Thus, derivatives are highly leveraged instruments. Even a small price movement in the underlying security could have a large impact on their value. Also, the market for derivative instruments is nascent in India.

Trading in derivatives SEBI in terms of Securities and Exchange Board of India (Portfolio Managers) Amendment Regulations, 2002, has permitted all the Portfolio Managers to participate in the derivatives trading subject to observance of guidelines issued by SEBI in this behalf. Pursuant to this, the Portfolio Managers may use various derivative and hedging products from time to time, as would be available and permitted by SEBI, in an attempt to protect the value of the portfolio and enhance the Clients’ interest.

Accordingly, the Portfolio Manager may use derivatives instruments like Stock Index Futures, Options on Stocks and Stock Indices, Interest Rate Swaps, Forward Rate Agreements or other such derivative instruments as may be introduced from time to time, as permitted by SEBI.

• RISKS SPECIFIC TO INVESTMENTS IN PORTFOLIOS

RELATING TO INVESTMENT IN SECURITIES/INSTRUMENTS WITH UNDERLYING ASSETS ASSOCIATED WITH REAL ESTATE AND INFRASTRUCTURE Title This is a well known fact that the system of documentation of land records in India has still not been fully computerized. In the cities where the system is yet to be computerized, the maintenance and updation of land records is done manually which means that the records of all land related documents are physically updated. In some states, the process of computerization of records is underway which is a long drawn and time consuming process and because of the sheer number of records, the possibility of inaccurate records cannot be ruled out. The process and the report of title verification mainly depend on the availability of records with the respective revenue department and at sub-registrar’s office. Due to pending computerization of records, non- availability of records and errors in the records, the possibility of an error in the title report of the underlying property cannot be ruled out.

Land Acquisition The right to own property in India or abroad is subject to restrictions that may be imposed by the Government of respective countries. Particularly, the Government has a right to acquire any land or a part thereof if such acquisition is for a ‘public purpose’ and after paying the owner reasonable compensation. However, this compensation may not be at the fair market value i.e. the price that such property might have fetched if it were sold in the market.

Therefore, the real property or a part that the underlying assets represent, might be acquired by the Government, if the Government is of the view that such property has to be used for a ‘public purpose’. Further, the

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compensation paid for this purpose may not be adequate to compensate for the loss of such real property which may have an adverse impact on AVFM.

Further, the government may specify certain lands to be either allotted for specific purpose and to be developed within a specified time or are leased from municipal corporation/ port trust, industrial development corporation, development authority or similar government or quasi-governmental authority for a long term. On completion of the specific purpose or expiry of lease, the land allotted / leased shall revert to the specified Government body. Certain terms and conditions such as renewal of lease, termination of lease etc. are also attached to the allotment or lease of land and hence the letter of allotment or the lease agreement and the related documents need to be scrutinized thoroughly.

Environmental Laws Courts have implemented the “Polluter pays” principle in the field of Environment Law, whereby the person, company or industry responsible for the pollution, through the use or disposal of hazardous or toxic substance either on under or in a property, would be liable to restore the degradation of the property and the surrounding environment and compensate any victims thereby. The presence of contamination or hazardous or toxic substances, may adversely affect the investments made by AVFM in any underlying assets which may be affected thereby and hence have an adverse impact on the returns. Preventive measures are to be taken by the developer for cleansing the soil with the use of latest technology.

With the changing times and increased awareness among the people, the Government has also become pro-active and over a period of time have introduced various legislations and regulations and accordingly require various approvals from the state pollution control boards (water and air) as well as approvals from Ministry of Environment and Forest (MoEF). Violation of such approvals or non-procurement of such approvals may drastically and adversely affect the progress of the project and may lead to stoppage of project.

Coastal Regulation Zones (CRZ) also prevent development on coastal areas as the same harms or contaminates such areas near to water bodies.

Rent Control Various Countries have enacted rent control laws, which, inter alias, place restriction on the amount of rent that may be collected from tenants. If AVFM has invested in instruments where the underlying assets represent property that comes under the purview of rent control laws, this may adversely impact the returns that AVFM may get from such property and thus consequently have an adverse effect on the performance of AVFM.

Litigation and stay / injunction on development Litigation in India is long drawn and time consuming and complicated process and there is generally a preponderance of litigation with respect to property. If any property in which the investments by AVFM is subjected to any litigation (litigation may commence after AVFM has invested in the underlying asset), this

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could have an adverse impact, financial or otherwise on the investments by AVFM.

Tenancy Risk The bankruptcy or insolvency of or vacation by a significant tenant or a number of smaller tenants would have an adverse impact on the cash flows of the project. This risk is primarily faced by yield based investments.

Use of Agricultural Land and Zoning In various countries including India, certain lands are earmarked as agricultural lands, wherein only agricultural activities are permitted to be carried out. In order to carry out any non-agricultural activity, a prior approval/permission from appropriate authority is required to be obtained. This approval may be given by the authority, at its own discretion or with certain conditions. Generally, only an agriculturist (a person indulged in farming or agricultural activities) is permitted to buy agricultural property. Corporates are prohibited from acquiring agricultural properties. Hence, if the Portfolio Company in which AVFM is investing decides to acquire and utilize agricultural land, it is required to necessarily obtain a prior approval for using the land for non-agriclutural purposes. If such Portfolio Company fails to get the authority’s approval for usage for non-agricultural purposes before it has transferred in its name, then the Company would not be able to utilize such land for any non-agricultural purposes and this could affect AVFM. Properties are divided into various zones either generally or through some municipal master plan or development plan for a particular area. Such zones can be industrial zone, commercial zone, residential zone, no development zone, coastal zone etc. Development in such zones is restricted to that particular purpose, for e.g. an industrial zone will not have any residential development. If required, conversion of zone from one zone to another is required before commencement of a particular development/activity. This can be carried out only if permission for conversion is obtained in advance. For instance residential development is usually not permitted in an industrial zone unless and to the extent permitted as ancillary or incidental to the industrial development.

Investment Risks Most of the investments made by AVFM may be in unlisted companies whose securities should be considered illiquid. These investments may be difficult to value and to sell or otherwise liquidate, and the risk of investing in such companies is much greater than the risk of investing in publicly traded securities. Moreover, these unlisted companies are not regulated by the same disclosure and investor protection norms that apply to listed companies.

Nature of Investments Many of the investments made by AVFM will be illiquid, and there can be no assurance that AVFM will be able to realize profits on its investments in a timely manner.

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AVFM make only a limited number of investments and these may involve high degree of risk. Poor performance by even a few of these investments could lead to adverse effects on the returns received.

In addition, the AVFM will compete with other Investors for investments in Portfolio Companies. This may result in fewer attractive investment opportunities. The Portfolio Manager may not be able to identify and successfully close a sufficient number of high-quality investments. In addition, such competition may have an adverse effect on the length of time required to fully invest the funds of AVFM which may have a substantial adverse impact on potential returns.

Investment Selection The Portfolio Companies may or may not have been identified at the time of commencement of the Portfolio. Accordingly, prospective clients may not have an opportunity to review the Portfolio Companies or the terms of AVFM’s investments in the Portfolio Companies prior to investing in AVFM. Performance Risks A portion of the Portfolio may be invested in companies in highly competitive markets or product segments dominated by firms with substantially greater financial and possibly better technical resources than the Portfolio Companies in which AVFM invests. They may operate in product segments that face technological changes and / or may be dominated by other firms or organizations. These and other inherent business risks could affect the performance of the Portfolio Companies, and affect the value of the equity investments, thereby affecting the Portfolio.

Restriction on Withdrawal and Transfer Investors may not be able to voluntarily withdraw from the Fund or transfer any of the interests, rights, or obligations with regard to the Fund except as may be provided in the Agreement and the applicable regulations.

Dilution and valuation risk Subsequent to the investments in the underlying Portfolio Companies by the Investors of India Real Estate Securities Portfolio, the underlying Portfolio Companies may admit other new investors at a price, which may be at a discount to the prevailing asset value of AVFM’s investment. This may result in dilution of the value of the holdings by the existing Clients of India Real Estate Securities Portfolio. Further, the valuation of such investments is subjective and the value arrived at by the Portfolio Manager or an independent auditor may not reflect the true value of the investments.

Portfolio Risk There is a risk of concentration of investments especially in the asset classes relating to the Portfolio.

To mitigate this risk AVFM will seek to have a fair degree of diversification in its investments both by geographic region or asset type. AVFM will invest across

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residential, commercial and retail properties including but not limited to industrial, hotel, hospital, warehousing and other types of properties. Further, to derisk from the down cycle of the market, AVFM proposes to invest in the projects having varying exit horizons.

Entitlement Risks and Development Risk The AVFM generally invests in companies focused on developing some properties in which it is investing from a “Greenfield” start. Although AVFM intends to invest in companies and partners with developers (who could be shareholders in the respective Portfolio Companies) having good track record of handling such development projects, it will still have various development risk, delay in project risk, regulatory risk, statutory approval risk etc.

The entitlement risk associated with the purchase of land can be partly addressed by buying the land from a reliable source and partly by making the developer to bear this risk.

Development risk can be partly mitigated by providing an incentive structure to the developers for timely completion of the project and to have adequate penal clauses in order to deter him from defaulting on the completion timelines. The incentive structure envisaging disproportionate sharing of profit in the Portfolio Company and/or project, after a hurdle rate, will bring in more discipline from the developer towards the project. However, development risk on integrated township projects and Special Economic Zones would be high on account of political and regulatory risks, which could lead to significant time and cost overruns. Besides, projects where the Portfolio Company bids for the land may subsequently get delayed due to time lag in obtaining regulatory or statutory approvals. Non-availability of various building materials and shortage of labour may also lead to delay in the project as well as rise in the project cost. Wrong product-mix, competing project, development at far flung underdeveloped areas may also have an adverse impact on the investment. Cost Overruns The Portfolio Manager will work with investee companies and endeavour to awarding a fixed term contract to reputed construction agencies with the possibility of including penal clauses if there is a material delay or cost overrun in the project. In addition, the investee companies will have a separate Project Group located at the site to ensure timely implementation of the project and also to ensure that the construction quality is as per the contracted norms. Based on the same the risk in delay or cost overrun due to increased construction time expected to be is minimal. There can be opportunity loss due to delays, which may not be fully compensated by liquidated damages from the Engineering Procurement Construction (EPC) contractor. Besides, volatility or upward movement in commodity prices, especially of cement and steel, could result in cost overruns that may not be fully absorbed by the EPC contractors. Projects could also face time and cost overruns due to force majeure risks that may not be mitigated.

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FSI / FAR and Height restrictions Floor Space Index (FSI) / Floor Area Ratio (FAR) sanctioned for utilization also affects the potential development of the project as the sanctioned FSI/FAR may vary from that of the one targeted. Height restrictions also prevail in various regions depending proximity from airport and defense base areas, which affect the development of a project in terms of height. Market Cycles Timing to market cycle is very important in this sector. The investment looking favorable in the up market cycle may become a loss-making proposition in the down cycle. There will always be risk associated with the market cycle. This can be partly addressed by diversifying the portfolio across geographic region, asset type and exit time horizon.

Management and Operational Risks Reliance on the Portfolio Manager The Investment Committee advises the Portfolio Manager regarding the investments and divestments and the Clients will not be able to make investment or other decisions in the business of AVFM.

The success of AVFM will depend to a large extent upon the ability of the Portfolio Manager, to source, select, complete and realize appropriate investments. The success of AVFM will also depend upon the judgment of the Investment Committee and the Portfolio Manager in reviewing investment proposals for AVFM. The Portfolio Manager will have considerable latitude in its choice of Portfolio Companies and the structuring of investments. Accordingly, no person should invest in AVFM unless such person is willing to entrust all aspects of the Management to the Portfolio Manager.

Indemnification of Directors and Employees of the Portfolio Manager: The Client Agreement provides for indemnification of the Portfolio Manager for any and all actions, suits, proceedings, claims, damages, settlement payments, losses and liabilities arising in connection with the Client Agreement, unless they result from gross negligence or willful misconduct.

Indemnification of the Directors of the Portfolio Manager, as well as other parties, may impair the financial condition of AVFM and its ability to acquire assets or otherwise achieve its investment objective or meet its obligations.

Failure to Infuse Additional Funds: Default by Clients of their obligations to infuse additional funds in the event of the Drawdown may cause the AVFM to lack the capital necessary to make planned investments in Portfolio Companies. Such default may, consequently, cause AVFM to breach its agreement with a Portfolio Company which may result AVFM to owe damages to such company. Loss of such opportunities, as well as the payment of damages, could result in a material adverse effect on the performance of AVFM.

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India-Related Risks: Political, Economic and Social Risk: Political and Socio-Economic factors, changes in Indian law or regulations and the status of India’s relations with other countries may adversely affect the value of the AVFM. In addition, the Indian economy may differ favorably or unfavorably from other economies in several respects, including the rate of growth of gross domestic product, the rate of inflation, capital reinvestment, resource self-sufficiency, future actions of the Indian central government or the respective Indian state governments could have a significant effect on the Indian economy, which could adversely affect private sector companies, market conditions and prices and yields of the portfolio securities. The occurrence of selective unrest, or external tension, could adversely affect India’s political and economic stability and, consequently, adversely affect AVFM’s investment in Portfolio Companies.

India’s Political, Economic and Social stability is related to various factors such as the possibility of nationalization, expropriations or taxation amounting to confiscation, political changes, government regulation, social instability, diplomatic disputes or other similar developments which are beyond the control of the Portfolio Manager, could adversely affect AVFM’s investments.

Government Approvals: Certain governmental approvals, local authority approvals, including approvals from the Securities and Exchange Board of India (SEBI) or the central government may be required before AVFM can make investments in Portfolio Companies. It is likely that all or some of these approvals are required to be obtained prior to the closing of AVFM. While the Portfolio Manager expects to obtain these governmental approvals within three months from the closing of offering of AVFM, the Portfolio Manager cannot be certain that these approvals will be given by the appropriate authority. The Portfolio Manager shall not be liable in any manner if any approval from the Government is not forthcoming and/or is not obtained and / or cannot be obtained for any reason whatsoever.

AVFM operates under Indian laws and securities regulations. If policy announcements or regulations are made subsequent to this offering, which require retrospective changes in the structure or operations of AVFM, these may adversely impact the performance of AVFM.

Tax Risks: Clients invested in AVFM are subject to a number of risks related to tax matters. In particular, the tax laws relevant to AVFM are subject to change, and tax liabilities could be incurred by Clients as a result of such changes. The tax consequences of an investment in AVFM are complex, and the full tax impact of an investment in AVFM will depend on circumstances particular of each investor and the additional peculiarities associated with respect to activities of each Portfolio Company and securities issued by such Companies. Accordingly,

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prospective Clients are strongly urged to consult their tax advisors with specific reference to their own situations.

International / Financial Risk: There may also be an impact on saleability, demand-supply of the developed / developable Property based on the prevailing international and financial scenario. Risk of non-deployment of funds

The available funds may not be deployed due to non-availability of appropriate projects / promoter or due to regulatory aspects applicable to AVFM.

Others Risks: Troubled Origination The Portfolio Manager may make substantial investments in non-performing or other troubled assets, which involve a degree of financial risk and which are experiencing or are expected to experience severe financial difficulties, which may never be overcome fully. As a result, the standards by which such investments were originated, the recourse to the selling institution or the standards by which such Investments are being serviced or operated may be adversely affected. Further, Investment in properties operating under the close supervision of a mortgage lender are, in certain circumstances, subject to certain additional potential liabilities which may exceed the value of the Portfolio‘s original investment therein. For example: under certain circumstances, lenders who have inappropriately exercised control of the management and policies of a debtor may have their claims subordinated or disallowed or may be found liable for damages suffered by parties as a result of such actions.

Bankruptcy Considerations: Investment made in real estate assets operating in workout modes or under applicable bankruptcy laws could, if the Portfolio Manager or the Portfolio Company inappropriately exercises control over the management and policies of the debtors, be subordinated or disallowed and, in certain circumstances, the Portfolio Manager or the Portfolio Company could be liable to third parties. Furthermore, under certain circumstances, payments to the Portfolio in respect of such investments, and payment by the Portfolio Manager to its Clients, may be reclaimed if any such payment is later determined to have been a fraudulent conveyance or a preferential payment under concepts of applicable bankruptcy. Co-investment and Control Issues: The Portfolio Company may (i) co – invest with third parties through partnerships, Joint ventures or other entities, thereby acquiring non – controlling interests in certain Investments, (ii) rely on independent third party management with respect to the operation of an Investment or (iii) only acquire a participation in an asset underlying an investment and, as a result, may not be able to exercise control over the management of such

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investments. Although, the Portfolio Company may not have complete control over these Investments and, therefore, may have a limited ability to protect its position therein, the Portfolio Manager expects that appropriate rights will be negotiated to protect the Portfolio’s interests. Nevertheless, such Investment may involve risks in connection with such third party involvement, including the possibility that a third party or investors may have financial difficulties, resulting in a negative impact on such investment, may have economic or business interests or goals which are inconsistent with those of the Portfolio or may be in a position to take action to contrary to the Portfolio’s investment objectives.

Development Activities: The Portfolio Company may invest, directly or indirectly, in undeveloped land and certain development properties. Undeveloped land and development properties may involve more risk than properties on which the development has been completed. Undeveloped land and development properties do not generate operating revenue while costs are incurred to develop the properties and may also generate operating revenue while costs are incurred to develop the properties and may also incur certain other expenses, including property taxes and insurance. Development activities include the risks that development of the projects may be abandoned after expending recourses, construction costs of a project may exceed original estimates, occupancy and rental rates at a newly completed property may be less than anticipated and construction and leasing of a property may not be completed on schedule. Development activities are also subject to risks relating to the inability to obtain, or delays in obtaining, all necessary zoning, and land use, building, occupancy and other required government permits and authorizations.

Investment in securities: Among the Investments the Portfolio will consider are debt or equity securities of a real estate – related companies which may be undergoing restructuring or require additional capital and active management. These securities are subject to various inherent risks, including that (i) equity and debt securities fluctuate in value, often based on factors unrelated to the issuers of the securities, and such fluctuations can be pronounced (ii) such investments are generally may be subject to risks with respect to issuer, (iii) the market for these securities may be less liquid than that for other higher rated or more widely followed securities, and (iv) securities of some issuers are less liquid and more volatile than securities of other comparable issuers. Periods of economic and political uncertainty may result in further volatility that could be expected by investors in comparable and political uncertainty may result in further volatility in the value of the Investments. There may be greater volatility than value that could be expected by investors in comparable securities traded in securities markets. There can be no assurance that such investment will not be sold at prices below their acquisition costs.

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CONFLICT OF INTEREST:

AVFM will be subject to certain conflicts of interest relating to the Clients the Portfolio Manager, directors of the Portfolio Manager or members of the Investment Committee (collectively, the “Interested Parties”)

The Portfolio Manager has evolved strict corporate governance guidelines designed to achieve and maintain discipline and transparency in all business process and to avoid any potential or actual conflict of interests. These guidelines are applicable to any transaction entered into by the Portfolio Manager in respect of AVFM.

A number of examples of potential conflicts of interest are outlined below. However, the examples listed below are not intended to be exhaustive, and other types of conflicts of interest, arise during the term of AVFM.

Allocation of Investment: Where there are multiple Portfolios under AVFM, there is a possibility of conflict of interest in allocation of investment opportunities amongst the AVFM Portfolios. The Portfolio Manager, will endeavour to resolve any such conflicts in a reasonable manner taking into account, amongst other things, the investment objectives and policies of each AVFM, the remaining uninvited capital of each AVFM, the level of diversification of each AVFM, and the basis on which prior conflicts in allocating investment opportunities have been resolved. However, there can be no assurance that AVFM will be allocated any particular investment opportunities that are identified by the Portfolio Manager, Furthermore, the Portfolio Manager, shall have the right, at its discretion, to allocate any investment opportunities to their other AVFM’s or to its own portfolio.

Portfolio Company Boards: As part of its investment methodology, the Portfolio Manager may require Portfolio Companies to grant to the Portfolio Manager a seat on the board of directors of such Portfolio company. The seat can be filled by a nominee of the Portfolio Manager, which may include, among others, a director of the Portfolio Manager, though it is not necessary that a Director be nominated or appointed on the Board of such Portfolio Company. As a consequence, such persons will have fiduciary and other duties to the Portfolio Company, which may conflict with the interest of AVFM.

The attorneys, accountants, and other professionals, who perform services for AVFM may, and in some cases do, also perform services for other Interested Parties and their affiliates, the Portfolio Manager shall wherever appropriate enter into confidentiality agreement prior to such services being rendered in the Portfolio Manager’s favour. The Portfolio Manager however, does not guarantee against any such conflict of interest.

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Experience Risk The Portfolio Manager has raised funds under Venture Capital Funds Regulations of SEBI since May 2005. It has mainly invested in real estate sector. Now, the Portfolio Manager is raising funds through Portfolio Management Services division.

7. CLIENT REPRESENTATION

(i) Client Representation:

Three Years history not applicable as no funds were managed through the PMS since last three years. However first client was registered sinceFebruary 2014 for which details are given here under.as prescribed by SEBI

Category of Clients

No. of Clients Funds Managed (Rs. Cr)

Disrectionary/Non Disrcetionary (If available)

Associate/Group Cos Last 3 years

Nil Nil Nil

Others March 2014

1

0.2683

Discretionary

(ii) Complete disclosure in respect of transactions with related parties as per the

standards specified by the Institute of Chartered Accountants of India. (This disclosure is extracted from the information provided in the Audited Accounts of the AMC for the financial year ended March 31, 2013).

Related parties where control exists:

• Other related parties with whom transactions have taken place during the year

(i) Dewan Housing Finance Corporation Ltd.(DHFL) (ii) Wadhawan Holdings Pvt. Ltd.(WHPL) (iii) Dish Hospitality Pvt. Ltd.(DHPL) (iv) DHFL Ventures Trustee Company Pvt. Ltd(DHFLVT) (v) DHFL Fund (vi) Star Fund

• Key management personnel:

(i) Kapil Wadhawan - Managing Director (KW) (ii) Bikram Sen – Chief Executive Officer (BS)

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(in Rs.)

Transactions during the year

DHFL DHFL Fund

WHPL Star Fund DHFL Trustee

Dish Hosp

COPL Bikram Sen

KW Total

Salary - - - - - - - - - -

- - - - - - - 1,12,08,413 - 1,12,08,413

Managerial remuneration

- - - - - - - - - -

- - - - - - (5621032) - - (5,621,032 )

Subscription towards equity shares - - - - - -

- - - -

(1,17,00,000) - - - - - - - - (1,17,00,000)

Conversion of loan to equity - -

- - - - - - - -

- - - - - -- - - ( 19,99,400) ( 19,99,400) Management recievable - 1,88,14,728

- 2,11,55,181 - - 3,99,69,909

- - - - - - - - - (1,71,80,793)

Management fees recieved - 2,67,60,631

- 1,82,32,691 - - - - - 4,49,93,322

- (94,40,395) - - - - - - - (94,40,395)

Canteen Expenses - - - - - 804

- - - 804

- - - - - (59,963) - - - (59,963)

Reimbursement of Expenses 24,84,303 40,24,874 26,57,624 1,14,924 1,84,788 -

- - - 94,66,512

(1,124) (29,46,829) (63,746) - (1,74,298) - - - - (31,85,996)

Reimbursement of expenses (Made earlier)

30,58,973 68,72,369 26,06,446 - - - - - - 1,25,37,787

- - - - - - - - - -

Sitting Fees - - - - - - - 8000 8000 16000

- - - - - - - (16000) (16,000) (32,000)

Conveyance - - - - - - - 2000 2000 4000

- - - - - - - (4000)

(4000) (8000)

Balance as at March 31, 2013

Debit Nil 99,334 1,14,924 29,22,490 1,84,788 - - - - 33,21,536

- (29,46,829) (63,746 ) 0 (1,74,298) - - - - (31,84,872)

Credit Nil - - 1,14,924 804 - - 1,15,728

(574,670) - - - (59,963) - - (6,34,633)

Note: 1. Figures in minus (Brackets) pertain to previous year Note: 2. Star Fund debit balance of Rs. 29.22 Lacs is towards management fees recievable and credit balance of Rs. 1, 14, 924 is towards reimbursement of expenses

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8. FINANCIAL PERFORMANCE OF THE AMC

(Based on audited financial statements)

For Financial Year ended 31st March, 2013 (Rs. in

For Financial Year ended 31st March, 2012 (Rs. in

For Financial Year ended 31st March, 2011 (Rs. in

Gross Income 3.62 3.80 3.09

Expenses 9.59 3.74 2.61

Profit / (Loss) before Tax (5.96) 0.06 0.48

Provision for Taxation -- 0.01 0.02

Profit / (Loss) after Tax (5.96) 0.04 0.46

Equity Capital 2.23 4.05 2.64

Free Reserves 0.00 0.00 0.00

Net Worth 2.23 4.05 2.64

9. PERFORMANCE OF THE PORTFOLIO MANAGER FOR THE LAST THREE YEARS

(Using weighted average method)

Three Years performance not applicable as no funds were managed through the PMS since last three years. However first client was registered in month of February 2014. Henceforth performance is given here under.

Performance of Portfolio Manager as of March 2014 since inception % (On weighted average basis for client under discretionary services

7.31%

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10. NATURE OF EXPENSES (INDICATIVE):

Investors may note that, the fees/ expenses that may be charged to Clients mentioned below are indicative only. The same will vary depending upon the exact nature of the services to be provided to investors and as permissible under the applicable law.

Details of Fees and Expenses (a.) Portfolio Management or Advisory Fees This fees relates to the portfolio management services offered by Portfolio Manager

(including advisory services) to the clients. These are annually recurring fee that is a fixed charge on the quantum of the funds being managed (or) charges linked to portfolio return (or) combination of both.

(b.) Entry Load This fees includes reimbursement of expenses to defray for costs incurred towards the

preliminary expenses, set up costs, placement fees and distribution costs. (c.) Exit Load

If the redemption is done prematurely at the option of the client, the Portfolio Manager will levy the Premature Redemption charges

(d.) Performance based fee

The Portfolio Manager shall charge performance based fee only on increase in portfolio value in excess of the previously achieved highest value.

(e.) Custodian/Depository Participant fee

The charges relating to opening and operation of demat accounts, custody and transfer charges of shares, bonds and units, dematerialization and rematerialization, pledged and unpledged, custodian transaction charges, etc. will be as per the actual charged by the Depository Participant/Custodian. Any charges levied by foreign intermediaries or custodians will also be borne by client.

(f.) Brokerage and transaction cost

The Brokerage and other charges like Service tax, Stamp Duty, Security Transaction Tax, SEBI fees, Bank charges, Turnover Tax, Foreign Tax and other charges(if any), as per the rates existing from time to time, will be charged on actual.

The investment by Portfolio Manager will be done by any stock brokers and other such intermediaries and would be as per the rates negotiated between Portfolio Manager and the broker. The charges relating to brokerage will be recovered on actual by Portfolio Manager.

(g.) 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

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of affadavits, notary charges, postage and courier charges and other related charges will be recovered on actual.

(h.) Certification charges, Fund Accounting charges and Professional fee

Any charges payable for outsourced professional services like fund accounting, taxation, auditing, and any legal services, franking charges and notarizations, etc. incurred on behalf of the Client by the Portfolio Manager, will be charged from the client on actual.

(i.) Out of Pocket and Other Incidental Expenses

Charges in connection with day to day operations like courier expenses, stamp duty, document franking charges, notary charges, Bank charges, Foreign remittance charges, charges to consultants for certification for foreign remittance, other professional charges, service tax, other statutory levies, postal and telephone expenses, opening of bank, trading and demat accounts and any other out of pocket expenses incurred by the Portfolio Manager, on behalf of the client, would be recovered from the client.

Nature of Expenses (Indicative) Maximum Indicative Rate of

(I) Portfolio Management and Advisory fee**

1) Fixed Fee Up to 6% p.a. 2) Entry Load Up to 10%

3) Performance Linked Fee as permitted under the Regulations. Up to 50% of the Returns

4) Exit Load Up to 20% 5) Combination of the above methods (II) Custodian/Depository Participant Fee** At Actuals

(III) Brokerage and transaction cost At Actuals, subject to a minimum per security transaction cost.

(IV) Registrar and Transfer Agent Fee As applicable

(V) Fund Accounting Charges** At Actuals

(VI) Out of Pocket & Other Incidental Charges At Actuals

(VII)

Bank Charges, Remittance charges, FX Charges, charges to consultants for certification for foreign remittance, other professional charges.

At Actuals

(VII) Service Tax, Security Transaction Tax & Other Statutory Levies As applicable

**Basis of Charge – Indicative (any one or a combination of the below)

1 On Average Daily Assets Under Management

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2 On Capital Invested

3 On Capital Committed

4 On Average Daily Equity portion of the Portfolio

Note: 1) Average daily portfolio value means the value of the portfolio of each client

determined in accordance with the relevant provisions of the agreement executed with the client and includes both realized and unrealized gains/losses

2) The Portfolio Manager may also be entitled to recover transaction fee,

brokerage charges, straight through processing charges, demat fees, and/or disbursement made in respect of the investments (and/or disbursements) and/or any incidentals in the form of stamp duties, registration charges, professional fees, legal fees, consultancy charges, service charges etc. and such other incidental expenses, taxes and duties, charges incurred on behalf of the Client on account of the Service provided to him/her/it.

11. TAXATION

The tax implications given hereunder are broad level implications only based on the law in force and after considering the amendments made in the Income Tax Act, 1961 ("the Act") by the Finance Act, 2012 and is not exhaustive. There can be no assurance or guarantee that the tax position or proposed tax position will remain same or it may not be acceptable to the tax authorities. It is neither designed nor intended to be a substitute for professional advice. In view of the above and since the implications may differ taking into account the specific facts of each case, each investor is advised to avail the services of a professional tax consultant in determining their exact tax implications arising out of participation in the portfolio management services offered by the Portfolio Manager. Further, the tax rates specified below are for the financial year 2012–2013 (assessment year 2013-14) and the tax rates are exclusive of surcharge2 and education cess3 unless specifically stated. The Portfolio Manager shall not be responsible for assisting in or completing the fulfillment of the investor’s tax obligations.

1. Taxation of the resident domestic investors (i.e. for Individual, HUF, Indian

Companies etc.) • Dividend from Companies

Dividends declared by Indian companies are exempt from tax in the hands of the investors under Section 10(34) of the Act read with Section 115-O of the Act. The Companies would be liable to pay Dividend Distribution Tax (“DDT”) at the effective rate of 16.22% (inclusive of surcharge and cess) of the dividends at the time of distributing dividends to

2 A surcharge of 5% on income tax is applicable to domestic companies having income chargeable to tax exceeding INR 1 crore and a surcharge of 2% is applicable to foreign companies having income chargeable to tax exceeding INR 1 crore. Surcharge is not applicable to any other assessee. 3 An education cess of 3% on income-tax and surcharge is applicable to all assessees.

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the investors. Further, Dividends other than that referred to in section 115-O of the Act will be taxable as Income from Other Sources.

• Interest from Companies Interest income would be subject to tax in the hands of investors at the rate of 30% plus cess and surcharge as may be applicable.

• Income from Mutual fund units

Income on units of Mutual Funds specified under clause 10(23D) of the Act is exempt from tax under section 10(35) of the Act. However, income arising from transfer of units of Mutual Fund is not exempt under section 10(35) of the Act and would be dealt with as discussed subsequently.

2. Exit gains on transfer/ buyback of securities of Companies Income arising from purchase and sale of shares / debentures can give rise to business income or capital gains in the hands of the investors. The issue of income characterization as above is essentially a question of fact and dependent on whether the shares are held as Business/Trading assets or on Capital Account. Based on judicial decisions, all of the following factors and principles need to be considered while determining the nature of assets as above:

• Motive for the purchase of shares. • Frequency of transactions and the length of period of holding of the shares. • Treatment of the shares and profit or loss on their sale in the accounts of the assessee. • Source of funds out of which the shares were acquired – borrowed or own. • Existence of an objects clause permitting trading in shares - relevant only in the case of

corporate. • Acquisition of the shares – from primary market or secondary market. • Infrastructure employed for the share transactions by the client including the

appointment of managers, etc. Any single factor discussed above in isolation cannot be conclusive to

determine the nature of the shares transactions. All factors and principles need to be construed harmoniously. Further, the background of the investor (Professional vs. a trader in shares) would also be a relevant factor in determining the nature of the shares.

The Central Board of Direct Taxes (“CBDT”) has clarified that it is possible for a tax

payer to have two portfolios i.e., an investment portfolio comprising of securities which are to be treated as capital assets and a trading portfolio comprising of stock-in-trade which are to be treated as trading assets. Where an assessee has two portfolios, the assessee may have income under both heads i.e.,capital gains as well as business income.

CBDT has advised that no single principle would be decisive and the total effect of all

the principles should be considered to determine whether, in a given case, the shares are held by the assessee as investment or stock-in-trade.

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Considering the above, the profits or gains arising from transaction in

securities could be taxed either as “Profits or Gains of Business or Profession” under section 28 of the Act or as “Capital Gains” under section 45 of the Act.

2.1. Tax implications if the gains are characterized as capital gains 2.1.1. If the investment under the Portfolio Management Services is treated as investment,

then the profit or loss from transfer of securities shall be taxed as Capital Gains under section 45 of the Act.

2.1.2. Section 48 of the IT Act provides that income chargeable as capital gains is the

difference between the full value of the consideration received or accrued for the transfer, on the one hand, and the cost of acquisition / indexed cost of acquisition of such asset plus expenditure in relation to such transfer, on the other.

2.1.3. The capital gains will be classified as long term or short term, depending upon the

period of holding of the assets. Shares and other listed securities held for a period of more than twelve months, immediately preceding the date of transfer, will qualify as long term capital asset and upon transfer of such assets, gains will be classified as long term capital gains. In case of other securities which are held for more than thirty-six months, immediately preceding the date of transfer, will qualify as a long term asset.

2.1.4. The Capital gains should be taxed in the hands of the resident domestic investors as

under:

Nature of Income Tax rate

Short-term capital gains (listed / to be listed equity shares or units of equity oriented mutual fund and on which STT has been paid)

15%

Short-term capital gains on securities other than specified above 30%

Long-term capital gains (listed / to be listed equity shares or units of equity oriented mutual fund and on which STT has been paid)

Nil*

Long-term capital gains (listed securities other than specified above and on which STT has not been paid (Refer Note 1)

10% (without indexation) (Refer Note 2) or 20% (with indexation), whichever is lower

Long-term capital gains (unlisted securities) (Refer Note 1) 20% (with indexation)

* Long Term Capital Gains arising to an Indian Company shall be taken into account in computing the book profit (discussed in this document) and income tax payable under section 115JB of the Act. Note –

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1. No indexation benefit is available on long-term capital gains arising from transfer of bond or debentures.

2. The Indian tax authorities may seek to apply a higher rate of 20% (plus applicable surcharge and cess) without indexation on long-term capital gains arising on sale of listed bonds and debentures.

2.2. Tax implications if the gains are characterized as business income:

2.2.1.If the investment under the Portfolio Management Services is regarded as “Business/Trading Asset” then the gain/loss arising there from shall be taxed as business income on net basis in accordance with the provision of the Act.

2.2.2.Any sum paid on account of STT will be allowed as deduction in computing the

income under the head “Profit and gains of business or profession” under section 36(1)(xv) of the Act .

2.2.3.Proviso (d) to Section 43(5) of the Act provides that transactions in respect of

trading in derivatives shall not be considered as a Speculative Transaction, if it is carried out electronically on screen based systems through a stock broker or sub-broker or intermediary registered under SEBI or by banks or mutual funds on a recognized stock exchange and is supported by time stamped contract note.

Losses under the head business income:

2.2.4.In the case of loss under the head “Profits and Gains of Business or Profession”,

it can be set off against the income from any other source under the same head or income under any other head (except Salary Income) in the same assessment year. Further, if such loss cannot be set off against any other head in the same assessment year, then it will be carried forward and shall be set off against the profits and gains of the business, within the period of eight subsequent assessment years.

2.2.5.As per section 80 of the Act, no loss shall be carry forward and set off if no loss has

been determined in pursuance of income tax return filed by the investor within the due date precribed under section 139 of the Act.

3. Taxation of the non-resident investors [i.e. Non-resident Indian (“NRIs”) and

Foreign Institutional Investors (“FIIs”)] 3.1. Non-resident investors will be subject to taxation in India only if they are residents

of India or if, as a non-resident,they derive Indian source income through a permanent establishment (“PE”) or a business connection in India or receive income, including accrued income, in India or transfer a capital asset situated in India or have any other income which accrues or arises or is deemed to accrue or arise in India.

3.2. The taxation of the Non-resident investors is governed by the provisions of the Act,

read with the provisions of the DoubleTaxation Avoidance Agreement (“Treaty”) between India and the country of residence of such Non-resident investors. As per

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section 90(2) of the Act, the provisions of the Act would apply to the extent they are more beneficial than the provisions of the Treaty. Accordingly, availability of Treaty benefits should be a relevant factor in determining the Indian tax consequences in respect of such income in the hands of Non-resident investors. However, no assurance can be provided that the terms of the Treaty will not be subject to any amendment or re-interpretation in the future.

Exit gains on transfer/ buyback of securities of Companies 3.3. The issue on characterisation of exit gains on transfer/ buyback of securities

of Companies as business income or capital gains in the hands of the investors is the same as discussed in the Para ‘Taxation of resident domestic Investors’.

Tax implications if the gains are characterized as capital gains: 3.4. Capital gains arising to the Non-resident investors shall be taxable as per the

provisions of their respective Treaty in case the same are more beneficial than the provisions of the Act.

3.5. Implications under the Act If the benefits of the Treaty are not available to the Non-resident investors, they would be

liable to tax as per the Act. As discussed above, depending on the period for which the securities are held, the gains would be characterized as long-term or short-term.

The income-tax implications for the NRIs and FIIs in respect of capital gains are

mentioned below.

Nature of Income Tax rate for NRIs

Tax rate for FIIs

Short-term capital gains (listed / to be listed equity shares or units of equity oriented mutual fund and on which STT has been paid)

15% 15%

Short-term capital gains on securities other than specified above

30%

30% Long-term capital gains (listed / to be listed equity shares or units of equity oriented mutual fund and on which STT has been paid)

Nil Nil

Long-term capital gains (listed securities other than specified above and on which STT has not been paid)

10% (Refer Note 3 below)

10%

Long-term capital gains (unlisted securities) 10% (Refer

note 4 below) 10%

Notes –

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1. No indexation benefit is available to NRIs / FIIs on long-term capital gains.

2. Foreign exchange adjustment is not be available to FIIs. Further, it may not be available to NRIs also.

3. Tax Authorities may seek to apply a higher rate of 20% (plus applicable surcharge and cess rates)

4. The rate of 10% (plus applicable surcharge and cess rates) would be applicable provided the unlisted shares fall within the definition of unlisted securities as provided in section 112(1) of the Act otherwise the applicable tax rate would be 20% (plus applicable surcharge and cess rates).Technically, the term ‘security’ may not cover within its ambit, shares and securities of a private limited company in India and accordingly, the benefit of 10% concessional rate may not apply to investments in unlisted Indian private companies. Further, there are conflicting company law judgements on whether the shares / securities of unlisted Indian public companies could qualify as security.

3.6. Option for non-resident indians – Tax in case of long term capital gains

Under section 115E of the Act for non-resident Indians, income by way of long-term

capital gains in respect of specified assets purchased in foreign currency as defined under section 115C of the Act (which includes shares, debentures, deposits in an Indian Company and security issued by Central Government) is chargeable at the rate of 10% plus applicable cess. Further, no benefit of indexed cost will be available in the computation of Long Term Capital Gain. However, Non-resident Indians may opt for computation of long term capital gains as explained earlier.

Tax implications if the gains are characterized as business income:

3.7. If the gains arising from the transfer/ buyback of securities of the Companies are characterized as business income, then the tax treatment of the Non-resdent investors would be as discussed below:

Business income Treaty Available Treaty not available

% %

No Permanent Establishment in India

NIL For NRIs- 30% and For

FIIs- (assuming company) -40% on income (net basis)

attributable to business connection / operations

carried out in India

Permanent Establishment in India

For NRIs – 30% and For FIIs – 40% on income (net basis) attributable to PE

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4. Other relevant provisions under the Act:

4.1. Deemed income on investment in shares of unlisted Companies in India The Portfolio Manager may acquire, on behalf of the investors, shares/ securities of a Company for a consideration which is lower than the fair market value (“FMV”) or without consideration. Such an acquisition could trigger tax implications in the hands of the investor which are discussed in the subsequent paras.

As per the provisions of the Act, where firm or any company in which public are not substantially interested (“closely held company”) acquires the shares of another closely held company without consideration or for a consideration which is lower than the FMV by more than INR 50,000, the shortfall in consideration is taxable in the hands of the investor as Income from Other Sources (“Other Income”) at the applicable tax rates. Also, where an individual/ HUF receives any property, being shares or securities, from any persons, other than relatives, without any consideration or for a consideration which is lower than the FMV by more than INR 50,000, then the FMV of the shortfall in consideration is taxable in the hands of the acquirer as Other Income at the applicable tax rates.

The rules for determining the FMV of shares have been prescribed under the Income-tax Rules, 1962 (“Rules”). As per the Rules, the FMV of unlisted equity shares would be based on the book values of assets and liabilities, whereas, the FMV of all other shares and securities (other than equity shares) would be based on the market value of such shares and securities. Further, the cost of the acquisition of the shares acquired would be deemed to be the FMV of the shares as determined above.

4.2. Tax implications on conversion of convertible debentures / preference shares

• Conversion of debentures

Conversion of debentures of a company into shares of that company is not regarded as a transfer under the Act. Hence, no capital gains would arise in the hands of the investors on conversion of convertible debentures of a Company into equity shares. At the time of transfer of the converted equity shares, the cost of acquisition of a convertible debenture would be deemed to be the cost of acquisition of such equity shares.Further, the holding period of the equity shares would commence from the date of allotment of equity shares upon conversion. • Conversion of convertible preference shares

It is unclear whether conversion of convertible preference shares into equity shares is a taxable transfer in the hands of the investors under the Act. There are two views possible in such a scenario: a) View 1 – Where the conversion is held to be a taxable event, the tax authorities may

take the fair market value of the equity shares at the time of conversion to be the value of sale consideration for the purpose of computing capital gains. Such capital gains, if held taxable, should be subject to similar tax implications as discussed above. Additionally, the fair market value of equity shares at the time of conversion

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could be deemed to be the cost of acquisition of equity shares arising post conversion. Further, the period of holding of the equity shares for determining whether the equity shares qualify as long term or short term assets should commence from the date of allotment of the equity shares upon conversion.

b) View 2 - In the event conversion is held to be a non-taxable transfer, cost of acquisition of the convertible preference shares could be deemed to be the cost of acquisition of the equity shares. Further, the holding period of the equity shares for purposes of determining whether the equity shares qualify as long term or short term assets should commence from the date of allotment of the equity shares upon conversion.

4.3. Disallowance under section 14A of the Act

It may be noted that expenditure incurred in relation to exempt income received / dividend is subject to disallowance under section 14A of the Act.

4.4. Avoidance of tax by certain transaction in securities under the Act • According to section 94(7) of the Act, if any person buys or acquires units within a

period of three months prior to the record date fixed for declaration of dividend or distribution of income and sells or transfers the same within a period of nine months from such record date, then capital losses arising from such sale to the extent of income received or receivable on such units, which are exempt under the Act, will be ignored for the purpose of computing his income chargeable to tax.

• Further, section 94(8) of the Act that, where additional units have been issued to any

person without any payment, on the basis of existing units held by such person then the loss on sale of original units shall be ignored for the purpose of computing income chargeable to tax, if the original units were acquired within three months prior to the record date fixed for receipt of additional units and sold within nine months from such record date. However, the loss so ignored shall be considered as cost of acquisition of such additional units held on the date of sale by such person.

5. Capital Loss 5.1. Losses under the head "Capital Gains" cannot be setoff against income under any other

head. Further within the head "Capital Gains", losses arising from the transfer of long-term capital assets cannot be adjusted against gains arising from the transfer of a short-term capital asset. However, losses arising from the transfer of short-term capital assets can be adjusted against gains arising from the transfer of a long-term capital asset or a short-term capital asset.

5.2. Under section 10(38) of the Act, Long Term Capital Gains on sale of equity shares in a

company and units of Equity Oriented Fund are exempt from income tax provided such transactions are entered on a recognised stock exchange or such units are sold to the Mutual Fund and are chargeable to STT. Hence, losses arising from such transactions of sale of equity shares of a Company and units of Equity Oriented Fund entered into a recognised stock exchange and sale of units of Equity Oriented Fund to the Mutual Fund would not be eligible for set-off against taxable capital gains.

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5.3. Unabsorbed long-term capital loss (other than that relating to sale of equity shares and

units of Equity Oriented Fund as stated in para above) can be carried forward and set off against the long-term capital gains arising in any of the subsequent eight assessment years.

5.4. Unabsorbed short-term capital loss can be carried forward and set off against the

income under the head Capital Gains in any of the subsequent eight assessment years. 5.5. Provisions of section 94(7) and 94 (8) of the Act in respect of non-availability of losses

to the extent of dividend/ bonus units received, within certain specified period shall be applicable. (Refer para 4.4. of above)

5.6. As per section 80 of the Act, no loss shall be carry forward and set off if no loss has been determined in pursuance of income tax return filed by the investor within the due date precribed under section 139 of the Act.

6. Dedcution of tax at source 6.1. Under the Act, tax is required to be deducted at source for non-residents. If any tax is

required to be withheld on account of any legislation, the Portfolio Manager shall be obliged to act in accordance with the same.

6.2. In accordance with the provisions of Circular no.728 dated October 30, 1995 issued by the CBDT, in case of a non resident assessee who is a resident of a country with which India has signed a Treaty, which is in force, the tax should be deducted at source under section 195 of the Act at the rate provided in the Finance Act of the relevant year or the rate provided in the said Treaty, whichever is more beneficial to such non-resident assessee. In order to obtain the benefit of the lower rate under the Treaty, the assessee would be required to provide a certificate from his Assessing Officer stating his eligibility for the lower rate.

6.3. Section 206AA of the Act inserted by the Finance (No.2) Act, 2009, operative with effect from April 1, 2010, states that the deductee is required to mandatorily furnish his PAN to the deductor failing which the deductor shall deduct tax at source at higher of the following rates: 1. the rate prescribed in the Act; 2. at the rate in force i.e., the rate mentioned in the Finance Act; or 3. at the rate of 20%

6.4. In order to claim treaty benefits, it is provided that Tax Residency Certificate (“TRC”) containing prescribed particulars would be required to be obtained by the non-residents. However, the TRC by itself may not be sufficient for availing tax treaty benefits. Further, TRC would have to be obtained in the format prescribed by CBDT vide Notification no. S.O. 2188(E) dated 17 September 2012.

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7. Certain tax obligations under the Act It will be the responsibility of the investors to meet the advance tax obligation

installments payable and to file the income tax return on or before the due dates prescribed under the Act.

8. Minimum Alternate Tax (‘MAT’)

Under the Act, a company is liable to pay MAT on the book profits, subject to certain adjustments to be made, if such tax is higher than the tax calculated under the normal provisions of the Act and MAT will be chargeable at the rate of 18.5% plus surcharge and cess, as may be applicable.

9. Introduction of General Anti-Avoidance Rule (“GAAR”)

The Finance Act, 2012 had introduced GAAR provisions in the Act which were to be effective from the financial year 2013-2014. However, as per recent press release dated 14 January 2013, GAAR provision will be effective from the financial year 2015-2016 which empowers the tax authorities to declare any transaction as impermissible if the same has been entered with the objective of obtaining tax benefit. Accordingly, if GAAR provisions are applied by the tax authorities, the possibility of recharacterization of income, denial of treaty benefits, disregarding of structuring etc. by the tax authorities cannot be completely ruled out and accordingly, it may have adverse tax impact for the investors.

10. Wealth tax benefits

As per Section 2(ea) of the Wealth Tax Act, 1957, units, equity shares and derivatives are not to be treated as assets and hence not liable to wealth tax.

11. Securities transaction tax Securities Transaction Tax (“STT”) is applicable on transactions of purchase or sale of

equity shares in a company or a derivative or units of Equity Oriented Fund entered into on a recognized stock exchange and sale of units of Equity Oriented Fund to the Mutual Fund.

The STT rates as applicable are given in the following table:

Taxable Securities Transaction Rate Payable by - Purchase of an equity share in a company or a unit of an equity

oriented fund, where : • the transaction of such purchase is entered into in a recognised

stock exchange; and

0.1%

Purchaser

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- Sale of an equity share in a company, or a unit of an equity oriented fund, where : • the transaction of such sale is entered into in a recognised

stock exchange; and • the contract for the sale of such share is settled by the actual

delivery or transfer of such share.

0.1%

Seller

- Sale of an equity share in a company or a unit of equity oriented fund, where : • the transaction of such sale is entered into in a recognised

stock exchange; and • the contract for the sale of such share is settled otherwise

than by the actual delivery or transfer of such share.

0.025%

Seller

- Sale of an option in securities . 0.017% Seller

- Sale of Option in securities, where option is exercised 0.125% Purchaser

- Sale of futures in securities 0.017% Seller

- Sale of unit of an equity oriented fund to the Mutual Fund. 0.25% Seller

- Sale of unlisted equity shares under an offer for sale to the public Included in an initial public offer and where such shares are subsequently listed on a recognised stock exchange.

0.2% Seller

12 TAX IMPLICATION WITH RESPECT TO INTERNATIONAL INVESTING

Tax implications for investor investing in foreign securities 12.1 Tax implication if Asset is characterised as Business Asset:

The income shall be taxable as business income. The period or place of transaction are

not relevant. 12.2 Tax implication if the Asset is characterised as Capital Asset:

If the securities are held for the period more than a year, the income on sale of investment in shares of foreign countries shall be taxed as Long Term Capital Gains, irrespective of the fact that the same is transacted through off-shore exchange. Further, in case of Long term Capital Asset, indexation benefit shall also be available on the cost of acquisition of assets (other than debentures / bonds) thereby reducing the amount of chargeable capital gains. The tax rate is also a beneficial 20%.

12.3 Tax Exemption on income from Investment in Foreign Companies:

Section 10 of the Income Tax Act, 1961 provides for Incomes which do not form part of Total Income. Section 10 (34) of Income Tax Act, 1961 provide exemption to income received by way of dividend only from a domestic company in the hands of the recipient, however all income received by way of dividend from a foreign company is liable to be taxed in India. Therefore, Dividend received from foreign Company is taxed under the head "Income from other sources" under the Indian Income Tax Act of 1961. Similarly

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exemption u/s 10(38) on LTCG on sale of investment shall not be available on the investment made in foreign countries as the same are not subject to STT and thus is also taxable.

12.4 Provision for carry forward and set off of losses:

12.4.1 If Asset is characterised as Business Asset: The loss on the sale investment shall be business loss and thus can be freely set off

against:

1. Any income from other business of in year of loss 2. Any income from other heads of income (except salaries) in year of loss 3. Shall be eligible for carry forward and set off for next 8 years against any business

income.

Further profit on the sale of investment can equally be eligible for set off against the brought forward and current year’s loss from other business.

12.4.2 If the Asset is characterised as Capital Asset:

(a) in case of short-term capital loss, it shall be set off against both short term capital gains and long term capital gains, of current year and can be carry forward and set off for next 8 years. (b) in case of long-term capital loss, it shall be set off against long term capital gains, of current year and can be carry forward and set off for next 8 years.

Tax Rates: Rate of Taxation for dividend / other capital payment in the source country will depend on the local laws of the country as well as any applicable Double Taxation Avoidance Agreement (DTAA), if any between Indian and the foreign country. In India, foreign dividend will be taxed as per the applicable slabs. Any withholding taxes paid by the payer may be available as credit for the investor in India. Client would require the tax withholding certificate issued by the payer to claim the credit against Indian Taxes Applicable tax slab: In case of Business Income – 30% In case of Short term capital gain – 30% In case of Long term capital gain – 20%

12. ACCOUNTING POLICIES FOLLOWED BY THE PORTFOLIO MANAGER WHILE ACCOUNTING FOR THE PORTFOLIO INVESTMENTS OF THE CLIENTS

Accounting under the respective portfolios is being done in accordance with general accounting principles and more specifically in line with the SEBI (Mutual Fund) Regulations, as amended from time to time. (As SEBI (Portfolio Managers) Rules and Regulations do not explicitly lay down detailed accounting policies, such policies, which

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are laid down under SEBI (Mutual Fund) Regulations, are being followed.) The existing policies are: - a) Dividend income earned by the Portfolio shall be recognized, not on the date the

dividend is declared, but on the date the share is quoted on an ex- dividend basis. For investments, which are not quoted on the stock exchange, dividend income would be recognized on the date of declaration of dividend. In case of listed securities, the dividend receivable from such securities in which the portfolio has invested is directly credited to the client's mandated bank account and is not reinvested in the portfolio. The same is disclosed as an outflow entry in the portfolio on a periodic basis.

b) In respect of all interest-bearing investments, income shall be accrued on a day-to-

day basis as it is earned. Therefore, when such investments are purchased, interest paid for the period from the last interest due date up to the date of purchase should not be treated as a cost of purchase but shall be debited to Interest Recoverable Account. Similarly, interest received at the time of sale for the period from the last interest due date up to the date of sale must not be treated as an addition to sale value but shall be credited to Interest Recoverable Account.

c) In determining the holding cost of investments and the gains or loss on sale of

investments, the “First In First Out” method shall be followed for each security. d) Transactions for purchase or sale of investments shall be recognized as of the trade

date and not as of the settlement date, so that the effect of all investments traded during a financial year are recorded and reflected in the financial statements for that year. Where investment transactions take place outside the stock market, for example, acquisition through private placement or purchases or sales through private treaty, the transaction would be recorded, in the event of a purchase, as of the date on which the portfolio obtains an enforceable obligation to pay the price or, in the event of a sale, when the portfolio obtains an enforceable right to collect the proceeds of sale or an enforceable obligation to deliver the instruments sold.

e) Bonus shares to which the portfolio becomes entitled shall be recognized only when

the original shares on which the bonus entitlement accrues are traded on the Stock Exchange, Mumbai on an ex-bonus basis. Similarly, rights entitlements shall be recognized only when the original shares on which the right entitlement accrues are traded on the stock exchange on an ex-right basis.

f) The cost of investments acquired or purchased shall include grossed-up brokerage,

stamp charges and any charge customarily included in the broker’s contract note except for Securities Transaction Tax (STT). In respect of privately placed debt instruments any front-end discount offered may be reduced from the cost of the investment.

g) Underwriting commission, if any, shall be recognized as revenue only when there is

no devolvement on the Portfolio. Where there is devolvement on the Portfolio, the

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full underwriting commission received and not merely the portion applicable to the devolvement shall be reduced from the cost of the investment.

h) Management Fees and Custody fees are accrued in accordance with the Portfolio

Management Services Agreement. Securities Transaction Tax (STT) is recognized on the trade day when the securities are accounted for on which such Securities Transaction Tax is levied.

13. INVESTORS SERVICES:

(i) Name, address and telephone number of the Investor Relation Officer, who shall attend to the investor queries and complaints:

Ms. Priyanshi Swaroop – Investor Relations Officer

Address: Ground Floor, HDIL Towers,

Anant Kanekar Marg, Bandra(E) Bandra, Mumbai – 51 Tel no.91-22- 67748548/500

Email ID: investor.relations@arthveda.co.in

Additionally, the communication may also be addressed to:

Mr. Satish Sawnani – Head Compliance

Address: Ground Floor, HDIL Towers, Anant Kanekar Marg, Bandra(E) Bandra, Mumbai – 51 Tel no.91-22- 67748594

Email ID: satish.sawnani@arthveda.co.in

(ii) Grievance redressal and dispute settlement mechanism:

The Client shall send a written complaint/email addressed to the Investor Relation officer. The Client may also send the e-mail at ir.pms@arthveda.co.in and on receipt of the complaint, the Portfolio Manager, on a best effort basis, may resolve the complaint, within 30 days. In the event the complaint is not resolved within 30 days, the Client and the Portfolio Manager or any person designated by the Portfolio Manager shall endeavor to resolve the complaint by mutual dialogue.

The Investment Relation Officer(s) will be the interface between the Portfolio Manager and the Client. Alternatively in case the Client is not satisfied with the redressal by the Portfolio Manager or otherwise, the Client may lodge the complaint on SEBI’s web based complaints redress system (SCORES).

All disputes, differences, claims and questions whatsoever arising from (i) the Agreement between the Client and the Portfolio Manager and (ii) the services to be rendered by the Portfolio Manager and/or their respective representatives shall be attempted to be resolved by discussions between the Parties and amicable settlement. In case the disputes remain unsettled, the same shall be referred to a sole

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arbitrator and such arbitration shall be in accordance with and subject to the provisions of The Arbitration and Conciliation Act 1996, or any statutory modification or re-enactment thereof for the time being in force. Such Arbitration proceedings shall be held at Mumbai.

Date: April 11, 2014

Place: Mumbai Name and Signature of the Directors of the Portfolio Manager signing the Disclosure Document

Sr. No.

Name of Directors

Signature

1.

Mr. Bikram Sen

2.

Mr. Lalit Kant

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14. SEBI FORM - C

FORM C

SECURITIES AND EXCHANGE BOARD OF INDIA (PORTFOLIO MANAGERS) REGULATIONS, 1993

(Regulation 14) We confirm that: (i) the Disclosure Document for Arthveda Fund Management Private Limited forwarded to

Securities and Exchange Board of India (SEBI) is in accordance with the SEBI (Portfolio Managers) Regulations, 1993 and the guidelines and directives issued by SEBI from time to time;

(ii) the disclosures made in the Disclosure Document for Arthveda Fund Management Private Limited are true, fair and adequate to enable the investors to make a well informed decision regarding entrusting the management of the portfolio to us / investment in the Portfolio Management Scheme;

(iii) the Disclosure Document, has been duly certified by Mr B. B. Jain, Proprietor – M/s. B. B. Jain & Associates; Charetered Accountant, Registration Number – 103889W, having their office at 301, Girnar Appts, Off Mandepashwar Road, Borivali – West, Mumbai - 400092; Tel. No. 022 -28905267 on April 11, 2014. The certificate issued by B. B. Jain & Associates certifying that the disclosures made in the Disclosure Document for Arthveda Fund Management Private Limited are in conformity with the requirement of Regulation 14(2)(b) of SEBI (Portfolio Managers) Regulations, 1993 and are true, fair and adequate to enable the investors to make a well informed decision is enclosed.

Signature of the Principal Officer : Sd/-

Name & address of the Principal Officer : Mr. Subroto Chakraborty Ground Floor, HDIL Towers, Anant Kanekar Marg, Bandra(E), Mumbai 400051

Place : Mumbai Dated : April 11, 2014

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15. APPENDIX - I

Contents Offerings under Equity Portfolio Management Service: ....................................................................... 59

INDIA EQUITY PRODUCTS ............................................................................................................. 59

1. ARTHVEDA BETAPLUS STRATEGY .................................................................................................. 59

1.1. ARTHVEDA BETAPLUS INDIA LARGECAP ................................................................. 59

1.2. ARTHVEDA BETAPLUS INDIA MIDCAP ....................................................................... 59

1.3. ARTHVEDA BETAPLUS INDIA SMALLCAP ................................................................. 60

1.4. ARTHVEDA BETAPLUS INDIA ALLCAP ....................................................................... 60

2. ARTHVEDA ALPHA STRATEGY ....................................................................................................... 60

2.1. ARTHVEDA ALPHA INDIA L50 ....................................................................................... 60

2.2. ARTHVEDA ALPHA INDIA L50 JUNIOR ....................................................................... 61

2.3. ARTHVEDA ALPHA INDIA L100 ..................................................................................... 62

2.4. ARTHVEDA ALPHA INDIA M100 ................................................................................... 62

2.5. ARTHVEDA ALPHA INDIA S100 ..................................................................................... 63

2.6. ARTHVEDA ALPHA INDIA LMC200 .............................................................................. 63

2.7. ARTHVEDA ALPHA INDIA MSC200 ............................................................................... 64

2.8. ARTHVEDA ALPHA INDIA ALLCAP300 ....................................................................... 64

2.9. ARTHVEDA ALPHA INDIA 500 ....................................................................................... 65

3. ARTHVEDA ALPHAPLUS STRATEGY ............................................................................................... 65

3.1. ARTHVEDA ALPHAPLUS INDIA L10 ............................................................................. 65

3.2. ARTHVEDA ALPHAPLUS INDIA L10 JUNIOR .............................................................. 66

3.3. ARTHVEDA ALPHAPLUS INDIA L50 ............................................................................. 67

3.4. ARTHVEDA ALPHAPLUS INDIA M50 ............................................................................ 67

3.5. ARTHVEDA ALPHAPLUS INDIA S50 ............................................................................. 68

3.6. ARTHVEDA ALPHAPLUS INDIA LMC100 ..................................................................... 68

3.7. ARTHVEDA ALPHAPLUS INDIA MSC100 ..................................................................... 69

3.8. ARTHVEDA ALPHAPLUS INDIA ALLCAP100 .............................................................. 69

INTERNATIONAL EQUITY PRODUCTS ........................................................................................ 70

4. ARTHVEDA ALPHA STRATEGY ....................................................................................................... 70

4.1. ARTHVEDA ALPHA US L500 ........................................................................................... 70

4.2. ARTHVEDA ALPHA US L30 ............................................................................................. 70

4.3. ARTHVEDA ALPHA US M400 .......................................................................................... 71

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4.4. ARTHVEDA ALPHA US S600 ........................................................................................... 72

4.5. ARTHVEDA ALPHA UK L100 .......................................................................................... 72

4.6. ARTHVEDA ALPHA EURO L50 ....................................................................................... 73

4.7. ARTHVEDA ALPHA EUROPE L400 ................................................................................ 73

4.8. ARTHVEDA ALPHA JAPAN L225 ................................................................................... 74

4.9. ARTHVEDA ALPHA GLOBAL ......................................................................................... 74

5. ARTHVEDA ALPHAPLUS STRATEGY ............................................................................................... 75

5.1. ARTHVEDA ALPHAPLUS US L50 ................................................................................... 75

5.2. ARTHVEDA ALPHAPLUS US M50 .................................................................................. 75

5.3. ARTHVEDA ALPHAPLUS US S50 ................................................................................... 76

5.4. ARTHVEDA ALPHAPLUS UK L20 ................................................................................... 76

5.5. ARTHVEDA ALPHAPLUS EURO L10 ............................................................................. 77

5.6. ARTHVEDA ALPHAPLUS EUROPE L50 ......................................................................... 77

5.7. ARTHVEDA ALPHAPLUS JAPAN L50 ............................................................................ 78

5.8. ARTHVEDA ALPHAPLUS GLOBAL50 ............................................................................ 78

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Offerings under Equity Portfolio Management Service: INDIA EQUITY PRODUCTS

1. ARTHVEDA BETAPLUS STRATEGY

1.1. ARTHVEDA BETAPLUS INDIA LARGECAP Introduction The BetaPlus India Largecap Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda BetaPlus India Largecap product is CNX 100 Index or S&P BSE 100 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading indexes. BetaPlus India Largecap portfolio will invest in 100 Large-cap stocks from the largest and most liquid quality stocks. It will use Fundamentals to screen stocks on economic risk and financial risk parameters. The portfolio will be a market-cap weighted portfolio. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. BetaPlus India Largecap portfolio will have a periodic review.

1.2. ARTHVEDA BETAPLUS INDIA MIDCAP Introduction The BetaPlus India Midcap Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda BetaPlus India Midcap product is CNX Midcap Index or S&P BSE Mid Cap Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid Midcap stocks which also happen to be part of India’s leading Midcap indexes. BetaPlus India Midcap portfolio will invest in 100 midcap stocks from the largest and most liquid quality midcap stocks universe. It will use Fundamentals to screen stocks on economic risk and financial risk parameters. The portfolio will be a market-cap weighted portfolio. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. BetaPlus India Midcap portfolio will have a periodic review.

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1.3. ARTHVEDA BETAPLUS INDIA SMALLCAP Introduction The BetaPlus India Smallcap Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda BetaPlus India Smallcap product is CNX Smallcap Index or S&P BSE Small Cap Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid Smallcap stocks which also happen to be part of India’s leading Smallcap indexes. BetaPlus India Smallcap portfolio will invest in 100 Smallcap stocks from the largest and most liquid quality Smallcap stocks universe. It will use Fundamentals to screen stocks on economic risk and financial risk parameters. The portfolio will be a market-cap weighted portfolio. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. BetaPlus India Smallcap portfolio will have a periodic review.

1.4. ARTHVEDA BETAPLUS INDIA ALLCAP Introduction The BetaPlus India Allcap Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda BetaPlus India Allcap product is CNX 500 Index or S&P BSE 500 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid pool of stocks which also happen to be part of India’s leading indexes. BetaPlus India Allcap portfolio will invest in 300 of fewer stocks from the largest and most liquid quality stocks universe. It will use Fundamentals to screen stocks on economic risk and financial risk parameters. The portfolio will be a market-cap weighted portfolio. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. BetaPlus India Allcap portfolio will have a periodic review.

2. ARTHVEDA ALPHA STRATEGY

2.1. ARTHVEDA ALPHA INDIA L50 Introduction The Alpha India L50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon).

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Benchmark The benchmark for ArthVeda Alpha India L50 product is NIFTY 50 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading indexes. Nifty is composed of more than 20 sectors which contribute significantly to the Indian economy. Nifty represents nearly 67% of the total market capitalization of Indian stock market. The companies in Nifty hold dominant position in their sectors and are typically either #1 or #2 in their respective markets. As such these companies have significant competitive advantages in their business and these are reflected in their fundamentals. Alpha L50 will invest in all largest and most liquid 50 stocks and will remain invested in them all the time. The portfolio will have a maximum stock weight of 4%-6% and minimum weight of 0.5%-0.75% for any stock within the 50 stocks universe. It will use Fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha L50 will have annual rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations. Alpha L50 will have near zero taxes because of long term nature of gains since the rebalancing will be done after completion of one year to satisfy the condition of calculation of Long Term Capital Gains Tax. Alpha L50 will have low turnover because of annual rebalancing and hence lower transaction cost.

2.2. ARTHVEDA ALPHA INDIA L50 JUNIOR Introduction The Alpha India L50 Junior Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha India L50 Junior product is NIFTY JUNIOR Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading indexes. Nifty Junior is composed of more than 15 sectors which contribute significantly to the Indian economy. Nifty Junior represents nearly 13% of the total market capitalization of Indian stock market. The companies in Nifty Junior hold dominant position in their sectors and are typically leading player in their respective markets. Alpha India L50 Junior will invest in all largest and most liquid 50 stocks which are among the top 100 largest and most liquid stocks but are excluded from Alpha India L50 universe. The portfolio will have a maximum stock weight of 4%-6% and minimum weight of 0.5%-0.75% for any stock. It will use Fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha India L50 Junior will have annual rebalancing where the overvalued stocks will be reallocated to the lower weight

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allocations and the undervalued stocks will be allocated to the higher weight allocations. Alpha India L50 Junior will have near zero taxes because of long term nature of gains since the rebalancing will be done after completion of one year to satisfy the condition of calculation of Long Term Capital Gains Tax. Alpha India L50 Junior will have low turnover because of annual rebalancing and hence lower transaction cost.

2.3. ARTHVEDA ALPHA INDIA L100 Introduction The Alpha INDIA L100 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha INDIA L100 product is CNX100 index or S&P BSE100 Index Investment Objective, Asset allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading indexes. Alpha INDIA L100 will invest in best 100 or fewer stocks from the largest and most liquid 100 large-cap stocks universe. It will use Fundamentals and the degree of under-valuation for deciding the weights. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The portfolio will either be an equi-weight portfolio or a well-diversified portfolio with allocation weights decided as per the portfolio manager’s discretion. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. During rebalancing the portfolio will be realigned.

2.4. ARTHVEDA ALPHA INDIA M100 Introduction The Alpha India M100 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha India M100 product is CNX Midcap Index or S&P BSE Mid Cap Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid Midcap stocks which also happen to be part of India’s leading Midcap indexes. Alpha India M100 will invest in 100 or fewer midcap stocks from the largest and most liquid quality midcap stocks universe. It will use Fundamentals and the degree of under-valuation for deciding the weights. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Portfolio manager at his discretion may apply additional criteria for greater financial

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prudence. The portfolio will either be an equi-weight portfolio or a well-diversified portfolio with allocation weights decided as per the portfolio manager’s discretion. Alpha India M100 will have regular rebalancing as per the discretion of the portfolio manager. The annually rebalanced Alpha India M100 portfolio will have near zero taxes because of long term nature of gains since the rebalancing will be done after completion of one year to satisfy the condition of calculation of Long Term Capital Gains Tax. Also, the annually rebalanced Alpha India M100 will have low turnover and hence lower transaction cost.

2.5. ARTHVEDA ALPHA INDIA S100 Introduction The Alpha India S100 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha India S100 product is CNX Smallcap Index or S&P BSE Small Cap Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid Smallcap stocks which also happen to be part of India’s leading smallcap indexes. Alpha India S100 will invest in 100 or fewer Smallcap stocks from the largest and most liquid quality Smallcap stocks universe. It will use Fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. The portfolio will either be an equi-weight portfolio or a well-diversified portfolio with allocation weights decided as per the portfolio manager’s discretion. Alpha India S100 will have regular rebalancing frequency based on portfolio manager’s discretion. The annually rebalanced Alpha India S100 portfolio will have near zero taxes because of long term nature of gains since the rebalancing will be done after completion of one year to satisfy the condition of calculation of Long Term Capital Gains Tax. Also, the annually rebalanced Alpha India S100 will have low turnover and hence lower transaction cost.

2.6. ARTHVEDA ALPHA INDIA LMC200 Introduction The Alpha INDIA LMC200 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha INDIA LMC200 product is CNX 200 Index or S&P BSE 200 Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading large-cap and midcap indexes. Alpha INDIA

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LMC200 will invest in best 50 or fewer stocks from Alpha India L50 universe, best 50 or fewer stocks from Alpha India L50 Junior universe and best 100 or fewer stocks from Alpha India M100 universe to constitute a well-diversified portfolio of 200 or fewer stocks from Large-cap & Midcap stocks universe. It will use Fundamentals and the degree of under-valuation for deciding the weights. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The Alpha INDIA LMC200 will either be an equi-weight portfolio or a well-diversified portfolio with allocation weights decided as per portfolio manager’s discretion. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. During rebalancing the portfolio will be realigned.

2.7. ARTHVEDA ALPHA INDIA MSC200 Introduction The Alpha INDIA MSC200 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha INDIA MSC200 product is CNX Midcap Index or S&P BSE Mid Cap Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading midcap and smallcap indexes. Alpha INDIA MSC200 will invest in best 100 or fewer stocks from Alpha India M100 universe and best 100 or fewer stocks from Alpha India S100 universe to constitute a well diversified 200 or fewer stocks portfolio from Mid-cap & Smallcap stocks universe. It will use Fundamentals and the degree of under-valuation for deciding the weights. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The Alpha India MSC200 will either be an equi-weight portfolio or a well-diversified portfolio with allocation weights decided as per portfolio manager’s discretion. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. During rebalancing the portfolio will be realigned.

2.8. ARTHVEDA ALPHA INDIA ALLCAP300 Introduction The Alpha INDIA ALLCAP300 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha INDIA ALLCAP300 product is CNX 500 Index or S&P BSE 500

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Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. Alpha India AllCap300 will invest in best 100 or fewer stocks from Alpha India L100 universe, best 100 or fewer stocks from Alpha India M100 universe and best 100 or fewer stocks from Alpha India S100 to constitute a well diversified 300 or fewer stocks portfolio from Large-cap, Mid-cap & Smallcap stocks universe. It will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. The portfolio will either be an equi-weight portfolio or a well-diversified portfolio with allocation weights decided as per portfolio manager’s discretion. Alpha INDIA ALLCAP300 will have regular rebalancing frequency based on portfolio manager’s discretion. The annually rebalanced Alpha INDIA ALLCAP300 portfolio will have near zero taxes because of long term nature of gains since the rebalancing will be done after completion of one year to satisfy the condition of calculation of Long Term Capital Gains Tax. Also, the annually rebalanced Alpha INDIA ALLCAP300 will have low turnover and hence lower transaction cost.

2.9. ARTHVEDA ALPHA INDIA 500 Introduction The Alpha INDIA 500 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha INDIA 500 product is CNX 500 Index or S&P BSE 500 Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest in best 500 or fewer stocks chosen from a broad based pool of stocks which also happen to be part of India’s leading indexes. CNX 500 represents nearly 97% of the total market capitalization of Indian stock market. It will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. The portfolio will be a well-diversified portfolio with allocation weights decided as per portfolio manager’s discretion based on degree of undervaluation of each stock. Alpha INDIA 500 will have regular rebalancing frequency based on portfolio manager’s discretion.

3. ARTHVEDA ALPHAPLUS STRATEGY

3.1. ARTHVEDA ALPHAPLUS INDIA L10 Introduction The Alphaplus India L10 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha India L50 strategy.

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Benchmark The benchmark for ArthVeda Alphaplus India L10 product is NIFTY 50 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in top 10 stocks chosen from a universe of largest and most liquid 50 stocks which also happen to be part of India’s leading indexes. The top 10 stocks are chosen on the basis of ArthVeda’s Alphaplus Strategy. Alphaplus India L10 will invest in all top 10 stocks chosen on the basis of Alphaplus strategy. The L10 will be an equi-weight portfolio of 10 stocks at portfolio creation or rebalancing. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. During rebalancing the portfolio will be realigned to equi-weight portfolio of top 10 stocks of Alpha India L50 portfolio. The L10 portfolio is expected to deliver returns higher than Nifty50 over long run. Although strategy is expected to provide higher return than the Alpha India L50 strategy but it also possesses higher risk than the Alpha India L50 portfolio.

3.2. ARTHVEDA ALPHAPLUS INDIA L10 JUNIOR Introduction The AlphaPlus India L10 Junior Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha India L50 Junior strategy. Benchmark The benchmark for ArthVeda AlphaPlus India L10 Junior product is NIFTY JUNIOR Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading indexes. AlphaPlus India L10 Junior will invest in selected top 10 stocks having highest degree of undervaluation. The L10 Junior will be an equi-weight portfolio of these 10 stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. During rebalancing the portfolio will be realigned to equi-weight portfolio of top 10 stocks of Alpha India L50 Junior. The L10 Junior portfolio is expected to deliver returns higher than Nifty Junior over long run. Although strategy is expected to provide higher return than the Alpha India L50 Junior strategy but it also possesses higher risk than the Alpha India L50 Junior portfolio.

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3.3. ARTHVEDA ALPHAPLUS INDIA L50 Introduction The AlphaPlus India L50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha India L100 strategy. Benchmark The benchmark for ArthVeda AlphaPlus India L50 product is CNX100 index or S&P BSE100 Index Investment Objective, Asset allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading indexes. AlphaPlus India L50 will be a concentrated portfolio of selected top 50 or fewer stocks having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha India L100 strategy but it also possesses higher risk than the Alpha India L100 portfolio.

3.4. ARTHVEDA ALPHAPLUS INDIA M50 Introduction The AlphaPlus India M50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha India M100 strategy. Benchmark The benchmark for ArthVeda AlphaPlus India M50 product is CNX Midcap Index or S&P BSE Mid Cap Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid Midcap stocks which also happen to be part of India’s leading midcap indexes. AlphaPlus India M50 will be a concentrated portfolio of selected top 50 or fewer stocks having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off

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between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha India M100 strategy but it also possesses higher risk than the Alpha India M100 portfolio.

3.5. ARTHVEDA ALPHAPLUS INDIA S50 Introduction The AlphaPlus India S50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha India S100 strategy. Benchmark The benchmark for ArthVeda AlphaPlus India S50 product is CNX Smallcap Index or S&P BSE Small Cap Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid Smallcap stocks which also happen to be part of India’s leading Smallcap indexes. AlphaPlus India S50 will be a concentrated portfolio of selected top 50 or fewer stocks having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha India S100 strategy but it also possesses higher risk than the Alpha India S100 portfolio.

3.6. ARTHVEDA ALPHAPLUS INDIA LMC100 Introduction The AlphaPlus INDIA LMC100 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha India LMC200 strategy. Benchmark The benchmark for ArthVeda AlphaPlus INDIA LMC100 product is CNX 200 Index or S&P BSE 200 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading large-cap and midcap indexes. AlphaPlus

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India LMC100 will be a concentrated portfolio of selected best 25 or fewer stocks from Alpha India L50 universe, best 25 or fewer stocks from Alpha India L50 Junior universe and best 50 or fewer stocks from Alpha India M100 universe. The selected stocks will have highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha India LMC200 strategy but it also possesses higher risk than the Alpha India LMC200 portfolio.

3.7. ARTHVEDA ALPHAPLUS INDIA MSC100 Introduction The AlphaPlus INDIA MSC100 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha India MSC200 strategy. Benchmark The benchmark for ArthVeda AlphaPlus INDIA MSC100 product is CNX Midcap Index or S&P BSE Mid Cap Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of India’s leading midcap and smallcap indexes. AlphaPlus India MSC100 will be a concentrated portfolio of selected best 50 or fewer stocks from Alpha India M100 universe and best 50 or fewer stocks from Alpha India S100 universe. The selected stocks will have highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha India MSC200 strategy but it also possesses higher risk than the Alpha India MSC200 portfolio.

3.8. ARTHVEDA ALPHAPLUS INDIA ALLCAP100 Introduction The AlphaPlus India ALLCAP100 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha India Allcap300 strategy.

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Benchmark The benchmark for ArthVeda Alpha India ALLCAP100 product is CNX 500 Index or S&P BSE 500 Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. AlphaPlus India Allcap100 will be a concentrated portfolio of selected best 50 or fewer stocks from Alpha India L100 universe, best 25 or fewer stocks from Alpha India M100 universe and best 25 or fewer stocks from Alpha India S100 universe. The selected stocks will have highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha India Allcap300 strategy but it also possesses higher risk than the Alpha India Allcap300 portfolio. INTERNATIONAL EQUITY PRODUCTS

4. ARTHVEDA ALPHA STRATEGY

4.1. ARTHVEDA ALPHA US L500 Introduction The Alpha US L500 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha US L500 product is S&P 500 Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to US market. The portfolio will invest in largest and most liquid US 500 or fewer stocks which also happen to be part of the most popular US indexes. The portfolio will have a maximum stock weight of 0.4%-0.6% and minimum weight of 0.04%-0.06% for any stock in the portfolio or any other allocation based on portfolio manager’s discretion. It will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha US L500 will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

4.2. ARTHVEDA ALPHA US L30 Introduction The Alpha US L30 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon).

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Benchmark The benchmark for ArthVeda Alpha US L30 product is Dow Jones 30 Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to US market. The portfolio will invest in all the largest and most liquid 30 stocks which also happen to be part of the popular US indexes. Dow Jones is composed of about 18 broad sectors which contribute significantly to the US economy. Dow Jones represents nearly 24% of the total market capitalization of US stock market. The companies in Dow Jones hold dominant position in their sectors and are typically either #1 or #2 in their respective markets. As such these companies have significant competitive advantages in their business and these are reflected in their fundamentals. Alpha US L30 will invest in all the 30 stocks of Dow Jones and will remain invested in them all the time. The portfolio will have a maximum stock weight of 4%-8% and minimum weight of 0.5%-0.75% for any stock in the portfolio or any other allocation that is based on portfolio manager’s discretion. It will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha US L30 will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

4.3. ARTHVEDA ALPHA US M400 Introduction The Alpha US M400 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha US M400 product is S&P MIDCAP 400 Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to US market. The portfolio will invest in top 400 or fewer best ranked stocks selected from 400 largest and most liquid US Midcap stocks which also happen to be part of the most popular US midcap indexes. The weight of each stock will be based on portfolio manager’s discretion. Portfolio manager will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha US M400 will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

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4.4. ARTHVEDA ALPHA US S600 Introduction The Alpha US S600 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha US S600 product is S&P SMALLCAP 600 Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to US market. The portfolio will invest in top 600 or fewer best ranked stocks selected from 600 largest and most liquid US Smallcap stocks which also happen to be part of the most popular US Smallcap indexes. The weight of each stock will be based on portfolio manager’s discretion. Portfolio Manager will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha US S600 will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

4.5. ARTHVEDA ALPHA UK L100 Introduction The Alpha UK L100 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha UK L100 product is FTSE 100 Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to UK market. The portfolio will invest in 100 or fewer best ranked stocks selected from the largest and most liquid 100 stocks which also happen to be part of the popular UK indexes. FTSE 100 is composed of about 23 broad sectors which contribute significantly to the UK economy. FTSE represents nearly 85% of the total market capitalization of UK stock market. The companies in FTSE hold dominant position in their sectors and are typically either #1 or #2 in their respective markets. As such these companies have significant competitive advantages in their business and these are reflected in their fundamentals. Alpha UK L100 Portfolio will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha UK L100 will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

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4.6. ARTHVEDA ALPHA EURO L50 Introduction The Alpha Euro L50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha Euro L50 product is Euro Stoxx 50 Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to European market. The portfolio will invest all 50 of fewer best ranked stocks selected from the largest and most liquid European stocks which also happen to be part of the popular European indexes. Euro Stoxx 50 covers 50 blue-chip stocks from 12 Eurozone countries. The companies in Euro Stoxx 50 hold dominant position in their sectors and are typically either #1 or #2 in their respective markets. As such these companies have significant competitive advantages in their business and these are reflected in their fundamentals. Alpha Euro L50 portfolio will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha Euro L50 will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

4.7. ARTHVEDA ALPHA EUROPE L400 Introduction The Alpha EUROPE L400 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha EUROPE L400 product is MSCI EUROPE Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to European market. The portfolio will invest in best ranked 400 or fewer stocks selected from the largest and most liquid 400 stocks which also happen to be part of the popular European indexes. MSCI Europe represents 15 developed markets countries in Europe. MSCI Europe represents nearly 85% of the free-float adjusted market capitalization across the European developed markets equity universe. Alpha Europe L400 portfolio will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha Europe L400 will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

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4.8. ARTHVEDA ALPHA JAPAN L225 Introduction The Alpha Japan L225 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha Japan L225 product is Nikkei 225 Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to Japanese market. The portfolio will invest in 225 or fewer best ranked stocks selected from the largest and most liquid 225 stocks which also happen to be part of the popular Japanese indexes. Nikkei is composed of about 24 broad sectors which contribute significantly to the Japanese economy. Nikkei represents nearly 60% of the total market capitalization of Japanese stock market. The companies in Nikkei hold dominant position in their sectors and are typically either #1 or #2 in their respective markets. As such these companies have significant competitive advantages in their business and these are reflected in their fundamentals. Alpha Japan L225 portfolio will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha Japan L225 will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

4.9. ARTHVEDA ALPHA GLOBAL Introduction The Alpha Global Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon). Benchmark The benchmark for ArthVeda Alpha Global product is MSCI World Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to developed Global markets. The portfolio will invest only in the best stocks selected from Alpha US L500, Alpha UK L100, Alpha EURO L50 and Alpha Japan L225 universe. Portfolio will is composed of nearly 24 broad sectors which contribute significantly to the global economy. The universe of global portfolio represents more than half of ~$63tn global market capitalization. The companies in the universe hold dominant position in their sectors and are typically either #1 or #2 in their respective markets. As such these companies have significant competitive advantages in their business and these are reflected in their fundamentals. Alpha Global portfolio will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The strategy goes overweight on undervalued stocks and overweight on undervalued stocks. Alpha Global will have regular rebalancing where the overvalued stocks will be reallocated to the lower weight allocations and the undervalued stocks will be allocated to the higher weight allocations.

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5. ARTHVEDA ALPHAPLUS STRATEGY

5.1. ARTHVEDA ALPHAPLUS US L50 Introduction The AlphaPlus US L50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha US L500 strategy. Benchmark The benchmark for ArthVeda AlphaPlus US L50 product is S&P 500 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of most popular US Large-cap indexes. AlphaPlus US L50 will be a concentrated portfolio of selected top 50-100 stocks from the Alpha US L500 universe having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha US L500 strategy but it also possesses higher risk than the Alpha US L500 portfolio.

5.2. ARTHVEDA ALPHAPLUS US M50 Introduction The AlphaPlus US M50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha US M400 strategy. Benchmark The benchmark for ArthVeda AlphaPlus US M50 product is S&P MIDCAP 400 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of most popular US Mid-cap indexes. AlphaPlus US M50 will be a concentrated portfolio of selected top 50-100 stocks from the Alpha US M400 universe having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher

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return than the Alpha US M400 strategy but it also possesses higher risk than the Alpha US M400 portfolio.

5.3. ARTHVEDA ALPHAPLUS US S50 Introduction The AlphaPlus US S50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha US S600 strategy. Benchmark The benchmark for ArthVeda AlphaPlus US S50 product is S&P SMALLCAP 600 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of most popular US Small-cap indexes. AlphaPlus US S50 will be a concentrated portfolio of selected top 50-100 stocks from the Alpha US S600 universe having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha US S600 strategy but it also possesses higher risk than the Alpha US S600 portfolio.

5.4. ARTHVEDA ALPHAPLUS UK L20 Introduction The AlphaPlus UK L20 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha UK L100 strategy. Benchmark The benchmark for ArthVeda AlphaPlus UK L20 product is FTSE 100 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of most popular UK Large-cap indexes. AlphaPlus UK L20 will be a concentrated portfolio of selected top 20-50 or fewer stocks from the Alpha UK L100 universe having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to

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provide higher return than the Alpha UK L100 strategy but it also possesses higher risk than the Alpha UK L100 portfolio.

5.5. ARTHVEDA ALPHAPLUS EURO L10 Introduction The AlphaPlus Euro L10 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha EURO L50 strategy. Benchmark The benchmark for ArthVeda AlphaPlus Euro L10 product is Euro Stoxx 50 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of most popular Euro Large-cap indexes. AlphaPlus Euro L10 will be a concentrated portfolio of selected top 10-25 stocks from the Alpha Euro L50 universe having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha Euro L50 strategy but it also possesses higher risk than the Alpha Euro L50 portfolio.

5.6. ARTHVEDA ALPHAPLUS EUROPE L50 Introduction The AlphaPlus EUROPE L50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha Europe L400 strategy. Benchmark The benchmark for ArthVeda AlphaPlus EUROPE L50 product is MSCI EUROPE Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of most popular European indexes. AlphaPlus Europe L50 will be a concentrated portfolio of selected top 50-100 stocks from the Alpha Europe L400 universe having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to

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deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha Europe L400 strategy but it also possesses higher risk than the Alpha Europe L400 portfolio.

5.7. ARTHVEDA ALPHAPLUS JAPAN L50 Introduction The AlphaPlus Japan L50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha Japan L225 strategy. Benchmark The benchmark for ArthVeda AlphaPlus Japan L50 product is Nikkei 225 Index Investment Objective, Asset Allocation and Securities The investment objective of the Strategy is to provide capital growth and benefits of long term investments. The portfolio will invest only in the largest and the most liquid stocks which also happen to be part of most popular Japanese indexes. AlphaPlus Japan L50 will be a concentrated portfolio of selected top 50-100 or fewer stocks from the Alpha Japan L225 universe having highest degree of undervaluation. The portfolio will be an equi-weight portfolio of these selected stocks always; either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha Japan L225 strategy but it also possesses higher risk than the Alpha Japan L225 portfolio.

5.8. ARTHVEDA ALPHAPLUS GLOBAL50 Introduction The AlphaPlus Global50 Portfolio has been designed for those investors who are aiming for capital appreciation over the long term (3-5 years horizon) with return and risk higher than that of Alpha Global strategy. Benchmark The benchmark for ArthVeda AlphaPlus Global50 product is MSCI World Index Investment Objective, Asset Allocation and Securities The investment objective of the strategy is to provide capital growth and benefits of long term investments and exposure to developed Global markets. ArthVeda AlphaPlus Global50 portfolio will be a concentrated portfolio of 50-100 most undervalued stocks selected from AlphaPlus US L50, AlphaPlus UK L20, AlphaPlus EURO L10 and AlphaPlus Japan50 universe. Alpha Global50 portfolio will use fundamentals and the degree of under-valuation for deciding the weights. Portfolio manager at his discretion may apply additional criteria for greater financial prudence. The portfolio allocation between regions will be based on country/region specific fundamentals. Allocation among stocks within a country/region will

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be equi-weighted either while creating or rebalancing the portfolio. The weights of the stock could deviate with time because of price movement. The strategy will have a regular rebalancing feature which will be at fund manager’s discretion and will usually depend on a trade-off between cost, tax and return. The portfolio is expected to deliver returns higher than benchmark over long run. Although strategy is expected to provide higher return than the Alpha Global strategy but it also possesses higher risk than the Alpha Global portfolio.