Schedule - V - Disclosure Document - Securities And Exchange Board of India (Portfolio Managers) Regulations, 2020

SCHEDULE V DISCLOSURE DOCUMENT [Regulation 22] General instructions 1. This Disclosure Document is to be given to the prospective client along with the account opening form (as per Format I) prior to signing of the agreement. 2. This Disclosure Document is to be filed after grant of certificate of registration before circulating it to any client or whenever any material change including change in the investment approach is effected . In case of material change, the disclosure document shall be filed within 7 working days from the date of the change. 3. This model Disclosure Document enumerates the minimum disclosure requirements to be contained in the disclosure document. The portfolio manager may make any other disclosures, which in its opinion are material for the investor, provided that such information is a statement of fact and is not presented in an incomplete, inaccurate or misleading manner. It should also be ensured that inclusion of such information does not, by virtue of its nature or manner of presentation, hamper understanding of any information that is required to be included under the model disclosure document The model Disclosure Document specifies only the nature of the disclosures that should be contained under various heads in the disclosure document and is not intended to describe the layout or language to be contained therein. MODEL DISCLOSURE DOCUMENT FOR PORTFOLIO MANAGEMENT The minimum disclosures to be given in the Disclosure Document shall be as under and due care shall be taken to present the information in simple language and in a clear, concise and easily understandable manner (11) Front page (i) The Document has been filed with the Board along with the certificate in the specified format in terms of Regulation 22 of the SEBI (Portfolio Managers) Regulations, 2020 . (ii) The purpose of the 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 a portfolio manager. (iii) The necessary information about the portfolio manager required by an investor before investing, and the investor may also be advised to retain the document for future reference. (iv) The name, phone number, e-mail address of the principal officer so designated by the portfolio manager is (Give details). II. Index page giving item number, contents and page number III. Contents of the Document 1. Disclaimer clause A statement to the effect that the particulars have been prepared in accordance with the SEBI (Portfolio Managers) Regulations, 2020 and filed with SEBI. This Document has neither been approved nor disapproved by SEBI nor has SEBI certified the accuracy or adequacy of the contents of the Document. 2. Definitions All terms used in the Disclosure Document be defined. The language and terminology used in the Disclosure Document shall be as provided in the Regulations. Any new term if used shall be clearly defined. All terms shall be used uniformly throughout the text of the Disclosure Document. 3. Description (i) History, Present Business and Background of the portfolio manager. (ii) Promoters of the portfolio manager, directors and their background. (iii) Top 10 Group companies/firms of the portfolio manager on turnover. basis (latest audited financial statements may be used for this purpose) (iv) Details of the services being offered: Discretionary/ Non-discretionary / Advisory. 4. Penalties, pending litigation or proceedings, findings of inspection or investigation for which action may have been taken or initiated by any regulatory authority. (i) All cases of penalties imposed by the Board or the directions issued by the Board under the Act or rules or regulations made thereunder. (ii) The nature of the penalty/direction. (iii) Penalties/fines imposed for any economic offence and/ or for violation of any securities laws. (iv) Any pending material litigation/legal proceedings against the portfolio manager/key personnel with separate disclosure regarding pending criminal cases, if any. (v) Any deficiency in the systems and operations of the portfolio manager observed by the Board or any regulatory agency. (vi) Any enquiry/ adjudication proceedings initiated by the Board 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. 5. Services Offered (i) The present investment objectives and policies including the types of securities in which it generally invests shall be clearly and concisely stated in the document for easy understanding of the potential investor. (ii) Investment Approaches of the Portfolio Manager (iii) 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. 6. Risk factors (i) Statement to the effect that securities investments are subject to market risks and there is no assurance or guarantee that the objective of the investments will be achieved. (ii) Statement to the effect that past performance of the portfolio manager does not indicate its future performance. (iii) Risk arising from the investment approach, investment objective, investment strategy and asset allocation. (iv) Risk arising out of non-diversification, if any. (v) If the portfolio manager has no previous experience/ track record a disclosure to that effect shall be made. (vi) All transactions of purchase and sale of securities by portfolio manager and its employees who are directly involved in investment operations shall be disclosed if found having conflict of interest with the transactions in any of the client s portfolio. (vii) If the portfolio manager has group companies, a disclosure of conflict of interest related to services offered by group companies of the portfolio manager if any. 7. Client Representation (i) Category of clients No. of clients Funds managed (Rs. Cr.) Discretionary / Non-Discretionary (if available) Associates / group companies (Last 3 years) Others (last 3 years) Total (ii) Complete disclosure in respect of transactions with related parties as per the standards specified by the Institute of Chartered Accountants of India. 8. Financial Performance The Financial Performance of the portfolio manager based on audited financial statements and in terms of procedure specified by the Board for assessing the performance. 9. Performance of Portfolio Manager Portfolio Management performance of the portfolio manager for the last three years, and in case of discretionary portfolio manager disclosure of performance indicators calculated using Time Weighted Rate of Return method in terms of Regulation 22 of the SEBI (Portfolio Managers) Regulations, 2020. 1 [ Provided that this sub-clause shall not apply in case of the Co-investment Portfolio Manager. ] 10. Audit Observations Audit observations of the preceding 3 years 11. Nature of expenses (i) Investment management and advisory fees. (ii) Custodian fee. (iii) Registrar and transfer agent fee. (iv) Brokerage and transaction cost. A brief explanation shall be given to assist the investor in understanding the various costs and expenses that an investor may have to bear directly or indirectly. Additionally, appropriate cross-references may be given to the relevant sections of the offer document for more complete description in this regard. 12. Taxation Disclose the tax implications of investments in securities and the tax provisions on Income/ Loss or Tax Deduction at Source on various investors. 13. Accounting policies Disclose the accounting policy followed by the portfolio manager while accounting for the portfolio investments of the clients. 14. Investors services (i) Name, address and telephone number of the investor relation officer who shall attend to the investor queries and complaints. (ii) Grievance redressal and dispute settlement mechanism. 2 [ 15) Details of investments in the securities of related parties of the portfolio manager The details of investment of client s funds by the portfolio manager in the securities of its related parties or associates. 16) Details of the diversification policy of the portfolio manager The details of the diversification policy of the portfolio manager for the portfolio of the clients. ] Date: Place: Name and signature of at least two Directors/ Designated Partners of Portfolio Manager FORMAT I (Account Opening Form) Information about the Client 5. General information about the client a. Name, primary mailing address, secondary (back up) mailing address, identity information such as photograph, Permanent Account Number (PAN), driving license etc. b. Occupation______ c. Introduced by____(name and full address) d. Annual incomes for the last 3 financial years and the net worth as on the last date of the respective years. (optional) 2. Investment profile of the client (a) Investment experience regarding securities. (b) Indicative percentage of total investment portfolio proposed to be invested with the portfolio manager (optional). (c) Overall investment goals such as capital appreciation or capital appreciation and regular income or regular income. (d) Risk tolerance i.e. low, medium or high. (e) Time period for which investments are proposed to be made with the portfolio manager. (This has to be same as the term of the agreement) (f) Provisions for systematic withdrawal on a monthly, quarterly, annual basis etc. 3. Investment approach opted by the client 4. Details of portfolio construction for the client (a) Equity: Nature of equities in which investments are desired, may be indicated. (b) Balanced: Percentage of debt/equity. (c) Debt: Government Bonds, corporate debt etc. (d) Mutual funds, (e) Others. Date: Place: Signature of the client] ************* NOTES:- 1. Inserted vide Notification No. SEBI/LAD-NRO/GN/2021/58 dated 09-11-2021 w.e.f. 09-12-2021 2. Inserted vide Notification No. SEBI/LAD-NRO/GN/2022/94 dated 22-08-2022 w.e.f. thirtieth day from the date of their publication in the Official Gazette