Portfolio Management Services

The initial corpus can be brought into the Portfolio Management Service by way or either cash and/or securities/shares. The securities & shares shall be valued as per the market price prevailing on the date of introduction. In case if shares/securities are offered as initial corpus, the portfolio will be gradually aligned with our model portfolio over several months. For portfolios which have been started purely with cash, it would take anywhere between 3-6 months for it to get full invested. The un-invested cash would remain deployed in an exchange traded liquid fund till the same is required for meeting investment obligations. If you desire to have the investment process to be handled in any other manner, the same should be explicitly instructed by you.

As per SEBI’s regulation the initial size of the portfolio has to be a minimum of Rs. 50 lacs.

You have the facility to make contributions/withdrawals subsequent to initial corpus at your discretion. The withdrawal should not bring the market valuation of the portfolio below Rs. 50 lacs. However a complete liquidation of the portfolio is possible at any point of time. Withdrawals / closure can also be made in the form of securities and doesn’t necessarily need to be made in cash. Similarly additions can also be made by bringing in additional securities and not just cash.

All requests for addition / withdrawals / closure or any other request would have to be signed by all account holders in case the account is opened in a joint name. In case the account is in an individual name the instructions would be accepted only from the account holder. Similarly for corporate accounts, the instructions would be accepted only if the same are authorised by signatures registered with us. All instructions against the account operation would only be accepted in writing and will not be acted upon on verbal instructions.

The Portfolio Management service has no lock-in period and you can make withdrawals by simply putting a request for the desired amount.

The portfolio management fee shall be charged @10% of the appreciation in the value of the portfolio under management. In addition to this charge, taxes as applicable shall be levied. At present Goods & Service tax @ 18% shall be levied on the said fee. This fee would be charged at the end of every financial year or on closure of the portfolio account, whichever is earlier. There are no other fixed charges towards asset management fee apart from this flat 10% performance based fee. The fee shall be collected by debiting the portfolio account at the end of the year. TDS obligation if any, would have to be taken care of by the client himself. Necessary credit would be given to the account on submission of the TDS certificate.

The returns shall be calculated as per the following formula:

* The securities shall be valued at the prevailing market rate on the date of introduction / addition to the Portfolio

In case if in any year the above return results in a negative figure you shall not be charged any Portfolio Management fee and nor shall we contribute in the loss.

Portfolio Management fees shall be charged only when the value of the portfolio goes beyond the previous profitable portfolio when performance fees were charged and so on and so forth. E.g., in case if the portfolio closes at a loss at the yearend the portfolio management fees will be calculated on the following basis:

* 10% of [Rs.5,900,000- Rs.5,800,000]

Rs. 5,800,000 is the previous portfolio value where Portfolio Management fees had been charged

In order to comply with the SEBI directive of outsourcing 80% of the services offered through related entities, we have revised the brokerage rate to 0 and only recover the Exchange Transaction Charges and Securities Transaction Tax as per the prevailing rates.

All transactions will be executed in your trading code on the Exchange and hence contract notes shall be issued in your name directly. The corresponding STT collected against the transactions will also be reflected directly against your Income Tax PAN.

All the shares purchased in your portfolio shall be held in your demat account maintained with us. The said account shall be operated on the basis of a Power of Attorney executed in our favour. All the transaction charges pertaining to the demat account shall be debited to your portfolio account at the end of every month.

The account nomination will be registered in the demat / PMS account opening form. The same can be altered at any time by providing details of a new nominee. Upto 3 nominees can be assigned to an account and their proportions of allocation can also be specified.

The dividends earned against the investments would be directly credited to your bank account, as per details provided by you in your demat account opening form. The bank account details can be updated at any time by submission of a required updation form.

At any given time, the funds would be invested in a portfolio of 20-25 securities which would include a mix of mid-caps and large caps. The ratio between the same would vary from 40% to 60% depending on how expensive the markets appear.

Investments are made only with a long-term perspective and all the capital gains realised during the year would primarily be long term. Consequently, the portfolio turnover ratio for the year would also well below 1.

You may also specify companies / sectors in which you would not want us to invest in.

You shall be sent the following reports & statements at the end of every month.

• Performance summary of your portfolio

• Holding statement of your demat account.

• Transaction statement of your demat account

• Demat account, charge statement

• Contact notes for all transactions effected during the month

• Certified Capital Gains Statement and Statement of Accounts at the end of the year.

* Reports can also be sent against specific request before the month end.

We do not undertake any responsibility towards tax treatments and tax liabilities of the client and the same shall have to be taken care of by the client himself.

Though all efforts will be made to outperform the benchmark index, there is no assurance of any fixed / minimum return on the investments. Further, equities being a risky asset class, there is also a risk of capital erosion and hence investors are advised to take investment decisions accordingly.