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DISCLOSURE DOCUMENT (As required under Regulation 14 of SEBI (Portfolio Managers) Regulations, 1993) (i) The Disclosure Document (hereinafter referred to as ‘the Document’) has been filed with the

Securities and Exchange Board of India (SEBI) along with the certificate in the prescribed format in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993.

(ii) The purpose of the Document is to provide essential information about the Portfolio

Management Services (PMS) in a manner to assist and enable the investors in making informed decision for engaging a Portfolio Manager.

(iii) The Document gives 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) Details of the acting Principal Officer

Name : Ravi Menon Address : HSBC Asset Management (India) Private Limited 3rd Floor, Mercantile Bank Chamber,

16, V. N. Road, Fort, Mumbai 400 001 Phone : +91 22 6614 5000 E-mail : ravi.r.menon@hsbc.com

(v) This Disclosure Document is dated October 27, 2017 Portfolio Management Services HSBC Asset Management (India) Private Limited SEBI Registration No. INP000001322

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TABLE OF CONTENTS

Sr. No. Contents Page No.

1 Disclaimer 3

2 Definitions 3-4

3 Description

3.1 History, Present Business and Background of the Portfolio Manager

4 - 5

3.2 Promoters of the Portfolio Manager, directors and their background

5 – 6

3.3 Group companies/firms of the Portfolio Manager in India on turnover basis

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

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

7 – 9

5 Services Offered 9 - 17

6 Risk Factors 17– 19

7 Client Representation 19

8 The Financial Performance of the Portfolio Manager 19 – 20

9 Portfolio Management Performance 21

10 Nature of Expenses 21– 23

11 Taxation 24– 30

12 Accounting Policies 31–32

13 Investor Services 33

14 Foreign Account Tax Compliance Act (FATCA) 33 – 34

15 SEBI Scores Platform 34

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1. Disclaimer

1.1. This Disclosure Document has been prepared in accordance with the SEBI (Portfolio

Managers) Regulations, 1993 as amended from time to time 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

2.1 Act The Securities and Exchange Board of India Act, 1992 (15 of 1992).

2.2 Cash Account the account in which the funds handed over by the client shall be held by the Portfolio Manager on behalf of the Client.

2.3 Chartered Accountant

a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has obtained a certificate of practice under sub-section (1) of section 6 of that Act.

2.4 Client anybody corporate, partnership firm, individual, HUF, association of person, body of individuals, trust, statutory authority, or any other person who enters into agreement with the Portfolio Manager for the management of his portfolio.

2.5 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.

2.6 Foreign Account Tax Compliance Act (FATCA)

Foreign Account Tax Compliance Act that seeks to identify U.S. taxpayers having accounts at Foreign Financial Institutions (FFIs) and attempts to enforce reporting of those accounts through withholding.

2.7 Fund Manager 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.

2.8 Funds the moneys placed by the Client with the Portfolio Manager and any accretions thereto.

2.9 Non-Discretionary Portfolio Manager

a Portfolio Manager who manages the funds in accordance with the directions of the client.

2.10 Person directly or indirectly connected

any person being an associate, subsidiary, inter connected company or a company under the same management within the meaning of section 370(1B) of the Companies Act, 1956 or in the same group.

2.11 PMS Agreement includes contract entered between the Portfolio Manager and the client for the management of funds or securities of the client.

2.12 PMS Portfolios any of the investment Portfolios as mentioned herein or such Portfolios that may be introduced at any time in future by the Portfolio Manager.

2.13 Portfolio the total holdings of securities belonging to the client.

2.14 Portfolio Manager

HSBC Asset Management (India) Private Limited (AMIN), who has obtained certificate of registration from SEBI to act as a Portfolio Manager under Securities and Exchange Board of India (Portfolio Managers) Rules and Regulations, 1993, vide Registration no. INP000001322.

2.15 Principal Officer a director of the Portfolio Manager who is responsible for the

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activities of portfolio management and has been designated as principal officer by the Portfolio Manager.

2.16 Rules The Securities and Exchange Board of India (Portfolio Managers) Rules, 1993.

2.17 Regulations The Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993, and as may be amended by SEBI from time to time.

2.18 SEBI / Board the Securities and Exchange Board of India.

2.19 Securities ‘Securities’ as per Securities Contracts (Regulation) Act, 1956 include:

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

derivatives (contracts which derive their value from the prices, or index of prices, of underlying securities)

units or any other instrument issued by any collective investment scheme to the investors in such schemes

security receipts as defined in clause (zg) of section 2 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002

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

Government securities

such other instruments as may be declared by the Central Government to be securities

rights or interests in securities.

2.20 Securities Lending Scheme

the securities lending as per the Securities Lending Scheme, 1997 specified by the Board.

3. Description

3.1. History, Present Business and Background of the Portfolio Manager:

HSBC Asset Management (India) Private Limited (AMIN) is a private limited company incorporated under the provisions of the Companies Act, 1956 having its Registered Office at 3rd Floor, Mercantile Bank Chamber, 16, V. N. Road, Fort, Mumbai 400 001. The paid-up equity share capital of the Portfolio Manager is Rs. 61.59 crores. HSBC Securities and Capital Markets (India) Private Limited holds 100% of the equity capital of the Portfolio Manager. AMIN is registered with SEBI as Portfolio Manager under Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993 and has obtained a license from SEBI for offering Portfolio Management Services under Registration No. INP000001322 which is valid till cancellation.

AMIN has also been appointed as the Investment Manager of HSBC Mutual Fund vide Investment Management Agreement dated February 07, 2002, executed between the Trustees of HSBC Mutual Fund and AMIN. SEBI approved AMIN to act as the Investment Manager for the Schemes of HSBC Mutual Fund vide letter dated 27 May 2002.

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There is no conflict between the two business lines, as AMIN has segregated its front and back office personnel, systems, securities/bank accounts etc. activity-wise ensuring that there is no access to confidential information between its various activities and all customers are treated fairly. As on September 30, 2017, AMIN had assets of over INR 9,951 crores under management in its Mutual Fund business with offices in 8 cities viz., Mumbai, New Delhi, Ahmedabad, Kolkata, Bangalore, Pune, Hyderabad and Chennai. As on September 30, 2017, AMIN had assets of approximately INR 131,712 crores under management in its PMS business including assets under the EPFO mandate.

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

3.2.1. Promoter

“HSBC Securities and Capital Markets (India) Private Limited (HSCI)” HSCI is a member of the HSBC Group, one of the world’s largest banking and financial services organizations. Headquartered in London, HSBC serves around 51 million customers through our four Global Businesses: Retail Banking and Wealth Management, Commercial Banking, Global Banking and Markets, and Global Private Banking. HSBC’s network covers 73 countries and territories in Europe, the Asia-Pacific region, the Middle East, Africa, North America and Latin America. Listed on the London, Hong Kong, New York, Paris and Bermuda stock exchanges, shares in HSBC Holdings plc are held by over 216,000 shareholders in 127 countries and territories. HSCI offers integrated investment banking services, securities and corporate finance & advisory. HSCI is a member of BSE Limited and National Stock Exchange of India Limited (capital and derivative market segments) and is a registered Research Analyst and a category I Merchant Banker and underwriter with the Securities and Exchange Board of India. Equities: HSCI is primarily an institutional stockbroker, with a client base spanning foreign institutional investors, Indian financial institutions, mutual funds and select retail clients. The business is backed by comprehensive research covering more than 100 of India’s largest, actively traded securities across industry groups. Global Investment Banking: HSCI provides public and private sector corporates and government clients with strategic and financial advice in the areas of mergers and acquisitions, primary and secondary market funding, privatizations, structured financial solutions and project export finance. HSCI holds 100% of the paid up equity share capital of the AMIN.

3.2.2. Board of Directors

(i) Sayed P Mustafa Sobha Ivory Apartments, Flat 251, 5th floor 7/1, St. John’s Road, Bangalore 560 042 Independent Director Ex Vice President Treasury, M&A and Investor Relations, Hindustan Unilever Limited Mr Mustafa holds a bachelor’s degree from St Stephens College, University of Delhi and is a Chartered Accountant and a Fellow of the Institute of Chartered

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Accountants of England and Wales. He has worked in the UK for a number of years and was a Partner in a Chartered Accountants firm in London prior to his joining Unilever. At Unilever, he had held several senior management and leadership positions over a number of years and his responsibilities covered strategic financial restructuring, mergers and acquisitions, development of external communication strategy, management of the supply chain, business performance, commercial controls and Financial & Management Accounting.

(ii) Kishori J Udeshi 15, Sumit Apartment, 31 Carmichael Road, Mumbai 400026 Independent Director (Chairperson) Ex-Deputy Governor, Reserve Bank of India Ms Kishori Udeshi has a M.A. Degree in Economics from Bombay University. She moved on to a professional career in central banking and became the first woman to be appointed as Deputy Governor of the Reserve Bank of India. As Deputy Governor of RBI, she was on the Board of SEBI, NABARD, Exim Bank and was the Chairperson of Bharatiya Reserve Bank Note Mudran (Pvt) Ltd., Bangalore. She was also the Chairperson of Deposit Insurance and Credit Guarantee Corporation. Ms Udeshi was also a Chairperson of The Banking Codes and Standards Board of India, set up by the RBI where she had evaluated and enforced the observance of the Banking Codes.

(iii) Dinesh Kumar Mittal

B 71, Sector 44, Noida 201301 Independent Director Former Secretary of Department of Financial Services, Government of India

Mr. Dinesh Mittal has a M. Sc (Physics) Degree with specialization in Electronics from the University of Allahabad, UP. He was the former Secretary of Department of Financial Services, Government of India. He was awarded Director's Gold Medal at Lal Bahadur Shastri National Academy of Administration for standing 1st in India among I.A.S. Officers of 1977 Batch. He played a key role in putting a framework of Special Economic Zones in India.

(iv) Ravi Menon 16, V N Road, Fort, Mumbai – 400 001

Chief Executive Officer HSBC Asset Management (India) Private Limited Mr. Ravi Menon has a M.Sc. Economics degree from Birla Institute of Technology and Science, Pilani and MBA from Symbiosis Institute of Business Management, Pune. He has around 26 years of experience in banking and financial services. Prior to joining HSBC AMC, Mr. Menon was Head Strategy & Planning Inclusive Banking at HSBC. He has held various positions at HSBC Group. He has also worked with UBS as Vice President – Investment Banking.

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3.3. Group companies/firms of the Portfolio Manager in India on turnover basis

a) The Hongkong and Shanghai Banking Corporation Limited b) HSBC Electronic Data Processing India Private Limited c) HSBC Professional Services (India) Private Limited d) HSBC Securities and Capital Markets (India) Private Limited e) HSBC Software Development (India) Private Limited f) HSBC InvestDirect (India) Limited g) HSBC InvestDirect Securities (India) Private Limited h) HSBC InvestDirect Financial Services (India) Limited i) HSBC InvestDirect Sales & Marketing (India) Limited j) HSBC Agency (India) Private Limited k) HSBC Global Shared Services (India) Private Limited

(The above are the Group companies in India based on turnover, however they are not listed as per turnover)

3.4. 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.

4. Penalties, pending litigation or proceedings, findings of inspection or investigations for which

action may have been taken or initiated by any regulatory authority. 4.1. All cases of penalties imposed by the SEBI or directions issued by SEBI under the Act or Rules

or Regulations made thereunder. The nature of the penalty/direction. Penalties imposed for any economic offence and/ or for violation of any securities laws. No penalties have been imposed on the Portfolio Manager by SEBI and no directions have been issued by SEBI under the Act or Rules or Regulations made thereunder. There are no penalties imposed on the Portfolio Manager for any economic offence and / or for violation of any securities laws.

4.2. Any pending material litigation / legal proceedings against the Portfolio Manager / key

personnel with separate disclosure regarding pending criminal cases, if any. There are no material litigations including criminal cases /legal proceedings against the Portfolio Manager / Key personnel.

4.3. Any deficiency in the systems and operations of the Portfolio Manager observed by SEBI or any regulatory agency. There has been no deficiency in the systems and operations of the Portfolio Manager observed by SEBI or any regulatory agency.

4.4. 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.

a) SEBI issued a Show Cause notice dated August 7, 2009 to the Trustees of the Mutual Fund,

Mutual Fund, AMC & CEO pertaining to the changes made in the Scheme Information Document of HSBC Gilt Fund via an Addendum. SEBI stated in the said Show Cause notice

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that the change made to the name, benchmark index and duration of the Scheme would be construed as a change in the fundamental attribute of the Scheme and hence the applicable provisions of the SEBI (Mutual Funds) Regulations, 1996 with respect to the same should have been complied with. The AMC has on behalf of the Trustees of the Mutual Fund, the Mutual Fund and CEO filed its response with relevant supporting documents with SEBI. Subsequently, the personal hearing took place before the Whole Time Member, SEBI. After considering the submissions made by the AMC, Whole Time Member, SEBI vide its order dated April 23, 2010 disposed-off the show cause notice dated August 7, 2009 and warned the Board Trustees of the Mutual Fund, the Mutual Fund, AMC and its CEO that they should strictly comply with the law governing the conduct and business of mutual fund in securities market.

Against the SEBI Order dated April 23, 2010, two appeals were filed with the Securities Appellate Tribunal (SAT) by certain aggrieved investors of HSBC Gilt Fund.

SAT issued Order dated May 03, 2011 and July 5, 2012 to the Mutual Fund, Trustees of the Mutual Fund, AMC and CEO of the AMC pertaining to the change effected in modified duration in HSBC Gilt Fund during January 2009. SAT held that the changes brought about in the scheme altered the fundamental attributes of the same affecting the interest of unitholders. SAT therefore directed the AMC and related parties to comply with regulation 18(15A) of the SEBI Regulations and provide an exit option to the appellants of the case. An appeal was filed by the AMC against these Orders before the Supreme Court and the same admitted before the Supreme Court, however the Supreme Court has vide Order dated January 15, 2014 dismissed the said appeal. The AMC has complied with the directions under SAT and Supreme Court Order.

b) SEBI had initiated an enquiry against HSBC Securities and Capital Markets (India) Private Limited (“HSCI”) and accordingly issued a Show Cause Notice dated 30 July 2008 calling upon HSCI to show cause as to why further action should not be taken against HSCI for the violations alleged to the have been committed by HSCI under Regulations 25 and 38 of the SEBI (Intermediaries) Regulations, 2008. HSCI had filed a detailed response in this regard on 10 September 2008 and had sought a personal hearing in the matter. Accordingly, submissions were made by HSCI’s counsel at the hearing held on 6 October 2008. Pursuant to the said hearing,, SEBI has vide its letter dated March 4, 2009, informed HSCI of the enquiry officer’s recommendation i.e. the matter is not a fit case to levy any penalty.

c) An enquiry was held under the SEBI (Procedure for Holding Enquiry by the Enquiry Officer

and Imposing Penalty) Regulations, 2002 in the matter of a voluntary open offer by Mr. V.K. Modi, Dr. B.K. Modi, Mod Fashions and Securities Private Limited and Modikem Limited in concert with Witta International Inc. and Sidh International Limited (collectively the Acquirers) to the shareholders of Modi Rubber Limited. Subsequent to the enquiry officer’s recommendations of a major penalty a show cause notice dated 1 August 2003 was issued requiring HSCI to show cause as to why HSCI’s certificate of registration should not be suspended for 6 months. HSCI submitted its reply and sought a personal hearing, wherein submissions were made by HSCI’s counsel at the hearing held on 9 October 2003. SEBI vide its order dated 9 December 2003, confirmed that HSCI had not acted negligently warranting imposition of a penalty.

d) SEBI had initiated an enquiry against HSBC Securities and Capital Markets (India) Limited

(“HSCI”) under the SEBI (Procedure for Holding Enquiry by the Enquiry Officer and Imposing Penalty) Regulations, 2002 in the matter of the Open Offer made by Global Green Company Limited to the shareholders of Saptarishi Agro Industries Limited in September 2000 under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. Subsequent to the enquiry officer’s recommendations of a minor penalty i.e. HSCI be censured, a show cause notice has been issued by SEBI requiring HSCI to show cause as to why the said

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penalty should not be imposed. SEBI had subsequently vide its order dated 7th March 2007 imposed a minor penalty of censure on the certificate of registration of HSCI. Thereafter, HSCI had appealed against the said order before the Securities Appellate Tribunal, Mumbai on 23rd April 2007 wherein SAT upheld the Order passed by SEBI.

e) A Show cause Notice was issued to HSCI vide a letter dated 9 June 2000 in the matter of the

rights issue of Siemens Limited in which HSCI was acting as the Lead Manager requiring HSCI to show cause as to why action should not be taken against HSCI for non-disclosure in the offer document of certain litigation against Siemens Limited involving ex-employees. Subsequently SEBI vide its letter dated 26 September 2000 advised HSCI to be cautious in future assignments.

f) HSCI was appointed as a manager to the open offer made by India Star (Mauritius) Limited (“India Star”) to the shareholders of Garware Offshore Services Limited which was completed in 2008. An individual shareholder had filed a complaint with SEBI in January 2012 against India Star alleging inadequate disclosures with regard to (i) the ultimate shareholders of India Star and (ii) one of the directors who had certain criminal charges pending against him. SEBI had dismissed the complaint stating that the disclosures made during the open offer were in terms of the SEBI Takeover Regulations. Thereafter the complainant filed an appeal before the Securities Appellate Tribunal in November 2012 where HSCI was also inducted as a party. SAT passed an order dated September 3, 2013 directing SEBI to reconsider the complaint but did not express any opinion on the merits of the case. SEBI have passed an order dated November 21, 2014 reprimanding India Star and HSCI for non-disclosures with regard to the ultimate shareholders of India Star. The non-disclosures of litigation against one of the directors have been held to be not required as per the Takeover Regulations.

g) SEBI vide its letter dated April 11, 2017 has informed HSCI of initiation of adjudication

proceedings under SEBI Act, 1992, against them in connection with one of the open offer transaction managed by them. HSCI is awaiting further details from SEBI

Other than as disclosed above, there are no enquiries/ 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 employees, under the Act or Rules or Regulations made thereunder. The above information has been disclosed in good faith as per the information available to the Portfolio Manager.

5. Services Offered

The Portfolio Manager offers the following three types of services: 5.1. Discretionary – the portfolio account of the client is managed at the full discretion and

liberty of the Portfolio Manager. For such the investment objective is to seek capital appreciation over the long term. Currently, the Portfolio Manager manages the following mandate under discretionary management services -

Management of Provident Fund (under Central Board of Trustees, EPFO) This Portfolio shall invest in debt securities in accordance with the investment pattern stipulated by the Ministry of Labour, Government of India and the guidelines issued by the Central Board of Trustees, Employees’ Provident Fund Organisation (CBT, EPF).

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The policies for investments in associates/ group companies of the Portfolio Manager and the maximum percentage of such investments therein would be subject to the applicable laws / regulations / guidelines and the guidelines issued by the CBT, EPF. The investment pattern will be as set out below or as may be amended from time to time:

(Pattern of investment is as per as per notification No. G-20031/1/2007/SS-II (Pt.)) issued by the Ministry of Labour, Government of India on April 23, 2015)

1. Investment Pattern

Category Investment Pattern Percentage of amount to be invested

(i)

Government Securities and related investments

a Government Securities Minimum 45% and upto 65%

b Other Securities {'securities' as defined in section 2(h) of the Securities Contracts (Regulation) Act, 1956} the principal whereof and interest whereon is fully and unconditionally guaranteed by the Central Government or State Government. The portfolio invested under this sub category of securities shall not be in excess of 10% of the total portfolio of the fund

c Units of mutual funds set up as dedicated funds for investment in govt securities and regulated by SEBI. Provided that the portfolio invested in such mutual funds shall not be more than 5% of the total portfolio at any point of time and fresh investments made in them shall not exceed 5% of the fresh accretions in the year

(ii) Debt Instruments and Related Investments

a Listed (or proposed to be listed in case of fresh issue) debt securities issued by bodies corporate, including banks and public financial institutions ('Public Financial Institutions' as defined under Section 2 of the Companies Act, 2013), which have a minimum residual maturity period of three years from the date of investment.

Minimum 35% and upto 45%

b Basel III Tier-I bonds issued by scheduled commercial banks under RBI Guidelines: Provided that in case of initial offering of the bonds the investment shall be made only in such Tier -I bonds which are proposed to be listed. Provided further that investment shall be made in such bonds of a scheduled commercial bank from the secondary market only if such Tier I bonds are listed and regularly traded. Total portfolio invested in this sub-category, at any time, shall not be more than 2% of the total portfolio of the fund. No investment in this sub-category in initial offerings shall exceed 20% of the initial offering. Further, at any point of time, the aggregate value of Tier I bonds of any particular bank held by the fund shall not exceed 20% of such bonds issued by that Bank.

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Category Investment Pattern Percentage of amount to be invested

c Rupee Bonds having an outstanding maturity of at least 3 years issued by institutions of the International Bank for Reconstruction and Development, International Finance Corporation and Asian Development Bank.

d Term Deposit receipts of not less than one year duration issued by scheduled commercial banks, which satisfy the following conditions on the basis of published annual report(s) for the most recent years, as required to have been published by them under law: i. having declared profit in the immediately preceding

three financial years: ii. maintaining a minimum Capital to Risk . Weighted

Assets Ratio of 9%, or mandated by prevailing RBI norms, whichever is higher;

iii. having net non-performing assets of not more than 4% of the net advances;

iv. having a minimum net worth of not less than Rs. 200 crores.

e Units of Debt Mutual Funds as regulated by Securities and Exchange Board of India: Provided that fresh investment in Debt Mutual Funds shall not be more than 5% of the fresh accretions invested in the year and the portfolio invested in them shall not exceed 5% of the total portfolio of the fund at any point in time.

f The following infrastructure related debt instruments: (i) Listed (or proposed to be listed in case of fresh issue) debt securities issued by body corporates engaged mainly in the business of development or operation and maintenance of infrastructure, or development, construction or finance of low cost housing. Further, this category shall also include securities issued by Indian Railways or any of the body corporates in which it has majority shareholding. This category shall also include securities issued by any Authority of the Government which is not a body corporate and has been formed mainly with the purpose of promoting development of infrastructure. It is further clarified that any structural obligation undertaken or letter of comfort issued by the Central Government, Indian Railways or any Authority of the Central Government, for any security issued by a body corporate engaged in the business of infrastructure, which notwithstanding the terms in the letter of comfort or the obligation undertaken, fails to enable its inclusion as security covered under category (i) (b) above, shall be treated as an eligible security under this sub-category.

(ii) Infrastructure and affordable housing Bonds issued by

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Category Investment Pattern Percentage of amount to be invested

any scheduled commercial bank, which meets the conditions specified in (ii)(d) above.

(iii) Listed (or proposed to be listed in case of fresh issue) securities issued by Infrastructure debt funds operating as a Non-Banking Financial Company and regulated by Reserve Bank of India.

(iv) Listed (or proposed to be listed in case of fresh issue) units issued by Infrastructure Debt Funds operating as a Mutual Fund and regulated by Securities and Exchange Board of India. It is clarified that, barring exceptions mentioned above, for the purpose of this subcategory (f), a sector shall be treated as part of infrastructure as per Government of India's harmonized master-list of infrastructure sub-sectors. Provided that the investment under sub-categories (a), (b) and (f) (i) to (iv) of this category No. (ii) shall be made only in such securities which have minimum AA rating or equivalent in the applicable rating scale from at least two credit rating agencies registered with Securities and Exchange Board of India under Securities and Exchange Board of India (Credit Rating Agency) Regulation, 1999. Provided further that in case of the sub-category (f) (iii) the ratings shall relate to the Non-Banking Financial Company and for the sub-category (f) (iv) the ratings shall relate to the investment in eligible securities rated above investment grade of the scheme of the fund. Provided further that if the securities / entities have been rated by more than two rating agencies, the two lowest of all the ratings shall be considered. Provided further that investments under this category requiring a minimum AA rating, as specified above, shall be permissible in securities having investment grade rating below AA in case the risk of default for such securities is fully covered with Credit Default Swaps (CDSs) issued under Guidelines of the Reserve Bank of India and purchased along with the underlying securities. Purchase amount of such Swaps shall be considered to be investment made under this category. For sub-category (c), a single rating of AA or above by a domestic or international rating agency will be acceptable. It is clarified that debt securities covered under category (i) (b) above are excluded from this category (ii).

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Category Investment Pattern Percentage of amount to be invested

(iii) Short-term Debt Instruments and Related Investments Upto 5%

a Money market instruments:

Provided that investment in commercial paper issued by body corporates shall be made only in such instruments which have minimum rating of A1+ by at least two credit rating agencies registered with the Securities and Exchange Board of India.

Provided further that if commercial paper has been rated by more than two rating agencies, the two lowest of the ratings shall be considered.

Provided further that investment in this sub-category in Certificates of Deposit of up to one year duration issued by scheduled commercial banks, will require the bank to satisfy all conditions mentioned in category (ii) (d) above.

b Units of liquid mutual funds regulated by the Securities and Exchange Board of, India.

c Term Deposit Receipts of up to one year duration issued by such scheduled commercial banks which satisfy all conditions mentioned in category (ii) (d) above.

(iv) Equities and Related Investments : Minimum 5% and Upto 15%

a) Shares of body corporates listed on Bombay Stock Exchange (BSE) or National Stock Exchange (NSE), which have:

(i) Market capitalization of not less than Rs. 5000 crore as on the date of investment: and

(ii) Derivatives with the shares as underlying traded in either of the two stock exchanges.

b) Units of mutual funds regulated by the Securities and Exchange Board of India, which have minimum 65% of their investment in shares of body corporates listed on BSE or NSE. Provided that the aggregate portfolio invested in such mutual funds shall not be in excess of 5% of the total portfolio of the fund at any point in time and the fresh investment in such mutual funds shall not be in excess of 5% of the fresh accretions invested in the year.

c) Exchange Traded Funds (ETFs)/index Funds regulated by the Securities and Exchange Board of India that replicate the portfolio of either BSE Sensex Index or NSE Nifty 50 Index.

d) ETFs issued by SEBI regulated Mutual Funds constructed specifically for disinvestment of shareholding of the Government of India in body corporates.

e) Exchange traded derivatives regulated by the Securities and Exchange Board of India having the underlying of any permissible listed stock or any of the permissible indices, with the sole purpose of hedging. Provided that the portfolio invested in derivatives in terms of contract value shall not be in excess of 5% of

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Category Investment Pattern Percentage of amount to be invested

the total portfolio invested in sub-categories (a) to (d) above.

(v) Asset Backed, Trust Structured and Miscellaneous Investments

Upto 5%

a) Commercial mortgage based Securities or Residential mortgage based securities.

b) Units issued by Real Estate Investment Trusts regulated by the Securities and Exchange Board of India.

c) Asset Backed Securities regulated by the Securities and Exchange Board of India.

d) Units of Infrastructure Investment Trusts regulated by the Securities and Exchange Board of India. Provided that investment under this category No. (v) shall only be in listed instruments or fresh issues that are proposed to be listed. Provided further that investment under this category shall be made only in such securities which have minimum AA or equivalent rating in the applicable rating scale from at least two credit rating agencies registered by the Securities and Exchange Board of India under Securities and Exchange Board of India (Credit Rating Agency) Regulations, 1999. Provided further that in case of the sub-categories (b) and (d) the ratings shall relate to the rating of the sponsor entity floating the trust. Provided further that if the securities / entities have been rated by more than two rating agencies, the two lowest of the ratings shall be considered.

2. Fresh accretions to the fund will be invested in the permissible categories specified in

this investment pattern in a manner consistent with the above specified maximum permissible percentage amounts to be invested in each such investment category, while also complying with such other restrictions as made applicable for various sub-categories of the permissible investments.

3. Fresh accretions to the funds shall be the sum of un-invested funds from the past and

receipts like contributions to the funds, dividend / interest / commission, maturity amounts of earlier investments etc., as reduced by obligatory outgo during the financial year.

4. Proceeds arising out of exercise of put option, tenure or asset switch or trade of any

asset before maturity can be invested in any of the permissible categories described above in the manner that at any given point of time the percentage of the assets under the category should not exceed the maximum limit prescribed for that category and also should not exceed the maximum limit prescribed for the sub-categories, if any. However, asset switch because of any RBI mandated Government debt switch would not be covered under this restriction.

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5. Turnover ratio (the value of securities traded in the year/average value of the portfolio at the beginning of the year and at the end of the year) should not exceed two.

6. If for any of the instruments mentioned above the rating falls below the minimum

permissible investment grade prescribed for investment in that instrument when it was purchased, as confirmed by one credit rating agency, the option of exit shall be considered and exercised, as appropriate, in a manner that is in the best interest of the subscribers.

7. Once these guidelines coming into effect, the above prescribed investment pattern shall

be achieved separately for each successive financial year through timely and appropriate planning.

8. The investment of funds should be at arm’s length, keeping solely the benefit of the

beneficiaries in mind. For instance, investment (aggregated across such companies/organizations described herein) beyond 5% of the fresh accretions in a financial year will not be made in the securities of a company / organization or in the securities of a company/organization in which such a company / organization holds over 10% of the securities issued, by a fund created for the benefit of the employees of the first company / organization, and the total volume of such investments will not exceed 5% of the total portfolio of the fund at any time. The prescribed process of due diligence must be strictly followed in such cases and the securities in question must be permissible investments under these guidelines.

9. i) The prudent investment of the Funds of a trust / fund within the prescribed pattern is

the fiduciary responsibility of the Trustees and needs to be exercised with appropriate due diligence. The Trustees would accordingly be responsible for investment decisions taken-to invest the funds. ii) The trustees will take suitable steps to control and optimize the cost of management

of the fund. iii) The trust will ensure that the process of investment is accountable and transparent. iv) It will be ensured that due diligence is carried out to assess risks associated with any

particular asset before investment is made by the fund in that particular asset and also during the period over which it is held by the fund. The requirement of ratings as mandated in this notification merely intends to limit the risk associated with investments at a broad and general level. Accordingly, it should not be construed in any manner as an endorsement for investment in any asset satisfying the minimum prescribed rating or a substitute for the due diligence prescribed for being carried out by the fund/trust.

v) The trust/fund should adopt and implement prudent guidelines to prevent concentration of investment in any one company, corporate group or sector.

10. If the fund has engaged services of professional fund/asset managers for management

of its assets, payment to whom is being made on the basis of the value of each transaction, the value of funds invested by them in any mutual funds mentioned in any of the categories or ETFs or Index Funds shall be reduced before computing the payment due to them in order to avoid double incidence of costs. Due caution will be exercised to ensure that the same investments are not churned with a view to enhancing the fee payable. In this regard, commissions for investments in Category III instruments will be carefully regulated, in particular.

Disclaimer – The above new Investment Pattern issued by Ministry of Labour and Employment, Investments of Funds shall be made as per the new pattern of Investment from 01st July 2015 onwards as per the notification issued by EPFO on 1st July 2015 as amended from time to time. It is

16

further informed by EPFO that investments in the following asset classes under the said pattern have been restricted as of now: -

Category Sub Category

Asset Class

i (a) Units of mutual funds set up as dedicated funds for investment in govt securities and regulated by SEBI

ii (b) Basel III Tier-I bonds issued by scheduled commercial banks under RBI Guidelines:

ii ( e ) Units of Debt mutual funds as regulated by SEBI

ii f (iii) * Listed (or proposed to be listed in case of fresh issue) securities issued by Infrastructure debt funds operating as a Non-Banking Financial Company and regulated by Reserve Bank of India.

ii f (iv) * Listed (or proposed to be listed in case of fresh issue) units issued by Infrastructure Debt Funds operating as a Mutual Fund and regulated by Securities and Exchange Board of India.

iii ( b ) Units of Liquid mutual funds regulated by SEBI

(iv) (a to e) Equity and related Investment

v (a) * Commercial mortgage based Securities or Residential mortgage based securities

v (b) Units issued by Real Estate Investment Trusts regulated by the SEBI

v ( c ) Asset backed Securities regulated by SEBI

v (d) Units of Infrastructure Investment Trusts regulated by SEBI

* Investments to be done only after guidelines are communicated by EPFO The following limits/restrictions within the categories as approved by Board will be applicable for investments under the said pattern. 1. Investment in Central Government Securities (CTG) – Minimum 5% 2. Investment in State Development Loan (SDL) – Minimum 10% 3. Investment in State Guarantee Securities (STG) – No Investment 4. Investment in Private Sector – upto 10%* * (i) Investment may be allowed in Dual AA+ Private Sector Bonds with maturity limit of upto 5 years. (ii) Investment in dual AA+ Private Sector Bonds be restricted to a limit of 2%. All other guidelines for investments continue to remain applicable as provided in Investment Manual which was part of Investment Management Service Agreement with the Portfolio Managers.

5.2. Non-Discretionary – the portfolio, which the Portfolio Manager manages in accordance with

the directions and permission of the client. 5.3. Advisory – the client is advised on buy/ sell decision within the overall risk profile without any

back-office responsibility for trade execution, custody or accounting functions.

5.4 Types of Securities in which the Portfolio Manager generally invests

(a) Units, Magnums and other instruments of Mutual Funds;

(b) Bank Deposits;

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However in addition to the above and subject to SEBI Regulations, the Funds can also be invested in such securities, capital and money market instruments or in fixed income securities or variable securities of any description, by whatever name called including:

(a) Convertible Stock and Preference Shares of Indian Companies;

(b) Debentures (Convertible and Non-convertible), Bonds and Secured Premium Notes, Swaps, Futures and Options, Securitised Debt, Structured Products, Pass Through Certificates and Instruments which are quasi-debt instruments, Tax-exempt Bonds of Indian Companies and Corporations;

(c) Government and Trustee Securities;

(d) Treasury Bills;

(e) Commercial Papers, Certificates of Deposit and other similar Money Market instruments

(f) Tradable or any other warrants;

(g) Such other instrument(s) offered in private placements, arrangements, treaties, contracts or agreements for facilitating acquisition and/or disposing of investments as the case may be;

(h) Any other eligible mode of investment within the meaning of the Regulations issued by SEBI and amended thereto from time to time.

5.5 The policies for investments in associates/ group companies of the Portfolio Manager and

the maximum percentage of such investments therein would be subject to the applicable laws / regulations/ guidelines. AMIN currently does not intend to invest in any of its associate or group companies.

6. Risk factors

General Risk Factors 6.1. Securities investments are subject to market risk and there is no assurance or guarantee

that the objectives of the Portfolio will be achieved. 6.2. Past performance of the Portfolio Manager does not indicate its future performance.

6.3. Investments made by the Portfolio Manager are subject to risks arising from the

investment objective, investment strategy, asset allocation and non- diversification. 6.4. Investments in Securities are subject to market and other risks and there can be no

guarantee in any of the Portfolios mentioned in this Disclosure Document against loss resulting from investing in the Portfolio(s) of the Portfolio Manager. The various factors which may impact the value of the Portfolios' investments include, but are not limited to, fluctuations in the equity and bond markets, fluctuations in interest rates, prevailing political and economic environment, changes in government policy, factors specific to the issuer of the securities, tax laws, liquidity of the underlying instruments, settlement periods, trading volumes etc.

6.5. Investment decisions made by the Portfolio Manager may not always be profitable.

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6.6. The tax benefits described in this Disclosure Document are as available under the present taxation laws and are available subject to conditions. The information given is included for general purpose only. The investors should be aware that the relevant fiscal rules or their interpretation may change. As is the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of an investment in the Portfolio will endure indefinitely. In view of the individual nature of tax consequences, each investor is advised to consult his/ her own professional tax advisor.

6.7. Prospective investors should review / study this Disclosure Document carefully and in its

entirety and shall not construe the contents hereof or regard the summaries contained herein as advice relating to legal, taxation, or financial / investment matters and are advised to consult their own professional advisor(s) as to the legal, tax, financial or any other requirements or restrictions relating to the subscription, gifting, acquisition, holding, disposal (sale or conversion into money) of Portfolio and to the treatment of income (if any), capitalisation, capital gains, any distribution, and other tax consequences relevant to their portfolio, acquisition, holding, capitalisation, disposal (sale, transfer or conversion into money) of portfolio within their jurisdiction of nationality, residence, incorporation, domicile etc. or under the laws of any jurisdiction to which they or any managed funds to be used to purchase/gift portfolio of securities are subject, and also to determine possible legal, tax, financial or other consequences of subscribing / gifting, purchasing or holding portfolio of securities before making an investment.

6.8. Investments are subject to certain risks viz. limited liquidity in the market, settlement

risk, impeding readjustment of portfolio composition, highly volatile stock markets in India etc. Such loss could arise due to factors which by way of illustration, include, default or non-performance of a third party, company’s refusal to register a security due to legal stay or otherwise, disputes raised by third parties. Mis-judgment by the Portfolio Manager or his incapacitation due to any reason however remote is also a risk. Thus the investment in Indian capital markets involves above average risk for investors compared with other types of investment opportunities. Investments will be of a longer duration compared to trading in securities. There is a possibility of the value of investment and the income there from falling as well as rising depending upon the market situation. There is also a risk of total loss of value of an asset and possibilities of recovery of loss in investments only through a legal process.

6.9. The investments made are subject to external risks such as war, natural calamities,

policy changes of local / international markets which affects stock markets. 6.10. Any policy change / technology change / obsolescence of technology would affect the

investments made in a particular industry. 6.11. The Client has perused and understood the disclosures made by the Portfolio Manager

in the Disclosure Document before entering into this Agreement. 6.12. Clients are not being offered any guarantee / assured returns.

6.13. Performance of the Portfolios may be impacted as a result of specific investment

restrictions provided by the client.

6.14. 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). Consequently, corporate debentures are sold at a yield above those offered on Government Securities, which are sovereign obligations. Normally, the value

19

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. The least risk perception is in case of government securities.

6.15. Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities in the 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.

6.16. Portfolios using derivative products (such as futures and options) are affected by risks different from those associated with stocks and bonds. Such products are highly leveraged instruments. Small price movements in the underlying securities may have a large impact on the value of the derivative instrument. Some of the other risks relate to mis-pricing or improper valuation of derivatives and the inability to correlate the positions with underlying assets, rates and indices.

7. Client Representation

7.1.

** Includes EPFO and Advisory Clients

7.2. Complete disclosure in respect of transactions with related parties as per the standards

specified by the Institute of Chartered Accountants of India. Please refer Annexure I.

8. The Financial Performance of the Portfolio Manager (based on audited financial statements)

(INR ‘000)

Balance Sheet 31 March 2017 31 March 2016 31 March 2015

Shareholders' Funds

Share Capital 615,909 615,909 615,909

Reserves and Surplus 531,157 370,940

109,985

Total 1,147,066 986,849 725,894

Category of clients

No. of clients

Funds managed (Rs. cr)

Discretionary/ Non-Discretionary (if available)

Associates / Group companies

As at 31 March 2015 NIL

NA NA

As at 31 March 2016 NIL NA NA

As at 31 March 2017 NIL NA NA

As at 30 September 2017

NIL NA NA

Others

As at 31 March 2015 2** 102,019.34 ** Discretionary & Advisory

As at 31 March 2016 2** 106,311.33** Discretionary & Advisory

As at 31 March 2017 2** 124,995.52** Discretionary & Advisory

As at 30 September 2017

2** 136450.68** Discretionary & Advisory

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Balance Sheet 31 March 2017 31 March 2016 31 March 2015

Non-current Liabilities

Long-term borrowings 2,109 3,564 5484

Deferred tax liabilities - - -

Long-term provisions 20,789 20,497 19,079

Total 22,898 24,061 24,563

Current liabilities

Trade payables 75,930 64,286

110,837

Other current liabilities 77,460 91,640 93,214

Short-term provisions 10,045 10,686 10,260

Total 163,435 166,612 214,311

TOTAL 1,333,399 1,177,522 964,768

ASSETS

Non-current assets

Fixed assets - - -

Tangible assets 21,939 31,672 22,375

Intangible Assets 3,847 4,344 1,309

Long-term loans and advances 404,412 375,577 2,437

Non-current investment 103,152 103,152 388,528

Total 533,350 514,745 414,649

Current Assets

Current investments 491,175 456,834 304,130

Trade receivables 250,433 135,880 140,864

Cash and cash equivalents 9,189 20,202 55,694

Short-term loans and advances 49,252 49,861 49,431

Other current assets - -

Total 800,049 662,777 550,119

TOTAL 1,333,399 1,177,522 964,768

Profit & Loss Statement Year ended 31-Mar-17

Year ended 31-Mar-16

Year ended 31-Mar-15

Total Income 901,413 935,024 868,894

Total Expenses 724,824 673,762 735,619

Profit/(loss) before depreciation & tax

176,589 261,262 133,275

Depreciation 17,817 16,839 19,240

Profit/(loss) before exceptional items and tax

158,772 244,423 114,035

Exceptional items - 45,000 -

Profit Before Tax 158,772 289,423 -

Provision for tax (net of deferred tax)

1445 9,037 8,907

Short Provision For Earlier Year - 19,431

Fringe benefit tax - -

Net Profit/(loss) after tax 160,217 260,955 105,128

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9. Portfolio Management Performance

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 weighted average method in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993.

Portfolio Benchmark

01/04/2017 -

30/09/2017

01/04/2016 -

31/03/2017

01/04/2015 -

31/03/2016

01/04/2014 -

31/03/2015

Portfolios HSBC Alpha Account Signature Portfolio Guard (#Since 01/04/2014 till date of exit of last client from portfolio - 02/02/2015)

NA NA NA #51.38%

Benchmarks BSE500 NA NA NA #36.87%

Portfolios HSBC Alpha Account Strategic Portfolio (~Since 01/04/2014 till date of exit of last client from portfolio - 18/12/2014)

NA NA NA ~70.98%

Benchmarks BSE Midcap NA NA NA ~40.69%

Portfolios HSBC Large Cap Oriented Portfolio (^Since 01/04/2014 till date of exit of last client from portfolio - 23/03/2015)

NA NA NA ^36.67%

Benchmarks Nifty NA NA NA ^27.55%

Portfolios HSBC Select 1 Portfolio (*Since 01/04/2014 till date of exit of last client from portfolio -23/12/2014)

NA NA NA *72.84%

Benchmarks BSE500 NA NA NA *27.92%

Notes: a. The returns shown above are post expenses. b. The performance of the Portfolio Manager is calculated using weighted average method taking

each individual category of investments. c. The portfolio performance for the period April 1, 2015 to March 31, 2016, April 1, 2016 to March

31, 2017 and April 01, 2017 to September 30, 2017 is not provided as there were Nil clients in the equity portfolios.

10. Nature of expenses

The following are the general costs and expenses to be borne by the client availing the services of the Portfolio Manager. However, the exact quantum and nature of expenses relating to each of the following services is annexed to the Portfolio Management Agreement in respect of each of the services provided.

10.1.1 Portfolio Management Fees

The Portfolio Management Fees relate to the Portfolio Management Services offered to the Clients under discretionary management in equity strategies. The fee may be a fixed fee or performance based fee or a combination of both, as agreed by the client in the PMS Agreement. It also consists of Subscription Fees and Exit Load, as agreed by the client in the PMS agreement. The nature/quantum of fees charged to clients (approx.) is provided below.

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Sr. No.

Nature of Fee % Range

1 Portfolio Management Fees

Annual recurring fee 1.25% to 2.25% of Daily Average AUM

Variable Fee 15% of annualized performance above a pre-determined hurdle rate can be charged by the portfolio manager as performance fee depending on the fees structure opted by the client.

Upfront Fee 0% to 2.5%

Exit Fee Nil w.e.f. 5th September 05, 2013

2 Depository / Custodian Fee At actual

3 Registration and transfer agents' fees At actual

4 Brokerage, transaction costs and other services At actual

5 Fees and charges in respect of investment in mutual funds At actual

6 Certification charges or professional charges At actual

7 Securities lending and borrowing charges At actual

8 Any other incidental and ancillary charges At actual

* The above fees structure is based on the latest fees structure offered by portfolio manager and excludes service tax which will be charged at the prevailing rates.

10.1.2 Depository / Custodian fee comprise of

charges relating to custody and transfer of shares, bonds and units, opening and operation of demat account, dematerialization and rematerialization, and / or any other charges in respect of the investment etc.

10.1.3 Registration and transfer agents' fees comprise of

fees payable for the Registrars and Transfer Agents in connection with effecting transfer of any or all of the securities and bonds including stamp duty, cost of affidavits, notary charges, postage stamps and courier charges

10.1.4 Brokerage, transaction costs and other services comprise of

brokerage and other charges like stamp duty, transaction cost and statutory levies such as service tax, securities transaction tax, turnover fees and such other levies as may be imposed upon from time to time.

10.1.5 Fees and charges in respect of investment in mutual funds

HSBC Mutual Fund shall be recovering expenses or management fees and other incidental expenses and such fees and charges shall be paid to the Asset Management Company of the Mutual Funds on behalf of the Client. Such fees and charges are in addition to the portfolio Management fees described above.

10.1.6 Certification charges or professional charges comprise of

the charges payable to outsourced professional services like accounting, taxation and any legal services, etc.

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10.1.7 Securities lending and borrowing charges comprise of

the charges pertaining to the lending of securities, costs of borrowings and costs associated with transfer of securities connected with the lending and borrowing transfer operations. Any other incidental and ancillary charges comprise of all incidental and ancillary expenses not recovered above but incurred by the Portfolio Manager on behalf of the client shall be charged to the Client. The Portfolio Manager shall deduct directly from the cash account of the client all the fees/costs as specified above and shall send a statement to the client for the same. The fees charged to the client for PMS come under the ambit of “fees for technical services” under Section 194J of the Income Tax Act, 1961(“the Act”). As the section calls for withholding tax, the client is required to withhold tax @ 10 % (plus applicable surcharge and education cess if applicable) on the fees that the client pays to the Portfolio Manager, if he / she fall under the following two categories: a) Individual / HUFs - In case a client is having a total sales, gross receipts or

turnover from business exceeding Rs. 1 crore or receipts from profession exceeding Rs. 50 lakhs (w.e.f. financial year 2016-17), during the financial year immediately preceding the financial year in which such sum by way of fees for technical services is credited or paid then he is liable to deduct tax at source on fees credited or paid, whichever is earlier, to the portfolio manager. However, the individuals/HUF shall not be required to deduct tax source in case such sum is credited or paid exclusively for personal purpose of the individual/ member of the HUF.

b) Any other person - Any other clients not covered by (a) above are liable to

deduct tax at source at the time of credit of fees or at the time of payment thereof, to the Portfolio Manager.

This implies, the client (as mentioned in point a and b above) while making payment or at the time of credit of the fees would have to deduct tax at source. However, as per the Agreement with the client, the Portfolio Manager acts as ‘an agent as well as a trustee’ of its clients and is entrusted by the client to fully operate its bank account. Further, the clients of the Portfolio Manager have executed a power of attorney in its favour. As the responsibility can vest with the Portfolio Manager on account of this agreement, and as an extension to our services, the Portfolio Manager will carry out the following on behalf of the client:

i) Deduct tax at source at the specified rate on the fees payable by the client

to the Portfolio Manager as per the provisions of section 194J; and ii) Make payment to the Government within the due date specified under the

Income Tax Rules, 1962. For this purpose, we take the Permanent Account Number (PAN), the Tax Deduction at Source Account Number (TAN) and Assessing Officer details from the client towards the Tax Deducted at Source on behalf of the client. However, the responsibility to issue the Tax Deduction Certificate in Form 16A and filing TDS return remains with the client who shall provide it to the Portfolio Manager within the statutory time limit laid down under the income tax provisions.

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11. Taxation - Discloses the implications of investments in securities and the tax provisions on

Income/ Loss or Tax Deduction at Source on various investors.

The Client, i.e. Employee Provident Fund Organisation (“EPFO”) is deemed to be a recognised Provident Fund within the meaning of that term under the Income tax Act, 1961 (“the IT Act”) as per section 9 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and, accordingly, any income received by the Trustees is exempt from income tax u/s 10(25) of the IT Act.

However, the client would be best advised to consult his or her tax advisor/consultant for appropriate counsel on tax treatment of the nature of income indicated herein.

11.1. Tax implications for other clients 11.1.1 Taxation

Disclose the implications of investments in securities and the tax provisions on Income/ Loss or Tax Deduction at Source on various investors. The following are the tax provisions applicable to Clients investing in the Portfolio Management Services under the taxation laws as on the date herewith, as advised by our Tax Consultants.

11.1.2 Dividend

Dividends declared, distributed or paid on or after April 1, 2003 by domestic companies will be exempt in the hands of the shareholder recipient (except where the dividend income of the certain specified resident recipient exceeds ten lakh rupees) but a tax on distributed profits at the rate of 15 per cent (as increased by surcharge @ 12 per cent), Education Cess of 2% and Secondary and Higher Education Cess of 1%) will be payable by the domestic company. From June 1, 2013, such tax will be computed after deducting the amount of dividend received by the domestic company from its subsidiary where the said subsidiary has paid the tax under section 115-O (in case of domestic subsidiary company) and under section 115BBD (in case of a foreign subsidiary company) on such dividend. As amended by the Finance Act, 2017, dividend will be taxable at the rate of 10 percent to the specified assesse1, in case aggregate dividend earned during the financial year exceeding Rs 10 lakhs. Income distributed on or after April 1, 2003 by a mutual fund specified u/s 10(23D) of the Act will be exempt in the hands of the unitholders but a tax on distributed income will be paid under section 115R as under: In case of distribution by a Debt fund, money market mutual fund or a liquid fund:

25 per cent when income is distributed to any person being individual or Hindu Undivided Family and

30 per cent when income is distributed to any other person

In case of distribution by an Infrastructure Debt Fund (“IDF”) Scheme: 25 per cent in case of distribution to an individual or Hindu Undivided Family; and 30 per cent when income is distributed to any other person other than a company.

1 "specified assessee" means a person other than,—

(i) a domestic company; or

(ii) a fund or institution or trust or any university or other educational institution or any hospital or other medical institution referred to in sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10; or

(iii) a trust or institution registered under section 12A or section 12AA.

25

5 per cent in case of distribution to a non-resident (not being a company) and to a foreign company.

With effect from 1 October 2014, the rates mentioned above would need to be grossed up.

However, no tax on such distributed income is payable by an equity oriented mutual fund. With effect from 1 October 2014, the rates mentioned above would need to be grossed up. Further, the tax on such distribution will be increased by surcharge @12% and further increased by the Education Cess @ 2% and Secondary and Higher Education Cess @ 1%.

11.2 Capital Gains Tax Profit on sale of investments, (being securities (other than a unit) listed in recognised stock exchange in India or units of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or a unit of an equity oriented fund or a zero coupon bond held for a period of more than 12 months (36 months in case of any other investments) immediately preceding the date of transfer, will be treated as long-term capital gains; in all other cases, it would be treated as short-term capital gains. With effect from Assessment Year 2017- 18, period of holding to be considered as 24 months instead of 36 months in case of unlisted shares of a company. The taxability of long-term and short-term capital gains is discussed below:

11.2.1. Transactions in securities on recognized stock exchange and in units of an equity oriented fund: Long term capital gains on sale of equity share in a company and on units of an equity

oriented fund are exempt from tax when the transactions for sale take place on recognized stock exchanges and are subject to the Securities Transactions Tax (“STT”) and transaction for purchase of shares is on or after 1 October 2004 and subject to STT. However, such long Term Capital Gains arising to a company shall be taken into account in computing the book profit and income tax payable u/s 115JB of the Act.

Short term capital gains on sale of equity share in a company and units of an equity oriented fund are taxable @15%^ (when the transactions for purchase and sale take place on recognized stock exchanges and are subject to the STT).

^ Plus applicable surcharge @ 7%/12% (in the case of a domestic company) and 2%/5% in the case of a foreign company, if any and education cess at 2% and Secondary and Higher Education Cess @ 1% on tax and surcharge.

Additionally, STT is payable in respect of purchase of listed securities and units of an

equity oriented fund on recognized stock exchanges, as under:

Sr. No. Taxable securities transaction Rate (per cent)

Payable by

1. Purchase of an equity share in a company where

(a) the transaction of such purchase is entered into in a recognized stock exchange; and

(b) the contract for the purchase of such share or unit is settled by the actual delivery or transfer of such share

0.1 Purchaser

2. Purchase of a unit of an equity oriented mutual fund, where

(a) the transaction of such purchase is entered

Nil Purchaser

26

Sr. No. Taxable securities transaction Rate (per cent)

Payable by

into in a recognized stock exchange; and (b) the contract for the purchase of such unit is

settled by the actual delivery or transfer of such unit

3.

Sale of an equity share in a company where - (a) the transaction of such sale is entered into in

a recognized stock exchange; and (b) 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 units of an equity oriented mutual fund where - a) the transaction of such sale is entered into in a

recognized stock exchange; and b) the contract for the sale of such unit is settled by

the actual delivery or transfer of such units

0.001 Seller

Sale of an equity share in a company or a unit of an equity oriented fund, where –

(a) the transaction of such sale is entered into in a recognized stock exchange; and

(b) the contract for the sale of such share or unit is settled otherwise than by the actual delivery or transfer of such share or unit

0.025 Seller

4. (a) Sale of an option in securities 0.05 Seller

(b) Sale of an option in securities, where option is exercised

0.125 Purchaser

(c) Sale of a futures in securities 0.01 Seller

5. Sale of a unit of an equity oriented fund to the Mutual Fund

0.001 Seller

6. Sale of unlisted equity shares under an offer for sale as part of an initial public offer and shares of the company are subsequently listed on the stock exchange

0.2 Seller

The investor would be liable to pay STT at the above rates on the value of the securities purchased/sold on a recognized stock exchange in India. The securities, in respect of which such tax is leviable, are: -

Equity Shares,

Derivatives;

Units of an equity oriented fund or any other instrument issued by any collective investment scheme to the investors in such schemes;

The value of taxable securities transaction –

(a) In the case of a taxable securities transaction relating to an option in securities, shall be –

(i) the option premium, in respect of a transaction of sale of an option in securities (ii) the settlement price, in respect of a transaction of sale of an option in securities, where

option is exercised. (b) in the case of a taxable securities transaction relating to a derivative, being “ futures”, shall

be the price at which such futures is traded; and

27

(c) in the case of any other taxable securities transaction, shall be the price at which such securities are purchased or sold:

STT is not available as a deduction in computing capital gains. However, from the assessment year 2009-10, where income from taxable securities transactions referred to above is treated as business income, the person will be eligible for deduction u/s 36(1)(xv), for the amount of STT paid.

11.2.2. Transactions in other securities or transactions not on recognized stock exchanges

Long Term Capital Gains

a. On units of equity oriented funds:

Section 10(38) exempts long term capital gains arising from the transfer of units of an equity oriented fund provided the transaction of sale is entered into on or after the date on which the securities transaction tax is made applicable and such transaction is chargeable to the securities transaction tax.

However such long term capital gains arising to a company shall be taken into account in computing the book profit and income tax payable under section 115JB.

b. On units of funds other than the equity oriented funds:

(i) Resident Investors

Long-term capital gains in respect of units held for a period of more than 36 months will be chargeable u/s.112 at the rate of 20%. Capital gains would be computed after reducing the aggregate of cost of acquisition (as adjusted by cost inflation index notified by the Central Government) and expenditure incurred wholly and exclusively in connection with transfer.

Further, in the case of Individuals and HUFs, where taxable income as reduced by long-term capital gains, is below the basic exemption limit, the long-term capital gains will be reduced to the extent of the shortfall and only the balance long-term capital gains will be subjected to income tax at 20%.

For Firms, Indian Companies and other residents:

(a) Firms and other residents:

Long term capital gains will be subjected to the income tax at the rate of 20% (plus surcharge and cess).

(b) Indian Companies:

Long term capital gains will be subjected to the income tax at the rate of 20% (plus surcharge and cess).

(ii) For non-residents and foreign companies:

(a) Non-residents other than a company:

Long-term capital gains on transfer of unlisted units arising after April 1, 2012 will be subjected to the income tax at the rate of 10%. However, no benefit of Currency Inflation Indexation or the Cost Inflation Indexation is available.

Long term capital gains on other units will be taxable @20%.

(b) Foreign companies:

Long-term capital gains on transfer of unlisted units arising after April 1, 2012 will be subjected to the income tax at the rate of 10%. However, no benefit of Currency Inflation Indexation or the Cost Inflation Indexation is available.

Long term capital gains on other units will be taxable at the rate of 20%.

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(iii) For Non-Resident Indians ("NRI"s):

Under Section 115E of the Act for NRIs, income by way of long-term capital gains in respect of Units is chargeable at the rate of 10%. However, no benefit of Cost Inflation Indexation is available.

(iv) For Overseas Financial Organizations, including Overseas Corporate Bodies fulfilling conditions laid down under Section 115AB of the Act (Offshore Funds):

Under Section 115AB of the Act, long term capital gains in respect of units purchased in foreign currency which units are held for a period of more than 36 months will be chargeable at the rate of 10%. Such gains would be calculated without indexation of cost of acquisition.

(v) For Foreign Portfolio Investors (FPIs) / Foreign Institutional Investors ("FIIs"):

Under section 115AD of the Act, long term capital gains in respect of units held for more than 36 months would be taxed at the rate of 10% plus surcharge (in case FPIs/FIIs are corporate bodies). Such gains would be calculated without indexation of cost of acquisition.

Tax on long term capital gains in all the above cases will increase by applicable surcharge and 3% education cess as per the Act.

Short Term Capital Gain:-

i. On units of equity oriented funds:

Section 111A provides that the short term capital gains arising from the transfer of units of an equity oriented fund will be taxed at 15% provided the transaction of sale is entered into on or after the date on which the securities transaction tax is made applicable and such transaction is chargeable to the securities transaction tax.

ii. On units of funds other than equity oriented funds:

Short Term Capital Gains in respect of Units held for a period of not more than 36 months is added to the total income. Total income including short-term capital gains is chargeable to tax as per the relevant slab rates (other than FPIs). FPIs are required to pay taxes at the rate of 30 percent on short term capital gains.

The maximum tax applicable to different categories of assesses are as follows:

Resident Individuals and HUF 30%

Firms 30%

Indian companies 30% or 25%

Non Resident Indians 30%

Foreign Companies 40%

Overseas financial Organisations and FPIs 40% if the entity is a corporate body (30% in other cases)

Tax on short term capital gains in all the above cases will increase by applicable surcharge and 3% Education Cess (as may be applicable) as per the Act.

11.2.3. Capital loss can be set off against any capital gains as follows: Long-term capital loss of a tax year, which is chargeable to tax, cannot be set off against short-term capital gains arising in that year. On the other hand, short-term capital loss in a year can be set off against both short-term and chargeable long-term capital gains of the same year.

29

Unabsorbed short term and long-term capital loss of prior years shall be separately carried forward. However, short-term capital loss shall be eligible for set off against the chargeable long term capital gains while the long term capitals loss brought forward for set off shall be eligible to be set off only against chargeable long term capital gains of the current year.

11.3 Dividend stripping

Losses arising from the sale/transfer (including redemption) of securities (including units) purchased up to 3 months prior to the record date (for entitlement of dividends) and sold within 9 months (in case of units) or 3 months (in case of any other securities) after such date, will be disallowed to the extent of income/dividend distribution (excluding redemptions) on such units (or other securities) claimed as tax exempt by the unitholder.

11.4 Bonus stripping

In case of units purchased within a period of 3 months prior to the record date (for entitlement of bonus) and sold/ transferred (including redeemed) within 9 months after such date, the loss arising on transfer of original units shall be ignored for the purpose of computing the income chargeable to tax. The loss so ignored shall be treated as cost of acquisition of such bonus units.

11.5 The tax rates applicable to resident individuals, Hindu Undivided Families and NRIs are as

follows: Slab Tax Rate*: (A) In the case of resident individuals of the age of sixty years or more but less than eighty

years at any time during the previous year:

Particulars Rates of income tax

Where the total income does not exceed Rs. 3,00,000

Nil

Where the total income exceeds Rs. 3,00,000 but does not exceed Rs.5,00,000

5% of the amount by which the total income exceeds Rs. 3,00,000 but does not exceed Rs. 500,000

Where the total income exceeds Rs.5,00,000 but does not exceed Rs. 10,00,000

Rs. 10,000 plus 20% of the amount by which the total income exceeds Rs.5,00,000 but does not exceed Rs. 10,00,000

Where the total income exceeds Rs. 10,00,000

Rs. 110,000 plus 30% of the amount by which the total income exceeds Rs.10,00,000

(B) In the case of every individual, being a resident in India, who is of the age of eighty

years or more at any time during the previous year:

Particulars Rates of income tax

Where the total income does not exceed Rs.5,00,000

Nil

Where the total income exceeds Rs.5,00,000 but does not exceed Rs.10,00,000

20% of the amount by which the total income exceeds Rs.5,00,000 but does not exceed Rs. 10,00,000

Where the total income exceeds Rs.10,00,000

Rs.100,000 plus 30% of the amount by which the total income exceeds Rs.10,00,000

30

(C) In the case of other individuals other than those referred to in (A) and (B) above and Hindu Undivided Families or Association of Persons or Body of Individuals, or every artificial juridical person other than those referred to in (A) and (B) above:

Particulars Rates of income tax

Where the total income does not exceed Rs. 2,50,000

Nil

Where the total income exceeds Rs. 2,50,000 but does not exceed Rs.5,00,000

5% of the amount by which the total income exceeds Rs. 2,50,000 but does not exceed Rs. 5,00,000

Where the total income exceeds Rs.5,00,000 but does not exceed Rs.10,00,000

Rs. 12,500 plus 20% of the amount by which the total income exceeds Rs.5,00,000 but does not exceed Rs. 10,00,000

Where the total income exceeds Rs.10,00,000

Rs. 1,12,500 plus 30% of the amount by which the total income exceeds Rs.10,00,000

* Rebate from tax of upto INR 2,500 available for a resident individual whose net total income is below Rs. 350,000 w.e.f. AY 2018-19. The tax rates as mentioned above will be increased by education Cess at 2% and Secondary and Higher Education Cess @ 1%. # The tax rate as mentioned above in point 11.5 will be increase by a surcharge @15% if the total income exceeds Rs. 1 crore and @10% if the total income exceeds Rs. 50 lakhs but less than Rs. 1 crore, marginal relief is available.

11.6 Domestic Companies:

In case of Indian Companies having total turnover of less than Rs. Fifty crores in financial year 2015-16, the tax rate applicable would be 25 percent (plus Education Cess @ 2% and Secondary and Higher Education Cess @ 1% on the amount of tax and Surcharge as applicable).

In the case of Indian Companies having total income of less than Rs. One Crore, the tax rate applicable would be 30 percent (plus Education Cess @ 2% and Secondary and Higher Education Cess @ 1% on the amount of tax).

In the case of Indian Companies having total income of more than Rs. One Crore, but less than Ten crores, the tax rate applicable would be 30 percent (plus 7% surcharge and Education Cess @ 2% and Secondary and Higher Education Cess @ 1% on the amount of tax and surcharge).

In the case of Indian Companies having total income of more than Rs. Ten Crore, the tax rate applicable would be 30 percent (plus 12% surcharge and Education Cess @ 2% and Secondary and Higher Education Cess @ 1% on the amount of tax and surcharge).

Notes: 1. The above provisions are as per the Finance Act 2017 and applicable for the financial year

beginning from April 01, 2017. 2. However, the client would be best advised to consult his or her tax advisor/consultant for

appropriate counsel on tax treatment of the nature of income indicated herein.

11.7 Commodity Transaction Tax (‘CTT’) CTT is would be levied on the value of taxable commodities transactions as follows:

Transaction

Rate Payable by

Sale of commodity derivative (other than agricultural commodities) entered in a recognised association

0.01% Seller

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12. Accounting policies- Disclose the accounting policy followed by the Portfolio Manager while accounting for the portfolio investments of the clients. 12.1 Basis of Accounting

Books and Records would be separately maintained in the name of the client to account for the assets and any additions, income, receipts and disbursements in connection therewith, as provided by the SEBI (Portfolio Management) Regulations, 1993, as amended from time to time. Accounting under the respective portfolios will be done in accordance with Generally Accepted Accounting Principles. As SEBI (Portfolio Management) Regulations, 1993, do not explicitly lay down detailed accounting policies, such policies which are laid down under SEBI (Mutual Fund) Regulations would be followed, in so for as accounting and valuation for equities or equity related instruments are concerned.

12.2 Maintenance of Client Account 12.2.1 In the case of investments by the Client in listed securities and in the event that

the Client is a Non-Resident Indian, as defined by SEBI from time to time and further in instances where the Client opts for the Non-Pool Account, the Portfolio Manager shall keep the funds of the Client in a separate designated account to be maintained by it in a scheduled commercial bank and shall also maintain a separate Portfolio record in the name of the Client in its books for accounting the assets and income of the Client.

In line with SEBI circular No. IMD/DOF I/PMS/Cir- 4/2009 dated 23 June 2009,

the portfolio manager keeps the funds of all clients in a separate bank account maintained by the portfolio manager and the following conditions are adhered to: There are clear segregation of each client’s fund through proper and

clear maintenance of back office records; Portfolio Managers do not use the funds of one client for another client; Portfolio Managers also maintain an accounting system containing

separate client-wise data for their funds and provide statement to clients for such accounts at least on monthly basis; and

Portfolio Managers reconcile the client-wise funds with the funds in the aforesaid bank account on daily basis.

12.2.2 The Portfolio Manager also maintains a separate depository account of each

client.

12.3 Portfolio Valuation

12.3.1 Investments in Equity or Equity Related instruments and Debt

Securities listed on a recognized stock exchange are valued at the last

quoted closing price on the National Stock Exchange of India Limited

(NSE). If on a particular valuation date, a security is not traded on NSE,

the value at which it is traded on The Stock Exchange, Mumbai (BSE) is

used or any recognized stock exchange. If a particular security is not

listed on the NSE, then it is valued at the last quoted closing price on

the BSE on the valuation date or on a recognized stock exchange as

the case may be.

12.3.2 Non-traded and thinly traded equity securities, including those not

traded within thirty days prior to the valuation date are valued at fair

value as determined by HSBC Asset Management (India) Private

32

Limited. Non-traded and thinly traded Fixed Income Instruments,

including those not traded within seven days prior to the valuation

date will be valued at cost plus interest accrual till the beginning of the

day plus the difference between the redemption value and the cost

spread uniformly over the remaining maturity period of the

instrument.

12.3.3 Equity securities awaiting listing are valued at fair value as determined

in good faith by HSBC Asset Management (India) Private Limited. Fixed

Income Instruments that are awaiting listing will be valued at cost plus

interest accrual till the beginning of the day plus the difference

between the redemption value and the cost spread uniformly over the

remaining maturity period of the instrument.

12.3.4 Equity share warrants listed on a recognised stock exchange are

valued at the last quoted closing price on NSE. If on a particular date

the warrant is not traded on NSE the value at which it is traded on BSE

is used. If no sale is reported at that time the last quoted closing price

of the equity shares receivable by the Portfolio when the option is

exercised less price per share payable upon exercise of the warrant

and the last dividend if any paid by the issuer of the warrants on the

shares of the issuer is used.

12.3.5 Instruments bought on ‘repo’ basis are valued at the resale price after

deduction of applicable interest up to the date of resale.

12.3.6 Investments in Mutual funds will be valued at the repurchase NAV

declared for the relevant schemes on the date of the report or the

most recent NAV will be reckoned.

12.3.7 In the Derivatives segment, the unrealized gains/losses for Futures and

Options will be calculated by marking all the open positions to market.

12.4 Securities Transaction

Investment securities transactions are accounted for on a trade date basis. The cost

of the investments acquired or purchased would include brokerage, stamp charges

and any charges customarily included in the broker’s contract note or levied by any

statue except STT(Securities Transaction Tax). Similarly, in case of Sale Transaction,

the above-mentioned charges will be deducted from the sale price. STT charged on

purchase/sale of securities during the financial year is recognized as an expense.

Realised Gains/Losses will be calculated by applying the First in/ First Out method.

12.5 Income/expenses All investment incomes and expenses will be accounted on accrual basis. Dividend will be accrued on the ex-date of the securities and the same will be reflected in the clients’ books on the ex-date. Similarly, bonus shares will be accrued on the ex-date of the securities and the same will be reflected in the clients’ books on the ex-date. In the case of Fixed Income instruments, purchased/sold at Cum-interest rates, the interest component upto the date of purchase /sale will be taken to interest receivable/payable account and net of interest will be at the cost/sale for the purpose of calculating realized gains/losses.

33

13. Investors services

13. Name, address and telephone number of the investor relation officer who shall attend to the investor queries and complaints.

Denny Thomas Chief Operating Officer HSBC Asset Management (India) Private Limited 3rd Floor, Mercantile Bank Chamber, 16, V N Road, Fort, Mumbai 400 001 Tel : + 91 22 6614 5000 email : hsbcpms@hsbc.co.in

13.1 Grievance redressal and dispute settlement mechanism.

The Portfolio Manager shall attend to and address any client query or concern as soon as possible to mutual satisfaction. All disputes, differences, claims and questions whatsoever which shall arise either during the subsistence of the agreement with a client or afterwards with regard to the terms thereof or any clause or thing contained therein or otherwise in any way relating to or arising there from or the interpretation of any provision therein shall be, in the first place settled by mutual discussions, failing which the same shall be referred to and settled by arbitration 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. The arbitration shall be held in Mumbai and be conducted in English language. The agreement with the client shall be governed by, construed and enforced in accordance with the laws of India. Any action or suit involving the agreement with a client or the performance of the agreement by the either party of its obligations will be conducted exclusively in courts located within the city of Mumbai in the State of Maharashtra.

14. Foreign Account Tax Compliance Act (FATCA):

The Hiring Incentives to Restore Employment Act (the “Hire Act”) was signed into US law in March 2010. It includes provisions generally known as FATCA. The intention of these is that details of U.S. investors holding assets outside the US will be reported by financial institutions to the IRS, as a safeguard against U.S. tax evasion. As a result of the Hire Act, and to discourage non-U.S. financial institutions from staying outside this regime, financial institutions that do not enter and comply with the regime will be subject to a 30% penalty withholding tax with respect to certain U.S. source income (including dividends) and gross proceeds from the sale or other disposal of property that can produce U.S. source income. Sections 1471 through 1474 of the U.S. Internal Revenue Code impose a 30% withholding tax on certain payments to a foreign financial institution (“FFI”) if that FFI is not compliant with FATCA. The Company is a FFI and thus, subject to FATCA. Beginning 1 July 2014*, this withholding tax applies to payments to the Company that constitute interest, dividends and other types of income from U.S. sources (such as dividends paid by a U.S. corporation) and beginning on 1 January 2017, this withholding tax is extended to the proceeds received from the sale or disposition of assets that give rise to U.S. source dividend or interest payments. These FATCA withholding taxes may be imposed on payments to the Company unless (i) the Company becomes FATCA compliant pursuant to the provisions of FATCA and the relevant regulations, notices and announcements issued thereunder, or (ii) the Company is subject to an appropriate Intergovernmental Agreement to improve international tax compliance and

34

to implement FATCA. The Company intends to comply with FATCA in good time to ensure that none of its income is subject to FATCA withholding. * or such date as may be applicable India has entered into Inter Governmental Agreement (“IGA”) with USA on 9th July 2015 and has notified Income Tax rules for compliance with FATCA regulations. Further, India has also signed a multilateral agreement on June 3, 2015, to automatically exchange information based on Article 6 of the Convention on Mutual Administrative Assistance in Tax Matters under the Common Reporting Standard (CRS). The Portfolio Manager intends to take any measures that may be required to ensure compliance under the terms of the IGA and local implementing regulations. In order to comply with its FATCA/CRS obligations, the Company will be required to obtain certain information from its investors so as to ascertain their tax status. If the investor is a specified person, or does not provide the requisite documentation, the Company may need to report information on these investors to the appropriate tax authority, as far as legally permitted. If an investor or an intermediary through which it holds its interest in the Company either fails to provide the Company, its agents or authorised representatives with any correct, complete and accurate information that may be required for the Company to comply with FATCA/CRS, the investor may be subject to withholding on amounts otherwise distributable to the investor, may be compelled to sell its interest in the Company or, in certain situations, the investor’s interest in the Company may be sold involuntarily. The Company may at its discretion enter into any supplemental agreement without the consent of investors to provide for any measures that the Company deems appropriate or necessary to comply with FATCA/CRS, subject to this being legally permitted under the IGA or the Indian laws and regulations. Other countries are in the process of adopting tax legislation concerning the reporting of information. The Company also intends to comply with such other similar tax legislation that may apply to the Company although the exact parameters of such requirements are not yet fully known. As a result, the Company may need to seek information about the tax status of investors under such other country’s laws and each investor for disclosure to the relevant governmental authority. Investors should consult their own tax advisors regarding the FATCA/CRS requirements with respect to their own situation. In particular, investors who hold their Units through intermediaries should confirm the FATCA/CRS compliance status of those intermediaries to ensure that they do not suffer FATCA/CRS withholding tax on their investment returns.

15. SEBI Scores Platform

SEBI has launched a centralized web based complaints redress system (SCORES), which enable investors to lodge and follow up their complaints and track the status of redressal of such complaints from anywhere. This also enables the market intermediaries and listed companies to receive the complaints from investors against them, redress such complaints and report redressal. All the activities starting from lodging of a complaint till its disposal by SEBI would be carried online in an automated environment and the status of every complaint can be viewed online at any time. An investor, who is not familiar with SCORES or does not have access to SCORES, can lodge complaints in physical form. However, such complaints would be scanned and uploaded in SCORES for processing.

For HSBC Asset Management (India) Private Limited Sd/- Ravi Menon Director

Sd/- Kishori Udeshi Director

Date : October 27, 2017 Place : Mumbai

Annexure - I

Related party disclosures

Names of related parties and nature of relationship

1 Holding Company

HSBC Securities and Capital Markets (India) Private Limited

2 Ultimate Holding Company

HSBC Holdings PLC

3 Fellow subsidiaries

The Hong Kong and Shanghai Banking Corporation Limited - India Branches

HSBC Global Asset Management (Hong Kong) Limited

HSBC Software Development (India) Private Limited

HSBC Electronic Data Processing (India) Private Limited

HSBC Global Asset Management Limited

The Hong Kong and Shanghai Banking Corporation Limited, Hong Kong

HSBC Invest Direct Securities (India) Limited.

HSBC Bank Plc.

HSBC Global Asset Management (Singapore) Limited

4 Others

HSBC Mutual Fund *

* HSBC Asset Management (India) Private Limited is the Investment Manager to HSBC Mutual Fund.

5

Mr. Ravi Menon ( Appointed with effect from Apr 24, 2015)

Mr. Puneet Chaddha (Resigned with effect from May 24, 2016)

Related party transactions

(All amounts in thousands of Indian Rupees unless otherwise stated)

i) Transactions during the year are as under:

March

31,2017

March

31,2016

March

31,2017

March

31,2016

March

31,2017

March

31,2016

March 31,2017 March 31,2016

Income

Investment management fees - - - - 519,790 500,536 - -

Advisory fees - - 339,241 367,702 - - - -

Dividend - - - - - - - -

Profit / (Loss) on sale of fixed assets

(net) (non trade)/ Other revenue

- - - - - - - -

Expenses

Managerial Remuneration - - - - - - 25,996 19,613

Training - - 4 121 - - - -

Brokerage and incentives - - - - - 1 - -

Support service charges - - 89,034 60,169 - - - -

Rent and Utilities - - 42,285 33,290 - - - -

Repairs and maintenance -

Computers

3,665 4,879 14,771 8,435 - - - -

Scheme related expenses - - - - 15,530 7,386 - -

Bank and Guarantee charges - - 2,181 2,033 - - - -

Refund of Deposit for premises - - 3,601 7,904 - - -

Deposit paid for premises - - 908 4,964 - - -

Purchase of investments - - - - 605,500 977,947 - -

Sale of investments - - - - 600,500 750,639 - -

* HSBC Asset Management (India) Private Limited is the Investment Manager to HSBC Mutual Fund.

As per Accounting Standard (AS 18) on ‘Related Party Disclosure’, the releated parties are as follows

Key management personnel

The nature and volume of transactions during the year and balances outstanding as year end with related parties in the ordinary course of business

Particulars with Holding with fellow with others* with Key Management Personnel

Notes to related party disclosures (to the extent of material transactions)

March 31,2017 March 31,2016

Investment management fees

HSBC Mutual Fund 519,790 500,536

Advisory fees

HSBC Global Asset Management (Hongkong) Limited 339,241 367,702

Managerial Remuneration

Ravi Menon 25,726 2,928

Puneet Chaddha 270 16,685

Training

HSBC Global Asset Management (Hongkong) Limited 4 101

Brokerage and incentives

HSBC Mutual Fund - 1

Support service charges

HSBC Global Asset Management Limited 38,091 14,234

HSBC Global Asset Management (Hongkong) Limited 24,719 27,007

The Hongkong and Shanghai Banking Corporation Ltd - Hongkong 7,286 8,760

HSBC Electronic Data Processing (India) Pvt Ltd 4,311 9,586

The Hong Kong and Shanghai Banking Corporation Limited - India - 581

HSBC Bank Plc 2,574 -

HSBC Holdings Plc 12,052 -

Rent and Utilities

The Hong Kong and Shanghai Banking Corporation Limited - India 42,285 33,290

Repairs and maintenance - Computers

HSBC Securities and Capital market Pvt ltd 3,665 4,879

HSBC Software Development Pvt Ltd 14,771 8,435

Scheme related expenses

HSBC Mutual Fund 15,530 7,386

Bank and Guarantee charges

The Hong Kong and Shanghai Banking Corporation Limited - India 2,181 2,033

Deposit for premises

The Hong Kong and Shanghai Banking Corporation Limited - India (Refund of Deposit for premises) 3,601 7,904

The Hong Kong and Shanghai Banking Corporation Limited - India (Deposit paid for premises) 908 4,964

Purchase of investments

HSBC Mutual Fund 605,500 977,947

Sale of investments

HSBC Mutual Fund 600,500 750,639

ii) Balances outstanding are as under:

Particulars

March

31,2017

March

31,2016

March

31,2017

March

31,2016

March

31,2017

March

31,2016

March 31,2017 March 31,2016

Assets

Investment management fee

receivable

- - - - 79,723 63,780 - -

PMS advisory fees receivable - - 9,226 4,703 - - - -

Investment advisory fee receivable - - 155,021 62,061

Deposit for premises - - 6,635 9,328 - - - -

Investments - - - - 594,327 559,986

Balances with banks - - 7,602 19,130 - - - -

Liabilities

Equity share capital 615,909 615,909 - - - -

Legal and professional fees - - - - - - - -

Computer maintenance 1,258 - - - - - - -

Support service charges - - 39,582 32,862 - - - -

Commission/Brokerage - - 401 401 - - - -

Scheme related expenses - - - - 14,835 7,321 - -

* HSBC Asset Management (India) Private Limited is the Investment Manager to HSBC Mutual Fund.

For the year ended

with Holding with fellow with others* with Key Management Personnel

Notes to related party disclosures (to the extent of material transactions)

March 31,2017 March 31,2016

Investment management fees

HSBC Mutual Fund 79,723 63,780

PMS advisory fees receivable

HSBC Global Asset Management (Hongkong) Limited 9,226 4,703

Investment advisory fee receivable

HSBC Global Asset Management (Hongkong) Limited 155,021 62,061

Deposit for premises

The Hong Kong and Shanghai Banking Corporation Limited - India 6,635 9,328

Investments

HSBC Mutual Fund 594,327 559,986

Balances with banks

The Hong Kong and Shanghai Banking Corporation Limited - India 7,602 19,130

Equity share capital

HSBC Securities and Capital market Pvt ltd 615,909 615,909

Computer maintenance

HSBC Securities and Capital market Pvt ltd 1,258 -

Support service charges

HSBC Global Asset Management Limited 15,982 11,778

HSBC Global Asset Management (Hong Kong) Limited 5,266 4,833

HSBC Bank Honkgong 1,824 7,112

HSBC Holdings Plc 10,748 -

HSBC Bank Plc, 2,574 -

HSBC Software Development India Pvt.Ltd 2,819 7,365

HSBC Electronic Data Processing (India) Pvt Ltd 369

Commission/Brokerage

The Hong Kong and Shanghai Banking Corporation Limited - India Branches 190 190

HSBC Investdirect Securities (India) Limited 211 211

Scheme related expenses

HSBC Mutual Fund 14,835 7,321

For the year ended