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DISCLOSURE DOCUMENT

MOPE INVESTMENT ADVISORS PRIVATE LIMITED

For Portfolio Management Services

MOPE Investment Advisors Private Limited

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DISCLOSURE DOCUMENT

(As per the requirement of Fifth Schedule of Regulation 14 of Securities and Exchange Board of India (Portfolio Managers) Regulation 1993)

i) The Disclosure Document has been filed with the Securities & Exchange Board of India 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 MOPE Investment Advisors Private Limited as a Portfolio Manager.

iii) The Disclosure Document contains the necessary information about the Portfolio Manager, required by an investor before investing, and hence, the investor may be advised to retain the document for future reference.

iv) The following are the Details of the Portfolio Manager:

Name of the Portfolio Manager MOPE Investment Advisors Private Limited

SEBI Registration Number INP 000004920

Registered Office Address 12th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025

Phone 022 7198 5551 / 09769184006

Fax 022 5036 6842

v) The name, phone number, e-mail address of the Principal Officer so designated by the Portfolio Manager is:

Name of the Principal Officer Mr. Vishal Tulsyan

Phone 022-7198 5504

Email [email protected]

Registered Office Address 12th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai - 400025

Date: September 18, 2019


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INDEx OF CONTENTS

Item No. Contents Page No.

1 Disclaimer clause 8

2 Definitions 8

3 Description 10

4 Penalties, pending litigations or proceedings, findings of inspections or investigations for which actions may have been taken or initiated by any regulatory authority.

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5 Services offered 17

6 Risk Factors 17

7 Client Representation 22

8 The Financial Performance of Portfolio Manager 23

9 Portfolio Management Performance of the Portfolio Manager 24

10 Nature of Expenses 24

11 Taxation 25

12 Other Aspects 29

13 Accounting Policies 30

14 Investor Services 31


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1) Disclaimer clause:

The particulars given in this Document have been prepared in accordance with the SEBI (Portfolio Managers) Regulations, 1993 as amended till date 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. This document is not for public distribution and has been furnished to you solely for your information and may not be reproduced or redistributed to any other person.

2) Definitions:

Unless the context or meaning thereof otherwise requires, the following expressions shall have the meaning assigned to them hereunder respectively: -

(a) “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992).

(b) “Agreement” means agreement between Portfolio Manager and its Client and shall include all Schedules and Annexures attached thereto.

(c) “Application” means the application made by the Client to the Portfolio Manager to place its funds and/or securities with the Portfolio Manager for Portfolio Management Services. Upon execution of the Agreement by the Portfolio Manager, the Application shall be deemed to form an integral part of the Agreement. Provided that in case of any conflict between the contents of the Application and the provisions of the Agreement, the provisions of the Agreement shall prevail.

(d) “Assets” means (i) the Portfolio and/or (ii) the Funds.

(e) “Body Corporate” shall have the meaning assigned to it in or under clause (11) of section 2 of the Companies Act, 2013.

(f) “Bank Account” means one or more accounts opened, maintained and operated by the Portfolio Manager with any of the Scheduled Commercial Banks in accordance with the agreement entered into with the Client.

(g) “Board” means the Securities and Exchange Board of India established under sub-section (1) of Section 3 of the Securities and Exchange Board of India Act, 1992.

(h) “Client” means the person who enters into an Agreement with the Portfolio Manager for managing its portfolio and /or funds

(i) “Custodian” means any person who carries on or proposes to carry on the business of providing custodial services in accordance with the regulations issued by SEBI from time to time.

(j) “Depository Account” means one or more account or accounts opened, maintained and operated by the Portfolio Manager with any depository or depository participant registered under the SEBI (Depositories and Participants) Regulations, 1996 in accordance with the agreement entered into with the Client.

(k) “Discretionary Portfolio Management Services” means the portfolio management services rendered to the Client by the Portfolio Manager on the terms and conditions contained in the agreement, whereunder the Portfolio Manager exercises any degree of discretion in the investments or management of assets of the Client.

(l) “Discretionary Portfolio Manager” means a Portfolio Manager who exercises or may, under a contract relating to portfolio management, exercise 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.

(m) “Document” means this Disclosure Document.

(n) “Financial Year” means the year starting from April 1 and ending on March 31 of the following year.

(o) “Funds” means the monies managed by the Portfolio Manager on behalf of the Client pursuant to Portfolio Investment Management Agreement and includes the monies mentioned in the Application, any further monies placed by the Client with the Portfolio Manager for being managed pursuant to Portfolio Investment Management Agreement, the proceeds of the sale or other realization of the Portfolio and interest, dividend or other monies arising from the Assets, so long as the same is managed by the Portfolio Manager.


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(p) “Non-discretionary Portfolio Management Services” means a portfolio management services under which the Portfolio Manager, subject to express prior instructions issued by the Client from time to time in writing, for an agreed fee structure and for a definite described period, invests in respect of the Client’s account in any type of security entirely at the Client’s risk and ensure that all benefits accrue to the Client’s Portfolio.

(q) “Parties” means the Portfolio Manager and the Client; and “Party” shall be construed accordingly.

(r) “Person” includes any individual, partnership firm including limited liability partnership, central or state government, company, body corporate, cooperative society, corporation, trust, society, Hindu Undivided Family or any other body of persons, whether incorporated or not.

(s) “Portfolio” means the Securities managed by the Portfolio Manager on behalf of the Client pursuant to the Portfolio Investment Management Agreement and includes any Securities mentioned in the Application, any further Securities placed by the Client with the Portfolio Manager for being managed pursuant to the Portfolio Investment Management Agreement, Securities acquired by the Portfolio Manager through investment of Funds and bonus and rights shares or otherwise in respect of Securities forming part of the Portfolio, so long as the same is managed by the Portfolio Manager.

(t) “Portfolio Manager” shall have the same meaning as given in regulation 2(cb) of the SEBI (Portfolio Managers) Regulations, 1993 as amended from time to time.

(u) “Principal Officer” means an employee of the Portfolio Manager who has been designated as such by the Portfolio Manager.

(v) “Regulations” means the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993, as may be amended from time to time.

(w) “Scheduled Commercial Bank” means any bank included in the second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934).

(x) “SEBI” means the Securities and Exchange Board of India established under sub-section (1) of Section 3 of the SEBI Act.

(y) “Securities” includes shares, debentures, convertible securities and: “Securities” as defined under the Securities Contracts (Regulation) Act, 1956 as amended from time to time and includes:

(i) 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;

(ii) derivative;

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

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

(v) units or any other such instrument issued to the investors under any mutual fund scheme;

(vi) Government securities;

(vii) such other instruments as may be declared by the Central Government to be securities;

(viii) rights or interest in securities;

(ix) Exchange Traded Funds; and

(x) Liquid Funds.

Words and expressions used in this disclosure document and not expressly defined shall be interpreted according to their general meaning and usage. The definitions are not exhaustive. They have been included only for the purpose of clarity and shall in addition be interpreted according to their general meaning and usage and shall also carry meanings assigned to them in regulations governing Portfolio Management Services.


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3) Description:

i) History, Present Business and Background of the Portfolio Manager:

MOPE Investment Advisors Private Limited (“MOPE”) is a company incorporated under the Companies Act, 1956 on 13th April, 2006, having its Registered Office at 12th Floor, Motilal Oswal Towers, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai – 400025. MOPE is a subsidiary of Motilal Oswal Financial Services Limited.

MOPE is an Investment Advisor /Investment Manager to India Business Excellence Fund, India Business Excellence Fund-II, India Business Excellence Fund - III, India Realty Excellence Fund and India Business Excellence Fund I (IBEF I). MOPE is also acting as a sub-advisor to India Business Excellence Fund - IIA. MOPE is also registered with SEBI as Investment Advisor bearing registration number INA000000508 dated 12th December 2013. MOPE provides co-investment and advisory services to corporates and High Net worth Individuals.

MOPE holds Certificate of Registration No. INP 000004920 dated 17th November 2015 issued under the Regulations to act as a Portfolio Manager.

ii) Promoters of the Portfolio Manager, Directors and their background:

Promoter:

MOPE is promoted by Motilal Oswal Financial Services Ltd. (“MOFSL”).

MOFSL is a public limited company listed on BSE and NSE. Pursuant to the internal restructuring of the Motilal Oswal Group of Companies, the lending business of MOFSL has been transferred to Motilal Oswal Finvest Limited, a wholly owned subsidiary of the MOFSL on August 20, 2018. Pursuant to the amalgamation of Motilal Oswal Securities Limited with MOFSL and their respective Shareholders being effective from August 21, 2018, MOFSL carries on the business of MOSL with effect from August 21, 2018. After receipt of SEBI approval on 05th February 2019 for name change, MOFSL is now a SEBI registered Trading Member registered with BSE Limited (BSE), National Stock Exchange of India Limited (NSE), Multi Commodity Exchange of India Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX). MOFSL is now a SEBI registered Depository Participant registered with Central Depository Services Ltd, (CDSL) and National Securities Depository Limited (NSDL). MOFSL now executes transactions in capital markets/equity derivatives/commodity derivatives/ currency derivatives segments on behalf of its clients which include retail customers (including high net worth individuals), mutual funds, foreign institutional investors, financial institutions and corporate clients. Besides stock broking, it also offers a bouquet of financial products and services to its client base. It is registered with SEBI as a Research Analyst, Investment Advisor, Portfolio Manager under applicable SEBI Regulations and with various other bodies / agencies like IRDA, AMFI, CERSAI, KRA agencies (CVL, Dotex, NDML, CAMS and Karvy) etc. Further, MOFSL, along with its subsidiaries, offers a diversified range of financial products and services to their clients including Loan against Shares, Investment Activities, Private Wealth Management, Broking and Distribution, Asset Management Business, Housing Finance, Institutional Equities, Private Equity and Investment Banking.


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Directors and their background:

Name Age / Qualification Brief Experience

Mr. Raamdeo AgrawalChairman

B.Com and ACA Raamdeo Agrawal, co-founder of the Motilal Oswal Group, is the driving force behind group’s approach to investing. Founded in 1987, Motilal Oswal is a well-diversified financial services firm focused on Indian equity capital markets and research.

As Chairman of its asset management business (Motilal Oswal Asset Management Company), Mr. Agrawal has framed the “QGLP” (Quality Growth Longevity & favorable Price) Investment Framework and its ‘Buy Right, Sit Tight’ investing philosophy. He is the driving force behind the Group’s highly awarded research offerings and has authored the annual Motilal Oswal Wealth Creation Study since its inception in 1996.

Mr. Agrawal is an Associate of Institute of Chartered Accountants of India and a member of the National Committee on Capital Markets of the Confederation of Indian Industry. He has also featured on ‘Wizards of Dalal Street on CNBC TV 18’. In 1986, he wrote the book Corporate Numbers Game, along with co-author Ram K Piparia. He has also authored the book “The Art of Wealth Creation” which compiles insights from his 22 “Wealth Creation Studies”.

Mr. Agrawal has been awarded the Rashtriya Samman Patra by Central Board of Direct Taxes for a consistent track record of highest integrity.

Mr. Motilal Oswal Chartered Accountant Mr. Motilal Oswal is the Chairman and Managing Director of MOFSL. He is a Chartered Accountant and started the business along with co-promoter, Mr. Raamdeo Agrawal in 1987.

Mr. Oswal has been felicitated with several awards and accolades including:

· ‘Rashtriya Samman Patra’ awarded by the Government of

India for being amongst the highest income taxpayers in the country for a period of 5 years from FY95–FY99

· ‘Excellent Business Achiever in Financial Services’ Award by the Institute of Chartered Accountants of India

· ‘Samaj Ratna’ Award at the hands of Her Excellency President Smt. Pratibha Patil in Rashtrapati Bhavan.

· ‘Special Contribution award to Indian Capital Markets’ Award by Zee Business

· ‘The Hall of Fame for Excellence in Franchising’ by Franchising World Magazine

· ‘Champion of Arthshastra’ by the Rotary Club· ‘Durgadevi Saraf Puraskar’ by Marwadi Sammelan for

extraordinary contributions in the field of Trade & Industry.


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· Management Excellence Award’ by Prestige Institute of Management and Research, Indore

· ‘Rajasthan Ratna Lifetime Achievement Award’ by Manav Seva Trust

· ‘Jewel of Rajasthan in the World’ title conferred by Maneesh Media.

· ‘Suryadatta National Life Time Achievement Award 2016’ by Suryadatta Group of Institutes

· ‘Darshan Sagar Award 2016’ by the Darshan Sagar Award Samman Committee

· ‘Lions Life Time Achievement Award’ by the Lions Club International

· ‘Outstanding Institution Builder Award’ by the All India Management Association (AIMA)üServed on the governing board of the Bombay Stock

Exchange (BSE) as well as IMC and also has served on many committees of BSE, NSE, SEBI and CDSL.

üMajor Donor as well as a Trustee of ‘Agarwal-Oswal Chhatravas’ of the Rajasthan Vidyarthi Griha, Andheri (W), Mumbai.

üRated amongst the top most ‘Famous Chartered Accountants’ by Topcafirms.com

üHindu Business Line has rated him amongst the Top 6 ‘Men Who Defined The Markets’.

üMember of the Advisory Council of Auronya College – upcoming liberal Arts Institute in Pondicherry

üFounder Member of ‘International Vaish Federation, New Delhi’

üTrading Member of the Advisory Committee of National Stock Exchange (NSE)

üChairman of the renowned Jain International Trade Organisation (JITO)

Mr. Oswal has also authored two books of quotations on ‘The Essence of Business & Management’ and ‘The Essence of Life’. He has published hundreds of articles in Financial Magazines and Newspapers.

Mr. Vishal Tulsyan Chartered Accountant Mr. Tulsyan is Managing Director & Chief Executive Officer of MOPE. He founded MOPE in 2006 with MOFSL being the sponsor. At MOPE, Mr. Tulsyan looks to build a platform to channelize long-term capital to create valuable enterprises and successful entrepreneurs.

He plays a crucial role in building the Team and defining the strategies that have taken MOPE to its present levels and has been directly involved both in identifying businesses, as well as in supporting portfolio companies.

Mr. Tulsyan has spent two decades in the Indian financial sector across private equity, investment banking and structured finance. He brings on board his deep experience of raising, investing and returning third party capital across several economic cycles.


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Prior to founding MOPE, Mr. Tulsyan was with Rabobank during its formative years in India, helping build its corporate finance and investment banking franchise. He was responsible for the origination and execution of structured finance, project finance, acquisition finance, private equity and M&A transactions. During his Rabobank tenure, he executed ~50 transactions aggregating more than INR 900 bn and helped build the life sciences practice in India into a key business driver.

Mr. Tulsyan holds a Bachelor’s Degree in Commerce from the prestigious St. Xaviers’ College, Kolkata and is a member of the Institute of Chartered Accountants of India (all-India #21 rank).

Key Management Personnel (For Portfolio Management Services):

Mr. Vishal Tulsyan Managing Director & Chief Executive Officer

Mr. Bharat Kedia Chief Operating Officer

Mr. Naveen Gupta Senior Vice President - Fund Administration

Mr. Bhadresh Mehta Assistant Manager - Fund Compliance

iii) Group company information (i.e. information related to top 10 Group Companies / firms of the Portfolio Manager

on turnover basis) (as per the audited financial statements for the year ended March 2019:

1. Motilal Oswal Financial Services Limited*2. Aspire Home Finance Corporation Limited3. Motilal Oswal Asset Management Company Limited4. Motilal Oswal Wealth Management Limited5. MOPE Investment Advisors Pvt Limited6. Motilal Oswal Investment Advisors Limited (formerly known as Motilal Oswal Investment Advisors Pvt Ltd)7. Motilal Oswal Real Estate Investment Advisors II Private Limited8. India Business Excellence Management Company9. Motilal Oswal Finvest Limited10. Motilal Oswal Commodities Broker Private Limited

*PursuanttoapprovalofschemeofamalgamationbytheNationalCompanyLawTribunal,MumbaiBench,otherregulatoryauthoritiesandtheshareholders,MotilalOswalSecuritiesLimitedhasbeenmergedintoMotilalOswalFinancialServicesLimitedwitheffectfromAugust21,2018

iv) Details of the services being offered:

a) Discretionary Services: Under these services, the choice as well as the timings of the investment decisions rest solely with the

Portfolio Manager and the Portfolio Manager can exercise any degree of discretion in the investments or management of assets of the Client. The Securities invested / disinvested by the Portfolio Manager for Clients may differ from Client to Client. The Portfolio Manager’s decision (taken in good faith) in deployment of the Client’s fund’s is absolute and final and can never be called in question or be open to review at any time during the currency of the agreement or at any time thereafter except on the ground of fraud, malafide, conflict of


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interest or gross negligence. This right of the Portfolio Manager shall be exercised strictly in accordance with the relevant Acts, Regulations, guidelines and notifications in force from time to time. Periodical statements in respect to Client’s Portfolio shall be sent to the respective Client.

The Portfolio Manager will provide the above services in relation to the following strategy/scheme(s):

A. Name of the Scheme: MOPE PMS I

Investment Strategy:

Under this strategy, the investments shall mainly be in the nature of co-investments along with alternative investment funds, managed by MOPE. The alternative investment funds and consequently MOPE under this Scheme will strive to invest in established mid-market businesses with strong growth characteristics, clear and mature business model and a leading market position. MOPE shall exercise management rights in portfolio companies on behalf of the alternative investment funds and the Scheme.

Investment objective

The primary investment objective is to achieve long-term capital appreciation by investing in equity and equity-linked instruments and/or debt and/or mezzanine or other instruments of Indian or India related companies. The Scheme will be sector agnostic and focus on providing growth capital to mid-sized companies.

Investment Philosophy

MOPE’s investment philosophy has evolved and today can be well-articulated in the following QGLP framework:

Quality: Focus both on quality of management and quality of business. It is important to have both in place and one does not substitute for the other. The relationship between the two is multiplicative and not additive.

The focus is to invest in businesses where the business model is sufficiently evolved and preferably has interface with an end user. At the same time, identify sustainable competitive advantages and prefer market leaders either in a geography, product or service. Equal emphasis is laid on the integrity, ability, ambition and trust-worthiness of the management.

Growth: MOPE strives to invest in companies with high-growth potential in sales volume and margins (~20% CAGR in both top line and bottom line) both during the years leading up to the investment as well as over the horizon of the investment.

MOPE will not invest on the basis of value creation only through multiple expansions, but focus on holistic growth opportunities which have been central to MOPE’s investment philosophy and the key reasons for the success of previous private equity funds launched by MOPE with a similar strategy.

Longevity: Focus on longevity of the growth; MOPE likes great companies with dominant positions, whose franchise is hard to replicate and has longevity and permanence. The Team understands the sustainable economics of business and analyses if the business model and the competitive advantages can be maintained for long periods of time. This has enabled the Team to stay away from businesses which may be transitory in nature.

Price: Focus on reasonable valuation and margin of safety; MOPE emphasises investing in companies at


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valuations which are consistent with the growth prospects and the quality of businesses. In almost all the transactions, entry valuation of the Funds has been at a significant discount relative to the listed peers.

Types of securities

The investments under the scheme shall be in equity and equity-linked instruments and/or debt and/or mezzanine or other instruments of Indian or India related companies

Investments in group / associate companies

The Portfolio Manager will not invest portfolio funds in the Securities of any associates/group companies of the Portfolio Manager.

Negative Universe from Rating perspective

The Portfolio Manager may invest in rated and unrated securities.

B. Name of the Scheme: MOPE RE PMS IV

Investment Strategy

Under this strategy, the investments shall mainly be in the nature of co-investments along with alternative investment funds managed by Motilal Oswal Real Estate Investment Advisors II Private Limited (“MORE II”). The investment strategy includes (but is not limited to) the following:

Investments in self-liquidating residential developments; may opportunistically look at other real estate asset class such as commercial, retail, hotels etc.

Investment at pre-approval, under-construction and last mile stage / near completion stage;

Investments in holding entities (the entities that have a portfolio of projects either in themselves and / or in downstream entities) as well as special purpose vehicles (that actually hold the assets). In case of investments in holding entities, there may be few projects which such entities may be developing in other than the cities mentioned above;

Partnering with credible large and mid-sized regional players;

Investment through both mezzanine debt and equity structure based on project profitability;

Focus on active asset management through asset management team of MOPE and/or MORE II;

Conservative underwriting approach with a margin of safety. MORE II may exercise management rights in the investee companies on behalf of alternative investment

funds managed by MORE II as well as the Scheme.

Investment objective

The investment objective is to provide returns in form of accrual and/or capital appreciation over the investment horizon. MOPE aims to achieve its investment objective by investing in the Securities, primarily consisting of debt instruments.

Investment Philosophy

Investment philosophy would be guided by:


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(i) Views on the credit rating outlook and movement within the yield curves

(ii) Credit cycle prevailing in the economy and opportunities available due to change therein

(iii) Utilizing opportunities available across the maturity and rating spectrum of the corporate debt

(iv) View of generating returns with a combination of both- regular accrual in form of interest income as well as capital gains

(v) Any other view taken by the Portfolio Manager based on temporal analysis of various qualitative and quantitative fundamental parameters

The Portfolio Manager would endeavour to maintain a consistent performance by maintaining an optimal balance between safety and profitability aspects.

Types of securities

The Portfolio Manager shall invest in:

(i) Bonds, debentures, debentures stock or other marketable securities of a like nature in or of any incorporated company or other body corporate;

(ii) Units or any other such instrument issued to the investors under any mutual fund scheme;

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

(iv) Such other instruments as may be declared by the Central Government to be securities;

(v) Rights or interest in securities.

The above mentioned securities are illustrative and not exhaustive in nature.

Investments in group / associate companies

The Portfolio Manager will not invest portfolio funds in the Securities of any associates/group companies of the Portfolio Manager.

Negative Universe from Rating perspective

The Portfolio Manager may invest in rated and unrated securities.

b) Non - Discretionary Services: Under the Non-Discretionary Portfolio Management Services, the portfolio of the Client shall be managed in

consultation with the Client. Under this service, the Assets will be managed as per express prior instructions issued by the Client from time to time. The Client will have complete discretion to decide on the investment (Stock Quantity and Price or amount). The Portfolio Manager inter alia manages transaction execution, accounting, recording or corporate benefits, valuation and reporting aspects on behalf of the Client entirely at the Client’s risk.

c) Advisory Services: Under these services, the Portfolio Manager advises the Client on investments in general or any specific

advice required by the Clients and agreed upon in the Client agreement. The Portfolio Manager will render the best possible advice to the client having regard to the client’s needs and the environment, and his own professional skills. The same can be binding or non - binding in nature or in such terms as mentioned in the


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Client agreement. For such services, the Portfolio Manager charges the Client a fee for services rendered mentioned in the Client agreement. The advice may be either general or specific in nature and may pertain to a particular portfolio. Entry / exit timing, execution and settlement are solely the Client’s responsibility.

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

1. All cases of penalties imposed by the Board or the directions issued by the Board under the Act or Regulations made there under relating to Portfolio Management Services.

None

2. The nature of the penalty/direction.

Not Applicable

3. Penalties imposed for any economic offence and/or for violation of any securities laws relating to Portfolio Management Services.

None

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

None

5. Any deficiency in the systems and operations of the Portfolio Manager observed by the Board or any regulatory agency in relation to Portfolio Management Services for which action may have been taken or initiated.

None

6. Any enquiry/adjudication proceedings initiated by the Board against the Portfolio Manager or its directors, principal officer or employee or any person directly or indirectly connected with the Portfolio Manager or its directors, principal officer or employee, under the Act or Regulations made thereunder relating to Portfolio Management Services.

None

5) Services offered:

The Portfolio Manager will offer Discretionary Portfolio Management Services wherein the choice as well as the timings of the investment decisions rest solely with the Portfolio Manager. The Portfolio Manager will manage the Assets of the Client in accordance with the Portfolio Management Agreement and the relevant Term Sheet. Further the Portfolio Manager may also offer Advisory Portfolio Management Services wherein the Portfolio Manager only renders investment advice to the Client in respect of securities.

6) Risk Factors:

The investments made in securities are subject to market risk and there is no assurance or guarantee that the objectives of investments will be achieved. Following are the risk factors as perceived by management:


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A. General risks associated with portfolio management services

(a) Securities investments are subject to market and other risks and the Portfolio Manager provides no guarantee or assurance that the objectives set out in the Document and/or the Agreement shall be accomplished.

(b) The investments may not be suited to all categories of Investors.

(c) The value of the Portfolio may increase or decrease depending upon various market forces. Consequently, the Portfolio Manager provides no assurance of any guaranteed returns on the Portfolio.

(d) Past performances of the Portfolio Manager or of the key personnel of the Portfolio Manager do not guarantee its/their future performance.

(e) The debt investments and other fixed income securities may be subject to interest rate risk, liquidity risk, credit risk, and reinvestment risk. Liquidity in these investments may be affected by trading volumes, settlement periods and transfer procedures.

(f) Investment decisions made by the Portfolio Manager may not always be profitable.

(g) The Portfolio Manager has less track record in portfolio management activities. Though it has established track record as an Investment Manager to alternative investment funds and venture capital funds of around 10 years.

(h) Investments made by the Portfolio Manager are subject to risks arising from the investment objective, investment strategy and asset allocation.

(i) The names of the strategies/options do not in any manner indicate their prospects or returns.

(j) The performance of the strategies /options may be adversely affected by the performance of individual companies, changes in the market conditions, macro and micro factors and forces such as interest rate risk, credit risk, liquidity risk and reinvestment risk.

(k) The market prices of the Securities in the Portfolio may be volatile and may not truly reflect its fundamental or intrinsic value due to the lack of sufficient liquidity for those Securities.

(l) The investments made by the Portfolio Manager are subject to limited liquidity in the market, settlement risk, impending readjustment of portfolio composition, highly volatile stock markets in India.

(m) The Portfolio Manager may make investments in unlisted Securities. This may also expose the Portfolio Manager to an illiquidity scenario since the exit from the portfolio entity would have to be a strategic exit.

(n) Acts of State, or sovereign action, acts of nature, acts of war, civil disturbance are extraneous factors which can impact the Portfolio.

(o) The Client stands the risk of total loss of value of an asset which forms part of the Portfolio or its recovery only through an expensive legal process due to various factors which by way of illustration include default or non-performance of a third party, portfolio entity’s refusal to register a Security due to legal stay or otherwise, disputes raised by third parties.


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(p) The portfolio management service is subject to risk arising out of non-diversification. Non-diversified portfolios tend to be more volatile than diversified portfolios.

(q) Changes in applicable law may impact the performance of the Portfolio.

B. Macro-Economic risks / Market cycles

(a) Overall economic slowdown, unanticipated corporate performance, environmental or political problems, changes to monitory or fiscal policies, fall in the value of the currency, changes in government policies and regulations with regard to industry and exports may have direct or indirect impact on the investments, and consequently the growth of the Portfolio.

(b) The investment made during the boom period and looking favorable may become a loss making proposition during the market recession. Hence there will always be a risk associated with the market cycle.

C. Management and Operational risks

(a) Reliance on the Portfolio Manager: The success of the portfolio / strategies will depend to a large extent upon the ability of the Portfolio Manager to source, select, complete and realize appropriate investments and also reviewing the appropriate investment proposals. The Portfolio Manager shall have considerable latitude in its choice of Portfolio Entities and the structuring of investments.

(b) Failure to meet drawdown’s by Client: Default of the Client in making drawdown may restrict the Portfolio Manager from making the planned investments in the Portfolio Entities. Such defaults may also cause the portfolio / strategies to breach the investment and payment obligations towards the portfolio entity rendering it liable to pay damages, which may result in material adverse effect on the performance of the Portfolio.

(c) Deployment risk: After accepting the corpus for management, the Portfolio Manager may not get an opportunity to deploy the same or there may be delay in deployment. In such situation the Clients may suffer opportunity loss.

(d) Identification of Appropriate Investments: The success of the Portfolio Manager as a whole depends on the identification and availability of suitable investment opportunities and terms. The availability and terms of investment opportunities will be subject to market conditions, prevailing regulatory conditions in India where the Portfolio Manager may invest, and other factors outside the control of the Portfolio Manager. Therefore, there can be no assurance that appropriate investments will be available to, or identified or selected by, the Portfolio Manager.

(e) Conflict of Interest: As a manager to domestic alternative investment funds (“Interested Party”), the Portfolio Manager will be subject to inherent conflicts of interest relating to the portfolio management activities conducted by it. The Portfolio Manager may participate in projects and entities on same or different terms as Interested Parties. In such cases, there could be potential conflicts between the interest of the Clients and the Interested Party.

The Affiliates of the Portfolio Manager may act for the issuer/ investee company as placement agents, referral agent and the affiliates may be financially compensated by the investee company for providing such services.

In certain circumstances, the investee company may avail services of the affiliates of the Portfolio Manager

and compensate the affiliate of the Portfolio Manager.


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(f) Exit Fee: Clients may have to pay an exit fee to withdraw the funds/Portfolio (as stipulated in the Agreement with the Client). In addition, they may be restricted / prohibited from transferring any of the interests, rights or obligations with regard to the Portfolio except as may be provided in the Agreement and in the Regulations. In case of early termination of the Agreement, additional rights available while the Securities were held as part of the Portfolio that were negotiated by the Portfolio Manager with a portfolio entity or its shareholders may no longer be available to the Client.

D. Risks related to investment in debt securities

(a) Price-Risk or Interest-Rate Risk: Fixed income securities such as bonds, debentures and money market instruments run price-risk or interest-rate risk. This risk is associated with movements in interest rates, which depend on various factors such as government borrowing, inflation, economic performance etc. The value of investments will appreciate/depreciate if the interest rates fall/rise. Fixed income investments are subject to the risk of interest rate fluctuations, which may accordingly increase or decrease the rate of return thereon. Generally, when interest rates rise, prices of existing fixed income securities fall and when interest rates drop, such prices increase. The extent of fall or rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in the level of interest rates.

(b) Interest Rate Risk: Changes in interest rates may affect the returns/ asset value of the liquid/debt scheme of mutual fund in which the Portfolio Manager may invest from time to time. Normally the asset of the liquid scheme increases with the fall in the interest rate and vice versa. Interest rate movement in the debt market can be volatile leading to the possibility of movements up or down in the asset value of the units of the liquid/ debt funds.

(c) Credit Risk: In simple terms this risk means that the issuer of a debenture/ bond or a money market instrument may default on interest payment or even in paying back the principal amount on maturity. Even where no default occurs, the price of a Security may go down because the credit rating of an issuer goes down.

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

(e) Reinvestment Risk: Investments in fixed income securities may carry reinvestment risk as interest rates prevailing on the interest or maturity due dates may differ from the original coupon of the bond. Consequently, the proceeds may get invested at a lower rate.

(f) Rating risks: Different types of debt securities in which the Client invests, may carry different levels and types of risk. Accordingly the risk may increase or decrease depending upon its investment pattern, for instance corporate bonds carry a higher amount of risk than Government securities. Further even among corporate bonds, bonds, which are AA rated, are comparatively more risky than bonds, which are AAA rated.

(g) Price volatility risk: Debt securities may also be subject to price volatility due to factors such as changes in interest rates, general level of market liquidity and market perception of the creditworthiness of the issuer, among others (market risk). The market for these Securities may be less liquid than that for other higher rated or more widely followed Securities.


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E. Risks related to investment in Equity securities

In case of investment in equity and equity related securities, trading volumes, settlement periods and transfer procedures may restrict the liquidity of these investments. Different segments of Indian financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances. The inability to make intended securities’ purchases due to settlement problems could cause to miss certain investment opportunities. Delays or other problems in settlement of transactions could result in temporary periods when the assets are not invested and no return is earned thereon. The inability to sell securities held, due to the absence of a liquid secondary market, would result at times, in potential losses to the investors, should there be a subsequent decline in the value of securities held in the portfolio.

(a) Market risk: Any type of risk due to the market conditions and evolution, such as volatility in the capital markets, interest rates, changes in policies of the Government, taxation laws or any other political and economic development, which may negatively affect the prices of the securities.

(b) Business risk: Risk related to uncertainty of income caused by the nature of a company’s business and having an impact on price fluctuations.

(c) Liquidity risk: This risk pertains to how saleable a security is in the market or the ease at which a security can be sold at or close to its’ quoted or published price/value. Securities that are listed on the stock exchange generally carry lower liquidity risk; the ability to sell these investments is limited by the overall trading volume on the stock exchanges.

F. Other important terms

(a) Prospective Clients should review / study this 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.

(b) The Portfolio Manager is neither responsible nor liable for any losses resulting from the Services.

(c) The Client has perused and understood the disclosures made by the Portfolio Manager in the Disclosure Document.


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7) Client Representation:

i) Details of Client’s accounts activated:

Category of Clients No. of ClientsFunds

Managed (Rs. Cr.)Discretionary/

Non-Discretionary As on September 15, 2019 Associate/group companies 0 0 DiscretionaryOthers 19 41.59 DiscretionaryTotal 19 41.59

As on March 31, 2019

Associate/group companies 0 0 DiscretionaryOthers 4 22.59 DiscretionaryTotal 4 22.59


Associate/group companies 0 0 -

Others 0 0 -Total 0 0 -As on March 31, 2017 Associate/group companies 1 7 Non-DiscretionaryOthers 103 60.40 Non-DiscretionaryTotal 104 67.40

ii) Transactions with related parties:

Names of related parties and nature of relationship (During the Financial Year 2018-19) are as under:A. Ultimate Holding Company Passionate Investment Management Private Limited

B. Holding Company Motilal Oswal Financial Services Limited

C. Subsidiaries and Step-down subsidiaries

Motilal Oswal Real Estate Investment Advisors Private Limited India Business Excellence Management Company Motilal Oswal Real Estate Investment Advisors II Private Limited

D. Fellow subsidiaries

Motilal Oswal Finvest Limited (formerly known as Motilal Oswal Capital Markets Limited) Motilal Oswal Trustee Company Limited Motilal Oswal Fincap Private Limited (Formerly known as Insurance Brokers Private Limited) Motilal Oswal Commodities Broker Private Limited Motilal Oswal Asset Management Company Limited Motilal Oswal Investment Advisory Limited Motilal Oswal Wealth Management Limited Motilal Oswal Securities International Private Limited Motilal Oswal Capital Market (Hongkong) Private Limited Motilal Oswal Capital Markets (Singapore) Pte. Limited Motilal Oswal Home Finance Limited (Formerly known as Aspire Home Finance Corporation Limited)


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7) Client Representation:

i) Details of Client’s accounts activated:

Category of Clients No. of ClientsFunds

Managed (Rs. Cr.)Discretionary/

Non-Discretionary As on September 15, 2019 Associate/group companies 0 0 DiscretionaryOthers 19 41.59 DiscretionaryTotal 19 41.59


Associate/group companies 0 0 DiscretionaryOthers 4 22.59 DiscretionaryTotal 4 22.59


Associate/group companies 0 0 -

Others 0 0 -Total 0 0 -As on March 31, 2017 Associate/group companies 1 7 Non-DiscretionaryOthers 103 60.40 Non-DiscretionaryTotal 104 67.40

ii) Transactions with related parties:

Names of related parties and nature of relationship (During the Financial Year 2018-19) are as under:A. Ultimate Holding Company Passionate Investment Management Private Limited

B. Holding Company Motilal Oswal Financial Services Limited

C. Subsidiaries and Step-down subsidiaries

Motilal Oswal Real Estate Investment Advisors Private Limited India Business Excellence Management Company Motilal Oswal Real Estate Investment Advisors II Private Limited

D. Fellow subsidiaries

Motilal Oswal Finvest Limited (formerly known as Motilal Oswal Capital Markets Limited) Motilal Oswal Trustee Company Limited Motilal Oswal Fincap Private Limited (Formerly known as Insurance Brokers Private Limited) Motilal Oswal Commodities Broker Private Limited Motilal Oswal Asset Management Company Limited Motilal Oswal Investment Advisory Limited Motilal Oswal Wealth Management Limited Motilal Oswal Securities International Private Limited Motilal Oswal Capital Market (Hongkong) Private Limited Motilal Oswal Capital Markets (Singapore) Pte. Limited Motilal Oswal Home Finance Limited (Formerly known as Aspire Home Finance Corporation Limited)

Motilal Oswal Asset Management (Mauritius) Private Limited Motilal Oswal Capital Limited Nagori Agro & Cattle Feeds Private Limited

E. Enterprises in which key management personnel have control OSAG Enterprises LLP

F. AssociatesIndia Realty Excellence Fund II LLP

G. Key management personnel

Mr. Motilal Oswal - DirectorMr. Raamdeo Agrawal – DirectorMr. Vishal Tulsyan – Managing Director & CEO

H. Enterprises in which key management personnel and their relatives exercise significant Influence

Motilal Oswal Foundation (Trust)

Please refer Annexure A for Related Party Transactions details.

8) The Financial Performance of Portfolio Manager (Based on audited financial Statements)

Financial highlights of MOPE Investment Advisors Private Limited for the last 2 years are given as under:

ParticularsYear ended

31st March, 2019Year ended

31st March, 2018

(Rs. In Lakhs) (Rs. In Lakhs)

Profit/(Loss) before depreciation & tax & After Exceptional & Extraordinary Items (Net of Tax) 2296 6722

Less: Depreciation (17) (37)Less: Provision for tax (512) (1356)Less: Tax on Transition Depreciation - -Less: MAT credit entitlement - -Less/Add: Deferred Tax (163) 90Less: Fringe Benefit Tax - -Less: Income tax earlier years (18) 2Less: Wealth Tax - -Less: Provision for Tax (for previous year) - -Profit/(Loss) for the year after tax 1586 5421

Less: Transition Depreciation - -Add: Other Comprehensive Income (8) 2Add/(Less): Balance B/F from Previous year 4195 4158Less: Dividend Paid - (5387)Balance carried to Balance Sheet 5773 4195

The audited financial statements of the Portfolio Manager for the immediately preceding three years are attached herewith.


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9) Portfolio Management performance of the Portfolio Manager for the last 3 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) Regulation 1993

There is a consistent performance of Portfolio Management of 17% p.a. during last 3 years since we had only one product which gave fixed income of 17% p.a. Further, the said product was redeemed during the month of November 2017 and no further investments have been made under the said product. Currently, we have 2 schemes (namely MOPE PMS I and MOPE RE PMS IV) and there is no performance parameter, since the schemes have been recently launched and the investments have been made into unlisted securities and the valuation is being undertaken at cost.

10) Nature of expenses:

i) Investment Management & Advisory Fees: Investment Management and Advisory fees charged may be a fixed fee or a return based fee or a combination

of both as detailed in the Schedule/Term Sheet to the Portfolio Management Services agreement. The Fees may be charged upfront and/or at the end of a specified tenure as agreed between the Client and the Portfolio Manager.

ii) Custodian Fees: As may be decided between the Client and the Portfolio Manager

iii) Registrar & Transfer Agent Fees: NIL

iv) Brokerage & Transaction Cost: The investments under Portfolio Management would be done through registered members of the Stock

Exchange(s) who will charge brokerage as per standard market rates on contract value. In addition to the brokerage, transaction cost like network charges, turnover charges, stamp duty, transaction costs, turnover tax, Securities transaction tax or any other tax levied by statutory authority (ies), foreign transaction charges (if any) and other charges on the purchase and sale of shares, stocks, bonds, debt, deposits, other financial instruments would also be levied by the broker (including Motilal Oswal Securities Ltd.)

v) Service Tax/GST: As applicable from time to time

vi) Depository Charges: As may be applicable from time to time

vii) Entry Load /Exit Load As may be mutually agreed to between the Client and the Portfolio Manager in the relevant Term Sheet.

viii) Certification and professional charges: Charges payable for out sourced professional services like accounting, auditing, taxation and legal services etc.

for documentation, notarisations, certifications, attestations required by bankers or regulatory authorities including legal fees etc.

ix) Incidental expenses: Charges in connection with day-to-day operations like courier expenses, stamp duty, service tax/GST, postal,

telegraphic, opening and operation of bank account, distribution charges or any other out of pocket expenses as may be incurred by the Portfolio Manager.

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


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Nature of Expenses (Indicative) Maximum Indicative Rate of Fee (%)(Plus applicable taxes, if any)

(I) Investment Management andAdvisory fee**

1) Fixed Fee Up to 5% p.a.

2) Fixed Upfront fee Up to 5% p.a.

3) Performance Linked Fee as permitted under the Regulations.

Up to 20% share of profits calculated by taking into consideration the Investments Amount and the Sale proceeds or Consideration received by selling Investment with a hurdle rate of 10% IRR and full catch-up on the hurdle rate to the Manager post the hurdle rate to the investor

4) Exit Loads Up to 25% of the net asset value of the Investment based on the valuation report not older than 8 months from the date such request made by the Client or up to 25% of the Client’s Investment, whichever is higher.

(II) Custodian Fee** Up to 5% p.a., if charged

(III) Brokerage and transaction costs as per standard market rates on contract value

(IV) Fund Accounting Charges** NIL

(VI) Operating expenses Actuals and up to 0.2% of Investment amount

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

1 On Average Daily Assets Under Management

2 On Capital Invested

3 On Capital Committed

4 On Average Daily Equity portion of the Portfolio

Note:

a. Average daily portfolio value means the value of the portfolio of each client determined in accordance with the relevant provisions of the agreement executed with the client and includes both realized and unrealized gains/losses.

b. The Portfolio Manager may also be entitled to recover transaction fee, brokerage charges, demat fees, and/or disbursement made in respect of the investments (and/or disbursements) and/or any incidentals in the form of stamp duties, registration charges, professional fees, legal fees, consultancy charges, service charges etc. and such other expenses, duties, charges incurred on behalf of the Client on account of the Service provided to him/her/it.

11) Taxation

The following information is based on the law incorporating the amendments vide the Finance Act, 2019. The information set forth below is based on the Portfolio Manager’s understanding of the tax laws as of this date of


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Disclosure Document, as applicable from 01st April, 20191. The client should seek advice from his/her/its own professional advisor if he/she/it is in any doubt regarding the taxation consequences of investing in the Products offered under Portfolio Management Services.

Income Tax:

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

Resident individual & HUF 30% + surcharge & cessPartnership Firms & Indian Companies^ 30% + surcharge & cessNon-resident Indians 30% + surcharge & cessForeign companies 40% + surcharge & cess

^For domestic companies having a total turnover/ gross receipts of not exceeding INR 400 crores in the financial year 2016-17, the applicable tax rate should be 25% (plus applicable surcharge and cess) for financial year 2018-19. (Similarly, for domestic companies having a total turnover/ gross receipts of not exceeding INR 400 crores in the financial year 2017-18, the applicable tax rate should be 25% (plus applicable surcharge and cess) for financial year 2019-20.)

Assessee Rate of surcharge & cess applicable

Individuals (including NRIs/PIOs), HUFs, AOP, and BOI, where the taxable income is more than INR 50 lakhs but up to INR 1 Crore

A surcharge of 10 % on income tax and health & education cess of 4 % is payable on the total amount of tax including surcharge.

Individuals (including NRIs/PIOs), HUFs, AOP, and BOI, where the taxable income is more than INR 1 Crore but up to INR 2 Crores

A surcharge of 15 % on income tax and health & education cess of 4 % is payable on the total amount of tax including surcharge.

Individuals (including NRIs/PIOs), HUFs, AOP, and BOI, where the taxable income is more than INR 2 Crores but up to INR 5 Crore

A surcharge of 25 % on income tax and health & education cess of 4 % is payable on the total amount of tax including surcharge.*

Individuals (including NRIs/PIOs), HUFs, AOP, and BOI, where the taxable income is more than INR 5 Crore

A surcharge of 37 % on income tax and health & education cess of 4 % is payable on the total amount of tax including surcharge.*

Companies where the taxable income is more than Rs. 1crores and upto Rs. 10 Crore

A surcharge of 7 % on income tax and health & education cess of 4 % is payable on the total amount of tax including surcharge. (a surcharge of 2 % in case of foreign companies).

Companies where the taxable income is more than Rs. 10 Crore

A surcharge of 12 % on income tax and health & education cess of 4 % is payable on the total amount of tax including surcharge. (a surcharge of 5 % in case of foreign companies).

*Theenhancedsurchargeof25%and37%doesnotapplyontaxpayableatspecialrateonincomearisingfromthetransferofequityshare/unitreferredtoinsection111Aandsection112Aofthe

ActasclarifiedbytheCBDTvidePressReleasedated24August2019.

1 The enhanced surcharge of 25% and 37% does not apply on tax payable at special rate on income arising from the transfer of equity share/unit referred to in section 111A and section 112A of the Act as clarified by the CBDT vide Press Release dated 24 August 2019.


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Dividend The dividend received in respect of the shares and units of Mutual Fund is exempt from tax in the hands of investor.

However, if the aggregate dividend income (other than dividend from units of mutual funds) accrued/ received by an investor being a specified assessee, resident in India, exceeds Rs. 10 lakhs, such excess of the aggregate dividend income accrued/ received shall be chargeable to tax at the rate of 10% (plus applicable surcharge and cess).

# Specified assesse means a person other than (a) a domestic company, or (b) 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 (c) a trust or institution registered under section 12A or section 12AA of the Income-tax Act, 1961 (‘the Act’).

However, the dividend/income distribution on securities and units received by the investors under the Portfolio Management Services will be after distribution tax on the amount of dividend/income distribution declared.

The rates of tax on the dividend on equity shares / income distribution on units would be as under:

Rate of Tax (%) #

Type of Payer

Equity dividend from Companies

Mutual Funds (other than a specified Mutual Fund)Money Market

Liquid FundEquity oriented

Infrastructure Debt Fund

Others

Individuals / H.U.F/ NRI 15% 25% 10% 5%^ 25%

Others 15% 30% 10% 5%^ 30%# +Surchargeattherateof12%+HealthandEducationCessattherateof4%^ Lowerrateof5%onlyincaseoftheunitholderbeinganon-residentoraforeigncompany

Specified Mutual Fund means a Mutual Fund specified under clause 23D of section 10 of the Act which is located in any International Financial Services Centre and it’s all units are by non-residents and where the consideration for such transaction is paid/payable in convertible foreign exchange.

For the computation of distribution tax, the amount of dividend distributed to shareholders/unitholders is to be increased to such amount as would after reduction of tax on such increased amount be equal to the net distributed profits/income.

Capital Gains Tax

(a) Long Term

For resident Individuals, HUF, Partnerships Firm and Indian Companies As per section 112A of the Act, long term capital gains (in excess of Rs. 1 lakh, on an aggregate basis in a

financial year), arising from transfer of equity shares, or units of equity oriented funds or units of REITs/InvITs, should be taxable at 10% (plus surcharge and cess). The provisions of this section are to be applicable only if STT has been paid on both acquisition and transfer of such capital asset, in the case of equity shares, and paid at the time of transfer in the case of units of equity oriented fund/REIT/InvIT. [The Central Board of Direct Taxes has issued a notification dated 1 October 2018 for transactions to which the condition of payment of STT at the time of acquisition should not apply.]


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The cost of acquisition in relation to an equity share of a company or a unit of equity oriented fund or unit of a REIT/InvIT, acquired before the 1st day of February, 2018 for the above purpose, to be the higher of the following: The cost of acquisition of such asset; and Fair market value of such shares or actual sales consideration accruing on its transfer, whichever is

lower.

The term “Fair market value” has been specifically defined for this purpose. Further, the benefit of indexation should not be available in the above case.

Under the provisions of section 112 of the Act, long-term capital gains (other than those mentioned above) are subject to tax at the rate of 20% (plus the applicable surcharge and cess). Indexation benefit should generally be available (other than in the case of bonds / debentures, not being capital indexed bonds / Sovereign Gold Bonds).

In the event that indexation benefit is not availed for the purpose of calculation of the cost of acquisition, the long-term capital gains should be taxed at the rate of 10% (plus the applicable surcharge and cess).This option should be available only in the case of long-term capital gains arising on the sale of listed securities (other than units) or zero coupon bonds or those covered under section 112A above.

Non-resident investors/Non-resident Indian investor

The section 112A of the Act (referred to above), should also be applicable to non-resident investors, on long term capital gains arising on transfer of equity or units of equity oriented mutual funds/REITS/InvITs (subject to payment of STT).

Long-term capital gains should be taxable at the rate of 10% (plus applicable surcharge and cess) on the transfer of capital assets, being unlisted securities or shares of a company in which the public are not substantially interested. For this purpose, the benefit of foreign currency fluctuation and indexation benefit should not be available.

Long term capital gains arising from the transfer of listed securities (other than a unit or zero coupon bond or those covered under section 112A above) should be chargeable to tax at the rate of 10% (without indexation) or at the rate of 20% (with indexation, if applicable), whichever is lower [plus applicable surcharge and cess].

Under the provisions of section 112 of the Act, long-term capital gains (other than those above) should be taxed at the rate of 20% (plus applicable surcharge and cess).

The benefit of indexation is not available to non-resident investor for the transfer of shares or debentures of an Indian company (assuming that the investments were initially acquired by them in foreign currency).

It may be noted that the non-resident Indians are permitted to be governed by the general provisions of the Act or the special provisions contained in section 115E of the Act. Under section 115E of the Act for non-resident Indians, income by way of long-term capital gains in respect of specified assets purchased in foreign currency as defined under section 115C of the Act (which includes shares, debentures, deposits in an Indian Company and security issued by central government), is chargeable at the rate of 10% (plus the applicable surcharge and cess)


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(b) Short Term

Under section 111A of the Act, income from short-term capital gains arising from the transfer of equity shares in a company on a recognized stock exchange or a unit of equity oriented fund, on which STT is paid, are taxable at the rate of 15% (plus the applicable surcharge and cess).

The tax rates applicable to different categories of assesses on short-term capital gains (other than those referred to above) would be the normal tax rates applicable to the investors.

Business Income

If the income is characterised as business income, the gain/ loss is to be computed under the head “Profits and Gains of Business or Profession” after allowing normal business expenses (inclusive of the expenses incurred on transfer, including securities transaction tax) according to the relevant provisions of the Act. The net income should be taxable at the normal rates otherwise applicable to the tax payer on its income.

However, the taxability of dividend should continue to be as per the earlier discussion.

12) Other Aspects

(a) Tax Deduction at Source The income earned by investors from its investments would be subject to TDS based on:

(a) Nature of income,(b) Nature of investment, and (c) Type of investors.

(b) Provisions regarding Dividend income and Bonus from Mutual Fund units According to the provisions of Section 94(7) of the Act, losses arising from the sale/redemption of units

purchased within 3 months prior to the record date (for entitlement of dividends) and sold within 9 months after such date, is disallowed to the extent of income on such units claimed as tax exempt.

According to the provisions of Section 94(8) of the Act, if an investor purchases units within 3 months before the record date (for entitlement of bonus) and sells/redeems the units within 9 months after that date, and by virtue of holding the original units, he becomes entitled to bonus units, then the loss arising on transfer of original units shall be ignored for the purpose of computing his income chargeable to tax. In fact, the loss so ignored will be treated as cost of acquisition of such bonus units.

(c) Non-resident investors shall be entitled to be governed by provisions of the applicable Tax Treaty which India has entered into with the country of residence of the non-resident investor, if it is more beneficial than the provisions of the Act. Under section 90(4) of the Act, a non-resident shall not be entitled to claim treaty benefits, unless the non-resident obtains a TRC of being a resident of his home country. Further, under section 90(5) of the Act, a non-resident is also required to provide other information in the prescribed Form No. 10F. The above summary does not cover the provisions of the Tax Treaties entered into by India.

(d) The above are only broad tax implications. They may differ taking into account the specific facts of each individual case.

(e) The income arising from the acquisition and transfer of securities can give rise to either capital gains or business income. The issue of characterisation of income is relevant as the income tax computation and rates differ in the two situations. The characterisation is essentially a question of fact and depends on whether the


30

shares are held as business/ trading assets or as capital assets. The characterisation has to be considered in light of the various circulars / judicial precedents in this context.

(f) There may be additional provisions that may be relevant depending upon the facts of the case. On an illustrative basis, the situations could be (a) sale of unquoted equity shares below “fair market value”, (b) receipt of securities below “fair market value”, buy-back of listed and unlisted shares, etc.

(g) There may be separate tax regime applicable to certain investors which have not been covered in this generic note.

13) Accounting Policies:

ThefollowingAccountingpolicywillbeappliedfortheinvestmentsofClients:

a) The financial statements will be prepared on accrual basis of accounting in accordance with the Portfolio Management Services Agreement between the Portfolio Manager and the Client.

b) Investments in Equities, Mutual funds, Exchange Traded Funds and Debt instruments will be valued at closing market prices of the exchanges (BSE or NSE as the case may be) or the Repurchase Net Asset Value declared for the relevant scheme on the date of the report or any cut off date or the market value of the debt instrument at the cut off date. Alternatively, the last available prices on the exchange or the most recent NAV will be reckoned. In case of structured products, the portfolio will be valued at the face value of the product until the expiry of the tenure. In case of unlisted shares/ convertible equity linked securities / unlisted debt, the valuation will be initially based on cost and then fair value arrived at through an Independent Valuation agency.

c) Realized gains/ losses will be calculated by applying the first in / first out principle. The Portfolio Manager may adopt any specific norms or methodology for valuation of investments or accounting the same on a case specific basis.

d) For derivatives, unrealised gains and losses will be calculated by marking to market the open positions.

e) Unrealised gains/losses are the differences in between the current market values/NAV and the historical cost of the securities.

f) Dividend on equity shares and interest on debt instruments shall be accounted on accrual basis. Further Mutual Fund dividend shall be accounted on receipt basis. Other income like bank interest, interest on FD etc. shall also be accounted on receipt basis.

g) Bonus shares shall be recognised only when the original shares on which the bonus entitlement accrues are traded on the stock exchange on an ex-bonus basis.

h) Right entitlement shall be recognised only when the original shares on which the right entitlement accrues are traded on the stock exchange on an ex-rights basis.

i) The cost of investment acquired or purchased shall include brokerage, stamp duty and any charge customarily included in the brokers cost note/bought note.

The Accounting Policies and Standards as outlined above are subject to changes made from time to time by Portfolio Manager. However, such changes would be in conformity with the Regulations.


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14) Investors Services:

(i) Details of investor relation officer who shall attend to the investor queries and complaints is mentioned herein below:

Name of the person Mr. Naveen Gupta

Designation Senior Vice President – Fund Administration

Address 12th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi – 400025

Email [email protected]

Telephone +91 22 7198 5551

(ii) Grievance redressal and dispute settlement mechanism:

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

b) Grievances, if any, that may arise pursuant to the Portfolio Investment Management Agreement entered into shall as far as possible be redressed through the administrative mechanism by the Portfolio Manager and are subject to SEBI (Portfolio Managers) Regulations 1993 and any amendments made thereto from time to time. However, all the legal actions and proceedings are subject to the jurisdiction of court in Mumbai only and are governed by Indian laws.

The Portfolio Manager will endeavour to address all complaints regarding service deficiencies or causes for grievance, for whatever reason, in a reasonable manner and time. If the Investor remains dissatisfied with the remedies offered or the stand taken by the Portfolio Manager, the investor and the Portfolio Manager shall abide by the following mechanisms:-

All disputes, differences, claims and questions whatsoever arising between the Client and the Portfolio Manager and/or their respective representatives shall be settled through Arbitration process as described in the Portfolio Investment Management Agreement or any Supplemental Agreement thereto.

For MOPE Investment Advisors Private Limited:

Mr. Motilal OswalDirector

Sd/-

Mr. Vishal TulsyanManaging Director & CEO Sd/-

Place: MumbaiDate: September 18, 2019

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MOPE Investment Advisors Private Limited Annexure A Summary of significant accounting policies and other explanatory information Note 42 : Related party disclosure As per Ind AS 24 - Related Party Disclosures, specified under section 133 of the Companies Act, 2013, read with The Companies (Indian Accounting Standards) Rules, 2015, the name of related party where control exists / able to exercise significant influence along with the transactions and year end balances with them as identified and certified by the management are as follows: (i) List of related parties and their relationship Ultimate Holding Company - Passionate Investment Management Private Limited Holding Company - Motilal Oswal Financial Services Limited

Subsidiaries and Step-down subsidiaries - Motilal Oswal Real Estate Investment Advisors Private Limited - India Business Excellence Management Company - Motilal Oswal Real Estate Investment Advisors II Private Limited

Fellow subsidiaries - Motilal Oswal Finvest Limited (formerly known as Motilal Oswal Capital Markets Limited) - Motilal Oswal Trustee Company Limited - Motilal Oswal Fincap Private Limited (Formerly known as Insurance Brokers Private Limited) - Motilal Oswal Commodities Broker Private Limited - Motilal Oswal Asset Management Company Limited - Motilal Oswal Investment Advisory Limited - Motilal Oswal Wealth Management Limited - Motilal Oswal Securities International Private Limited - Motilal Oswal Capital Market (Hongkong) Private Limited - Motilal Oswal Capital Markets (Singapore) Pte. Limited - Aspire Home Finance Corporation Limited - Motilal Oswal Asset Management (Mauritius) Private Limited - Motilal Oswal Capital Limited - Nagori Agro & Cattle Feeds Private Limited

Associates - India Realty Excellence Fund II LLP

Enterprises in which key management personnel have control - OSAG Enterprises LLP Key management personnel (a) Managing director and Chief Executive Officer - Mr.Vishal Tulsyan

(b) Non - executive directors - Mr. Raamdeo Agarawal - Mr. Motilal Oswal Enterprises in which key management personnel and their relatives exercise significant Influence - Motilal Oswal Foundation (Trust)

33

(ii) T

rans

actio

ns w

ith re

late

d pa

rties

: 31

Mar

ch 2

019

(All

amou

nts a

re in

INR

Lakh

s, u

nles

s oth

erw

ise st

ated

)

Tran

sacti

onN

ame

of th

e re

late

d Pa

rty

Hol

ding

Com

pany

/

Subs

idia

ry C

ompa

ny

/ Fe

llow

Sub

sidi

ary

( A )

Key

Man

ager

ial

Pers

onne

l / R

elati

ve

of K

MP

( B )

Ass

ocia

te (C

)To

tal (

A+B

+C)

2018

-19

2017

-18

2018

-19

2017

-18

2018

-19

2017

-18

2018

-19

2017

-18

Mar

ketin

g co

mm

issio

n ex

pens

eM

otila

l Osw

al W

ealth

Man

agem

ent L

td -

3

- -

- -

- 3

Bu

sines

s Sup

port

Ser

vice

Moti

lal O

swal

Fin

anci

al S

ervi

ces L

imite

d 1

80

- -

- -

- 1

80

- Re

ferr

al F

ees

Moti

lal O

swal

Wea

lth M

anag

emen

t Ltd

4

20

- -

- -

4

20

Profi

t Fro

m IR

EF II

LLP

( Par

tner

ship

Firm

)In

dia

Real

ity E

xcel

lenc

e Fu

nd II

LLP

- -

- -

233

2

97

233

2

97

Plac

emen

t fee

s (IB

EF II

I)M

otila

l Osw

al W

ealth

Man

agem

ent L

td 9

2 5

41

- -

- -

92

541

M

otila

l Osw

al F

inan

cial

Ser

vice

s Lim

ited

113

5

85

- -

- -

113

5

85

Setu

p fe

es (I

BEF

III)

Moti

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swal

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lth M

anag

emen

t Ltd

7

48

- -

- -

7

48

Moti

lal O

swal

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anci

al S

ervi

ces L

imite

d 1

97

252

-

- -

- 1

97

252

Ad

viso

ry fe

esIn

dia

Busin

ess E

xcel

lenc

e M

anag

emen

t Com

pany

931

2

,121

-

- -

- 9

31

2,1

21

Divi

dend

Pai

dM

otila

l Osw

al F

inan

cial

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vice

s Lim

ited

- 4

,578

-

- -

- -

4,5

78

Mr.V

ishal

Tul

syan

- -

- 5

81

- -

- 5

81

Inte

rest

Exp

ense

Moti

lal O

swal

Fin

vest

Lim

ited

35

- -

- -

- 3

5 -

Moti

lal O

swal

Fin

anci

al S

ervi

ces L

imite

d 2

9 6

8 -

- -

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9 6

8

Rent

Inco

me

and

Expe

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Moti

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l Est

ate

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stm

ent A

dviso

rs II

Pvt

Ltd.

35

35

- -

- -

35

35

Moti

lal O

swal

Fin

anci

al S

ervi

ces L

imite

d 2

57

279

-

- -

- 2

57

279

Di

vide

nd In

com

eIn

dia

Busin

ess E

xcel

lenc

e M

anag

emen

t Com

pany

- 5

,387

-

- -

- -

5,3

87

PMS

shar

ing

expe

nse

Moti

lal O

swal

Wea

lth M

anag

emen

t Ltd

15

- -

- -

- 1

5 -

Reim

burs

emen

t of e

xpen

seM

otila

l Osw

al F

inan

cial

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vice

s Lim

ited

34

56

- -

- -

34

56

Dona

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swal

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ndati

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rust

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(Tak

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anci

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ervi

ces L

imite

d 2

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,724

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- -

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M

otila

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al F

inve

st L

imite

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,698

-

- -

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98

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otila

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vice

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ited

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55

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55

Repa

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imite

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take

n (M

axim

um b

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lal O

swal

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vest

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ited

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49

- -

- -

- 2

,449

-

Moti

lal O

swal

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anci

al S

ervi

ces L

imite

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1

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-

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,225

1

,151

Lo

an g

iven

Mr.V

ishal

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syan

30

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- -

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Empl

oyee

com

pens

ation

- M

anag

eria

l re

mun

erati

onM

r.Vish

al T

ulsy

an -

- 1

59

114

-

- 1

59

114

Not

e : A

s the

liab

ilitie

s for

defi

ned

bene

fit p

lans

are

pro

vide

d on

act

uaria

l bas

is fo

r the

Com

pany

as a

who

le, t

he a

mou

nts p

erta

inin

g to

Key

Man

agem

ent P

erso

nnel

are

not

incl

uded

.

34

(ii) O

utst

andi

ng b

alan

ces o

f / w

ith re

late

d pa

rties

:(A

ll am

ount

s are

in IN

R La

khs,

unl

ess o

ther

wise

stat

ed)

Tran

sacti

onN

ame

of th

e re

late

d Pa

rty

Hol

ding

Com

pany

/ S

ubsi

diar

y Co

mpa

ny /

Fel

low

Sub

sidi

ary

( A )

Key

Man

ager

ial P

erso

nnel

/ R

elati

ve

of K

MP

( B )

2018

-19

2017

-18

2016

-17

2018

-19

2017

-18

2016

-17

Out

stan

ding

Bal

ance

s:

Loan

/Int

eres

t Pay

able

sM

otila

l Osw

al F

inan

cial

Ser

vice

s Lim

ited

1,2

25

907

3

32

- -

- M

otila

l Osw

al F

inve

st L

imite

d 7

-

- -

- -

Rent

/ M

OT

cost

Moti

lal O

swal

Fin

anci

al S

ervi

ces L

imite

d 9

1

5 -

- -

-

Trad

e pa

yabl

e/ re

ceiv

able

Indi

a Bu

sines

s Exc

elle

nce

Man

agem

ent C

o 1

90

442

-

- -

- M

otila

l Osw

al F

inan

cial

Ser

vice

s Lim

ited

6

5

- -

- -

Indi

a Bu

sines

s Exc

elle

nce

Man

agem

ent C

o 8

83

525

1

,014

-

- -

Moti

lal O

swal

Wea

lth M

anag

emen

t Ltd

4

5

2

- -

- O

ther

rece

ivab

leM

otila

l Osw

al F

ound

ation

(Tru

st 2

-

- -

- -

Oth

er p

ayab

leM

otila

l Osw

al S

ecur

ities

Lim

ited

- -

17

- -

- Re

nt D

epos

it Re

ceiv

able

Moti

lal O

swal

Fin

anci

al S

ervi

ces L

imite

d -

139

1

39

- -

- Lo

an re

ceiv

able

Mr.V

ishal

Tul

syan

- -

- 3

0 -

-

Inve

stm

ent i

n re

late

d pa

rties

:

Inve

stm

ent

Indi

a Bu

sines

s Exc

elle

nce

Man

agem

ent C

o 5

8 5

8 5

8 M

otila

l Osw

al R

eal E

stat

e In

vest

men

t Adv

isors

Priv

ate

Lim

ited

100

1

00

10

Aspi

re H

ome

Fina

nce

Corp

orati

on L

imite

d 0

0

0

M

otila

l Osw

al R

eal E

stat

e In

vest

men

t Adv

isors

II

Priv

ate

Lim

ited

- 2

45

495

Indi

a Re

alty

Exc

elle

nce

Fund

II L

LP 7

10

1,1

71

1,9

17

Chandrakant SoniHead - Fund Raising & Investor RelationsDID: (+91) 22 7193 4302E-mail: [email protected]

Sanghamitra KarakManager - Investor RelationsDID: (+91) 22 7198 5568E-mail: [email protected]

MOPE Investment Advisors Private LimitedPortfolio Management Services12th Floor, Motilal Oswal Tower, Rahimtullah Sayani Road, Opp. Parel ST Depot,Prabhadevi, Mumbai - 400025

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