DISCLOSURE DOCUMENT · 2020. 10. 1. · This Disclosure Document has been prepared in accordance...

DISCLOSURE DOCUMENT

1

DISCLOSURE DOCUMENT FOR

PORTFOLIO MANAGEMENT SERVICES

(i) The Disclosure Document has been filed with the Securities and Exchange Board of India (SEBI) alongwith the certificate in the specified format in terms of Regulation 22 of the SEBI (Portfolio Managers) Regulations, 2020 and amendments thereto, as applicable.

(ii) The purpose of the Disclosure Document is to provide essential information about the Portfolio Management Services (PMS) in a manner to assist and enable the investors in making an informed decision for engaging a Portfolio Manager.

(iii) The Disclosure Document gives the necessary information about the Portfolio Manager required by an investor before investing, and the investor is also advised to retain the document for future reference.

(iv) Name of Principal Officer: Mr. Chandresh Kumar Nigam Address: Axis Asset Management Company Limited

"Axis House", 1st Floor, C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400025 Tel: 91 22 4325 5161 / 2425 4108 Fax: 91 22 4325 5199 / 2425 5199 Email:[email protected]

This Disclosure Document is dated September 30, 2020.

DISCLOSURE DOCUMENT

2

INDEX

Page no. 1. DISCLAIMER 3 2. DEFINITIONS 3 3. THE PORTFOLIO MANAGER 4

4. PENALTIES, PENDING LITIGATIONS OR PROCEEDINGS ETC AGAINST THE PORTFOLIO MANAGER (STATUS AS ON August 31, 2020). 11

5. SERVICES OFFERED 12

6. RISK FACTORS 30

7. CLIENT REPRESENTATION 34 8. FINANCIAL PERFORMANCE OF THE PORTFOLIO MANAGER 36 9. PORTFOLIO MANAGEMENT PERFORMANCE OF AXIS ASSET MANAGEMENT COMPANY LIMITED FOR THE LAST THREE YEARS. 10. AUDIT OBSERVATIONS

37 37

11. NATURE OF COSTS AND EXPENSES FOR CLIENTS 37

12. TAX IMPLICATIONS FOR CLIENTS 39 13. ACCOUNTING POLICIES 54 14. INVESTOR SERVICES 55 15. PREVENTION OF MONEY LAUNDERING 56 16. GENERAL 56 17. MISCELLANEOUS PROVISIONS 56 18. DISCLAIMER 58

DISCLOSURE DOCUMENT

3

1. DISCLAIMER This Disclosure Document has been prepared in accordance with the Securities and Exchange Board of India (Portfolio Managers) Regulations,2020, and amendments thereto as applicable and has been filed with the Securities and Exchange Board of India (SEBI). The Disclosure Document has neither been approved nor disapproved by SEBI nor has SEBI certified the accuracy or adequacy of the contents of this Disclosure Document. 2. DEFINITIONS For the purposes of this Disclosure Document, except as otherwise expressly provided or as the context or meaning thereof otherwise requires, the following words and expressions shall have the meanings assigned to them respectively hereinafter: “Act” means the Securities and Exchange Board of India Act, 1992 (15 of 1992) as amended from time to time. “Chartered Accountant” means 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. “Client” means any individual, Hindu Undivided Family(HUF), partnership firm, association of person, body of individuals, body corporate, trust, statutory authority, or any other person who enters into an agreement with the Portfolio Manager for managing its portfolio. “Fund Manager” (FM) means 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. “Net Asset Value” (NAV) means the fair market/fair value of the assets in the Portfolio consisting of the aggregate of (a) the amount of cash in the Bank Account; and (b) the market value of Client Securities/ units of Mutual Funds computed in accordance with the methodology as set out in Clause 12, reduced by the amounts payable by the Client to the Portfolio Manager and all such fees, costs, charges payable by the Client in respect of the Portfolio which include but are not restricted to custodian fees, bank charges, stamp duty charges, legal charges, taxes and out of pocket expenses incurred in respect of the Portfolio. “Person directly or indirectly connected” means 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. “PMS Agreement” means the contract entered between the Portfolio Manager and the client for the management of funds or securities of the client. “Portfolio” means the total holdings of securities belonging to the client. “Portfolio Manager” (PM) means Axis Asset Management Company Limited, a company incorporated under the Companies act, 1956, which has obtained a certificate of registration from SEBI to act as a Portfolio Manager under Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020, vide registration no. INP000003534.

DISCLOSURE DOCUMENT

4

“Principal Officer” means an employee of the Portfolio Manager who has been designated as such by the Portfolio Manager. “Regulations” meansthe Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020 including any modification or amendment thereof. “SEBI” means the Securities and Exchange Board of India. “Securities” means and includes securities as defined in Section 2 (h) of the Securities Contracts (Regulation) Act, 1956 and any amendments thereto. “Securities lending” means securities lending in accordance with the Securities Lending and Borrowing Framework specified by SEBI. The terms that are used but not defined herein, except where the context otherwise so requires, shall have the same meanings as are assigned to them under the Act or the Regulations. 3. THE PORTFOLIO MANAGER (i) History, Present Business and Background of the portfolio manager Axis Asset Management Company Limited(Axis AMC), the Portfolio Manager, is a subsidiary of Axis Bank Limited.The Portfolio Manager was incorporated on January 13, 2009 in India. Presently, Axis AMC is the investment manager to the schemes of Axis Mutual Fund(Certificate of Registration for the mutual fund and approval to act as investment manager to Axis Mutual Fund received on September 4, 2009)..Axis AMC also acts as investment manager for Axis Alternative Investment Fund – Category II (Certificate of Registration for the Alternative Investment Fund received on January 19, 2018) and Axis Alternative Investment Fund – Category III (Certificate of Registration for the Alternative Investment Fund received on December 13, 2018). Axis AMC will be guided by 3 principle beliefs that will serve as the bedrock for future growth. Enduring wealth creation Focus on sustainable wealth creation and therefore not just aim at short term fleeting investment opportunities. Long term relationships Focus on long term relationships with investors and stakeholders. Investor’s viewpoint The investor will always be the centerpiece around which Axis AMC will structure its communication. PROMOTER Brief Profile of Axis Bank Limited The equity capital of the portfolio manager is held by Axis Bank Limited and Schroder Investment Management (Singapore) Ltd. Axis Bank is one of the first new generation private sector banks to have begun operations

DISCLOSURE DOCUMENT

5

in 1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The shareholding of Unit Trust of India was subsequently transferred to SUUTI, an entity established in 2003. As on 30th June 2020, the Bank had a network of 4,528 domestic branches and extension counters situated in 2,559 centres compared to 4,094 domestic branches and extension counters situated in 2,380 centres last year. As on 30th June 2020, the Bank had 11,971 ATMs and 5,485 cash recyclers spread across the country. Financial performance The Bank’s Balance Sheet grew 16% YOY and stood at 8,97,138 crores as on 30th June 2020. The Bank’s advances including TLTRO investments grew 17% YOY to 5,79,444 crores as on 30th June 2020.The Bank’s loan to deposit ratio stood at 89%. Retail loans grew 16% YOY to 2,98,636 crores and accounted for 53% of the Net advances of the Bank. SME loans book stood at Rs. 57,148 crores. Corporate loan book including TLTRO investments grew by 26% YOY. Brief Profile of Schroders and Schroder Investment Management (Singapore) Ltd (SIMSL) Schroder Group Investment management is their only business and their goals are completely aligned with those of their clients – the creation of long-term value to assist them in meeting their future financial requirements. They have responsibility for US$649.6 billion on behalf of institutional and retail investors, financial institutions and high net worth clients from around the world, invested across equities, fixed income, multi-asset, private assets and alternatives.

Schroders Singapore Schroder Investment Management (Singapore) Ltd (‘Schroders Singapore’) is a wholly-owned subsidiary of Schroders plc and has been operating in Singapore since 1976. We manage over US$18 billion on behalf of clients which include official institutions, sovereign wealth funds, pension funds, insurance companies, charities, local statutory boards, government-linked companies, high net worth individuals and retail investors. We currently have over 400 permanent staff, and are one of the largest asset management companies in Singapore.

Schroders Singapore is the “centre of excellence” for Asia ex Japan fund management. Schroders Singapore is also the regional headquarters for Asia Pacific covering Australia, China, Hong Kong, Japan, Korea, Indonesia and Taiwan. The key functions located in Singapore include investment, product management, trading, compliance, human resources, operations and technology. Schroders Singapore is also the Crisis Management Centre of Schroders’ business in the region.

Source: Schroders, as at 30June 2020. DIRECTORS OF THE PORTFOLIO MANAGER AND THEIR BACKGROUND IN BRIEF The following table sets forth current details regarding the Portfolio Manager’s Board of Directors:

DISCLOSURE DOCUMENT

6

Name, Father’s Name, Designation, Address and Occupation

Age Other Directorships

1. Ms. Sonia Singh Father’s name: Kailash Khosla Designation: Non – Executive Director Occupation: Professional Address: 184, Vaishali, Pitampura, Delhi- 110088

55 1) Trent Limited 2) J.K. Helene Curtis Limited 3) Kansai Nerolac Paints Limited

2. Mr. V. Anantharaman Father’s name: (Late) Ganapathy Venkataramanan Designation: Non – Executive Director Occupation: Professional Address: B2101 Lodha Bellissimo, N M Joshi Marg, Mahalaxmi, Mumbai 400011, India

55 1) Ecom Express Private Limited 2) Indian Hotels Company Limited 3) Ihoco BV, Netherlands

3. Mr. Shailendra Bhandari Father’s name: Late Dalip Kumar Bhandari Designation: Non – Executive Director Address: E-27, Dhanraj Mahal, Chatrapati Shivaji Marg, Appollo Bunder, Mumbai – 400 001

61 1) Future Retail Limited 2) Triveni Turbine Limited

4. Mr. Amitabh Chaudhry Father’s name: Om Singh Chaudhry Designation: Non – Executive Director and Chairperson Occupation: Service Address: Flat No.4301, 43rd Floor, Tower 3, Planet Godrej, K K Marg, Near Jacob Circle, Mahalaxmi, Mumbai 400011

55 1) Axis Bank Limited 2) Axis Capital Ltd. 3) Axis Finance Limited

5. Mr. Ravi Narayanan Father’s name: Narayanan Ramamoorthy Designation: Non – Executive Director Occupation: Professional, private sector

51 NIL

DISCLOSURE DOCUMENT

7

Address: B-8 / 603, Safal Complex, Sector 19A, Nerul East, Navi Mumbai 6. Chandresh Kumar Nigam Father’s name : M B L Nigam Designation : Managing Director and CEO Occupation : Service Address: D-47, Venus Apartments, Dr. R.G. Thadani Marg, Worli, Mumbai, Maharashtra Mumbai 400018

51 NIL

7. Mr. Lieven Michael O Debruyne Fathers Name : Frans Debruyne Designation : Non – Executive Director Occupation : Service Address: Unit 9A, 26 Magazine Gap Road, The Peak, Hong Kong

51 1) Bank of Communications Schroder Fund Management Co. Ltd.

2) Pacific Interest Hong Kong Ltd. 3) Pacific Interest S.a.r.l.

4) S.& C. Nominees Ltd.

5) Schroder Investment Management (Hong Kong) Ltd.

6) Schroder Investment Management (Japan) Ltd.

7) Schroder Investment Management (Shanghai) Ltd.

8) Schroder Asia Nominees Ltd.

It is to be noted that tenure of Mr. Ashok Sinha on the board of Axis Asset Management Company Limited completed w.e.f. close of business hours of September 17, 2020.

DISCLOSURE DOCUMENT

8

GROUP COMPANIES/FIRMS OF THE PORTFOLIO MANAGER Given below are the group companies of the Portfolio Manager: Name of company / firm

Address Type of activity handled

Nature of interest of promoter /director

Nature of interest of company

Axis Bank Ltd.

Registered Office: ‘Trishul’, 3rd Floor, Opp. Samartheshwar Temple, Law Garden, Ellisbridge,Ahmedabad – 380006. Corporate Office: "Axis House", First Floor, C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400025

Banking Axis Asset Management Company Ltd. is a subsidiary of Axis Bank Ltd.

Axis Asset Management Company Limited is a subsidiary of Axis Bank Ltd. Axis Bank holds 75% (less one equity share of Axis AMC)

Axis Mutual Fund Trustee Ltd.

Registered Office: "Axis House", First Floor, C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400025

The company is the trustee to Axis Mutual Fund

Subsidiary of the promoter viz Axis Bank Ltd.

Axis Asset Management Company Ltd. has entered into an Investment Management Agreement with Axis Mutual Fund Trustee Ltd. to act as Investment Manager for Axis Mutual Fund

Axis Capital Ltd.

Registered Office: Axis House, 8th Floor, C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400 025

Investment Banking and Institutional Broking

Wholly owned subsidiary of the promoter viz. Axis Bank Ltd.

None

Axis Capital USA,LLC

Registered Office:

1675 South State Street, Suite B, Dover, County of Kent, Delaware 19901.

Financial services relating to equity capital market, institutional stock broking to institutional investors in USA

Wholly owned subsidiary of Axis Capital Ltd.

None

Axis Private Equity Limited

Registered Office: "Axis House", C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400025

Managing Investments, venture capital funds and off shore funds

Wholly owned subsidiary of the promoter viz Axis Bank Ltd.

None

Axis Trustee Registered Office: Debenture Wholly owned None

DISCLOSURE DOCUMENT

9

Name of company / firm




Services Limited

2nd floor, "Axis House", C-2, Wadia International Centre, Pandurang Budhkar Marg, Worli, Mumbai – 400025

Trustee subsidiary of the promoter viz Axis Bank Ltd.

Axis Bank U.K. Limited (formerly Axis UK Ltd.)

Registered Office: 4 Chiswell Street, (First Floor), London, England, EC1Y 4UP

Banking Company

Axis Bank U.K. Ltd.is a wholly owned subsidiary of Axis Bank Ltd.

None

Axis Finance Ltd.

Registered office: Axis House,C-2, Wadia International Centre,P.B. Marg,Worli, Mumbai, 400 025, India

Non - Banking Finance Company (NBFC)

Axis Finance Ltd is a wholly owned subsidiary of Axis Bank Ltd.

None

Axis Securities Ltd

Registered office: 8th Floor, Axis House, C-2, Wadia International Centre P.B. Marg Worli Mumba, 400 025, India

Marketing of Retail Asset Products, Credit Cards and Retail Broking

Wholly owned subsidiary of the promoter viz Axis Bank Ltd.

None

A.Treds Ltd.

Registered office: Axis House, C-2 Wadia International Centre, P B Marg, Worli Mumbai Mumbai 400025

Setting up institutional mechanism to facilitate financing of trade receivables of MSME

Subsidiary of the promoter viz Axis Bank Ltd. Axis Bank holds 67%.

None

Freecharge Payment Technologies Pvt. Ltd.

Ground Floor, Plot No. 68 Okhla Industrial Estate, Phase-III New Delhi South Delhi DL 110020 IN

Operating payment system for semi closed prepaid payment instrument

Freecharge Payment Technologies Private Limited is a wholly owned subsidiary of Axis Bank Ltd.

None

Accelyst Solutions Pvt. Ltd.

2nd Floor, unit no. 205-206, Plot no. 1 Vaibhav Chambers, Bandra Kurla Complex Mumbai Bandra Suburban MH 400051 IN

Providing and facilitating online recharge/bill payment/coupon services, marketing platform for third parties, distribution of mutual funds and insurance.

Accelyst Solutions Private Limitedis a wholly owned subsidiary of Axis Bank Ltd.

None

Schroder Singapore Holdings Pvt. Ltd.

Registered office: 138, Market Street #23-01 Capita Green Singapore 048946

Investments Schroder Singapore Holdings Private Limited holds 25%

None

DISCLOSURE DOCUMENT

10

Name of company / firm




+ 1 equity shares in Axis AMC Ltd.

Schroders plc

Registered office: 1 London Wall Place,London, EC2Y 5AU, England

Holding Company

Schroders Plc. is the ultimate holding company of Schroder Singapore Holdings Pvt.Ltd.

None

Schroder Administration Ltd.


Holding Company

Schroder Administration Limited is a group company of Schroder Singapore Holdings Pvt. Ltd.

None

Schroder International Holdings Ltd.


Holding Company

Schroder International Holdings Ltd. is a group company of Schroder Singapore Holdings Pvt. Ltd.

None

Schroder Investment Management (Singapore) Ltd

Registered Office: 138, Market Street #23-01 Capita Green Singapore 048946

Fund management

Holding company of Schroder Singapore Holdings Pvt. Ltd.

None

Schroders India Pvt. Ltd.(in liquidation)

Registered office: 1209, Navjivan Society, Bldg. No. 3, Lamington Road, Mumbai Central, Mumbai – 400008

Investment Advisory

Schroders India Private Limited is an affiliated company of the holding company of Schroder Singapore Holdings Pvt. Ltd.

None

Nippon Life Global Investors Singapore Ltd. (formerly known as Nissay Schroders Asset Management Asia Ltd.

Registered office: 138, Market Street # 22-03 Capita Green Singapore 048946

Fund Management

Nippon Life Global Investors Singapore Ltd. (formerly known as Nissay Schroders Asset Management (Asia) Ltd. is an affiliated company of the holding company of Schroder Singapore Holdings Pvt. Ltd.

None

DISCLOSURE DOCUMENT

11

4. PENALTIES, PENDING LITIGATIONS OR PROCEEDINGS, FINDINGS OF INSPECTION OR INVESTIGATION FOR WHICHFOR WHICH ACTION MAY HAVE BEEN TAKEN OR INITIATED BY REGULATORY AUTHORITY (STATUS AS ON AUGUST 31, 2020).

1. All cases of penalties imposed by the Board or the directions issued by the Board

under the Act or Rules or Regulations made thereunder:

None 2. The nature of the penalty/ direction:

Not Applicable 3. Penalties/fines imposed for any economic offence and/or for violation of any

securities laws:

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 deficiencies in the system and operations of the Portfolio Manager observed

by the Board or any regulatory agency:

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 Rules or Regulations made thereunder:

None

Axis Bank Limited is the promoter of the portfolio manager and being a listed banking entity holding various business licenses, either by itself or through its subsidiaries, is governed by regulators such as RBI and SEBI. These regulators have conducted reviews/ inspections on the operations of the Bank and/ or its subsidiaries in the regular course of business during which issues have been identified and communicated to the respective entities by the regulators. These have been duly responded to by the entities concerned and as confirmed by the management corrective actions, where necessary have been initiated.

DISCLOSURE DOCUMENT

12

5. SERVICES OFFERED

i. DETAILS OF SERVICES BEING OFFERED BY THE PORTFOLIO MANAGER

The Portfolio Manager broadly offers the following services:

A. DISCRETIONARY SERVICES

Under these services, the Portfolio Manager shall have the sole and absolute discretion to invest in respect of the Client’s account. A PMS agreement outlining the details of services including the objectives, rights and responsibilities, fees and expenses, etc. is entered into with each Client separately.

Currently the Portfolio Manager offers following Investment Approaches under Discretionary Management Services: 1. Fixed Income Portfolio 2. Diversified Equity Portfolio 3. Dynamic Balanced Portfolio 4. Axis Core & Satellite Portfolio 5. Axis Efficient Capital Allocators Portfolio 6. Axis Titans Portfolio 7. Axis Emerging Stars Portfolio 8. Axis Opportunities Portfolio 9. Axis Brand Equity Portfolio 10. Axis Smart Beta Portfolio 11. Axis Quant Strategies Portfolio 12. Axis Liquid Portfolio 13. Axis Real Estate Opportunities Portfolio

B. NON-DISCRETIONARY SERVICES

Under these services, the Portfolio Manager manages the account in accordance with the directions and after obtaining permission of the Client.For such services, the Portfolio Manager would charge the client a fee for services rendered as laid out in the PMS Agreement.

C. ADVISORY SERVICES

Under these services, the Portfolio Manager shall provide investment advisory services to its clients on investments in general and specifically, ifrequired by the client.The Portfolio Manager would charge the client a fee for services rendered as laid out in the PMS Agreement. The Portfolio Manager shall be solely acting as an advisor to the portfolio of the client and shall not be held responsible for theinvestment / divestment of securities and / or administrative activities on the clients portfolio. The Portfolio Manager shall,provide advisory services in accordance with such guidelines and/ or directives issued by the regulatory authorities and /or theClient, from time to time.

ii. DIRECT CLIENTS

Clients can invest directly with Portfolio Manager, without intermediation of persons engaged in distribution services.

DISCLOSURE DOCUMENT

13

For investing directly with the Portfolio Manager, client can visit any of the branches of Axis AMC or contact Relationship Manager of Axis AMC.

iii. INVESTMENT APPROACH(ES)

The general objective is to formulate and device the investment philosophy to invest in different asset classes, which generate reasonable risk adjusted return. The actual portfolio management objective and style will vary in line with the specific portfolio investment approach that is selected (list of available investment approach is provided below) by the Client along with any specific preferences or concerns (the specific objective based on the type of service will be as mentioned in the PMS agreement with the Client). The investment objective and investment approach of the existing portfolios offered are as follows: 1. Fixed Income Portfolio a. Investment Objective

The portfolio endeavors to generate optimal risk adjusted returns by investing in a diversified portfolio of debt and money market instruments.

b. Investment Strategy(Basis of selection of securities)

The portfolio manager will endeavor to allocate the assets between various fixed income securities taking advantage of the prevailing interest rate scenario and the liquidity of the different instruments. Allocation to securities will be done based on multiple factors including the general macroeconomic condition, political environment, systemic liquidity, inflationary expectations, corporate performance & other economic considerations in order to determine the portfolio duration and degree of credit exposure. The portfolio will be unconstrained with regards to duration or credit exposure.

c. Benchmark

Nifty Composite Debt index

The NIFTY Composite debt index measures the performance of a debt portfolio covering government securities, SDLs and AAA/AA+/AA rated corporate bonds. The index is based on a well-defined, market relevant and rules-based framework making it a transparent and objective indicator of corporate bond market performance and the strategy.

d. Allocation of Portfolio across Types of securities

Type of Securities Indicative Allocation

(% of Net Asset Value) Minimum Maximum

Debt Instruments* including Government Securities and Corporate Debt 0% 100%

Money market instruments 0% 100% *includes securitized debt up to 30% of the net assets of the portfolio.

The asset allocation for the Portfolios given herewith are only indicative allocations and not absolute. The fund manager at its absolute discretion may vary exposure from the stated indicative asset allocation in the interest of clients from time to time and for such period as may be considered appropriate. These proportions can vary

DISCLOSURE DOCUMENT

14

depending upon the perception of the fund manager, market conditions, market opportunities, applicable regulations, political and economic factors; the intention being at all times to seek to protect interest of clients.

e. Indicative Tenure or Horizon

The indicative horizon for investment is 5 years.

f. Risks associated with the Investment Approach

• Strategy specific risk factor: The strategy would be subject to risks associated with investment in debt instruments which are covered below.

• Other Risk factors • Risks associated with investments in Fixed Income Instruments • General Risks associated with investments

• Other salient features, if any. NA

2. Diversified Equity Portfolio

a. Investment Objective

To generate long term capital appreciation by investing in a diversified portfolio of equity and equity related instruments across market capitalization.

b. Investment Strategy (Basis of selection of securities)

The Diversified Equity Portfolio aims to deliver superior risk-adjusted returns through investments in equity markets. The fund manager will pursue a bottom – up stock selection process investing in high quality businesses having favorable prospects going forward. Investments will be made in both large and mid-cap companies. Investments will be made on the basis of a fundamental-driven research process. Risk management is embedded in the investment process.

c. Benchmark

NIFTY 500 Index

The portfolio’s strategy is to invest in a diversified portfolio of companies across sectors. The strategy will also have the flexibility to invest in companies across the market capitalization spectrum and as such, the constituents of the NIFTY 500 Index reasonably represent the portfolio of the strategy

d. Asset Allocation

Instruments Indicative Allocation

(% of Net Assets) Minimum Maximum

Equity & Equity Related Instruments 80% 100%

Debt & Money market instruments 0% 20%

The portfolio will not invest in derivatives

The asset allocation for the Portfolios given herewith are only indicative allocations and not absolute. The fund manager at its absolute discretion may vary exposure from the stated indicative asset allocation in the interest of clients from time to time and for such period as may be considered appropriate. These proportions can vary

DISCLOSURE DOCUMENT

15

depending upon the perception of the fund manager, market conditions, market opportunities, applicable regulations, political and economic factors; the intention being at all times to seek to protect interest of clients.


The indicative horizon of the portfolio will be 3 years.


• Strategy Specific Risk Factors The strategy would be subject to risks associated with investment in equity and debt instruments which are covered below.

• General Risk Factors • Risks associated with investments in Equities • Risks associated with investments in Fixed Income Instruments • General Risks associated with investments

• Other salient features, if any.

Investments into the strategy can be done using the systematic transfer option (STO) that enables investors to stagger investments into the equity oriented strategy in a time bound manner minimizing market timing risks.

3. Dynamic Balanced Portfolio a. Investment Objective

To generate a consistent risk adjusted return through a dynamic mix of equity and fixed income instruments with an endeavor to generate a cycle agnostic return. The strategy will also aim to manage risk through active asset allocation.


The Dynamic Balanced Portfolio aims to generate absolute returns in the long term by dynamically allocating assets between equity and fixed income instruments. In addition, the portfolio manager will actively manage the equity and fixed income components.

The Dynamic Balanced Portfolio aims to benefit from the appropriate asset allocation across equity and fixed income. Asset allocation plays an important role in determining the overall risk and returns of the portfolio.

In order to decide the asset allocation, the fund manager will evaluate the relative attractiveness of equity and bond markets based on underlying factors that can affect their performance. A regular review of the asset allocation will be done by the fund manager.

The fund manager will normally maintain a balanced mix of equity and fixed income instruments in the portfolio. However, the fund manager will have the flexibility to change the asset allocation in favor of a specific asset class based on the expected performance of equity and fixed income markets.

The equity portion of the portfolio will follow a bottom – up stock selection process investing in high quality businesses on the basis of a fundamental-driven research process.

DISCLOSURE DOCUMENT

16

The fixed income portfolio will be actively managed in order to generate optimal risk adjusted returns by investing in debt and money market instruments.

c. Benchmark

NIFTY Hybrid Composite Debt 50:50 Index

The strategy invests in both equity and debt using an active asset allocation approach to manage risk. NIFTY Hybrid Composite Debt 50:50 Index seeks to track the performance of portfolio having a blend of the 50% Equity and 50% Debt. The NIFTY Hybrid Composite Debt 50:50 Index being the most appropriate of the available benchmarks reflecting the investible universe of the strategy, is being used as a benchmark.

d. Asset Allocation






The asset allocation for the Portfolios given herewith are only indicative allocations and not absolute. The fund manager at its absolute discretion may vary exposure from the stated indicative asset allocation in the interest of clients from time to time and for such period as may be considered appropriate. These proportions can vary depending upon the perception of the fund manager, market conditions, market opportunities, applicable regulations, political and economic factors; the intention being at all times to seek to protect interest of clients.




• Strategy Specific Risk Factors • The strategy will endeavor to manage risk through active asset allocation.

According to detailed historical analysis done by the AMC, such a strategy is able to generate a much lower risk profile compared to a 100% equity investment strategy. However, there is no certainty that the active asset allocation approach will be able to deliver the risk management going forward.



NA

DISCLOSURE DOCUMENT

17

4. Axis Core & Satellite Portfolio

a. Investment Objective

To generate long term capital appreciation by investing in a diversified portfolio of equity and equity related instruments across market capitalization.

b. Investment Strategy(Basis of selection of securities) Axis Core & Satellite Portfolio is a compact portfolio investing in equity and equity related instruments. The portfolio construction follows a core & satellite approach with an aim is to build a cycle agnostic portfolio of companies geared towards sustainable alpha generation.

The Portfolio comprises two parts viz. "Core" and "Satellite".

Core – Fundamentally Strong businesses with Strong Brand Presence

‘Core’ part comprises strong brands

• Businesses with sustainable competitive advantage driven by strong brands • The segment will offer an eclectic mix of Established, Emerging & Turnaround

brands

‘Satellite’ – Cyclical Businesses with Efficient Capital Management Practices

• The ‘Satellite’ part comprises of companies with a cyclical business models with a track record of superior capital allocation policy

• The Segment further broken up into ‘Evergreen capital Allocators’ & ‘Allocators driven by change’.

The allocation will consist of best ideas within each category. While the portfolio will consist of bottom-up best ideas, portfolio construction will target reasonable diversification across sectors. Investments will be across market capitalizations.

c. Benchmark

S&P BSE 200 Index

The portfolio’s strategy is to invest in a diversified portfolio of companies across sectors. The strategy will also have the flexibility to invest in companies across the market capitalization spectrum and as such, the constituents of the S&P BSE 200 Index reasonably represent the portfolio of the strategy.

d. Asset Allocation






The asset allocation for the Portfolios given herewith are only indicative allocations and not absolute. The fund manager at its absolute discretion may vary exposure from the stated indicative asset allocation in the interest of clients from time to time and for such period as may be considered appropriate. These proportions can vary depending upon the perception of the fund manager, market conditions, market

DISCLOSURE DOCUMENT

18

opportunities, applicable regulations, political and economic factors; the intention being at all times to seek to protect interest of clients.


The indicative horizon of the investment is3 years.


• Risks associated with investments in Equities • Risks associated with investments in Fixed Income Instruments • General Risks associated with investments



5. Axis Titans Portfolio a. Investment Objective

To achieve long term capital appreciation by investing in a diversified portfolio predominantly consisting of Large cap companies


The Axis Titans portfolio is an unconstrained, diversified large cap strategy without any bias towards themes, sectors, or style in picking investment opportunities. The strategy aims to maximize the long term capital appreciation by identifying opportunities resulting from Indian economic growth and its structural shifts.

The portfolio will consist of high-quality businesses that are structurally well-positioned, have sustainable competitive advantages and execution capability for consistent long term growth.

The investment universe of the strategy will comprise of the 100 largest companies by free float market capitalization listed on the domestic exchanges. The universe will be updated at half yearly intervals to coincide with the rebalancing cycle of the NSE.

c. Benchmark

NIFTY 100 Index

The portfolio’s strategy is to invest in a diversified portfolio of the top 100 companies by free float market capitalization within the domestic listed universe. The index methodology and the constituents of the NIFTY 100 Index reasonably represent the portfolio of the strategy.

d. Asset Allocation






DISCLOSURE DOCUMENT

19





• Strategy Specific Risk Factors • The strategy will aim to run a compact portfolio of Large cap companies which

may exclude securities of certain issuers which may result in the strategy underperforming due to the size constraints of the investment universe. Stocks of companies below the top 100 names may shift into and out of favor with stock market investors depending on market and economic conditions, and will affect the performance of the strategy leading to underperformance.




6. Axis Emerging Stars Portfolio a. Investment Objective

To achieve long term capital appreciation by investing in a diversified portfolio predominantly consisting of Mid & Small cap companies


Axis Emerging Stars portfolio is a high conviction mid and small cap strategy. The strategy aims to generate long term capital appreciation by investing in a high quality portfolio of mid and small cap companies with scalable business models and operating moats that have the potential to scale up businesses in a secular manner going forward. The portfolio will be diversified across sectors and themes. The strategy may also allocate selectively to large cap companies as part of the general portfolio where qualitative attributes may be present.

The investment universe of the strategy will comprise of the 500 largest companies by free float market capitalization listed on the domestic exchanges. The universe will be updated at half yearly intervals to coincide with the rebalancing cycle of the NSE.

c. Benchmark

NIFTY 500 Index

DISCLOSURE DOCUMENT

20

The portfolio’s strategy is to invest predominantly in mid and small cap companies with a select allocation to large cap stocks. The diversified portfolio will consist of equity of the top 500 companies by free float market capitalization within the domestic listed universe. The index methodology and the constituents of the NIFTY 500 Index reasonably represent the portfolio of the strategy.

d. Asset Allocation



Equity and Equity Related Instruments of Mid-cap & Small cap companies 65% 100%

Other Equity & Equity Related instruments 0% 35%







• Strategy Specific Risk Factors • Mid and small cap stocks are considered riskier due to the relatively illiquid

nature of the scrips. While adequate care will be exercised by the AMC in managing the strategy, investors should remain aware of the risk due to market illiquidity during adverse market conditions.

• Small cap stocks are more volatile & less liquid than large cap companies. Investors therefore should assume that illiquidity risks are higher in this strategy than large cap/multicap strategies.




7. Axis Opportunities Portfolio a. Investment Objective

To generate long-term capital appreciation by investing in mis-priced stocks facing special situations. The mis-pricing of stocks can occur due to companies facing

DISCLOSURE DOCUMENT

21

special situations like regulatory/policy changes, management restructuring, technology led disruption and innovation or any temporary challenges in the operating environment.


Axis Opportunities Portfolio is a compact high conviction strategy that aims to combine allocations to quality long term stocks with allocations invest in quality companies that are facing a turnaround or special situations which makes them attractive absolute return opportunities. While the investment strategy will be to invest in companies that can generate absolute returns, and the portfolio may see some limited active turnover as well as higher cash allocations over time as portfolio companies meet their target returns and/or other opportunities become available. The portfolio will follow a multicap approach to investing while endeavoring to be reasonably diversified.

c. Benchmark

NIFTY 500 Index

The portfolio’s strategy is to invest in a diversified portfolio of companies across sectors. The strategy will also have the flexibility to invest in companies across the market capitalization spectrum and as such, the constituents of the NIFTY 500 Index reasonably represent the portfolio of the strategy

d. Asset Allocation









DISCLOSURE DOCUMENT

22

f. Risks associated with the Investment Approach • Strategy Specific Risk Factors

• The strategy may invest in stocks, which are undervalued with the anticipation of increase in price. However, the stocks may continue to languish and may not attain the anticipated price. The strategy is subject to investment style risk; the performance may not be in line with the general market in scenarios of strong upward or downward cycles.

• The prices of securities invested by the strategy may not behave as expected by Fund Manager; this may affect the returns of the strategy adversely.

• General Risk Factors




8. Axis ‘Brand Equity’ Portfolio a. Investment Objective

To generate long term capital appreciation by investing in a diversified portfolio of equity instruments of companies with brands.


Axis ‘Brand Equity’ Portfolio is a compact portfolio investing in equity that endeavors to achieve long term capital appreciation through investment in companies with ‘established and emerging brands.’ The allocation will consist of best ideas within this space. While the portfolio will consist of bottom-up best ideas, portfolio construction will target reasonable diversification across sectors. Investments will be across market capitalizations.

The portfolio seeks to buy businesses with strong brands that provide:

- Sustainable competitive advantage - Capable Management Team - Good Corporate governance

The Portfolio Manager does not indicate any guarantee for capital/returns.

c. Benchmark

S&P BSE 200 Index


DISCLOSURE DOCUMENT

23

d. Asset Allocation










• Strategy Specific Risk Factors Evaluation of companies from a Brand perspective may exclude securities of certain issuers for non-investment reasons and therefore the strategy may forgo some market opportunities available to strategy that don’t fit the Brand theme. Stocks of companies with Brand attributes may shift into and out of favor with stock market investors depending on market and economic conditions, and the strategy’s performance may at times be better or worse than the performance of stocks that do not have brand attributes.

• General Risk Factors


• Other salient features, if any. Investments into the strategy can be done using the systematic transfer option (STO) that enables investors to stagger investments into the equity oriented strategy in a time bound manner minimizing market timing risks.

9. Axis Efficient Capital Allocators Portfolio a. Investment Objective

To generate long term capital appreciation by investing in a diversified portfolio of equity instruments of companies with efficient capital allocation attributes.


Axis Efficient Capital Allocators Portfolio is a compact portfolio investing in equity that endeavors to achieve long term capital appreciation through investment in companies with a track record of efficient capital management. The allocation will consist of best ideas within this space. While the portfolio will consist of bottom-up

DISCLOSURE DOCUMENT

24

best ideas, portfolio construction will target reasonable diversification across sectors. Investments will be across market capitalizations.

c. Benchmark

S&P BSE 200 Index


d. Asset Allocation










• Strategy Specific Risk Factors Evaluation of companies from a capital allocation perspective may exclude securities of certain issuers for non-investment reasons and therefore the strategy may forgo some market opportunities available to other strategies that don’t fit the theme. Stocks of companies with such attributes may shift into and out of favor with stock market investors depending on market and economic conditions, and the performance may at times be better or worse than the performance of stocks that do not have internally defined efficient capital allocation attributes.

• Other Risk Factors




DISCLOSURE DOCUMENT

25

10. Axis Smart Beta Portfolio a. Investment Objective

To generate long-term capital appreciation by investing in equity instruments of listed companies using a factor based approach.

b. Investment Strategy (Basis of selection of securities) The Axis Smart Beta portfolio is a systematic strategy of factor-based investing in a multicap portfolio based on a pre-defined set of factors with the aim of generating superior risk adjusted returns. Factors are underlying characteristics that drive returns of stocks – such as quality, growth, momentum etc. Factor exposure for any of the selected characteristics (such as quality) can be achieved through a number of different parameters for each of the stocks in the universe which is used for calculating a factor score for each of the stocks. The portfolio is generated by selecting and weighing the stocks based their factor scores.

c. Benchmark

Will be determined basis the specific factor strategy to be determined at the time of the launch.

d. Asset Allocation










• Strategy Specific Risk Factors • Factor based approach to investing factors a variety of qualitative and

quantitative investment factors that may or may not result in the strategy’s outperformance.

• Other Risk Factors • Risks associated with investments in Equities • Risks associated with investments in Fixed Income Instruments • General Risks associated with investments

DISCLOSURE DOCUMENT

26

• Other salient features, if any. Investments into the strategy can be done using the systematic transfer option (STO) that enables investors to stagger investments into the equity oriented strategy in a time bound manner minimizing market timing risks.

11. Axis Quant Strategies Portfolio a. Investment Objective

To generate long-term capital appreciation by investing primarily in equity and equity related instruments selected based on a quantitative model.


The Axis Quant Strategies portfolio is a quantitative model-based multicap multifactor strategy derived from harmonizing a variety of technical indicators and fundamental growth metrics to generate alpha through an algorithmic and systematic stock picking process. Aim is to create a model based strategy that is entrenched in the principles of sound investing without emotional bias. The model will be adapted to changing market conditions through periodic reweighting of factors based on qualitative factors to mitigate risk of strategy redundancy while maintaining an optimum risk reward function.

c. Benchmark

S&P BSE 200 Index


d. Asset Allocation



Equity & Equity related instruments of selected companies based on a quantitative model

80% 100%

Other Equity and Equity related instruments 0% 20%

Debt & Money Market Instruments 0% 20%





DISCLOSURE DOCUMENT

27


• Strategy Specific Risk Factors • The strategy proposes to invest in a diversified portfolio of equity instruments by

screening, selecting and weighting stocks based on an in-house proprietary quantitative model. This model will factor in various fundamental, technical, quantitative and qualitative factors. There is no guarantee that the factor model will generate higher returns as compared to the benchmark.

• Other Risk Factors • Risks associated with investments in Equities • Risks associated with investments in Fixed Income Instruments • General Risks associated with investments



12. Axis Real Estate Opportunities Portfolio a. Investment Objective

To generate a yield and/or capital appreciation (growth) oriented investments in the Indian real estate sector focused on the residential asset class.

b. Investment Strategy(Basis of selection of securities)

Axis Real Estate Opportunities portfolio is high yield structured debt portfolio comprising of debt instruments issued by real estate companies and allied businesses (either at project or entity level). The investment objective is to generate superior risk adjusted returns by investing in structured debt instruments including debentures, subordinate debt, quasi-debt, mezzanine instruments and bonds.

The primarily focus will be on investing in Investee companies (either at project or entity level) engaged in construction and development of commercial and residential real estate assets across all stages of project development.

To achieve its investment objective, the portfolio will be built with a focus on a combination of key factors which provide a unique opportunity for investors in this specialized portfolio.

Key Points of Emphasis while determining Investment Decisions • Focus on builders with a strong local market presence and brand • Sound financial position with a track record of navigating through regulatory

issues

c. Benchmark

Nifty Liquid Index

d. Asset Allocation



Debt & Money Market Instruments including securitized debt

0% 100%

DISCLOSURE DOCUMENT

28





• Strategy Specific Risk Factors • Government Approvals:

The real estate sector operates in a complex legal architecture of central and state laws. Investments made will be subject to these laws as well as rules and regulations laid down by SEBI. The property developer will also require several regulatory and government approvals to conduct activates for which investment capital will be provided under this strategy. Changes are revocations of these policies and approvals may adversely impact the performance of strategy.

• Legal and Tax Considerations: Many of the fundamental laws in India have only recently come into force, which increases the risk of ambiguity and inconsistency in their application, interpretation and enforcement. This risk is additionally increased as adequate procedural safeguards have often not been developed. Due to the developing nature of the Indian legal and regulatory system, laws often refer to regulations which have not yet been introduced, leaving substantial gaps and the regulatory framework is often poorly drafted and incomprehensible. These uncertainties can lead to difficulties in obtaining or renewing necessary licenses or permissions and can lead to substantial delays and costs for the companies’ subject to them, all of which can ultimately adversely affect the performance of strategy. Changes in laws and regulations (or in the interpretation thereof) occurring from time to time in India are possible and may worsen the legal and tax constraints within which the strategy will operate and, as a result, may require structuring and financing alternatives to be identified and implemented and lead to increased legal costs and reduced returns. In particular, tax laws and regulations or their interpretation may change and there can be no assurance that the structure of strategy or its investments will be tax efficient. Further, India is subject to rapid changes in legislation, many of which are extremely difficult to predict. Existing laws are often applied inconsistently and new laws and regulations, including those which purport to have retroactive effect, may be introduced with little or no prior consultation.

• Litigation Risk:

The Portfolio Investments may be governed by a complex series of legal documents and contracts. As a result, the risks of a dispute over interpretation or enforceability of the documentation and consequent costs and delays may be higher than for other types of investments.

• Other Risk Factors • Risks associated with investments in Fixed Income Instruments

DISCLOSURE DOCUMENT

29

• General Risks associated with investments

• Other salient features, if any. • The strategy will invest in fixed income securities issued by developers with a

specific intention to fund construction and allied activities as well as purchase land for the purpose of conducting construction activities.

Axis ‘Liquid’ Portfolio Axis ‘Liquid’ Portfolio is a portfolio that will invest with an objective to provide short term liquidity and generate regular income through investments in liquid mutual funds. The portfolio will deploy its assets in Axis Liquid Fund/ Axis Overnight Fund. Systematic Transfer Option from Axis ‘Liquid’ Portfolio into other Equity & Real Estate Portfolio Strategies Investors have the option to deploy funds into the Axis PMS portfolio strategies in a systematic manner through a Systematic Transfer Option (“STO”). In this option the subscription amount will be invested initially in Axis ‘Liquid’ Portfolio. From Axis ‘Liquid’ Portfolio, funds will be switched into the selected Portfolio in a systematic manner. All STO transactions will be effected by redemption of investments in Axis Liquid Portfolio on a specified frequency (specified dates / months etc.). In the event specified date is a non-business day, the succeeding business day will be the effective date for such transaction.

iv. TYPES OF SECURITIES

The Portfolio Manager/Fund Manager shall invest in all such types of Securities(as defined in Section 2) and in all such securities/ instruments as permissible from time to time and in line with the mandate of the Client.

v. RESTRICTIONSIMPOSED BY CLIENT

The Portfolio Manager shall not invest any part of the Portfolio in Securities of companies or bodies corporate in which the Client has specifically restricted investments in terms of the PMS Agreement.

vi. RISK MANAGEMENT

The portfolios shall be structured so as to keep risk at acceptable levels. This shall be done through various measures including:

a) Diversification of portfolio according to the investment objective of the specific

portfolio. b) Ongoing review of relevant market, industry, sector and economic parameters. c) Investing in companies, which have been extensively researched. d) Endeavour to maintain strong covenants with periodic milestone based

payment structures to minimize default risk.

Besides, the asset allocation by the Portfolio Manager would be done keeping in view the investment objective, risk profile and investment horizon of the Client.

DISCLOSURE DOCUMENT

30

6. RISK FACTORS

General Risks associated with investments

i. Investments are subject to market risks and there is no assurance or guarantee that the objectives of the investment will be achieved.

ii. The investment value of portfolio may increase or decrease depending on the factors and forces affecting capital markets.

iii. Past performance of the Portfolio Manager/Fund Manager/Sponsor does not indicate the future performance of the portfolios managed under the Portfolio Management Services.

iv. The Portfolio Manager is neither responsible nor liable for any losses resulting from the management of client portfolios/advisory services, etc.

v. The investment made by the Portfolio Manager is subject to risk arising out of non-diversification, in case it is the investment approach, investment objective of the specific portfolio.

vi. The investments made by the Portfolio Manager is subject to risks arising from the investment objective, investment strategy and asset allocation.

vii. Performance of the portfolios may be impacted as a result of specific investment restrictions provided by the client.

viii. Investments are subject to various factors which may impact its value including, but 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. There is also the risk of total loss of value of an asset where thepossibility of recovery is only through an expensive legal process. 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.

ix. 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 Market involves above average risk for investors compared with other types of investment opportunities. There is a possibility of the value of investment and the income therefrom falling as well as rising depending upon the market situation.

x. The Portfolio Manager does not guarantee or assure any return on investment. xi. 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 and is based on advice received by the Portfolio Manager regarding the law and practice in force in India and 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.

xii. The investments made are subject to external risks including war, natural calamities, policy changes of local / international markets which affect stock markets, which are outside the control of the Portfolio Manager.

xiii. Any technology updation / obsolescence of technology would affect the investments made in a particular industry.

xiv. The performance of any portfolio which endeavours to provide absolute returns, may not correspond with the performance of the stock exchange.

DISCLOSURE DOCUMENT

31

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

Risks associated with investments in equities

• Investments in equity and equity related securities are volatile and prone to price fluctuations on a daily basis. The liquidity of investments made may be restricted by trading volumes and settlement periods. The value of the investments may be affected by interest rates, currency exchange rates, changes in law/policies of the government, taxation laws and political, economic or other developments which may have an adverse bearing on individual securities, a specific sector or all sectors.

• Investments in equity and equity related securities involve a degree of risk and investors should not invest unless they can afford to take the risk of losing their investment.

• Securities which are not quoted on the stock exchanges are inherently illiquid in nature and carry a larger liquidity risk in comparison with securities that are listed on the exchanges or offer other exit options to the investors, including put options.

Risks associated with investments in Fixed Income Instruments

Interest-Rate Risk: Fixed income instruments such as government bonds, corporate bonds, money market instruments and derivatives run price-risk or interest-rate risk. The extent of fall or rise in the prices depends upon the coupon and maturity of the security. It also depends upon the yield level at which the security is being traded.

Re-investment Risk: Investments in fixed income instruments carry re-investment risk as interest rates prevailing on the coupon payment or maturity dates may differ from the original coupon of the bond. Basis Risk: The underlying benchmark of a floating rate security or a swap might become less active or may cease to exist and thus may not be able to capture the exact interest rate movements, leading to loss of value of the portfolio.

Spread Risk: In a floating rate security the coupon is expressed in terms of a spread or mark up over the benchmark rate. In the life of the security this spread may move adversely leading to loss in value of the portfolio. The yield of the underlying benchmark might not change, but the spread of the security over the underlying benchmark might increase leading to loss in value of the security.

DISCLOSURE DOCUMENT

32

Liquidity Risk: The liquidity of a bond may change, depending on market conditions leading to changes in the liquidity premium attached to the price of the bond. At the time of selling the security, the security can become illiquid, leading to loss in value of the portfolio. Credit Risk: This is the risk associated with the issuer of a debenture/bond or a money market instrument defaulting on coupon payments or in paying back the principal amount on maturity. Even when there is no default, the price of a security may change with expected changes in the credit rating of the issuer.

Liquidity Risk on account of unlisted securities: The liquidity and valuation of unlisted securities may be affected if they have to be sold prior to their target date of divestment. The unlisted security can go down in value before the divestment date and selling of these securities before the divestment date can lead to losses in the portfolio. Settlement Risk: Fixed income instruments run the risk of settlement which can adversely affect the ability of the portfolio manager to swiftly execute trading strategies which can lead to adverse movements in the portfolio.

Risks associated with Investments in Real Estate Debt

In addition to the risks of default by a borrower (including loss of principal and non payment of interest) and the risks associated with real estate investments generally, real-estate related debt investments are subject to a variety of other risks, including the risks of illiquidity, lack of control, mismanagement or decline in value of collateral, contested foreclosures, bankruptcy of the debtor, claims for lender liability, violations of usury laws and the imposition of common law or statutory restrictions on the exercise of contractual remedies for defaults of such investments. Debt investments have special inherent risks relative to collateral value. If a property is mortgaged to secure payment of indebtedness and the Portfolio Entity is unable to meet mortgage payments, the property could be foreclosed upon or otherwise transferred to the mortgagee, with a consequent loss of income and asset value to portfolio, which could have an adverse effect on the financial condition, results of operations and cash flow of portfolio. In the event that a Portfolio Entity cannot generate adequate cash flow to meet debt service, strategy may suffer a partial or total loss of investment in the Portfolio Entity, which could adversely affect the returns of portfolio. In certain circumstances, loans may not be secured by a mortgage, but instead by fund interests or other collateral that may provide weaker rights than a mortgage. In any case, in the event of default, the source of repayment is limited to the value of the collateral and may be subordinate to other lien holders (and the collateral value of the property may be less than the outstanding amount of the investment). Returns on an investment of this type depend on the borrower’s ability to make required payments and, in the event of default, the ability of the loan’s servicer to foreclose and liquidate the mortgage loan.

Risk associated with Investment in Mutual Fund Units

• Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal.

• As the price / value / interest rates of the securities in which the Scheme invests fluctuates, the value of your investment in the Scheme may go up or down.

DISCLOSURE DOCUMENT

33

• Past performance of the Sponsor/AMC/Mutual Fund does not guarantee future performance of the Scheme.

• Axis Liquid Fund is only the name of the Scheme and does not in any manner indicate either the quality of the Scheme or its future prospects and returns.

• The sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond the initial contribution of Rs. 1 lakh made by it towards setting up the Fund.

• Axis Liquid Fund is not a guaranteed or assured return Scheme. TRANSACTIONS OF PURCHASE AND SALE OF SECURITIES BY PORTFOLIO MANAGER AND ITS EMPLOYEES WHO ARE DIRECTLY INVOLVED IN INVESTMENT OPERATIONS IF FOUND TO HAVING CONFLICT OF INTEREST WITH THE TRANSACTIONS IN ANY OF THE CLIENT’S PORTFOLIO. The personal securities transaction of employees of the Portfolio Manager are governed by Policy Governing Personal Securities Transactions by Employees framed by Axis AMC which incorporates requirements specified under SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended from time to time.Employees who are directly involved in investment operations of portfolio management services provided by Portfolio Manager are required to obtain approval from Compliance officer for trade in securities. The approval for trades are given for trades in securities which satisfies conditions specified in the Policy to address instances of conflict of interest. There are no transactions in purchase and sale of securities by specified employees and Portfolio Manager which requires disclosures. DETAILS OF CONFLICT OF INTEREST REALTED TO SERVICES OFFERED BY GROUP / ASSOCIATE COMPANIES

The Portfolio Manager may utilize the services of the sponsor, group / associate companies and / or any other subsidiary or associate company of the sponsor established or to be established at a later date, in case such a company is in a position to provide requisite services to the Portfolio Manager. The services which Portfolio Manager may obtain from such companies may include will not be limited to Fund Accounting, Custodian, Broking, Distribution/Referral services or any other such services required by the Portfolio Manager. The Portfolio Manager will conduct its business with the aforesaid companies (including their employees or relatives) on commercial terms and on arm’s length basis and at mutually agreed terms and conditions and to the extent permitted under all applicable laws after evaluation of the competitiveness of the pricing offered and the services to be provided by them. The details of transactions with Related Parties are disclosed separately. While entering into such transactions, in accordance with obligations under the Regulations, the Client’s interests shall always be paramount. The Portfolio Manager/ Fund Manager may invest in Securities of the associate/ group companies including entire portfolio value / Net Asset Value in schemes of Axis Mutual Fund. These investments will be carried out to achieve the investment objectives and strategies and in the normal course of investment activity subject to the applicable laws/ regulations.

DISCLOSURE DOCUMENT

34

7. CLIENT REPRESENTATION Category of Clients No. of

Clients as on

Funds managed as on (Rs. in Crores)

Discretionary/ Non-Discretionary (if available)

Associates/ group companies (last 3 years)

Nil

Not Applicable Not Applicable

Others (last 3 years)

As on August 31, 2020 3,203 1,256.366 Discretionary As on March 31, 2020 3,440 985.003 Discretionary

As on March 31, 2019 2,841 882.187 Discretionary

As on March 31, 2018 607 866.003 Discretionary

DISCLOSURES IN RESPECT OF TRANSACTIONS WITH RELATED PARTIES, ASSOCIATES AND GROUP COMPANIES FOR THE PERIOD APRIL 1, 2019TO MARCH 31, 2020:

A) Holding Company : Axis Bank Limited B) Fellow Subsidiaries : Axis Capital Limited : Axis Securities Limited : Axis Trustee Services Limited C) Significant Share Holder : Schroder Singapore Holdings Private Limited (SSHPL) is a

wholly owned subsidiary of Schroder Investment Management (Singapore) Limited (SIMSL)

D) Fellow subsidiaries of significant shareholder - SIMSL

: Schroders Investment Management Limited : Schroder Investment Management Luxemborg S.A. : Schroder Investment Management Australia Limited : Schroders Unit Trusts Limited

E) Key Management Personnel

: Mr. Chandresh Kumar Nigam (MD & CEO)

: Mr. Gopal Menon (COO & CFO) : Mr. Lalit Taparia (Company secretary)

DISCLOSURE DOCUMENT

35

Sr. No. Name of Related Party Description of Transactions/Categories Transaction for the Year

Outstanding amount carried to

Balance Sheet

Transaction for the Year

Outstanding amount carried to

Balance Sheet Mutual Fund - Brokerage (amortised value)# 14,30,62,880 - 1,74,15,02,860 27,59,596 AIF - Brokerage & Set up fees $ 10,40,26,281 26,83,750 9,88,69,185 3,80,68,875 PMS - Brokerage & Set up fees $ 16,55,50,925 96,05,734 12,11,12,628 2,96,46,803 PMS - FA/R&T/CCIL fees 1,26,30,807 34,43,046 71,60,790 20,65,523 Bank Charges 5,44,229 - 6,28,964 - Rent Expenses 2,88,18,407 - 2,88,18,407 - Facil ities Expenses 59,16,531 - 1,02,63,527 - Branding Expenses ( Royalty ) 70,20,239 23,02,783 - - Administrative & Other Expenses 1,98,62,648 81,95,425 1,39,54,321 (3,01,070) Investor Compensation - - 66,370 -

Current account balance[Bal as per Bank Rs. 1,08,04,150.36 ( Previous Year Rs. 94,15,991.48 ) as on Mar 31, 2020] 84,58,226 - 36,46,743 - Equity Share Capital contribution: - 1,57,58,33,330 - 1,57,58,33,330 Contribution to Share Premium a/c - 21,66,66,672 - 21,66,66,672 Secured Loan 36,66,921 36,66,921 - -

2 Schroder Investment Management (Singapore) Ltd. Travell ing Expenses (reimbursement) - - 3,86,090 - 3 Schroder Investment Management Luxembourg S.A. Offshore Advisory fees 20,05,94,482 1,30,74,924 20,46,06,955 1,85,44,016 4 Schroder Investment Management Australia Limited Offshore Advisory fees 1,93,58,415 48,61,997 1,80,17,268 43,20,427 5 Schroder Unit Trusts Limited Offshore Advisory fees 39,80,137 4,62,137 - - 6 Schroder Investment Management Ltd Offshore Advisory fees 53,38,633 60,56,597 7,17,964 7,17,964

Equity Share Capital contribution: - 52,52,77,790 - 52,52,77,790 Contribution to Share Premium a/c - 7,22,22,224 - 7,22,22,224 Mutual Fund - Brokerage (amortised value)# 23,49,101 - 2,01,33,719 - Outsourced services cost 1,87,732 - 6,70,931 49,000

9 Axis Capital Ltd. Mutual Fund - Brokerage (amortised value)# 478 - 15,550 - 10 Axis Trustee Services Limited One time acceptance fee for Axis AIF - - 2,00,000 - 11 Mr. Chandresh Kumar Nigam (MD & CEO) Remuneration to Key Managerial Personnel** 17,53,99,124 - 12,66,93,212 - 12 Mr. Gopal Menon (COO & CFO) Remuneration to Key Managerial Personnel** 3,12,61,000 - 2,09,30,106 - 13 Mr. Lalit Tapria Remuneration to Key Managerial Personnel** 19,39,580 - 15,29,824 -

# Note:- Total transaction value of brokerage for F.Y.2019-20 in AMC books for Axis Bank Ltd and Axis Securities Ltd & Axis Capital Ltd. Is NIL.

$ Note:- Total transaction value of brokerage for PMS for F.Y.201

Date post:	27-Jan-2021
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

DISCLOSURE DOCUMENT · 2020. 10. 1. · This Disclosure Document has been prepared in accordance...

Documents