PORTFOLIO MANAGEMENT SERVICES DISCLOSURE DOCUMENTcwmlreports.centrumbroking.com/ecn/CSS/PMS... ·...

PORTFOLIO MANAGEMENT SERVICES DISCLOSURE DOCUMENT

Centrum Broking Private Limited (CBPL) PORTFOLIO MANAGER

(SEBI Registration no. INP000000456)

Regd. Office: Bombay Mutual Bldg., 2nd Floor, Dr. D.N. Road, Fort, Mumbai - 400 001

Corporate Office: Centrum House, CST Road, Near Bandra Kurla Complex, Vidya Nagari Marg, Kalina, Santa Cruz(East), Murnbai - 400 098. Tel.: +9122 42 159000 Fax no. : +9122 42159455

Disclosure in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993

i This document has been filed with the Board along with the certificate in the prescribed format in terms of Regulations 14 of the SEBI (Portfolio Manager) 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 Centrum Broking Pvt. Ltd. as a Portfolio Manager,

iii This disclosure document sets forth concisely the necessary information about CBPL that a prospective investor ought to know before investing.

iv The investor should carellly read the Disclosure document prior to making a decision to avail of the portfolio management services and retain this Disclosure document for future reference,

v Investor may also like to seek further clarification after date of this document fiom the service provider.

vi The name, phone number, e-mail address of the principal officer so designated by the portfolio manager is:

Name of the Principal OEcer Phone Fax Email Address

Mr. K. Sandeep Nayak 02242159413 022 42159455 [email protected] Centrum House, CST Road, Near Bandra Kurla Complex, Vidya Nagari Marg, Kalina, Santacruz (East), Mumbai - 400 098.

INDEX

FORM - 'C'

SECURITIES AND EXCHANGE BOARD OF INDIA (PORTFOLIO MANAGERS)

REGULATIONS, 1993 (Regulation 14)

We confirm that:

I. The Disclosure Document forwarded to the Board is in accordance with the SEBI (Portfolio Managers) Regulations, 1993 and the guidelines and directives issued by the Board fiom time to time;

11. The disclosures made in the document are true, fair and adequate to enable the investors to make a well informed decision regarding entrusting the management of the portfolio to us / investment in the Portfolio Management Strategy;

111. The Disclosure Document has been duly certified by an independent chartered accountant Mr.Upendra M Shah (Mem.No. 14610) of MIS UPENDRA SHAH

For Centrum Broking Pvt. Ltd.

Date: February 2,2012 Place: Mumbai

Name : K. Sandeep Nayak Designation: Principal Officer ~ d d r i s s : centrum House, CST

Road, Near Bandra Kurla Complex, Vidya Nagari Marg, Kalina, Santacruz (East), Mumbai - 400 098

Centrum Broking Private Limited PORTFOLIO MANAGER

(SEBI Registration no. INP000000456) Regd. Office: Bombay Mutual Bldg., 2'* Floor, Dr. D.N. Road, Fort, Mumbai - 400 001 Corporate Office: Centrum House, CST Road, Near Bandra Kurla Complex, Vidya Nagari Marg, Kalina, Santa C-ast), Mumbai - 400 098. Tel.: +9122 4215 9000 Fax no. : +9122 4215 9455

1. DISCLAIMER CLAUSE:

This Disclosure Document has been prepared in accordance with the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993 as amended till date and the same is filed with Securities and Exchange Board of India (SEBI). This Disclosure Document has neither been approved nor disapproved by SEBI nor has SEBI certified the accuracy or adequacy of the contents of the Disclosure Document.

2 DEFINITIONS & INTERPRETATIONS

In this disclosure document, unless the context otherwise requires:

"Act" means the Securities and Exchange Board of India Act, 1992 (15 of 1992).

"Agreementn means the agreement to be executed between the portfolio manager (CBPL) and its clients in terms of Regulation 14 and Schedule IV of SEBI (Portfolio Managers) Regulations, 1993 and SEBI (Portfolio Managers) Amendment Regulations, 2002 issued by the Securities and Exchange Board of India and as may be modified from time to time.

"Assets" means i) the Portfolio and or ii) the Funds.

"Bank" means scheduled commercial bank, with which the Portfolio Manager will open and operate the Bank Accounts for the purposes of the Portfolio Management Services.

"Board" means the Securities and Exchange Board of India. established under Securities and Exchange Board of India Act, 1992

"Bank Account" means one or more bank accounts opened, maintained in the name of the clients for the purpose of the portfolio management services to be provided by the Portfolio Manager.

"Client" or "Constituent" or "Investor" means any person who registers with the Portfolio Manager for availing the services of Portfolio Management.

"Custodian" means any person who carries on or proposes to carry on the business of providing custodial services.

"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.

"Depository" means Depository as defined in the Depository Act, 1996 (22 of 1996) and includes National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL).

"Depository Participant" means an entity registered with the depositories CDSL andlor NSDL for providing depository services

"Depository Account" means an account opened with a Depository Participant

"Demat Accountn means the depository account styled as "Centrum Broking Private Ltd. PMS Nc" for all its clients, for all and/or some of their products/Portfolios and/or individual depository accounts for each of their products or individual accounts of clients or a combination of all or any of these at the sole discretion of the Portfolio Manager and opened, maintained and operated by the Portfolio Manager on behalf of the Client with Centnun Broking Pvt. Ltd. or any other entity, being a Depository Participant, for the purpose of providing the Portfolio Management Services.

"Disclosure Document" means this disclosure document issued by the Portfolio Manager for offering Portfolio Management Services, prepared in terms of Regulation 14 and Schedule V of the SEBI (Portfolio Managers) Regulations, 1993

"Discretionary Portfolio Management Servicestt mean Portfolio Management Services rendered to the clients by the Portfolio Manager on the terms and conditions contained in the agreement with respect to assets of the client where the Portfolio Manager exercise its sole and absolute discretion to with respect to investments or management of the Assets of the client, entirely at client's risk, in such manner as the Portfolio manager may deem fit.

"Funds" means the monies managed by the Portfolio Manager on behalf of the Client pursuant to this 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 the 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.

"Financial year" means the year starting fiom April 1 and ending on March 3 1 of the following year.

"Funds managed" means the market value of the assets of the Client as on a particular date.

"Fund Manager" means any person who pursuant to contract or agreement with the Portfolio Manager appointed for managing its certain Products.

"Fll" means Foreign Institutional Investors registered with SEBI under securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995.

"Initial Corpus" means the value of the funds and/ or the market value of securities brought in by the client at the time of registering as a client with the Portfolio Manager and accepted by the Portfolio Manager. Securities so bought in by clients will be values as per valuation policy of CBPL at the closing price of immediately preceding working day of the date of activating the client's account.

"Non-discretionary Portfolio Management Services" means Portfolio Management Services

under which the Portfolio Manager, shall invest assets of the client on client's account, entirely at the Client's risk, as per express prior instructions issued by the Client from time to time for an agreed fee structure and to ensure that all benefits accrue to the Client's Portfolio.

"NRI" means a non-resident Indian as defined under the Foreign Exchange Management Act, 1999.

"Portfolio" means the value of total holdings of securities belonging to any person.

"Portfolio Manager" means Centrum Broking Private Limited (CBPL), a company incorporated under the Companies Act, 1956 and having its registered ofice at Bombay Mutual Building 2nd Floor, Dr. D.N. Road, Fort, Mumbai - 400 001 who pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as discretionary portfolio manager or otherwise) the management or administration of portfolio of securities or the h d s of the client, as the case may be.

"Portfolio Management Fees" means the fees payable by the Client to the Portfolio Manager as specified in the Agreement for the Portfolio Management Services.

"Principal Officer" means an employee of the portfolio manager who has been designated as such by the portfolio manager.

"Product" means an any of the current investment plan or such plans that may be introduced at any time in future designed to suit objectives of various categories of investors according to their risk taking capabilities.

"Regulations" means the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993, as may be amended from time to time;

"Rules" unless the context indicates otherwise, means all rules prescribed by SEBI including and without limitation to the Securities and Exchange Board of India (Portfolio Managers)Rules, 1993, as may be amended from time to time and other relevant authorities and all other rules made under the relevant laws governing the same.

"RBI" means Reserve Bank of India, established under the Reserve Bank of India Act, 1934.

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

Securites includes:-

(i) "securities" as defined under the Securities Contracts (Regulation) Act, 1956;

(ii) shares, stocks, bonds, warrants, convertible and non-convertible debentures, fixed return investment, equity linked instruments, negotiable instruments (to the extent permitted by the Regulation), deposit, units issued by the Unit Trust of India andlor by any mutual funds, foreign

currency commitments, hedged swaps and any other securities issued by any company or other body corporate, any trust, any entity, the Central Government, any State Government or any local or statutory authority and all money rights or property that may at any time be offered or accrue (whether by rights, bonus, redemption preference, option or otherwise) and whether in physical or dematerialised form in respect of any of the foregoing or evidencing or representing rights or interest therein, government securities, warrants, options, futures, derivatives, convertible debentures, securities debt instruments, fixed return investments, equity linked investments or other marketable securities of alike nature and or of any incorporated company or other body corporate, negotiable instruments including issuance of bills of exchange, deposits or other money markets instruments, commercial papers, certificates of deposits, units issued by Unit trust of India and units issued by mutual funds, mortgaged backed or other asset backed securities issued by any institution or any body corporate cumulative convertible preference shares issued by any incorporated company, securities issued by central government or a state government for the purpose of raising public loan and having one of the forms specified in clause 2 of section 2 of the Public Debt Act, 1944, relief bonds saving bonds any other new forms of capital or money market instruments that may be issued in the future by any incorporated company/firm/institution or government to reserve bank of India.

(iii) any other instruments or investments (including borrowing or lending of securities) as may be permitted by applicable law from time to time.

Services mean Discretionary Portfolio Management, Non-Discretionary Portfolio Management and Advisory or a combination of these.

3. HISTORY, PRESENT BUSINESS & BACKGROUND OF CBPL

(i) PORTFOLIO MANAGER:

Centnun Broking Pvt. Ltd.(CBPL) is a company incorporated under the Companies Act on 2nd May, 1994 and is a SEBI registered Portfolio Manager (SEBI Registration no. INP000000456), a registered trading member with BSE and NSE and a registered Depository Participant of CDSL. CBPL acquired the BSE and NSE membership h m erstwhile Advani Share Brokers Private Limited in 2006. It has undertaken change in shareholding which amounts to change in control. After this change, Centrum Broking has become a subsidiary of Centrum Capital Limited

With a network of few branches and a team of several professionals, CBPL has built expertise in offering wide spectrum of financial solutions to a cross section of client. comprising HNIs, Corporate, NRIs, FIIs, Mutual Funds, Insurance Companies, Banks and Financial Institutions.

Present Capital Structure of the Company

Authorised Capital Equity Preference Other Classified Shares

Issued , subscribed & Paid Up Capital Equity Preference

No. Of Shares 50,00,000 55,00,000 Nil

14,34,002 55,000,OO

Amount 5,00,00,000 55,00,00,000 Nil

1,43,40,020 55,00,00,000

Present Shareholding Pattern (after the changes are affected) of the Company -

Authorised Capital Other Classified Shares

CBPL has obtained Certificate of Registration as Portfolio Manager from SEBI effective 01 January 2008 with Registration No. INP000000456. The Registration was valid for a period of 3 years, and has subsequently been renewed for a M h e r period of 3 years.i.e from 20 1 1 to 20 13. It has already applied for the new certificate in view of the change in share holding amounting to change in control

No. Of Shares Nil

Name

Ms. Centrum Capital Limited Mr. Rajendra Naik Mr. Alok Nanavaty Mr. Rajendra Nalk, Mr. Alok Nanavaty and Ms Deepa Poncha (Jointly as Trustees of CBPL Employees Trust) TOTAL

4. BACKGROUND OF PROMOTERS & DIRECTORS OF CBPL, PORTFOLIO MANAGER:

Amount Nil

Promoters

Number of shares held

1290666 27896 7887

107550

1434002

Centrum Broking Private Limited has now become a subsidiary of Centrum Capital Limited (CCL). It holds 90% stake in the company. CCL is a Category I Merchant Banker registered with SEBI. It is into Investment Banking services. CCL is a BSE listed company.

% of total

90% 1.95% 0.55% 7.50%

100.00%

DirectorsMr. Pradeep Oak is the Designated (Whole time) Director & Chief Financial Officer of CBPL. He holds a graduation degree in Commerce and is a qualified Chartered Accountant. He has more than 30 years of experience in corporate finance, registry and depository activities. Prior to joining CBPL, Mr.Oak was the CEO of Tata Share Registry Ltd. and Sr. General Manager of Tata Motors Ltd. He joined Tata Motors Ltd. (formerly Tata Engineering & Locomotive Co. Ltd. - TELCO) in November 1979 as Junior Accounts Officer. In his career with that company spanning 2 decades, he received eight promotions to rise to the position of General Manager (Finance) in 1998, having twice been a recipient of the Chairman's Award for excellent performance. In August 2000, he was transferred to Tata Share Registry Ltd. as President & Chief Executive Officer where his mandate was to restructure and revitalize the company, which was then facing year on year double-digit drop in revenues and profits. He is a speaker at tax planning seminars for new joinees as also persons planning for retirement, at private and co- operative banks' Forum on Business Risks, Challenges and Business Process Re-engineering (BPR), World Human Resource Development Congress on BPO perspective etc.

Mr. Sandeep Nayak is the CEO of the company and also a Designated (Whole time) Director of the company. He is also the Principal Officer for the purpose of PMS. He is a Chartered Accountant from the Institute of Chartered Accountants of India with an All India First Rank and is a multiple Gold medalist in the Final Examination in C.A. He is also a Cost Accountant (ICWA) fiom the Institute of Cost and Work Accountants of India with an all India First Rank and is a multiple Gold medalist in the Final Examination. He is also a Bachelor of Commerce fiom Bangalore University. He has 17 years of rich and vast experience in the Financial Services sector with in depth knowledge of capital market business- retail broking, retail distribution, fi-anchise development, private client services and portfolio management. He is well versed in equity trading and investment strategies, derivative trading strategies, model based trading etc. He has versatile experience on the business side viz. sales, marketing, equity1 derivative trading besides having a strong grounding in all aspects of accounting, auditing and £inancia1 management. He worked with HSBC Investdirect Ltd, Mumbai as a Head- Retail Broking and Wealth Management. He was instrumental in providing strategic direction to Retail Broking, NBFC and Wealth Management business of the Company. He also designed and implemented strategies for the business, built a robust operational platform and people capabilities required to take the business into a key market positioning in the retail space. Previously he has also worked with Kotak Securities Ltd, Mumbai where he was working in the capacity of an Executive Vice President- Head Equities and was responsible for heading equity Sales and equity Dealing servicing high networth Indian capital market investors and high volume equity and derivatives trader . He had a long stint of close to 11 year with Kotak Securities. In the past, he has also worked with Kotak Mahindra Finance Ltd, Bangalore and Ford Credit Mahindra Ltd, Mumbai.

Mr. V. Sriram is the Designated (Whole time) Director looking after operations for broking and Wealth Management activities of the company. He is an Electrical & Electronics Engineer (B.E. Hons.) from Birla Institute of Technology & Science (BITS), Pilani and holds a Post Graduate Diploma in Management Studies fiom Indian Institute of Management, Bangalore. He has previously worked as a Director - India Development Center with Aptuit Informatics India Private Limited, a Multi National Company where he was responsible for managing the software product development activities and also handled planning and delivery of product releases / project portfolios fiom scope and specifications to final release. Prior to his stint with Aptuit Informatics India Private Limited he was Vice President at Essar Group where he handled the entire Telecom & Technology Group. He has also worked as a Manager - Strategy & Business Development in Thakral Corporation Limited located at Hong Kong where he rationalized the product lines for distribution & trading, developed a business plan for new video security solutions product, forged two alliances for distribution in Hong Kong etc. His previous assignments also include handling and identifying of various retail financial services like equity brokerage business, setting up of a first online equity trading platforms in India, setting up of offline trading system, setting up of DP system, handling of Corporate Business Development etc. at Reliance Capital Limited and Anagram Stock Broking.

Mr. S. Ganashyam is a Non Executive Director of the company. He holds a post graduation degree in management fiom the University of Mumbai and is a CFA (Chartered Financial Analyst) from the CFA Institute, USA. He has also been conferred the Certified Financial Planner (CFP) degree through the grandfathering process by the Association of Financial Planners (AFP), India, an affiliate of the International CFP Council. He has to his credit of being selected as a member of the first Examination and Certification committee for the CFP program in India. He has worked with HSBC where he was Senior Vice President and Head of Wealth Management and also a Director of some HSBC Group companies namely ILFS Investsmart Insurance Brokers Limited and ILFS

Investsmart Academy for Insurance and Finance Limited. He has experience of about 20 years across a range of business including Wealth Management, Private Banking, Institutional and Retail Equities, Equity Research, Portfolio and Investment Advisory Service, Management Consultancy, Customer Proposition, Distribution channel Management, Financial Journalism and Databases. He has played a crucial role as a member of the core management team in setting up businesses and steering them towards the subsequent phases of growth. During the 10 years that he was with HSBC, he led the Bank to a position of leadership in the wealth management domain. He also seeded and ran a large distribution channel management W e w o r k for HSBC branches across the country, covering a team of over 1,000 wealth sales and service RMs. He was also responsible for customer propositions and segments. He played a key role in reshaping the IL&FS Investsmart (the retail broking acquisition) business in line with the HSBC Group's strategic objectives for India. He held the position of Vice President and Head Investment Advisory Service with ABN AMRO Private Banking. During his tenure the Private Bank was rated among the most well regarded private banking offerings in the country. He was part of the core team that set up Anand Rathi Securities and he was a Director of the firm when he left them. He was responsible for setting up the equity research function and was also involved in the sales efforts of the firm with institutional clients. He has also served a short stint with the Dalal Street Journal Group. He started his career as a management consultant with AF Ferguson and Co with consulting projects in the area of strategy and systems.

Mr. Rajesh V Nanavaty is an Independent Director of the company. He is also a Director of V K Nanavaty Share & Stock Brokers Pvt. Ltd., a member of the Bombay Stock Exchange (BSE). He graduated with a Science degree fiom the University of Mumbai and went on to get a degree in Chemical Engineering fiom USA. After returning to India in 1972, he joined a public limited company, The Dharamsi Morarji Chemical Co. Ltd., a pioneer in the manufacture of Phosphatic fertiliser, Sulphuric acid and Alum. He set up their Project Department to supply technical know-how as well as for taking up turnkey projects for the manufacture of the above mentioned products. He was also involved in setting up projects in the Middle East and East African countries. Subsequently, he did a course in Corporate Planning from the Indian Institute of Management ( I N , Ahmedabad. He then created and headed the Corporate Planning Department for the company. During this time, he also became the Director of Jasmine Investments Ltd., a public limited investment company listed on the BSE. In 1992, he joined his 70-year old, proprietary family business of stock broking and eventually formed the current private limited company in 1997. His broad outlook drove him to accept the invitation to join the Board of Trustees of M P Shah English High School, where he is actively contributing to the management of the school. He is especially involved in the hctioning of Kalyandeep, their section for the mentally challenged. Key Personnel for PMS

MR. PRAVEEN MALIK

Mr Praveen Mallk, Compliance Officer of the Company, is a qualified Cost accountant having 22 years of experience in the Capital Market. He is also an M.com, CAW. He has worked in companies like Rolta Shares and Stock Private Limited as Sr Vice President and Kantilal Chagganlal Securities as Head Compliance and RMS.

MR. NAVEEN FERNANDES

Mr. Naveen Fernandes has joined Centrum Broking Pvt. Ltd. as Vice President - Fund Management. He is a Certified Financial Planner (CFP) and author of a textbook on 'Retirement Planning and Employee Benefits'. He has 27 years as a Professional in the Capital Markets.

Naveen joins Centrum fiom K R Choksey Share and Securities Pvt Ltd where he was Head - Institutional Brokerage. Prior to that he has been at Orbis Financial Corporation Ltd (a SEBI approved Custodian), Enam Securities Pvt Ltd, Sahara Mutual Fund and JM Financial Mutual Fund.

MR ASHlSH MITTAL

Mr. Ashish Mittal has joined Centrum as Fund Manager and is a key member of the team overseeing Portfolio advisory1 management functions. He is a MBA (Finance) and B.Tech graduate

Mr. Ashish Mittal joins us from universal Sompo General Insurance Company where he was responsible for managing Equity portfolio investments for the treasury desk that, at whole, managed funds of Rs. 300 crores.

In period prior he served Sahara AMC and handled various responsibilities including dealing of equities, investment research and find management.

MS. MUKTA DESAI

Ms. Mukta Desai has joined Centrum as AssociateFund Manager and is a key member of the Group's management team overseeing Portfolio advisory1 management functions. She has a Masters in Finance fiom Vanderbilt University, USA and is a B.Tech graduate. She has also done a course in General Management fiom Stanford University, USA.

She has experience in Equity markets in India and USA. In her last role she served Barclays Wealth in the discretionary fund management team.

5. Group companies of Centrum Broking Pvt. Ltd.

The following are the group entities of Centrum Broking Pvt. Ltd. This list of group entities has not been arranged on the basis of their turnover:

Name of the Entity

Centnun Capital Limited

CentrumDirec t Limited

Membership number

ROC Registration number L6599OMH1977PLCO19986 SEBI Category I merchant banker INMOO0010445 ROC Registration number U67 190MH1999PLC119009 Authorised Dealer-Category 11- No. 1212008

Business Area

Merchant Banking, Investment Banking, Project Financing

Forex

Name of the Entity

Club 7 Holidays Limited

Centrum Financial Services Limited

Centrum hfhstructure and Realty Limited

Centnun Wealth Management Limited (Formerly Centrum Investments Limited)

Accounts Receivables Management Services (India) Limited Centrum Capital Holdings LLC

Centrum Securities LLC

Centrum Securities (Europe) Limited

Commonwealth Centnun Advisors Limited

Centrum Securities Private Limited

Membership number

ROC Registration number U63040WB 1988PLCO4400 1

ROC Registration number U65910MH1993PLC192085

RBI Registration No.: B - 13.01946

ROC Registration number U45201MH2006PLC166127

ROC Registration number U65993MH2008PLC 178252

ROC Registration number U70 101MH2007PLC176913

NYS Department of sale

NYS Department of sale

Registrar of Companies England & Wales: 6803701

Registrar of Companies Hongkong: 125 1 1 12 Securities and Futures Commissions: AUD356

ROC Registration number U67 190MH1997PTC 109007 Pune Stock Exchange - INB111021631 Inter Connected Stock Exchange INB24 102 1634

Business Area

Tours and Travels

Non - Deposit Accepting Non - Banking Financial Company

&structure & Real Estate Advisory

Wealth Management Company

Not yet commenced business

Providing Macro Economic Research on U.S. and international markets and information to research team in India.. : US Broker 1 Dealer registered with the Financial Industry Regulatory Authority (FINRA) Non - Functional

Dealing in Securities and Advising on Securities

Stock Broking (Non - functional membership of ISE and PSE)

6. DETAILS OF SERVICES BEING OFFERED

CBPL, as a Portfolio Manager offers the following services to its clients based on their investments needs.

A) Discretionary Portfolio Management Services:

Under the Discretionary Portfolio Management Services, the Portfolio Manager shall deploy the Assets brought in by a Client by investing or divesting suitably in the capital markets as per agreement executed with the client subject to the applicable Act and Regulations.

The Portfolio Manager shall be acting in a fiduciary capacity, both, as an agent as well as a trustee, with regard to the Client's assets and account consisting of investments, accruals, benefits, allotments, calls, r e h d s , returns, privileges, entitlements, substitutions andlor replacements or any other beneficial interest including dividend, interest, rights, bonus as well as residual cash balances, if any (represented both by quantity and in monetary value).

The Portfolio Manager will provide Discretionary Portfolio Management Services which shall be in the nature of investment management, and may include the responsibility of managing, renewing and reshuffling the portfolio, buying and selling the securities, keeping safe custody of the securities and monitoring book closures, dividend, bonus, rights etc. So that all benefits accrue to the Client's Portfolio, for an agreed fee structure and for a definite period as described, entirely at the Client's risk.

The Portfolio Manager shall have the sole and absolute discretion to invest on behalf of the client in any type of security as per executed Agreement and make such changes in the investments and invest some or all of the Funds in such manner and in such markets as it deems fit. The Portfolio Manager's decision (taken in good faith) in deployment of the client's h d s is absolute and final and can not be called in question or be open to review at any time during the currency of the agreement or any time thereafter except on the ground of mala fide, fiaud, conflict of interest or gross negligence. The right of portfolio Manager will be exercised strictly in accordance with the relevant acts, rules, regulations, guidelines and notification in force from time to time. Periodical statements in respect Client's Portfolio shall be sent to the respective Client.

B) Non Discretionary Portfolio Management Services:

Under this category, the investment decisions of the Portfolio Manager are guided by the instructions received from the Client under an agreement executed between the Portfolio Manager and the Client. The deployment of Funds is the sole discretion of the Client and is to be exercised by the Portfolio Manager in a manner that strictly complies with the Client's instruction. The decision of the Client in deployment of Funds and the handling of his / her / its Portfolio is absolute and final. The role of the Portfolio Manager apart fiom adhering to investments or divestments upon instructions of the Client is restricted to providing market intelligence, research reports, trading strategies, trade statistics and such other material which will enable the Client to take appropriate investment decisions. However the Portfolio Manager

will continue to act and be strictly guided by relevant guidelines, acts, Rules, Regulations and notifications in force from time to time. For the purpose of acting on the Client's instructions, the Portfolio Manager shall take instructions in writing or orally or through any other media mutually agreed such as e-mail or suitable and secured message and may include managing, renewing and reshuffling the portfolio, buying and selling the securities, keeping safe custody of the securities and monitoring book closures, dividend, bonus, rights etc. so that all benefits accrue to the Client's Portfolio, for an agreed fee structure, entirely at the Client's risk The benchmark index for products under this services is S &P CNX NIFTY.

C) Investment Advisory Services -

The Portfolio Manager will provide advisory portfolio management services, in terms of the SEBI (Portfolio Manager) Regulations 1993, which shall be in the nature of investment advisory and shall include the responsibility of advising on the portfolio strategy and investment and divestment of individual securities on the clients portfolio, for an agreed fee structure and for a period hereinafter described, entirely at the Client's risk; to all eligible category of investors who can invest in Indian market including NRIs, FIIs, etc. The Portfolio Manager shall be solely acting as an advisor to the portfolio of the client and shall not be responsible for the investment / divestment of securities and / or an 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 the Client , from time to time, in this regard.

7. PENALTIES, PENDING LITIGATIONS OR PROCEEDINGS. FINDINGS OR INSPECTION OR INVESTIGATIONS FOR WHICH ACTION MAY HAVE BEEN TAKEN OR INITIATED BY ANY REGULATORY AUTHORITY

All cases of penalties imposed by the SEBI or directions issued by SEBI under the Act or Rules or Regulations made there under. The nature of the penaltyldirection. Penalties imposed for any economic offence and/ or for violation of any securities laws Any pending material litigation 1 legal proceedings against the Portfolio Manager 1 key personnel with separate disclosure regarding pending criminal cases, if any.

Nil

Two Arbitraion proceedings and one case in consumer court against the portfolio manager as broker

Any deficiency in the systems and operations of the Portfolio Manager

Any enquiry/ adjudication proceedings initiated by SEBI against the Portfolio Manager or its directors, principal officer or employee or any person directly or

Nil

I indirectly connected with the Portfolio Manager or its directors, principal I officer or employee, under the Act or Rules or Regulations made thereunder.

8. PRODUCTS/PORTFOLIOS OFFERED.

Under the Discretionary Portfolio Management services CBPL offers the following investment Portfolios/Products to clients.

I Conservative Portfolio (Centrum Secure)

Investment Objective

Build a portfolio of companies which have strong fundamentals, consistent operating performance and strong balance sheets.

Investment Philosophy

Seek steady and consistent returns by investing in equities and equity-related instruments of well-established large-cap companies.

Basis of Investment

Investments shall be made in line with investment objectives, risk appetite and investment time horizon of the portfolio. Stocks shall be identified based on fundamental analysis of the companies coupled with technical inputs to time entry / exits as maybe required. The portfolio manager may rely on research (Technical and Fundamental) fiom the Centrum group or fiom other research providers and brokers to make investment decisions.

Criteria for stock selection

Typically, more than 80% of the assets shall be invested in large-cap stocks. The choice for stock may be influenced by one or more factors, like reputation of the management, earnings outlook, dominance in respective sectors, price volatility etc.

Benchmark Index

BSE 500

Portfolio Composition

The portfolio typically shall have between 10 - 25 stocks. The portfolio shall be built on a bottom-up style of stock selection. The portfolio shall be reasonably diversified with no specific sector having an allocation exceeding 30% of assets under management. Considering the market conditions, the Fund Manager may choose to be in cash / deposits / Mutual Funds fiom time to

time. Additionally, the Portfolio may have investments in deposits I Mutual h d s and Derivatives to optimize risk and returns and hedge market volatility.

Investment Horizon and Risk Return Profile

This Portfolio is recommended for investors seeking to hold a stable high quality equity portfolio with low to moderate risk appetite expecting a moderate return over the a medium term horizon (1 -3 years).

I1 Opportunities Portfolio (Centrum Creative)


Manage a dynamic portfolio of stocks to take advantage of opportunities available owing to relative undervaluation of securities I market imperfections to outperform the market benchmarks.


Identify and leverage opportunities based on market imperfections, emerging themes, events etc. and drive short term returns through timely investment decisions. The predominant style shall be to capture momentum in sectors or stocks that can deliver market out-performance in the short to medium term. As a corollary to the objective, the turnover of stocks in the portfolio shall be higher relative to other portfolios.

Basis of Investment

The portfolio shall have stocks from the large-cap and mid-cap segments, across various sectors, which are either existing or potential performers that are not widely recognized or are undervalued and value unlocking is imminent. This Portfolio will focus on a 'quick entry and quick exit' strategy and hence the clients holding this portfolio may expect a reasonable turnover in their portfolio.

Investments shall be made in line with investment objectives, risk appetite and investment.time horizon of the portfolio. Stocks shall be identified based on fimdamental analysis of the companies coupled with technical inputs to time entry I exits as maybe required. The portfolio manager may rely on research (Technical and Fundamental) from the centrum group or from other research providers and brokers to make investment decisions.


The investment strategy revolves around the idea that a fimdamentally sound stock may get mis- priced owing exogenous factors which may not affect the performance of the company. Such opportunities to acquire the stock at a relatively lower price shall be tapped to deliver market

out-performance over the short term. The stock universe may span large and mid caps and occasionally a few small cap stocks which offer liquidity for easy entry and exit.

Benchmark Index

BSE 500


The stocks are drawn fiom a range of small-cap, mid-cap and large-cap universe. The fund manager shall identify opportunities across sectors and capitalization to generate short term out- performance. Investments shall be done in stocks that offer adequate liquidity to facilitate easy entry and exits. Additionally, this Portfolio may have investments in cash 1 deposits 1 Mutual Funds and Derivatives to optimize risk and returns and hedge market volatility.

Suggested Investment Horizon and Risk Return Profile:

This Portfolio is meant for investors with a high risk appetite and are willing to stay invested for a short to medium term (1 -3 years).

I11 Aggressive Portfolio (Catch Me Young)

Portfolio Investment Objective

Build a portfolio of select stocks with a focus to create significant value over the long term by identifymg value in relatively unknown small and mid caps that can offer superlative return.


Seek superlative returns by identifjmg companies which are under-valued or under-performers, across sectors and segments, which are on the verge of turnaround due to various factors like change in management, demand-supply scenario, change in business environment, change in government policies etc. and are likely to deliver superior performance over time. Some of these investments may be done in companies at the early growth stage and hence the risk is relatively high.

Basis of Investment

Investments shall be made in low-profile companies which may not be widely traded or "followed on the street", but have the potential of being multi-baggers over time. The stocks would typically be undervalued and are identified based on in depth fundamental analysis of the companies complimented in many cases with in person management and facility visits and detailed financial projections.


Since these companies are largely "undiscovered" by most market participants, most of the investments are typically fiom the small cap and mid cap universe. The choice for stock may be influenced by one or more factors, like reputation of the management, earnings outlook, govt. policies, liquidity etc.

Benchmark Index

BSE 500


The portfolio would be a mix of small and mid-cap companies. The portfolio would typically have between 10 - 15 stocks. The f h d manager would follow a bottom-up approach for stock picking. The portfolio aims to deliver superior returns over the long term. Additionally, this Portfolio may have investments in cash / deposits / Mutual Funds to optimize returns.

Investment Horizon and Risk Return Profile

This Portfolio is recommended for investors with high risk appetite who willing to stay invested for a long term (3 - 5 years). Withdrawal fiom the portfolio may have to be measured and abrupt liquidation is not recommended from this portfolio.

IV Balanced Portfolio (Centrum One)


Manage a mixed portfolio of stocks to take advantage of opportunities available owing to relative undervaluation of securities / market imperfections to outperform the market benchmarks on the one hand and balance the same with the traditional frontlines on the other.


Identify and leverage opportunities based on market imperfections, emerging themes, events etc. and drive short term returns through timely investment decisions. The predominant style shall be to capture momentum in sectors or stocks that can deliver market out-performance in the short to medium term. To balance out the same, some investment should be made in the traditional large caps. As a corollary to the objective, the turnover of stocks in the portfolio shall be higher relative to other portfolios.

Basis of Investment

The portfolio shall have stocks from the large-cap and mid-cap segments, across various sectors, which are either existing or potential performers that are not widely recognized or are

undervalued and value unlocking is imminent. To balance the above, some investment should be done in the front liners also. This Portfolio will focus on a 'quick entry and quick exit' strategy and hence the clients holding this portfolio may expect a reasonable turnover in their portfolio.

Investments shall be made in line with investment objectives, risk appetite and investment time horizon of the portfolio. Stocks shall be identified based on fbndamental analysis of the companies coupled with technical inputs to time entry I exits as maybe required. The portfolio manager may rely on research (Technical and Fundamental) from the Centrum group or from other research providers and brokers to make investment decisions.


The investment strategy revolves around the idea that a fhdamentally sound stock may get mis- priced owing exogenous factors which may not affect the performance of the company. The portfolio should be balanced between the large cap as well as mid-cap stocks. Such opportunities to acquire the stock at a relatively lower price shall be tapped to deliver market out-performance over the short term. The stock universe may span large and mid caps and occasionally a few small cap stocks which offer liquidity for easy entry and exit.

Benchmark Index

BSE 500


The stocks are drawn from a range of small-cap, mid-cap and large-cap universe. The fbnd manager shall identify opportunities across sectors and capitalization to generate short term as well as long term out-performance. Investments shall be done in stocks that offer adequate liquidity to facilitate easy entry and exits on the one hand and some amount for the long term. Additionally, this Portfolio may have investments in cash I deposits I Mutual Funds and Derivatives to optimize risk and returns and hedge market volatility.

Suggested Investment Horizon and Risk Return Profile:

This Portfolio is meant for investors with a mixed risk appetite and are willing to stay invested for a short to medium term (1-5 years).

V. Centrum Growth Portfolio Benchmarked to BSESOO


- The Portfolio objective is to achieve capital appreciation through participation in large cap companies


- Build a portfolio of stocks of companies which have strong fundamentals, sound management, proven and stable business model, consistent operating performance and strong balance sheets to deliver consistent returns over the medium to long term. .

- Investments shall be made in line with investment objectives, risk appetite and investment time horizon of the portfolio. Stocks shall be identified based on fundamental analysis of the companies coupled with technical inputs to time entry / exits as maybe required. The portfolio manager may rely on research (technical and fundamental) from the Centnun group or from other research providers and brokers to make investment decisions.

- The portfolio shall target to deliver superior risk adjusted return with a bias for risk mitigation over return maximization -alignment with market expectations.

- Emphasis on the fund whenever there is significant upside expected in the market

Portfolio composition

- Portfolio shall typically comprise of around 15 stocks with appropriate diversification - 70-80% of the portfolio would be invested in stock of large-cap companies and the

remaining in stocks of mid-cap & small-cap companies. - Liquidity criterion:

o For large cap stocks: 90 day average daily traded value > Rs. 5.00 crore o For other (mid cap & small cap) stocks: Market capitalization >= Rs. 250.00 crore

- StockISectoral exposure limit criteria: o Stock exposure limit <= 10%

Portfolio asset allocation criteria to be followed. o Sector exposure limit <= 20%

BSESOO/Centnun in-house sectoral classification to be followed.

Client Suitability

- Investors with an investment horizon of 1- 3 years seeking steady moderate market returns with low to moderate risk appetite.

Asset Allocation

# Preferably used when opportunities for investment in stocks are not available.

Proportion % of Net Assets

Equity Exposure

Cash andlor Liquid Funds

Minimum

60%

0%

Maximum

100%

40%

Risk Profile

Modest

Low

M. Centrum Wealth Creator Portfolio Benchmarked to BSESOO


- The Portfolio objective is to achieve long term wealth creation while meeting the liquidity needs

o Large cap stocks to provide liquidity. o Deep value, mid-cap stocks to contribute to wealth creation.


- Build a portfolio of stocks of companies which have strong hdamentals, sound management, proven and stable business model, consistent operating performance and strong balance sheets to deliver consistent returns over the medium to long term.

- The portfolio shall target to deliver superior risk adjusted return with a bias for risk mitigation over return maximization - to achieve long term objective of wealth creation while meeting the liquidity needs.

Investment Strategy

- Identify "Outperforming Sectors" for short to medium term gains - Identify successfUl themes emerging for solid wealth creation.( For example)

o Old Private Sector Banks - Continuation of consolidation post new banking licenses o Agriculture Theme - Growing structural demand-supply imbalances in food crops,

need for increasing productivity through larger application of fertilizers & pesticides, etc

o Growing automobile population - steep increase in demand for tyres - id en^ sound managements with high quality of corporate governance

o Identify hidden Gems, o Identify deep-value stocks


- Portfolio shall typically comprise of 15-20 stocks with appropriate diversification - Around 50-60% of the portfolio would be invested in stock of mid-cap & small-cap

companies and the remaining in stocks of large-cap companies. - Liquidity criterion


- StocWSectoral exposure limit criteria: o Stock exposure limit <= 15%

Portfolio asset allocation criteria to be followed o Sector exposure limit <= 20%

BSE5OOICentnun in-house sectoral classification to be followed

Client Suitability

- Investors with an investment horizon of 1- 3 year seeking relatively risk adjusted superior returns with high risk appetite.

Asset Allocation



Equity Exposure


VII. Centrum Bankinp & Financial Services Portfolio

Benchmarked to Bankex

Minimum

70%

0%


- The Portfolio objective is to achieve superior returns by investments in the banking & financial services sector.

Maximum

100%

30%


Risk Profile

High

Low

- Build a portfolio of stocks of companies fiom banking and financial services sector which have strong fundamentals, sound management, proven and stable business model, consistent operating performance and strong balance sheets to deliver consistent retums over the medium to long term.

- The portfolio shall target to deliver superior risk adjusted return with a bias for risk mitigation over return maximization.

Investment Rationale

Centrum Banking & Financial Services portfolio is thematic fund which would endeavor to benefit by investing in stocks of companies in banking and financial services sector.

M a n economy is in the high growth phase - India's GDP growth rate moved into a higher trajectory since FY2004 as compared to the past. An analysis shows that during FY2004-FY2010, India's GDP growth averaged 8.4 per cent as compared to little above 4 % averaged till FY2004. High GDP growth demands a structural role for the banking and financial services industry, to ensure and provide a seamless growth opportunity for the economy.

The total asset size of Scheduled Commercial Banks (SCB), of the Indian banking industry, has grown more than 3-fold between March 2004 and March 2010, fiom Rs.19.8 lakh cr to more than

Rs. 60.3 lakh cr, registering a CAGR of 20 per cent during 2004-2010 compared to the GDP growth rate averaging around 8.4 per cent during the same period.

During the period between 2003 and 2010, India's credit base expanded nearly 4.5 times fiom Rs. 7.2 lakh crore to around Rs. 32.4 lakh crore as compared to GDP which grew by 2.5 times. The bank credit figure has fUrther grown to Rs. 39.57 lakh cr as on May 6,2011. This gives a sense of the robust growth that the Indian banking sector has witnessed over this time period.

The Indian Banking sector has benefited fiom the fast growth in GDP as well and has emerged as one of the most sound banking systems of the world. An interesting point to note is that the banking sector has enjoyed a credit multiplier of -3x over GDP growth rate in the past. The credit multiplier for 2011E is around 2.5. Even if the credit multiplier remains at these levels, the GDP expectation for FY2012 at 8.2 % and FY2013 at 9 %means that the bank credit growth for FY2011 and FY2012 could be around 20% p.a.

Also, bank credit as a percentage of GDP in India has expanded fiom -31 per cent in 2004 to around 80 per cent in 201 lE, as compared to ratios in developed economies which are well above loo%, substantiating the growing importance of the Indian Banking sector in India's growth story.

Banking sector performance

- From 2002-2008, Bankex has consistently outperformed Sensex - From 2002-201 1, where Sensex has grown 5.8 times, Bankex has grown more than 13 times

This trend in growth witnessed by the Indian Banking sector is expected to continue going forward. India is likely to emerge as the third largest domestic banking market in the world by 2040 and could grow faster than China in the long run, according to a study by Pricewaterhouse Coopers. Thanks to the upswing in the Indian economy, a young population and the low penetration of banking services in the country among other factors, the Indian banking sector today stands on the threshold of exponential growth.

Potential in financial services

Currently we are witnessing a paradigm shift in the financial intermediaries' space, which pool savings and channel them into investment and consumption Owing to this, we expect, over the next three years nominal GDP (excluding agriculture) is expected to grow at 14-15%. Financial services sector, which would lead this growth, is expected to grow at 22%. Helping this growth is the growth in private sector savings which have gone up 87% over FY06- 10 to USD 1 1 5 billion and we expect the growth trajectories to remain strong.

The growth in financial services sector can also be attributed to the favorable demographic profile which continues to save more. The savings rate is rising consistently (reaching 33% of GDP) thereby raising the appetite for savings and investments products. Moreover, Indian investors are both underleveraged and are also underinvested into equities. A natural sequel to this positive trend in the domestic and corporate savings, and external flows is the expanded role of intermediaries in agency businesses and higher lending opportunities at the banW NBFC level.


- Portfolio shall typically comprise of around 15 stocks. - Liquidity criterion


- StocWSectoral exposure limit criteria: o Stock exposure limit <= 15% - for companies in banking & financial services sector.

Client Suitability

- Investors with minimum investment horizon of 1 year with moderate to high risk appetite.

Asset Allocation


Proportion % of Net Assets Equity and equity related securities of companies in Banking and Financial Services Sectors

Cash and Liquid Funds

VIII. Centrum Market Opportunities Portfolio

Benchmarked BSE 500


Risk Profile

High

Low

Minimum

60%

0%

- The Portfolio objective is to deliver superior returns by capturing various market opportunities arising fiom corporate specific actions or market volatility

Maximum

100%

40%


- Build a portfolio of companies guided by the following o Following the top-down approach and constructing a portfolio based on available

opportunities, the portfolio may invest in up to 10-12 stocks. o Endeavour will be to capture investment opportunities that arise fiom certain

corporate actions like buy-back offer, open offer etc. o Spot investment opportunities in stock of companies which experience high

volatility in market due to some misinformation leading to substantial valuation gaps-

o Use of volatility in markets due to domestic or global events leading to significant market correction in stock prices greater than what fundamentals deserve.


- Portfolio shall typically aspire to invest in 10-12 stocks with reference to investment philosophy.

- The portfolio weightage will have bias towards large-cap stocks. - Liquidity criterion


- StocWSectoral exposure limit criteria: o Stock exposure limit <= 10%

Portfolio asset allocation criteria to be followed o Sector exposure limit <= 20%

BSE5OO/Centrum in-house sectoral classification to be followed

Client Suitability

- Investors with an investment horizon of 1 year with high risk appetite.

Asset Allocation



Equity Exposure


IX Centrum Deep-Value - 'Multi Bagger' Portfolio Benchmarked to BSESOO


Minimum

0%

0%

- To create and actively manage a portfolio of select stocks with a focus to create significant value over the long term by identifling and investing in deep value stocks some of which may be relatively unknown small and mid caps.

- The objective is not to necessarily stay invested in a stock idea through out the lifetime of the fund. As the market typically delivers a non-linear return profile, the fund manager shall actively manage the portfolio to capture any possible significant returns and may opportunistically seek to re allocate monies across stock ideas dynamically. We may also exit our investment for loss or insignificant gain if there is any adverse development in our view.

Investment Philosophy & Strategy

- Seek superior returns by identiflmg companies which are deep value, across sectors and segments; companies that are likely to deliver superior performance over time.

Maximum

100%

loo%#

Risk Profile

High

Low

Identifl companies which are on the verge of turnaround due to various factors like change in management, demand-supply scenario, improved business environment, favorable government policies etc. Identify "outperforming sectors" for short to medium term gains; identify "hidden gems/ emerging themes", along with concentrated bets for long-term wealth creation. E.g.

o Investment in stocks offering strong growth outlook and value unlocking potential Thematic play on automobile boom and a potential acquisition target

o Investment in stocks on possible consolidation in a sector Potential beneficiary of consolidation in the Old Private Sector Banking (OPSB) space


- Portfolio shall typically comprise around 15 stocks with appropriate diversification. - Portfolio shall predominantly be invested in mid-cap and small-cap companies which may

be illiquid at the time of investment. Some investments may be done in companies at early growth stage and hence the risk would be relatively higher.

- Market Cap criterion: o Market capitalization >= Rs. 100.00 crore

- StocWSectoral exposure limit criteria: o Stock exposure limit <= 25%; Sector exposure limit <= 50%

Note applicable to all the above products:

9 Minimum amount of funds andlor securities under each investment product would be Rs. 5 Lac

> The portfolio of each client may differ from that of the other client in the same product, as per the discretion of the Fund / Portfolio Manager depending on the investment horizon and capital preservation level. The Client may give informal guidance to customize the portfolio under the product; however the final decision rests with the Fund / Portfolio Manager.

> The un-invested amounts in all the above products may be deployed in liquid fund schemes, debt oriented schemes of mutual funds, Initial Public Offering (IPO), Gilt schemes, bank deposits and other short-term avenues for investment. In all the above products, the securities invested / disinvested by the Fund / Portfolio Manager for clients in the same product may differ fiom client to client. The Portfolio Manager may, with the consent of the Client, lend the securities through an Approved Intermediary, for interest.

9 Market Can definition: Large-cap stock >= Rs. 5000/- Crores > Mid-cap stock>= Rs 1000/- Crores > Small-cap stock.

> The performance of the portfolios may not be strictly comparable with the performance of the Indices, due to inherent differences in the construction of the portfolios. The Portfolio Manager may fiom time to time, review the benchmark selection process and make suitable changes as to use of the benchmark, or related to composition of the benchmark, whenever it deems necessary.

9 The Fund / Portfolio Manager may also use various derivatives and hedging products. Derivatives instruments may take the form of Index Futures, Index Options, Options on individual equities / securities, interest Rate Swaps, Forward Rate Agreements or such other derivative instruments as may be appropriate, from time to time. The Fund / Portfolio Manager may also invest in other instruments / products as allowed by SEBI h m time to

time. CBPL will not make investments in securities of associates 1 group companies of the Portfolio Manager.

9. RISK FACTORS

General risk factors applicable to all the Products:-

a) Securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the investments will be achieved.

b) Past performance of the Portfolio Manager does not indicate the future performance of the Portfolio Manager.

c) Investors are not being offered any guaranteed or assured returds i.e. either of Principal or appreciation on the portfolio.

d) Investors may note that Portfolio Manager's investment decisions may not be always profitable, as actual market movements may be at variance with anticipated trends.

e) The liquidity of the Portfolio's investments is inherently restricted by trading volumes in the securities in which it invests.

f) The valuation of the Portfolio's investments, may be affected generally by factors affecting securities markets, such as price and volume volatility in the capital markets, interest rates, currency exchange rates, changes in policies of the Government, taxation laws or any other appropriate authority policies and other political and economic developments which may have an adverse bearing on individual securities, a specific sector or all sectors including equity and debt markets. There will be no prior intimation or prior indication given to the Clients when the composition/ asset allocation pattern changes.

g) Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by the Portfolio. Different segments of the Indian financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances. The inability of the Portfolio to make intended securities purchases due to settlement problems could cause the Portfolio to miss certain investment opportunities. By the same rationale, the inability to sell securities held in the portfolio due to the absence of a well developed and liquid secondary market for debt securities would result, at times, in potential losses to the Portfolio, in case of a subsequent decline in the value of securities held in the Portfolio.

h) The Portfolio Manager may, considering the overall level of risk of the portfolio, invest in lower rated, unrated securities offering higher yields. This may increase the risk of the portfolio. Such investments shall be subject to the scope of investments as laid down in the Agreement.

i) In case of Dividend Yield PortfolioA returns of the Portfolio could depend on the dividend earnings and capital appreciation, if any, h m the underlying investments in various

dividend yielding companies. The dividend earnings of the portfolio may, vary from year to year based on the philosophy and other consideration of each of the high-dividend yielding companies. Further, it should be noted that the actual distribution of dividends and frequency thereof - by the high-dividend yielding companies in future would depend on the quantum of profits available for distribution by each of such companies. Dividend declaration by such companies will be entirely at the discretion of the shareholders of such companies, based on the recommendations of its Board of Directors. Past track record of dividend distribution may not be treated as indicative of future dividend declarations. Further the dividend yielding stocks may be relatively less liquid as compared to growth stocks.

j) Securities, which are not quoted on the stock exchanges, are inherently illiquid in nature and carry a larger amount of liquidity risk, in comparison to securities that are listed on the exchanges or offer other exit options to the investor, including a put option. The Portfolio Manager may choose to invest in unlisted securities that offer attractive yields. This may however increase the risk of the portfolio. Such investments shall be subject to the scope of investments as laid down in the Agreement.

k) While securities that are listed on the stock exchange carry lower liquidity risk, the ability to sell these investments is limited by the overall trading volume on the stock exchanges. Money market securities, while fairly liquid, lack a well-developed secondary market, which may restrict the selling ability of the Portfolio(s) and may lead to the investment(s) incurring losses till the security is h l l y sold.

1) To the extent that the portfolio will be invested in securities denominated in foreign currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by changes in regulations concerning exchange controls or political circumstances as well as the application to it of other restrictions on investment.

m) Interest Rate Risk: As with all debt securities, changes in interest rates may affect valuation of the Portfolios, as the prices of securities generally increase as interest rates decline and generally decrease as interest rates rise. Prices of long-term securities generally fluctuate more in response to interest rate changes than prices of short-term securities. Indian debt markets can be volatile leading to the possibility of price movements up or down in fixed income securities and thereby to possible movements in the valuations of Portfolios.

n) 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.

o) Credit Risk: Credit risk or default risk refers to the risk that an issuer of a fixed income security may default (i.e., will be unable to make timely principal and interest payments on the security). Because of this risk corporate debentures are sold at a higher yield above those offered on Government Securities which are sovereign obligations and free of credit risk Normally, the value of a fixed income security will fluctuate depending upon the changes in the perceived level of credit risk as well as any actual event of default. The greater the credit risk, the greater the yield required for someone to be compensated for the increased risk.

p) Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities under a particular Portfolio are authorities in India. To the extent that the portfolio of the Strategy will be invested in securities/ instruments denominated in foreign currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by changes/fluctuation in the value of certain foreign currencies relative to the Indian Rupee. The repatriation of capital to India may also be hampered by changes in regulations concerning exchange controls or political circumstances as well as the application to it of other restrictions on investment.

q) The Portfolio Manager may use various derivative products as permitted by the Regulations. Use of derivatives requires an understanding of not only the underlying instrument but also of the derivative itself. Other risks include the risk of mispricing or improper valuation and the inability of derivatives to correlate perfectly with underlying assets, rates and indices.

r) The Portfolio Manager may use derivatives instruments like Stock Index Futures, Interest Rate Swaps, Forward Rate Agreements or other derivative instruments, as' permitted under the Regulations and guidelines. Usage of derivatives will expose the Portfolio to certain risks inherent to such derivatives.

s) The Portfolio Manager may change the Fund Manager in the interest of the product(s) at any time without any reason assigning to it and / or without any information to the investors.

t) The Employee of the Portfolio Manager may also subscribe to any of the product(s) offered by the Portfolio Manager.

10. CLIENT REPRESENTATION

Category of Clients

Associate / Group Companies

Others

Total C

Discretionary / Non Discretionary (if available)

N/A

Discretionary

Non Discretionary

No. of Clients

As on 30.09.10

Nil

41

20

61

Funds Managed (Rs. Cr.)

As on 31.03.2011

NIL

35

16

51

As on 30.09.2011

NIL.

8.11

3.59

11.70

Ason 30.0910

Nil

5.35

12.80

18.15

As on 30.0920ll

NIL

37

6

43

Ason 31.0320l1

NIL

2.98

5.44

8.42

11. FINANCIAL PERFORMANCE OF THE PORTFOLIO MANAGER: Summarised Financial Statements (as per audited annual accounts) (Figures In Rrr. Lacs)

June30,2011 (Audited)

12. PERFORMANCE OF THE PORTFOLIO MANAGER:

Income statement

The following exhibit captures the past performance of the Portfolio Manager based on weighted average method in terms of Regulation 14 of SEBI Portfolio Managers Regulations 1993.

June302010 (Audited)

June302009 (Audited)

Sources of funds

Total income Total expenditure Profit before depreciation Depreciation Profit before taxes & extraordinary items Extra ordinary items Profit before tax Provision for tax (includes Deferred & FBT) Profit after tax

2935.95 4375.22

(1439.27) 150.96

(1590.23)

- (1590.23)

488.85

(1 101.38)

1241.14 2656.82

(1415.68) 106.27

(1 52 1.95)

50.44 (1471.51)

8.30

(1463.22)

Shareholders f h d Loan f h d s Net deferred tax liability

2355.88 3662.56

(1306.68) 192.01

(1498.70)

- (1498.70)

511.98

(986.72)

FY July 2010 to

June 2011 -6.08

Particulars

Discretionary

6597.47 1311.41

-

6597.47 1145.18

-

6597.47 1759.28

- Application of funds

FY July 2008 to

June 2009 27.29

FY July 2009 to

June 2010 41.52

743.9 1 77.69

6584.33 1010.95

5573.38 635.98

1325.79

Net fmed assets Investments Current assets Less : Current liabilities and provisions Net current assets Net deferred tax Assets Profit & Loss Account

386.55 77.69

2804.2 1 549.29

2254.91 1133.13 3890.37

628.59 77.69

4758.99 1108.38

3650.6 1 1124.84 2427.18

13. DISCLOSURES ON TRANSACTIONS WITH RELATED PARTIES AS ON JUNE 3om, 2011

A) List of Related Parties:

-19.69

Associates with whom transactions have been entered into in the ordinary course of business:

-23.29 Non Discretionary

Centrum Capital Limited Future Capital Securities Limited Centrum Direct Limited

53.09

Key Management Personnel:

Mr. Pradeep Oak Mr. Alok Nanavaty Mr.T.S.Bhaskaran Mr. Rajendra Naik Ms. Sanju Verma

Relatives of Key Management Personnel1 Having Controlling Interest where transactions have taken place:

Ms. Prachi Oak Mr. Sagar Oak Ms. Sneha Oak Mr. Rajesh Nanavaty Ms. Jasmine Nanavaty Ms. Yashomati Nanavaty Ms. Aditi Nanavaty W s . V K Nanavaty shares brokers MIS. Nanavaty Associates Ms. Asha Naik Ms. Amita Naik Mr. Sharadchandra Naik

B) Transaction with related parties:

Total

2011

21,3500,000 55,000,000 30,000,000

Key Managerial Personnel

2011

- - -

Nature of Transactions

Loans and advances taken - Centrum Capital Limited -Future Capital Securities Limited -CentrumDired Limited

Associates

2011

213,500,000 55,000,000 30,000,000

100,650,000 55,000,000

156,283,118

Repayment of Loans and advances taken - Centrum Capital Limited -Future Capital Securities Limited -CentrumDirect Limited Loans Given -CentrumDirect Limited Repayment of Loans Given -CentrumDirec t Limited Deposit Received - Future Capital Securities Limited Deposit Repaid - Future Ca~ital Securities Limited

100,650,000 55,000,000

156,283,118

7,7l6,882

Professional Fees Received - Centrum Capital Limited 1,000,000 - 1,000,000 Referral Fees Paid

- - - -

7,716,882

9,289,350

9.289.350

-Future Capital Securities Limited

Purchase of Foreign exchange -CentrumDirect Limited

I I I 1

Note: No amounts in respect of related parties have been written off 1 written back during the year, nor has any provision been made for doubtful debts / receivables.

-

Sale Consideration Received -Future Capital Securities Limited

14. NATURE OF COSTS AND EXPENSES:

7,7l6,882

-

-

2,7000,000

290,323

The following are indicative types of costs and expenses for clients availing the

7,7l6,882

9,289,350

9,289,350

- 25,000,000

7,356,622

2,560,422 1,200,790 1,738,368

484,578

1,38,40,412

- Rent Paid - - Centrum Capital Limited

-

-Key Managerial Personal & Relative - 209,606 209,606 -Centrum Ca~ital Limited I 2.676.078 1 - I 2.676.078

2,7000,000

Interest Expense - Centrum Capital Limited -Future Capital Securities Limited -CentrumDirect Limited Interest Income -CentrumDirec t Limited Remuneration to Key Management Personnel Commission and Brokerage received

290,323

- 40,75,00,000

- -

Corporate Guarantees Received -Centrum Capital Limited Closing Balances:

- 25,000,000

pp

40,75,00,000

2,560,422 1,200,790 1,738,368

484,578

pp

- - -

-

1,38,40,412

Portfolio Management services. The exact basis of charge relating to each of the following services shall be annexed to the Portfolio Management Agreement and the agreements in respect of each of the services availed at the time of execution of such agreements.

14.1 Portfolio Management Fees

Professional charges relate to the Portfolio management services offered to clients. The fee may be a fvred charge or a fvred percentage of the quantum of funds managed and may be returdperformance based or a combination of any of these, as agreed by the clients in the PMS Agreement.

Maximum Fees chargeable to client will be Fixed - 5% of AUM & Variable 40% of Profit or a combination of both as agreed in the PMS Agreement.

14.2 Custodian/Depository Fees

The charges relating to opening and operation of dematerialized accounts, custody and transfer charges for shares, bonds and units, dematerialization, rematerialisation and other charges in connection with the operation and management of the depository accounts.

14.3 Registrar and transfer agent fee

Charges payable to registrars and transfer agents in connection with effecting transfer of securities and bonds including stamp charges cost of affidavits, notary charges, postage stamp and courier charges.

14.4 Brokerage and transaction costs

The brokerage charges and other charges like service charge, stamp duty, transaction costs, turnover tax, exit and entry loads on the purchase and sale of shares, stocks, bonds, debt, deposits, units and other financial instruments.

14.5 Certification and professional charges

Charges payable for out sourced professional services like accounting, taxation and legal services, notarisations etc for certifications, attestations required by bankers or regulatory authorities, audit fees paid to independent Chartered Accountants to get the individual client accounts audited under regulation.

14.6 Incidental Expenses

Charges in connection with the courier expenses, stamp duty, service tax, postal, telegraphic, opening and operation of bank accounts etc.

14.7 Securities lending and borrowing charges

The charges pertaining to the lending of securities, costs of borrowing and costs associated with transfer of securities connected with the lending and borrowing transfer operations.

14.8 Besides the above indicative costs and charges, all other reasonable costs, fees, charges and expenses incurred by the Portfolio Manager or any other person appointed by the Portfolio Manager arising out of or in connection with or in relation to the management, acquisition, holding, custody, sale andlor transfer, of the Client's Portfolio or the rendering of the Portfolio Management Services or the performance of any act pursuant to or in connection with the Client Agreement shall be recovered by the Portfolio Manager from the respective Clients.

14.9 The Portfolio Manager shall deduct directly fiom the account of the client all the feeslcosts as specified above and shall send a statement to the client for the same.

15. TAXATION

The Client shall be liable for all tax liabilities arising out of his investments in Securities and availing services hereunder. In view of the individual nature of tax consequences the Client is best advised to consult his / her / their tax advisor /consultant for appropriate advice on tax treatment. The Portfolio Manager shall not be responsible for assisting in or completing the hlfillment of the client tax obligations.

16. ACCOUNTING POLICIESNALUATIONS:

The following Accounting policy will be applied for the portfolio investments of clients and Accounting under the respective portfolios is being done in accordance with general accounting principles

16.1 Basis of Accounting:-

Books and Records would be separately maintained in the name of the client to account for the assets and any additions, income, receipts and disbursement in connection therewith as provided by the SEBI (Portfolio Management) Regulations, 1993, as amended fiom time to time. As SEBI (Portfolio Management) Regulations, 1993, do not explicitly lay down detailed accounting policies, accounting policies followed by the Portfolio Manager while accounting for the portfolio investments of the clients Accounting under the respective portfolios is being done in accordance with general accounting principles. The existing policies are:-

1. Dividend income earned by the Portfolio shall be recognized, not on the date the dividend is declared, but on the date the share is quoted on an ex-dividend basis. For investments, which are not quoted on the stock exchange, dividend income would be recognized on the date of declaration of dividend.

2. In respect of all interest-bearing investments, income shall be accrued on a day-to-day basis as it is earned. Therefore, when such investments are purchased, interest paid for the period from the last interest due date up to the date of purchase should not be treated as a cost of purchase but shall be debited to Interest Recoverable Account. Similarly, interest received at the time of sale for the period from the last interest due date up to the date of sale must not be treated as an addition to sale value but shall be credited to Interest Recoverable Account.

3. Transactions for purchase or sale of investments shall be recognized as of the trade date and not as of the settlement date, so that the effect of all investments traded during a financial year are recorded and reflected in the financial statements for that year.

4. Bonus shares to which the portfolio becomes entitled shall be recognized only when the original shares on which the bonus entitlement accrues are traded on the Stock Exchange, Mumbai on an ex-bonus basis. Accordingly, date of recognition of bonus shares is construed as date of acquisition for the purpose of computing short tend long- term capital gain. Similarly, rights entitlements shall be recognized only when the original shares on which the right entitlement accrues are traded on the stock exchange on an ex-right basis.

5. In cases of corporate action of demerger, the ex-date is reckoned as date of acquisition for demerged stock.

6. The cost of investments acquired or purchased shall include brokerage but does not include service tax, security transaction tax (STT) and other charges customarily included in the broker's bought note. Similarly sale consideration of investments sold shall be reduced by amount of brokerage but does not reduce service tax, security transaction tax (STT) and other charges customarily included in the broker's bought note

7. In determining the holding cost of investments and the gainlloss on sale of securities, the First In First Out (FIFO) method is followed for each security.

8. Management Fees and Custody fees are recognized /accrued in accordance with the Discretionary Portfolio Management Services Agreement.

9. Securities Transaction Tax (STT) is recognized on the trade day when the securities are accounted for on which such Securities Transaction Tax is levied.

10. In case of corpus received in form of stock, date on which such shares are in warded as corpus shall be construed as date of acquisition and value at which they are in warded as corpus is considered as cost of acquisition for the purpose of computing gains / returns.

1 1. In case of corpus redeemed in form of stock, date on which such shares are recorded in books as corpus handed over shall be construed as date of sale and value at which they are recorded as corpus handed over is considered as sale consideration for the purpose of computing gains / returns.

12. In case of futures and options, mark to market margin on outstanding position as at the balance sheet date which is actually paid1 received to/from broker is considered in Profit

and Loss account under the head "Mark To Market on Futures" even though the same represent unrealized loss or gain.

16.2 Portfolio Valuation

Equity Shares

Investments in listed Equity Shares shall be valued at the closing price announced by The Bombay Stock Exchange Limited (BSE). When on a particular valuation day, a security has not been traded on BSE but has been traded on National Stock Exchange of India Limited, (NSE) the value at which it is traded on NSE shall be used. When a scrip is not traded on any stock exchange on a particular valuation day, the value at which it was traded on NSE, BSE or any other stock exchange as the case may be, on the earliest previous day may be used, provided that such day is not more than h t y days prior to the valuation date. When a security is not traded on the valuation date and no quote is available for earliest previous day upto 30 days, the security shall be valued at zero.

In case the security is not traded on any exchange, in the exceptional circumstances such as, merger and acquisitions and interim period, restructuring of the company and the interim period of non trading, and similar other exceptional circumstances, it shall be valued 'in - good faith' by the Portfolio Manager on the basis of appropriate valuation methods approved by valuation committee of Portfolio Manager.

Equity shares allotted in Initial Public Offering (PO) would be valued at the IPO cut-off price at which allotment is made till they are listed.

Rights Equity Shares

If the right renunciation form is traded on the exchange, the closing price of the exchange in the manner stated in case of equity share above shall be taken for right renunciation for the purpose of valuing right entitlement.

If the price is not available or the right renunciation forms are not traded, the right entitlement shares shall be valued until applied for as under

Vr = nlm*(Pex-Pof) Where Vr = Value of rights , n = number of rights offered, m = number of original shares held, Pex = Ex-rights price Pof = Rights offer price

Once right share are subscribed for, they shall be valued as equity shares to the extent of the entitled shares. Additional Shares, if any, subscribed shall be taken as share application money pending allotment and shall be valued at the amount applied for till they are allotted.

In case original shares on which the right entitlement accrues are not traded on the Stock Exchange on an ex-right basis, right entitlement should not be recognized as investments.

Where right entitlements are not traded and it was decided not to subscribe the rights, the right entitlements shall be valued at zero.

In case the Rights Offer Price is greater than the ex-rights price, the value of the rights share is to be taken as zero.

Warrants

Listed warrants shall be valued at closing price announced by NSE or as the case may be, BSE or any other exchange similar to the manner mentioned herein above in case of listed equity shares.

Non traded warrants can be valued at the value of the share which would be obtained on exercise of the warrant as reduced by the amount which would be payable on exercise of the warrant. The value of the share for the said purpose shall be the same as stated above in equity shares. A discount at the appropriate rate on account of non-tradability of Warrants shall be deducted to account for the period, which must elapse before the warrant can be exercised.

In case, the amount payable on exercise of the warrants is higher than the value of the share, the value of the warrants is to be taken as zero.

Units of Mutual Funds

Units of the Mutual Funds will be valued at the latest Repurchase Net Asset Value declared for the relevant plan of a scheme of the mutual find on the date of the report.

Equity Option Derivatives

Market values of traded open option contracts shall be determined with respect to the exchange on which contracted originally, i.e. an option contracted on The National Stock Exchange (NSE) would be valued at the closing option price on the NSE. The price of the same option series on the BSE cannot be considered for the purpose of valuation, unless the option itself has been contracted on the BSE.

The Exchanges give daily settlement prices in respect of all derivates positions. These settlements prices would be adopted for the positions, which are not traded

Equity Futures Derivatives

Market values of traded futures contracts shall be determined with respect to the exchange on which contracted origmdly, i.e. futures position contracted on the National Stock Exchange (NSE) would be valued at the closing option price on the NSE. The price of same futures contract on BSE cannot be considered for the purpose of valuation, unless the futures contract itself has been contracted on the BSE.

The Exchanges give daily settlement prices in respect of all derivates positions. These

settlements prices would be adopted for the positions, which are not traded.

Fixed deposit with Banks

Fixed Deposits with Bank should be valued at cost

Fixed Income Instruments

Fixed Income Instruments will be valued at cost plus interest accrued till the beginning of the day plus the difference between the redemption value and the cost spread uniformly over the remaining maturity period of the instrument.

17. INVESTOR SERVICES:

(a) Name, address and telephone number of the investor relations officer who shall attend to investor queries and complaints.

For Investor Querries: Mr. Praveen Malik Centrum Broking Pvt. Ltd. Centrum House, CST Road, Near Bandra Kurla Complex, Vidya Nagri Marg, Kalina S a n t a m (East) Mumbai - 400098

Tel No: 022 - 42 159703 Email Id: [email protected]

For Investor Grievances: Investor.gJ.ievancesO,centrum.co.in

(b) Grievance Redressal and Dispute settlement mechanism: The Portfolio Manager shall attend to and address any client query or concern as soon as possible to mutual satisfaction.

The Portfolio Manager will endeavor 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 out of or in connection with the provision of services as a Portfolio Manager, between the Client and the Portfolio Manager and lor their respective representatives shall be settled in accordance with and subject to the provisions of The Arbitration and Conciliation Act, 1996, or any statutory requirement, modification or re-enactment thereof. Such Arbitration proceedings shall be held at Mumbai or such other place as the Portfolio Manager thinks fit and be conducted in

English language.

The agreement with the client shall be governed by, construed and enforced in accordance with the laws of India. Any action or suit involving the agreement with a client or the performance of the agreement by the either party of its obligations will be conducted exclusively in courts located within city of Mumbai in the state of Maharashtra or such other places as Portfolio Manager think fit.

18. GENERAL:

The Portfolio Manager and the client can mutually agree to be bound by specific terms through a written two-way agreement between themselves in addition to the standard agreement.

Date : February 2,2012 Place : Mumbai

For CENTRUM BROKING PVT LTD

Sandeep ~ & a k U Pradeep Oak Director and CEO Director and CFO

S.Canashyam Director

Rajesh Nanavaty Director

~riramenkatasubramanian Whole time Director

Date post:	05-Apr-2020
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