DSP Fixed Maturity Plan (FMP) – Series 277 to 279

SCHEME INFORMATION DOCUMENT SECTION I DSP Fixed Maturity Plan (FMP) – Series 277 to 279 (30 Days to 120 Months) SO no. 1 & 2 A Close Ended Debt Scheme. A __________ interest rate risk and ____________ credit risk. This product is suitable Scheme Riskometer# Benchmark Riskometer# for investors who are SO no. 3 seeking*: (i) For Scheme tenure 1-3 Month - NIFTY Liquid Index less than or equal to 12 3-6 Month - NIFTY Ultra Short Duration Debt months Index 6-12 Month - NIFTY Low Duration Debt Index This product is suitable 12-36 Months - NIFTY Short Duration Debt for investors who are Index seeking*: 36-48 Months - NIFTY Medium Duration Debt • Income over a Index short-term investment 48-84 Months - NIFTY Medium to Long horizon Duration Debt Index • Investment in > 84 Months - NIFTY Long Duration Debt debt & money market Index instruments maturing on or before maturity of the scheme *Investors should consult their financial advisers if in doubt about whether the Scheme is suitable for them. (ii) For Scheme tenure more than 12 months up to 120 months • Income generation over the specified investment horizon • Investment in debt & money market instruments maturing on or before maturity of the scheme *Investors should consult their financial advisers if in doubt about whether the Scheme is suitable for them. #The actual Risk-o-meter will be decided at the time of launch based on the tenure and portfolio of each scheme. 1(The product labelling assigned during the New Fund Offer is based on internal assessment of the Scheme Characteristics or model portfolio and the same may vary post NFO when actual investments are made). (For latest Riskometers, investors may refer on the website of the fund viz. www.dspim.com ) Potential Risk Class Matrix: The potential risk class matrix of DSP Fixed Maturity Plan (FMP) – Series 277 to 279 (30 Days to 120 Months) based on interest rate risk and credit risk is as follows: SO no. 4 Potential Risk Class* Credit Risk → Relatively Low Moderate Relatively High Interest Rate Risk ↓ (Class A) (Class B) (Class C) Relatively Low (Class I) - - - Moderate (Class II) - - - Relatively High (Class III) - - - *The actual PRC Matrix will be decided at the time of launch based on the tenure and portfolio of each scheme. New Fund Offer of units at NAV based prices Name of Mutual Fund : DSP Mutual Fund Name of Asset Management Company : DSP Asset Managers Private Limited CIN of Asset Management Company : : U65990MH2021PTC362316 Name of Trustee Company : DSP Trustee Private Limited CIN of Trustee Company : U65991MH1996PTC100444 Addresses of the entities : The Ruby, 25th Floor, 29, Senapati Bapat Marg, Dadar (West), Mumbai- 400028 Website : www.dspim.com The particulars of the Scheme have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations 1996, (herein after referred to as SEBI (MF) Regulations) as amended till date and circulars issued thereunder filed with SEBI, along with a Due Diligence Certificate from the AMC. The units being offered for public subscription have not been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy of the Scheme Information Document. The Scheme Information Document sets forth concisely the information about the scheme that a prospective investor ought to know before investing. Before investing, investors should also ascertain about any further changes to this Scheme Information Document after the date of this Document from the Mutual Fund / Investor Service Centres / Website / Distributors or Brokers. The investors are advised to refer to the Statement of Additional Information (SAI) for details of DSP Mutual Fund, Standard Risk Factors, Special Considerations, Tax and Legal issues and general information on www.dspim.com. SAI is incorporated by reference (is legally a part of the Scheme Information Document). For a free copy of the current SAI, please contact your nearest Investor Service Centre or log on to our website. The Scheme Information Document (Section I and II) should be read in conjunction with the SAI and not in isolation. This Scheme Information Document is dated ______________. 2BSE Disclaimer: BSE Ltd. ("the Exchange") has vide its letter no. LO/IPO/AP/MF/IP/48/2025-26 dated October 07, 2025, given permission to DSP Mutual Fund to use the Exchange's name in this SID as one of the Stock Exchanges on which this Mutual Fund's Unit are proposed to be listed. The Exchange has scrutinized this SID for its limited internal purpose of deciding on the matter of granting the aforesaid permission to DSP Mutual Fund. The Exchange does not in any manner: - i) warrant, certify or endorse the correctness or completeness of any of the contents of this SID; or ii) warrant that this scheme's unit will be listed or will continue to be listed on the Exchange; or iii) take any responsibility for the financial or other soundness of this Mutual Fund, its promoters, its management or any scheme or project of this Mutual Fund; and it should not for any reason be deemed or construed that this SID has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any unit of DSP Fixed Maturity Plan (FMP) – Series 277 to 279 (30 Days to 120 Months) of this Mutual Fund may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. 3Table of Contents Particulars Page No. SECTION I PART I. HIGHLIGHTS / SUMMARY OF THE SCHEME 4 PART II. INFORMATION ABOUT THE SCHEME 15 A. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? 18 B. WHERE WILL THE SCHEME INVEST? 18 C. WHAT ARE THE INVESTMENT STRATEGIES? 20 D. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? 20 E. WHO MANAGES THE SCHEME? 20 F. HOW IS THE SCHEME DIFFERENT FROM EXISTING SCHEMES OF MUTUAL FUND? 21 G. HOW HAS THE SCHEME PERFORMED 22 H. ADDITIONAL SCHEME RELATED DISCLOSURES 23 PART III. OTHER DETAILS 24 A. COMPUTATION OF NAV 24 B. NEW FUND OFFER (NFO) EXPENSES 25 C. ANNUAL SCHEME RECURRING EXPENSES 25 D. LOAD STRUCTURE 28 SECTION II I. INTRODUCTION 30 A. DEFINITIONS/ INTERPRETATION 30 B. RISK FACTORS 31 C. RISK MITIGATION STRATEGIES 41 II. INFORMATION ABOUT THE SCHEME 42 A. WHERE WILL THE SCHEME INVEST 42 B. WHAT ARE THE INVESTMENT RESTRICTIONS? 58 C. FUNDAMENTAL ATTRIBUTES 62 D. INDEX METHODOLOGY 68 E. PRINCIPLES OF INCENTIVE STRUCTURE FOR MARKET MAKERS (FOR ETFS) 69 F. FLOORS AND CEILING WITHIN A RANGE OF 5% OF THE INTENDED ALLOCATION 69 AGAINST EACH SUB CLASS OF ASSET G. OTHER SCHEME SPECIFIC DISCLOSURES 69 III. OTHER DETAILS 85 A. OVERVIEW OF THE UNDERLYING FUNDS 85 B. PERIODIC DISCLOSURES 86 C. TRANSPARENCY/NAV DISCLOSURE 89 D. TRANSACTION CHARGES AND STAMP DUTY 89 E. ASSOCIATE TRANSACTIONS 89 F. TAXATION 89 G. RIGHTS OF UNITHOLDERS 93 H. LIST OF OFFICIAL POINTS OF ACCEPTANCE 93 I. PENALTIES, PENDING LITIGATION OR PROCEEDINGS, FINDINGS OF INSPECTIONS 93 OR INVESTIGATIONS 4Part I. HIGHLIGHTS/SUMMARY OF THE SCHEME Sr. Title Description No. Name of the I. DSP Fixed Maturity Plan (FMP) – Series 277 to 279 (30 Days to 120 Months) scheme Category of the II. Close Ended Debt Fund Scheme A Close Ended Debt Scheme. A ______________ Interest Rate Risk and III. Scheme type ______________ Credit Risk. SO no. 6 IV. Scheme code <<Shall be inserted before launch of the Scheme>> SO no. 7 The investment objective of the Scheme is to seek to income by investing in a portfolio of Debt and Money Market Securities maturing on or before the Investment V. maturity of the Scheme. objective SO no. 5 There is no assurance that the investment objective of the Scheme will be a chieved. Liquidity Details - The Units of the Scheme cannot be redeemed by the investors directly with the Mutual Fund until the maturity of the Scheme and there will be redemption by the Mutual Fund on the maturity of the Scheme. However, investors who wish to exit/redeem before the maturity date may do so through stock exchange mode, if they have opted to hold Units in a demat form, by mentioning their demat details on the NFO application form. The Unit holders are given an option to hold Units by way of an account statement (physical form) or in dematerialized form (demat). The Units of the Scheme will be listed on the Mutual Fund Segment of BSE Limited (BSE) within 5 business days from the date of allotment. The Trustee may at its sole discretion list the Units under the Scheme on any other recognized Stock Exchange at a later date. Liquidity/listing VI. The Units of the Scheme can be purchased/sold on a continuous basis details (subject to suspension of trading) on BSE and/or any other Stock Exchange on which the Units are listed during the trading hours like any other publicly traded stock. The price of the Units in the market will depend on demand and supply at that point of time. There is no minimum investment, although the Units are purchased in round lots of 1. The record date for determining the Unit holders whose name(s) appear on the list of beneficial owners as per the Depositories (NSDL/CDSL) records for the purpose of redemption of Units on Maturity / Final Redemption date (“Maturity Record Date”) will be one working day prior to the Maturity / Final Redemption date. The stock exchange(s) will suspend trading in Units one working day prior to the Maturity Record Date. No separate notice will be issued by the AMC informing about Maturity Record Date or Suspension of trading by the stock exchange. However, the Fund reserves the right to change the Maturity Record Date by issue of suitable notice. 5The Mutual Fund will endeavor to despatch redemption proceeds within 2 Business Days from the date of acceptance of redemption request. However, as per SEBI (MF) Regulations, the timeline to dispatch redemption proceeds is 3 Working Days from the date of acceptance of redemption request. Investors will not be able to redeem their units during the tenor of the Scheme directly from the fund and there will be redemption by the fund only on the maturity of the Scheme. The redemption proceeds shall be dispatched to the unit holders within three working days from the date of maturity of the Scheme. In case of exceptional situations listed in AMFI Circular No. AMFI/35P/MEM-COR/74/2022-23 dated January 16, 2023, the scheme shall be allowed additional timelines for transfer of redemption or repurchase proceeds to the unitholders. Investor may note that in case of exceptional scenarios as prescribed by AMFI vide its communication no. AMFI/ 35P/ MEM-COR/ 74 / 2022-23 dated January 16, 2023 read with SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 (SEBI Master Circular), the AMC may not be able to adhere with the timelines prescribed above. Listing details - The Units are proposed to be listed on BSE Limited or any other recognized Stock Exchange as may be approved by the Trustee, within 5 business days from allotment. The Scheme is open ended and the Units are not proposed to be listed on any stock exchange. However, the Mutual Fund may, at its sole discretion, list the Units on one or more Stock Exchanges at a later date, and thereupon the Mutual Fund will make suitable public announcement to that effect. For details, please refer provision for Listing under ‘Section II. O ther Scheme Specific Disclosure’. • AMFI Tier I benchmark/ Benchmark of the Scheme: Tenure Benchmark Index 1-3 Month NIFTY Liquid Index 3-6 Month NIFTY Ultra Short Duration Debt Index Benchmark 6-12 Month NIFTY Low Duration Debt Index (Total Return 12-36 Months NIFTY Short Duration Debt Index Index) 36-48 Months NIFTY Medium Duration Debt Index VII. 48-84 Months NIFTY Medium to Long Duration Debt Index > 84 Months NIFTY Long Duration Debt Index SO no. 25 • Justification: The composition & duration profile of the aforesaid benchmark is most suited to compare the performance of the scheme. The Trustee may change the benchmark for any of the Schemes in the series in future, if a benchmark better suited to the investment objective of that Scheme is available at such time and as per the guidelines and directives issued by SEBI from time to time. 6• Second Tier benchmark: Not applicable. The AMC will declare separate NAV under Regular Plan and Direct Plan of Scheme. The first NAV will be calculated and declared within 5 business days from the date of allotment. Thereafter, the Mutual Fund shall declare the NAV of the Schemes on every Business Day, on AMFI’s website www.amfiindia.com, by 11.00 p.m. and also on AMC website www.dspim.com. The Net Asset Value (NAV) of Segregated Portfolio, if any, shall be declared VIII. NAV disclosure on every business day. The information on NAVs of the Scheme/plans may be obtained by the Unit Holders, on any day, by calling the office of the AMC or any of the Investor Service Centres at various locations. The NAV of the Scheme will also be updated on the AMFI website www.amfiindia.com and on www.dspim.com. Further details in Section II. Timeline for- • Dispatch of redemption proceeds Investors will not be able to redeem their units during the tenor of the Scheme directly from the fund and there will be redemption by the fund only on the maturity of the Scheme. The redemption proceeds shall be dispatched to the unit holders within three working days from the date of maturity of the Scheme. Applicable IX. timelines In case of exceptional situations listed in AMFI Circular No. AMFI/35P/MEM-COR/74/2022-23 dated January 16, 2023, the scheme shall be allowed additional timelines for transfer of redemption or repurchase proceeds to the unitholders • Dispatch of Income Distribution cum Capital Withdrawal (‘IDCW’) IDCW warrants shall be dispatched to the Unit Holders within 7 Working days from the record date for declaration of the IDCW. Plan Options Sub-Option IDCW Frequency/ Available Record Date Regular Growth Option - - Plan Income • Payout of IDCW Annual^ and X. Plans and Direct Distribution • Reinvestment Options cum Capital of IDCW Plan Withdrawal (‘IDCW’) *Quarterly • Payout of IDCW 28th of each quarter IDCW • Reinvestment of the financial year# of IDCW 7^The Trustee, in its sole discretion, may also declare interim Income Distribution cum Capital Withdrawal. #If 28th is not a Business Day, the record date shall be the immediately preceding Business Day. If record date for all frequency (other than monthly frequency) falls on a non Business Day, the immediate next Business Day shall be considered as the Record Date. Investors may note that under Income Distribution cum Capital Withdrawal options the amounts can be distributed out of investor’s capital (Equalization Reserve), which is part of sale price that represents realized gains. Default Option- Investors should indicate the name of the Scheme and/or Option, clearly in the application form. In case of valid applications received, without indicating the Scheme and/or Option etc. or where the details regarding option are not clear or ambiguous, the following defaults will be applied: If no indication is given under the following Default Option – Growth / IDCW Growth Sub-option – Payout of IDCW /Reinvestment of IDCW Payout of IDCW In case an investor/Unit Holder fails to mention the plan and broker details in the application form, then the application shall be processed under respective option/sub-option under Direct Plan of the Scheme. The Plans under the Scheme will have common portfolio. Processing of Application Form/Transaction Request: The below table summarizes the procedures which would be adopted while processing application form/transaction request by the AMC. Sr. AMFI Registration Number Plan as selected Transaction shall No. (ARN) Code/Direct/Blank as in the application be processed and mentioned in the application form/ transaction Units shall be form/ transaction request request allotted under 1 Not mentioned Not mentioned Direct Plan 2 Not mentioned Direct Direct Plan 3 Not mentioned Regular Direct Plan 4 Mentioned Direct Direct Plan 5 Direct Not mentioned Direct Plan 6 Direct Regular Direct Plan 7 Mentioned Regular Regular Plan 8 Mentioned Not mentioned Regular Plan In cases of wrong/ invalid/ incomplete ARN, any purchase or switch-in or SIP & STP registration shall be processed under Direct Plan or rejected depending on the mode of the transaction. “Invalid ARNs” shall include ARN validity period expired, ARN cancelled /terminated, ARN suspended, ARN Holder deceased, Nomenclature change, as required pursuant to SEBI (Investment 8Advisers) Regulations, 2013, not complied by the Mutual Fund Distributor (‘MFD’), MFD is debarred by SEBI, ARN not present in AMFI ARN database, ARN not empanelled with AMC. Notes: a) Investors should provide details/instructions only in the space provided in the form. Any details/notings/information/ instruction provided at a non -designated area of the standard form being used, or any additional details, for which space is not designated in the standard form, may not be executed and the AMC will not be liable for the same. b) Applications not specifying Schemes/Plans/Options and/ or accompanied by cheque/demand drafts/account to account transfer instructions favouring Schemes/Plans/Options other than those specified in the application form are liable to be rejected. c) Where the Scheme name as written on the application form and on the payment instrument differs, the proceeds may, at the discretion of the AMC be allotted in the Scheme as mentioned on the application form. d) Investors shall note that once Units are allotted, AMC shall not entertain requests regarding change of Plan/Option, with a retrospective effect. e) Any change in IDCW sub option due to additional investment or customer request will be applicable to all existing Units in the IDCW option of the scheme concerned. f) The AMC and its Registrar reserve the right to disclose the details of investors and their transactions to third parties viz. banks, distributors, Registered Investment Advisors from whom applications of investors are received and any other organization for the purpose of compliance with legal and regulatory requirements or for complying with antimony laundering requirements. g) Returned cheques are liable not to be presented again for collection, and the accompanying application could also be rejected. In case returned cheques are presented, the necessary charges including returned charges may be debited to the investor. For detailed disclosure on default plans and options, kindly refer SAI. XI. Load Structure E xit Load – Nil • During NFO: Rs.5,000 and any amount thereafter. • On Continuous basis : Minimum Not Applicable, as purchase/redemption/switch-out is not permitted XII. Application during the term of the Scheme. The listed units will have to be sold in Amount/switch in lots of 1(one) Unit or such other marketable lots as prescribed by the Exchange, from time to time 9Note: The minimum application amount will not be applicable for investment made in schemes in line with SEBI guidelines on Alignment of interest of Designated Employees of AMC. Minimum XIII. Additional Not Applicable. Purchase Amount Not Applicable, as purchase/redemption/switch-out is not permitted during Minimum the term of the Scheme. The listed units will have to be sold in lots of 1(one) XIV. Redemption/swit Unit or such other marketable lots as prescribed by the Exchange, from time ch out amount to time NFO opens on:-_________NFO closes on: - _________ As per clause 1.10.1A of SEBI Master Circular, the NFO shall remain open for subscription for a minimum period of three Working Days. Further, as per clause New Fund Offer 1.10.1 of the SEBI Master Circular, the maximum number of days for which the Period NFO will be open shall be 15 days. This is the period SO no. 34 XV. during which a Extension or Termination of NFO Period new scheme sells In case the NFO Opening/ Closing Date is subsequently declared as a non-Business its units to the Day, the following Business Day will be deemed to be the NFO Opening/ Closing investors. Date. The AMC/Trustee reserves the right to change the New Fund Offer Period, subject to the condition that the subscription list of the New Fund Offer Period shall not be kept open for more than 15 days. An addendum shall be uploaded on the AMC website i.e. www.dspim.com notifying the change in the NFO Dates/Period. New Fund Offer Price: This is the price XVI. per unit that the Rs. 10/- per unit during the New Fund Offer. investors have to pay to invest during the NFO. Segregated As per clause 4.4 of the SEBI Master Circular, the scheme is enabled for portfolio/side XVII. pocketing s egregated portfolio. For details, kindly refe Sr OSA nI. o . 54 disclosure In accordance with clause 4.10 of the SEBI Master Circular, Swing pricing Swing pricing XVIII framework is not applicable. disclosure Stock XIX. lending/short T he scheme will not invest in stock lending/Borrowing. selling • Please refer to the SAI and application form for instructions. • Investors intending to trade in Units of the Schemes, will be required to provide demat account details in the application form, as mentioned under ‘Dematerialisation’. How to Apply and XX. Investors intending to apply through ASBA will be required to submit ASBA other details form to their respective banks, which in turn will block the amount in their account as per authority contained in the ASBA form. For details on ASBA process please refer the ASBA application form. Financial transactions through email in respect of non- individual investors 10shall be accepted in terms of AMFI Best Practice Guidelines (BPG) no. 118/ 2024-25 dated January 31, 2025 and such other circulars issued in this regard from time to time. For the terms and conditions of for availing the facility to transact through electronic mail, please refer SAI. SO no. 35 Please refer further details in section II. Contact details for general service requests: Investors may contact any of the AMC's Investor Service Centers or call on Toll Free number 1800-208-4499 or 1800-200-4499 for any queries. E-mail: service@dspim.com Contact details for complaint resolution: Mr. Santosh Pandey Investor Relations Officer XXI. Investor services DSP Asset Managers Private Limited The Ruby, 25th Floor, 29, Senapati Bapat Marg, Dadar (West), Mumbai – 400028, Tel.: +91 22 6657 8000 Stock Exchange Transactions: For grievances related to stock exchange transactions, contact either the stockbroker or the investor grievances cell of the respective stock exchange. MFU Customer Care: For transactions related to MFU, Investors may contact the customer care of MFUI on 1800-266-1415 (business hours on all days except Sunday and Public Holidays) or send an email to c lientservices@mfuindia.com. Specific attribute of the scheme (such as lock in, duration The Scheme is a close ended scheme and the tenure of the Scheme will be XXII in case of target (*) days/months after the date of allotment of units. The Scheme will be maturity fully redeemed / wound up at the end of the tenure of the scheme. scheme/close ended schemes) (as applicable) Special product/facility available during NFO: 1. Switching: During the NFO period (switch request will be accepted upto 3.00 p.m. on the last day of the NFO), the Unit holders will be able to invest into the NFO of the Scheme by switching part or all of their Unit holdings held in the existing schemes of the Mutual Fund. Special product/facility A switch has the effect of redemption from one scheme/plan/ option and a XXIII available during purchase in the other scheme/plan/option to which the switching has been the NFO and on done. The price at which the units will be switched-out will be based on the ongoing basis redemption price of the scheme from which switch-out is done and the proceeds will be invested into the Scheme at the NFO Price. Unit holders are requested to note that application for switch-out for units for which funds are not realized via purchase or switch-in in the scheme of the Fund shall be liable to be rejected. In other, switch out of units will be 11processed only if the funds for such units are realized in the scheme by a way of payment instructions/ transfer or switch-in funding process. Further, all switch funding shall be in line with redemption funding timelines adopted by the concerned scheme i.e. if a scheme follows T+3 payout for redemption, the switch out funding should also be made on the T+3 and not earlier or later than T+3, where T is the day of transaction. The funds from the switch out schemes into the switch in scheme should be received till the allotment date. If the NFO of the scheme is called off for any reason whatsoever, the Switch Out amount from other schemes to the NFO scheme will be paid to the investor within 5 Business Days of the closure of the NFO, similar to a redemption from Switch out scheme. Investors should note that the Switch transaction will not be nullified and the switch amount will be paid out as redemption. Further, such payments will not qualify as delayed payments and no interest will be payable by the Fund/AMC/RTA in such cases where the payment date is beyond 10 days of the switch out date, as the switch transactions are accepted from the first day of the entire NFO period and the NFO may be called off after the closure of NFO 2. Applications Supported by Blocked Amount (ASBA) facility ASBA facility will be provided to the investors subscribing to NFO of the Scheme. It shall co-exist with the existing process, wherein cheques/ demand drafts are used as a mode of payment. Please refer ASBA application form for detailed instructions. Please refer the SAI and ASBA application form for complete details on ASBA. Special product/facility available on ongoing basis: 1. Pledge of Units for Loans: Units can be pledged by the Unit Holders as security for raising loans, subject to any rules / restrictions that the Trustee may prescribe from time to time. For Units held in demat form, the rules of the respective DP will be applicable for pledge of the Units. Units held in demat form can be pledged by completing the requisite forms/formalities as may be required by the Depository. The pledge gets created in favour of the pledgee only when the pledgee’s DP confirms the creation of pledge in the system. In case of Units held in physical form, the Registrar will note and record such pledge. A standard form for this purpose is available at any of the official points of acceptance of transactions and on www.dspim.com. 2. One time mandate facility: This Facility enables the Unit Holder/s of DSP - Mutual Fund (‘Fund’) to transact with in a simple, convenient and paperless manner by submitting OTM - One Time Mandate registration form to the Fund which authorizes his/her bank to debit their account up to a certain specified limit per transaction, as and when they wish to transact with the Fund, without the need of submitting cheque or fund transfer letter with every transaction thereafter. This Facility enables Unit holder(s) of the Fund to start Systematic Investment Plan (SIP) or invest lump sum amounts in any Scheme of the Fund by sending instructions through Transaction forms, and online facility specified by the AMC. It is to be noted that 12allotment of units are subject to realization of credit in the scheme. For further details, please refer SAI. Link for TER for last 6 months and Daily TER: https://www.dspim.com/mandatory-disclosures/ter XIV. Weblink Link for scheme factsheet: Not Applicable XXV. Minimum Not Applicable installment Amount for Systematic Investment Plan (SIP) XXVI. Minimum Not Applicable installment Amount for Systematic Withdrawal Plan (SWP)/Systemati c Transfer Plan (STP) XXVII Maturity The Units of the Schemes shall be fully redeemed at the end of the respective . tenure. DSP FMP – Series 277 to 279 (30 Days to 120 Months) will mature on _________. If the maturity date is not a Business Day, the immediately succeeding Business Day will be considered as the maturity date. On the maturity date, all Units under the Schemes will be compulsorily, and without any further act by the Unit Holders, redeemed at the Applicable NAV of that day. For the units held in electronic form, the units will be extinguished with the Depository and the redemption amount will be paid to the Unit Holders on the maturity date, at the prevailing NAV on that date. 13DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY It is confirmed that: (i) The Scheme Information Document submitted to SEBI is in accordance with the SEBI (Mutual Funds) Regulations, 1996 and the guidelines and directives issued by SEBI from time to time. (ii) All legal requirements connected with the launching of the Scheme as also the guidelines, instructions, etc., issued by the Government and any other competent authority in this behalf, have been duly complied with. (iii) The disclosures made in the Scheme Information Document are true, fair and adequate to enable the investors to make a well informed decision regarding investment in the Scheme. (iv) The intermediaries named in the Scheme Information Document and Statement of Additional Information are registered with SEBI and their registration is valid, as on date. (v) The contents of the Scheme Information Document including figures, data, yields etc. have been checked and are factually correct (vi) The AMC has complied with the compliance checklist applicable for Scheme Information Documents and other than cited deviations/ that there are no deviations from the regulations. (vii) Notwithstanding anything contained in this Scheme Information Document, the provisions of the SEBI (Mutual Funds) Regulations, 1996 and the guidelines there under shall be applicable. (viii) The Trustees have ensured that the DSP FMP – Series 277 to 279 (30 Days to 120 Months) approved by them is a new product offered by DSP Mutual Fund and is not a minor modification of any existing scheme/fund/product. Date: ____________ , 2025 Name: Dr. Pritesh Majmudar Place: Mumbai Designation: (Head - Legal and Compliance) 14Part II. INFORMATION ABOUT THE SCHEME A. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? SO no. 13 (i) For Scheme tenure less than or equal to 12 months Indicative allocations (% of total assets) Instruments Minimum Maximum Debt and money market instruments 0% 100% (ii) For Scheme tenure more than 12 months up to 36 months Indicative allocations (% of total assets) Instruments Minimum Maximum Debt Securities 70% 100% Money market instruments 0% 30% (iii) For Scheme tenure more than 36 months up to 120 months Indicative allocations (% of total assets) Instruments Minimum Maximum Debt Securities 80% 100% Money market instruments 0% 20% Indicative table (Actual instrument/percentages may vary subject to applicable SEBI circulars): SO no. 18 & 19 Type of Instrument Percentage of exposure Circular references Securitised Debt Upto 50% - Clause 12.11 of the SEBI Master Securities Lending Nil Circular Short selling In line with Regulatory Guidelines - Clause 12.25 of the SEBI Master Derivatives Upto 100% for hedging Circular Derivatives for other than SO no. 20 Nil hedging Overseas Securities Nil - ReITS and InVITS Nil - Debt Instruments with special Nil - features (AT1 and AT2 Bonds) 15Upto 10% of the debt portfolio and Debt Instruments with SO / CE the group exposure in such Clause 12.3 of the SEBI Master rating instruments shall not exceed 5% of Circular the debt portfolio Tri-party repos (including Reverse repo in T-bills and Upto 50% - Government Securities) Clause 4 of the Seventh Schedule of Upto 5 % of AUM of Mutual Fund Other / own mutual funds SEBI (Mutual Funds) Regulations, level 1996 Repo/ Reverse Repo of Clause 12.18 of the SEBI Master Upto 10% corporate debt securities Circular The total exposure related to Clause 12.28 of the SEBI Master premium paid for all derivative Credit Default Swap Circular and SEBI Circular no. positions, including CDS, shall not transactions SEBI/HO/IMD/PoD2/P/CIR/2024/125 exceed 20% of the net assets of dated September 20, 2024 the scheme Foreign Securitized debt Nil - Unrated debt and money Upto 5% (Refer note 1) Clause 12.1 of SEBI master circular market instruments Upto 15% of net assets (Refer note Clause 12.16 of the SEBI Master Short Term Deposit 2) Circular Note 1- All such investments shall be made with the prior approval of the Board of AMC and the Board of trustees. Note 2 - Investment in short-term deposits of scheduled commercial banks- Pending deployment of funds of the Scheme shall be in terms of clause 12.16 of the SEBI Master Circular, the AMC may invest funds of the Scheme in short-term deposits of scheduled commercial banks, subject to the following conditions: 1. “Short Term” for parking of funds shall be treated as a period not exceeding 91 days. 2. Such short-term deposits shall be held in the name of the Scheme. 3. The Scheme shall not park more than 15% of their net assets in the short term deposit(s) of all the scheduled commercial banks put together. However, it may be raised to 20% with the prior approval of the Trustee. Also, parking of funds in short term deposits of associate and sponsor scheduled commercial banks together shall not exceed 20% of total deployment by the Mutual Fund in short term deposits. 4. The Scheme shall not park more than 10% of their net assets in short term deposit(s) with any one scheduled commercial bank including its subsidiaries. 5. The Trustee shall ensure that the funds of the Scheme are not parked in the short term deposits of a bank which has invested in the Scheme. 6. AMC will not charge any investment management and advisory fees for parking of funds in short term deposits of scheduled commercial banks. 7. The Trustee shall also ensure that the bank in which a scheme has short term deposits do not invest in the scheme until the scheme has short term deposits with such bank. The above provisions do not apply to term deposits placed as margins for trading in cash and derivative market. Towards maturity (when residual maturity of the scheme is 90 days or lower, there may be higher allocation to money market instruments & cash and cash equivalents under the scheme. SO no. 17 16Cumulative gross exposure- As per Clause 12.24 of the SEBI Master Circular, the cumulative gross exposure through debt, derivative positions, repo transactions and credit default swaps in corporate debt securities, , other permitted securities/assets and such other securities/assets as may be permitted by the Board from time to time should not exceed 100% of the net assets of the scheme. Cash and cash equivalents as per SEBI letter no. SEBI/HO/ IMD-II/DOF3/ OW/P/ 2021/ 31487 / 1 dated November 03, 2021 which includes T-bills, Government Securities, Repo on Government Securities and any other securities as may be allowed under the regulations prevailing from time to time subject to the regulatory approval, if any, having residual maturity of less than 91 Days, shall not be considered for the purpose of calculating gross exposure limit. As per SEBI letter no. SEBI/HO/ IMD-II/DOF3/ OW/P/ 2021/ 31487 / 1 dated November 03, 2021, Cash and Cash Equivalents will include following securities having residual maturity of less than 91 Days: 1. TREPS, SO no. 14 2. Treasury Bills, 3. Government securities, and 4. Repo on Government Securities and any other securities as may be allowed under the regulations prevailing from time to time. SO no. 23 & 24 Rebalancing of deviation due to short term defensive consideration- Due to market conditions, the AMC may invest beyond the range set out in the asset allocation. Such deviations shall normally be for a short term on defensive considerations as per Clause 1.14.1.2 of the SEBI Master Circular; the intention being at all times to protect the interests of the Unit Holders and the Scheme shall endeavor to rebalance the portfolio within 30 calendar days. It may be noted that no prior intimation/indication will be given to investors when the composition/asset allocation pattern under the Scheme undergoes changes within the permitted band as indicated above. Portfolio rebalancing in case of passive breach- SO no. 22 & 24 As per clause 2.9 of SEBI Master circular and the clarifications/ guidelines issued by AMFI/ SEBI from time to time read with SEBI Circular dated June 26, 2025, in the event of deviation from mandated asset allocation mentioned or prudential limits, passive breaches (i.e. occurrence of instances not arising out of omission and commission of AMC), shall be rebalanced within 30 business days. Where the portfolio is not rebalanced within above mentioned period, justification in writing, including details of efforts taken to rebalance the portfolio shall be placed before Investment Committee. The Investment Committee, if so desires, can extend the timelines up to sixty (60) business days from the date of completion of mandated rebalancing period. In case the portfolio is not rebalanced within the aforementioned mandated plus extended timelines the AMC shall comply with the prescribed restrictions, the reporting and disclosure requirements as specified in para 2.9.3 and 2.9.4 of SEBI Master Circular. Intended Portfolio for Scheme The Schemes shall invest in various securities/ instruments as mentioned below with the ratings mentioned against the type of instrument. As per the regulations, the Scheme(s) is allowed to invest within a range of 5% of the intended allocation (floor and cap) against each sub asset class/credit rating. The intended allocation shall be provided at the time of launch of the respective Scheme. Intended Portfolio Allocation for DSP FMP – Series 277 to 279 (30 Days to 120 Months) 17Credit Credit Credit Credit Credit Credit rating rating rating rating rating rating (%) (%) (%) (%) (%) (%) Not A1+** AAA* AA* A* BBB* Applicable Certificates of Deposits (CD) Commercial Papers (CP) Non – Convertible Debentures (NCDs) /Bonds Securities issued by the Government of India /State Development Loans (SDLs) Bills Re-discounting Scheme (BRDS) Cash & Cash Equivalent (TREPS / Reverse Repo) Mutual Fund Units * for long term debt instruments **for short term debt instruments Notes: a. All investments shall be made based on rating prevalent at the time of investment. Further, in case of an instrument which has dual rating, the most conservative publicly available rating would be considered. b. Further, the Schemes shall not invest more than 5% of its NAV in any unrated debt instruments including BRDS. All such investments shall be made with the prior approval of the Board of Trustees and the Board of Asset Management Company. c. Rating considerations - Securities with Rating AA will include AA+ and AA-, Similarly, securities with Ratings A1+ will include A1. d. At the time of building up the portfolio post NFO and towards the maturity of the Scheme, there may be a higher allocation to cash and cash equivalents There would be no variation between the intended portfolio and the final portfolio, subject to the following: (i) Positive variation in investment towards higher credit rating in the same instrument may be allowed. (ii) In case instruments/securities as indicated above are not available or taking into account risk - reward analysis of instruments/securities, the Scheme may invest in Certificate of Deposits (CDs) having highest short term money market ratings/ TREPS /Government Securities/Reverse Repo and Repo in Government Securities/SDLs/T-bills. (iii) Further, the allocation may vary during the tenure of the Scheme. Some of these instances are: (i) coupon inflow; (ii) the instrument is called or bought back by the issuer (iii) in anticipation of any adverse credit event. In case of such deviations, the Scheme may invest in CDs of highest rating/ TREPS /Government Securities/Reverse Repo and Repo in Government Securities/T-Bills. (iv) The above investment pattern is indicative and may be changed by the Fund Manager for a short term period including but not limited to building up the portfolio post NFO and towards the maturity of the Scheme, the Investment Manager may deploy (upto 100%) the funds in cash/cash equivalents/in units 18 SO no. 23of money market/Overnight/liquid schemes of DSP Mutual Fund and/any other mutual Fund in terms of applicable regulations on defensive considerations, pursuant to Clause 1.14.1.2 of the SEBI Master Circular keeping in view market conditions, market opportunities, applicable SEBI (Mutual Funds) Regulations 1996, legislative amendments and other political and economic factors, the intention being at all times to seek to protect the interests of the Unit Holders. In the event of any deviation from the asset allocation as stated above, the Fund Manager shall review and rebalance the portfolio within 30 Calendar days from the date of such deviation. (v) As per clause 2.9 of SEBI Master circular and the clarifications/ guidelines issued by AMFI/ SEBI from time to time read with SEBI Circular dated June 26, 2025, as may be amended/ clarified from time to time in the event of change in the asset allocation due to passive breaches (occurrence of instances not SO no. 22 arising out of omission and commission of the AMC), the fund manager is required to carry out portfolio rebalancing within 30 Business Days. In case the portfolio is not rebalanced within the period of 30 Business days, justification in writing, including details of efforts taken to rebalance the portfolio shall be placed before the Investment Committee. The Investment Committee, if it so desires, can extend the timeline for rebalancing up to sixty (60) Business days from the date of completion of mandated rebalancing period. B. WHERE WILL THE SCHEME INVEST? SO no. 29 The Scheme will invest in debt and money market securities, which include, but are not limited to: • Debt obligations of the Government of India, state and local governments, government agencies, statutory bodies, public sector undertakings, scheduled commercial banks, non-banking finance companies, development financial institutions, corporate entities and trusts (securitised debt) • Interest rate and credit derivatives as permitted by SEBI • Money market securities include commercial papers, commercial bills, treasury bills, Government securities having an unexpired maturity up to one year, call or notice money, certificate of deposit, usance bills, Tri-party REPO repurchase agreement (repo), reverse repurchase agreement (rev-repo), Bills Rediscounting Scheme (BRDS) and any other like instruments as specified by the Reserve Bank of India from time to time • Pass through, Pay through or other Participation Certificates, representing interest in a pool of assets including receivables • The non-convertible part of convertible securities • Securitized Debt • Debt instruments with SO / CE rating • Tri-party repos • Repo of corporate debt securities • Debt derivative instruments • Structured Notes • Units of Mutual funds as may be permitted by regulations Any other instruments/securities as may be permitted by RBI/SEBI/such other Regulatory Authority from time to time. From time to time, it is possible that the Investment Manager may decide to invest a higher proportion in debt and money market securities, depending on prevailing economic and market conditions and the need to adopt a defensive posture on the portfolio of the Scheme. The securities mentioned in, “Where will the Scheme(s) invest?”, could be listed, to be listed, unlisted, privately placed, secured, unsecured, rated or unrated (subject to the rating or equivalency requirements discussed above) and of any maturity. The securities may be acquired through secondary market operations, primary issues/offerings, other public offers, Private Placement and negotiated deals amongst other mechanisms. 19For detailed definition/description of instruments and applicable regulations/guidelines for instruments please refer Section II. At the time of investment, the AMC would use Association of Mutual Funds in India (AMFI) defined sector category. The list of sector/category of investment including rating and limits are subject to regulatory changes. Credit Evaluation Policy: Credit Risk associated with fixed income securities will be managed by making investments in securities issued by borrowers, which have a good credit profile. The credit research process includes a detailed in-house analysis and due diligence. Limits are assigned for each of the issuer (other than government of India); these limits are for the amount as well as maximum permissible tenor for each issuer. The credit process ensures that issuer level review is done at inception as well as periodically by taking into consideration the balance sheet and operating strength of the issuer. Credit evaluation process: The credit evaluation process includes a thorough analysis of the operating and financial strength of the issuer as well as management and industry risk evaluation. Typically, an interaction with the company management is also sought prior to setting up of issuer limits. For structured obligations, in addition to the above, the evaluation also covers originator analysis, collateral analysis, structure analysis and embedded risk analysis. Sectors in which the Schemes shall not invest The Schemes shall not invest in debt issued by floriculture, Gems and Jewelry and Leather and Leather products. C. WHAT ARE THE INVESTMENT STRATEGIES? SO no. 27 & 28 The investment manager will invest in various debt and money market securities maturing on or before the scheme maturity date. In-house research by the investment manager will emphasize on credit analysis to determine the associated credit risk. The investment process will take into account aspects such as interest rate outlook, term structure of interest rates, systemic liquidity, RBI’s policy stance, inflationary expectations, Government borrowing program, fiscal deficit, global interest rates, currency movements, etc. Investments in derivatives SEBI has permitted all the mutual funds to participate in the derivatives trading subject to observance of guidelines issued by SEBI in this behalf. Pursuant to this, the mutual funds may use various derivative and hedging products from time to time, as would be available and permitted by SEBI, in an attempt to protect the value of the portfolio and enhance Unit holders' interest. For detailed derivative strategies, please refer to SAI. The scheme will not invest in Units issued by REITs & InvITs. However, scheme has flexibility to invest in debt securities issued by REITs & InvITs. D. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? AMFI Tier I benchmark/ Benchmark of the Scheme would be as follows, on the basis of tenure of the Scheme: Tenure Benchmark Index 201-3 Month NIFTY Liquid Index 3-6 Month NIFTY Ultra Short Duration Debt Index 6-12 Month NIFTY Low Duration Debt Index 12-36 Months NIFTY Short Duration Debt Index 36-48 Months NIFTY Medium Duration Debt Index NIFTY Medium to Long Duration Debt 48-84 Months Index > 84 Months NIFTY Long Duration Debt Index • Justification: The composition & duration profile of the aforesaid benchmark is most suited to compare the performance of the scheme. The Trustee may change the benchmark for any of the Schemes in future, if a benchmark better suited to the investment objective of that Scheme is available at such time and as per the guidelines and directives issued by SEBI from time to time. E. WHO MANAGES THE SCHEME? SO no. 33 Fund Age Tenure Qualifications Brief Experience Other Scheme managed Manager Mr. Karan 35 --- BCOM. Over 10 years of DSP Bond Fund Mundhra Charted experience as under: DSP Floater Fund Accountant From April 01, 2023 DSP Low Duration Fund (CA) onwards- Fund manager- DSP Overnight Fund DSPAM DSP Savings Fund From May 1, 2021 to DSP Short Term Fund March 31, 2023- Fund DSP Ultra Short Fund manager- DSPIM DSP Arbitrage Fund From July 2016 to April DSP Liquidity Fund 30, 2021- Dealer, Fixed Income – DSPIM. From February 2016 to July 2016 –Manager – Fixed Income - DSPIM From April 2012 to January 2016 – Manager - Fund Accounting – DSPIM Ms. 37 --- MBA (Finance); Over 12 years of DSP Low Duration Fund Shalini years BA (Economics Experience: DSP Overnight Fund Vasanta & Statistics From April 01, 2023 DSP Savings Fund Hons) onwards: AVP, Fixed DSP Liquidity Fund Income Investments - DSP Credit Risk Fund DSP Asset Managers DSP Ultra Short Fund Private Limited From Jan 2017 to March 31, 2023 -AVP, Fixed Income Investments - DSP Investment Managers Private Limited From March 2012 – December 2016: Senior 21Fund Age Tenure Qualifications Brief Experience Other Scheme managed Manager Credit Analyst - ICRA Limited Mr. Kunal 32 --- Chartered 8 years of experience: DSP Strategic Bond Fund Khudania Accountant B.Com From July 01, 2025 to (Honors) present: Fund Manager (Fixed Income) – DSP Asset Managers Private Limited From August 02, 2024 to present: Dealer (Fixed Income) – DSP Asset Managers Private Limited From April 01, 2023 to August 01, 2024: Credit Analyst – DSP Asset Managers Private Limited From August 16, 2022 to March 31, 2023: Credit Analyst – DSP Investment Managers Private Limited From March 17, 2017 to August 12, 2022 – Credit Analyst – Mirae Asset Investment Managers India Private Limited From July, 2016 to March, 2017 – Market Analyst – Futures First Info Services Private Limited F. HOW IS THE SCHEME DIFFERENT FROM EXISTING SCHEMES OF THE MUTUAL FUND? List of other close-ended debt schemes- DSP FMP - Series 264-60M-17D DSP FMP Series 267 - 1246 Days DSP FMP Series 268 - 1281 Days DSP FMP Series 270 - 1144 Days For further details please refer our website - https://www.dspim.com/mandatory-disclosures/disclosures- under-offer-documents/scheme-comparison G. HOW HAS THE SCHEME PERFORMED? This is a new scheme and does not have any performance track record. 22H. ADDITIONAL SCHEME RELATED DISCLOSURES Since the scheme is a new fund to be launched, the following disclosures are not applicable i. Scheme’s portfolio holdings- Not Applicable. ii. Disclosure of name and exposure to Top 7 issuers, stocks, groups and sectors as a percentage of NAV of the scheme- Not applicable iii. Website link for Portfolio Disclosure - Fortnightly / Monthly/ Half Yearly- https://www.dspim.com/mandatory-disclosures/portfolio-disclosures iv. Portfolio Turnover Rate- Not Applicable Aggregate investment in the Scheme by- Not Applicable. For any other disclosure w.r.t investments by key personnel and AMC directors including regulatory provisions in this regard kindly refer SAI. v. Investments of AMC in the Scheme- SO no. 59 In terms of sub-regulation 16(A) in Regulation 25 of SEBI (Mutual Funds) Regulations,1996 read along with clause 6.9 of the SEBI Master Circular and AMFI Best Practice Guidelines Circular No.100 /2022- 23 dated April 26, 2022 on ‘Alignment of interest of AMCs with the Unitholders of the Mutual Fund schemes’, the AMC shall invest such amounts in such schemes of the mutual fund, based on the risks associated with the schemes, as may be specified by the SEBI from time to time. For details of investments of AMC in the scheme refer link- https://www.dspim.com/mandatory- disclosures/amcs-investments-in-schemes 23Part III- OTHER DETAILS A. COMPUTATION OF NAV SO no. 43 The NAV of the Units of a Scheme will be computed by dividing the net assets of the Scheme by the number of Units outstanding on the valuation date. NAV of Units under each Scheme may be calculated by either of the following methods shown below: Market or Fair Value of Scheme’s investments + Current Assets - Current Liabilities and Provisions NAV Per Unit (Rs.) = No. of Units outstanding under the Scheme The numerical illustration of the above method is provided below. Market or Fair Value of Scheme’s investments (Rs.) = 11,42,53,650.00 Current Assets (Rs.) = 10,00,000.00 Current Liabilities and Provisions (Rs.) = 5,00,000.00 No. of Units outstanding under the Scheme = 1,00,00,000 11,42,53,650.00 + 10,00,000.00 - 5,00,000.00 NAV Per Unit (Rs.) = = 11.4754 1,00,00,000 N.B.: The aforesaid provisions pertaining to “Calculation of NAV” shall apply in respect of each individual Scheme and/or plan as the case may be. The NAV Per Unit above is rounded off to four decimals. The NAV will be calculated as of the close of every Business Day. 24NAVs will be rounded off to four decimal places. The valuation of the Schemes’ assets and calculation of the Schemes’ NAVs shall be subject to audit on an annual basis and such regulations as may be prescribed by SEBI from time to time. Note: In respect of Schemes having Growth and IDCW Options, there will be more than one NAV, one for each Option, after the declaration of the first IDCW by that Scheme. While determining the price of the units, the mutual fund shall ensure that the repurchase price of Scheme is not be lower than 95% Net Asset Value as provided under SEBI (MF) Regulations. For other details such as policies w.r.t computation of NAV, rounding off, investment in foreign securities, procedure in case of delay in disclosure of NAV etc. refer to SAI. • Ongoing price for subscription (Purchase Price/switch-in from other schemes/ plans) by investors This is the price you need to pay for purchase/switch-in. The Purchase Price of the Units on an ongoing basis will be calculated as described below, which is based on the Applicable NAV Purchase Price = Applicable NAV Illustration: Say, Applicable NAV = Rs. 12/- Therefore, Purchase Price = Rs.12/- • Ongoing price for redemption (sale) /switch outs (to other Schemes/plans of the Mutual Fund)/ intra- Plan switching by investors (Redemption Price) This is the price you will receive for redemptions/switch outs. The Redemption Price of the Units will be calculated on the basis of the Applicable NAV subject to prevailing Exit Load, if any. In the case of Scheme which currently have no Exit Load, the Redemption Price will be the Applicable NAV. In the case of Scheme having an Exit Load or in which an Exit Load is introduced, the Redemption Price will be calculated as under: Redemption Price = Applicable NAV x (1 - Exit Load) Illustration: Say, Applicable NAV = Rs. 12.0000 and the Exit Load is 0.50%, Redemption Price = 12 x (1-0.005) = Rs. 11.9400. B. NEW FUND OFFER (NFO) EXPENSES These expenses are incurred for the purpose of various activities related to the NFO like sales and distribution fees paid, marketing and advertising, registrar expenses, printing and stationery, bank charges etc. All such expenses are borne by AMC. C. ANNUAL SCHEME RECURRING EXPENSES These are the fees and expenses for operating the Scheme. These expenses include Investment Management and Advisory Fee charged by the AMC, Registrar’s fee, marketing and selling costs etc., as given in the table 2 which summarizes estimated annualized recurring expenses as a % of daily net assets of the Scheme. The AMC has estimated that upto 1.00% of the daily net assets of the scheme will be charged to the scheme as expenses. For the actual current expenses being charged, the investor should refer to the website of the mutual fund. 25Operating & recurring expenses under regulation 52 (6) & 52 (6A): The Scheme may charge expenses within overall limits as specified in the Regulations except those expenses which are specifically prohibited. The annual total of all charges and expenses of the Scheme shall be subject to the following limits, defined under Regulation 52 of SEBI MF regulations: Table 1: Limit as prescribed under regulation 52 of SEBI MF regulations for other than equity oriented close ended funds: Particulars As a % of daily net assets as per Additional TER as per Regulation 52(6) (d) (ii) Regulation 52 (6A) (b)^ On total assets 1.00% 0.30% Notes to Table 1: ^In addition to expenses as permissible under Regulation 52 (6)(d)(ii), the AMC may charge the following to the concerned Scheme of the Fund under Regulation 52 (6A): a. Additional expenses upto 0.30 per cent of daily net assets of the concerned Schemes of the Fund if new inflows from such cities as may be specified by Regulations from time to time are at least: (i) 30 per cent of gross new inflows from retail investors* in the concerned Scheme, or; (ii) 15 per cent of the average assets under management (year to date) of the concerned Scheme, whichever is higher. Provided that if inflows from such cities is less than the higher of (i) or (ii) mentioned above, such expenses on daily net assets of the concerned Scheme shall be charged on proportionate basis. * Inflows of amount upto Rs 2,00,000/- per transaction, by individual investors shall be considered as inflows from “retail investors. The additional expenses charged shall be utilised for distribution expenses incurred for bringing inflows from such cities. The additional expense charged to the Scheme on account of inflows from such cities shall be credited back to the concerned Scheme in case such inflows are redeemed within a period of one year from the date of investment. Note: Pursuant to the directions received from SEBI vide its letter no. SEBI/HO/IMD-SEC- 3/P/OW/2023/5823/1 dated February 24, 2023 read along with AMFI communication dated March 02, 2023, w.e.f March 01, 2023 no additional expense shall be charged on the new inflows received on or after March 01, 2023 from specified cities as per Regulation 52 (6A) (b) till any further guidance is received from SEBI in this regard. b. Brokerage and transaction costs which are incurred for the purpose of execution of trade up to 0.12 per cent of trade value in case of cash market transactions and 0.05 per cent of trade value in case of derivatives transactions. It is clarified that the brokerage and transaction cost incurred for the purpose of execution of trade over and above the said 0.12 percent and 0.05 percent for cash market transactions and derivatives transactions respectively may be charged to the Scheme within the maximum limit of Total Expense Ratio (TER) as prescribed under regulation 52 of the SEBI (Mutual Funds) Regulations, 1996. In addition to expenses under Regulation 52 (6) and (6A), AMC may charge GST on investment and advisory fees, expenses other than investment and advisory fees and brokerage and transaction cost as below: 26a. Goods and Service Tax (GST) on investment and advisory fees: AMC may charge GST on investment and advisory fees of the Scheme in addition to the maximum limit of TER as per the Regulation 52(6) and (6A). b. GST on expenses other than investment and advisory fees: AMC may charge GST on expenses other than investment and advisory fees of the Scheme, if any within the maximum limit of TER as per the Regulation under 52(6) and (6A). c. GST on brokerage and transaction cost: GST on brokerage and transaction costs which are incurred for the purpose of execution of trade, will be within the limit of TER as per the Regulation 52(6) and (6A). Others: In accordance with clause 10.1.12 (a) of the SEBI Master Circular, all scheme related expenses including commission paid to distributors, by whatever name it may be called and in whatever manner it may be paid, shall be paid from the scheme only within the regulatory limits and not from the books of the AMC, or by the trustee or sponsors. Provided that the expenses that are very small in value but high in volume (as provided by AMFI in consultation with SEBI) may be paid out of AMC’s books. Such expenses can be paid out of AMC’s books at actuals or not exceeding 2 bps of the Scheme AUM, whichever is lower. Further with regards to the cost of borrowings in terms of Regulation 44(2), the same shall be adjusted against the portfolio yield of the Scheme and borrowing costs in excess of portfolio yield, if any, shall be borne by the AMC. Disclosure relating to changes in TER: In accordance with clause 10.1.8 of the SEBI Master Circular, the AMC shall prominently disclose TER on daily basis on the website www.dspim.com. Further, changes in the base TER (i.e. TER excluding additional expenses provided in Regulation 52(6A)(b), 52(6A)(c) of SEBI (Mutual Funds) Regulations, 1996 and Goods and Services Tax on investment and advisory fees) in comparison to previous base TER charged to any scheme/plan shall be communicated to investors of the scheme/plan through notice via email or SMS at least three working days prior to effecting such change. The notices of change in base TER shall be updated on the website at least three working days prior to effecting such change Provided that any decrease in TER in a mutual fund scheme due to various regulatory requirements, would not require issuance of any prior notice to the investors. The prior intimation/notice shall not be required for any increase or decrease in base TER due to change in AUM and any decrease in base TER due to various regulatory requirements. A. Illustrative example for estimating expenses for a scheme: The AMC in good faith has estimated and summarized in the below table for each Scheme. The actual total expenses may be more or less than as specified in the table below. The below expenses are subject to inter- se change and may increase/decrease as per actuals, and/or any change in the Regulations. Table 2: The estimated total expenses as a % of daily net assets of the Scheme are as follows: % p.a. of daily Expense Head Net Assets (Estimated p.a.) Investment Management & Advisory Fee 27Audit fees/fees and expenses of trustees* Custodial Fees Registrar & Transfer Agent Fees including cost of providing account statements / IDCW / redemption cheques/ warrants Marketing & Selling Expenses including Agents Commission and statutory Advertisement Costs related to investor communications Costs of fund transfer from location to location Upto 1.00% Cost towards investor education & awareness (at least 0.02 percent) Brokerage & transaction cost pertaining to distribution of units Goods & Services Tax on expenses other than investment and advisory fees Goods & Services Tax on brokerage and transaction cost Brokerage & transaction cost over and above 0.12 percent and 0.05 percent for cash and derivative market trades, respectively Maximum Total expenses ratio (TER) permissible under Regulation 52 (6) (d)(ii) Upto 1.00% Additional expenses for gross new inflows from specified cities Up to 0.30% SO no. 47 *The Trusteeship fees as per the provisions of the Trust Deed are subject to a maximum of 0.02% of the average net Trust Funds per annum. It has been decided by the Trustee to charge the Trusteeship Fees in proportion to the net assets of each of the Scheme of the Mutual Fund. The Trustee reserves the right to change the method of allocation of Trusteeship fees for the Scheme, from time to time. The goods and service tax on Investment Management and Advisory fees will depend on the total amount charged as Investment Management and Advisory fees. Currently it is chargeable at 18% on Investment Management and Advisory Fees. The purpose of the above table is to assist the investor in understanding the various costs & expenses that the investor in the Scheme will bear directly or indirectly. Expense Structure for Direct Plan: Direct Plan will have lower expense ratio than Regular Plan of the Scheme. The expenses under Direct Plan shall exclude the distribution and commission expenses and additional expenses for gross new flows from specified cities under regulation 52(6A)(b). All fees and expenses charged in a direct plan (in percentage terms) under various heads including the investment and advisory fee shall not exceed the fees and expenses charged under such heads in a Regular Plan. For the actual current expenses being charged, the investor should refer to the website of the Mutual Fund. SO no. 45 Illustration of impact of expense ratio on scheme’s returns: Particulars Regular Plan Direct Plan Amount invested at the beginning of the year 10,000 10,000 Annual income accrued to the scheme 1,000 1,000 Expenses other than Distribution expenses 75 75 Distribution expenses 25 Returns after expenses at the end of the year 900 925 % Returns after expenses at the end of the year 9.00% 9.25% 28The above expense structures are indicative in nature. Actual expenses could be lower than mentioned above. The purpose of the above table is to assist the investor in understanding the various costs & expenses that the investor in the Scheme will bear directly or indirectly. Link for TER disclosure: https://dspim.com/others/mandatory-disclosures D. LOAD STRUCTURE SO no. 48 Exit Load is an amount which is paid by the investor to redeem the units from the scheme. Load amounts are variable and are subject to change from time to time. For the current applicable structure, please refer to the website of the AMC (www.dspim.com) or may call at (toll free no. 1800 208 4499 or 1800 200 4499) or your distributor. Type of Load# Load chargeable (as %age of NAV) Exit Nil The Exit Load will be applicable for investments made through normal purchase and SIP/STP/SWP transactions. Note on Exit load exemptions: 1. There will be no Exit Load on inter-option switching. 2. No load will be charged on issue of Units allotted on reinvestment of IDCW for existing as well as prospective investors. 3. No exit load shall be levied in case of switch of investments from Direct Plan to Regular Plan and vice versa Exit load charged shall be credited to the Scheme. The goods and service tax on exit load shall be paid out of the exit load proceeds and exit load net of goods and service tax shall be credited to the scheme. Investors may note that the Trustee has the right to impose/modify exit load subject to a maximum as prescribed under the SEBI (MF) Regulations. Any imposition or enhancement in the load shall be applicable on prospective investments only. At the time of changing the load structure, the AMC shall consider the following measures to avoid complaints from investors about investment in the scheme without knowing the loads: (i) Addendum detailing the changes will be attached to the SID and Key Information Memorandum (KIM). The addendum may be circulated to all the distributors/brokers so that the same can be attached to all SIDs and KIMs already in stock. (ii) Arrangements will be made to display the addendum to the SID in the form of a notice in all the ISCs/offices of the AMC/Registrar. (iii) The introduction of the Exit Load along with the details may be stamped in the acknowledgement slip issued to the investors on submission of the application form and will also be disclosed in the statement of accounts issued after the introduction of such load. Investors are advised to contact any of the Investor Service Centers or the AMC to know the latest position on Exit Load structure prior to investing in the Scheme. 2930Section II I. Introduction A. Definitions/interpretation Business Day/ Working Day A day other than (i) Saturday and Sunday, (ii) a day on which the Reserve Bank of India or banks in Mumbai remains closed, (iii) a day on which there is no Reserve Bank of India clearing/settlement of securities, (iv) a day on which money markets are closed /not accessible and (v) a day on which the Sale and Redemption of Units are suspended. The AMC reserves the right to declare any day as a non-business day at any of its locations at its sole discretion. Custodian Citibank N. A., acting as custodian to the Scheme, or any other Custodian who is approved by the Trustee. DSP FMP/ DSP FMP – Series 277 to 279 DSP FMP – Series 277 to 279 (30 Days to 120 Months) (30 Days to 120 Months) / Scheme/The Scheme Scheme Information Document/SID This document issued by DSP Mutual Fund, offering Units of DSP FMP – Series 277 to 279 (30 Days to 120 Months) . For common definitions, please refer website Link - https://www.dspim.com/mandatory- disclosures/disclosures-under-offer-documents/definitions-interpretation AMC: Asset Management Company LTV: Loan to Value Ratio AMFI : Association of Mutual Funds in India MBS: Mortgaged Backed Securities AML: Anti-Money Laundering MFSS: Mutual Fund Service System ABS: Asset Backed Securities MFU: MF Utilities India Private Limited ASBA: Application Supported by Blocked NAV: Net Asset Value Amount AOP: Association of Person NEFT: National Electronic Funds Transfer BSE: BSE Limited NFO: New Fund Offer BSE StAR MF: BSE Stock Exchange Platform for NRI: Non-Resident Indian Allotment and Repurchase of Mutual Funds CAS: Consolidated Account Statement NRE: Non Resident External CAMS: Computer Age Management Services NRO: Non Resident Ordinary CDMDF LCiomrpitoerda te Debt Market Development NSE / National National Stock Exchange of India CDSL: FCuenndtr al Depository Services (India) SNtSoDcLk: Exchange: LNiamtiiotenda l Securities Depository Limited Limited DFI: Development Financial Institutions OTC: Over the Counter DP: Depository Participant OTM: One Time Mandate DFI: Development Financial Institutions POA: Power of Attorney ECS: Electronic Clearing System PIO: Person of Indian Origin EFT: Electronic Funds Transfer PMLA: Prevention of Money Laundering FPI: Foreign Portfolio Investors POS: APocitn, t2s0 o0f2 S ervice FRA: Forward Rate Agreement PSU: Public Sector Undertaking FIRC: Foreign Inward Remittance Certificate RBI: Reserve Bank of India 31FOF: Fund of Funds RTGS: Real Time Gross Settlement FPI: Foreign Portfolio Investor REITs: Real Estate Investment Trusts FATCA: Foreign Account Tax Compliance Act SEBI: Securities and Exchange Board of India Flex STP: Flex Systematic Transfer Plan SI: Standing Instructions HUF: Hindu Undivided Family SIP: Systematic Investment Plan IDCW Income Distribution cum Capital SWP: Systematic Withdrawal Plan Withdrawal IDCW Transfer Transfer of Income Distribution cum STP: Systematic Transfer Plan Plan Capital Withdrawal Plan IMA: Investment Management Agreement STT: Securities Transaction Tax InvITs: Infrastructure Investment Trusts SCSB: Self -Certified Syndicate Bank IRS: Interest Rate Swap SLR: Statutory Liquidity Ratio ISC: Investor Service Centre UBO: Ultimate Beneficial Ownership KYC: Know Your Customer TREPs Tri-Party Repurchase Agreement/Tri-Party Repos Value STP: Value Systematic Transfer Plan REITs: Real Estate Investment Trusts PRC Potential Risk Class INTERPRETATION For all purposes of this SID, except as otherwise expressly provided or unless the context otherwise requires: ▪ The terms defined in this SID include the plural as well as the singular. ▪ Pronouns having a masculine or feminine gender shall be deemed to include the other. ▪ All references to “US$” refer to United States Dollars and “Rs.” refer to Indian Rupees. A “Crore” means “ten million” and a “Lakh” means a “hundred thousand”. ▪ References to times of day (i.e. a.m. or p.m.) are to Indian Standard Time (IST) and references to a day are to a calendar day including non-Business Day. B. Risk factors Scheme Specific Risk Factors SO no. 8 Risk Factors associated with investments in Debt Securities and Money Market Securities: i. Price-Risk or Interest-Rate Risk: Fixed income securities such as bonds, debentures and money market instruments run price-risk or interest-rate risk. Generally, when interest rates rise, prices of existing fixed income securities fall and when interest rates drop, such prices increase. The extent of fall or rise in the prices is a function of the existing coupon, days to maturity and the increase or decrease in the level of interest rates. However, certain debt securities may be intended to be held till maturity. For such securities held till maturity, there will not be any interest rate risk at the end of the tenure. Duration risk refers to the movement in price of the invested debt instruments due to change in interest rates over different durations of maturity of instruments. Duration of portfolio is expressed in years and should be used as a measure of the sensitivity of the fixed income instrument to a change in interest rates. A longer portfolio duration is associated with greater price fluctuations. A rise in interest rates could normally lead to decrease in prices and generally negatively affects portfolios having longer duration vis-a-vis portfolios having shorter duration. A fall in interest 32rate generally benefits portfolio having longer duration. A longer duration portfolio is also generally associated with greater volatility vis-a-vis a shorter duration portfolio. ii. Term Structure of Interest Rates (TSIR) Risk: The Net Asset Value (NAV) of the Scheme(s), to the extent invested in Debt and Money Market securities, will be affected by changes in the general level of interest rates. The NAV of the Scheme(s) is expected to increase from a fall in interest rates while it would be adversely affected by an increase in the level of interest rates. iii. Credit Risk: Investments in Debt Securities are subject to the risk of an issuer's inability to meet interest and principal payments on its obligations and market perception of the creditworthiness of the issuer. Different types of securities in which the Scheme would invest as given in the SID carry different levels of credit risk. Accordingly, the Scheme’ risk may increase or decrease depending upon their investment patterns. E.g., corporate bonds carry a higher amount of risk than Government securities. Further, even among corporate bonds, bonds which are rated AAA are comparatively less risky than bonds which are AA rated. Investments in money market instruments involve credit risk commensurate with short term rating of the issuers. iv. Rating Migration Risk: Fixed income securities are exposed to rating migration risk, which could impact the price on account of change in the credit rating. For example: One notch downgrade of a AAA rated issuer to AA+ will have an adverse impact on the price of the security and vice-versa for an upgrade of a AA+ issuer. v. Liquidity or Marketability Risk: This refers to the ease with which a security can be purchased or 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. The liquidity of investments made in the Scheme may be restricted by trading volumes besides operational issues like settlement periods and transfer procedures. Different segments of the Indian financial markets have different settlement processes & periods and such periods may be extended significantly by unforeseen circumstances. There have been times in the past, when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct further transactions. Delays or other problems in settlement of transactions could result in temporary periods when the assets of the Scheme are not invested and no return is earned thereon. The inability of the Scheme to make intended securities purchases or sale could cause the Scheme to miss certain investment opportunities due to the absence of a well-developed and liquid secondary market for debt securities which would result at times, in potential underperformance in the Scheme. vi. Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities in the Scheme are reinvested. Investments in fixed income securities may carry reinvestment risk as the cash flows received may get invested at a lower rate of interest prevailing on the date of investment of cash flows viz. interest or redemptions received during the tenure of the scheme. vii. Pre-payment Risk: Certain fixed income securities give an issuer the right to call back its securities before their maturity date, in periods of declining interest rates. The possibility of such prepayment may force the fund to reinvest the proceeds of such investments in securities offering lower yields, resulting in lower interest income for the fund. viii. Risk from zero coupon securities: As zero coupon securities do not provide periodic interest payments to the holder of the security, these securities are more sensitive to changes in interest rates. Therefore, the interest rate risk of zero coupon securities is higher. The AMC may choose to invest in zero coupon securities that offer attractive yields. This may increase the risk of the portfolio. ix. Risk associated with floating rate securities: To the extent the Scheme’ investments are in floating rate debt instruments or fixed debt instruments swapped for floating rate return, they will be affected by: 33a) Interest rate movement (Basis Risk) - Coupon rates on floating rate securities are reset periodically in line with the benchmark index movement. Normally, the interest rate risk inherent in a floating rate instrument is limited compared to a fixed rate instrument. Changes in the prevailing level of interest rates will likely affect the value of the Scheme’ holdings until the next reset date and thus the value of the Scheme’ Units. The value of securities held by the Scheme generally will vary inversely with changes in prevailing interest rates. The Mutual Fund could be exposed to interest rate risk (i) to the extent of time gap in the resetting of the benchmark rates, and (ii) to the extent the benchmark index fails to capture interest rate changes appropriately; b) Spread Movement (Spread Risk) - Though the basis (i.e. benchmark) gets readjusted on a regular basis, the spread (i.e. markup) over benchmark remains constant. This can result in some volatility to the holding period return of floating rate instruments; c) Settlement Risk (Counterparty Risk) - Specific floating rate assets may also be created by swapping a fixed return into a floating rate return. In such a swap, there is the risk that the counterparty (who will pay floating rate return and receive fixed rate return) may default; d) Liquidity Risk: The market for floating rate securities is still in its evolutionary stage and therefore may render the market illiquid from time to time, for such securities that the Scheme are invested in. Risk factors associated with investments in debt instruments having Structured Obligations / Credit Enhancements: The Scheme may invest in debt instruments having credit enhancement (backed by assets such as equity shares/real estate or backed by payment mechanisms such as guarantees/ escrows of identified revenue streams). Typically, in such instruments, the profile of the underlying issuer tends to be relatively weaker. The risks with such credit enhanced structures include inability to sell and realize the collateral due to sharp prices moves of the underlying collateral values, erosion in collateral values, and illiquidity of collateral. There is a possibility of the guarantor or underlying issuer going insolvent which also can impact the recovery value of exposure. These instruments are typically less liquid in the secondary market which is an additional risk factor. In case of complex payment mechanisms, these may be challenged in legal courts by the unsecured creditors in case of bankruptcy of the underlying obligors which may result in delays or defaults in payments. Risk factors associated with investment in unrated securities: The scheme may invest in unrated securities as permitted under regulation. Investment in unrated securities involve a risk of default or decline in market value higher than rated instruments due to adverse economic and issuer-specific developments. Such investments display increased price sensitivity to changing interest rates and to a deteriorating economic environment. The market values for unrated investments tends to be more volatile and such securities tend to be less liquid than rated debt securities. Risk factors associated with Investment in special feature bonds: The scheme may invest in special feature bonds as permissible by the SEBI & scheme offer documents, which may be subordinate to the equity and thus may carry high credit risk and risk of capital loss. Some Tier 2 bonds issued by the banks under the Basel III norms may have such special features. Risk factors associated with investments in Perpetual Debt Instrument (PDI) Perpetual Debt instruments are issued by Banks, NBFCs and corporates to improve their capital profile. Some 34of the PDIs issued by Banks which are governed by the RBI guidelines for Basel III Capital Regulations are referred to as Additional Tier I (AT1 bonds). While there are no regulatory guidelines for issuance of PDIs by corporate bodies, NBFCs issue these bonds as per guidelines issued by RBI. The instruments are treated as perpetual in nature as there is no fixed maturity date. The key risks associated with these instruments are highlighted below: i. Risk on coupon servicing: a. Banks: As per the terms of the instruments, Banks have discretion at all times to cancel distributions/ payment of coupons. b. NBFCs: While NBFCs have discretion at all times to cancel payment of coupon, coupon can also be deferred (instead of being cancelled), in case paying the coupon leads to breach of capital ratios. c. Corporates: Corporates usually have discretion to defer the payment of coupon. However, the coupon is usually cumulative and any deferred coupon shall accrue interest at the original coupon rate of the PDI. ii. Risk of write-down or conversion into equity: a. Banks: As per current RBI guidelines, banks have to maintain a Common Equity Tier-1 (CET- 1) ratio of minimum 5.5% of Risk Weighted Assets (RWAs), failing which the AT-1 bonds can get written down. Further, AT-1 Bonds are liable to be written down or converted to common equity, at the discretion of RBI, in the event of Point of Non Viability Trigger (PONV). PONV is a point, determined by RBI, when a bank is deemed to have become non-viable unless there is a write off/ conversion to equity of AT-1 Bonds or a public sector capital injection happens. The write off/conversion has to occur prior to public sector injection of capital. This risk is not applicable in case of NBFCs and Corporates iii. Risk of instrument not being called by the Issuer: a. Banks: The issuing banks have an option to call back the instrument after minimum period of 5 years from the date of issuance and typically annually thereafter, subject to meeting the RBI guidelines. However, if the bank does not exercise the call on first call date, the Scheme may have to hold the instruments for a period beyond the first call exercise date. b. NBFCs: The NBFC issuer has an option to call back the instrument after minimum period of 10 years from date of issuance and typically annually thereafter, subject to meeting the RBI guidelines. However, if the NBFC does not exercise the call option the Scheme may have to hold the instruments for a period beyond the first call exercise date. c. Corporates There is no minimum period for call date. However, if the corporate does not exercise the call option, the Scheme may have to hold the instruments for a period beyond the call exercise date iv. Risk of rating downgrades: The Rating agencies, which rate the instruments, have a slightly different rating methodology for these Instruments compared to plain vanilla bonds. In the event of deterioration of the financial health of the Issuer or due to other reasons, the rating of the Perpetual Debt Instruments may be downgraded whilst the ratings of other bonds issued by the issuer may remain constant. In such a scenario, Perpetual Debt Instrument holders may incur losses on their investment v. Liquidity risk: There may be no active market for the Perpetual Debt Instruments on the platform of the Stock Exchanges. As a result, the liquidity and market prices of the Perpetual Debt Instruments may fail to develop and may accordingly be adversely affected. There is no assurance that a trading market for the Perpetual Debt Instruments will exist and no assurance as to the liquidity of any trading market. The liquidity and market prices of the Perpetual Debt Instruments can be expected to vary with changes in market and economic conditions, financial condition and prospects and other factors that generally influence market price of such instruments. Such fluctuations may significantly affect the liquidity and market price of these Instruments, which may trade at a discount to the 35price at which one purchases these instruments. Risk factors associated with investment in Tri-Party Repo: The mutual fund is a member of securities segment and Triparty Repo trade settlement of the Clearing Corporation of India (CCIL). All transactions of the mutual fund in government securities and in Tri-party Repo trades are settled centrally through the infrastructure and settlement systems provided by CCIL; thus reducing the settlement and counterparty risks considerably for transactions in the said segments. The members are required to contribute an amount as communicated by CCIL from time to time to the default fund maintained by CCIL as a part of the default waterfall (a loss mitigating measure of CCIL in case of default by any member in settling transactions routed through CCIL). As per the waterfall mechanism, after the defaulter’s margins and the defaulter’s contribution to the default fund have been appropriated, CCIL’s contribution is used to meet the losses. Post utilization of CCIL’s contribution if there is a residual loss, it is appropriated from the default fund contributions of the non-defaulting members. Thus the scheme is subject to risk of the initial margin and default fund contribution being invoked in the event of failure of any settlement obligations. In addition, the fund contribution is allowed to be used to meet the residual loss in case of default by the other clearing member (the defaulting member). CCIL shall maintain two separate Default Funds in respect of its Securities Segment, one with a view to meet losses arising out of any default by its members from outright and repo trades and the other for meeting losses arising out of any default by its members from Triparty Repo trades. The mutual fund is exposed to the extent of its contribution to the default fund of CCIL, in the event that the contribution of the mutual fund is called upon to absorb settlement/ default losses of another member by CCIL, as a result the scheme may lose an amount equivalent to its contribution to the default fund Risk associated with investments in repo of corporate debt securities: In repo transactions, also known as a repo or sale repurchase agreement, securities are sold with the seller agreeing to buy them back at later date. The repurchase price should be greater than the original sale price, the difference effectively representing interest. A repo is economically similar to a secured loan, with the buyer receiving corporate debt securities as collateral to protect against default. The Scheme may invest in repo of corporate debt securities which are subject to the following risks: i. Counterparty Risk: This refers to the inability of the seller to meet the obligation to buy back securities at the contracted price. The Investment Manager will endeavor to manage counterparty risk by dealing only with counterparties having strong credit profiles assessed through in-house credit analysis or with entities regulated by SEBI/RBI/IRDA ii. Collateral Risk: In the event of default by the repo counterparty, the scheme have recourse to the corporate debt securities. Collateral risk arises when the market value of the securities is inadequate to meet the repo obligations. This risk is mitigated by restricting participation in repo transactions only in AA and above rated money market and corporate debt securities. In addition, appropriate haircuts are applied on the market value of the underlying securities to adjust for the illiquidity and interest rate risk on the underlying instrument. Risks associated with segregated portfolio: i. Investor holding units of segregated portfolio may not able to liquidate their holding till the time recovery of money from the issuer. ii. Security comprises of segregated portfolio may not realise any or desired value. iii. Listing of units of segregated portfolio in recognised stock exchange does not necessarily guarantee their liquidity. There may not be active trading of units in the stock market. Further trading price of units on the stock market may be significantly lower than the prevailing NAV. 36Risks associated with investments in Securitized Assets: A securitization transaction involves sale of receivables by the originator (a bank, non-banking finance company, housing finance company, or a manufacturing/service company) to a Special Purpose Vehicle (SPV), typically set up in the form of a trust. Investors are issued rated Pass Through Certificates (PTCs), the proceeds of which are paid as consideration to the originator. In this manner, the originator, by selling his loan receivables to an SPV, receives consideration from investors much before the maturity of the underlying loans. Investors are paid from the collections of the underlying loans from borrowers. Typically, the transaction is provided with a limited amount of credit enhancement (as stipulated by the rating agency for a target rating), which provides protection to investors against defaults by the underlying borrowers. Some of the risk factors typically analyzed for any securitization transaction are as follows: • Risks associated with asset class: Underlying assets in securitised debt may assume different forms and the general types of receivables include commercial vehicles, auto finance, credit cards, home loans or any such receipts. Credit risks relating to these types of receivables depend upon various factors including macro - economic factors of these industries and economies. Specific factors like nature and adequacy of collateral securing these receivables, adequacy of documentation in case of auto finance and home loans and intentions and credit profile of the borrower influence the risks relating to the asset borrowings underlying the securitised debt. • Risks associated with pool characteristics: (a) Size of the loan: This generally indicates the kind of assets financed with loans. While a pool of loan assets comprising of smaller individual loans provides diversification, if there is excessive reliance on very small ticket size, it may result in difficult and costly recoveries. (b)Loan to Value Ratio: This Indicates how much percentage value of the asset is financed by borrower’s own equity. The lower LTV, the better it is. This ratio stems from the principle that where the borrowers own contribution of the asset cost is high, the chances of default are lower. To illustrate for a Truck costing Rs. 20 lakhs, if the borrower has himself contributed Rs.10 lakhs and has taken only Rs. 10 lakhs as a loan, he is going to have lesser propensity to default as he would lose an asset worth Rs. 20 lakhs if he defaults in repaying an installment. This is as against a borrower who may meet only Rs. 2 lakhs out of his own equity for a truck costing Rs. 20 lakhs. Between the two scenarios given above, the later would have higher risk of default than the former. (c) Original maturity of loans and average seasoning of the pool: Original maturity indicates the original repayment period and whether the loan tenors are in line with industry averages and borrower’s repayment capacity. Average seasoning indicates whether borrowers have already displayed repayment discipline. To illustrate, in the case of a personal loans, if a pool of assets consists of those who have already repaid 80% of the installments without default, this certainly is a superior asset pool than one where only 10% of installments have been paid. In the former case, the portfolio has already demonstrated that the repayment discipline is far higher. (d)Default rate distribution: This indicates how much % of the pool and overall portfolio of the originator is current, how much is in 0-30 DPD (days past due), 30-60 DPD, 60-90 DPD and so on. The rationale here is very obvious, as against 0-30 DPD, the 60-90 DPD is certainly a higher risk category. • Credit Rating and Adequacy of Credit Enhancement: Unlike in plain vanilla instruments, in securitisation transactions, it is possible to work towards a target credit rating, which could be much higher than the originator’s own credit rating. This is possible through a mechanism called “Credit enhancement”. The process of “Credit enhancement” is fulfilled by filtering the underlying asset classes and applying selection criteria, which further diminishes the risks inherent for a particular asset class. The purpose of credit enhancement is to ensure timely payment to the investors, if the actual collection from the pool of receivables for a given period is short of the contractual payout on securitisation. Securitisation is normally non-recourse instruments and therefore, the repayment on securitisation would have to come from the underlying assets and the credit enhancement. Therefore, the rating criteria centrally focus on the quality of the underlying assets. 37The Scheme will predominantly invest in those securitisation issuances which have AA and above rating indicating high level of safety from credit risk point of view at the time of making an investment. However, there is no assurance by the rating agency either that the rating will remain at the same level for any given period of time or that the rating will not be lowered or withdrawn entirely by the rating agency. • Limited Liquidity & Price Risk: Presently, the secondary market for securitised papers is not very liquid. There is no assurance that a deep secondary market will develop for such securities. This could limit the ability of the investor to resell them. Even if a secondary market develops and sales were to take place, these secondary transactions may be at a discount to the initial issue price due to changes in the interest rate structure. • Limited Recourse to Originator & Delinquency: Securitised transactions are normally backed by pool of receivables and credit enhancement as stipulated by the rating agency, which differ from issue to issue. The Credit Enhancement stipulated represents a limited loss cover to the Investors. These Certificates represent an undivided beneficial interest in the underlying receivables and there is no obligation of either the Issuer or the seller or the originator, or the parent or any affiliate of the seller, issuer and originator. No financial recourse is available to the Certificate Holders against the Investors” Representative. Delinquencies and credit losses may cause depletion of the amount available under the credit enhancement and thereby the investor payouts may get affected if the amount available in the credit enhancement facility is not enough to cover the shortfall. On persistent default of an obligor to repay his obligation, the servicer may repossess and sell the underlying Asset. However, many factors may affect, delay or prevent the repossession of such asset or the length of time required to realize the sale proceeds on such sales. In addition, the price at which such asset may be sold may be lower than the amount due from that Obligor. • Risks due to possible prepayments: Weighted Tenor / Yield: Asset securitisation is a process whereby commercial or consumer credits are packaged and sold in the form of financial instruments Full prepayment of underlying loan contract may arise under any of the following circumstances; a. Obligor pays the receivable due from him at any time prior to the scheduled maturity date of that receivable; or b. Receivable is required to be repurchased by the seller consequent to its inability to rectify a material misrepresentation with respect to that Receivable; or c. The servicer recognizing a contract as a defaulted contract and hence repossessing the underlying asset and selling the same. d. In the event of prepayments, investors may be exposed to changes in tenor and yield. • Bankruptcy of the Originator or Seller: If originator becomes subject to bankruptcy proceedings and the court in the bankruptcy proceedings concludes that the sale from originator to trust was not a sale then an Investor could experience losses or delays in the payments due. All possible care is generally taken in structuring the transaction so as to minimize the risk of the sale to Trust not being construed as a ‘True Sale’. Legal opinion is normally obtained to the effect that the assignment of Receivables to Trust in trust for and for the benefit of the Investors, as envisaged herein, would constitute a true sale. • Bankruptcy of the Investor’s Agent: If Investor’s agent, becomes subject to bankruptcy proceedings and the court in the bankruptcy proceedings concludes that the recourse of Investor’s Agent to the assets/receivables is not in its capacity as agent/Trustee but in its personal capacity, then an Investor could experience losses or delays in the payments due under the agreement. All possible care is normally taken in structuring the transaction and drafting the underlying documents so as to provide that the assets/receivables if and when held by Investor’s Agent is held as agent and in Trust for the Investors and shall not form part of the personal assets of Investor’s Agent. Legal opinion is normally obtained to the effect that the Investors Agent’s recourse to assets/receivables is restricted in its capacity as agent and trustee and not in its personal capacity. 38• Risk of co-mingling: The servicers normally deposit all payments received from the obligors into the collection account. However, there could be a time gap between collection by a servicer and depositing the same into the collection account especially considering that some of the collections may be in the form of cash. In this interim period, collections from the loan agreements may not be segregated from other funds of the servicer. If the servicer fails to remit such funds due to Investors, the Investors may be exposed to a potential loss. Due care is normally taken to ensure that the Servicer enjoys highest credit rating on standalone basis to minimize co-mingling risk. • Risks relating to tax incidence on securitization Special Purpose Vehicles: In October 2011, the income tax authorities issued a claim on certain securitisation SPVs, stating that the gross income of such SPVs was liable to tax. The matter is presently under sub judice with the Bombay High Court. Several industry participants approached the Ministry of Finance (MoF) to seek clarity and reinforce the “pass through” status of a securitisation SPV. The Finance Bill, 2013, has sought to clarify the tax position by stating that securitisation SPVs are not liable to pay income tax. However, any tax incidence on gross income of SPVs could result in dilution of payouts to investors. Risks Associated with fixed income Derivatives: The Scheme may invest in fixed income derivatives for swap of fixed rate debt instruments swapped to floating rate or floating rate debt instruments swapped to fixed rate, hedging and portfolio rebalancing or any other purposes as may be permitted under regulatory guidelines. The Scheme may use derivative instruments like Interest Rate Swaps, Forward Rate Agreements or other derivative as may be permitted by SEBI / RBI / such other Regulatory Authority from time to time. The use of derivatives may expose the Scheme to a higher degree of risk. In particular, derivative contracts can be highly volatile, and the amount of initial margin is generally small relative to the size of the contract so that transactions may be leveraged in terms of market exposure. A relatively small market movement may have a potentially larger impact on derivatives than on standard bonds or equities. Leveraged derivative positions can therefore increase Scheme volatility. Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor. Execution of such strategies depends upon the ability of the fund manager to identify such opportunities. Identification and execution of the strategies to be pursued by the fund manager involve uncertainty and decision of fund manager may not always be profitable. No assurance can be given that the fund manager will be able to identify or execute such strategies. The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Derivatives require the maintenance of adequate controls to monitor the transactions and the embedded market risks that they add to the portfolio. Besides the price of the underlying asset, the volatility, tenor and interest rates affect the pricing of derivatives. Identification and execution of the strategies to be pursued involve uncertainty and decision of the Investment Manager may not always be profitable. No assurance can be given that the Investment Manager will be able to identify or execute such strategies. Other risks in using derivatives include but are not limited to: a) Counterparty Risk - this occurs when a counterparty fails to abide by its contractual obligations and therefore, the Schemes are compelled to negotiate with another counter party, at the then prevailing (possibly unfavourable) market price. For exchange traded derivatives, the risk is mitigated as the exchange provides the guaranteed settlement but one takes the performance risk on the exchange b) Market Liquidity risk – this occurs where the derivatives cannot be transacted due to limited trading volumes and/or the transaction is completed with a severe price impact. c) Model Risk - the risk of mispricing or improper valuation of derivatives 39d) Basis Risk arises due to a difference in the price movement of the derivative vis-à-vis that of the security being hedged Risk factors with respect to imperfect hedging using interest rate futures: An Interest Rate Futures is an agreement to buy or sell a debt instrument at a specified future date at a price that is fixed today. Interest Rate Futures are Exchange traded. These future contracts are cash settled. Perfect Hedging means hedging the underlying using IRF contract of same underlying. Imperfect hedging means the underlying being hedged and the IRF contract has correlation of closing prices of more than 90%. In case of imperfect hedging, the portfolio can be a mix of: i) Corporate Bonds and Government securities or ii) Only Corporate debt securities or iii) Only government securities with different maturities Risk associated with imperfect hedging includes: Basis Risk: The risk arises when the price movements in derivative instrument used to hedge the underlying assets does not match the price movements of the underlying assets being hedged. Such difference may potentially amplify the gains or losses, thus adding risk to the position. Price Risk: The risk of mispricing or improper valuation and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. Risk of mismatch between the instruments: The risk arises if there is a mismatch between the prices movements in derivative instrument used to hedge, compared to the price movement of the underlying assets being hedged. For example when IRF which has government security as underlying is used, to hedge a portfolio that contains corporate debt securities. Correlation weakening and consequent risk of regulatory breach: SEBI Regulation mandates minimum correlation criterion of 0.9 (calculated on a 90 day basis) between the portfolio being hedged and the derivative instrument used for hedging. In cases where the correlation falls below 0.9, a rebalancing period of 5 working days has been permitted. Inability to satisfy this requirement to restore the correlation level to the stipulated level, within the stipulated period, due to difficulties in rebalancing would lead to a lapse of the exemption in gross exposure computation. The entire derivative exposure would then need to be included in gross exposure, which may result in gross exposure in excess of 100% of net asset value. Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor. Execution of such strategies depends upon the ability of the investment manager to identify such opportunities. Identification and execution of the strategies to be pursued by the investment manager involve uncertainty and decision of investment manager may not always be profitable. No assurance can be given that the investment manager will be able to identify or execute such strategies. The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Risks associated with transacting in scheme units through stock exchange mechanism In respect of transactions in units of the schemes through NSE and/or BSE or any other recognized stock exchange promoted platforms, allotment and redemption of Units on any Business Day will depend upon the 40order processing/settlement by NSE, BSE or such other exchange and their respective clearing corporations on which the AMC and Fund has no control. Further, transactions conducted through the stock exchange mechanism shall be governed by the operating guidelines and directives issued by NSE, BSE or such other recognized exchange in this regard. Risk Factor associated with Close-ended Schemes Investing in close-ended Schemes is more appropriate for seasoned investors. A close-ended Scheme endeavors to achieve the desired returns only at the scheduled maturity of the Scheme. Investors who wish to exit/redeem before the scheduled maturity date may do so through the stock exchange mode, if they have opted to hold Units in a demat form, by mentioning their demat details on the NFO application form. For the units listed on the exchange, it is possible that the market price at which the units are traded may be at a discount to the NAV of such Units. Hence, Unit Holders who sell their Units in a Scheme prior to maturity may not get the desired returns. Risk Factor associated with Listing of Units a. Trading in the Units of the Schemes on the Exchange may be halted because of market conditions or for reasons in view of the Exchange Authorities or SEBI, rendering trading in the Units of the Schemes inadvisable. In addition, trading of the Units of the Schemes is subject to trading halts caused by extraordinary market volatility and pursuant to the Stock Exchange’s/market regulator’s ‘circuit filter’ rules. There can be no assurance that the requirements of the concerned Stock Exchange necessary to maintain the listing of the units of the Schemes will remain unchanged. b. Unit holders may find it difficult or uneconomical to liquidate their investments at any particular time. For the units listed on the exchange, it is possible that the market price at which the units are traded may be at a discount to the NAV of such Units. As a result, a Unit holder must be prepared to hold the units until the maturity of the Schemes. c. Although the Units of the Schemes will be listed on the Stock Exchange, there can be no assurance that an active secondary market will develop or be maintained. d. The Units of the Schemes may trade at a significant discount or premium on the Stock Exchange. The NAV of the Schemes will fluctuate in accordance with market supply and demand for the units of the Schemes as well as be affected by changes in NAV. e. Regulatory Risk: Any changes in trading regulations by the Stock Exchange or SEBI among other things may also result in a wider premium/ discount to the NAV of the Schemes. Although the Units are proposed to be listed on the Stock Exchange, the AMC and the Trustees will not be liable for any loss suffered by investors due to delay in listing of units of the Schemes on the Stock Exchange or due to connectivity problems with the depositories due to the occurrence of any event beyond their control. f. In case of investments by NRIs during NFO, at the time of redemption of units, TDS will be deducted at the applicable rate. However, in respect of those Unit Holders who have acquired the Units on the Stock Exchange, the Unit Holders would need to provide a certificate from a Chartered Accountant certifying the details of acquisition of Units to the Fund within two days before the maturity of the Scheme, so as to enable the Fund to deduct TDS at the applicable rates. In the event of such details not being provided, the Fund would deduct TDS on the redemption proceeds at the highest rate of TDS applicable. g. The Trustee reserves the right to list the Units of the Schemes on any other recognized Stock Exchange in India, as may be deemed fit, in which case the investors may face risks related to an undeveloped market, delay in settlements etc. h. There may be acts/omissions on the part of the Stock Exchange resulting in the cancellation of Unit Holder’s orders or the execution of orders on erroneous terms. Risk associated with principles of efficient portfolio management: The Scheme may use models, techniques and instruments for efficient portfolio management and may also attempt to hedge or reduce the risk. The Scheme’s ability to use these techniques may be limited by market conditions, regulatory limits and tax considerations (if any). The use of these techniques is further dependent 41on the ability to predict movements in the prices of securities being hedged and movements in macro variables such as interest rates. There exists an imperfect correlation between the hedging instruments and the securities or market sectors being hedged. Thus due to mentioned bottleneck these techniques and instruments if imperfectly used have the risk of the Scheme incurring losses due to mismatches particularly in a volatile market. There could be possible absence of a liquid market for any particular instrument at any particular time even though the futures and options may be bought and sold on an exchangeS. Further the returns from the types of securities or assets in which the scheme invests may under perform returns of general Securities markets or different asset classes. Different types of Securities tend to go through cycles of out-performance and under-performance in comparison of Securities markets. Risk associated with favorable taxation of certain scheme in India: In any event beyond the control of AMC if the scheme is not able to invest the minimum % of the threshold that it is required to invest in eligible asset classes as per the domestic income tax regulation and rule, the benefit of lower tax, if any, on income distribution or capital gains may not be available to the Unit Holders. The summary of tax implications given in the taxation section (Units and Offer Section) is based on the existing provisions of the tax laws. The current taxation laws may change due to change in the domestic Tax Act or any subsequent changes / amendments in Finance Act / Rules / Regulations. Such change may entail a higher tax to the scheme or to the investors by way of any tax as made applicable thus adversely impacting the scheme. The investors are requested to consult their tax counsel for detail understanding of the tax laws and the risk factor associated with such tax laws. SO no. 9 C. Risk mitigation strategies Risks associated with Debt Securities and Money Market Securities: i. Market Liquidity Risk: The liquidity risk will be managed and/or sought to be addressed by creating a portfolio which has adequate access to liquidity. The Investment Manager will select fixed income securities, which have or are expected to have high secondary market liquidity. Market Liquidity Risk will be managed actively within the portfolio liquidity limits by maintaining proper asset-liability match to ensure payout of the obligations. Amongst all the segments of the fixed income market in India, the government securities market demonstrates the highest market liquidity. The liquidity varies from security to security with benchmark securities for the reference tenors like 10 years, 5 years etc. showing relatively higher market liquidity. With time, the benchmark government security changes and thus hence liquidity propagates from one security to the other. ii. Credit Risk: Credit Risk associated with fixed income securities (including and not limited to instruments having structured obligations, credit enhancements, special features or are unrated) will be managed by making investments in securities issued by borrowers post detailed credit review internally. The credit research process includes a detailed in-house analysis and due diligence where limits are assigned for each of the issuer (other than government of India) for the amount as well as maximum permissible tenor. The credit process ensures that issuer limits are reviewed periodically by taking into consideration the financial statements and operating strength of the issuer. iii. Rating Migration Risk: The endeavor is to invest in well researched issuers. The due diligence performed by the fixed income team before assigning credit limits and the periodic credit review and monitoring should help keep the rating migration risk low for company-specific issues. 42iv. Interest Rate Risk: The investment managers will endeavor to keep the duration within the permissible limit as defined by the scheme document and based on the investment objectives. v. Re-investment Risk: The Investment Manager will endeavor that besides the tactical and/or strategic interest rate calls, the portfolio is fully invested. vi. Term Structure of Interest Rates (TSIR) Risk: The Scheme is expected to have duration based on the investment objective and limits defined in the scheme documents. Depending on the nature of the scheme, the Term Structure of Interest Rates (TSIR) Risk cannot be eliminated and it exists as a primary feature of the scheme. Risks associated with fixed income Derivative investments: Investment managers will ensure adherence to the limits and the guidelines as issued by SEBI / RBI and as mentioned in the scheme offer document from time to time for forward rate agreements and interest rate swaps and other fixed income derivative products. Risks associated with favorable taxation of certain Scheme: Investment Manager regular monitor’s investment thresholds of Scheme of the Fund house to ensure compliance with the relevant tax laws & regulation. Risk associated with investments in repo of corporate debt securities: The Investment Manager will endeavor to manage counterparty risk in corporate debt repos by dealing only with counterparties having strong credit profiles or through tri-party corporate repos done on the exchange platforms. The collateral risk is mitigated by restricting participation in repo transactions only in AA and above rated money market and corporate debt securities, where potential for downgrade/default is low. In addition, appropriate haircuts are applied on the market value of the underlying securities to adjust for the illiquidity and interest rate risk on the underlying instruments. Risk Management & Liquidity Management Tools DSP mutual fund schemes as mandated wide various SEBI & AMFI circulars, have adopted the following for risk management & liquidity management tools Potential Risk Matrix (PRC) & Risk-o-meter: Investors are requested to review this scheme’s Potential Risk Matrix (PRC) to understand the maximum risk that this scheme will run as per design and & Risk-o- meter to understand periodical measurement of that risk on a regular basis. Investor are suggested to read about various disclosures under the section “C.PERIODIC DISCLOSURES” pertaining to “Compliance with Potential Risk Class Matrix norms” & “Risk-o-meter” to understand in detail the disclosure frequency and remedial measures in case of breaches in the boundaries. II. Information about the scheme: A. Where will the scheme invest Detailed description of the instruments (including overview of debt markets in India, if applicable) mentioned in Section I Government Securities created and issued by the Central Government and/or a State Securities Government (including Treasury Bills) or Government Securities as defined in the Government Securities Act, 2006, as amended or re- enacted from time to time. 43Derivatives Derivatives are financial contracts of pre-determined fixed duration, whose values are derived from the value of an underlying primary financial instrument, commodity or index, such as: interest rates, exchange rates, commodities, and equities. Money Commercial papers, commercial bills, treasury bills, Government Market securities having an unexpired maturity up to one year, call or notice Instruments money, certificate of deposit, usance bills, and any other like instruments having maturity upto 1 year Repos & Repo (Repurchase Agreement) or Reverse Repo is a transaction in which Reverse two parties agree to sell and purchase the same security with an Repos agreement to purchase or sell the same security at a mutually decided future date and price. The transaction results in collateralized borrowing o r lending of funds. TREPS TREPs is a money market instrument that enables entities to borrow and lend against sovereign collateral security. The maturity ranges from 1 day to 90 days and can also be made available upto 1 year. Central Government securities including T-bills are eligible securities that can be used as collateral for borrowing through TREPs. Credit Default A Credit Default Swap (CDS) is a financial derivative that allows an investor Swaps (CDS) to "swap" or offset their credit risk with that of another investor. Essentially, it is a form of insurance against the default of a borrower. The buyer of a CDS makes periodic payments to the seller and, in return, receives a payoff if the underlying financial instrument (such as a bond or loan) defaults. CDS are commonly used to hedge against the risk of default or to speculate on the creditworthiness of an entity. Debt Debt instruments with Structured Obligation (SO) or Credit Enhancement (CE) instruments ratings are bonds or loans that have been enhanced with additional credit with SO/CE support to reduce default risk. SO ratings indicate that the instrument's Rating creditworthiness is improved through structural mechanisms like collateral, guarantees, or insurance. CE ratings signify that external support, such as a third-party guarantee or letter of credit, bolsters the instrument's credit profile. These enhancements provide greater security to investors, often resulting in higher credit ratings and lower interest rates compared to non- enhanced debt instruments. Usance Bills A usance bill, also known as a time draft or usance draft, is a type of bill of exchange that allows the buyer a specific period, known as the usance period, to pay the seller after receiving the goods or services. This financial instrument provides the buyer with a credit period, facilitating smoother cash flow and working capital management. Interest Rate An interest rate swap (IRS) is a derivative contract where two parties Swaps exchange interest payments based on a notional amount. One party typically pays a fixed rate, while the other pays a floating rate pegged to a benchmark. IRS help manage interest rate risk or speculate on future rate movements. Forward Rate A forward rate agreement (FRA) is a short-term interest rate locking Agreement mechanism. Two parties agree on a fixed rate for a future loan or deposit, protecting them from interest rate changes. The difference between the agreed rate and the market rate at settlement is settled in cash, making FRAs a popular hedging tool in the OTC market. 44Interest Rate Interest rate derivatives are contracts linked to future interest rate Derivatives movements. Used for hedging or speculation, they allow parties to lock in rates (e.g., swaps) or bet on rate changes (e.g., options). Common types include interest rate swaps, forward rate agreements, and options. These are complex instruments with risks, requiring careful understanding and risk management. Zero Coupon A zero-coupon bond is a type of debt security that does not pay periodic Bonds interest (coupons). Instead, it is issued at a significant discount to its face value and matures at its full face value. Return from the bond is the difference between the purchase price and the amount received at maturity. Treasury Bills Treasury bills (T-bills) are short-term government securities issued at a discount to their face value and mature within one year. They do not pay periodic interest but provide returns by maturing at their full face value, with the difference between the purchase price and the maturity value representing the investor's earnings. T-bills are considered low-risk investments due to government backing. Corporate Debt Corporate debt refers to bonds or other forms of debt securities issued by companies to raise capital. Investors lend money to the corporation in exchange for periodic interest payments and the return of the principal amount at maturity. This type of debt is used by companies to fund operations, expansions, or other financial needs. Convertible Convertible securities are financial instruments, such as bonds or preferred Securities shares, that can be converted into a predetermined number of the issuing company's common stock. This conversion can typically be done at the holder's discretion and is often subject to specific terms and conditions. Convertible securities offer the potential for capital appreciation through stock price increases while providing downside protection through fixed interest payments or dividends. Debt Obligations Debt obligations of the Government of India include financial instruments like of Government Government Bonds (G-Secs), Treasury Bills (T-Bills), Savings Bonds, and of India Sovereign Gold Bonds (SGBs). These instruments are issued to finance government expenditures and manage monetary policy, offering varying maturities and interest rates. G-Secs are long-term securities with semi- annual interest payments, while T-Bills are short-term, issued at a discount. These debt obligations are considered low-risk investments due to government backing, providing stable returns and portfolio diversification. Debt Obligations Debt obligations of State Governments of India primarily include State of State Development Loans (SDLs). SDLs are bonds issued by state governments to Government of finance their budgetary needs and developmental projects. These bonds have India varying maturities, typically ranging from 1 to 10 years, and offer fixed interest payments. SDLs are considered relatively safe investments, as they are backed by the state governments' revenues and, to some extent, the central government. Debt Obligations Debt obligations of local governments in India, such as municipal bonds, are of Local financial instruments issued by urban local bodies (ULBs) to fund Governments of infrastructure projects and other development activities. These bonds India typically offer fixed interest payments and have varying maturities. 45Participation Participation Certificates, including pass-through and pay-through certificates certificates, represent an investor's interest in a pool of assets such as receivables. Pass-through certificates directly pass the principal and interest payments from the asset pool to investors, minus servicing fees. Pay-through certificates restructure these cash flows before passing them to investors, allowing for different tranches with varied risk and return profiles. These instruments offer investors exposure to the underlying assets' cash flows, providing diversification and potentially attractive returns. Units of Mutual Units of mutual funds represent an investor's share in a mutual fund scheme. Funds When investors buy mutual fund units, they pool their money with other investors to collectively invest in a diversified portfolio of assets such as stocks, bonds, or other securities. Each unit reflects the proportionate ownership of the fund's assets. The value of these units, known as the Net Asset Value (NAV), fluctuates based on the performance of the underlying assets. Securitised debt Securitised debt refers to financial instruments created through the process of securitisation, where various types of receivables or loans (such as mortgages, auto loans, or credit card debt) are pooled together and transformed into tradable securities. These securities, often in the form of bonds or notes, are then sold to investors. Securitised debt instruments allow issuers to convert illiquid assets into liquid funds and provide investors with access to diversified income streams backed by the underlying assets. Common forms include mortgage-backed securities (MBS) and asset-backed securities (ABS). Structured Structured Notes are hybrid financial instruments that combine traditional Notes debt securities with derivative components to offer customized investment solutions. These notes typically pay a return based on the performance of an underlying asset, index, or benchmark, such as stocks, commodities, interest rates, or currencies. Structured notes are designed to meet specific investment objectives, providing features like principal protection, enhanced yields, or leverage. While they can offer attractive returns and tailored risk exposure, they also carry higher complexity and risk compared to traditional fixed-income securities, making them suitable for more sophisticated investors. Bills re- Bills re-discounting is a financial practice where banks purchase bills of discounting exchange from other financial institutions at a discounted rate, providing immediate liquidity to the selling institution. This transaction allows banks to manage their short-term liquidity needs efficiently, as they can convert their assets into cash before their maturity dates. Fixed Income Fixed income securities issued by domestic government agencies and statutory Securities of bodies are debt instruments that provide regular interest payments and return domestic the principal amount at maturity. These securities are typically considered Government low-risk investments due to the backing of government-related entities. agencies and Examples include bonds issued by public sector undertakings (PSUs), municipal statutory bodies bonds, and securities from other government-affiliated organizations. 46Commercial Commercial Papers (CPs) are short-term, unsecured debt instruments issued Papers by corporations, financial institutions, and other large entities to meet their immediate funding needs, such as working capital requirements. Typically issued at a discount to face value and with maturities ranging from a few days to one year, CPs offer investors a relatively safe, liquid investment option with competitive returns compared to other short-term instruments. Due to their short maturity periods, CPs are often used by companies as a cost- effective alternative to bank loans for short-term financing needs. Commercial Bills Commercial Bills are short-term, negotiable financial instruments used in trade finance, representing a written order from one party (the drawer) to another (the drawee) to pay a specified amount to the bearer or a named party (the payee) at a future date. They are commonly used by businesses to finance their working capital needs by enabling the seller of goods to receive immediate payment, while the buyer gets a credit period to make the payment. These bills can be discounted with banks or financial institutions before maturity, providing liquidity to the holder. They play a crucial role in facilitating trade transactions and managing short-term funding requirements. Certificate of A Certificate of Deposit (CD) is a short- to medium-term, interest-bearing deposit deposit instrument issued by banks and financial institutions to individuals or corporations. CDs have a fixed maturity date, typically ranging from a few months to several years, and offer a fixed interest rate higher than regular savings accounts. They are negotiable and can be traded in the secondary market before maturity. CDs provide a low-risk investment option for investors seeking predictable returns, as they are generally insured and backed by the issuing institution's creditworthiness. Coupon bearing Coupon-bearing bonds are debt securities that pay periodic interest bonds payments, known as coupons, to bondholders based on a fixed or variable interest rate. These bonds have a predetermined maturity date, at which the issuer repays the principal amount to the bondholder. The coupon rate is typically stated as a percentage of the bond's face value and determines the amount of interest paid to the bondholder at each coupon payment date. They are commonly issued by governments, municipalities, corporations, and other entities to raise capital for various projects and operations. State State development loan (SDL) is a bond issued by a state government to fund development its various developmental projects and infrastructure initiatives loan (SDL) Short Term Pending deployment of funds as per the investment objective of the Scheme, Deposits the Funds may be parked in short term deposits of the Scheduled Commercial Banks, subject to guidelines and limits specified by SEBI. Investment in units of schemes of own/other Mutual Fund The Scheme may invest in other Schemes managed by the AMC or in the Schemes of any other Mutual Fund(s), provided such investment is in conformity to the investment objectives of the Scheme and in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for 47such investments and the aggregate inter-scheme investment made by all Schemes of the Mutual Fund or in the Scheme under the management of other asset management companies shall not exceed 5% of the net asset value of the Mutual Fund. Inter scheme asset transfer Transfer of investments from one Scheme to another Scheme in the Mutual Fund shall be allowed as per guidelines prescribed under clause 12.30 of the SEBI Master Circular and amendments made from time to time. Further, clause 9.11 of the SEBI Master Circular, has prescribed the methodology for determination of price to be considered for inter-scheme transfers. Investment in Short-Term Deposits Pending deployment of the funds of the Scheme shall be in terms of clause 12.16 of the SEBI Master Circular, the AMC may invest funds of the Scheme in short term deposits of scheduled commercial banks, subject to following conditions: 1. The term ‘short term’ for parking of funds shall be treated as a period not exceeding 91 days. 2. Such deposits shall be held in the name of the Scheme. 3. The Scheme shall not park more than 15% of its net assets in the short term deposit(s) of all the scheduled commercial banks put together. However, it may be raised to 20% with the prior approval of the Trustee. Also, parking of funds in short term deposits of associate and sponsor scheduled commercial banks together shall not exceed 20% of total deployment by the Mutual Fund in short term deposits. 4. The Scheme shall not park more than 10% of its net assets in short term deposit(s) with any one scheduled commercial bank including its subsidiaries. 5. The Trustee shall ensure that the funds of the Scheme are not parked in the short term deposits of a bank which has invested in that Scheme. 6. AMC will not charge any investment management and advisory fees for parking of funds in short term deposits of scheduled commercial banks. 7. The Trustee shall also ensure that the bank in which a scheme has short term deposits do not invest in the scheme until the scheme has short term deposits with such bank. The above provisions do not apply to term deposits placed as margins for trading in cash and derivative market. Investment limits for investing in HFCs SO no. 31 AMC shall ensure that total exposure in a particular sector (excluding investments in Bank CDs, TREPS, G- Secs, TBills, short term deposits of Scheduled Commercial Banks and AAA rated securities issued by Public Financial Institutions and Public Sector Banks) shall not exceed 20% of the net assets of the scheme and an additional exposure to financial services sector (over and above the limit of 20%) not exceeding 10% of the net assets of the scheme shall be allowed only by way of increase in exposure to HFCs. The additional exposure to such securities issued by HFCs should be rated AA and above and these HFCs should be registered with National Housing Bank (NHB) and the total investment/ exposure in HFCs shall not exceed 20% of the net assets of the Scheme. Further, an additional exposure of 5% shall be allowed for investments in securitized debt instruments based on retail housing loan portfolio and/or affordable housing loan portfolio. Investment in Domestic Securitized Debt Depending upon the Investment Manager’s views, the Schemes may invest in domestic securitized debt such as ABS or MBS. The investments in domestic securitized debt will be made only after giving due consideration to factors such as but not limited to the securitization structure, quality of underlying receivables, credentials of the servicing agent, level of credit enhancement, liquidity factor, returns provided by the securitized paper vis-a-vis other comparable investment alternatives. 48Although the returns provided by securitized debt could be higher, one must not lose sight of the fact that risks also exist with regard to investments in securitized debt. Investments in pass-through certificates of a securitization transaction represent an undivided beneficial interest in the underlying receivables and do not represent an obligation of either the issuer or the seller, or the parent of the seller, or any affiliate of the seller or the issuer or the trustee in its personal capacity, save to the extent of credit enhancement to be provided by the credit enhancer. The trust’s principal asset will be the pool of underlying receivables. The ability of the trust to meet its obligations will be dependent on the receipt and transfer to the designated account of collections made by the servicing agent from the pool, the amount available in the cash collateral account, and any other amounts received by the trust pursuant to the terms of the transaction documents. However, the credit enhancement stipulated in a securitization transaction represents a limited loss cover only. Delinquencies and credit losses may cause depletion of the amount available under the cash collateral account and thereby the scheduled payouts to the investors may get affected if the amount available in the cash collateral account is not enough to cover the shortfall. Further Unit holders are requested to refer below the disclosure relating to investments in securitized debt, in the SEBI prescribed format: (i) How the risk profile of securitized debt fits into the risk appetite of the scheme The scheme seeks to generate an attractive return, consistent with prudent risk, from a portfolio which is substantially constituted of quality debt securities. The scheme also seeks to generate capital appreciation by investing a smaller portion of its corpus in equity and equity related securities of issuers domiciled in India. In line with the investment objective, securitised debt instruments having a high credit quality commensurate with other debt instruments in the portfolio and in line with internal fund manager guidelines will be considered for investment. (ii) Policy relating to originators based on nature of originator, track record, NPAs, losses in earlier securitized debt, etc The parameters used to evaluate originators are • Track record • Willingness to pay, through credit enhancement facilities etc. • Ability to pay • Business risk assessment, wherein following factors are considered: - Outlook for the economy (domestic and global) - Outlook for the industry - Company specific factors In addition, a detailed review and assessment of rating rationale is done including interactions with the originator as well as rating agency. Critical Evaluation Parameters (for pool loan) regarding the originator / underlying issuer: • Default track record/ frequent alteration of redemption conditions / covenants • High leverage ratios of the ultimate borrower - both on a standalone basis as well on a consolidated level/ group level • Higher proportion of re-schedulement of underlying assets of the pool or loan, as the case may be • Higher proportion of overdue assets of the pool or the underlying loan, as the case may be • Poor reputation in market • Insufficient track record of servicing of the pool or the loan, as the case may be. 49(iii) Risk mitigation strategies for investments with each kind of originator Analysis of originator: Dedicated credit research analysts, analyses and evaluates each originator and sets up limits specifying both the maximum quantum and maximum tenor for investments and investments are considered only within these limits. Originator analysis typically encompasses: • Size and reach of the originator • Collection process, infrastructure and follow-up mechanism • Quality of MIS • Credit enhancement for different type of originator (iv) The level of diversification with respect to the underlying assets, and risk mitigation measures for less diversified investments Eligible assets: Only assets with an established track record of low delinquencies and high credit quality over several business cycles will be considered for investment. Analysis of pool: Characteristics such as average pool maturity (in months), average loan to value ratio, average seasoning of the pool, maximum single exposure, geographical distribution and average single exposure are studied to determine pool quality Risk mitigating measures: Credit enhancement facilities (including cash, guarantees, excess interest spread, subordinate tranches), liquidity facilities and payment structure are studied in relation to historical collection and default behavior of the asset class to ensure adequacy of credit enhancement in a stress scenario. (v) Minimum retention period of the debt by originator prior to securitization We will follow the guidelines on minimum holding period requirements as laid down by SEBI and RBI from time to time. (vi) Minimum retention percentage by originator of debts to be securitized We will follow the guidelines on minimum holding period requirements as laid down by SEBI and RBI from time to time. (vii) The mechanism to tackle conflict of interest when the Mutual Fund invests in securitized debt of an originator and the originator in turn makes investments in that particular scheme of the Fund The AMC has a rigorous credit due diligence process for all fixed income investments, which also encompasses securitized debt. A dedicated team of credit analysts is responsible for credit research and surveillance. (viii) The resources and mechanism of individual risk assessment with the AMC for monitoring investment in securitized debt The AMC has a rigorous risk management process for all fixed income investments, which also encompasses securitized debt. Dedicated credit research analysts are responsible for monitoring risks including credit and liquidity risk. The functions of the team include: 50• Detailed credit analysis of issuers: based on the management evaluation, operating strength and financial strength to determine suitability for investment. Periodic reviews on a quarterly/annual basis are under taken for eligible issuers. Ratings are monitored on a daily basis and any changes are immediately recorded and suitable action taken. For securitized pool loan exposures, the analysis includes pool seasoning, pool asset quality, diversification, collateral margin, originator analysis and credit enhancement mechanisms. Pool performance statistics published by rating agencies are analyzed for performance of other securitised pools of the same originator as well as for the performance of the asset class as a whole. Regular interactions with the rating agencies are done to discuss performance trends. Documents are vetted by the legal and compliance team. In addition, monthly payout reports from the trustees are analysed for collection performance and adequacy of cash collateral. Framework that is applied while evaluating investment decision relating to a pool securitization transaction: Commercial Characteristic Mortgage Vehicle and s CAR 2 wheelers Others Loan Construction / Type of Pool Equipment Approximate In line with In line with average In line with In line with In line with Average average maturity of average average maturity average maturity (in maturity of Commercial Vehicle maturity of car of two-wheeler maturity of Months) mortgage and Construction loans as per loans as per the asset loans as per Equipment loans as industry norms. industry norms. class as per industry per industry norms. Typically less Typically less than industry norms. Typically less than 4 than 4 years. 4 years. norms. Typically less years. than 10 years. Collateral The collateral The collateral margin The collateral The collateral The margin margin will be will be adequate for margin will be margin will be collateral (including adequate for the pool to achieve a adequate for adequate for the margin will cash, the pool to rating in the high the pool to pool to achieve a be adequate guarantees, achieve a safety category at the achieve a rating in the high for the pool excess rating in the time of initial rating. rating in the safety category at to achieve a interest high safety The collateral margin high safety the time of initial rating in the spread, category at will ensure at least a category at the rating. The high safety subordinate the time of 3 times cover over time of initial collateral margin category at tranche) initial rating. historical losses rating. The will ensure at least the time of The collateral observed in the asset collateral a 3 times cover initial margin will class. margin will over historical rating. ensure at ensure at least losses observed in The least a 3 times a 3 times cover the asset class. collateral cover over over historical margin will historical losses observed ensure at losses in the asset least a 3 observed in class. times cover the asset over class. historical losses observed in the asset class. 51Commercial Characteristic Mortgage Vehicle and s CAR 2 wheelers Others Loan Construction / Type of Pool Equipment Average Loan In line with In line with average In line with In line with In line with to Value Ratio average Loan Loan to Value ratio of average Loan average Loan to average to Value ratio Commercial Vehicle to Value ratio Value ratio of two- Loan to of mortgage and Construction of car loans as wheeler loans as Value ratio loans as per Equipment loans as per per industry per industry of the asset industry industry norms. norms. norms. Typically class loans norms. Typically less than 85 Typically less less than 85 per as per per cent. than 85 per cent. industry Typically less cent. norms. than 80 per cent. Average In line with In line with industry In line with In line with In line with seasoning of industry norms and guidelines industry norms industry norms industry the Pool norms and laid down by RBI/SEBI and guidelines and guidelines laid norms and guidelines laid from time to time. laid down by down by RBI/SEBI guidelines down by Typically, more than 3 RBI/SEBI from from time to time. laid down RBI/SEBI from months time to time. Typically, more by RBI/SEBI time to time. Typically, more than 3 months from time Typically, than 3 months to time. more than 3 months Maximum Not more Not more than 10% Not more than Not more than Not more single than 10% 10% 10% than 10% exposure range Average single Not more Not more than 10% Not more than Not more than Not more exposure than 10% 10% 10% than 10% range % *Kindly note that all references to single loan securitization has been removed as securitization of single corporate loans are no longer envisaged under revised RBI guidelines on securitization Investments in derivatives SEBI has permitted all the mutual funds to participate in the derivatives trading subject to observance of guidelines issued by SEBI in this behalf. Pursuant to this, the mutual funds may use various derivative and hedging products from time to time, as would be available and permitted by SEBI, in an attempt to protect the value of the portfolio and enhance Unit holders' interest. Derivatives are financial contracts of pre-determined fixed duration, whose values are derived from the value of an underlying primary financial instrument, commodity or index, such as interest rates, exchange rates, commodities, and equities. The fixed Income derivative market has made considerable progress in last two years. Interest rate swaps have become an integral part of Risk Management practice for most banks. Corporate Treasury have issued Innovative instruments like floating rate debt and constant maturity swaps. 521. Interest Rate Swap (IRS) Any swap is effectively an exchange of one set of cash-flows for another considered to be of equal value. If the exchange of cash flows is linked to interest rates, it becomes an interest rate swap. An interest rate swap is an agreement between two parties to exchange future payment streams based on a notional amount. Only the interest on the notional amount is swapped, and the principal amount is never exchanged. In a typical interest rate swap, one party agrees to pay a fixed rate over the term of the agreement and to receive a variable or floating rate of interest. The counterparty receives a stream of fixed rate payments at regular intervals as described in the agreement and pays the floating rate of interest. A fixed/ floating interest rate swap is characterized by: 1. Fixed interest rate; 2. Variable or floating interest rate, which is periodically reset; 3. Notional principal amount upon which total interest payments are based; and 4. The terms of the agreement, including a schedule of interest rate reset dates, payment dates and termination date. The primary reason for engaging in an interest rate swap is to hedge the interest rate exposure. An illustration could be an institution having long-term fixed rate assets (longer tenor securities receiving fixed rate) in a rising interest rate environment; it can hedge the interest rate exposure by purchasing an interest rate swap where the institution receives floating interest rate and pays fixed rate. In this case, an interest rate swap is likely to reduce the duration and interest rate volatility of the fund. Example: Terms: Fixed Interest Rate : 8.50% p.a. Variable Interest Rate : NSE Over-Night MIBOR reset daily and compounded daily Notional Principal Amount: Rs.100 Crore Period of Agreement : 1 year Payment Frequency : Semi-annual Now, suppose the six-month period from the effective date of the swap to the first payment date comprises 182 days and the daily compounded NSE Over-Night MIBOR is 8.15% p.a. on the first payment date, then the fixed and variable rate payment on the first payment date would be as follows: Fixed rate payment: Rs. 4,23,83,562 = (Rs.100,00,00,000) x (8.50%) x (182 Days / 365 Days) Variable rate payment: Rs. 4,06,38,356 = (Rs.100,00,00,000) x (8.15%) x (182 Days / 365 Days) Often, a swap agreement will call for only the exchange of net amount between the counterparties. In the above example, the fixed-rate payer will pay the variable-rate payer a net amount of Rs. 17,45,205 = Rs. 4,23,83,562 - Rs. 4,06,38,356. The second and final payment will depend on the daily NSE MIBOR compounded daily for the remaining 183 days. The fixed rate payment will also change to reflect the change in holding period from 182 days to 183 days. 2. Forward Rate Agreement (FRA) An FRA is an off balance sheet agreement to pay or receive on an agreed future date, the difference between an agreed interest rate and the interest rate actually prevailing on that future date, calculated on an agreed notional principal amount. It is settled against the actual interest rate prevailing at the beginning of the period to which it relates rather than paid as a gross amount. An FRA is referred to by the beginning and end dates of the period covered. Thus a 5x8 FRA is one that covers a 3-month period beginning in 5-months and ending in 8-months. FRAs are purchased to hedge the 53interest rate risk; an investor facing uncertainty of the interest rate movements can fix the interest costs by purchasing an FRA. An illustration could be a corporation having floating rate debt linked to an index such as say, 3-Month MIBOR. If the existing interest cost is at 8% on Rs.100 Crore for the next three months, the corporation can purchase a 3x6 FRA @ 8.1% on Rs.100 Crore and fix the interest cost for the 3-6 months period. If the actual 3-Month MIBOR after 3-months is at 8.25%, the corporation has saved 15 bps in interest cost. As the settlement is done at the beginning of the period, the savings in interest expense are discounted to a present value using a 3-month rate to calculate the actual settlement amount. The flows for the institution will be, as follows: Interest Savings = Rs. 100 Crore * 15 bps * 92/365 (assuming 92 days in the 3 month FRA period and 365 days in the conventional year) = Rs.3,78,082.19 Settlement Amount = Rs.3,78,082.19/ (1+8.25%*92/365) Please note that the above examples are hypothetical in nature and the figures are assumed. 3. Interest Rate Futures An Interest Rate Futures (‘IRF’) contract is "an agreement to buy or sell a debt instrument at a specified future date at a price that is fixed today." The underlying security for Interest Rate Futures is either Government Bond or T-Bill. Interest Rate Futures are Exchange traded and standardized contracts based on 6 year, 10 year and 13 year Government of India Security and 91-day Government of India Treasury Bill (91DTB). These future contracts are cash settled. These instruments can be used for hedging the underlying cash positions. The overall gross exposure for a fund is computed as sum of exposure to equity, cash, debt instruments and derivatives (other than for hedging purposes) and it should not be more than 100%. Derivative position is considered to be for hedging purposes only if the following conditions are met: 1. Perfect Hedging - We hedge the underlying using IRF contract of same underlying 2. Imperfect hedging – the Underlying being hedged and the IRF contract has a 90 day correlation of closing prices of more than 90%. In case of correlation breaking at any time the derivative position would be counted as an exposure. SEBI allows maximum of 20% imperfect hedging. For example, assume a portfolio comprising the following structure: Security Amount (crs) Price (Rs) IGB 6.79% 2027 100 100.40 IGB 6.79% 2029 50 98.35 IGB 7.72% 2025 25 104.55 Cash 25 Total 200 Assuming the fund manager intends to hedge the portfolio using IRF and uses contracts on IGB 6.79% 2027 as it is most liquid. Maximum imperfect hedging allowed, based on SEBI limit of 20% for the above fund is 200*20% = 40 crs Maximum perfect hedging using 6.79% 2027 is 100 crs (as amount of 6.79% 2027 in the fund is 100 crs) Total hedge the fund can do = 100 crs + 40 crs =140 crs 54Assuming the 90 day historical correlation between the instruments in the portfolio are as follows 90 day historical correlation IGB 6.79% 2027 IGB 6.79% 2029 IGB 7.72% 2025 IGB 6.79% 2027 1 0.95 0.80 IGB 6.79% 2029 0.95 1 0.75 IGB 7.72% 2025 0.80 0.75 1 Given that we are using IRF on 6.79% 2027, we can hedge 6.79% 2029 using IRFs as correlation is more than 90% upto 40 crs (based on the 20% limit of imperfect hedging). Since one contract of IRF has a notional of Rs. 2 lakhs, in this example the fund manager sells Rs. 140 crores/2 lakhs = 7000 contracts, to hedge his position. Hence after hedging the fund is as shown below: Security Amount (crs) Price (Rs) Comments IGB 6.79% 2027 100 100.40 100% hedged – Perfect hedging IGB 6.79% 2029 50 98.35 40% hedged – Imperfect hedging IGB 7.72% 2025 25 104.55 Unhedged Cash 25 Unhedged IRF 6.79% 2027 140 100.35 Total 200 At maturity of the Interest Rate Futures Case 1: bonds close higher than at the time the hedge was entered into Amount Price before Price on maturity of Security Gain Net Gain (lakhs) (crs) hedging(Rs) hedge (Rs) IGB 6.79% 2027 100 100.4 100.5 0.1 10.00 IGB 6.79% 2029 50 98.35 98.5 0.15 7.50 IGB 7.72% 2025 25 104.55 104.6 0.05 1.25 Cash 25 - Without IRF 18.75 IRF 6.79% 2027 140 100.35 100.5 -0.15 (21.00) Total With IRF 200 (2.25) Case 2: bonds close lower than at the time the hedge was entered into Security Amount Price before Price on maturity of Gain Net Gain (lakhs) (crs) hedging hedge (Rs) IGB 6.79% 2027 100 100.4 100.3 -0.1 (10.00) IGB 6.79% 2029 50 98.35 98.23 -0.12 (6.00) IGB 7.72% 2025 25 104.55 104.5 -0.05 (1.25) Cash 25 - Without IRF (17.25) IRF 6.79% 2027 140 100.35 100.3 0.05 7.00 Total with IRF 200 (10.25) 55As can be seen in the cases above, in case yields move higher, IRFs help in reducing the loss to the fund. With respect to investments made in derivative instruments, the Scheme shall comply with the following exposure limits in line with clause 12.24.1 and clause 12.25 of the SEBI Master Circular: 1. The cumulative gross exposure through equity, debt, derivative positions (including commodity and fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by SEBI from time to time should not exceed 100% of the net assets of the scheme. However, the following shall not be considered while calculating the gross exposure: a. Security-wise hedged position and b. Exposure in cash or cash equivalents with residual maturity of less than 91 days. 2. Exposure due to hedging positions may not be included in the above mentioned limits subject to the following: a. Hedging positions are the derivative positions that reduce possible losses on an existing position in securities and till the existing position remains. b. Hedging positions cannot be taken for existing derivative positions. Exposure due to such positions shall have to be added and treated under limits mentioned in Point 1. c. Any derivative instrument used to hedge has the same underlying security as the existing position being hedged. d. The quantity of underlying associated with the derivative position taken for hedging purposes does not exceed the quantity of the existing position against which hedge has been taken. 3. (a) Mutual Funds may enter into plain vanilla Interest Rate Swaps (IRS) for hedging purposes. The value of the notional principal in such cases must not exceed the value of respective existing assets being hedged by the scheme. (b) In case of participation in IRS is through over the counter transactions, the counter party has to be an entity recognized as a market maker by RBI and exposure to a single counterparty in such transactions should not exceed 10% of the net assets of the scheme. However, if mutual funds are transacting in IRS through an electronic trading platform offered by the Clearing Corporation of India Ltd. (CCIL) and CCIL is the central counterparty for such transactions guaranteeing settlement, the single counterparty limit of 10% shall not be applicable. 4. Exposure due to derivative positions taken for hedging purposes in excess of the underlying position against which the hedging position has been taken, shall be treated under the limits mentioned in point 1. Investments in debt instruments with SO/CE rating– The Scheme shall invest in Debt instruments having Structured Obligations/Credit Enhancements in accordance with provisions of clause 4.3.1 of Master Circular as may be amended by SEBI from time to time. The same are currently as under: The investment of the Scheme in the following instruments shall not exceed 10% of the debt portfolio of the Scheme and the group exposure in such instruments shall not exceed 5% of the debt portfolio of the Scheme: a. Unsupported rating of debt instruments (i.e. without factoring-in credit enhancements) is below investment grade; and b. Supported rating of debt instruments (i.e. after factoring-in credit enhancement) is above investment grade. 56For this purpose, a group means a group as defined under regulation 2 (mm) of the Regulations and shall include an entity, its subsidiaries, fellow subsidiaries, its holding company and its associates. However the above Investment limits shall not be applicable on investments in securitized debt instruments, as defined in SEBI (Public Offer and Listing of Securitized Debt Instruments) Regulations 2008. Investment in debt instruments, having credit enhancements backed by equity shares directly or indirectly, shall have a minimum cover of 4 times considering the market value of such shares. Investments in repo of corporate debt securities Guidelines for participation of mutual funds in Repo in corporate debt securities. SEBI has vide Clause 12.18 of the SEBI Master Circular enabled mutual funds to participate in repos in corporate debt securities as per the guidelines issued by RBI from time to time and subject to few conditions listed in the circular. Accordingly, the Scheme may participate in Repo in corporate debt securities in accordance with directions issued by RBI and SEBI from time to time and in accordance with guidelines framed by the Board of AMC and Trustee Company in this regard. Conditions applicable: - • The net exposure of any Mutual Fund scheme to repo transactions in corporate debt securities shall not be more than 10 % of the net assets of the Scheme. • The cumulative gross exposure through debt, derivative positions, repo transactions in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by the Board from time to time should not exceed 100% of the net assets of the scheme. • Mutual funds shall participate in repo transactions only in AA and above rated corporate debt securities. These conditions will be subject to any revisions announced by SEBI from time to time. Other Guidelines i. Category and credit rating of counter party: 1. SEBI regulated mutual funds 2. RBI regulated Banks, Non-Banking Finance Companies, Primary Dealers 3. IRDA regulated Insurance companies 4. Corporates for whom credit limits have been assigned are eligible counterparties. These corporates should have a minimum investment grade credit rating. For new counterparties, approval from Head – Risk will be taken and an assessment will be done by the Risk & Quantitative Analysis team. ii. Tenor of collateral: <=20 years for corporate debt securities. iii. Applicable haircuts: RBI, in its circular no. IDMD.PCD. 09 /14.03.02 /2012-13 dated January 7, 2013 prescribed the following minimum haircuts on the market value of the underlying security: a. AAA rated: 7.5% b. AA+ rated: 8.5% c. AA rated: 10% The above haircuts are subject to change based on how market practice evolves with respect to corporate bond repo. Prior approval of the Investment committee shall be sought for change in the haircut from existing % to such other % as deemed fit. iv. Valuation of repo assets: At cost. Investment in unrated instruments 57As per 12.1.5 of SEBI Master Circular, Investment in unrated debt and money market instruments, other than government securities, treasury bills, derivative products such as Interest Rate Swaps (IRS), Interest Rate Futures (IRF), etc. shall be subject to the following: a) Investments should only be made in such instruments, including bills re-discounting, usance bills, etc., that are generally not rated and for which separate investment norms or limits are not provided in SEBI (Mutual Fund) Regulations, 1996 and various circulars issued thereunder. b) Exposure of mutual fund schemes in such instruments shall not exceed 5% of the net assets of the schemes. All such investments shall be made with the prior approval of the Board of AMC and the Board of trustees. Overview of Debt Market in India The Indian bond market comprises mainly of Government securities; State Development Loans (SDL), bonds issued by Public Sector Undertakings (PSU), Development Financial Institutions (DFI) and Infrastructure– related agencies; debentures and money market instruments issued by corporate sectors and banks. The Government of India routinely issues Government securities and Treasury bills for liquidity and fiscal management. While the Government issues Treasury bills for 91 days, 182 days and 364 days in a discounted form, coupon-bearing Government securities are issued for maturity ranging from 1 year to as high as 50 years. Both Treasury bills and coupon-bearing securities are auctioned by the RBI on behalf of the Government of India. The Indian bond market has also witnessed issuance of bonds from Government- sponsored institutions, DFIs, and infrastructure-related agencies. These bonds are rated by credit rating agencies like CRISIL, ICRA, CARE and India Ratings. They are widely held by market participants because of their liquidity and reduced risk perception due to the government stake in some of them. The Indian corporate sector has also been frequently raising capital through issuance of non-convertible debentures and commercial papers. These debentures/commercial Papers are mostly rated by rating agencies like CRISIL, ICRA, CARE and India Ratings. There is an active and vibrant secondary market for these debentures/commercial Papers. These normally trade at a marginally higher yield than bonds issued by PSU and other government-sponsored agencies. Overview of Money Market in India Money market instruments includes commercial papers, commercial bills, treasury bills, Government securities having an unexpired maturity up to one year, call or notice money, certificate of deposit, usance bills, and any other like instruments as specified by the Reserve Bank of India from time to time. Money market assets are liquid and actively traded segment of fixed income markets. Treasury bills are issued by the Government of India through regular weekly auctions, while Cash Management Bills are issued on an ad-hoc basis. They are mostly subscribed by banks, state governments, mutual funds and other entities. As on 26 Sep 2025, total outstanding treasury bills are Rs. 7,54,280 crore*. Certificate of Deposits are issued by scheduled banks for their short-term funding needs. They are normally available for up to 365 days tenor. Certificate of deposits issued by public sector banks are normally rated A1+ (highest short-term rating) by various rating agencies. As on 19 Sep 2025, outstanding Certificate of Deposits are Rs. 5,01,817 crore*. Certificate of deposits currently trade at a spread of around 80-85 basis points over comparable treasury bills as on 6 Oct 2025, for a one-year tenor. Commercial Papers are issued by corporate entities for their short-term cash requirements. Commercial Papers are normally rated A1+ (highest short-term rating). As on 30 Sep 2025, total outstanding Commercial Papers are Rs. 4,88,263 crore*. Commercial papers trade at around 115 basis points** over comparable treasury bills as on 6 Oct 2025, for a one-year tenor. 58Call Money, TREPS and CROMS are mainly used by the borrowers to borrow a large sum of money on an over- night basis. While Call Money is an unsecured mode of borrowing, TREPS and CROMS are secured borrowing backed by collaterals approved by the Clearing Corporation of India. *Source: Reserve Bank of India Bulletin, Weekly Statistical Supplement, October 3, 2025 B. What are the Investment Restrictions? As per the Trust Deed read with the SEBI (MF) Regulations, the following investment restrictions apply in respect of the Scheme at the time of making investments. However, all investments by the Scheme will be made in accordance with the Investment Objective and Investment Pattern described earlier, as well as the SEBI (MF) Regulations, including Schedule VII thereof, as amended from time to time. Subject to the asset allocation table under Section II Part C of this document, the following investment restrictions are presently applicable: 1. (i) The Scheme shall not invest more than 10% of its NAV in debt instruments comprising money market instruments and non-money market instruments issued by a single issuer which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the SEBI Act 1992. Such investment limit may be extended to 12% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of AMC. Clause 12.8 of the SEBI Master Circular introduced the following norms for credit rating based single issuer limit for actively managed mutual fund schemes. A Scheme shall not invest more than: a. 10% of its NAV in debt and money market securities rated AAA; or b. 8% of its NAV in debt and money market securities rated AA; or c. 6% of its NAV in debt and money market securities rated A and below issued by a single issuer. The above investment limits may be extended by up to 2% of the NAV of the scheme with prior approval of the Board of Trustees and Board of Directors of the AMC, subject to compliance with the overall 12% limit specified in clause 1 of Seventh Schedule of the Mutual Fund Regulation. Provided that such limit shall not be applicable for investments in Government securities, T-Bills and triparty repo on Government securities or treasury bills. Provided further that investment within such limit can be made in mortgaged backed securitised debt which are rated not below investment grade by a credit rating agency registered with the Board. (ii) The Scheme shall not invest in unlisted debt instruments including commercial papers (CPs), other than (a) government securities, (b) other money market instruments and (c) derivative products such as Interest Rate Swaps (IRS), Interest Rate Futures (IRF), etc. which are used by mutual funds for hedging. Provided that Mutual Fund Schemes may invest in unlisted Non-Convertible Debentures (NCD) upto a maximum of 10% of the debt portfolio of the scheme subject to the condition that such unlisted NCDs have a simple structure (i.e. with fixed and uniform coupon, fixed maturity period, without any options, fully paid up upfront, without any credit enhancements or structured obligations) and are rated and secured with coupon payment frequency on monthly basis. 59(iii) Investment in unrated debt and money market instruments, other than government securities, treasury bills, derivative products such as Interest Rate Swaps (IRS), Interest Rate Futures (IRF), etc. shall be subject to the following: a. Investments should only be made in such instruments, including bills re-discounting, usance bills, etc., that are generally not rated and for which separate investment norms or limits are not provided in SEBI (Mutual Fund) Regulations, 1996 and various circulars issued thereunder. b. Exposure of mutual fund schemes in such instruments shall not exceed 5% of the net assets of the schemes. All such investments shall be made with the prior approval of the Board of AMC and the Board of trustees. 2. All fresh investments by mutual fund schemes in CPs would be made only in CPs which are listed or to be listed. 3. Restrictions on Investment in debt instruments having Structured Obligations / Credit Enhancements: The investment of mutual fund schemes in the following instruments shall not exceed 10% of the debt portfolio of the schemes and the group exposure in such instruments shall not exceed 5% of the debt portfolio of the schemes: i.Unsupported rating of debt instruments (i.e. without factoring-in credit enhancements) is below investment grade and ii.Supported rating of debt instruments (i.e. after factoring-in credit enhancement) is above investment grade. iii.Investment limits as mentioned above shall not be applicable on investments in securitized debt instruments, as defined in SEBI (Public Offer and Listing of Securitized Debt Instruments) Regulations 2008. iv.Investment in debt instruments, having credit enhancements backed by equity shares directly or indirectly, shall have a minimum cover of 4 times considering the market value of such shares. For this purpose, a group means a group as defined under regulation 2 (mm) of SEBI (Mutual Funds) Regulations, 1996 (Regulations) and shall include an entity, its subsidiaries, fellow subsidiaries, its holding company and its associates. 4. Transfer of investments from one Scheme to another Scheme in the Mutual Fund shall be allowed as per guidelines prescribed under clause 12.30 of the SEBI Master Circular and amendments made from time to time. Also SEBI vide Clause No. 9.11 of the SEBI Master Circular has prescribed the methodology for determination of price to be considered for inter-scheme transfers. 5. The Scheme may invest in another scheme (except fund of funds Schemes) under the AMC or any other mutual fund without charging any fees, provided that the aggregate inter-scheme investment made by all Scheme under the same management or in Scheme under the management of any other asset management company shall not exceed 5% of the Net Asset Value of the Mutual Fund. 6. The Scheme shall not invest in Fund of Funds scheme. 7. The Mutual Fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relevant securities and in all cases of sale, deliver the securities. Provided further that sale of government security already contracted for purchase shall be permitted in accordance with the guidelines issued by the RBI in this regard. 8. The Mutual Fund shall get the securities purchased/transferred in the name of the Mutual Fund on account of the Scheme, wherever the instruments are intended to be of a long term nature. 9. Pending deployment of funds of the Scheme, the AMC may invest funds of the Scheme in short-term 60deposits of scheduled commercial banks shall be in terms of clause 12.16 of the SEBI Master Circular: 1. “Short Term” for parking of funds shall be treated as a period not exceeding 91 days. 2. Such short-term deposits shall be held in the name of the Scheme. 3. The Scheme shall not park more than 15% of their net assets in the short term deposit(s) of all the scheduled commercial banks put together. However, it may be raised to 20% with the prior approval of the Trustee. Also, parking of funds in short term deposits of associate and sponsor scheduled commercial banks together shall not exceed 20% of total deployment by the Mutual Fund in short term deposits. 4. The Scheme shall not park more than 10% of their net assets in short term deposit(s) with any one scheduled commercial bank including its subsidiaries. 5. The Trustee shall ensure that the funds of the Scheme are not parked in the short term deposits of a bank which has invested in the Scheme. 6. AMC will not charge any investment management and advisory fees for parking of funds in short term deposits of scheduled commercial banks. 7. The Trustee shall also ensure that the bank in which a scheme has short term deposits do not invest in the scheme until the scheme has short term deposits with such bank. The above provisions do not apply to term deposits placed as margins for trading in cash and derivative market. 10. The Scheme shall not make any investment in: a. any unlisted security of any associate or group company of the Sponsors; or b. any security issued by way of private placement by an associate or group company of the Sponsors; or c. the listed securities of group companies of the Sponsors, which is in excess of 25% of the net assets, except for investments by equity oriented exchange traded funds and index funds and subject to such conditions as may be specified by the SEBI. 11. The net exposure of the Scheme to repo transactions in corporate debt securities shall not be more than 10 % of the net assets of the Scheme. 12. The Scheme will not make investment in REIT/INVITS and shall not invest in Debt instruments with Special Features (AT1 and AT2 Bonds). 13. The Scheme will not invest in foreign debt securities. 14. Save as otherwise expressly provided under SEBI (MF) Regulations, the Mutual Fund shall not advance any loans for any purpose and the Mutual Fund shall not borrow except to meet temporary liquidity needs of the Scheme for the purpose of payment of interest or IDCWs to Unit Holders, provided that the Mutual Fund shall not borrow more than 20% of the net assets of the Scheme and the duration of such borrowing shall not exceed a period of six months. 15. If any company invests more than 5 percent of the NAV of any of the Scheme, investment made by that Scheme or any other Scheme of the Mutual Fund in that company or its subsidiaries will be disclosed in accordance with the SEBI (MF) Regulations. 16. The total exposure of all Debt oriented Schemes in a particular sector (excluding investments in Bank CDs, TREPS, G-Secs, TBills, short term deposits of Scheduled Commercial Banks and AAA rated securities issued by Public Financial Institutions and Public Sector Banks) shall not exceed 20% of the net assets of the scheme and an additional exposure to financial services sector (over and above the limit of 20%) not exceeding 10% of the net assets of the scheme shall be allowed only by way of increase in exposure to HFCs. The additional exposure to such securities issued by HFCs should be rated AA and above and these HFCs should be registered with National Housing Bank (NHB) and the total investment/ exposure in HFCs shall not exceed 20% of the net assets of the Scheme. Further, an additional exposure of 5% shall be allowed for investments in securitized debt instruments based 61on retail housing loan portfolio and/or affordable housing loan portfolio. At the time of investment, the AMC would use Association of Mutual Funds in India (AMFI) defined sector category. The list of sector/category of investment including rating and limits are subject to regulatory changes. 17. i) The total exposure of the Scheme in a particular group (excluding investments in securities issued by Public Sector Units, Public Financial Institutions and Public Sector Banks) shall not exceed 20% of the net assets of the Scheme. Such investment limit may be extended to 25% of the net assets of the Scheme with the prior approval of the Board of Trustees. ii) The investments by debt mutual fund schemes in debt and money market instruments of group companies of both the sponsor and the asset management company shall not exceed 10% of the net assets of the scheme. Such investment limit may be extended to 15% of the net assets of the scheme with the prior approval of the Board of Trustees. For this purpose, a group means a group as defined under regulation 2 (mm) of SEBI (Mutual Funds) Regulations, 1996 (Regulations) and shall include an entity, its subsidiaries, fellow subsidiaries, its holding company and its associates. 18. The cumulative gross exposure through debt, derivative positions (including commodity and fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by the Board from time to time should not exceed 100% of the net assets of the scheme. However, the following shall not be considered while calculating the gross exposure: a) Security-wise hedged position and b) Exposure in cash or cash equivalents with residual maturity of less than 91 days. 19. No sponsor of a mutual fund, its associate or group company including the asset management company of the fund, through the schemes of the mutual fund or otherwise, individually or collectively, directly or indirectly, have – a. 10% or more of the share-holding or voting rights in the asset management company or the trustee company of any other mutual fund; or b. representation on the board of the asset management company or the trustee company of any other mutual fund. 20. The Scheme shall invest only in such securities which mature on or before the date of the maturity of the Scheme in accordance to SEBI Guidelines. 21. In accordance with clause 12.7 of the SEBI Master Circular close ended debt scheme can invest only in such securities which mature on or before the date of the maturity of the scheme. Accordingly, close ended debt schemes shall not invest in perpetual bonds. 22. The Scheme will comply with any other Regulation applicable to the investments of mutual funds from time to time. 23. The Scheme shall not invest in foreign securitized debt. These investment limitations/parameters as expressed (linked to the Net Asset/Net Asset Value/capital) shall, in the ordinary course, apply as at the date of the most recent transaction or commitment to invest, and changes do not have to be effected merely because, owing to appreciation or depreciation in value or 62by reason of the receipt of any rights, bonuses or benefits in the nature of capital or of any Scheme of arrangement or for amalgamation, reconstruction or exchange, or at any repayment or redemption or other reason outside the control of the Mutual Fund, any such limits would thereby be breached. If these limits are exceeded for reasons beyond its control, the AMC shall adopt as a priority objective the remedying of that situation, taking due account of the interests of the Unit Holders. Apart from the Investment Restrictions prescribed under the SEBI (MF) Regulations, there are internal risk parameters for limiting exposure to a particular security, country or sector. Such parameters are prescribed from time to time to respond to the dynamic market conditions and market opportunities. The Trustee /AMC may alter the above stated limitations from time to time, and also to the extent the SEBI (MF) Regulations change, so as to permit the Scheme to make their investments in the full spectrum of permitted investments in order to achieve their investment objective. All investment restrictions shall be applicable at the time of making investments. C. Fundamental Attributes SO no. 60 Following are the Fundamental Attributes of the scheme, in terms of Clause 1.14 of SEBI Master Circular: (i) Type of Scheme • A Close Ended Debt Scheme. A ______________ Interest Rate Risk and ______________ Credit Risk. (ii) Investment Objective • Main Objective – Please refer “Highlights/Summary of the Scheme” • Investment pattern – Please refer “How will the Scheme allocate its assets?” • Potential Risk Class: Please refer to PRC matrix disclosed on the cover page. The PRC reflects the maximum risks (i.e., interest rate risk and credit risk) that the Scheme can take. The Scheme would have the flexibility to move downwards on the risk scale. However, any permanent change in the positioning of a Scheme into a cell resulting in a risk (in terms of credit risk or duration risk) which is higher than the maximum risk specified for the chosen PRC cell, shall be considered as a fundamental attribute change of the Scheme in terms of Regulation 18(15A) of SEBI (Mutual Fund) Regulations, 1996. The Mutual Fund shall inform the unitholders about subsequent changes, if any, in the PRC through SMS and by providing a link on the website referring to the said change. However, the PRC value of a Scheme could change temporarily due to price movements, rating changes, investment actions, etc. Any such temporary change in the PRC cell of a scheme to a higher risk scale for either credit risk or duration risk beyond the maximum risk specified for the chosen PRC cell shall be subject to rebalancing in terms of provisions specified in the SID. PRC cell chosen does not reflect the scheme’s pre-existing holdings as on June 7, 2021, i.e. date of SEBI Circular pertaining to perpetual bonds (including debt instruments with special features viz. subordination to equity which absorbs losses before equity capital and/ or convertible to equity upon trigger of a pre- specified event for loss absorption, for instance Additional Tier I bonds issued under Basel III framework) with respect to the Macaulay Duration and maturity thresholds specified therein, till the time such bonds are held by the scheme. (iii) Terms of Issue • Liquidity provisions such as listing, repurchase, redemption. Please refer, “Highlights/Summary of the Scheme” • Aggregate fees and expenses charged to the Scheme. Please refer, “Annual Scheme Recurring Expenses” • Any safety net or guarantee provided – Not applicable. In accordance with Regulation 18(15A) of the SEBI (MF) Regulations and Clause 1.14.1.4 of SEBI Master Circular for Mutual Funds the Trustees shall ensure that no change in the fundamental attributes of the Scheme(s) and the Plan(s) / Option(s) thereunder or the trust or fee and expenses payable or any other 63change which would modify the Scheme(s) and the Plan(s) / Option(s) thereunder and affect the interests of Unitholders is carried out unless: • SEBI has reviewed and provided its comments on the proposal; • A written communication about the proposed change is sent to each Unit Holder and an advertisement is given in one English daily newspaper having nationwide circulation as well as in a newspaper published in the language of the region where the Head Office of the Mutual Fund is situated; and • The Unit Holders are given an option for a period of 30 days to exit at the prevailing NAV without any exit load. D. Index methodology Not applicable E. Principles of incentive structure for market makers Not applicable F. Floors and ceiling within a range of 5% of the intended allocation against each sub class of asset, as per clause 13.6.2 of Sebi master circular for mutual funds. As mentioned under the heading “How will the Scheme Allocate its assets- Section A -Part II of Section I. G. OTHER SCHEME SPECIFIC DISCLOSURES: Listing and transfer of units The Units of the Schemes will be listed on the Mutual Fund Segment of BSE within 5 business days of allotment. BSE has vide its letter no. LO/IPO/AP/MF/IP/48/2025-26 dated October -7, 2025 provided in-principle approval to the Mutual Fund for listing of the Units of the Schemes on BSE. The Mutual Fund may at its sole discretion list the Units under the respective Schemes on any other recognized Stock Exchange(s) at a later date. The Trustee shall issue an addendum for listing of Units on any other recognised Stock Exchange in India, and a public notice to this effect will be given in two newspapers and also displayed at the Investor Service Centres. All regulatory procedures will be followed in this regard. An investor can buy/sell Units on a continuous basis on BSE and/or any other Stock Exchange(s) on which the Units are listed during the trading hours like any other publicly traded stock. The Mutual Fund reserves the right to suspend/deactivate/freeze trading of the Schemes and do all such matters with respect to closure of the Scheme at any time upto 10 days prior to the maturity. The proceeds of the maturity will be payable to the persons/beneficial owners/lien holders whose names appear in the beneficiary position as on the record date for maturity, as per the information available from the depositories. The record date for determining the Unit holders whose name(s) appear on the list of beneficial owners as per the Depositories 64(NSDL/CDSL) records for the purpose of redemption of Units on Maturity / Final Redemption date (“Maturity Record Date”) will be one working day prior to the Maturity / Final Redemption date. The stock exchange(s) will suspend trading in Units one working day prior to the Maturity Record Date. No separate notice will be issued by the AMC informing about Maturity Record Date or Suspension of trading by the stock exchange. However, the Fund reserves the right to change the Maturity Record Date by issue of suitable notice. The price of the Units in the market will depend on demand and supply at that point of time. There is no minimum investment, although Units are purchased in round lots of 1. As the Stock Exchange(s) do not allow trading of fractional units, Units may be allotted only in integers by rounding off the Units allotted to the lower integer and the balance amount may be refunded to the investor. Transaction Cost: Though there will be no entry/exit load for buying/selling the Units from/to the secondary market, the investors will have to bear the other costs related to transacting in the secondary market, e.g. brokerage, Goods and Service Tax (GST), etc. The Schemes will be de-listed after their respective tenures. The AMC/Trustee will initiate the delisting procedure prior to the date of maturity. The Unit holders will not be able to trade on the stock exchange once the Schemes are delisted. Transfer of Units: The Unit holders are given an option to hold the Units by way of an Account Statement (physical form) or in Dematerialized (demat form). Transfer of Units is possible in Demat and as well as in non demat. A unitholder, in a close ended scheme listed on a recognized stock exchange, who desires to trade in units shall hold units in dematerialised form. Units held in Demat form are transferable (subject to lock-in period, if any and subject to lien, if any marked on the units) in accordance with the provisions of SEBI (Depositories and Participants) Regulations, 2018, as may be amended from time to time. Transfer can be made only in favor of transferees who are capable of holding Units and having a Demat Account. The delivery instructions for transfer of Units will have to be lodged with the DP in requisite form as may be required from time to time and transfer will be effected in accordance with such rules / regulations as may be in force governing transfer of securities in dematerialized mode. Further, for the procedure of release of lien, the investors shall contact their respective DP. 65Transfer of units held in Non-Demat [Statement of Account (‘SOA’)] mode: As per the AMFI Best Practices Guidelines Circular No.116 /2024- 25 dated August 14, 2024 read with AMFI Best Practices Guidelines Circular No. 119/2025-26 dated May 08, 2025 and such other circulars/ guidelines issued thereunder from time to time, on ‘Standard Process for Transfer of Units held in Non-Demat (SoA) mode’, units held by individual unitholders in Non-Demat (‘SoA’) mode can be transferred only in following cases- 1. Surviving joint unitholder, who wants to add new joint holder(s) in the folio upon demise of one or more joint unitholder(s). 2. A nominee of a deceased unitholder, who wants to transfer the units to the legal heirs of the deceased unitholder, post the transmission of units in the name of the nominee. 3. A minor unitholder who has turned a major and has changed his/her status from minor to major, wants to add the name of the parent / guardian, sibling, spouse etc. in the folio as joint holder(s). 4. transfer to siblings. Gifting of units. 5. Transfer of units to third party. 6. addition/deletion of unit holder Partial transfer of units held in a folio shall be allowed. If the request for transfer of units is lodged on the record date, the IDCW payout/ reinvestment shall be made to the transferor. Redemption of the transferred units shall not be allowed for 10 days from the date of transfer. This will enable the investor to revert in case the transfer is initiated fraudulently. Mode of submitting the Transfer Request Non-Demat (SOA) mode The facility for transfer of units held in SoA mode shall be available only through online mode via the transaction portals of the RTAs and the MF Central, i.e., the transfer of units held in SoA mode shall not be allowed through physical/ paper-based mode or via the stock exchange platforms, MFU, channel partners and EOPs etc. For details on pre-requisites, payment of stamp duty on transfer of units, please refer SAI. Dematerialization of units The Unit holders are given an option to hold the Units by way of an account statement (physical form) or in dematerialized form (Demat). SO no. 58 Unit holders opting to hold the Units in demat form must provide their Demat account details in the specified section of the application form. Unit holders intending to hold the Units in Demat form are required to have a beneficiary account with the Depository Participant (DP) registered with NSDL/CDSL and will be required to indicate in the application form, the DP’s name, DP ID 66number and the beneficiary account number of the Unit holder with the DP. The Units of the Schemes will be traded compulsorily in dematerialized form. In case Unit holders do not provide their Demat account details or provide incomplete details or the details do not match with the records as per Depository(ies), an account statement shall be sent to them. Such investors will not be able to trade on the stock exchange till the holdings are converted in to Demat form. Unit holder who so desires to hold the Units in demat form at a later date, will be required to have a beneficiary account with a DP of NSDL/CDSL and will have to submit the account statement alongwith a request form asking for the conversion into demat form. This request is called a Demat Request Form (DRF). The AMC shall issue units in dematerialized form to a unit holder in a scheme within two working days of the receipt of request from the unit holder.” Unit holder will be required to fill in a DRF in triplicate alongwith the relevant details and submit the same to the Registrar alongwith the account statement to be dematerialized. The sequence of names in the account statement must be same as that in the demat account. Rematerialization of Units will be in accordance with the provisions of SEBI (Depositories & Participants) Regulations, 1996 as may be amended from time. For further details, please refer SAI. Minimum Target amount The Mutual Fund seeks to collect a minimum subscription amount of Rs. 20 crore in each of the Schemes during the NFO period. In (This is the minimum amount the event this amount is not raised during the NFO period, the required to operate the amount collected under the Schemes will be refunded to the scheme and if this is not applicants as mentioned in the section, ‘Refund’. collected during the NFO period, then all the investors would be refunded the amount invested without any return.) Maximum Amount to be There is no maximum subscription amount for the Schemes to be raised (if any) raised and therefore, subject to the applications being in accordance with the terms of this offer, full allotment will be made to the applicants. However, the Trustee/AMC retains the sole and absolute discretion to reject any application. Minimum balance to be maintained and consequences of Non maintenance: SO no. 36 Not Applicable Dividend Policy (IDCW) 67(i) Growth Option Under this option, the Mutual Fund will not declare any IDCW. The income earned by the Scheme will remain invested in the Scheme concerned and will be reflected in the NAV. This Option is suitable for investors who are not looking for current income but who have invested only with the intention of capital appreciation. Please refer the section “A. Tax Benefit of Investing in the Mutual Funds” under “Tax & Legal & General Information” in the SAI. (ii) IDCW Option / Annual IDCW Option / Quarterly IDCW Option The above options are suited for investors seeking income through IDCW declared by the Scheme. Only Unit Holders opting for such option(s) will receive IDCWs. Under these options, the Scheme envisage declaring IDCWs comprising substantially of net income and realized gains. The options stated in point (ii) above, in turn offer two sub- options i.e. “Payout of IDCW” or “Reinvestment of IDCW” • Payout of IDCW As per the SEBI (MF) Regulations, the Mutual Fund shall despatch to the Unit Holders, IDCW warrants within 7 working days from record date for IDCW. IDCWs will be payable to those Unit Holders whose names appear in the Register of Unit Holders on the date (Record Date). IDCWs will be paid by cheque, net of taxes as may be applicable. Unit Holders will also have the option of direct payment of IDCW to the bank account. The cheques will be drawn in the name of the sole/first holder and will be posted to the Registered address of the sole/first holder as indicated in the original application form entirely at the risk of the unitholders. To safeguard the interest of Unit Holders from loss or theft of IDCW cheques, investors should provide the name of their bank, branch and account number in the application form. IDCW cheques will be sent to the Unit Holder after incorporating such information. If the IDCW amount payable to Unit holders (net of tax deducted at source, wherever applicable) is for: i. Rs. 100/- in the then such IDCW will compulsorily and automatically reinvested in the Scheme/Plan by issuing additional Units of the Scheme under Regular Plan/ Direct Plan at the Applicable NAV on the next Business day after the Record Date. There shall be no load on IDCW so reinvested. The IDCW amount payable will be compulsorily and automatically reinvested in the respective Scheme/Plan by issuing additional Units of the Scheme/Plan at the Applicable NAV on the next Business day after the Record Date. There shall be no load on IDCW so reinvested. • Reinvestment of IDCW 68Under this sub-option, IDCW will be reinvested by way of additional Units of the Scheme instead of being paid out. Such reinvestment will be at the applicable NAV on the next Business Day after the Record Date. There shall however, be no entry load/exit load, if any, on the IDCW so re- invested. The IDCW so reinvested shall be constructive payment of IDCW to the Unit Holders and constructive receipt of the same amount from each Unit Holder, for reinvestment in Units. The additional Units issued under this option and held as capital asset would get the benefit of long term capital gains if sold after being held for greater than 12 months. For this purpose, 12 months will be computed from the date when such additional Units are issued/allotted. Effect of IDCW: The NAV of the Unit Holders in IDCW Option, Monthly IDCW Option, Daily Reinvestment of IDCW Option, Weekly IDCW Option, and Quarterly IDCW option will stand reduced by the amount of IDCW declared. On declaration of IDCW, the NAV of the respective IDCW Options will further stand reduced by the applicable statutory levy / surcharge/cess/ any other levy payable by the scheme in respect of separate category of investors if any. Notwithstanding varying rates of statutory levies, the ex IDCW NAV will remain the same for all categories of investors in a particular option, though the amount of IDCW received by Unit Holders may vary depending on the category of each Unit Holder. For details on taxation of IDCW please refer the SAI. Notes The Trustee may decide to declare distributions under the IDCW Option of the Scheme subject to availability of distributable surplus. There is no assurance or guarantee to the Unit Holders as to the rate of IDCW will be regularly paid, though it is the intention of the Scheme to make IDCW distribution under the respective plan/options of the Scheme. For IDCW Options having a defined frequency, the Trustee at its sole discretion may also declare interim distributions between two successive record dates. The declaration/actual payment of IDCW and the frequency thereof will depend on the availability of distributable surplus computed in accordance with SEBI (MF) Regulations. The decision of the Trustee in this regard shall be final. An investor on record of the CAMS / Statement of Beneficiary Owners maintained by the Depositories for the purpose of IDCW distribution is an investor who is a Unit Holder/ Beneficial Owners as on the Record Date. In order to be a Unit Holder, an investor has to be allocated Units representing receipt of clear funds by the Scheme. 69IDCW, if declared, will be paid (subject to deduction of tax at source, if any) to those Unit holders whose names appear in the Register of Unit holders on the record date. In case of units held in dematerialized mode, the Depositories (NSDL/CDSL) will provide the list of eligible demat account holders and the number of units held by them in electronic form on the Record date to the Registrars and Transfer Agent of the Mutual Fund. On payment of IDCW, the NAV will stand reduced by the amount of IDCW and Dividend distribution tax/statutory levy (if applicable) paid. The Trustee/AMC reserves the right to change the record date from time to time. IDCW Distribution Procedure In accordance with clause 11.6.1 of Master Circular, the procedure for IDCW Distribution would be as under: a. Quantum of IDCW and the record date will be fixed by the Trustee. IDCW so decided shall be paid, subject to availability of distributable surplus. Further, with respect to declaration of IDCW upto monthly frequency, the trustees can delegate to the officials of AMC to declare and fix the record date as well as decide the quantum of IDCW subject to the conditions as laid under clause 11.6.3 of Master Circular. b. Within one calendar day of decision by the Trustee, the AMC shall issue notice to the public communicating the decision about the IDCW including the record date, in one English daily newspaper having nationwide circulation as well as in a newspaper published in the language of the region where the head office of the Mutual Fund is situated. c. The Record Date will be 2 working days from the date of publication in at least one English newspaper or in a newspaper published in the language of the region where the Head Office of the mutual fund is situated, whichever is issued earlier. Record date shall be the date which will be considered for the purpose of determining the eligibility of investors whose names appear on the register of Unit holders maintained by the Mutual Fund/statement of beneficial ownership maintained by the Depositories, as applicable, for receiving IDCW. d. The notice will, in font size 10, bold, categorically state that pursuant to payment of IDCW, the NAV of the Scheme would fall to the extent of payout and statutory levy (if applicable). e. The NAV will be adjusted to the extent of IDCW distribution and statutory levy, if any, at the close of business hours on record date. f. Before the issue of such notice, no communication indicating the probable date of IDCW declaration in any manner whatsoever, will be issued by Mutual Fund. Allotment (Detailed procedure) Allotment: Allotment will be completed after due reconciliation of receipt of funds for all valid applications within 5 Business Days from the closure of the NFO period. Allotment to NRIs/FPIs will be subject to RBI approval, if required. Subject to the SEBI (MF) Regulations, the Trustee may reject any application received in 70case the application is found invalid/incomplete or for any other reason in the Trustee's sole discretion. For investors who have given demat account details, the Units will be credited to the investor’s demat account after due verification and confirmation from NSDL/CDSL of the demat account details. As the Stock Exchange(s) do not allow trading of fractional units, Units will be allotted only in integers by rounding off the Units allotted to the lower integer and the balance amount will be refunded to the investor. • Clear funds should be available to the Fund One business day prior to the date of allotment in respect of all purchase applications received during the NFO period. All cases where clear funds have not been identified or not received One business day prior to the date of allotment for whatsoever reasons, including technical clearing reasons, will not be considered for allotment and the amount will be refunded to the investor in due course. The AMC will not entertain any claims of allotment or compensation in such cases. • An applicant in a scheme whose application has been accepted shall have the option either to receive the statement of accounts or to hold the units in dematerialised form and the AMC shall issue to such applicant, a statement of accounts specifying the number of units allotted to the applicant or issue units in the dematerialized form as soon as possible but not later than five working days from the date of closure of the initial subscription list or from the date of receipt of the application. • Allotment Conformation: Allotment information specifying the number of Units allotted shall be sent to the Unit holders at their registered e-mail address and/or mobile number by way of email and/or SMS within 5 Business Days from the date of receipt of transaction request. • For investors who have given demat account details, the Units will be credited to the investor’s demat account after due verification and confirmation from NSDL/CDSL of the demat account details and only after the funds are credited into the Mutual Fund’s scheme(s) account to the satisfaction of the AMC. Statement for such Units shall be provided by the respective DP and no further confirmation/statement shall be issued by the AMC/Registrar. The AMC shall issue units in dematerialized form to a unit holder in a scheme within two working days of the receipt of request from the unit holder. • The Mutual Fund reserves the right to recover from an investor any loss caused to the Schemes on account of dishonour of cheques issued by him/her/it for purchase of Units. Note: Allotment of units will be done after deduction of applicable stamp duty. and transaction charges, if any. Refund If the Schemes fail to collect the minimum subscription amount of Rs. 20 Crore each, the Mutual Fund shall be liable to refund the money to the applicants. Refund of subscription money to applicants whose applications are invalid for any reason whatsoever, will commence immediately 71after the closure of the NFO. Refunds will be completed within 5 Business Days from the closure of the New Fund Offer Period. If the Mutual Fund refunds the amount after 5 Business Days, interest as specified by SEBI (currently, 15% per annum) shall be paid by the AMC. AMC may also use instruments or payment channels such as RTGS, NEFT, IMPS, direct credit, etc. or any other mode allowed by Reserve Bank of India from time to time, for payments including refunds to unitholders in addition to the cheque, demand draft. As per the directives issued by SEBI, it is mandatory for Applicants to mention their bank account numbers in their applications for purchase of Units. Further, AMCs may also use modes of despatch such as speed post, courier etc. for payments including refunds to unitholders in addition to the registered post along with due acknowledgement. Who can invest (This is an indicative list and you are requested to consult your This is an indicative list and financial advisor to ascertain whether the Scheme is suitable to investors shall consult their your risk profile.) financial advisor to ascertain whether the scheme is The following persons (subject to, wherever relevant, purchase of suitable to their risk profile. units of mutual funds, being permitted under respective constitutions, and relevant statutory regulations) are eligible and may apply for subscription to the Units of the Scheme: a. Indian Resident Adult Individuals either singly or jointly (not exceeding three) b. Minors through parent/legal guardian c. Companies, Bodies Corporate, Public Sector Undertakings, association of persons or bodies of individuals whether incorporated or not and societies registered under the Societies Registration Act, 1860 (so long as the purchase of Units is permitted under the respective constitutions) d. Religious, Charitable and Private Trusts, under the provisions of 11(5) of Income Tax Act, 1961 read with Rule 17C of Income Tax Rules, 1962 (subject to receipt of necessary approvals as "Public Securities", where required) e. Trustee of private trusts authorised to invest in mutual fund Scheme under the Trust Deed f. Partnership Firms g. Karta of Hindu Undivided Family (HUF) h. Banks (including Co-operative Banks and Regional Rural Banks) and Financial Institutions i. NRIs/Persons of Indian Origin residing abroad on full repatriation basis (subject to RBI approval, if any) or on non- repatriation basis j. Foreign Portfolio Investors (FPI) as defined in Regulation 2(1)(h) of Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 k. Army, Air Force, Navy and other para-military funds l. Scientific and Industrial Research Organisations m. International Multilateral Agencies approved by the Government of India n. Non-Government Provident/Pension/Gratuity funds as and when permitted to invest 72o. Others who are permitted to invest in the Scheme as per their respective constitutions p. Mutual Funds registered under the SEBI (Mutual Funds) Regulations, 1996 q. The scheme of the DSP Mutual Fund, subject to the conditions and limits prescribed in SEBI (MF) Regulations and/or by the Trustee, AMC or Sponsors (The AMC shall not charge any fees on such investments). r. The AMC (No fees shall be charged on such investments). All category of investors (whether existing or new) as permitted above are eligible to subscribe under Direct Plan. Investments under the Direct Plan can be made through various mode offered by the Fund for investing directly in the Fund. Applicability and provisions of Foreign Account Compliance Act (FATCA) For further details relating to FATCA, investors are requested to refer SAI which is available on the website viz. www.dspim.com Who cannot invest Non-acceptance of subscriptions from U.S. Persons and Residents of Canada in the Scheme United States Person (U.S. Person), corporations and other entities organized under the applicable laws of the U.S. and Residents of Canada as defined under the applicable laws of Canada should not invest in units of any of the Schemes of the Fund and should note the following: • No fresh purchases /additional purchases/switches in any Schemes of the Fund would be allowed. However, existing Unit Holder(s) will be allowed to redeem their units from the Schemes of the Fund. If an existing Unit Holder(s) subsequently becomes a U.S. Person or Resident of Canada, then such Unit Holder(s) will not be able to purchase any additional Units in any of the Scheme of the Fund. However, subscription (including systematic investments) and switch transactions requests received from U.S. persons who are Non-resident Indians (NRIs) /Persons of Indian origin (PIO) and at the time of such investment, are present in India and submit a physical transaction request along with such documents as may be prescribed by the AMC/ Trustee Company from time to time shall be accepted. The AMC shall accept such investments subject to the applicable laws and such other terms and conditions as may be notified by the AMC/ Trustee Company. The investor shall be responsible for complying with all the applicable laws for such investments. The AMC reserves the right to reject the transaction request or redeem with applicable exit load and TDS or reverse allotted units, as the case may be, as and when identified by the AMC, which are not in compliance with the terms and conditions notified in this regard. 73• For transaction from Stock Exchange platform, while transferring units from the broker account to investor account, if the investor has U.S./Canadian address then the transactions, subject to the abovementioned conditions, may be rejected. • In case the AMC/Fund subsequently indentifies that the subscription amount is received from U.S. Person(s) or Resident(s) of Canada, in that case the AMC/Fund at its discretion shall redeem all the units held by such person from the Scheme of the Fund at applicable Net Asset Value. How to Apply and other details Application form and Key Information Memorandum may be obtained from Official Points of Acceptance (OPAs) / Investor Service Centres (ISCs) of the AMC or RTA or Distributors or can be downloaded from our website www.dspim.com. Please refer to the SAI and Application form for further details and the instructions. Applications can be submitted at any of the official points of acceptance of transactions, the addresses of which are given at the end of this SID and updated list is available on the website of the Fund and the registrar. Investors can log on to www.camsonline.com for details of various offices/ISCs of Registrar. Stock brokers registered with recognized stock exchange and empaneled with the AMC shall also be considered as ‘official point of Acceptance of Transaction’. It is mandatory for every applicant to provide the name of the bank, branch, address, account type and account number as per requirements laid down by SEBI and any other requirements stated in the Application Form. Applications without these details will be treated as incomplete. Such incomplete applications will be rejected. Financial transactions through email in respect of non- individual investors shall be accepted in terms of AMFI Best Practice Guidelines (BPG) no. 118/ 2024-25 dated January 31, 2025 and such other circulars issued in this regard from time to time. For the terms and conditions of for availing the facility to transact through electronic mail, please refer SAI. The policy regarding reissue of Not Applicable repurchased units, including the maximum extent, the manner of reissue, the entity (the scheme or the AMC) involved in the same. Restrictions, if any, on the Investors who do not provide their demat account details will not right to freely retain or dispose be allowed to trade their Units on the Exchange till the time the 74of units being offered. holdings are converted into demat form. Also, in the event of an order being received from any regulatory authority/body, directing attachment of the Units of any investor, redemption of Units at the time of maturity will be restricted in due compliance of such order. Cut off timing for For purchases and switch-ins subscriptions/ redemptions/ The Units of the Schemes will not be available for switches subscriptions/switch-in after the closure of the NFO period. This is the time before which your application (complete in For redemptions and switch-outs all respects) should reach the Redemption/switch-out through the Fund/AMC is not permitted official points of acceptance. during the term of the Schemes. Therefore, the provisions of cut- off timing for redemption/switch-out will not be applicable. However, once the Units are listed, an investor can buy/sell the units on a continuous basis on the Exchange during the trading hours, like any other publicly traded stock. Switch-out request to other Schemes of the Mutual Fund will be accepted upto 3.00 p.m. on the Maturity Date. Minimum amount for • During NFO: Rs.5,000 and any amount thereafter. purchase/redemption/switches • On Continuous basis : Not Applicable, as purchase/redemption/switch-out is not permitted during the term of the Scheme. The listed units will have to be sold in lots of 1(one) Unit or such other marketable lots as prescribed by the Exchange, from time to time *In case of Units held in dematerialized mode, the redemption request can be given only with DPs or on Stock exchange Platform; and only in number of Units. Accounts Statements Allotment confirmation specifying the number of Units allotted shall be sent to the Unit holders at their registered e-mail address and/or mobile number by way of email and/or SMS within 5 working Days from the date of receipt of the valid application/transaction. SO no. 61 A Consolidated Account Statement (CAS) detailing all the transactions across all mutual funds and holding at the end of the month shall be sent to the Unit holders in whose folio(s) transaction(s) have taken place during the month. eCAS will be sent on or before 12th of the succeeding month and physical CAS will be sent on or before 15th of the succeeding month. However, if the investor wishes to opt for physical copy may request for the same. Half-yearly CAS shall be issued at the end of every six months (i.e. April and October). eCAS shall be sent on or before 18th day of succeeding month and physical CAS shall be sent on or before 21st day of succeeding month to all investors providing the prescribed details across all schemes of mutual funds and 75securities held in dematerialized form across demat accounts, if applicable. For further details, refer SAI. Dividend/ IDCW The IDCW proceeds will be paid directly into the Unitholder's bank account through various electronic payout modes such as Direct credit/NEFT/RTGS and cheques as applicable within 7 working days of the record date of IDCW In the event of delay/failure to despatch the IDCW warrants within the aforesaid period, interest for the period of delay in transfer of IDCW shall be paid by AMC to unitholders at the rate of 15% per annum along with the proceeds of IDCW. Redemption Redemption by the Mutual Fund is not permitted during the term of the Schemes. However, once the Units are listed, an investor holding Units in demat form can sell the Units on a continuous basis on the exchange during the trading hours, like any other publicly traded stock. The maturity redemption proceeds will be dispatched to Unit holders within 3 working days of the Maturity Date. The cheque will be issued in favour of the sole/first Unit Holder's registered name and bank account number, if provided, and will be sent to the registered address of the sole/first holder as indicated in the original application form. The redemption cheque/demand draft will be payable at par at all the places where the official points of acceptance of transaction are located. Bank charges for collection of cheques at all other places will be borne by the Unit Holder. The proceeds towards redemptions and IDCW will be dispatched by a reasonable mode of despatch like courier, Speed post, UCP, etc. in case of cheque/demand draft or directly credited to the bank account (as per the details mentioned by the investor), entirely and solely at the risk of the investor. The Mutual Fund will endeavour to remit redemption proceeds via electronic means (payment channels such as RTGS, NEFT, IMPS, direct credit, etc.), as made available by RBI. Where such electronic means are not available or feasible under any circumstances, the Mutual Fund will remit the redemption proceeds by way of cheques. The investor will not hold the Mutual Fund or the AMC responsible for any non- receipt or delay of receipt of redemption & IDCW proceeds due to any negligence or deficiency in service by the courier company, postal authorities or the bank executing direct credits, or due to incorrect bank account details provided by the investor. Switch upon Maturity: Unit holder may note that an additional option of switch upon maturity is provided by the Mutual Fund, whereby Unit holder can switch the entire proceeds (other than IDCW) upon maturity to any other scheme of the Mutual Fund by filling in the relevant portion of the KIM at the time of investment. In this case, on maturity the entire proceeds will be invested in the switch-in scheme as notified by the Unit holder, at the applicable NAV for switch-in scheme. Unit holders are requested to carefully read the Scheme Information Document of the 76relevant switch-in scheme before exercising this option. This option/facility shall not be applicable for Units held in demat form. The Redemption or repurchase proceeds shall be dispatched to Unit Holders within three Working Days from the date of acceptance of redemption or repurchase. Investor may note that in case of exceptional scenorios as prescribed by AMFI vide its communication no. AMFI/ 35P/ MEM- COR/ 74 / 2022-23 dated January 16, 2023 read with Clause 14.1.3 of the SEBI Master Circular, the AMC may not be able to adhere with the timelines prescribed above. Bank Mandate It is mandatory for every applicant to provide the name of the bank, branch, address, account type and number as per requirements laid down by SEBI and any other requirements stated in the Application Form. Applications without these details will be treated as incomplete. Such incomplete applications will be rejected. The Registrar/AMC may ask the investor to provide a SO no. 62 blank cancelled cheque or its photocopy for the purpose of verifying the bank account number. Investor/s or /Unit Holder/s are requested to note that any one of the following documents shall be submitted by the investor/s or /Unit Holder/s, in case the cheque provided along with fresh subscription/new folio creation does not belong to the bank mandate specified in the application form: a. Original cancelled cheque having the First Holder Name printed on the cheque [or] b. Original bank statement reflecting the First Holder Name, Bank Account Number and Bank Name as specified in the application [or] c. Photocopy of the bank statement / bank pass book duly attested by the bank manager and bank seal preferably with designation and employee number [or] d. Photocopy of the bank statement / passbook / cancelled cheque copy duly attested by the AMC/ RTA branch officials after verification of original bank statement / passbook / cheque shown by the investor or their representative [or] e. Confirmation by the bank manager with seal, on the bank’s letter head with name, designation and employee number confirming the investor details and bank mandate information. Where such additional documents are not provided for the verification of bank account for redemption or IDCW payment, the AMC reserves the right to capture the bank account used towards subscription payment for the purpose of redemption and IDCW payments. For more details on Multiple Bank Accounts Registration Facility, Bank Account Details, Change of Bank, please refer SAI. 77Delay in payment of redemption / The AMC shall be liable to pay interest to the Unit Holders at such repurchase proceeds/dividend rate as may be specified by SEBI (presently @ 15% per annum) in case the redemption proceeds are not made within 3 (three) working days of the Maturity Date. In the event of delay/failure to transfer the redemption/repurchase proceeds within the aforesaid period, Interest for the period of delay in transfer of redemption or repurchase shall be paid by AMC to unitholders at the rate of 15% per annum along with the proceeds of redemption or repurchase. Investor may note that in case of exceptional scenarios as prescribed by AMFI vide its communication no. AMFI/ 35P/ MEM- COR/ 74 / 2022-23 dated January 16, 2023 read with Clause 14.1.3 of the SEBI Master Circular, the AMC may not be able to adhere with the timelines prescribed above. IDCW payments shall be dispatched/transferred to the investors within seven working days from the IDCW record date. In case the AMC fails to make IDCW payment within seven working days, the AMC shall be liable to pay interest to investors at 15% per annum. The interest on delayed payment would be computed from the record date for IDCW. Unclaimed Redemption and The treatment of unclaimed redemption and IDCW amounts shall Income Distribution cum Capital be in terms of clause 14.3 of SEBI Master Circular. Withdrawal Amount For further details, please refer SAI. SO no. 53 Disclosure w.r.t investment by Note: For Investments ‘On behalf of Minor’: Where the investment minors is on behalf of minor by the guardian, please note the following important points. a. The minor shall be the sole and only first holder in the account. Nomination facility is not available for applications/ folios on behalf of a minor. Joint holders’ SO no. 37 details and nomination details, even if mentioned and signed will not be considered. b. Guardian of the minor should either be a natural guardian (i.e. father or mother) or a court appointed legal guardian. c. Details like minor’s date of birth, Guardian’s relation with Minor, Guardian name, PAN, KYC are mandatory, along with supporting documents. Photo copy of the document evidencing the date of birth of minor like i) Birth certificate of the minor, or ii) School leaving certificate / Mark sheet issued by Higher Secondary Board of respective states, ICSE, CBSE etc., or iii) Passport of the minor, or iv) any other suitable proof should be attached with the application form. d. Where the guardian is not a natural guardian (father or mother) and is a court appointed legal guardian, suitable supporting documentary evidence should be provided. 78e. If the mandatory details and/or documents are not provided, the application is liable to be rejected without any information to the applicant. f. Payment towards subscription/investment through any mode in units of the schemes of Fund shall be accepted from the bank account of the minor, bank account of the parent or legal guardian of the minor, or from a joint bank account of the minor with parent or legal guardian. g. All redemption proceeds shall be credited only in the verified bank account of the minor or a joint bank account of the minor with the parent or legal guardian after completing all KYC formalities. A minor Unit Holder, on becoming major, may inform the Registrar about attaining majority, and provide his specimen signature duly authenticated by his banker as well as his details of bank account and a certified true copy of the PAN card, KYC details and such other details as may be asked by AMC from time to time to enable the Registrar to update records and allow the minor turned major to operate the account in his own right. Further, all other requirement for investments by minor and process of transmission shall be followed in line with clause 17.6 of SEBI Master Circular read with SEBI Circular dated May 12, 2023 as amended from time to time. Requirement of minimum Each Series of Scheme under the Scheme(s) shall have a minimum investors in the scheme of 20 investors and no single investor shall account for more than 25% of the corpus of such Scheme(s). These conditions will be complied with immediately after the close of the NFO itself i.e. at the time of allotment. In case of non-fulfillment with the condition of minimum 20 investors, Scheme(s) concerned shall be wound up in accordance with Regulation 39 (2) (c) of the SEBI (MF) Regulations automatically without any reference from SEBI. In case of non-fulfillment with the condition of 25% holding by a single investor on the date of allotment, the application to the extent of exposure in excess of the stipulated 25% limit would be liable to be rejected and the allotment would be effective only to the extent of 25% of the corpus collected. Consequently, such exposure over 25% limits will lead to refund within 5 business days from the closure of the NFO period. Transactions Through Channel Investors may enter into an agreement with certain distributors Distributors (with whom AMC also has a tie up) referred to as “Channel Distributors” who provide the facility to investors to transact in units of mutual funds through various modes such as their website / other electronic means or through Power of Attorney in favor of the Channel Distributor, as the case may be. Under such arrangement, the Channel Distributors will aggregate the details of transactions (viz. subscriptions/ redemptions/switches) of their various investors and forward the same electronically to the AMC / RTA for processing on daily basis as per the cut-off timings applicable to the relevant schemes. The Channel Distributor is required to send copy of investors’ KYC and agreement entered into between the investor & distributor to the 79RTA (one time for central record keeping) as also the transaction documents / proof of transaction authorization as the case may be, to the AMC / RTA as per agreed timelines. Normally, the subscription proceeds, when invested through this mode, are by way of direct credits to the specified bank account of DSP Mutual Fund. The redemption proceeds (subject to deduction of tax at source, if any) and IDCW payouts, if any, are paid by the AMC to the investor directly through direct credit in the bank account of the investor specified by the distributor or through issuance of payment instrument, as applicable. In case KYC and other necessary documents are not furnished within the stipulated timeline, the transaction request shall be liable to be rejected or the folio will be locked for future subscriptions/ switches. The Mutual Fund, the AMC, the Trustee, along with their directors, employees and representatives shall not be liable for any errors, damages or losses arising out of or in connection with the transactions undertaken by investors or as provided by the distributors through the above mode. It may be noted that investors investing through this mode may also approach the AMC / ISC directly with their transaction requests (financial / non-financial) or avail of the online transaction facilities offered by the AMC. Subscription of Units Through Subject to the investor fulfilling certain terms and conditions as Electronic Mode stipulated by AMC from time to time, the AMC, Mutual Fund, Registrar or any other agent or representative of the AMC, Mutual Fund, the Registrar (“Recipient”) may accept transactions through any electronic mode (fax/web/ / /electronic transactions) (“Electronic Transactions”). The acceptance of Electronic Transactions will be solely at the risk of the investor and the Recipient shall not in any way be liable or responsible for any loss, damage caused to the investor directly or indirectly, as a result of the investor sending or purporting to send such transactions including where such transaction sent / purported to be sent is not processed on account of the fact that it was not received by the Recipient. The investor acknowledges that Electronic Transaction is not a secure means of giving instructions / transactions requests and that the investor is aware of the risks involved including those arising out of such transmission being inaccurate, imperfect, ineffective, illegible, having a lack of quality or clarity, garbled, altered, distorted, not timely etc. The investor’s request to the Recipient to act on Electronic Transaction is for the investor’s convenience and the Recipient is not obliged or bound to act on the same. The investor authorizes the recipient to accept and act on any Electronic Transaction which the recipient believes in good faith to be given by the investor and the recipient may at its discretion treat any such transaction as if the same was given to the recipient under the investor’s original signature. 80In case there is any difference between the particulars mentioned in the fax/ web/ electronic transmission received as against the original document which may be received thereafter, the Recipient shall not be liable for any consequences arising therefrom. The investor agrees that the recipient may adopt additional security measures including signature verification, telephone call backs or a combination of the same, which may be recorded and the investor consents to such recording and agrees to co-operate with the recipient to enable confirmation of such transaction requests. In consideration of the Recipient from time to time accepting and at its sole discretion (including but not limited to the AMC extending / discontinuing such facilities from time to time) acting on any Electronic Transaction request received / purporting to be received from the investor, the investor agrees to indemnify and keep indemnified the AMC, Directors, employees, agents, representatives of the AMC, Mutual Fund and Trustees from and against all actions, claims, demands, liabilities, obligations, losses, damages, costs and expenses of whatever nature (whether actual or contingent) directly or indirectly suffered or incurred, sustained by or threatened against the indemnified parties whatsoever arising from or in connection with or any way relating to the indemnified parties in good faith accepting and acting on Electronic Transaction requests including relying upon such transaction requests purporting to come from the investor even though it may not come from the Investor. The AMC reserves the right to modify the terms and conditions or to discontinue the facility at any point of time. Unit holders should note that Two Factor Authentication [2FA] is mandatory for all subscriptions including SIP registration submitted through electronic mode. OTP will be sent to either email id or mobile number registered in the folio and the Unit holder have to confirm on the OTP received. On successful validation only, the subscriptions / systematic registration will be accepted and processed. Third Party Payment Avoidance To safeguard the interests of applicant/investors and avoid & additional documents/ fraudulent transactions in any other name, the Mutual Fund does declaration required not accept Third Party Payments. In case of subscriptions, the Mutual Fund shall verify the bank account from which the funds have been paid for the subscription. In case it is identified that the funds have not come from the investor’s bank account, the subscription will be rejected. Please refer SAI for Details. Transaction in Units through The facility of transacting through the stock exchange mechanism Stock Exchange mechanism enables investors to buy and sell the Units of the Scheme(s) through the stock brokers registered with the BSE and/or NSE in accordance with the guidelines issued by SEBI and operating guidelines and directives issued by NSE, BSE or such other recognized stock exchange in this regard and agreed with the Asset Management Company/ Registrar and Transfer Agent. The investor shall be serviced directly by such stock brokers/ Depository Participant. The Mutual Fund will not be in a position to accept any request for transactions or service requests in respect of Units 81bought under this facility in demat mode. This facility will be offered to investors who wish to hold Units in dematerialized form or in physical mode. Further, the minimum purchase/ redemption amount in the respective plan / option of such notified Schemes of the Fund will be applicable for each transaction. This facility will currently not support transactions done through switches or facilities such as SWP and STP. In case of non-financial requests/applications such as change of address, change of bank details, etc., investors should approach the respective Depository Participant(s). Unit holders may have/open a beneficiary account with a Depository Participant of a Depository and choose to hold the Units in dematerialized mode. The Unit holders have the option to dematerialize the Units as per the account statement sent by the Registrar by making an application to the AMC/registrar for this purpose. Rematerialization of Units can be carried out in accordance with the provisions of SEBI (Depositories and Participants) Regulations, 1996 as may be amended from time to time. Investors, who wish to get back their securities in physical form, may request their respective Depository Participant for rematerialization of Units in their beneficiary accounts. The Depository Participant will generate a rematerialization request number and the request will be dispatched to the AMC/ Registrar. On acceptance of request from the Depository Participant, the AMC/Registrar will dispatch the account statement to the investor and will also send confirmation to the Depository participant. Transactions conducted through the Stock Exchange mechanism shall be governed by the SEBI (Mutual Funds) Regulations 1996 and operating guidelines and directives issued by NSE, BSE or such other recognized exchange in this regard. Further, in line with SEBI circular No. SEBI/HO/MRD1/DSAP/CIR/P/2020/29 dated February 26, 2020 as amended from time to time, investors can directly buy/redeem units of the Scheme through stock exchange platform. Cash Investments in mutual In order to help enhance the reach of mutual fund products funds amongst small investors, who may not be tax payers and may not have PAN/bank accounts, such as farmers, small traders/businessmen/workers, SEBI has permitted receipt of cash transactions for fresh purchases/ additional purchases to the extent of Rs. 50,000/- per investor, per financial year shall be allowed subject to: i. compliance with Prevention of Money Laundering Act, 2002 and Rules framed there under; the SEBI Circular(s) on Anti Money Laundering (AML) and other applicable Anti Money Laundering Rules, Regulations and Guidelines; and ii. sufficient systems and procedures in place. 82iii. However, payment towards redemptions, IDCW, etc. with respect to aforementioned investments shall be paid only through banking channel. The Fund/AMC is currently in the process of setting up appropriate systems and procedures for the said purpose. Appropriate notice shall be displayed on its website viz. as well as at the Investor Service Centres, once the facility is made available to the investors. Facility to transact in units of The AMC has entered into an Agreement with MF Utilities India the Schemes through MF Utility Private Limited (MFUI), for usage of MF Utility (“MFU”) - a shared portal & MFUI Points of Services services initiative of various Asset Management Companies, which pursuant to appointment of MF acts as a transaction aggregation portal for transacting in multiple Utilities India Private Limited schemes of various Mutual Funds with a single form and a single payment instrument. Investors can execute financial and non-financial transactions pertaining to Schemes of the Fund electronically on the MFU portal i.e. www.mfuonline.com as and when such a facility is made available by MFUI. The MFU portal i.e. www.mfuonline.com will be considered as Official Point of Acceptance for such transactions. The Points of Service (“POS”) of MFUI with effect from the respective dates as published on MFUI website i.e. www.mfuindia.com against the POS locations will be considered as Official Point of Acceptance/ Investor Services Centre where application for financial transactions in schemes of the Fund will be accepted on an ongoing basis. Further, investors can also submit their non-financial transaction requests at the POS. The salient features of the facility to transact in units of the Schemes through MFU are given below: 1) Common Account Number (“CAN”): Investors are required to submit duly filled in CAN Registration Form (“CRF”) and prescribed documents at the MFUI POS to obtain CAN. The CRF can be downloaded from MFUI website i.e. www.mfuindia.com or can be obtained from MFUI POS. CAN is a single reference number for all investments in the Mutual Fund industry, for transacting in multiple schemes of various Mutual Funds through MFU and to map existing investments, if any. MFU will map the existing folios of investors in various schemes of Mutual Funds to the CAN to enable transacting across schemes of Mutual Funds through MFU. The AMC and / or its Registrar and Transfer Agent (RTA) shall provide necessary details to MFUI as may be needed for providing the required services to investors / distributors through MFU. CAN registered investors can transact in physical mode through MFUI POS by submitting relevant Common Transaction Form prescribed by MFUI. 832) CAN registered investors can transact through electronic mode through MFU portal i.e. www.mfuonline.com as and when such a facility is made available to them by MFUI. The time of transaction submission done through MFU portal i.e. www.mfuonline.com and the successful receipt of the same in the servers of MFUI would be the time-stamp for the transaction. 3) Investors not registered with MFUI can also submit their financial & non-financial transactions request at MFUI POS by giving reference of their existing folio number allotted by the Fund. 4) The transactions on the MFU portal shall be subject to the terms & conditions as may be stipulated by MFUI / Mutual Fund / the AMC from time to time. All other terms and conditions of offering of the Scheme as specified in the SID, KIM and SAI shall be applicable to transaction through MFUI. KYC Requirements Investor are requested to take note that it is mandatory to complete the KYC requirements (including updation of Permanent Account Number) for all unit holders, including for all joint holders and the guardian in case of folio of a minor investor. Accordingly, financial transactions (including redemptions, switches and all types of systematic plans) and non-financial requests are liable to be rejected, if the unit holders have not completed the KYC requirements. Notwithstanding in the above cases, the AMC reserves the right to ask for any requisite documents before processing of financial and non-financial transactions or freeze the folios as appropriate. Unit holders are advised to use the applicable KYC Form for completing the KYC requirements and submit the form at the point of acceptance. Further, upon updation of PAN details with the KRA (KRA-KYC)/ CERSAI (CKYC), the unit holders are requested to intimate us/our Registrar and Transfer Agent their PAN information along with the folio details for updation in our records. Facility to transact in units of the MFCentral is created with an intent to be a one stop portal / Schemes through MFCentral mobile app for all Mutual fund investments and service-related needs that significantly reduces the need for submission of physical documents by enabling various digital / physical services to Mutual fund investors across fund houses subject to applicable Terms & Conditions of the Platform from time to time. MFCentral will be enabling various features and services in a phased manner. MFCentral may be accessed using https://mfcentral.com/ and a Mobile App in future. 84DSP Mutual fund designates MFCentral as its Official point of acceptance (DISC – Designated investor Service Centre) with effect from 23rd September 2021. Nomination for Mutual Fund Unit Pursuant to clause 17.16 of the SEBI Master Circular with respect Holders to nomination for unitholders, the following shall be considered: 1. New Investors: Investors who are subscribing to units of DSP Mutual Fund solely shall submit either the nomination form or the prescribed declaration form for opting out of nomination in physical or online as per the choice of the unit holder(s). The requirement of nomination shall be optional for jointly held folio(s). a) In case of physical option: The forms shall carry the wet signature of all the unit holder(s). b) In case of online option: i. The unit holder(s) shall validate the forms by using e-Sign facility recognized under Information Technology Act, 2000 or ii. Through two factor authentication (2FA) in which one of the factor shall be a One-Time Password sent to the unit holders at their email/phone number registered with the KYC Registration Authority or AMC. Implication of failure with respect to nomination: New investors subscribing solely, the application will be rejected if the applicant does not provide nomination or does not provide declaration form for opting out of nomination, duly signed in physical form or through online modes. 2. Existing Unitholders: The existing individual unitholders of DSP Mutual Fund are encouraged, in their own interest, to provide the nomination/ opting out of nomination duly signed in physical form or through online modes for ensuring smooth transmission of securities held by them as well as to prevent accumulation of unclaimed assets in securities market. 3. Who cannot nominate: The nomination can be made only by individuals applying for/holding units on their own behalf singly or jointly. Non- individuals including a Society, Trust, Body Corporate, Partnership Firm, Karta of Hindu undivided family, a Power of Attorney holder and/or Guardian of Minor unitholder Holder of Power of Attorney (POA) cannot nominate. The application will be rejected if the holder aforesaid non individual sign the nomination form. For more details, please read the Statement of Additional Information [SAI] document. 85Process for change of address Investors who wish to change their address have to get their new address updated in their KYC records. Investor will have to submit a KYC Change Request Form in case of individual investors and KYC form in case of non-individual investors along with proof of address and submit to any of the AMC Offices or CAMS Investor Service Centers. Based on the new address updated in the KYC records, the same will be updated in the investor folio. Maturity • The Schemes shall be fully redeemed/wound up at the end of the Term, i.e. on the Maturity Date. • No redemption/repurchase of units shall be allowed prior to the SO no. 57 maturity of the Schemes. However, for Units held in electronic/demat form, investors wishing to exit may do so through the stock exchange mode. • For the Units held in electronic form, at maturity, the Units will be extinguished with the Depository and the redemption amount will be paid to the Unit Holders at the applicable NAV of that date. • The maturity proceeds will be paid to the investors whose names appear in the Register of Unit holders on the respective date of maturity of the Schemes within 3 (three) working days from the date of Maturity. • However, the Schemes may be wound up at any time prior to the Maturity Date under the following circumstances: 1) On the happening of any event, which, in the opinion of the Trustee, requires that the Scheme concerned be wound up; 2) If seventy five per cent of the Unit Holders of the Scheme concerned pass a resolution that the Scheme be wound up; 3) If SEBI so directs in the interest of the Unit Holders. Static details • The details provided by investors in the application form for subscribing to Units should be same as the details registered with the DP. • In the event of any conflict, the details registered with the DP will prevail. • Incase any particular detail is not registered with the DP, the details in the application form will be considered. • In the event of mismatch in the mode of holding as mentioned in the application form vis-à-vis details with the DP, the application is liable to be rejected. III. Other Details A. Details of Benchmark, Investment Objective, Investment Strategy, TER, AUM, Year wise performance, Top 10 Holding/ link to Top 10 holding of the underlying fund Not Applicable B. Periodic Disclosures 86Half yearly In case of unit holders whose email address are registered with the Fund, the AMC Portfolio shall send half yearly portfolio via email within 10 days from the end of each half- Disclosures: year. The half yearly portfolio of the Scheme shall also be available in a user- (This is a list of friendly and downloadable spreadsheet format on the AMFI’s website securities where www.amfiindia.com and website of AMC viz. www.dspim.com on or before the 10th the corpus of each day of succeeding month. Scheme is currently invested. The The advertisement in this reference will be published by the Fund in all India edition market value of of atleast two daily newspapers, one each in English and Hindi. these investments is also stated in The AMC shall provide a physical copy of the statement of the Scheme portfolio, portfolio without charging any cost, on specific request received from a unitholder. disclosures) Refer to AMC website (https://www.dspim.com/mandatory-disclosures/portfolio- disclosures and AMFI website (https://www.amfiindia.com/investor-corner/online- center/portfoliodisclosure ) for further details. Fortnightly The fortnightly portfolio of the Scheme shall be available in a user-friendly and Portfolio downloadable format on the website viz. www.dspim.com on or before the fifth day Disclosure of succeeding fortnight. In case of unit holders whose email addresses are registered with the Fund, the AMC shall send fortnightly portfolio via email within 5 days from the end of each fortnight. The AMC shall provide a physical copy of the statement of the Scheme portfolio, without charging any cost, on specific request received from a unitholder. Refer to AMC website (https://www.dspim.com/mandatory-disclosures/portfolio- disclosures) and AMFI website (https://www.amfiindia.com/investor- corner/online-center/portfoliodisclosure ) for further details. Half Yearly The Mutual Fund shall, before the expiry of one month from the close of each half Financial Results year, (i.e. March 31 and September 30) shall display the unaudited financial results on www.dspim.com and advertisement in this regards will be published by the Mutual Fund in at least one English daily newspaper having nationwide circulation and in a newspaper having wide circulation published in the language of the region where the Head Office of the Mutual Fund is situated. In accordance with SEBI circular no. SEBI/HO/IMD/PoD1/CIR/P/2024/150 dated November 05, 2024, disclosure w.r.t. the total recurring expenses, returns during the half year and compounded annualized yields shall be separately disclosed for direct and regular plans. Refer to AMC website (link- https://www.dspim.com/mandatory-disclosures/fund- financials), AMFI website (link- https://www.amfiindia.com/research- information/other-data/accounts-data ) for further details. Annual Report Annual report or Abridged Summary, in the format prescribed by SEBI, will be hosted on AMC’s website www.dspim.com and on the website of AMFI www.amfiindia.com Annual Report or Abridged Summary will also be sent by way of e-mail to the investor’s who have registered their email address with the Fund not later than four months from the date of the closure of the relevant financial year i.e. March 31 each year. In case of unit holders whose email addresses are not available with the Fund, the AMC shall send physical copies of scheme annual reports or abridged summary to those unitholders who have ‘opted-in’ to receive physical copies. The opt-in facility 87to receive physical copy of the scheme-wise annual report or abridged summary thereof shall be provided in the application form for new subscribers. Unitholders who still wish to receive physical copies of the annual report/abridged summary notwithstanding their registration of e-mail addresses with the Fund, may indicate their option to the AMC in writing and AMC shall provide abridged summary of annual report without charging any cost. Physical copies of the report will also be available to the unitholders at the registered offices at all times. For request on physical copy refer relevant disclosures mentioned in the SAI available on AMC website i.e. www.dspim.com The advertisement in this reference will be published by the Fund in all India edition of atleast two daily newspapers, one each in English and Hindi. Investors are requested to register their e-mail addresses with Mutual Fund. Dashboard In accordance with clause 5.8.4 of the SEBI Master Circular, the AMC has developed a dashboard on the website wherein the investor can access information relating to scheme’s AUM, investment objective, expense ratios, portfolio details and past performance of each scheme. In accordance with SEBI circular no. SEBI/HO/IMD/PoD1/CIR/P/2024/150 dated November 05, 2024, disclosures w.r.t. expense ratio, returns and/or yield of the schemes will be made for both regular and direct plans. Refer to AMC website (https://www.dspim.com/mandatory-disclosures/dashboard) for further details. Risk-o-Meter In accordance with SEBI circular no. SEBI/HO/IMD/PoD1/CIR/P/2024/150 dated November 05, 2024, in addition to the existing labels relating to levels of risk i.e. Low, Low to Moderate, Moderate, Moderately High, High and Very High, the Risk-o- SO no. 38 meter shall also be depicted using a colour scheme. In accordance with clause 5.16.1 of the SEBI Master Circular, AMC, based on internal assessment, shall disclose the following in all disclosures, including promotional material or that stipulated by SEBI: a. risk-o-meter of the scheme wherever the performance of the scheme is disclosed. b. risk-o-meter of the scheme and benchmark wherever the performance of the scheme vis-à-vis that of the benchmark is disclosed. The portfolio disclosure shall also include the scheme risk-o-meter, name of benchmark and risk-o-meter of benchmark. Further, as per Clause 17.4.1.i and 17.4.1.j of the Master Circular, Risk-o-meters shall be evaluated on a monthly basis and Mutual Funds/AMCs shall disclose the Risk- o-meters along with portfolio disclosure for their schemes on AMCs website and on AMFI website within 10 days from the close of each month. (Refer to AMC website https://www.dspim.com/mandatory-disclosures/portfolio-disclosures and refer to AMFI website https://www.amfiindia.com/investor-corner/online- center/riskmeterinformation 88Mutual Funds shall also disclose the risk level of schemes as on March 31 of every year, along with number of times the risk level has changed over the year, on AMCs website and AMFI website. Refer to AMC website https://www.dspim.com/mandatory-disclosures/annual-risk- o-meter-disclosure and refer to AMFI website https://www.amfiindia.com/investor-corner/online-center/riskmeterinformation Any change in risk-o-meter of the Scheme or its benchmark shall be communicated by way of Notice cum Addendum and by way of an e-mail or SMS to unitholders of that particular scheme. Investors may please note that the Risk-o-meter disclosed is basis internal assessment of the scheme portfolio as on the date of disclosure. Scheme Summary The AMC has provided on its website a standalone scheme document for all the Document Schemes which contains all the details of the Scheme including but not limited to Scheme features, Fund Manager details, investment details, investment objective, expense ratios, etc. Scheme summary document is uploaded on the websites of SO no. 38 AMC, AMFI and stock exchanges in 3 data formats i.e. PDF, Spreadsheet and a machine readable format (either JSON or XML). In accordance with SEBI circular no. SEBI/HO/IMD/PoD1/CIR/P/2024/150 dated November 05, 2024, disclosures w.r.t. expense ratio of the schemes will be made for both regular and direct plans. Refer to AMC website https://www.dspim.com/mandatory-disclosures/scheme- summary-document Compliance with In line with clause 17.5 of the SEBI Master Circular, the PRC of the Scheme based Potential Risk on interest rate risk and credit risk of the Scheme is being classified. Class Matrix norms Further, the investors are requested to note following in accordance with the SEBI Master Circular read along with the clarification issued by AMFI: (i) when PRC cell classification is changed into a cell with either a higher interest rate risk or credit risk, mutual funds shall intimate to all unit holders about the change in the PRC value post completion of the fundamental attribute change (FAC) process. This shall be in addition to the intimation to unit holders about the proposed FAC and the 30-day exit period, prior to the change. (ii) the change in the PRC value due to investment actions, price changes, rating changes, etc. shall be determined as part of the day-end post trade compliance check and if the day end PRC value is higher than the maximum risk specified for either of the risks, it shall be rebalanced within a period specified in the Scheme Information Document of the Scheme. Such rebalancing shall be monitored by the Investment Management Committee of the AMC. However, the rule relating to maximum residual maturity of the instrument as per clause 19 of the SEBI Master circular shall be part of pre-trade checks. Further, only a permanent change in the PRC positioning of a scheme into a higher risk cell will be regarded as a FAC. 89Special Investor are requested to read special consideration section in SAI. Consideration C. Transparency/NAV Disclosure SO no. 41 & 42 The NAVs of the Scheme/plans will be calculated by the Mutual Fund on each Business Day and will be made available by 11 p.m. of the same Business Day. The information on NAVs of the Scheme/plans may be obtained by the Unit Holders, on any day, by calling the office of the AMC or any of the Investor Service Centres at various locations. The NAV of the Scheme will also be updated on the AMFI website www.amfiindia.com and on www.dspim.com. In case of delay, the reasons for such delay would be explained to AMFI in writing. If the NAVs of the Scheme are not available before commencement of business hours on the following day due to any reason, the Fund shall issue a press release providing reasons for the delay and explaining when the Fund would be able to publish the NAVs. If the NAVs of the Scheme for a business day (Day T) is not published till 3.00 p.m. on the following business day (T+1) due to any reason, the Investment Manager shall temporary suspend all transactions (subscription/redemption) from T+2 business day onwards, till NAVs of the Scheme for Day T and Day T+1 are published. Latest available NAVs shall be available to unitholders through SMS, upon receiving a specific request in this regard. Refer relevant disclosures mentioned in the SAI available on AMC website i.e. www.dspim.com D. Transaction charges and stamp duty- Transaction charges: In line with the provisions of SEBI Circular No. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2025/115 dated August 08, 2025, transaction charges paid to Mutual Fund distributors has been discontinued from the date of issue of the Circular. Stamp Duty: Mutual fund units issued against Purchase transactions would be subject to levy of stamp duty @ 0.005% of the amount invested. For further details, please refer SAI. E. Associate Transactions- Please refer to Statement of Additional Information (SAI) F. Taxation- For details on taxation please refer to the clause on Taxation in the SAI apart from the following: The information provided is as per the provisions of the Income-tax Act, 1961 (“the Act”), as amended by the Finance Act, 2025. The information is provided for general information only. It does not purport to be a complete analysis of all relevant tax considerations; nor does it purport to be a complete description of all potential tax costs, tax incidence and risks for the investors. In view of the individual nature of the implications, each investor is advised to consult his or her own tax advisors/authorized dealers with respect to the specific amount of tax and other implications arising out of his or her participation in the Schemes. It is assumed that units of mutual fund are held as capital asset by the investors. $Specified Mutual Funds 90Particulars Resident Investors NRI/PIOs & Other Non- FPI Investors Mutual resident Investors other Fund than FPI Tax Rates TDS Rates Tax Rates TDS Rates Tax Rates TDS Rates Tax / TDS Rates Tax on 10% i.In respect of 20% (u/s 20% (u/s 20% (u/s NIL (u/s Income (under non-resident 196A) or as 115AD) 196D) or 10(23D)) Distributed section 194K) non-corporate per as per by Mutual Taxable at applicable applicable Funds normal rates DTAA DTAA of tax whichever whichever applicable to is lower is lower the assessee (other than units purchased in foreign currency) ii.In respect of non-resident (not being company) or foreign corporates - 20%(for units purchased in foreign currency) Capital Gains Long Term: Listed Units 12.5% (u/s 112) NIL 12.5% (u/s 12.5% (u/s 12.5% NIL NIL (u/s of a 112) 195) without 10(23D)) Specified exchange Mutual Fund fluctuation acquired (u/s 115AD) prior to 1 April 2023 Unlisted 12.5% (u/s 112) NIL 12.5% without 12.5% 12.5% NIL (u/s Units of a exchange without without 10(23D)) Specified fluctuation exchange exchange Mutual Fund (u/s 112) fluctuation fluctuation acquired (u/s 195) (u/s 115AD) prior to 1 April 2023 NIL Short Term: 91Units of a Taxable at NIL In respect of In respect 30% (u/s NIL NIL (u/s Specified normal rates of non-resident of non- 115AD) 10(23D)) Mutual Fund tax applicable non-corporate resident acquired on to the assessee Taxable at non or after 1st normal rates corporates April 2023 of tax - 30% will be short applicable to term the assessee. In respect irrespective of non- of holding In respect of resident period non-resident corporates( corporates: u/s 195): 35% 35% $ The definition of Specified Mutual Fund as per section 50AA has been amended w.e.f 1 April 2025 which reads as "Specified Mutual Fund" means, (a) a Mutual Fund by whatever name called, which invests more than sixty-five per cent of its total proceeds in debt and money market instruments; or (b) a fund which invests sixty-five per cent or more of its total proceeds in units of a fund referred to in sub-clause(a). As per the said section, gains/losses from units of Specified Mutual Fund would be deemed to be short term capital gain/losses irrespective of the holding period. This is applicable for all such units which are acquired on or after Apr 1, 2023. For units which were acquired prior to that, rates applicable to long term capital gains shall be applicable if the units are held for a period of 24 months or more. Additional Notes: 1. Income of Mutual Fund is exempt from tax as per section 10(23D) of the Act. 2. Based on the investment objectives of the scheme, the scheme will potentially be classified as "Specified Mutual Fund" for the purpose of taxation. Accordingly, the rates covered above are as applicable to Specified Mutual Funds. 3. These rates should also applicable to units acquired in case of consolidation of options under any scheme of a mutual fund (in the absence of any specific exemption provision in the Act) 4. The above rates are subject to surcharge as applicable (refer table below for rates) and Health and Education cess at the rate of 4% on income tax and surcharge. Income > Incom Income 50 lakhs e > 1 Income > > 5 cr and upto cr and 2 cr and and Income exceeding Particulars 1 upto 2 upto 5 upto 10 10 cr(in Rs) crores(in cr(in cr(in Rs) cr(in Rs) Rs) Rs) Resident and Non Resident Individuals / HUFs / BOIs / AOPs and 10% 15% 15% 15% 15% Artificial juridical persons - Long Term Capital Gains Non Resident 10% 15% 25% 25%& 25%& Individuals / 92HUFs / BOIs / AOPs and Artificial juridical persons - Short Term Capital Gains and Income Distribution Firms, Local - 12% 12% 12% 12% authorities Co-operative - 7% 7% 7% 12% societies Co-operative societies ++(New 10% 10% 10% 10% 10% regime under section 115BAD) Domestic - 7% 7% 7% 12% Company Domestic Company ++(New 10% 10% 10% 10% 10% regime under section 115BAA) FII/ FPI, Foreign - 2% 2% 2% 5% company Please note surcharge is not applicable in case of TDS deducted on income distributed to resid ent investors under section 194K & The maximum rate of surcharge for individuals and HUFs or association of persons [other than a cooperative society], or body of individuals, whether incorporated or not, or an artificial juridical person referred to in sub-clause (vii) of clause (31) of section 2 who opt for the new tax regime under section 115BAC, shall be 25% instead of 37% under normal provisions (Old tax r egime). The new tax regime would be the default tax regime from FY 2023-24 onwards. ++ In case company / co-operative society opts for new regime of taxation, then the surcharge w ould be applicable at the rate of 10% irrespective of the taxable income. Any person entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB (hereafter referred to as deductee), shall furnish his valid and operative Permanent Account Number to the person responsible for deducting such tax (hereafter referred to as deductor), failing which tax shall be deducted at the higher of the following rates, namely: (i) at the rate specified in the relevant provision of this Act; or (ii) at the rate or rates in force; or (iii) at the rate of twenty per cent. The aforesaid provision dealing with higher taxation in the absence of furnishing Permanent Account Number shall not apply to a non-resident with effect from 1st June, 2016 on furnishing t he following details and documents by such non-resident: (i) name, e-mail id, contact number; 93(ii) address in the country or specified territory outside India of which the non-resident is a resident; (iii) a certificate of his being resident in any country or specified territory outside India from the Government of that country or specified territory if the law of that country or specified territory provides for issuance of such certificate; (iv) Tax Identification Number of the non-resident in the country or specified territory of his residence and in case no such number is available, then a unique number on the basis of which the non-resident is identified by the Government of that country or the specified territory of which he claims to be a resident. In case of investments by NRIs in closed ended funds during NFO, at the time of redemption of units, TDS will be deducted at the applicable rate. However, in respect of those Unit Holders who have acquired the units on the Stock Exchange post listing of units, the Unit Holders would need to provide a certificate from a Chartered Accountant certifying the details of acquisition of units to the Fund within two days of maturity of the Scheme, so as to enable the Fund to deduct TDS at the applicable rates. In the event of such details not being provided, the Fund would deduct TDS on the redemption proceeds at the highest rate of TDS applicable. For detailed tax implications, please refer to 'SECTION VIII – TAX & LEGAL & GENERAL INFORMATION' provided in 'Statement of Additional Information ('SAI')'. G. Rights of Unitholders- Please refer to SAI for details. H. List of official points of acceptance: Website Link- https://www.dspim.com/mandatory-disclosures/disclosures-under-offer-documents/list-of- investor-service-centers-iscs-official-points-of-official-points-of-acceptance-collecting-banker-details I. Penalties, Pending litigation or Proceedings, findings of Inspections or Investigations for which action may have been taken or is in the process of being taken by any Regulatory Authority SO no. 49 & 50 Investors are requested to refer AMC website. Link- https://www.dspim.com/mandatory- disclosures/disclosures-under-offer-documents/penalties-pending-litigation-or-proceedings-findings-of- inspections-or-investigations Undertaking from Trustees The Trustees have ensured that DSP FMP – Series 277 to 279 (30 Days to 120 Months), approved by them, is a new product offered by DSP Mutual Fund and is not a minor modification of any existing scheme/fund/product. DSP FMP – Series 277 to 279 (30 Days to 120 Months) Fund has been approved by the Trustees vide circular resolution dated October 05, 2025. SO no. 64 Notwithstanding anything contained in this SID, the provisions of the SEBI (MF) Regulations, 1996 and the guidelines thereunder shall be applicable. For DSP Trustee Private Limited Trustee: DSP Mutual Fund Sd/- Place: Mumbai Shitin D. Desai Director Date: _____________, 2025 94