Parag Parikh Large Cap Fund

PPFAS MUTUAL FUND SCHEME INFORMATION DOCUMENT (Offer of units of Rs. 10/- each for cash (subject to applicable load) during the New Fund Offer and Continuous Offer for units at Applicable NAV) S t d.Obs.1 Name of the Scheme Parag Parikh Large Cap Fund Type of the Scheme An open ended equity scheme predominantly investing in large cap stocks New Fund Offer opens on New Fund Offer closes on Scheme Reopens on This product is suitable Risk-o-meter for investors who are seeking* Scheme’s Risk-o-meter AMFI Tier I Benchmark’s Risk-o- meter Std.Obs.3 (Nifty 100 TRI ) ● Wealth creation over long term. ● To invest predominantly in equity and equity related instruments of large cap companies. *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. Note: The product labelling assigned during the NFO is based on internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made Name of the Mutual Fund PPFAS Mutual Fund Name of the Sponsor Parag Parikh Financial Advisory Services Limited CIN: U67190MH1992PLC068970 Name of the Asset Management Company PPFAS Asset Management Private Limited CIN: U65100MH2011PTC220623 Name of the Trustee Company PPFAS Trustee Company Private Limited CIN: U65100MH2011PTC221203 Registered Address, Website of the Entities 81/82, 8th Floor, Sakhar Bhavan, Ramnath Goenka Marg, 230, Nariman Point, Mumbai- 400021, Maharashtra, India Website: https://amc.ppfas.com The particulars of the Scheme have been prepared in accordance with the Securities and Exchange Board of Page 1 of 66India (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. This SID can be modified from time to time through an Addendum whenever a material change occurs. Such material change will also be filed with SEBI and circulated to all Unit holders or may be publicly notified by advertisements in newspapers subject to Regulations. Investors can obtain such Addenda from the Mutual Fund/ its Investor Service Centres or distributors / AMC Website. The investors are advised to refer to the Statement of Additional Information (SAI) for details of PPFAS Mutual Fund, Standard Risk Factors, Special Considerations, Tax and Legal issues and general information on https://amc.ppfas.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, https://amc.ppfas.com. The Scheme Information Document (Section I and II) should be read in conjunction with the SAI and not in isolation. Th e Mutual Fund has not authorized any person to provide any information or representation not confirmed in the SAI and SID. Investors are advised, while taking investment decisions, not to rely on any such information or representation that is not contained in the SAI / SID All information in the Scheme Information Document (SID) and Key Information Memorandum (KIM) shall be updated 30 days before the launch of the scheme. Std.Obs.64 Any modification to the New Fund Offer Period shall be announced by way of an Addendum uploaded on the website of the AMC Std.Obs.34 This Scheme Information Document is dated September 12, 2025. Page 2 of 66INDEX The Scheme Information Document has two sections- Section I and Section II. While Section I contains scheme specific information that is dynamic, Section II contains elaborated provisions (including references to applicable Regulations/circulars/guidelines) with reference to information/disclosures provided in Section I. Sr.No. Details of Content Pg no. SECTION I 1 Part I – Highlights/Summary of the Scheme 5 Due Diligence by the Asset Management Company 2 Part II – Information about the Scheme A How will the Scheme allocate its assets 12 B Where will the Scheme invest? 15 C What are the investment strategies? 17 D How will the Scheme benchmark its performance? 19 E Who manages the Scheme? 22 F How is the Scheme different from existing schemes of the Fund 22 G How has the Scheme performed? 22 H Additional Scheme related disclosures 22 3 Part III – Other Details A Computation of NAV 23 B New Fund Offer (NFO) expenses 24 C Annual Scheme recuring expenses 24 D Load structure 27 SECTION II I Introduction A Definitions/Interpretation 29 B Risk factors 29 C Risk mitigation strategies 37 Page 3 of 66II Information about the Scheme A Where will the Scheme invest? 42 B What are the investment restrictions? 45 C Fundamental Attributes 51 D Other Scheme specific disclosures 51 III Other Details A Periodic disclosures 63 B Transparency/NAV disclosure 65 C Transaction charges and stamp duty 65 D Associate transactions 65 E Taxation 65 F Rights of Unitholders 67 G List of official points of acceptance 67 H Penalties, Pending Litigation or proceedings, findings etc. 67 Page 4 of 66SECTION I Part I. HIGHLIGHTS/SUMMARY OF THE SCHEME Sr. No. Title Description I. Name of the scheme Parag Parikh Large Cap Fund II. Category of the Scheme Large Cap Fund III. Scheme type An open ended equity scheme predominantly investing in large cap stocks. IV. Scheme code It is to be obtained from NSDL and will be updated at the time of filing final Std.Obs.7 launch of Scheme Information Document (SID) with SEBI. V. Investment objective The objective of the Scheme is to generate long term capital appreciation and income distribution to investors by predominantly investing in equity and equity related instruments of large cap Std.Obs.5 companies. However, there is no assurance that the investment objective of the Scheme will be achieved and the Scheme does not assure or guarantee any returns. VI. Liquidity/listing details The scheme being offered is an open ended equity scheme. It will open for sale and repurchase/redemption of units within 5 business days from the date of allotment. Being an open ended scheme, the scheme is open for repurchase/redemption on all business days. Redemption proceeds shall be dispatched within three working days from the date of redemption request. Further, in exceptional circumstances, transfer of redemption shall be within 5 working days as per SEBI and/or AMFI Guidelines. A penal interest of 15% per annum or any other rate as may be prescribed by SEBI from time to time will be paid by the AMC for the period of delay in case the redemption proceeds are not transferred within the prescribed time. The scheme would not be listed on any of the stock exchanges. The AMC, at its discretion, can undertake listing on any of the stock exchange. Please refer to section 'Redemption' for more details. VII. Benchmark (Total Return ● The scheme’s benchmark is Nifty 100 Total Return Index (TRI) Index) ● The benchmark is based on AMFI Tier-1 benchmark ● Justification - Nifty 100 TRI - The composition of the aforesaid benchmark Std.Obs.25 is such that, it is most suited for comparing the performance of the scheme. The NIFTY 100 TRI covers the overall universe of large cap companies in India. Since the fund is a large cap fund, the NIFTY 100 TRI is an appropriate benchmark and will be able to give a true and accurate comparative analysis The Trustee reserves the right to change the benchmark for the evaluation of the performance of the Scheme from time to time, keeping in mind the investment objective of the Scheme and the appropriateness of the benchmark, subject to the compliance with Regulations/ circulars issued by SEBI and AMFI in this regard from time to time. VIII. NAV disclosure The AMC shall update the NAVs on the website of the Mutual Fund (https://amc.ppfas.com) and on the website of Association of Mutual Funds in India – AMFI (www.amfiindia.com) by 11.00 p.m. on every Business Day. For further details, kindly refer Section III.B of the SID. The first NAV shall be calculated and disclosed within 5 business days of allotment of units under the NFO. Page 5 of 66IX. Applicable timelines Under normal circumstances, the redemption or repurchase proceeds shall be released to the unitholders within 3 working days from the date of redemption or repurchase and in case of exceptional circumstances, the transfer shall be made within 5 working days. For IDCW, under normal circumstances, the IDCW proceeds shall be released to unitholders within 7 working days from the record date and in case of exceptional circumstances it shall be released within 9 working days from the record date as per SEBI and/or AMFI Guidelines dated January 16, 2023 as amended from time to time. The AMC shall be liable to pay interest to the unitholders at such rate as may be specified by SEBI for the period of such delay (presently @ 15% per annum) along with the proceeds of redemption or repurchase or IDCW. However, the AMC will not be liable to pay any interest or compensation or any amount otherwise, in case the AMC / Trustee is required to obtain from the investor / unitholders, verification of identity or such other details relating to subscription for units under any applicable law or as may be requested by a regulatory body or any government authority, which may result in delay in processing the application. X. Plans and Options The Scheme offers two Plans: Plans/Options and sub- options under the Scheme 1. Direct Plan 2. Regular Plan Both Regular and Direct Plan(s) offers only two Options, viz. -Growth Option -Income Distribution cum capital withdrawal Option (IDCW) Income Distribution cum capital withdrawal Option have the following sub- options/facilities: -Payout of IDCW (“Payout”) and -Re-investment of IDCW (“Re-investment”) Under this Option, it is proposed to declare IDCW subject to availability of distributable surplus, as computed in accordance with SEBI (MF) Regulations. Investors should note that the IDCW amount can be distributed out of investor’s capital (Equalization Reserve), which is part of sale price that represents realized gains. The NAVs of the above plans will be different and separately declared; the portfolio of investments remains the same. The Investors should indicate the plan / option for which Subscription is made by indicating the choice in the appropriate box provided for this purpose in the application form. In case of valid application received without any choice of option/ facility, the following default plan / option will be considered: Default Plan – Investors subscribing under Direct Plan of the Scheme will have to indicate “Direct Plan” against the Scheme name in the application form. However, if distributor code is mentioned in application form, but “Direct Plan” is mentioned against the Scheme name, the distributor code will be ignored and the application will be processed under “Direct Plan”. Further, where application is received for Regular Plan without Distributor code or “Direct” mentioned in the ARN Column, the application will be processed under Direct Plan. Page 6 of 66Default Option – Growth Default IDCW Facility- Payout In cases of transactions received in Regular Plan with Invalid ARN, the transactions shall be processed under Direct Plan of the same scheme. The AMC shall adhere with the AMFI Best Practices Guidelines Circular No.111 /2023-24 dated February 2, 2024, and as amended from time to time where the transactions from investors are received with invalid ARNs. As per AMFI Best Practice Guideline No: 135/BP/ 107 /2023-24 dated May 04, 2023, AMC can accept business only from an empaneled distributor. Transactions received, if any, from / under the ARN of a non-empaneled MFD may be processed under Direct Plan, with prompt intimation to the non- empaneled MFD, and the investor. For detailed disclosure of default plans and options, kindly refer SAI. Also refer to Section II for additional information. XI. Load Structure Entry Load: NIL Exit Load: NIL The Trustees shall have the right to prescribe or modify the exit load structure with prospective effect subject to a maximum prescribed under the Regulations. XII. Minimum Application During New Fund Offer period and on continuous basis: Amount/switch in New Purchase – Rs. 1,000/- and in multiples of Re. 1 thereafter. Monthly SIP- Rs. 1,000/- and in multiples of Re. 1 thereafter. Quarterly SIP – Rs. 3,000/- and in multiple of Re. 1 thereafter. Rs. 1,000/- and multiples of Re. 1 thereafter . XIII. Minimum Additional Purchase Amount XIV. Minimum Redemption/switch Re. 1000/- or 1 units or account balance, whichever is lower in respect of out amount each Option. The scheme does not require maintenance of minimum balance in the units of the scheme. Std.Obs.36 In case the balance in the account of the unitholder does not cover the amount of redemption request, then the Mutual Fund is authorized to redeem all the units in the folio and send the redemption proceeds to the unitholder. XV New Fund Offer Period NFO opens on: This is the period during NFO closes on: which a new scheme sells its units to the As permitted by SEBI, NFO shall remain open for subscription for a investors. minimum period of three (3) working days but not more than fifteen (15) calendar days. Any extension or change to the NFO dates will be subject to the requirement of NFO period not exceeding 15 days. Any changes in dates of NFO will be published through notice on AMC website i.e. https://amc.ppfas.com/ and display of such notice on the notice board at each of the official point for acceptance of transactions for the mutual fund. XVI New Fund Offer Price: Rs. 10/- per unit. This is the price per unit that the investors have to pay to Page 7 of 66invest during the NFO. XVII. Timelines for deployment of In accordance with SEBI Circular No. SEBI/HO/IMD/IMD- Funds collected during New PoD1/P/CIR/2025/23 dated February 27, 2025, the AMC shall deploy the Fund Offer (NFO) period funds garnered during the NFO within 30 Business Days from the date of allotment of units. In an exceptional case, if the AMC is not able to deploy the funds as per the aforesaid timeline, justification in writing, including details of efforts taken to deploy the funds shall be placed before the Investment Committee of the AMC. The Investment Committee, after examining the root cause for delay in deployment, may extend the timeline by 30 Business Days. The Investment Committee shall also recommend on how to ensure deployment within 30 Business Days going forward and monitor the same. However, an extension shall not be granted if the Scheme’s assets are liquid and readily available. In case the funds are not deployed as per the aforesaid mandated plus extended timelines, the AMC shall follow the requirements specified under the aforesaid circular including reporting the deviation to Trustees at each stage. The Trustees shall monitor the deployment of funds collected in NFO and take steps, as may be required, to ensure that the funds are deployed within a reasonable timeframe. XVIII Segregated portfolio/side Currently, there is no segregated portfolio in the Scheme. The Scheme carries pocketing disclosure the provision to segregate the portfolio, if required in future. To know details Std.Obs.53 about provision for segregation of portfolio, kindly refer SAI. XIX. Swing pricing disclosure Not Applicable Std.Obs.54 XX. Stock lending/short selling The Scheme may engage in short selling of securities in accordance with framework relating to short selling and securities lending and borrowing specified by SEBI. For details on this provision. Kindly refer SAI, section C – General Information. XXI. How to Apply and Other Investors can apply for their transactions requests either offline or details electronically using the relevant application / transaction request forms available on our website https://amc.ppfas.com/ or at any of our Officials Std.Obs.35 Points of Acceptance, Investor Service Centres and RTA (Computer Age Management Services Limited’s branch offices). The application form/transaction slip for subscription/ redemption/ switches can be submitted at our Official Points of Acceptances whose addresses are available on the website of the AMC. For Summary of process please refer to the SAI and application form for the instructions. Details in section II. XXII. Investor services ● Contact details for general service requests: Toll Free No. – 1800- 266- 7790, write to mf@ppfas.com or send communications to registered office address. ● Contact details for complaint resolution: Mr. Aalok Mehta, Head - Investor Relations & Direct Channel or write to mf@ppfas.com ● Investors also have an option to approach SEBI, by logging a complaint on SEBI’s complaints redressal system (SCORES 2.0) https://scores.sebi.gov.in ● SMART ODR Portal – Link’ is being made available for investors on https://amc.ppfas.com/out-source-url/?https://smartodr.in/login Page 8 of 66XXIII Specific attribute of the NIL. The scheme, being open ended in nature, has perpetual duration. scheme (such as lock in, duration in case of target maturity scheme/close ended schemes) (as applicable) XXIV Special product/facility The Special Products / Facilities available under the Scheme, are: available on ongoing basis i. Systematic Investment Plan (SIP) - The Unit holders under the eligible Scheme(s) can benefit by investing specified Rupee amounts at regular intervals for a continuous period. Under the SIP, Investors can invest a fixed amount of Rupees at regular intervals for purchasing additional Units of the Scheme(s) at Applicable NAV. ii. SIP Top up Facility Investors may avail SIP Top-up facility where they have options to increase the SIP Installment at pre-defined intervals. This will enhance the flexibility of the investor to invest higher amounts during the tenure of the SIP. iii. SIP Pause Facility The Fund offers SIP Pause facility for investors who wish to temporarily pause their SIP in the Scheme(s) of the Fund. iv. Systematic Transfer Plan (STP) A unitholder may establish a Systematic Transfer Plan (STP) and choose to transfer an amount from one PPFAS MF Scheme (Source Scheme) to another PPFAS MF Scheme (Target Scheme) on a date/ frequency prescribed by the Investment Manager. The amount thus withdrawn by redemption shall be converted into units at the applicable NAV on the scheduled day and such units will be subtracted from the unit balance of that unitholder. The net amount will be considered for allotment in the target scheme and units will be allotted as per the applicable NAV of the target scheme. v. Systematic Withdrawal Plan (SWP) This facility available to the unitholders of the fund enables them to redeem fixed sums or fixed number of units from their unit accounts at periodic intervals. The amount withdrawn under SWP by redemption shall be converted into the Fund units at the Repurchase price and such units will be redeemed/ subtracted from the unit balance of that unitholder. In case the date falls during a non business day/ book closure period the immediate next Business day will be considered for this purpose. vi.Facilitating transactions through Stock Exchange Mechanism PPFAS Mutual Fund is introducing the facility to purchase and redeem units of PPFAS Mutual Fund scheme(s) through Stock Exchange Platform, in accordance with SEBI Circulars No. CIR/MRD/DSA/32/2013 dated October 4, 2013, read with SEBI Master Circular for Mutual Funds No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024. Please refer SAI for more details. vii. Transaction through “Channel Distributors” Investors may enter into an agreement with certain distributors/ Registered Investment Advisers (RIAs) / Portfolio Managers (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/agreement/ any such arrangement in favour of the Channel Distributor, as the case may be. Please refer SAI more details. Page 9 of 66viii. PPFAS Corp (Web App) PPFAS Mutual Fund launched a new web app "PPFAS Corp" with effect from August 20, 2024. PPFAS Corp offers secure, online investment management for existing corporate entities. Transactions through this app function similarly to those on PPFAS Selflnvest App, with an additional layer of initiators and approvers. This ensures that every transaction is reviewed and authorized before processing, followed with the resolutions approved by the Board of Directors of the respective Companies. Onboarding of new Companies (creating a new folio) will continue to happen offline. PPFAS Corp can be accessed at https://corp.ppfas.com. ix. Transactions through Electronic Mode The eServices facility includes PPFAS MF SelfInvest Online, PPFAS-MF SelfInvest Mobile App. Please refer SAI for more details. x. Email based transactions Non-individual investors can submit transactions via email. To avail of this facility, submission of either a Board Resolution (BR) or an authority letter is mandatory. Please refer more details under ‘Other Scheme Specific Disclosures’. xi. Registration of Multiple Bank Accounts in respect of an Investor Folio An Investor can register with the Fund upto 5 bank accounts in case of individuals and HUFs and upto 10 in other cases. Registering of Multiple Bank Accounts will enable the Fund to systematically validate the pay-in of funds and avoid acceptance of third party payments. For the purpose of registration of bank account(s), Investor should submit Bank Mandate Registration Form (available at the AMC Website, office of AMC and Official Points of Acceptance) together with documents as given in the SAI. xi. SIP cancellation: The AMC will endeavour to have the cancellation of registered SIP mandate within T+2 days from the date of receipt of the cancellation request from the investor. The existing instructions/mandate would continue till the date that when it is confirmed that the SIP has been cancelled. xii. 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. xiii. MF Central as Official Point of Acceptance: Pursuant to SEBI Master circular for Mutual Funds no. SEBI/HO/IMD/IMD- PoD-1/P/CIR/2024/90 dated June 27, 2024, to comply with the requirements of RTA inter-operable Platform for enhancing investors’ experience in Mutual Fund transactions / service requests, the Qualified RTAs, at present, Kfin Technologies Private Limited (“KFintech”) and Computer Age Management Services Limited (“CAMS”) have jointly developed MFCentral - A digital platform for Mutual Fund investors (hereinafter referred to as “MFCentral” or “the Platform”). MFCentral is created with an intent to be a one stop portal / 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 and Conditions of the Platform. 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. With a view to comply with all provisions of the aforesaid circular and to increase digital penetration of Mutual Funds, PPFAS Mutual Fund designates MFCentral as its Official Point of Acceptance (DISC - Designated Page 10 of 66Investor Service Centre) w.e.f. September 23, 2021. Any registered user of MFCentral, requiring submission of physical document as per the requirements of MFCentral, may do so at any of the DISCs or collection centres of Kfintech or CAMS. XXV. Weblink Click here for the Total Expense Ratio (TER) - https://amc.ppfas.com/statutory-disclosures/total-expense-ratio-TER/ Click here for Factsheet of the Fund - https://amc.ppfas.com/downloads/factsheet/ DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY Std.Obs.55 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) A confirmation that 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 scheme ‘Parag Parikh Large Cap Fund’ as approved by them on June 20, 2025 is a new product offered by PPFAS Mutual Fund and is not a minor modification of any existing scheme/fund/product. Place: Mumbai. Signed: Sd/- Date: September 12, 2025 Name: Priya Hariani Designation: Chief Compliance Officer and Company Secretary Page 11 of 66Part II. INFORMATION ABOUT THE SCHEME A. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? Under normal circumstances, the asset allocation pattern will be as follows: Instruments Normal Allocation (% of Risk Profile Net Assets) Minimum Maximum High/Medium/Low Equities & Equity related securities of 80% 100% Very High large cap companies Equities & Equity related securities of 0% 20% Very High other than large cap companies, equity & equity related securities of foreign companies Debt and Money Market Instruments* 0% 20% Low Units issued by REITs and InvITs 0% 10% Low to Medium The investment universe of “Large Cap” shall comprise companies as defined by SEBI from time to time. In terms of SEBI Master Circular for Mutual Funds dated June 27, 2024, the universe of “Large Cap” shall consist of 1st to 100th company in terms of full market capitalization. Mutual Funds are required to adopt a list of stocks of ‘large cap’ companies prepared by AMFI in this regard. Subsequent to any updates to the said list as uploaded by AMFI, the portfolio of the Scheme will be rebalanced within a period of one month. *Money market instruments will include commercial papers, certificate of deposit, Triparty REPO, Reverse Repo and equivalent and any other like instruments as specified by SEBI and Reserve Bank of India from time to time. Investment in Foreign Securities / Overseas ETFs would be as per SEBI Master Circular for Mutual Funds dated June 27, 2024, as may be amended from time to time. The Scheme may invest up to US $ 100 million in foreign securities. As per SEBI Master Circular for Mutual Funds dated June 27, 2024, Mutual Funds can make overseas investments subject to a maximum of US $ 1 billion per Mutual Fund within the overall industry limit of US $ 7 billion. The overall ceiling for investment in overseas ETFs that invest in securities is US$ 1 billion subject to a maximum of US$ 300 million per mutual fund. The Scheme may invest up to US $ 30 million in Overseas ETFs. Std.Obs.16 The Scheme may undertake repo/reverse repo transactions in Corporate Debt Securities in accordance with the directions issued by RBI and SEBI from time to time. In addition to the instruments stated in the table above, the Scheme may enter into repos/reverse repos as may be permitted by RBI. From time to time, the Scheme may hold cash. A part of the net assets may be invested in the Tri-party Repos on Government securities or treasury bills (TREPS) or repo or in an alternative investment as may be provided by RBI to meet the liquidity requirements, subject to approval, if any. Std.Obs.13 The Scheme may engage in securities lending in accordance with the framework relating to short selling and securities lending and borrowing specified by SEBI. Subject to the SEBI (MF) Regulations, as applicable from time to time, the Scheme seek may engage in Stock Lending. Stock Lending means the lending of stock to another person or entity for a fixed period of time, at a negotiated compensation in order to enhance returns of the portfolio. The securities lent will be returned by the borrower on the expiry of the stipulated period. The Scheme will ensure compliance with SEBI (MF) Regulations and with Securities Lending Scheme, 1997, SEBI Master Circular for Mutual Funds No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 and framework for short selling and borrowing and lending of securities notified by SEBI from time to time. The maximum exposure of the Scheme to a single intermediary in the stock lending at any point of time would be limited to 5% of the market value of its equity portfolio i.e the limit of 5% will be at broker level or up to such limits as may be specified by SEBI. Page 12 of 66The Scheme will not engage in stock lending and borrowing for more than 20% of net assets of the scheme. The Scheme will not lend more than what is permitted under applicable SEBI (MF) Regulations. For detailed understanding on Securities lending by the Scheme, Investors are requested to refer to the SAI. The Scheme may invest in other scheme(s) under the same AMC or any other mutual fund without charging any fees, provided that aggregate inter-scheme investment made by all Schemes under the same AMC or in Scheme(s) under the management of any other asset management shall not exceed 5% of the net asset value of the Mutual Fund. Further, the Scheme shall not invest in any fund of funds scheme. Indicative Table (Actual instrument/percentages may vary subject to applicable SEBI circulars) Sl. no Type of Instrument Percentage of exposure Circular references* Upto 20% of net assets in securities lending and not more than 5% of the market SEBI Master circular for Mutual value of its equity portfolio i.e Funds dated June 27, 2024 – 1. Securities Lending the limit of 5% will be at Clause 12.11-Stock Lending broker level will be deployed scheme with single intermediary or upto such limits as may be specified by SEBI. SEBI Master circular for Mutual Derivatives for hedging Up to 100% of total assets 2. Funds dated June 27, 2024 - purposes Clause 12.25 SEBI Master circular for 50% of equity assets of the Equity Derivatives for Mutual Funds dated June 27, scheme 3 non- hedging 2024 – Clause 12.25- Norms purposes Std.Obs.20 for investment and disclosure by Mutual Funds in derivatives SEBI Master circular for 10% of Fixed Income assets Fixed Income Mutual Funds dated June 27, of the scheme. 4 Derivatives for non- 2024 – Clause 12.25- Norms hedging purposes Std.Obs.20 for investment and disclosure by Mutual Funds in derivatives SEBI Master circular for 20% of the net assets of the Mutual Funds dated June 27, 5. Securitized Debt scheme. 2024 – Clause 12.15- Investment restrictions for securitized debt SEBI Master circular for Mutual Funds dated June 27, 2024 – 20% of total assets of the Clause 12.19-Overseas scheme. 6. Overseas Securities investment and SEBI Circular Std.Obs.15 no . SEBI/HO/IMD/IMD-PoD- 1/P/CIR/149 dated November 4, 2024 SEBI Master Circular for 10% of net assets of the 7. ReITs and InvITs Mutual Funds dated June 27, scheme 2024- Clause 12.21 As per regulatory limits SEBI Master circular for Mutual 8. Covered Call Funds- Clause 12.25 SEBI Master Circular for Non-convertible 10% of net assets of the 9. Mutual Funds dated June 27, Preference shares scheme 2024- Clause 12.10 Upto 10% of AUM of the SEBI Circular dated June 27, 10. Credit Default Swaps scheme and shall be within 2024- Clause 12.28.1.3 the overall limits of derivatives SEBI Master circular for Mutual The scheme will invest in Structured obligations, Funds dated June 27, 2024 – 11. these securities as per the credit enhancements Clause 12.3-Investment in SEBI permissible limits instruments having special Page 13 of 66features 12. Repo / reverse repo Upto 10% of the net assets SEBI Master circular for Mutual in Corporate debt and only in AA and above Funds dated June 27, 2024 – securities rated corporate debt securities Clause 12.18.1.1-Participation of mutual funds in repo in corporate debt securities 13. Short term deposits As per regulatory limits SEBI Master circular for Mutual with scheduled Funds dated June 27, 2024 – commercial banks Clause 12.16-Investment in short term deposits of scheduled commercial banks – pending deployment 14. Mutual Fund Units Upto 5% of the net assets of Clause 4 of Seventh Schedule the Mutual Fund (i.e. across all of SEBI (MF) Regulations the schemes of the Fund) The scheme will not invest in following securities: Std.Obs.18 Sr. No. Securities 1. AT1 and AT2 Bonds 2 Fund of Funds Schemes The cumulative gross exposure through equity, debt, money market instruments, units of mutual fund schemes, securitised debt, units issued by REITs and InvITs, equity derivatives, fixed income derivatives, Foreign securities/ Overseas ETFs, repo transactions in corporate debt securities 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 in accordance with SEBI Master Circular for Mutual Funds dated June 27, 2024. Std.Obs.17 However, cash or cash equivalents with residual maturity of less than 91 days may be treated as not creating any exposure in line with SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024. Further, SEBI vide letter dated November 3, 2021 has clarified that Cash Equivalent shall consist of Government Securities, T-Bills and Repo on Government Securities. Std.Obs.14 Pursuant to SEBI Master Circular for Mutual Funds dated June 27, 2024, the Scheme may deploy NFO proceeds in Triparty repo on Government securities or treasury bills (TREPS) before the closure of NFO period. However, the AMC shall not charge any investment management and advisory fees on funds deployed in TREPS during the NFO period. At the time of building up the portfolio post NFO, the Fund Manager may deploy the funds in units of liquid mutual fund schemes to the extent permitted under SEBI (MF) Regulations, in case suitable debt / money market instruments are not available or the Fund Manager is of the view that the risk-reward is not in the best interest of the unit holders. All of the Scheme's assets will be invested in transferable securities. The corpus of the Scheme shall not in any manner be used in option trading, short selling or carry forward transactions as stipulated in SEBI Regulations and amended from time to time. Change in Asset Allocation/ Investment Pattern Std.Obs. 23 & 24 Subject to SEBI (MF) Regulations the asset allocation pattern indicated above may change from time to time, keeping in view market conditions, market opportunities, applicable regulations and political and economic factors. It must be clearly understood that the percentages stated above are only indicative and not absolute and that they can vary substantially depending upon the perception of the Investment Manager, the intention being at all times to seek to protect the interests of the Unit holders. Such changes in the investment pattern will be for short term and for defensive consideration only. In the event of change in the asset allocation, the fund manager will carry out portfolio rebalancing within 30 calendar days or such other timeline as may be prescribed by SEBI from time to time. It may be noted that no prior intimation/indication would be given to investors when the fund manager deviates from Page 14 of 66the asset allocation mentioned above for short term or for defensive considerations, including factors such as market conditions, market opportunities, applicable regulations and political and economic factors. In case such deviations are carried, the fund manager shall endeavor to rebalance the asset allocation within 30 calendar days of the deviation. The investors/unit holders can ascertain details of asset allocation of the scheme as on the last date of each month on AMC’s website at www.amc.ppfas.com that will display the asset allocation of the scheme as on the given day. Portfolio Rebalancing due to passive breaches Std.Obs.22 SEBI vide it’s Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 on Timelines for Rebalancing of Portfolios of Mutual Fund Schemes, the following have been mandated for the applicable schemes of Mutual Funds: In the event that the asset allocation of the scheme should deviate from the ranges as stated in asset allocation table above, then the portfolio of the scheme will be rebalanced by the fund manager for the position indicated in the asset allocation table above within a maximum period of 30 business days from the date of said deviation. In case the portfolio of schemes mentioned are not rebalanced within the above mandated timelines (i.e. 30 Business Days), 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 the mandated rebalancing period. In case the portfolio of schemes is not rebalanced within the aforementioned mandated plus extended timelines, AMCs shall: i. not be permitted to launch any new scheme till the time the portfolio is rebalanced. ii. not to levy exit load, if any, on the investors exiting such scheme(s). As per SEBI Circular no. SEBI/HO/IMD/PoD2/P/CIR/2025/92 dated June 26, 2025, in case of all passive breaches across actively managed mutual fund schemes (excluding Index Funds and ETFs), including those arising due to corporate actions, market movements, instrument maturity or large redemptions etc. , the portfolios shall be rebalanced within 30 business days from the date of breach. This requirement shall also be applicable to breaches of issuer limits, sectoral limits and group exposure limits. B. WHERE WILL THE SCHEME INVEST? Std.Obs.29 The corpus of the Scheme shall be invested in accordance with the investment objective in any (but not exclusively) of the following securities: a) Equity and equity related securities including convertible bonds and debentures and warrants carrying the right to obtain equity shares. b) Securities created and issued by the Central and State Governments and/or repos/reverse repos in such Government Securities as may be permitted by RBI (including but not limited to coupon bearing bonds, zero coupon bonds and treasury bills). c) Securities guaranteed by the Central and State Governments (including but not limited to coupon bearing bonds, zero coupon bonds and treasury bills). d) Debt securities issued by domestic Government agencies and statutory bodies, which may or may not carry a Central/State Government guarantee. e) Corporate debt securities (of both public and private sector undertakings). f) Securities issued by banks (both public and private sector) including term deposits as permitted by SEBI / RBI from time to time and development financial institutions. g) Money market instruments as permitted by SEBI/RBI. Page 15 of 66h) Securitized Debt i) The non-convertible part of convertible securities j) Derivative instruments like Stock/Index Futures, Stock/Index Options, Interest Rate Future, Interest Rate Swap, Forward Rate Agreement and such other derivative instruments permitted by SEBI. k) ADRs / GDRs / Foreign Securities as permitted by Reserve Bank of India and Securities and Exchange Board of India. l) Units of Mutual Fund Schemes/Exchange Traded Funds m) Cash & cash equivalents n) Non-convertible Preference shares o) Repo transactions in corporate debt securities p) Units of REITs & InvITs q) Debt instruments with special features r) Covered call Strategy s) Any other securities subject to requisite approvals from SEBI/RBI, if needed. For applicable regulatory investment limits, please refer the section on "Investment Restrictions”, under Section II. The Fund Manager reserves the right to invest in such other securities as may be permitted from time to time and which are in line with the investment objectives of the Scheme. Subject to the above, any change in the asset allocation affecting the investment profile of the Scheme shall be effected only in accordance with the provisions of sub regulation (15A) of Regulation 18 of the SEBI MF Regulations, as detailed later in this document. Debt Market in India The instruments available in Indian Debt Market are classified into two categories, Government and Non – Government debt securities. The following instruments are available in these categories: A) Government Debt Securities Central Government Debt ★ Treasury Bills ★ Dated Government Securities ★ • Coupon Bearing Bonds • Floating Rate Bonds • Zero Coupon Bonds State Government Debt ★ • State Government Loans • Coupon Bearing Bonds B) Non-Government Debt Instruments issued by Government Agencies and other Statutory Bodies ★ • Government Guaranteed Bonds • PSU Bonds C)Instruments issued by Public Sector Undertakings Commercial Paper ★ Page 16 of 66PSU Bonds ★ Fixed Coupon Bonds ★ Floating Rate Bonds ★ Zero Coupon Bonds ★ D)Instruments issued by Banks and Development Financial Institutions Certificates of Deposit ★ Promissory Notes ★ Bonds ★ Fixed Coupon Bonds ★ Floating Rate Bonds ★ Zero Coupon Bonds ★ E) Instruments issued by Corporate Bodies Commercial Paper ★ Non-Convertible Debentures ★ Fixed Coupon Debentures ★ Floating Rate Debentures ★ Zero Coupon Debentures ★ Pass Through certificates ★ F) Instruments that comprise a major portion of money market activity include, Overnight Call ★ Corporate Debt repo ★ Repo/Reverse Repo Agreements ★ Tri Party Repo/Reverse Repo ★ Treasury Bills ★ Government Securities with a residual maturity of < 1 year ★ Commercial Paper and Certificates of Deposit ★ Apart from these, there are some other options available for short tenure investments that include MIBOR linked debentures with periodic exit options and other such instruments. C. WHAT ARE THE INVESTMENT STRATEGIES? Std.Obs.27 Parag Parikh Large Cap Fund is an actively managed equity scheme that seeks to generate long term capital appreciation and income distribution to unitholders from a portfolio that predominantly invests in equity and equity related securities of large cap companies, and balance in equity and equity related securities of mid or small cap companies, foreign companies, debt securities and money market instruments. For investments in large cap companies, the Fund Manager(s) will select stocks for investment from large cap universe as may be prescribed by SEBI/AMFI from time to time. The Scheme aims to maximize long term total return by investing predominantly in equity and equity related securities of large cap companies without any sector bias. The Scheme shall adopt a disciplined yet flexible long term approach to investing with a focus of generating long term capital appreciation. The Scheme shall look at such opportunities in the universe of large and established companies. The Scheme may also invest a part of its corpus in overseas markets in Global Depository Receipts (GDRs), ADRs, overseas equity, bonds and mutual funds and such other instruments as may be allowed under the Regulations from time to time. The Scheme may engage in Stock Lending activities. The scheme intends to use equity derivatives for purposes that may be permitted by SEBI Mutual Fund Regulations from time to time. Derivatives instruments may take the form of Stock/Index Futures, Stock/Index Options, Swaps or any other instrument, as may be permitted from time to time. For detailed derivative strategies, please refer to Page 17 of 66SAI. Fixed Income securities The Scheme may also invest in Debt and Money Market Securities/Instruments (Money Market securities include cash and cash equivalents). The Scheme aims to identify securities which offer optimal level of yields/returns, considering risk-reward ratio. With the aim of controlling risks rigorous in depth credit evaluation of the securities proposed to be invested in will be carried out by the Risk Management Team of the AMC. The credit evaluation includes a study of the operating environment of the issuer, the short as well as long-term financial health of the issuer. Rated debt instruments in which the Scheme invests will be of investment grade as rated by a credit rating agency. The AMC may consider the ratings of such Rating Agencies as approved by SEBI to carry out the functioning of rating agencies. The Scheme may invest in securitised debt. In addition, the investment team of the AMC will study the macro economic conditions, including the political, economic environment and factors affecting liquidity and interest rates. The AMC would use this analysis to attempt to predict the likely direction of interest rates and position the portfolio appropriately to take advantage of the same. The scheme intends to use fixed income derivatives for purposes that may be permitted by SEBI Mutual Fund Regulations from time to time. Derivatives instruments may take the form of forward rate agreement, interest rate Swaps, interest rate future or any other instrument, as may be permitted from time to time. Further, the Scheme may invest in other schemes managed by the AMC or in the schemes of any other Mutual Funds in terms of the prevailing Regulations. As per the Regulations, no investment management fees will be charged for such investments. For the present, the Scheme does not intend to enter into underwriting obligations. However, if the Scheme does enter into an underwriting agreement, it would do so after complying with the Regulations and with the prior approval of the Board of the AMC/Trustee. The scheme may undertake repo transactions in corporate debt securities in accordance with the directions issued by RBI and SEBI from time to time. Such investment shall be made subject to the guidelines which may be prescribed. For detailed derivative strategies, please refer to SAI. For position limits to derivatives, refer section ‘Where will the scheme invest’ under Section II, Part II, Clause A. Though every endeavour will be made to achieve the objective of the Scheme, the AMC/Sponsor/Trustee do not guarantee that the investment objective of the Scheme will be achieved. No guaranteed returns are being offered under the Scheme. Std.Obs.9 Risk Control: Risk is an inherent part of the investment function. Effective risk management is critical to fund management for achieving financial soundness. Since investing requires disciplined risk management, the AMC would incorporate adequate safeguards for controlling risks in the portfolio construction process. The risk control process involves reducing risks through portfolio diversification; The AMC believes that this diversification would help achieve the desired level of consistency in returns. The AMC aims to identify securities, which offer superior levels of yield at lower levels of risks. With the aim of controlling risks, rigorous in-depth credit evaluation of the securities proposed to be invested in will be carried out by the investment team of the AMC. Risk control would involve managing risk in order to keep it in line with the investment objective of the Scheme. For this purpose, the Front Office System (FOS) has incorporated all the investment restrictions as per SEBI guidelines and “soft” warning alerts at appropriate levels for preemptive monitoring. Portfolio Turnover: The Scheme being an open-ended scheme, it is expected that there would be a number of subscriptions and redemptions on a daily basis. Consequently, it is difficult to estimate with any reasonable measure of accuracy, the likely turnover in the portfolio. There may be an increase in transaction cost such as brokerage paid, if trading is done frequently. Frequent trading may increase the profits which will offset the increase in costs. The fund manager will endeavor to optimize portfolio turnover to maximize gains and minimize risks keeping in mind the cost associated with it. However, it is difficult to estimate with reasonable accuracy, the likely turnover in the portfolio of the Scheme. Page 18 of 66The Scheme has no specific target relating to portfolio turnover. C. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? Std.Obs.25 The performance of the Scheme will be benchmarked with Nifty 100 Total Return Index (TRI). Justification: The composition of the aforesaid benchmark is such that, it is most suited for comparing the performance of the scheme The performance of the scheme will be benchmarked to the performance of the Nifty 100 TRI. The Nifty 100 TRI covers the overall universe of large cap companies in India. Since the fund is a large cap fund, the Nifty 100 TRI is an appropriate benchmark and will be able to give a true and accurate comparative analysis. As required under SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024, the benchmark has been selected from amongst those notified by AMFI as the first tier benchmark to be adopted by mutual funds and which are reflective of the category of the scheme. The Trustee reserves the right to change the benchmark for evaluation of performance of the Scheme from time to time in conformity with investment objective of the Scheme and appropriateness of the benchmark subject to SEBI Regulations and other prevailing guidelines, if any. The Total Return variant of the index (TRI) will be used for performance comparison. D. WHO MANAGES THE SCHEME? S t d . O b s . 33 Name and Age Educational Experience Other Fund Qualifications Managed Rajeev Thakkar B. Com. (Bombay Till March 2012 he was acting as a Parag Parikh University) Chief Executive Officer of PPFAS ELSS Tax Saver (Chief Investment (Sponsor Company). Fund (PPTSF), Officer – Equity Chartered Accountant and Fund He joined the company in 2001. Parag Parikh Flexi Manager- Equity) CFA Charter Holder Grad Cap Fund ICWA He started his career in the year (PPFCF) 53 years 1994 and he has experience of working in areas like; merchant Parag Parikh (managing since banking, managing fixed income Arbitrage Fund inception) portfolio, broking operations, PMS (PPAF) operations for over two decades. Parag Parikh He was functioning as a Fund Conservative Manager for PMS service of Hybrid Fund PPFAS managing a portfolio of (PPCHF) around Rs. 300 crores. Parag Parikh Dynamic Asset Allocation Fund He is acting as a Chief Investment (PPDAAF) Officer and Equity Fund Manager to the Company. Raunak Onkar Bsc. IT (Bombay He has more than 10 years of Parag Parikh (Dedicated Fund University) experience in the capital market. ELSS Tax Saver Manager for He started his career with Parag Fund (PPTSF), Overseas MMS- Finance (Bombay Parikh Financial Advisory Services Securities & Co- University) Limited, following his internship, in Parag Parikh Flexi Fund Manager) the year 2009. Cap Fund (PPFCF), 40 years He joined PPFAS as a research Page 19 of 66analyst. He was appointed as (managing since Head- research in the year 2011. Parag Parikh inception) Arbitrage Fund (PPAF) He is working with the company as Parag Parikh an Dedicated Fund Manager for Conservative the Overseas Investment. Hybrid Fund (PPCHF). Parag Parikh Dynamic Asset Allocation Fund (PPDAAF) Raj Mehta B.Com (Mumbai He is appointed as a Debt Fund Parag Parikh University), M.Com Manager of the Parag Parikh Flexi ELSS Tax Saver (Fund Manager- (Mumbai University), Cap Fund w.e.f 27th January 2016. Fund (PPTSF) Equity) He has collectively over 8 years of Chartered Accountant, experience in investment research. Parag Parikh 36 years Arbitrage Fund CFA Level III Pass. (PPAF) (managing since inception) He started his career with PPFAS Parag Parikh Asset Management Pvt Ltd as an Conservative intern in 2012. Following which, he Hybrid Fund joined the company as a Research (PPCHF) Analyst in 2013. Parag Parikh Flexi Cap Fund (PPFCF) Parag Parikh Dynamic Asset Allocation Fund (PPDAAF) Rukun Post Graduate He is appointed as an Additional Parag Parikh Flexi Tarachandani Fund Manager - Equity with effect Cap Fund (Fund Manager - Diploma in Management from May 16, 2022. (PPFCF) Equity) (Specialization: Finance), Mr. Rukun Tarachandani has more Parag Parikh 35 years B. Tech (Information than 9 years of experience in the ELSS Tax Saver Technology), financial market in Equity research Fund (PPTSF) (managing since and Fund Management inception) Chartered Financial (Arbitrage). He is based in Mumbai Parag Parikh Analyst (CFA) and will be responsible for fund Conservative Charterholder and management of the equity portion Hybrid Fund Certificate in Quantitative of schemes of PPFAS Mutual (PPCHF). Finance (CQF) Fund. Parag Parikh He joined PPFAS Asset Arbitrage Fund Management Pvt. Ltd. in March (PPAF) 2021 as Vice President - Research. He is involved in Quantitative Parag Parikh Research to identify investment Dynamic Asset opportunities in listed equities. Allocation Fund Prior to joining PPFAS Asset (PPDAAF) Management Limited his previous assignments held during Page 20 of 66the last 10 years were as below: 1. Goldman Sachs (India) Securities Pvt Ltd (From April 2013 to March 2015): He was part of the Sell-side Equity Research team focussed on US Banks and Credit Card companies 2. Kotak Mahindra Asset Management Company Limited (From March 2015 to February 2021) Mr. Rukun was appointed as an Equity Research analyst and was involved in Equity Research for Indian stocks across market capitalization and across sectors. He was also responsible for identifying and evaluating special situation investment opportunities in listed equities. He also managed the Kotak Equity Arbitrage Fund from May 2019 to December 2019. Tejas Soman CFA Level III Candidate Mr. Tejas Soman has spent over a Parag Parikh Flexi (Chief Investment decade in the fixed income Cap Fund Officer – Debt PGPSM – NISM markets. Prior to PPFAS, He (PPFCF) and Fund worked with SBI Funds Manager- Debt) B.com (Mumbai University) Management Ltd. as a Fund Parag Parikh Manager, where he managed a Liquid Fund 33 years range of fixed income portfolios. He (PPLF) has also worked with Yes Bank in (managing since Parag Parikh its primary dealership unit, STCI September 01, ELSS Tax Saver Primary Dealership, and 2025) Fund (PPTSF) PricewaterhouseCoopers in tax and regulatory advisory. Parag Parikh Conservative He holds his post-graduation in Hybrid Fund securities markets from National (PPCHF) Institute of Securities Markets (NISM). Parag Parikh Arbitrage Fund (PPAF) Parag Parikh Dynamic Asset Allocation Fund (PPDAAF) Aishwarya Dhar MBA - Finance Ms. Aishwarya has started her Parag Parikh Flexi (Fund Manager – career with Tata AIA Life Insurance Cap Fund Debt) Co. Ltd as Executive Finance from (PPFCF) September 2012 till May 2015 and 37 Years handled Accounts Payable & Parag Parikh Procurement. She had further Liquid Fund (managing since joined the Debt Dealing team in (PPLF), September 01, ManipalCigna Health Insurance Page 21 of 662025) Co. Ltd. as Deputy Manager – Dealer Portfolio from June 2015 till Parag Parikh March 2021. She had a total ELSS Tax Saver experience of 8 Years and 6 Fund (PPTSF), months in the Financial Service Parag Parikh Industry. Arbitrage Fund Ms. Aishwarya Dhar was (PPAF) appointed as a Debt Dealer for the Schemes of the PPFAS Mutual Fund in March 2021. E. HOW IS THE SCHEME DIFFERENT FROM EXISTING SCHEMES OF THE MUTUAL FUND? The existing open-ended equity schemes of PPFAS Mutual Fund are as below: Sr.No. Name of scheme Type of scheme 1 Parag Parikh Flexi Cap Fund An open-ended dynamic Equity scheme investing across large cap, mid cap, small cap stocks. 2. Parag Parikh ELSS Tax Saver An open-ended equity linked savings scheme with a statutory lock Fund in of 3 years and tax benefit. For a detailed comparison table of aspects viz., scheme type, investment objective, differentiation, Assets Under Management and No. of folios of each of the above schemes, kindly refer the below link - https://amc.ppfas.com/downloads/disclosure-related-to-offer-documents/ F. HOW HAS THE SCHEME PERFORMED This scheme is a new scheme and does not have any performance track record. G. ADDITIONAL SCHEME RELATED DISCLOSURES Sr. Disclosure Website link/ Details i) Scheme’s portfolio holdings (top 10 This scheme is a new scheme and thus not applicable. holdings by issuer and fund allocation Subsequently, the details can be accessed using the towards various sectors) Link. https://amc.ppfas.com/downloads/portfolio-disclosure/ ii) Portfolio Disclosure - Monthly/ Half This scheme is a new scheme and thus not applicable. Yearly Subsequently, the details can be accessed using the Link. Monthly – https://amc.ppfas.com/downloads/portfolio-disclosure/ Half yearly – https://amc.ppfas.com/schemes/scheme-s-financial-half- yearly/ iii) Portfolio Turnover Rate (for equity Not Applicable (Since the scheme is a new fund to be schemes) launched, the said ratio is not applicable). Page 22 of 66iv) Aggregate investment in the Scheme The scheme is a new scheme and thus not applicable. by Fund Manager Aggregate investment in the Scheme by Fund Manager will (Details of investment by AMC Key be made according to the extant SEBI MF regulations and personnel and Directors is part of SAI) applicable SEBI circulars as may be issued by SEBI from time to time. v) AMC’s investment in the Scheme The AMC, Trustee, Sponsor, or their associates may invest Std.Obs.58 in the Scheme subject to the SEBI Regulations & circulars issued by SEBI and to the extent permitted by its Board of Directors from time to time. As per the existing SEBI Regulations, the AMC will not charge investment management and advisory fee on the investment made by it in the Scheme. The AMC shall based on the risk value assigned to the scheme, in terms of para 17.4 of SEBI Master Circular for Mutual Funds No. SEBI/HO/IMD/IMD- PoD-1/P/CIR/2024/90 dated June 27, 2024, shall invest minimum amount as a percentage of assets under management (‘AUM’) as per provisions of para 6.9 and 6.10 of SEBI Master circular for Mutual Funds SEBI/HO/IMD/IMD- PoD-1/P/CIR/2024/90 dated June 27, 2024 as amended from time to time. Subsequently, the details can be accessed using the Link : https://amc.ppfas.com/statutory-disclosures/mandatory- skin-in-the-game-for-amc/ Part III- OTHER DETAILS A. COMPUTATION OF NAV Std.Obs.42 The Net Asset Value (NAV) per Unit of the Scheme(s) will be computed by dividing the net assets of the Scheme(s) by the number of Units outstanding under the Scheme on the valuation date. The Mutual Fund will value its investments according to the valuation norms, as specified in Schedule VIII of the SEBI (MF) Regulations, or such norms as may be specified by SEBI from time to time. NAV of Units of under each Scheme / Plan shall be calculated as shown below: Market or Fair Value of the Scheme's Investments + Current Assets including Accrued income - Current Liabilities and Provisions NAV (Rs) per unit = __________________________________________________ No. of Units outstanding under the Scheme / Plan/ Option on the Valuation day The AMC will calculate and disclose the NAV of the Scheme(s) at the close of every Business Day. Separate NAV will be calculated and disclosed for each Plan/Option. The NAV of the Scheme(s) will be calculated up-to 4 decimals. Units will be allotted up-to 3 decimals. NAV will also be displayed on the website of the Mutual Fund. In addition, the ISCs would also display the NAV. The Fund will ensure the repurchase price of the scheme shall not be lower than 95% of the NAV as provided for under the regulations. For other details such as policy on computation of NAV, investment in foreign securities, rounding off, procedure in case of delay in disclosure of NAV etc., kindly refer to SAI. Std.Obs.47 Page 23 of 66Illustration for Computation of NAV: NAV for the Scheme shall be calculated as shown below: Particulars Amount (In INR) Assets Investments (at Market Value) 10,000 Current Assets Interest receivable 1,000 Dividend Receivables 550 Trades Receivables 1,500 Total Assets (A) 13,050 Current Liabilities Trade Payables 1,500 Expense Payable 25 Dividend payable 25 Total Liabilities (B) 1,550 Net Assets (C) (A – B) 11,500 Units Outstanding (D) 1,000 NAV per unit (C/D) ₹ 11.50 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, marketing and advertising expenses, Registrar & Transfer Agents’ expenses, printing and stationary, bank charges etc. In accordance with the provisions of SEBI Master circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2024/90 dated June 27, 2024, the NFO expenses shall be borne by the AMC/ Trustee/Sponsor and not by the scheme of mutual fund. 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 and Transfer Agents' fee, marketing and selling costs etc. as given in the table below: The AMC has estimated that the following percentages of the daily net assets of the Scheme will be charged to the Scheme as expenses. Please refer to the table below for details. For the actual current expenses being charged, the investor should refer to the website of the Mutual Fund viz.https://amc.ppfas.com/statutory-disclosures/total- expense-ratio-TER/. (% p.a. of Daily Net Sr. Expenses Head Assets* No (Estimate d p.a.) i. Investment Management & Advisory Fees ii. Trustee Fees iii. Audit Fees iv. Custodial Fees v. Registrar & Transfer Agent Fees including cost of providing account statements / IDCW / redemption cheques/ warrants Upto vi. Marketing & Selling expenses incl. agent commission and statutory advertisement 2.25% vii Costs related to investor communications viii. Cost of fund transfer from location to location ix. Cost towards investor education & awareness (at least 0.02 percent p.a.) & x. Brokerage & transaction cost pertaining to distribution of units % Page 24 of 66(% p.a. of Daily Net Sr. Expenses Head Assets* No (Estimate d p.a.) xi. Goods and Services tax on expenses other than investment and advisory fees xii. Goods and Services tax on brokerage and transaction cost xiii. Other Expenses (to be specified as per Reg 52 of SEBI MF Regulations) # A. Maximum total expense ratio (TER) permissible under Regulation 52 (6) (c) Upto 2.25% B. Additional expenses under regulation 52 (6A) (c)^ Upto 0.05% C. Additional expenses for gross new inflows from specified cities under Regulation Upto 0.30% 52(6A)(b) * ^ In terms of SEBI Master circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024, in case exit load is not levied / not applicable, the AMC shall not charge the said additional expenses. *SEBI vide letter no. SEBI/HO/IMD/IMD-SEC3/P/OW/2023/5823/1 dated February 24, 2023 and AMFI vide letter no. 35P/MEM-COR/85/2022-23 dated March 02, 2023 has advised AMCs to keep B-30 incentive in abeyance till AMCs put in place effective controls. Accordingly, applicability of this expense ratio will be subject to any further communication issued by SEBI / AMFI in this regard. #As permitted under the Regulation 52 of SEBI (MF) Regulations and pursuant to SEBI Master Circular for Mutual Funds dated June 27, 2024. &In terms of SEBI Master Circular for Mutual Funds dated June 27, 2024, the AMC / Mutual Fund shall annually set apart at least 2 basis points (i.e. 0.02%) on daily net assets of the scheme within the maximum limit of Total Expense Ratio as per Regulation 52 of the SEBI (MF) Regulations for investor education and awareness initiatives. %Brokerage and transaction costs incurred for the execution of trades and included in the cost of investment, not exceeding 0.12% of the value of trades of cash market transactions and 0.05% of the value of trades of derivative market transactions. It is hereby clarified that the brokerage and transaction costs incurred for the execution of trades may be capitalized to the extent of 0.12% of the value of trades of cash market transactions and 0.05% of the value of trades of derivative market transactions. Any payment towards brokerage and transaction costs (including Goods & Services Tax, if any) incurred for the execution of trades, over and above the said 0.12% for cash market transactions and 0.05% of the value of trades of derivative market transactions may be charged to the scheme within the maximum limit of Total Expense Ratio (TER) as prescribed under Regulation 52 of the SEBI (MF) Regulations. 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 necessarily be paid from the scheme only within the regulatory limits and not from the books of the Asset Management Companies (AMC), its associate, sponsor, trustee or any other entity through any route. However, expenses that are very small in value but high in volume may be paid out of AMC’s books at actuals or not exceeding 2 bps of respective Scheme AUM, whichever is lower. A list of such miscellaneous expenses will be as provided by AMFI in consultation with SEBI. *Note: Expenses of Direct Plan will be lower than expenses of the Regular Plan as no commission/distribution expenses will be charged in the case of Direct Plan. 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. NAV of the Direct Plan will be different than the NAV of Regular Plan. *Impact of TER on Scheme returns (for both Direct and Regular plans) Std.Obs.44 Expense ratio, normally expressed as a percentage of Average Assets under Management, is calculated by dividing the permissible expenses under the Regulations by the average net assets. To further illustrate the above, for the Scheme under reference, suppose an Investor invested ₹ 10,000/- under the Growth Option, the impact of expenses charged will be as under: Particulars Regular Plan Direct Plan Page 25 of 66Amount invested at the beginning of the year (Rs.) 10,000 10,000 Returns before expenses (Rs.) 1,500 1,500 Expenses other than Distribution expenses (Rs.) 150 150 Distribution expenses (Rs.) 50 0 Returns after expenses at the end of the year (Rs.) 1300 1350 Returns (in %) 13% 13.5% Notes: • The purpose of the above illustration is purely to explain the impact of expense ratio charged to the Plan(s) under the Scheme and should not be construed as providing any kind of investment advice or guarantee of returns on investments. • It is assumed that the expenses charged are evenly distributed throughout the year. • The expenses of the Direct Plan of the Scheme will be lower to the extent of the distribution expenses/commission • Any tax impact has not been considered in the above example, in view of the individual nature of the tax implications. Each investor is advised to seek appropriate advice. The exact web link for TER is https://amc.ppfas.com/statutory-disclosures/total-expense-ratio-TER/ As per Para B of the SEBI Master Circular for Mutual Funds No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024, GST shall be charged as follows: 1. GST on investment management and advisory fees shall be charged to the Scheme in addition to the maximum limit of TER as prescribed in Regulation 52 (6) of the SEBI (MF) Regulations. 2. GST on other than investment management and advisory fees, if any, shall be borne by the Scheme within the maximum limit of TER as prescribed in Regulation 52 (6) of the SEBI (MF) Regulations. 3. GST on exit load, if any, shall be paid out of the exit load proceeds and exit load net of GST, if any, shall be credited to the Scheme. 4. GST on brokerage and transaction cost paid for execution of trade, if any, shall be within the limit prescribed under Regulation 52 of the SEBI (MF) Regulations. The AMC shall charge the Mutual Fund with investment and advisory fee as prescribed in the SEBI (MF) Regulations from time to time. Presently, the SEBI (MF) Regulations permit fees as follows: The recurring expenses of the Scheme shall be as per the limits prescribed under the SEBI (MF) Regulations. These are as follows: Assets under management Slab (Rs. In Crore) Total Expense ratio format On the first Rs. 500 crores of the daily net assets 2.25% p.a; On the next Rs. 250 crores of the daily net assets 2.00% p.a; On the next Rs. 1,250 crores of the daily net 1.75% p.a; assets On the next Rs. 3,000 crores of the daily net 1.60% p.a; assets On the next Rs. 5,000 crores of the daily net 1.50%p.a; assets On the next Rs. 40,000 crores of the daily net Total expense ratio reduction of 0.05% for assets every increase of Rs. 5,000 crores of daily net assets or part thereof. On the balance of the assets 1.05%p.a; ** Minimum of 0.02% shall be allocated annually to investor education and awareness initiatives It is possible that the AMC may charge the maximum recurring expenses provided above as investment Page 26 of 66management and advisory fees. In such case the other recurring expenses will not be charged to the Scheme. 1. Brokerage and transaction cost incurred for the purpose of execution of trade shall be charged to the schemes as provided under Regulation 52 (6A) (a) upto 12 bps and 5 bps for cash market transactions and derivatives transactions respectively. Any payment towards brokerage & transaction costs, over and above the said 12 bps and 5 bps 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 (MF) Regulations. 2. Expenses not exceeding of 0.30 per cent of daily net assets, if the new inflows from such cities as specified by SEBI/AMFI from time to time are at least – Std.Obs.46 (i) 30 per cent of gross new inflows in the Scheme, or; (ii) 15 per cent of the average assets under management (year to date) of the Scheme, whichever is higher: As per SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024, additional expenses of 30 basis points, shall be charged based on inflows only from retail investors from beyond top 30 cities. As per SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024, inflows of amount upto Rs 2,00,000/- per transaction, by individual investors shall be considered as inflows from “retail investor”. In case inflows from such cities are less than the higher of (a) or (b) above, such expenses on daily net assets of the Scheme shall be charged on proportionate basis in accordance with SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024. The amount so charged shall be utilised for distribution expenses incurred for bringing inflows from such cities. However, the amount incurred as expense on account of inflows from such cities shall be credited back to the Scheme in case the said inflows are redeemed within a period of one year from the date of investment. Currently, SEBI has specified that the above additional expense may be charged for inflows from beyond 'Top 30 cities'. Top 30 cities shall mean top 30 cities based on Association of Mutual Funds in India (AMFI) data on 'AUM by Geography - Consolidated Data for Mutual Fund Industry' as at the end of the previous financial year. 3. Expenses not exceeding 0.05% p.a. of daily net assets towards Investment Management and Advisory Fees and the various sub-heads of recurring expenses mentioned under Regulation 52 (2) and (4) respectively of SEBI (MF) Regulations. However, in terms of SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2024/90 dated June 27, 2024, in case exit load is not levied / not applicable, the AMC shall not charge the said additional expenses to the scheme. The total expenses of the Scheme including the Investment Management and Advisory Fee shall not exceed the limits stated in Regulation 52 of the SEBI (MF) Regulations. The total expense ratios of the schemes of the Fund are available in downloadable spreadsheet format on the AMC website and AMFI website. Any change in the current expense ratios will be updated at least three working days prior to the effective date of the change. For the current total expense ratio details of the Scheme, investors may visit https://amc.ppfas.com/statutory-disclosures/total-expense-ratio-TER/ available on the website of the AMC viz., www.amc.ppfas.com and AMFI’s website viz., www.amfiindia.com. LOAD STRUCTURE Std.Obs.47 Load is an amount which is paid by the investor to subscribe to the units or to redeem the units from the scheme. This amount is used by the AMC to pay commissions to the distributor and to take care of other marketing and selling expenses. 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 (http://amc.ppfas.com) or call at 1800-266-8909 or your distributor. Type of Load# Load chargeable (as %age of NAV) Entry Load* Not Applicable Page 27 of 66Exit Load NIL #Applicable for normal subscriptions / redemptions including transactions under special products such as SIP, STP, SWP, switches, etc. offered by the AMC. *In accordance with the requirements specified by the SEBI Master Circular for Mutual Funds dated June 27, 2024, no entry load will be charged for subscription /additional subscription /switches accepted by the Mutual Fund. Similarly, no entry load will be charged with respect to applications for registrations under the SIP/STP accepted by the Mutual Fund. For the purpose of charging of exit load, units would be considered on First in First out (FIFO) basis. Any imposition or enhancement of exit load shall be applicable only on prospective investments. Load on bonus/ re-investment of Income Distribution cum capital withdrawal units: In terms of SEBI Master Circular for Mutual Funds dated June 27, 2024, no entry and exit load shall be charged on bonus units or units allotted on reinvestment of Income Distribution cum capital withdrawal. Under the Scheme, the Trustee / AMC reserves the right to modify / change the Load structure if it deems fit in the interest of smooth and efficient functioning of the Mutual Fund. The AMC reserves the right to introduce / modify the Load Structure depending upon the circumstances prevailing at that time subject to maximum limits as prescribed under the SEBI (MF) Regulations. The Load may also be changed from time to time and in the case of an Exit / Redemption Load this may be linked to the period of holding. The Repurchase Price however, will not be lower than 95% of the NAV as prescribed by SEBI from time to time. Any imposition or enhancement of Exit Load in the load shall be applicable on prospective investments only. The investor is requested to check the prevailing load structure of the scheme before investing. However, AMC shall not charge any load on the issue of bonus units and units allotted on reinvestment of IDCW for existing as well as prospective investors. At the time of changing the load structure the AMC / Mutual Fund may adopt the following procedure: 1. The addendum detailing the changes will be attached to Scheme Information Document and Key Information Memorandum and displayed on our website http://amc.ppfas.com The addendum will be circulated to all the distributors / brokers so that the same can be attached to all Scheme Information Document and Key Information Memorandum already in stock. 2. Arrangements will be made to display the changes / modifications in the Scheme Information Document in the form of a notice in all the Investor Service Centers and distributors / brokers office. 3. The introduction of the Load along with the details will be stamped in the acknowledgment slip issued to the investors on submission of the application form and will also be disclosed in the Account Statement or in the covering letter issued to the Unit holders after the introduction of such Load. 4. A public notice shall be given in respect of such changes in one English daily newspaper having nationwide circulation as well as in a newspaper published in the language of region where the Head Office of the Mutual Fund is situated. 5. GST on exit load, if any, shall be paid out of the exit load proceeds. The entire exit load (net of GST), charged, if any, shall be credited to the Scheme. 6. Any other majors which the mutual fund may feel necessary. Page 28 of 66Section II I. INTRODUCTION A. Definitions/Interpretation Visit: https://amc.ppfas.com/downloads/disclosure-related-to-offer-documents/ B. Risk factors Std.Obs.8 Scheme specific risk factors Some of the specific risk factors related to the Scheme include, but are not limited to the following: The performance of the Scheme may be affected by changes in Government policies, general levels of interest rates and risks associated with trading volumes, liquidity and settlement systems. As the Scheme will be investing in equity and equity related instruments it may have the following risks: 1. Risk factors associated with investing in equities and equity related instruments • The value of Scheme’s investments may be affected by factors affecting the Securities markets and price and volume volatility in the capital markets, interest rates, currency exchange rates, changes in law/policies if the Government, taxation laws and political, economic or other developments which may have an adverse bearing on individual securities, a specific sector or all sectors. Consequently, the NAV of the units of the Scheme may be affected. • Equity and equity related instruments/ securities are volatile and prone to price fluctuations on a daily basis. Investments in equity shares and equity related instruments involve a degree of risk and investors should not invest in the Scheme(s) unless they can afford to take the risks. • The liquidity of investments made in the Scheme may be restricted by trading volumes and settlement periods. Settlement periods may be extended significantly by unforeseen circumstances. The inability of the Scheme to make purchases due to settlement problems could cause the Scheme to miss certain investment opportunities. Similarly, the inability to sell securities held in the Scheme’s portfolio may result, at times, in potential losses to the Scheme, should there be a subsequent decline in the value of securities held in the Scheme’s portfolio. • Securities, which are not quoted on the stock exchanges, are inherently illiquid in nature and carry a larger amount of liquidity risk, in comparison to securities that are listed on the exchanges. Investment in such securities may lead to increase in the scheme portfolio risk. The liquidity and valuation of the Scheme’s investments due to the holdings of unlisted securities may be affected if they have to be sold prior to the target date of disinvestment. • While securities that are listed on the stock exchange carry lower liquidity risk, the ability to sell these investments is limited by the overall trading volume on the stock exchanges and may lead to the Scheme incurring losses till the security is finally sold. • The Liquidity of the scheme is inherently restricted by trading volumes in securities in which it invests. • Investment strategy to be adopted by the Scheme may carry the risk of significant variance between the portfolio allocation of the Scheme and the Benchmark particularly over a short to medium term period. • Mid Cap and Small Cap Companies are generally less liquid in terms of trading volumes on stock exchanges. Risk to the scheme may increase in proportion to the investment made in Mid Cap and Small Cap Companies. 2.Risk Factors Associated with Fixed Income Securities and Money Market Instruments Interest-Rate Risk: Fixed income securities such as government bonds, corporate bonds, and money market instruments and derivatives 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 depends upon the coupon and maturity of the security. It also depends upon the yield level at which the security is being traded. Reinvestment Risk: Investments in fixed income securities carry reinvestment risk as interest rates prevailing on the coupon payment or maturity dates may differ from the original coupon of the bond. Basis Risk: The underlying benchmark of a floating rate security or a swap might become less active or may cease Page 29 of 66to exist and thus may not be able to capture the exact interest rate movements, leading to loss of value of the portfolio. Spread Risk: In a floating rate security the coupon is expressed in terms of a spread or mark up over the benchmark rate. In the life of the security this spread may move adversely leading to loss in value of the portfolio. The yield of the underlying benchmark might not change, but the spread of the security over the underlying benchmark might increase leading to loss in value of the security. Liquidity Risk: The liquidity of fixed income securities may change, depending on market conditions leading to changes in the liquidity premium attached to the price of the bond. At the time of selling the security, the security can become illiquid, leading to loss in value of the portfolio. Credit Risk: This is the risk associated with the issuer of a debenture/bond or a money market instrument defaulting on coupon payments or in paying back the principal amount on maturity. Even when there is no default, the price of a security may change with expected changes in the credit rating of the issuer. It is to be noted here that a Government Security is a sovereign security and is the safest. Corporate bonds carry a higher amount of credit risk than Government securities. Within corporate bonds also there are different levels of safety and a bond rated higher by a particular rating agency is safer than a bond rated lower by the same rating agency. Liquidity Risk on account of unlisted securities: The liquidity and valuation of the Scheme investments due to their holdings of unlisted securities may be affected if they have to be sold prior to their target date of divestment. The unlisted security can go down in value before the divestment date and selling of these securities before the divestment date can lead to losses in the portfolio. Counterparty Risk: - This is the risk of failure of counterparty to a transaction to deliver securities against consideration received or to pay consideration against securities delivered, in full or in part or as per the agreed specification. There could be losses to the Scheme in case of a counterparty default. Settlement Risk: Fixed income securities run the risk of settlement which can adversely affect the ability of the fund house to swiftly execute trading strategies which can lead to adverse movements in NAV. Risks associated with unrated instruments: -Investments in unrated instruments are subject to the risk associated with investments in any other fixed income securities, as referred above. However, investments in unrated instruments are considered to be subject to greater risk of loss of principal and interest than rated instruments. 3.Risks associated with Investing in Structured Obligation (SO) & Credit Enhancement (CE) rated securities The risks factors stated below for the Structured Obligations & Credit Enhancement are in addition to the risk factors associated with debt instruments. -Credit rating agencies assign CE rating to an instrument based on any identifiable credit enhancement for the debt instrument issued by an issuer. The credit enhancement could be in various forms and could include guarantee, shortfall undertaking, letter of comfort, etc. from another entity. This entity could be either related or non-related to the issuer like a bank, financial institution, etc. Credit enhancement could include additional security in form of pledge of shares listed on stock exchanges, etc. SO transactions are asset backed/ mortgage backed securities, securitized paper backed by hypothecation of car loan receivables, securities backed by trade receivables, credit card receivables etc. Hence, for CE rated instruments evaluation of the credit enhancement provider, as well as the issuer is undertaken to determine the issuer rating. In case of SO rated issuer, the underlying loan pools or securitization, etc. is assessed to arrive at rating for the issuer. Liquidity Risk: SO rated securities are often complex structures, with a variety of credit enhancements. Debt securities lack a well-developed secondary market in India, and due to the credit enhanced nature of CE securities as well as structured nature of SO securities, the liquidity in the market for these instruments is adversely affected compared to similar rated debt instruments. Hence, lower liquidity of such instruments, could lead to inability of the scheme to sell such debt instruments and generate liquidity for the scheme or higher impact cost when such instruments are sold. Credit Risk: The credit risk of debt instruments which are CE rated derives rating based on the combined strength Page 30 of 66of the issuer as well as the structure. Hence, any weakness in either the issuer or the structure could have an adverse credit impact on the debt instrument. The weakness in structure could arise due to inability of the investors to enforce the structure due to issues such as legal risk, inability to sell the underlying collateral or enforce guarantee, etc. In case of SO transactions, co-mingling risk and risk of servicer increases the overall risk for the securitized debt or assets backed transactions. Therefore, apart from issuer level credit risk such debt instruments are also susceptible to structure related credit risk. 4.Risk factors associated with investing in Derivatives: The AMC, on behalf of the Scheme may use various derivative products, from time to time, in an attempt to protect the value of the portfolio and enhance Unit holders' interest. Derivative products are specialized instruments that require investment techniques and risk analysis different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument but of the derivative itself. Other risks include, the risk of mis-pricing or improper valuation and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. 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 the 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. Std.Obs.28 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 entered into, the ability to assess the risk that a derivative adds to the portfolio and the ability to forecast price or interest rate movements correctly. There is the possibility that a loss may be sustained by the portfolio as a result of the failure of another party (usually referred to as the “counterparty”) to comply with the terms of the derivatives contract. The Scheme bears a risk that it may not be able to correctly forecast future market trends or the value of assets, indices or other financial or economic factors in establishing derivative positions for the Scheme. Besides the price of the underlying asset, the volatility, tenor and interest rates affect the pricing of derivatives, trading in derivatives carry a high degree of risk although they are traded at a relatively small amount of margin which provides the possibility of great profit or loss in comparison with the principal investment amount. Other risks in using derivatives include but are not limited to: a.Credit Risk – This occurs when a counterparty defaults on a transaction before settlement and therefore, the Scheme are compelled to negotiate with another counter party, at the then prevailing (possibly unfavorable) market price, in order to maintain the validity of the hedge. For exchange traded derivatives, the risk is mitigated as the exchange provides a guaranteed settlement but one takes the performance risk on the exchange. b.Liquidity risk - This risk arises from the inability to sell derivatives at prices that reflect the underlying assets/ rates/ indices, lack of availability of derivative products across different maturities and with various risk appetite. c. Model Risk – This is the risk of mis–pricing or improper valuation of derivatives. d.Basis Risk – This risk arises when the derivative instrument used to hedge the underlying asset does not match the movement of the underlying being hedged for example, when a bond is hedged using a derivative, the change in price of the bond and the change in price of the derivative may not be fully correlated leading to basis risk in the portfolio. The underlying benchmark of a floating rate security might become less active or may cease to exist and thus may not be able to capture the exact interest rate movements, leading to loss of value of the portfolio. Example: Where swaps are used to hedge an underlying fixed income security, basis risk could arise when the fixed income yield curve moves differently from that of the swap benchmark curve or if there is a mismatch in the tenor of the swap and the fixed income security. Additional Risk viz. Basis Risk associated with imperfect hedging using Interest Rate Futures (IRF): The imperfect correlation between the prices of securities in the portfolio and the IRF contract used to hedge part of the portfolio leads to basis risk. Thus, the loss on the portfolio may not exactly match the gain from the hedge position entered using the IRF. Page 31 of 66e.Market Risk: Derivatives are traded in the market and are exposed to losses due to change in the prices of the underlying and/or other assets and change in market conditions and factors. The volatility in prices of the underlying may impact derivative instruments differently than its underlying. f.Valuation Risk: This is the risk of mis–pricing or improper valuation of derivatives due to inadequate trading data with good volumes. g.Operational / Systemic Risk: This is the risk arising due to failure of operational processes followed by the exchanges and Over the Counter (OTC) participants for the derivatives trading. h.Counterparty Risk: Counterparty risk is the risk that losses will be incurred due to the default by the counterparty for OTC derivatives. i.Exposure Risk: An exposure to derivatives in excess of the hedging requirements can lead to losses. An exposure to derivatives can also limit the profits from a plain investment transaction. j.Interest Rate Risk: This risk arises from the movement of interest rates in adverse direction. As with all the debt securities, changes in the interest rates will affect the valuation of the portfolios. 5.Risk factors Associated with Securitised Debt: The Scheme may invest in domestic securitized debt such as Asset Backed Securities (ABS) or Mortgage Backed Securities (MBS). ABS are securitized debts where the underlying assets are receivables arising from various loans including automobile loans, personal loans, loans against consumer durables, etc. MBS are securitized debts where the underlying assets are receivables arising from loans backed by mortgage of residential / commercial properties. At present in Indian market, following types of loans are securitized: 1. Auto Loans (cars / commercial vehicles /two wheelers) 2. Residential Mortgages or Housing Loans 3. Consumer Durable Loans 4. Personal Loans 5. Corporate Loans In terms of specific risks attached to securitization, each asset class would have different underlying risks. Residential Mortgages generally have lower default rates than other asset classes, but repossession becomes difficult. On the other hand, repossession and subsequent recovery of commercial vehicles and other auto assets is fairly easier and better compared to mortgages. Asset classes like personal loans, credit card receivables are unsecured and in an economic downturn may witness higher default. A corporate loan/receivable, depend upon the nature of the underlying security for the loan or the nature of the receivable and the risks correspondingly fluctuate. The Risks involved in Securitised Papers described below are the principal ones and does not represent that the risks set out hereunder is exhaustive. Limited Liquidity & Price Risk There is no assurance that a deep secondary market will develop for the Certificates. This could limit the ability of the investor to resell them. Limited Recourse, Delinquency and Credit Risk The Credit Enhancement stipulated represents a limited loss cover to the Investors. These Certificates represent an undivided beneficial interest in the underlying receivables and do not represent an obligation of either the Issuer or the Seller or the originator, or the parent or any associate of the Seller, Issuer and Originator. Delinquencies and credit losses may cause depletion of the amount available under the Credit Enhancement and thereby the Investor Payouts to the Certificate Holders 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 Asset. However, many factors may affect, delay or prevent the repossession of such Asset or the length of time required to realise 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 and Charge Offs In the event of prepayments, investors may be exposed to changes in tenor and yield. Also, any Charge Offs would result in the reduction in the tenor of the Pass-Through Certificates (PTCs). Re-investment Risk: Since prepayment risk increases when interest rates decline, this also introduces re- Page 32 of 66investment risk, which is the risk that the principal can only be reinvested at a lower rate. Bankruptcy of the Swap Bank If the Swap Bank becomes subject to bankruptcy proceedings then an Investor could experience losses or delays in the payments due under the Interest Rate Swap Agreement. Risk of Co-mingling With respect to the Certificates, the Servicer will 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 originator. If the originator in its capacity as Servicer fails to remit such funds due to Investors, the Investors may be exposed to a potential loss. 6.Risk factors associated with Securities Lending As with other modes of extensions of credit, there are risks inherent to securities lending, including the risk of failure of the other party, in this case the approved intermediary, to comply with the terms of the agreement entered into between the lender of securities i.e. the Scheme and the approved intermediary. Such failure can result in the possible loss of rights to the collateral put up by the borrower of the securities, the inability of the approved intermediary to return the securities deposited by the lender and the possible loss of any corporate benefits accruing to the lender from the securities deposited with the approved intermediary. 7.Risk factors associated with Segregated Portfolio Different types of securities in which the scheme would invest carry different levels and types of risk as given in the Scheme Information Document of the scheme. In addition to the same, unitholders are requested to also note the following risks with respect to Segregated Portfolio: Liquidity Risk: A lower level of liquidity affecting an individual security (ies) or an entire market may have an adverse bearing on the value of the Segregated Scheme's assets. This may more importantly affect the ability to sell particular securities with minimal impact cost as and when necessary to meet requirements of liquidity or to sell securities in response to triggers such as a specific economic/corporate event. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of a few of the investments. This may impact the NAV of the segregated portfolio and could result into potential loss to the Unit holders. Credit risk: The scheme's risk may increase or decrease depending upon its investment pattern. E.g. corporate bonds carry a higher amount of risk than Government securities. Further even among corporate bonds, bonds, which are AA rated, are comparatively more risky than bonds, which are AAA rated. Investment in unrated securities may be riskier compared to investment in rated instruments due to non-availability of third party assessment on the repayment capability of the issuer. As the securities are unrated, an independent opinion of the rating agency on the repayment capability of the issuer will not be available. The issuer of a debenture/ bond or a money market instrument may default on interest payment or even in paying back the principal amount on maturity. Even where no default occurs, the price of a security may go down because the credit rating of an issuer goes down. This may impact the NAV of the segregated portfolio and resultant loss to the Unit holders. Listing of units: Listing of units of segregated portfolio in recognized 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. 8.Risk factors associated with processing of transaction through Stock Exchange Mechanism: The trading mechanism introduced by the stock exchange(s) is configured to accept and process transactions for mutual fund units in both Physical and Demat Form. The allotment and/or redemption of Units through NSE and/or BSE or any other recognised stock exchange(s), on any Business Day will depend upon the modalities of processing viz. collection of application form, order processing/settlement, etc. upon which the Fund has no control. Moreover, transactions conducted through the stock exchange mechanism shall be governed by the operating guidelines and directives issued by respective recognized stock exchange(s). 9.Risks associated with investments in Repo transactions in Corporate Bonds 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 Page 33 of 66debt securities as collateral to protect against default. The Scheme may invest in repo of corporate debt securities which are subject to the following risks: Counterparty Risk: This refers to the inability of the seller to meet the obligation to buy back securities at the contracted price on the contracted date. The Investment Manager will endeavour to manage counterparty risk by dealing only with counterparties, having strong credit profiles. Also, the counterparty risk is to an extent mitigated by taking collateral equivalent in value to the transaction after knocking off a minimum haircut on the intrinsic value of the collateral. In the event of default by the repo counterparty, the scheme shall have recourse to corporate debt securities. Collateral Risk: 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 with collateral bearing a minimum rating as prescribed by the regulators (currently AA or equivalent and above rated money market and corporate debt securities). Any rating downgrade will tantamount to either an early termination of the repo agreement or a call for fresh margin to meet the minimum haircut requirement. In addition, the Investment manager may apply a higher haircut on the underlying security than mentioned above to adjust for the illiquidity and interest rate risk on the underlying instrument. The adequacy of the collateral will be monitored on a daily basis by considering the daily market value & applying the prescribed haircut. In the event of shortfall in the collateral, the counterparty shall be asked to replenish the same. If the counterparty is not able to top-up either in form of cash / collateral, it shall tantamount to early termination of the repo agreement. Settlement Risk: Corporate Bond Repo shall be settled between two counterparties in the OTC segment unlike in the case of Government securities repo transactions where CCIL stands as central counterparty on all transactions which neutralizes the settlement risk. However, the settlement risk pertaining to CDRs shall be mitigated through Delivery versus Payment (DvP) mechanism which is followed by all clearing members. 10.Risk factors associated with investing in Non- Convertible Preference Shares Credit Risk - Credit risk is the risk that an issuer will be unable to meet its obligation of payment of dividend and/ or redemption of principal amount on the due date. Further, for non-cumulative preference shares, issuer also has an option to not pay dividends on preference shares in case of inadequate profits in any year. Liquidity Risk - The preference shares generally have limited secondary market liquidity and thus we may be forced to hold the instrument till maturity. Unsecured in nature - Preference shares are unsecured in nature and rank lower than secured and unsecured debt in hierarchy of payments in case of liquidation. Thus there is significant risk of capital erosion in case the company goes into liquidation. 11.Risk associated with investment in Government securities and Triparty repo on Government securities or treasury bills: -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. Page 34 of 6612. Risk associated Credit Default Swaps: Risks associated with Credit Default Swaps may include credit risk of seller of CDS. Mutual funds participating in CDS transactions, as users, shall be required to comply with the guidelines issued by RBI, vide notification no IDMD.PCD.No.5053/14.03.04/2010-11 dated May 23, 2011 and subsequent guidelines issued by RBI and SEBI from time to time 13. Risk associated with Interest Rate Future (IRF): An Interest Rate Futures is an agreement to buy or sell a debt instruments at a specified future date at a price that is fixed today. Interest Rate Futures are Exchange Traded and are cash settled. Hedging using Interest Rate Futures can be perfect or imperfect. Perfect hedging means hedging the underlying using IRF contract of same underlying. Market risk: Derivatives carry the risk of adverse changes in the market price. Price Risk- The risk of mispricing or improper valuation and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. Liquidity risk – This occurs where the derivatives cannot be sold (unwound) at prices that reflect the underlying assets, rates and indices. Model Risk - The risk of mispricing or improper valuation of derivatives. Basis Risk – This risk arises when the instrument used as a hedge does not match the movement in the instrument/ underlying asset being hedged. The risks may be inter-related also; for e.g. interest rate movements can affect equity prices, which could influence specific issuer/industry assets. Correlation weakening and consequent risk of regulatory breach: SEBI Regulations 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. 14. Risk Factors Associated with Investments in REITs and InvITs: ● Interest-Rate Risk: REITs & InvITs carry interest-rate risk. Generally, when interest rates rise, prices of existing 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. ● Market Risk: REITs and InvITs are volatile and prone to price fluctuations on a daily basis owing to market movements. Investors may note that AMC/Fund Manager's investment decisions may not always be profitable, as actual market movements may be at variance with the anticipated trends. The NAV of the Scheme is vulnerable to movements in the prices of securities invested by the scheme, due to various market related factors like changes in the general market conditions, factors and forces affecting capital market, level of interest rates, trading volumes, settlement periods and transfer procedures. ● Risk of lower than expected distributions: The distributions by the REIT or InvIT will be based on the net cash flows available for distribution. The amount of cash available for distribution principally depends upon the amount of cash that the REIT/Invt receives as dividends or the interest and principal payments from portfolio assets. The cash flows generated by portfolio assets from operations may fluctuate based on, among other things: -success and economic viability of tenants and off-takers -economic cycles and risks inherent in the business which may negatively impact valuations, returns and profitability of portfolio assets -debt service requirements and other liabilities of the portfolio assets and fluctuations in the working capital needs ability of portfolio assets to borrow funds and access capital markets -amount and timing of capital expenditures on portfolio assets ● Liquidity Risk: This refers to the ease with which REIT/InvIT units can be sold. There is no assurance that an active secondary market will develop or be maintained. Hence there would be time when trading in the units could be infrequent. The subsequent valuation of illiquid units may reflect a discount from the market price of comparable securities for which a liquid market exists. ● Reinvestment Risk: Investments in REITs & InvITs may carry reinvestment risk as there could be repatriation of funds by the Trusts in form of buyback of units or IDCWpay-outs, etc. Consequently, the proceeds may get invested in assets providing lower returns. The above are some of the common risks associated with investments in REITs &InvITs. There can be no assurance that a Scheme's investment objectives will be achieved, or that there will be no loss of capital. Investment results may vary substantially on a monthly, quarterly or annual basis. Page 35 of 66● Price-Risk: The valuation of the REIT/InvIT units may fluctuate based on economic conditions, fluctuations in markets (eg. real estate) in which the REIT/InvIT operates. As an indirect shareholder of portfolio assets, unit holders rights are subordinated to the rights of creditors, debt holders and other parties specified under Indian law in the event of insolvency or liquidation of any of the portfolio assets. The above are some of the common risks associated with investments in REITs & InvITs. There can be no assurance that a Scheme's investment objectives will be achieved, or that there will be no loss of capital. Investment results may vary substantially on a monthly, quarterly or annual basis. 15. Risk Factors associated writing covered call options for equity shares: a) Writing call options are highly specialized activities and entail higher than ordinary investment risks. In such investment strategy, the profits from call option writing is capped at the option premium, however the downside depends upon the increase in value of the underlying equity shares. This downside risk is reduced only to the extent of premium received by writing covered call options. b) The Scheme may write covered call option only in case it has adequate number of underlying equity shares as per regulatory requirement. This would lead to setting aside a portion of investment in underlying equity shares. If covered call options are sold to the maximum extent allowed by regulatory authority, the scheme may not be able to sell the underlying equity shares immediately if the view changes to sell and exit the stock. The covered call options need to be unwound before the stock positions can be liquidated. This may lead to a loss of opportunity or can cause exit issues if the strike price at which the call option contracts have been written become illiquid. Hence, the scheme may not be able to sell the underlying equity shares, which can lead to temporary illiquidity of the underlying equity shares and result in loss of opportunity. c) The writing of the covered call option would lead to loss of opportunity due to appreciation in value of the underlying equity shares. Hence, when the appreciation in equity share price is more than the option premium received the scheme would be at a loss. d) The total gross exposure related to option premium paid and received must not exceed the regulatory limits of the net assets of the scheme. This may restrict the ability of Scheme to buy any options. e) Increased volatility in the market may result in higher premium and marked to market losses in NAV for all the existing short option position even at the same price of underlying stock. 16. Risk factors associated with investing in Foreign Securities. Std.Obs.11 Subject to necessary approvals and within the investment objectives / asset allocation pattern of the Scheme may invest in overseas markets which carry risks related to fluctuations in the foreign exchange rates, the nature of the securities market of the country, repatriation of capital due to exchange controls and political circumstances. It is the AMC’s belief that investment in foreign securities offers new investment and portfolio diversification opportunities into multimarket and multi-currency products. Such investment opportunities may be pursued by the AMC provided they are considered appropriate in terms of the overall investment objectives of the Scheme. Since the Scheme would invest only partially in foreign securities, there may not be readily available and widely accepted benchmarks to measure performance of the Scheme. However, such investments also entail additional risks not only limited to the following: Currency Risk: Moving from Indian Rupee (INR) to any other currency involves currency risk. To the extent that the assets of the Scheme will be invested in securities denominated in foreign currencies, the Indian Rupee equivalent of the net assets and income may be adversely affected by changes in the value of certain foreign currencies relative to the Indian Rupee. Interest Rate Risk: The pace and movement of interest rate cycles of various countries, though loosely co-related, can differ significantly. Investments in securities of countries other than India, the Scheme stand exposed to their interest rate cycles. Credit Risk: To manage risks associated with foreign currency and interest rate exposure, the Mutual Fund may use derivatives for efficient portfolio management including hedging in accordance with conditions as may be stipulated by SEBI / RBI from time to time. Repatriation Risk: The repatriation of capital to India may also be hampered by changes in regulations concerning exchange controls or political circumstances as well as the application to it of other restrictions on investment. 17. General Risk factors: Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by the Scheme. Different segments of the Indian financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances leading to delays in receipt of proceeds from sale of securities. The NAV of the Units of the Scheme can go up or down because of various factors that affect the capital markets in general. Page 36 of 66As the liquidity of the investments made by the Scheme could, at times, be restricted by trading volumes and settlement periods, the time taken by the Mutual Fund for redemption of Units may be significant in the event of an inordinately large number of redemption requests or restructuring of the Scheme. In view of the above, the Trustee has the right, in its sole discretion, to limit redemptions (including suspending redemptions) under certain circumstances, as described under "Right to Limit Redemptions" in Section ‘Restrictions, if any, on the right to freely retain or dispose of units being offered’. The Scheme may retain certain investments in cash or cash equivalents for its day-to-day liquidity requirements. Investment strategy to be adopted by the Scheme may carry the risk of significant variance between the portfolio allocation of the Scheme and the Benchmark particularly over a short to medium term period. Performance of the Scheme may be affected by political, social, and economic developments, which may include changes in government policies, diplomatic conditions, and taxation policies. C. Risk mitigation strategies The Fund by utilizing a holistic risk management strategy will endeavor to manage risks associated with investing in debt and equity markets. The risk control process involves identifying & measuring the risk through various risk measurement tools. The Fund has identified following risks of investing in equity and debt and designed risk management strategies, which are embedded in the investment process to manage such risks. Risk associated with Debt Investment Risk Description Risk Mitigants/management strategy Market Risk In a rising interest rates scenario, the Fund Manager will endeavor to increase investment in As with all debt securities, changes in interest money market securities whereas if the interest rates may affect the scheme’s Net Asset Value rates are expected to fall, the allocation to debt as the prices of securities generally increase as securities with longer maturity will be increased interest rates decline and generally decrease as thereby mitigating risk to that extent. interest rates rise. Prices of long-term securities generally fluctuate more in response to interest rate changes than do short-term securities. Indian debt markets can be volatile leading to the possibility of price movements up or down in fixed income securities and thereby to possible movements in the NAV. Liquidity or Marketability Risk The scheme may invest in government securities, corporate bonds and money market This refers to the ease with which a security can instruments. While the liquidity risk for be sold at or near to its valuation Yield-To- government securities, money market Maturity (YTM). The primary measure of liquidity instruments and short maturity corporate bonds risk is the spread between the bid price and the may be low, it may be high in case of medium to offer price quoted by a dealer. Liquidity risk is long maturity corporate bonds. Liquidity risk is today characteristic of the Indian fixed income today characteristic of the Indian fixed income market. market. The fund will however, endeavor to minimise liquidity risk by investing in securities having a liquid market. Credit Risk A traditional SWOT analysis will be used for Credit risk or default risk refers to the risk that an identifying company specific risks. issuer of a fixed income security may default Management’s past track record will also be (i.e., will be unable to make timely principal and studied. In order to assess financial risk, a interest payments on the security). Because of detailed assessment of the issuer’s financial this risk corporate debentures are sold at a statements will be undertaken to review its ability higher yield above those offered on Government to undergo stress on cash flows and asset Securities which are sovereign obligations and quality. A detailed evaluation of accounting free of credit risk. Normally, the value of a fixed policies, off balance sheet exposures, notes, income security will fluctuate depending upon auditors’ comments and disclosure standards will Page 37 of 66the changes in the perceived level of credit risk also be made to assess the overall financial risk as well as any actual event of default. The of the potential borrower. In case of securitized greater the credit risk, the greater the yield debt instruments, the fund will ensure that these required for someone to be compensated for the instruments are sufficiently backed by assets. increased risk. Reinvestment Risk Reinvestment risks will be limited to the extent of This risk refers to the interest rate levels at which coupons received on debt instruments, which will cash flows received from the securities in the be a very small portion of the portfolio value. scheme are reinvested. The additional income from reinvestment is the “interest on interest” component. The risk is that the rate at which interim cash flows can be reinvested may be lower than that originally assumed. Derivatives Risk The fund has provision for using derivative As and when the scheme trades in the instruments for portfolio balancing and hedging derivatives market, there are risk factors and purposes. Interest Rate Swaps will be done with issues concerning the use of derivatives that approved counter parties under pre approved Investors should understand. Derivative ISDA agreements. Mark to Market of swaps, products are specialized instruments that require netting off of cash flow and default provision investment techniques and risk analyses clauses will be provided as per international best different from those associated with stocks and practice on a reciprocal basis. Interest rate bonds. The use of a derivative requires an swaps and other derivative instruments will be understanding not only of the underlying used as per local (RBI and SEBI) regulatory instrument but also of the derivative itself. There guidelines. is the possibility that a loss may be sustained by the portfolio as a result of the failure of another party (usually referred to as the “counter party”) to comply with the terms of the derivatives contract. Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. Currency Risk The scheme subject to applicable regulations shall have the option to enter into forward The Scheme may invest in Foreign Securities as contracts for the purposes of hedging against the permitted by the concerned regulatory foreign exchange fluctuations. The Schemes authorities in India. Since the assets may be may employ various measures (as permitted by invested in securities denominated in foreign SEBI/RBI) including but not restricted to currency currency, the INR equivalent of the net assets, hedging (such as currency options and forward distributions & income may be adversely currency exchange contracts, currency futures, affected by changes / fluctuations in the value of written call options and purchased put options on the foreign currencies relative to the INR. currencies and currency swaps), to manage foreign exchange movements arising out of investment in foreign securities. Risks associated with Equity investment Risk Description Risk Mitigants/management strategy Market Risk Market risk is a risk which is inherent to an equity scheme. The scheme may use The scheme is vulnerable to movements in the derivatives for hedging purpose and diversify prices of securities invested by the scheme, the securities investment. which could have a material bearing on the overall returns from the scheme. The value of the scheme’s investments, may be affected generally by factors affecting securities markets, such as price and volume, volatility in the capital markets, interest rates, currency exchange rates, changes in policies of the Government, taxation laws or any other appropriate authority policies and other political and economic developments which may have an adverse Page 38 of 66bearing on individual securities, a specific sector or all sectors including equity and debt markets. Liquidity risk The fund seeks to control such risk by investing in such diversified stocks having Liquidity risk is the risk of not being able to sell / strong fundamentals, sound financial strength liquidate a security at short notice at prevailing and superior quality of management and market prices or without incurring impact cost. In highly liquid securities. The fund will aim at taking exposure only into case of Arbitrage trades, under abnormal liquid stocks / derivatives where there will be circumstances it will be difficult to square off the minimal risk to square off the transaction or we transaction due to liquidity being poor in the can take or deliver the stock. underlying stock, stock futures or options market. Derivatives Risk The fund has provision for using derivative instruments for portfolio balancing and As and when the scheme trades in the hedging purposes. Investments in derivative derivatives market there are risk factors and instruments will be used as per local (RBI and issues concerning the use of derivatives that SEBI) regulatory guidelines. The fund will Investors should understand. Derivative endeavor to maintain adequate controls to products are specialized instruments that require monitor the derivatives transactions entered investment techniques and risk analyses into. different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument but also of the derivative itself. The risks in using derivatives include the risk of mis- pricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. Currency Risk The scheme subject to applicable regulations shall have the option to enter into forward The Scheme may invest in Foreign Securities as contracts for the purposes of hedging against permitted by the concerned regulatory the foreign exchange fluctuations. The authorities in India. Since the assets may be Schemes may employ various measures (as invested in securities denominated in foreign permitted by SEBI/RBI) including but not currency, the INR equivalent of the net assets, restricted to currency hedging (such as distributions and income may be adversely currency options and forward currency affected by changes / fluctuations in the value of exchange contracts, currency futures, written the foreign currencies relative to the INR. call options and purchased put options on currencies and currency swaps), to manage foreign exchange movements arising out of investment in foreign securities. ii) Debt Derivative instruments like Interest Rate Swaps, Forward Rate Agreements and such other derivative instruments permitted by SEBI/RBI. Interest Rate Swap - An Interest Rate Swap (“IRS”) is a financial contract between two parties exchanging or swapping a stream of interest payments for a “notional principal” amount on multiple occasions during a specified period. Such contracts generally involve exchange of a “fixed to floating” or “floating to fixed” rate of interest. Accordingly, on each payment date that occurs during the swap period, cash payments based on fixed/ floating and floating rates are made by the parties to one another. Forward Rate Agreement - A Forward Rate Agreement (“FRA”) is a financial contract between two parties to exchange interest payments for a notional principal amount on settlement date, for a specified period from start date to maturity date. Accordingly, on the settlement date, cash payments based on contract (fixed) and the settlement rate, are made by the parties to one another. The settlement rate is the agreed benchmark/ reference rate prevailing on the settlement date. Page 39 of 66Interest Rate Futures: A futures contract is a standardized, legally binding agreement to buy or sell a commodity or a financial instrument in a designated future month at a market determined price (the futures price) by the buyer and seller. The contracts are traded on a futures exchange. An Interest Rate Future is a futures contract with an interest-bearing instrument as the underlying asset. Characteristics of Interest Rate Futures 1. Obligation to buy or sell a bond at a future date. 2. Standardized contract. 3. Exchange traded 4. Physical/Cash settlement. 5. Daily mark to market. The Scheme(s) may take derivatives position based on the opportunities available subject to the guidelines provided by SEBI from time to time and in line with the overall investment objective of the Scheme(s). The Fund has to comply with the prescribed disclosure requirements. These may be taken to hedge the portfolio, rebalance the same or to undertake any other strategy as permitted under SEBI (MF) Regulations from time to time. Hedging could be perfect or imperfect. Hedging does not mean maximisation of returns but only reduction of systematic or market risk inherent in the investment. The Scheme(s) intends to take position in derivative instruments like Futures, Options, Interest Rate Swaps, Forward Rate Agreements and such other derivative instruments as may be permitted by SEBI from time to time. 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. 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. Exposure limits on Interest Rate Futures (IRF) The exposure limits for trading in Interest Rate Futures (IRFs) by Mutual Funds specified by SEBI vide its Master Circular for Mutual Funds No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 are as follows: i. To reduce interest rate risk in a debt portfolio, mutual funds may hedge the portfolio or part of the portfolio (including one or more securities) on weighted average modified duration basis by using Interest Rate Futures (IRFs). The maximum extent of short position that may be taken in IRFs to hedge interest rate risk of the portfolio or part of the portfolio, is as per the formula given below: (Portfolio Modified Duration* Market Value of the Portfolio)/ (Futures Modified Duration *Futures Price/PAR) ii. In case the IRF used for hedging the interest rate risk has different underlying security(s) than the existing position being hedged, it would result in imperfect hedging. iii. Imperfect hedging using IRFs may be considered to be exempted from the gross exposure, upto maximum of 20% of the net assets of the scheme, subject to the following: a) Exposure to IRFs is created only for hedging the interest rate risk based on the weighted average modified duration of the bond portfolio or part of the portfolio. b) Mutual Funds are permitted to resort to imperfect hedging, without it being considered under the gross exposure limits, if and only if, the correlation between the portfolio or part of the portfolio (excluding the hedged portions, if any) and the IRF is atleast 0.9 at the time of initiation of hedge. In case of any subsequent deviation from the correlation criteria, the same may be rebalanced within 5 working days and if not rebalanced within the timeline, the derivative positions created for hedging shall be considered under the gross exposure computed in terms of SEBI Master circular for Mutual Funds dated June 27, 2024. The correlation should be calculated for a period of last 90 days. Explanation: If the fund manager intends to do imperfect hedging upto 15% of the portfolio using IRFs on weighted Page 40 of 66average modified duration basis, either of the following conditions need to be complied with: i. The correlation for past 90 days between the portfolio and the IRF is at least 0.9 or ii. The correlation for past 90 days between the part of the portfolio (excluding the hedged portions, if any) i.e. at least 15% of the net asset of the scheme (including one or more securities) and the IRF is at least 0.9. c) At no point of time, the net modified duration of part of the portfolio being hedged should be negative. d) The portion of imperfect hedging in excess of 20% of the net assets of the scheme should be considered as creating exposure and shall be included in the computation of gross exposure in terms of SEBI Master circular for Mutual Funds dated June 27, 2024. iii) Covered Call Options A call option gives the holder (buyer) the right but not the obligation to buy an asset by a certain date for a certain price. Covered calls are an options strategy where a person holds a long position in an asset and writes (sells) call options on that same asset. Benefits of using Covered Call strategy in Mutual Funds: The covered call strategy can be followed by the Fund Manager in order to hedge risk thereby resulting in better risk adjusted returns of the Scheme. The strategy offers the following benefits: a) Down side protection to the extent of premium collected - Since the fund manager sells a call option on a stock already owned by the mutual fund scheme, the downside from fall in the stock price would be lower to the extent of the premium earned from the call option. b) Generating additional returns in the form of option premium in a range bound market. Thus, a covered call strategy involves gains for unit holders in case the strategy plays out in the right direction. Illustration — Covered Call strategy using stock call options: A fund manager buys equity stock of ABC Ltd. for Rs. 1000 and simultaneously sells a call option on the same stock at a strike price of Rs. 1100. Further, it is assumed that the scheme has earned a premium of Rs. 50 and the fund manager is of the opinion that the stock price will not exceed Rs. 1100, during the expiry period of the option. Scenario 1: Stock price exceeds Rs. 1100 The call option will get exercised and the fund manager will sell the stock to settle his obligation on the call at Rs. 1100 (earning a return of 10% on the stock purchase price). Also, since the scheme has earned a premium of Rs. 50, this has reduced the purchase cost of the stock (Rs. 1000 — Rs. 50 = Rs. 950). Hence, the Net Gain = Rs. 150 (Rs 100 stock appreciation + Rs 50 call option premium) (However, please note that in a scenario where the stock price reaches Rs. 1300, investment in long only equity would be more beneficial than a covered call strategy as the net gain under the covered call strategy would be Rs. 150, against a net gain of Rs. 300 under a pure long only equity strategy.) Scenario 2: Stock prices stays below Rs. 1100 The call option will not get exercised and will expire worthless. The premium earned on call option will generate alpha for the scheme. Hence, the Net Gain = Rs. 50. Any other like instruments as may be permitted by RBI / SEBI / such other Regulatory Authority from time to time subject to approvals required, if any. For applicable regulatory investment limits please refer to paragraph "Investment Restrictions”. Details of various derivative strategies/examples of use of derivatives have been provided under the section “Strategies for Investment in Derivatives”. The Fund Manager reserves the right to invest in such securities as may be permitted from time to time and which are in line with the investment objectives of the Scheme. Page 41 of 66II. INFORMATION ABOUT THE SCHEME: A. Where will the scheme invest Std.Obs.29 The corpus of the Scheme shall be invested in accordance with the investment objective in any (but not exclusively) of the following securities: Equity and Equity Related Instruments: Equity related instruments shall mean equities, equity derivatives, cumulative convertible preference shares and fully convertible debentures and bonds of companies. Investment may also be made in partly convertible issues or debentures and bonds including those issued on rights basis subject to the condition that, as far as possible, the non- convertible portion of the debentures so acquired or subscribed, shall be disinvested within a period of 12 (twelve) months. Investments in these securities will be as per the limits specified in the asset allocation table(s) of respective Scheme(s), subject to permissible limits laid under SEBI (MF) Regulations. Debt Securities & Money Market Instruments: 1. Certificate of Deposits (CD) – CD is a negotiable money market instrument issued by scheduled commercial banks and select all-India Financial Institutions that have been permitted by the RBI to raise short term resources. The maturity period of CDs issued by the Banks is between 7 days to one year, whereas, in case of FIs, maturity is between one year to 3 years from the date of issue. CDs may be issued at a discount to face value. 2. Commercial Paper (CP) - CP is an unsecured negotiable money market instrument issued in the form of a promissory note, generally issued by the corporates, primary dealers and all India Financial Institutions as an alternative source of short term borrowings. They are issued at a discount to the face value as may be determined by the issuer. CP is traded in the secondary market and can be freely bought and sold before maturity. 3. Bills Re-discounting (BRD) – BRD is the rediscounting of trade bills which have already been purchased by / discounted with the bank by the customers. These trade bills arise out of supply of goods / services. 4. Securities issued by the Central and State Governments as may be permitted by RBI, securities guaranteed by the Central and State Governments (including but not limited to coupon bearing bonds, zero coupon bonds and treasury bills). Central Government securities are sovereign debt obligations of the Government of India with zero-risk of default and issued on its behalf by RBI. They form part of the Government's annual borrowing programme and are used to fund the fiscal deficit along with other short term and long-term requirements. Such securities could be fixed rate, fixed interest rate with put/call option, zero coupon bond, floating rate bonds, capital indexed bonds, fixed interest security with staggered maturity payment etc. State Government securities are issued by the respective State Government in co-ordination with the RBI. 5. Treasury Bills (T-Bills) are issued by the Government of India to meet their short term borrowing requirements. T-Bills are issued for maturities of 91 days, 182 days and 364 days. T-bills are issued at a discount to their face value and redeemed at par. 6. Cash Management Bill - Cash Management Bill (CMB) are issued by the Government of India to meet their short term borrowing requirements. CMB are generally issued for maturities of less than 91 days. 7. Repos/reverse repos in Government Securities as may be permitted by RBI (including but not limited to coupon bearing bonds, zero coupon bonds and treasury bills). Repo (Repurchase Agreement) or Reverse Repo is a transaction in which two parties agree to sell and purchase the same security with an agreement to purchase or sell the same security at a mutually decided future date and price. 8. Triparty Repo - According to Repurchase Transactions (Repo) (Reserve Bank) Directions, 2018, triparty repo means a repo contract where a third entity (apart from the borrower and lender), called a Triparty Agent, acts as an intermediary between the two parties to the repo to facilitate services like collateral selection, payment and settlement, custody, and management during the life of the transaction. 9. Debt obligations of domestic Government agencies and statutory bodies, which may or may not carry a Central/State Government guarantee – These are instruments which are issued by various government agencies Page 42 of 66and bodies. They can be issued at discount, par or premium. 10. Corporate debt and securities (of both public and private sector undertakings) including Bonds, Debentures, Notes, Strips etc. These are instruments issued by corporate entities for their business requirements. They are generally rated by credit rating agencies, higher the rating lower the risk of default. 11. Non-Convertible Debentures and Bonds- Non convertible debentures as well as bonds are securities issued by companies / institutions promoted / owned by the Central or State Governments and statutory bodies which may or may not carry a Central/State Government guarantee, Public and private sector banks, all India Financial Institutions and Private Sector Companies. These instruments may be secured or unsecured against the assets of the Company and generally issued to meet the short term and long term fund requirements. The Scheme may also invest in the non- convertible part of convertible debt securities. 12. Floating rate Debt instruments- Floating rate debt instruments are instruments issued by Central / state governments, corporates, PSUs, etc. with interest rates that are reset periodically. 13. Money market instruments permitted by SEBI/RBI, in Tri Party Repo/Reverse Repo (TREPS) market or in alternative investment for the Tri Party Repo market as may be provided by the RBI to meet the short term liquidity requirements. 14. Investments in units of mutual fund schemes/ Exchange Traded Funds – The Scheme may invest in other schemes managed by the AMC or in the schemes of any other mutual funds, provided it is in conformity with the investment objectives of the Scheme and in terms of the prevailing SEBI (MF) Regulations. 15. Investment in Short Term Deposits – Pending deployment of funds as per the investment objective of the Scheme, the Funds may be parked in short term deposits of the Scheduled Commercial Banks, subject to guidelines and limits specified by SEBI. 16. Securitised Debt Obligations - Securitization is a structured finance process which involves pooling and repackaging of cash-flow producing financial assets into securities that are then sold to investors. They are termed as Asset Backed Securities (ABS) or Mortgage Backed Securities (MBS). ABS are backed by other assets such as credit card, automobile or consumer loan receivables, retail installment loans or participations in pools of leases. MBS is an asset backed security whose cash flows are backed by the principal and interest payments of a set of mortgage loans. Such Mortgage could be either residential or commercial properties. 17. Pass through, Pay through or other Participation Certificates, representing interest in a pool assets including receivables. It represents beneficial interest in an underlying pool of cash flows. These cash flows represent dues against single or multiple loans originated by the sellers of these loans. 18. Repo of corporate debt securities. 19. When issued security- When, as and if issued’ (commonly known as “when-issued” (WI) security) refers to a security that has been authorized for issuance but not yet actually issued. WI trading takes place between the time a new issue is announced and the time it is actually issued. All “when issued” transactions are on an “if” basis, to be settled if and when the actual security is issued. SEBI has on April 16, 2008 in principle allowed Mutual Funds to undertake ‘When Issued (WI)’ transactions in Central Government securities, at par with other market participants. Open Position in the ‘WI’ market are subject to the following limits: Category Reissued Security Newly Issued Security Non-PDs Long Position, not exceeding 5 percent Long Position, not of the notified amount. exceeding 5 percent of the notified amount. The Scheme may invest, if and to the extent permissible under the Regulations in derivative instruments. 20. Trading in Derivatives- Equity Derivatives like Futures and Options Position Limits: The position limits for trading in derivatives by Mutual Funds specified by SEBI vide SEBI Circular No. DNPD/ Page 43 of 66Cir-29/2005 dated September 14, 2005, SEBI Circular No. DNPD/Cir -30/2006 dated January 20, 2006 and SEBI Circular No. SEBI/DNPD/Cir-31/2006 dated September 22, 2006 are as follows: Mutual Fund will comply with applicable position limits. i. Position limit for Mutual Funds in index options contracts a. The Mutual Fund position limit in all index options contracts on a particular underlying index shall be Rs. 500 crore or 15% of the total open interest of the market in index options, whichever is higher, per Stock Exchange. b. This limit would be applicable on open positions in all options contracts on a particular underlying index. ii. Position limit for Mutual Funds in index futures contracts a. The Mutual Fund position limit in all index futures contracts on a particular underlying index shall be Rs. 500 crore or 15% of the total open interest of the market in index futures, whichever is higher, per Stock Exchange. b. This limit would be applicable on open positions in all futures contracts on a particular underlying index. iii. Additional position limit for hedging in addition to the position limits at point (i) and (ii) above, Mutual Funds may take exposure in equity index derivatives subject to the following limits : 1. Short positions in index derivatives (short futures, short calls and long puts) shall not exceed (in notional value) the Mutual Fund's holding of stocks. 2. Long positions in index derivatives (long futures, long calls and short puts) shall not exceed (in notional value) the Mutual Fund's holding of cash, government securities, T-Bills, money market mutual funds and gilt funds and similar instruments. iv. Position limit for Mutual Funds for stock based derivative contracts As per SEBI circular no: SEBI/HO/MRD/DP/CIR/P/2016/143December 27, 2016, The combined futures and options position limit shall be 20% of the applicable Market Wide Position Limit (MWPL). v. Position limit for each scheme of a Mutual Fund The scheme-wise position limit requirements shall be: 1. For stock option and stock futures contracts, the gross open position across all derivative contracts on a particular underlying stock of a scheme of a mutual fund shall not exceed the higher of: 1% of the free float market capitalization (in terms of number of shares). or 5% of the open interest in the derivative contracts on a particular underlying stock (in terms of number of contracts). 2. This position limits shall be applicable on the combined position in all derivative contracts on an underlying stock at a Stock Exchange. 3. For index based contracts, Mutual Funds shall disclose the total open interest held by its scheme or all schemes put together in a particular underlying index, if such open interest equals to or exceeds 15% of the open interest of all derivative contracts on that underlying index. 21. The Scheme may invest in Non-Convertible Preference Shares (NCPS). 22. Covered Call Options - A call option gives the holder (buyer) the right but not the obligation to buy an asset by a certain date for a certain price. Covered calls are an options strategy where a person holds a long position in an asset and writes (sells) call options on that same asset. Any other like instruments as may be permitted by RBI / SEBI / such other Regulatory Authority from time to time subject to approvals required, if any. 23. Securitized Debt 24. Any other securities subject to requisite approvals from SEBI/RBI, if needed. 25. Derivative instruments like Stock/Index Futures, Stock/Index Options, Interest Rate Future, Interest Rate Swap, Forward Rate Agreement and such other derivative instruments permitted by SEBI. 26. ADRs / GDRs / Foreign Securities as permitted by Reserve Bank of India and Securities and Exchange Board of India 27. Cash & cash equivalents 28. Units of REITs & InvITs. “REIT” or “Real Estate Investment Trust” under SEBI (Real Estate Investment Trusts) Regulations, 2014 means a person that pools rupees fifty crores or more for the purpose of issuing units to at least two hundred investors so as to acquire and manage real estate asset(s) or property(ies), that would entitle such investors to receive the income generated therefrom without giving them the day-to-day control over the management and operation of such real estate asset(s) or property(ies). “InvIT” or “Infrastructure Investment Trust” shall mean the trust registered as such under SEBI (Infrastructure Investment Trusts) Regulations, 2014. Page 44 of 6629. Debt instruments with special features Investments in debt instruments with special features will be made in accordance with clause 12.2 of SEBI Master Circular for Mutual Funds dated June 27, 2024. Subject to the Regulations, the securities mentioned above could be listed, unlisted, privately placed, secured, unsecured and of varying maturity. The securities may be acquired through Initial Public Offerings (IPOs), secondary market operations, private placement, rights issue or negotiated deals. Further, the scheme intend to participate in securities lending as permitted under the regulations. Investment in overseas securities shall be made in accordance with the requirements stipulated by SEBI and RBI from time to time. The Scheme may also enter into repurchase and reverse repurchase in various securities as per the guidelines and regulations applicable to such transactions. The securities / instruments mentioned above and such other securities the Scheme is permitted to invest in could be listed, unlisted, privately placed, secured, unsecured, rated or unrated and of any maturity. The securities may be acquired through initial public offering (IPOs), secondary market, private placement, rights offers, negotiated deals. Further investments in debentures, bonds and other fixed income securities will be in instruments which have been assigned investment grade rating by the Credit Rating Agency. Investment in unrated debt instruments shall be subject to complying with the provisions of the Regulations and within the limit as specified in Schedule VII to the Regulations. Pursuant to SEBI Master circular no. for Mutual Funds SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2023/74 dated June 27, 2024, the AMC may constitute committee(s) to approve proposals for investments in unrated debt instruments. The AMC Board and the Trustee shall approve the detailed parameters for such investments. However, in case any unrated debt security does not fall under the parameters, the prior approval of Board of AMC and Trustee shall be sought. The Fund Manager reserves the right to invest in such securities as may be permitted from time to time and which are in line with the investment objectives of the Scheme. B. What are the investment restrictions? Pursuant to Regulations, specifically the Seventh Schedule and amendments thereto, the following investment restrictions are currently applicable to the Scheme: 1. The Scheme shall not invest more than 10% of its NAV in the equity shares or equity related instruments of any company. Provided that, the limit of 10% shall not be applicable for investments in case of index fund or sector or industry specific scheme. 2. All investments by a mutual fund scheme in equity shares and equity related instruments shall only be made provided such securities are listed or to be listed 3. The Mutual Fund under all its Scheme(s) shall not own more than 10% of any company‘s paid up capital carrying voting rights. Provided, investment in the asset management company or the trustee company of a mutual fund shall be governed by clause (a), of sub-regulation (1), of regulation 7B. 4. The Scheme shall not invest more than 10% of its NAV in debt instruments, issued by a single issuer, comprising money market securities and non-money market securities rated investment grade or above by a credit rating agency authorised to carry out such activity under the Act. This overall 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.: Provided that such limit shall not be applicable for investments in Government Securities, treasury bills and Triparty repo. Provided further that investment within such limit can be made in mortgaged backed securitized debt which are rated not below investment grade by a credit rating agency registered with the SEBI. Provided further that single issuer investment in debt and money market instruments shall be made based on credit risk of the issuer within the limits specified in the clause 1 of Seventh Schedule of the MF Regulation, following prudential limits shall be followed, for schemes other than Credit risk funds: Page 45 of 66i. A mutual fund 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. The long term rating of issuers shall be considered for the money market instruments. However, if there is no long term rating available for the same issuer, then based on credit rating mapping of CRAs between short term and long term ratings, the most conservative long term rating shall be taken for a given short term rating. Exposure to government money market instruments such as TREPS on G-Sec/ T-bills shall be treated as exposure to government securities Debentures, irrespective of any residual maturity period (above or below one year), shall attract the investment restrictions as applicable for debt instruments. It is further clarified that the investment limits are applicable to all debt securities, which are issued by public bodies/institutions such as electricity boards, municipal corporations, state transport corporations etc. guaranteed by either state or central government. Government securities issued by central/state government or on its behalf by the RBI are exempt from the above investment limits. 5. The Scheme may invest in another scheme under the same AMC or any other mutual fund without charging any fees, provided that aggregate inter-scheme investment made by all schemes under the same AMC or in schemes under the management of any other asset management shall not exceed 5% of the net asset value of the Mutual Fund. However, the aforesaid provision will not apply to the fund of funds scheme. 6. The Scheme shall not make any investments in: (a) any unlisted security of an 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. 7. The Scheme shall not invest in any Fund of Funds Scheme. Std.Obs.30 8. Transfer of investments from one scheme to another scheme in the same Mutual Fund, shall be allowed only if:- (a) such transfers are made at the prevailing market price for quoted Securities on spot basis (spot basis shall have the same meaning as specified by Stock Exchange for spot transactions). Provided that inter scheme transfer of money market or debt security (irrespective of maturity) shall take place based on prices made available by valuation agencies as prescribed by SEBI from time to time. (b) the securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made. (c) Inter Scheme Transfers are effected in accordance with the guidelines specified by SEBI Master circular for Mutual Funds No. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 as amended from time to time. 9. 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 that the Mutual Fund may engage in short selling of securities in accordance with the framework relating to short selling and securities lending and borrowing specified by SEBI. ● Provided further that the Mutual Fund may enter into derivatives transactions in a recognized stock exchange, subject to the framework specified by SEBI. ● Provided further that sale of government security already contracted for purchase shall be permitted in accordance with the guidelines issued by the Reserve Bank of India in this regard. 10. The Fund shall not borrow except to meet temporary liquidity needs of the Fund for the purpose of repurchase/redemption of Units or payment of interest and/or Income Distribution cum capital withdrawal to the Unit holders. Provided that the Fund shall not borrow more than 20% of the net assets of the individual Scheme and the duration of the borrowing shall not exceed a period of 6 months. 11. The Mutual Fund shall enter into transactions relating to Government Securities only in dematerialised form. Page 46 of 6612. The Mutual fund shall get the securities purchased / transferred in the name of the fund on account of the concerned scheme, where investments are intended to be of long term nature. 13. Pending deployment of funds of a scheme in terms of investment objectives of the scheme, a mutual fund may invest them in short term deposits of scheduled commercial banks, subject to the guidelines issued by SEBI vide its Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 as may be amended from time to time. The AMC shall not charge any investment management and advisory fees for parking of funds in such short term deposits of scheduled commercial banks for the scheme. i. “Short Term” for parking of funds shall be treated as a period not exceeding 91 days. ii. Such short-term deposits shall be held in the name of the Scheme. iii. 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. iv. 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. v. The Trustee / AMC 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. vi. AMC will not charge any investment management and advisory fees for parking of funds in short term deposits of scheduled commercial banks. vii. The Trustee / AMC 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 the cash and derivative market. 14. In accordance with SEBI Master circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024, in case of debt scheme the total exposure in a group, except and in the group of sponsor and the asset management company, (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. Further, the investments 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 (MF) Regulations and shall include an entity, its subsidiaries, fellow subsidiaries, its holding company and its associates. 15. In accordance with the guidelines as stated under SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2023/74 dated June 27, 2024, investments in following instruments as specified in the said circular, as may be amended from time to time, shall be applicable: 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. However, Mutual fund schemes may invest in unlisted Non-Convertible Debentures (NCDs) not exceeding 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. Provided further that, the Scheme shall comply with the norms under this clause within the time and in the manner as may be specified by the Board. ii. Further, 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. by mutual fund schemes shall be subject to the conditions as specified in the said circular: Page 47 of 66Investments should only be made in such instruments, including bills rediscounting, usance bills, etc., that are generally not rated and for which separate investment norms or limits are not provided in SEBI (MF) Regulations and various circulars issued thereunder. iii. Exposure of mutual fund schemes in such instruments, shall not exceed 5% of the net assets of the schemes. 16. The Scheme shall invest in Debt instruments having Structured Obligations/ Credit Enhancements in accordance with provisions of SEBI Master Circular for Mutual Funds No. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2024/90 dated June 27, 2024 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. For 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. Further, the investment in debt instruments having credit enhancements should be sufficiently covered to address the market volatility and reduce the inefficiencies of invoking of the pledge or cover, whenever required, without impacting the interest of the investors. In case of fall in the value of the cover below the specified limit, AMCs will initiate necessary steps to ensure protection of the interest of the investors. 17. SEBI vide its Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 has prescribed the following investment restrictions w.r.t investment in derivatives: ● The Scheme shall not write options or purchase instruments with embedded written options except for covered call strategy. ● The total exposure related to option premium paid and received must not exceed 20% of the net assets of the Scheme. ● Cash or cash equivalents with residual maturity of less than 91 days may be treated as not creating any exposure. Cash or cash equivalents for this purpose shall consist of Government Securities, T-Bills and Repo on Government securities. ● 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 as exposure as per SEBI Master Circular for Mutual Funds point number 12.24.1 dated June 27, 2024 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. ● 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 as exposure as per SEBI Master Circular for Mutual Funds point number 12.24.1 dated June 27, 2024. ● Each position taken in derivatives shall have an associated exposure as defined under. Exposure is the maximum possible loss that may occur on a position. However, certain derivative positions may theoretically have unlimited possible loss. Exposure in derivative positions shall be computed as follows: Position Exposure Page 48 of 66Long Future Futures Price * Lot Size * Number of Contracts Short Future Futures Price * Lot Size * Number of Contracts Option bought Option Premium Paid * Lot Size * Number of Contracts. ● The Scheme may enter into plain vanilla Interest Rate Swaps(IRS) for hedging purposes. Further, the value of the notional principal in such cases shall not exceed the value of respective existing assets being hedged by the Scheme. ● In case of participation in IRS is through over the counter transactions, the counterparty in such transactions has to be an entity recognized as a market maker by RBI and exposure to a single counterparty in such transactions shall 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. 18. The scheme will invest in Repos in Corporate debt in accordance with SEBI Master Circular for Mutual Funds no SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024. Participation of mutual funds in repo in corporate debt securities The Mutual Funds can participate in repos on following corporate debt securities: 1) Listed AA and above rated corporate debt securities 2) Commercial Papers (CPs) and Certificate of Deposits (CDs) The gross 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 concerned scheme. The cumulative gross exposure through repo transactions in corporate debt securities along with equity, debt and derivatives shall not exceed 100% of the net assets of the concerned scheme. Mutual funds shall participate in repo transactions only in AA and above rated corporate debt securities. In terms of Regulation 44 (2) of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, mutual funds shall borrow through repo transactions only if the tenor of the transaction does not exceed a period of six months. For the purpose of consideration of credit rating of exposure on repo transactions for various purposes including for Potential Risk Class (PRC) matrix, liquidity ratios, Risk-o-meter etc., the same shall be as that of the underlying securities, i.e., on a look through basis. For transactions where settlement is guaranteed by a Clearing Corporation, the exposure shall not be considered for the purpose of determination of investment limits for single issuer, group issuer and sector level limits. 19. Save as otherwise expressly provided under the Regulations, the Scheme shall not advance any loans for any purpose. 21. Covered Call Strategy- The Scheme can write Call options under a covered strategy for constituent stocks of NIFTY 50 and BSE SENSEX subject to the following condition: a) The total notional value (taking into account strike price as well as premium value) of call options written by a scheme shall not exceed 15% of the total market value of equity shares held in that scheme. b) The total number of shares underlying the call options written shall not exceed 30% of the unencumbered shares of a particular company held in the scheme. The unencumbered shares in a scheme shall mean shares that are not part of Securities Lending and Borrowing Mechanism (SLBM), margin or any other kind of encumbrances. c) At all points of time the scheme shall comply with the provisions at points (a) and (b) above. In case of any passive breach of the requirement at paragraph (a) above, the respective scheme shall have 7 trading days to Page 49 of 66rebalance the portfolio. During the rebalancing period, no additional call options can be written in the said scheme. d) In case the scheme needs to sell securities on which a call option is written under a covered call strategy, it must ensure compliance with paragraphs (a) and (b) above while selling the securities. e) In no case, the scheme shall write a call option without holding the underlying equity shares. A call option can be written only on shares which are not hedged using other derivative contracts. f) The premium received shall be within the requirements prescribed in terms of SEBI Master circular for Mutual Funds dated June 27, 2024 i.e. the total gross exposure related to option premium paid and received must not exceed 20% of the net assets of the scheme. g) The exposure on account of the call option written under the covered call strategy shall not be considered as exposure in terms of paragraph 3 of SEBI Master circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2024/90 dated June 27, 2024. h) The call option written shall be marked to market daily and the respective gains or losses factored into the daily NAV of the respective scheme(s) until the position is closed or expired. i) Non Convertible Preference Shares shall be treated as debt instruments and hence investment restrictions as applicable to debt instruments shall be applicable to these instruments. As per AMFI Best Practices Guidelines Circular No.115/2024-25 as amended from time to time, investment in Partly Paid Debentures, if undertaken, will be subject to a cap on maximum investment of Mutual Fund Scheme at 5% of the AUM of the scheme. However, once the Partly Paid Debentures are fully paid up, the cap on maximum investment of Mutual Fund scheme at 5% of the AUM of the scheme will not apply The Scheme may invest in the units of REITs and InvITs subject to the following: (a) PPFAS Mutual Fund under all its Schemes shall not own more than 10% of units issued by a single issuer of REIT and InvIT; and (b) The Scheme shall not invest – (i) more than 10% of its NAV in the units of REIT and InvIT; and (ii) more than 5% of its NAV in the units of REIT and InvIT issued by a single issuer. The AMC/Trustee may alter these above stated restrictions from time to time to the extent the SEBI (MF) Regulations change, so as to permit the Scheme to make its investments in the full spectrum of permitted investments for mutual funds to achieve its investment objective. The AMC/Trustee may from time to time alter these restrictions in conformity with the SEBI (MF) Regulations. Further, apart from the investment restrictions prescribed under SEBI (MF) Regulations, the Fund may follow any internal norms vis-à-vis restricting / limiting exposure to a particular scrip or sector, etc. All investment restrictions shall be applicable at the time of making investment. Std.Obs.19 C. Fundamental Attributes Std.Obs.59 Following are the Fundamental Attributes of the Scheme, in terms of Regulation 18 (15A) of the SEBI (MF) Regulations: (i) Type of a scheme Please refer to Section ‘Type of the Scheme’ (ii) Investment Objective Main Objective - Please refer to Section ‘What is the Investment Objective of the Scheme?' Investment pattern - Please refer to section 'How will the Scheme Allocate its Assets?' (iii) Terms of Issue a) Liquidity provisions such as listing, repurchase, redemption. Refer to Page 62. b) Aggregate Fees and Expenses charged to the Scheme Please refer to section 'Fees and Expenses' for details. c) Any safety net or guarantee provided: The Scheme does not provide any guaranteed or assured return. Page 50 of 66Changes in Fundamental Attributes In accordance with Regulation 18 (15A) of the SEBI (MF) Regulations, the Trustee shall ensure that no change in the fundamental attributes of the Scheme and the Option thereunder or the trust or fee and expenses payable or any other change which would modify the Scheme and the Option thereunder and affect the interest of Unit holders is carried out unless: - - A prior approval is taken from Securities and Exchange Board of India before brining such change(s) -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 consent or approval of unitholders can also be done through Postal Ballot mechanism i.e. voting by post or through any electronic mode. - The Unit holders are given an option for a period of 30 days to exit at the prevailing Net Asset Value without any Exit Load. D. Other Scheme Specific Disclosures: Listing and transfer Being an open ended Scheme under which units of the Scheme will be offered for subscription of units and redemption at NAV based prices on all Business Days on an ongoing basis providing the required liquidity to investors, units of the Scheme are not proposed to be listed on any stock exchange. However, the Trustee reserves the right to list the units of the Scheme on any stock exchange(s) at its sole discretion at a later date. Units held in non demat form / by way of an Account Statement can be transferred. If a person becomes a holder of the Units consequent to operation of law, or upon enforcement of a pledge, the Fund will, subject to production of satisfactory evidence, effect the transfer, if the transferee is otherwise eligible to hold the Units. Similarly, in cases of transfers taking place consequent to death, insolvency etc., the transferee’s name will be recorded by the Fund subject to production of satisfactory evidence. Units held in Demat form are transferable in accordance with the provisions of SEBI (Depositories and Participants) Regulations, as may be amended from time to time. Transfer can be made only in favor of transferees who are eligible 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. For units held in non - demat form, AMC have system in place for Transfer of Units held in Non-Demat (SoA) mode as laid down by AMFI vide its AMFI Best Practices Guidelines Circular No.116 /2024-25 dated August 14, 2024 for the following categories. (i) Surviving joint unitholder, who wants to add new joint holder(s) in the folio upon demise of one or more joint unitholder(s). (ii) 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. (iii) 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). Pursuant to AMFI Best Practice Guidelines Circular No.135/BP/119/2024-25 dated May 08, 2025, the above procedure has been extended to all investors under Resident/ Non- Resident Individual categories for the reasons like (i) Transfer to siblings(ii)Gifting of Units (iii) Transfer of units to third party (iv) Addition/deletion of unitholder. This facility shall be available only through online mode via the transaction portals of our Registrar and Transfer Agent (i.e. CAMS) and the MF Central (as and when enabled), 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. The Stamp duty for transfer of units, if/where applicable, shall be payable by the transferor. Unitholders can refer https://digital.camsonline.com/transfer for more details and can follow the process available on website of our CAMS if intends to transfer of their units in aforesaid scenarios. Page 51 of 66Dematerialization of The Unit holders would have an option to hold the Units in electronic (dematerialized) form or units account statement/ physical (non-demat) form. Units held in Demat Form are freely transferable. The Applicant intending to hold Units in dematerialized form will be required to Std.Obs.57 have a beneficiary account with a Depository Participant (DP) of the NSDL/CDSL and will be required to mention in the application form DP's Name, DP ID No. and Beneficiary Account No. with the DP at the time of purchasing Units. Unit-holders are requested to note that requests for conversion of units held in Account Statement (non-demat) form into Demat (electronic) form should be submitted to their Depository Participants. Income Under the Income Distribution cum capital withdrawal option, the Trustee will have discretion Distribution cum to declare the dividend, subject to availability of distributable surplus and partly out of investor’s capital calculated in accordance with the Regulations. The actual declaration of capital withdrawal IDCW and frequency will inter-alia, depend on availability of distributable surplus calculated (IDCW) Policy in accordance with SEBI (MF) Regulations and the decisions of the Trustee shall be final in this regard. The amounts can be distributed out of investors capital (Equalization Reserve), which is part of sale price that represents realized gains. There is no assurance or guarantee to the Unitholder as to the rate of IDCW nor that will the IDCW be paid regularly. On payment of IDCW, the NAV will stand reduced by the amount of IDCW and IDCW tax (if applicable) paid. The AMC/Trustee reserves the right to change the frequency of declaration of IDCW or may provide additional frequency for Declaration of IDCW. IDCW Distribution Procedure: In accordance with SEBI Master circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2024/90 dated June 27, 2024, the procedure for IDCW distribution would be as under: 1.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. 2.Within one calendar day of decision by the Trustees, the AMC shall issue notice to the public communicating the decision including the record date. The record date shall be 2 Working days from the date of publication in atleast 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. 3.Record date shall be the date, which will be considered for the purpose of determining the eligibility of Unitholders whose names appear on the register of Unitholder for receiving Dividends. The Record Date will be 2 Working days from the date of issue of public notice. 4.The notice will, in font size 10, bold, categorically state that pursuant to payment of Dividend, the NAV of the Scheme would fall to the extent of payout and statutory levy (if applicable). 5.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. 6.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. The requirement of giving public notice shall not be applicable for IDCW options having frequency ranging from daily up to monthly distribution. Allotment (Detailed Investors may apply for Units by filling up an Application Form. All valid and complete procedure) applications will be allotted Units at the Applicable NAV for the application amount. Allotment of units shall be made within 5 business days from the closure of the NFO and the Scheme shall be available for ongoing repurchase/sale/trading within 5 business days of the allotment. Allotment of Units shall be subject to: (i) the achievement of the minimum target amount; (ii) receipt of complete Application Forms that are in order; (iii) realisation of the specified minimum Subscription amount from the Investor, and (iv) provisions set out in the section on 'Refund/Rejection of the application’ given below. Account Statements An account statement will be sent by ordinary post/courier/electronic mail to each Unit Holder within 5 business days from the closure of the NFO, stating the number of Units purchased. In case the investor provides the e-mail address, the Fund will provide the Account Statement Page 52 of 66only through e-mail message. Should the unit holder experience any difficulty in accessing the electronically delivered documents, the unit holders shall promptly advise the Mutual Fund to enable the Mutual Fund to make the delivery through alternate means. It is deemed that the unit holder is aware of all security risks including possible third-party interception of the documents and contents of the documents becoming known to third parties. Normally, no unit certificates will be issued. However, if an applicant so desires, the AMC shall issue the unit certificates to the applicant within 5 business days of the receipt of request for the certificate. Consolidated Account Statements In accordance with SEBI Circulars as amended from time to time, a consolidated account statement for each calendar month is issued to the investors in whose folios transactions has taken place during that month. Further, as per SEBI circular no. SEBI/HO/MRD-PoD2/CIR/P/2024/93 dated July 1, 2024, email has been recognised as default mode for dispatch for Consolidated Account Statement (CAS) by Mutual Funds. In case there is no transaction in any of the mutual fund and demat accounts, then CAS with holding details shall be sent to the investors by email on half yearly basis. Refund If application is rejected, full amount will be refunded within 5 working days of closure of NFO. If refunded later than 5 working days @ 15% p.a. for delay period will be paid and charged to the AMC. Who can invest The following persons are eligible to apply for subscription to the units of the Scheme (subject This is an indicative to, wherever relevant, subscription to units of the Scheme being permitted under the respective list and investors constitutions and relevant statutory regulations): shall consult their 1. Indian resident adult individuals either singly or jointly (not exceeding three) or on an Anyone financial advisor to or Survivor basis; ascertain whether 2.Hindu Undivided Family (HUF) through Karta of the HUF; the scheme is 3. Minor (as the first and the sole holder only) through a natural guardian (i.e. father or mother, suitable to their risk as the case may be) or a court appointed legal guardian. There shall not be any joint holding profile. with minor investments. Payment for investment by any mode shall be accepted from the bank account of the minor, parent or legal guardian of the minor, or from a joint account of the minor with parent or legal guardian. 4. Partnership Firms and Limited Liability Partnerships (LLPs); 5. Proprietorship in the name of the sole proprietor; 6. Companies, Bodies Corporate, Public Sector Undertakings (PSUs), Association of Persons (AOP) or Bodies of Individuals (BOI) and societies registered under the Societies Registration Act, 1860; 7. Banks (including Co-operative Banks and Regional Rural Banks) and Financial Institutions; 8. Mutual Funds/ Alternative Investments Fund registered with SEBI; 9. Religious and Charitable Trusts, Wakfs or endowments of private trusts (subject to receipt of necessary approvals as “Public Securities” as required) and private trusts authorised to invest in mutual fund schemes under their trust deeds; 10. Non-Resident Indians (NRIs) / Persons of Indian origin (PIOs) residing abroad on repatriation basis or on non-repatriation basis; 11. Foreign Institutional Investors (FIIs) and their sub-accounts registered with SEBI on repatriation basis; 12. Army, Air Force, Navy and other para-military units and bodies created by such institutions; 13. Council of Scientific and Industrial Research, India 14. Multilateral Funding Agencies / Bodies Corporate incorporated outside India with the permission of Government of India / RBI; 15. Provident Funds, Pension Funds, Gratuity Funds and Superannuation Funds to the extent they are permitted; 16. Other schemes of PPFAS Mutual Fund subject to the conditions and limits prescribed by SEBI (MF) Regulations; 17. Trustee, AMC or Sponsor or their associates may subscribe to units under the Scheme; 18. Qualified Foreign Investor (QFI) 19. Foreign Portfolio Investors (FPI) registered with SEBI on repatriation basis; 20. Such other individuals /institutions/ body corporates etc., as may be decided by the AMC from time to time, so long as, wherever applicable, subject to their respective constitutions and relevant statutory regulations. The list given above is indicative and the applicable laws, if any, as amended from time to time Page 53 of 66shall supersede the list. Notes: 1. Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs)residing abroad / Foreign Institutional Investors (FIIs) have been granted a general permission by Reserve Bank of India under Schedule 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 for investing in / redeeming units of the mutual funds subject to conditions set out in the aforesaid regulations. 2. It is expressly understood that at the time of investment, the investor/ unitholder has the express authority to invest in units of the Scheme and the AMC / Trustee / Mutual Fund will not be responsible if such investment is ultravires the relevant constitution. Subject to the Regulations, the Trustee may reject any application received in case the application is found invalid/ incomplete or for any other reason in the Trustee's sole discretion. 3. For subscription in the Scheme, it is mandatory for investors to make certain disclosures like bank details etc. and provide certain documents like PAN copy etc. (for details please refer SAI) without which the application is liable to be rejected. PAN and Aadhar linking to be successful for applicable investor’s and Name and DOB on the application to be as per PAN/CBDT. 4.Subject to the SEBI (MF) Regulations, any application for units of this Scheme may be accepted or rejected in the sole and absolute discretion of the Trustee/AMC. The Trustee/AMC may inter-alia reject any application for the purchase of units if the application is invalid or incomplete or if the Trustee for any other reason does not believe that it would be in the best interest of the Scheme or its unitholders to accept such an application. 5. The AMC / Trustees may request Investors / Unit holders to provide other further details as may be required in the opinion of the AMC / Trustees under applicable Laws. This may result in a delay in dealing with the applicants, Unit holders, benefits distribution, etc. 6.In case of application(s) made by individual investors under a Power of Attorney, the original Power of Attorney or a duly notarized copy should be submitted along with the subscription application form. In case of applications made by non-individual investors, the authorized signatories of such non-individual investors should sign the application form in terms of the authority granted to them under the Constitutional Documents/ Board resolutions/Power of Attorneys, etc. A list of specimen signatures of the authorized signatories, duly certified / attested should also be attached to the Application Form. The Mutual Fund/AMC/Trustee shall deem that the investments made by such non-individual investors are not prohibited by any law/Constitutional documents governing them and they possess the necessary authority to invest. 7. Investors desiring to invest / transact in mutual fund schemes are required to comply with the KYC norms applicable from time to time. Under the KYC norms, Investors are required to provide prescribed documents for establishing their identity and address such as copy of the Memorandum and Articles of Association / bye-laws/trust deed/ partnership deed/Certificate of Registration along with the proof of authorization to invest, as applicable, to the KYC Registration Agency (KRA) registered with SEBI. 8.Further, all other requirement for investments by minor and process of transmission shall be followed in line with SEBI Master Circular for Mutual Funds dated June 27, 2024 read with SEBI Circular dated May 12, 2023 as amended from time to time. 9.The Mutual Fund/ AMC/ Trustee/ other intermediaries will rely on the declarations/ affirmations provided by the Investor(s) in the Application/Transaction Form(s) and the documents furnished to the KRA. Further, the Investor shall be liable to indemnify the Fund/ AMC/ Trustee/ other intermediaries in case of any dispute regarding the eligibility, validity and authorization of the transactions and/ or the applicant who has applied on behalf of the Investor. The Mutual Fund/ AMC/ Trustee reserves the right to call for such other information and documents as may be required by it in connection with the investments made by the investors. 10.Returned cheques are not liable to be presented again for collection and the accompanying application forms are liable to be rejected by the AMC. In case the returned cheques are presented again, the necessary charges are liable to be debited to the investor. 11.The Trustee reserves the right to recover from an investor any loss caused to the Scheme on account of dishonour of cheques issued by the investor for purchase of Units of the Scheme. Who cannot invest The following persons are not eligible to invest in the Scheme: Pursuant to RBI A.P. (DIR Series) Circular No. 14 dated September 16, 2003, Overseas Corporate Bodies (OCBs) cannot invest in Mutual Funds. Any prospective investor/s residing in Non-Compliant Countries and Territories (NCCTs) as determined by the Financial Action Task Force (FATF), from time to time. Page 54 of 66Such other persons as may be specified by AMC from time to time or as may be required by the applicable rules and regulations. How to Apply (and Please refer to the SAI and Application form for the instructions. other details) 1.Availability of application form from either the Investor Service Centers (ISCs)/Official Points Std.Obs.35 of Acceptance (OPAs) of AMC or may be downloaded from the website of AMC - https://amc.ppfas.com/downloads/index.php 2. Link for the list of official points of acceptance, collecting banker details etc.- https://amc.ppfas.com/contact/official-points-of-acceptance-opa/ https://www.camsonline.com/Investors/Support/CAMS-Location&Service-center 3. Name, address and contact no. of Registrar and Transfer Agent (R&T), email id of R&T, website address of R&T, official points of acceptance, collecting banker details etc. on back cover page. Investors may obtain Key Information Memorandum (KIM) along with the application forms from the AMC offices or Point of Acceptance of the Registrar or may be downloaded from http://amc.ppfas.com (AMC’s website). Please refer to the SAI and Application Form for the instructions. For further details, please refer to paragraph - Non-acceptance of Third Party Payment Instruments for subscriptions / investments under the section - How to Apply in SAI Bank Details: Std.Obs.61 In order to protect the interest of Unit holders from fraudulent encashment of redemption / IDCW cheques, SEBI has made it mandatory for investors to provide their bank details viz. name of bank, branch, address, account type and number, etc. to the Mutual Fund. Applications without complete bank details shall be rejected. The AMC will not be responsible for any loss arising out of fraudulent encashment of cheques / warrants and / or any delay / loss in transit. The policy regarding Units once redeemed will not be reissued. reissue of repurchased units, including the maximum extent, the manner of reissue, the entity (the scheme or the AMC) involved in the same. Restrictions, if any, RIGHT TO RESTRICT REDEMPTION AND / OR SUSPEND REDEMPTION OF THE UNITS on the right to freely (as per clause 1.12 of Master Circular): retain or dispose of units being offered. The Fund at its sole discretion reserves the right to restrict Redemption (including switch-out) of the Units (including Plan /Option) of the Scheme of the Fund upon occurrence of the below mentioned events for a period not exceeding ten (10) working days in any ninety (90) days period subject to approval of the Board of Directors of the AMC and the Trustee. The restriction on Redemption (including switch-out) shall be applicable where the Redemption (including switch-out) request is for a value above Rs. 2,00,000/- (Rupees Two Lakhs). Further, no restriction shall be applicable to the Redemption / switch-out request upto Rs. 2,00,000/- (Rupees Two Lakhs). It is further clarified that, in case of redemption request beyond Rs. 2,00,000/- (Rupees Two Lakhs), no restriction shall be applicable on first Rs. 2,00,000/- (Rupees Two Lakhs). The Trustee / AMC reserves the right to restrict Redemption or suspend Redemption of the Units in the Scheme of the Fund on account of circumstances leading to a systemic crisis or event(s) that severely constrict market liquidity or the efficient functioning of the markets. A list of such circumstances under which the restriction on Redemption or suspension of Redemption of the Units in the Scheme of the Fund may be imposed are as follows: 1. Liquidity issues- when market at large becomes illiquid affecting almost all securities rather than any issuer specific security; or 2. Market failures / Exchange closures; or 3. Operational issues; or 4. If so directed by SEBI. It is clarified that since the occurrence of the abovementioned eventualities have the ability to Page 55 of 66impact the overall market and liquidity situation, the same may result in exceptionally large number of Redemption requests being made and in such a situation the indicative timelines, if any mentioned by the Fund in the scheme offering documents, for processing of requests for Redemption may not be applicable. Any restriction on Redemption or suspension of Redemption of the Units in the Scheme(s) of the Mutual Fund shall be made applicable only after specific approval of the Board of Directors of the AMC and Trustee Company and thereafter, immediately informing the same to SEBI. The AMC / Trustee reserves the right to change / modify the provisions of right to restrict Redemption and / or suspend Redemption of the Units in the Scheme of the Fund. Cut off timing for Subscriptions/Purchases including Switch – ins for any amount. subscriptions/ redemptions/ ● In respect of valid applications received for any amount upto 3.00 p.m.(cut-off time) on a switches Business Day at the Official Point(s) of Acceptance and where the funds for the entire amount of subscription / purchase as per the application / switch-in request, are credited to This is the time the bank account of the Scheme before the cut-off time i.e. available for utilization before before which your the cut-off time - the closing NAV of the day on which valid application is received shall be application applicable. (complete in all ● In respect of valid applications received for any amount after 3.00 p.m. on a Business Day respects) should at the Official Point(s) of Acceptance and where the funds for the entire amount of reach the official subscription / purchase as per the application / switch-in request, are credited to the bank points of account of the Scheme before the cut-off time of the next Business Day i.e. available for acceptance. utilization before the cut-off time of the next Business Day - the closing NAV of the next Business Day shall be applicable. ● Irrespective of the time of receipt of application, where the funds for the entire amount are credited to the bank account of the Scheme before the cut-off time on any subsequent Business Day i.e. available for utilization before the cut-off time on any subsequent Business Day - the closing NAV of such subsequent Business Day shall be applicable. For Switch-ins of any amount: For determining the applicable NAV, the following shall be ensured: ● Application for switch-in is received before the applicable cut-off time. ● Funds for the entire amount of subscription/purchase as per the switch in request are credited to the bank account of the Scheme before the cut-off time. ● The funds are available for utilization before the cut-off time. ● In case of ‘switch’ transactions from one scheme to another, the allocation shall be in line with redemption payouts. ● In case of switches, the request should be received on a day which is a Business Day for the Switch-out scheme. Redemption for switch-out shall be processed at the applicable NAV as per cut-off timing. Switchin will be processed at the Applicable NAV (on a Business Day) based on realization of funds as per the redemption pay-out cycle for the switch-out scheme. ● For investments through systematic investment routes such as Systematic Investment Plans (SIP), Systematic Transfer Plans (STP), etc. the units will be allotted as per the closing NAV of the day on which the funds are available for utilization within applicable cut-off time by the Target Scheme irrespective of the installment date of the SIP, STP or record date of IDCW etc. ● While the AMC will endeavour to deposit the payment instruments accompanying investment application submitted to it with its bank expeditiously, it shall not be liable for delay in realization of funds on account of factors beyond its control such as clearing / settlement cycles of the banks. ● Since different payment modes have different settlement cycles including electronic transactions (as per arrangements with Payment Aggregators / Banks / Exchanges etc), it may happen that the investor's account is debited, but the money is not credited within cut- off time on the same date to the Scheme's bank account, leading to a gap / delay in Unit allotment. Investors are therefore urged to use the most efficient electronic payment modes to avoid delays in realization of funds and consequently in Unit allotment. Page 56 of 66Redemptions including switch-out: The following cut-off timings shall be observed by the Mutual Fund in respect of Repurchase of Units: 1. Where the valid application is received up to 3.00 p.m. on a business day by the Mutual Fund- the closing NAV of the day on which application is received shall be applicable and 2. Where the valid application is received after 3.00 p.m. on a business day by the Mutual Fund- the closing NAV of the next business day shall be applicable. Investors shall make sure that after deducting bank charges for outstation cheque amount available for investment shall not be less than amount specified for minimum investment. Transactions through online facilities / electronic modes: The time of transaction done through various online facilities / electronic modes offered by the AMC, for the purpose of determining the applicability of NAV, would be the time when the request for purchase / sale / switch of units is received in the servers of AMC/RTA. In case of transactions through online facilities / electronic modes, there may be a time lag of upto 5-7 banking days between the amount of subscription being debited to the investor's bank account and the subsequent credit into the respective Scheme’s bank account. This lag may impact the applicability of NAV for transactions where NAV is to be applied, based on actual realization of funds by the Scheme. Under no circumstances will PPFAS Asset Management Private Limited or its bankers or its service providers be liable for any lag / delay in realization of funds and consequent pricing of units. The AMC has the right to amend cut off timings subject to SEBI (MF) Regulations for the smooth and efficient functioning of the Scheme. Minimum amount Minimum amount for new purchase is Rs. 1,000 and in multiples of Re. 1 thereafter. for purchase/ Minimum additional amount for purchase is Rs. 1,000 and in multiples of Re. 1 thereafter. redemption/switche Minimum amount for redemption/ switch is Rs. 1000/- or 1 units or account balance, s whichever is lower in respect of each Option. In case the investor specifies the number of units and amount to be redeemed, the number of units shall be considered for redemption. In case the unitholder does not specify the number of units or amount to be redeemed, the redemption request will not be processed. Where Units under a Scheme are held under both Plans and the redemption / Switch request pertains to the Direct Plan, the same must clearly be mentioned on the request (along with the folio number), failing which the request would be processed from the Regular Plan. However, where Units under the requested Option are held only under one Plan, the request would be processed under such Plan. The AMC reserves the right to change the minimum amounts for various purchase/ redemption/ switches. Such changes shall only be applicable to transactions on a prospective basis. Non-applicability of Minimum Application Amount (Lump-sum) and Minimum Redemption amount to Alignment of interest of Designated Employees of AMC: SEBI vide its Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024 and SEBI circular no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/36 dated March 21, 2025 on Alignment of interest of Designated Employees of Asset Management Companies (AMCs) with the Unitholders of the Mutual Fund Schemes has, inter alia mandated that a minimum percentage of Gross Annual CTC net of income tax and any statutory contributions of the Designated Employees of the AMCs shall be invested in units of the scheme(s) of the Fund in which they have a role/oversight The percentage to be invested shall be based on the slabs as mentioned in the SEBI Circular dated March 21, 2025. The said guidelines came into effect from the April 01, 2025. In accordance with the regulatory requirement, the minimum application amount and minimum redemption amount wherever specified in the concerned SID / KIM will not be applicable for investment made in schemes of the Fund in compliance with the aforesaid circular(s). Account The AMC shall send an allotment confirmation specifying the units allotted by way of email Statements and/or SMS within 5 working days of receipt of valid application/transaction to the Unit Page 57 of 66holders registered e-mail address and/ or mobile number (whether units are held in demat Std.Obs.60 mode or in account statement form). A Consolidated Account Statement (CAS) detailing all the transactions across all mutual funds (including transaction charges paid to the distributor) 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. Investor those who have opted for delivery via electronic mode,e-CAS will be sent by the twelfth (12th) day from the month end and to investors who have opted for delivery via physical mode, physical CAS will be despatched by the fifteenth (15th) day from the month end. If there is any transaction in any of the demat accounts of the investor or in any of his mutual fund folios, then CAS will be sent to that investor through email on monthly basis. In case there is no transaction in any of the mutual fund and demat accounts then CAS with holding details will be sent to the investors by email on half yearly basis. In respect of half-yearly CAS, the AMCs/MF-RTAs shall provide the data with respect to the common PANs to the depositories on or before eighth(8th) day of April and October every year. The depositories shall then consolidate and dispatch the CAS to investors that have opted for delivery via electronic mode, on or before the eighteenth (18th) day of April and October and to investors that have opted for delivery via physical mode, on or before the twenty-first (21st) day of April and October. However, where an investor does not wish to receive CAS through email, option will be given to the investor to receive the CAS in physical form at the address registered with the Depositories and the AMCs/MF-RTAs. For further details, refer SAI. IDCW 1. The IDCW proceeds will mandatorily be paid directly into the Unitholder’s bank account through various electronic payout modes such as Direct credit/ NEFT/RTGS/IMPS/ECS/NECS etc, as directed by SEBI. Please note that physical despatch of IDCW payment instruments shall be made by the AMC only in exceptional circumstances. 2. The IDCW proceeds will be paid in favour of the Unit holder (registered holder of the Units or, if there is more than one registered holder, only to the first registered holder) with bank account number furnished to the Mutual Fund (please note that it is mandatory for the Unit holders to provide/update the Bank account details IFSC code etc. as per the directives of SEBI. 3. The IDCW payment shall be transferred to the Unitholders within 7 working days from the record date of such declaration of IDCW and in case of exceptional circumstances, it shall be released within 9 working days from the record date as per SEBI and/or AMFI Guidelines dated January 16, 2023 as amended from time to time. In the event of failure to transfer IDCW within the stipulated period, the AMC shall be liable to pay interest @ 15% per annum to the Unitholders for the delay in payment as computed from the Record Date or from such other date or for such period as may be advised by SEBI from time to time. 4.For units held in demat form: The IDCW proceeds will be credited to the bank account of the Unitholder, as per the bank account details recorded with the Depository Participant based on the list provided by the Depositories (NSDL/CDSL) giving the details of the demat account holders and the number of Units held by them in demat form on the Record date. Redemption ● The redemption or repurchase proceeds shall be dispatched to the unitholders within three working days from the date of redemption or repurchase. ● In order to protect the interest of Unit holders from fraudulent encashment of redemption / IDCW cheques, SEBI has made it mandatory for investors to provide their bank details viz. name of bank, branch, address, account type and number, etc. to the Mutual Fund. Applications without complete bank details shall be rejected. The AMC will not be responsible for any loss arising out of fraudulent encashment of cheques / warrants and / or any delay / loss in transit. Also, please refer to point on Registration of Multiple Bank Accounts in respect of an Investor Folio given elsewhere in this document. ● For list of exceptional circumstances, refer para 14.1.3 of SEBI Master Circular for Mutual Funds dated June 27, 2024. Bank Mandate Registration of multiple bank accounts An Investor can register with the Fund upto 5 bank accounts in case of individuals and HUFs and upto 10 in other cases. Registering of Multiple Bank Accounts will enable the Fund to systematically validate the pay-in of funds and avoid acceptance of third party payments. For the purpose of registration of bank account(s), Investor should submit Bank Mandate Registration Form (available at the AMC Website, office of AMC and Official point of Acceptance) together with any of the Page 58 of 66following documents: Cancelled original cheque leaf in respect of bank account to be registered where the account number and names of the account holders are printed on the face of the cheque; or Bank statement or copy of Bank Pass Book page with the Investor‘s Bank Account number, name and address. The above documents will also be required for change in bank account mandate submitted by the Investor. The AMC will register the Bank Account only after verifying that the sole/ first joint holder is the holder / one of the joint holders of the bank account. In case if a copy of the above documents is submitted, Investor shall submit the original to the AMC/ Investor Service Centre for verification and the same shall be returned. In case of Multiple Registered Bank Account, Investor may choose one of the registered bank accounts for the credit of redemption/IDCW proceeds (being - Pay-out bank account). Investors may however, specify any other registered bank accounts for credit of redemption proceeds at the time of requesting for the redemption. Investors may change such Pay-out Bank accounts, as necessary, through written instructions. However, if a request for redemption is received together with a change of bank account (unregistered new bank account) or before verification and validation of a new bank account, the redemption request would be processed to the currently registered default old bank account. Bank account which is stated first shall be treated as default bank account. For further details please refer to paragraph on Registration of Multiple Bank Accounts in respect of an Investor Folio in the SAI. The AMC reserves the right to alter/ discontinue all / any of the above-mentioned special product(s)/ facility(ies) at any point of time. Further, the AMC reserves the right to introduce more special product(s) / facility(ties) at a later date subject to prevailing SEBI Guidelines and Regulations. Email ID for communication First / Sole Holders should register their own email address and mobile number in their folio for speed and ease of communication in a convenient and cost-effective manner, and to help prevent fraudulent transactions. Delay in payment Under normal circumstances, the redemption or repurchase proceeds shall be released to of redemption / the unitholders within 3 working days from the date of redemption or repurchase and in case repurchase of exceptional situation it shall be within 5 working days For IDCW, under normal proceeds/dividen circumstances, the IDCW proceeds shall be released to unitholders within 7 working days d from the record date and in case of exceptional circumstances it shall be within 9 working days from the record date as per SEBI and/or AMFI Guidelines dated January 16, 2023 as amended from time to time. The AMC shall be liable to pay interest to the unitholders at such rate as may be specified by SEBI for the period of such delay (presently @ 15% per annum). However, the AMC will not be liable to pay any interest or compensation or any amount otherwise, in case the AMC / Trustee is required to obtain from the investor / unitholders, verification of identity or such other details relating to subscription for units under any applicable law or as may be requested by a regulatory body or any government authority, which may result in delay in processing the application. Unclaimed As per the SEBI Master Circular for Mutual Funds dated June 27, 2024, the unclaimed Redemption and redemption and IDCW amounts shall be allowed to be deployed by the Fund in call money Income market or money market instruments and the same shall also be allowed to be invested in a Distribution cum separate plan of Liquid scheme / Money Market Mutual Fund scheme floated by Mutual Funds Capital specifically for deployment of the unclaimed amounts. Withdrawal Amount Provided that such schemes where the unclaimed redemption and IDCW amounts are Std.Obs.52 deployed shall be only those Overnight scheme/ Liquid scheme / Money Market Mutual Fund Page 59 of 66schemes which are placed in A-1 cell (Relatively Low Interest Rate Risk and Relatively Low Credit Risk) of Potential Risk Class matrix as per SEBI Master Circular dated June 27, 2024. The investment management fee charged by the AMC for managing such unclaimed amounts shall not exceed 50 basis points. Investors claiming these amounts during a period of three years from the due date shall be paid at the prevailing NAV. After a period of three years, this amount shall be transferred to a pool account and the investors can claim the said amounts at the NAV prevailing at the end of the third year. Income earned on such funds shall be used for the purpose of investor education. The AMC shall make a continuous effort to remind investors through letters to take their unclaimed amounts. The details of such unclaimed amounts shall be disclosed in the annual report sent to the Unit Holders. The AMC reserves the right to provide the facility of redeeming Units of the Scheme through an alternative mechanism including but not limited to online transactions on the Internet through the AMC website or any other website, etc., as may be decided by the AMC from time to time. The alternative mechanisms would be applicable to only those investors who opt for the same in writing and/or subject to investor fulfilling such conditions as the AMC may specify from time to time. Unit-holders should note that while remitting your redemption proceeds, tax will be deducted at source in accordance with applicable tax laws. On the receipt of transmission request form the claimant, AMC/RTA shall ascertain any unclaimed IDCW/redemption and refund amount payable to the deceased unit holder and pay to the claimant’s registered bank account via RTGS/NEFT/Direct Fund transfer. Further, as per AMFI circular no. 35P/ MEM-COR/ 105/ 2024-25, following uniform practices shall be followed by AMC: 1.AMC to transfer the unclaimed redemption and dividend amounts to unclaimed dividend and redemption scheme (UDRS) after 90 days and not beyond 105 days from the date of the issuance of the instruments. 2.AMCs shall have separate scheme/plan for Unclaimed IDCW and Unclaimed Redemption amount, pending for less than 3 years or more than 3 years. 3.On completion of first 3 years period, AMC shall transfer such units to UDRS plan (>3 years) within 10 business days of the subsequent month. 4.The amount of income accrued on daily basis on unclaimed amounts beyond three years shall be transferred on a monthly basis (i.e. on or before 10th calendar day of subsequent month) to the investor education scheme /folio. Disclosure w.r.t Pursuant to SEBI Master circular for Mutual Funds June 27, 2024 - Chapter 17.6, read with investment by minors SEBI Circular dated May 12, 2023 the following uniform process shall be applicable with respect to Investments made in the name of a minor through a guardian. Std.Obs.37 i. Payment for investment by means of Cheque, Demand Draft or any other mode shall be accepted from the bank account of minor, parent or legal guardian of minor, or from the joint account of the minor with parent or legal guardian. For existing folios, the AMC shall insist upon a Change of payout bank mandate before redemption is processed. However, all redemptions from investments made in the name of a minor shall be credited only to the verified bank account of the minor, with effect from June 15, 2023. ii. Existing unit holders are requested to review the Bank Account registered in the folio and ensure that the registered Bank Mandate is in favour of minor or joint with registered guardian in folio. If the registered Bank Account is not in favour of minor or not joint with registered guardian, unit holders will be required to submit the change of bank mandate, where minor is also a bank account holder (either single or joint with registered guardian), before initiation any redemption transaction in the folio, else the transaction is liable to get rejected. iii.Upon the minor attaining the status of major, the minor in whose name the investment was made, shall be required to provide all the KYC/FATCA details, updated bank account details including cancelled original cheque leaf of the new account and his/her specimen signature Page 60 of 66duly authenticated by banker/guardian. Investors shall additionally note that, upon the minor attaining the status of major, no further transactions shall be allowed till the status of the minor is changed to major. The standing instructions registered for Systematic Investment Plan (SIP), Systematic Transfer Investment Plan (STP), Systematic Withdrawal Plan (SWP), IDCW Transfer Plan (DTP), etc., shall be suspended when the minor attains majority, till the status is changed to major. Acceptance of Non-individual unitholders desiring to avail the facility of carrying out financial transactions financial transactions through email in respect of PPFAS Mutual Fund schemes shall through email in respect of non- a. Submit a copy of the Board resolution or an authority letter on their letter head (signed individual investors: by competent authority), granting appropriate authority to the designated officials of their entity. b. The board resolution/authority letter should explicitly consist of: i. List of approved authorized officials who are authorized to transact on behalf of non-individual investors along with their designation and email IDs. ii. An Undertaking that the instructions for any financial transactions sent by email by the authorized officials shall be binding upon the entity as if it were a written agreement. c. In case the document is submitted electronically with a valid Digital Signature Certificate (DSC) or through Aadhaar based e-signature by the authorized official/s shall be considered as valid and acceptable and shall be binding on the non-individual investor as per the AMFI guidelines mentioned above. d. In addition to acceptance of financial transaction via email, scanned copy of duly signed transaction form/request letter bearing wet signatures of the authorized signatories of the entity, received from some other official / employee of the non-individual investor may also be accepted, and shall be binding on the non-individual investor provided - i. The email is also cc'd (copied) to the registered email ID of the authorized official / signatory of the non-individual unitholder; and ii. the domain name of the email ID of the sender of the email is from the same organization's official domain name. e. No change in bank details or addition of bank account of the entity or any non-financial transactions shall be allowed / accepted via email. f. Request for change in bank details or addition of bank account of the entity shall be submitted by the non-individual investor using the prescribed service request form duly signed by the entity's authorized signatories with wet signature of the designated authorized signatories. g. Change in the registered email address / contact details of the entity shall be accepted only through a physical letter (including scanned copy thereof) with wet signature of the designated authorized officials of the entity, duly supported by copy of the board resolutions/authority letter on the entity's letter head. h. In addition to acceptance of financial transactions via email, scanned copies of signed transaction form /request letters bearing wet signatures of the authorized signatories of the entity, received from the registered MFD of the entity or a third party authorized by the non-individual unitholder may also be accepted subject to fulfilment of the following requirements: i. Authorization letter from the non-individual unitholder authorizing the MFD/person to send the scanned copies of signed transaction form/request letter on behalf the non-individual investor and ii. the non-individual unitholder's registered email ID is also cc’d (copied) in the email sent by the authorized MFD/person sending the scanned copies of the duly signed transaction form/request letter. Page 61 of 66III. OTHER DETAILS A. Periodic Disclosures The first NAV of the Scheme will be calculated and disclosed within a period of 5 business days Net Asset Value from the date of allotment. Subsequently, the AMC will calculate and disclose the NAVs on all the Business Days. This is the value per unit of the Scheme on Due to any reason, if the NAVs of the Scheme are not available before the commencement of a particular day. You Business Hours on the following day, the Mutual Fund shall issue a press release giving reasons can ascertain the and explaining when the Mutual Fund would be able to publish the NAV. value of your investments by SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June multiplying the NAV 27, 2024 states that Mutual Fund shall declare separate NAV for Direct and Regular Plan. with your Unit balance. Accordingly, Direct and Regular Plan shall have different NAV. The difference in NAV will be the Std.Obs.41 commission paid to the distributor/s. NAV will be declared with 4 decimal points. Information regarding NAV can be obtained by the unitholders’ or investors by calling or visiting the nearest ISC or visiting the website of the Mutual Fund. Link - The Fund will upload the NAV as required by SEBI MF regulations once the scheme reopens. The AMC shall upload performance of the Scheme on a daily basis on AMFI website in the Daily Performance prescribed format along with other details such as Scheme AUM and previous day NAV, as Disclosure prescribed by SEBI from time to time. Link- https://www.amfiindia.com/otherdata/fund-performance Monthly Disclosure The Mutual Fund shall disclose the Monthly AAUM under different categories of Schemes as of Average Assets specified by SEBI in the prescribed format on a monthly basis on its website viz. www.amc.ppfas.com and forward to AMFI within 7 working days from the end of the month. Under Management (AAUM) Link- https://amc.ppfas.com/schemes/assets-under-management/ The AMC shall disclose the portfolio of the Scheme along with ISIN as on the last day of each Half yearly month / half year on its website viz. www.amc.ppfas.com and on the website of AMFI viz. Disclosures: www.amfiindia.com within 10 days from the close of each month/ half-year respectively in a user- Portfolio / friendly and downloadable spreadsheet format. Financial Results In case of Unitholders whose e-mail addresses are registered, the AMC shall send via email both This is a list of the monthly and half-yearly statement of the Scheme portfolio within 10 days from the close of each month/ half-year respectively. Further, the AMC shall publish an advertisement in all India securities where the editions of at least two daily newspapers, one each in English and Hindi, every half year corpus of the Scheme disclosing the hosting of the half- yearly statement of the schemes’ portfolio(s) on the AMC’s is currently invested. website and on the website of AMFI. The AMC shall provide a physical copy of the statement of The market value of these investments is the Scheme portfolio, without charging any cost, on specific request received from a Unitholder. Link - https://amc.ppfas.com/downloads/portfolio-disclosure/ also stated in portfolio disclosures. https://amc.ppfas.com/schemes/scheme-s-financial-half-yearly/ https://www.amfiindia.com/otherdata/accounts Half Yearly Results The Mutual Fund shall within one month from the close of each half year (i.e. 31st March and 30th September), host a soft copy of its unaudited financial results on its website www.amc.ppfas.com. The Mutual Fund shall also publish an advertisement disclosing the hosting of such financial results on its website, in at least one English daily newspaper having nationwide circulation and in a newspaper having wide circulation published in the language of Page 62 of 66the region where the Head Office of the Mutual Fund is situated. The unaudited financial results shall also be displayed on the website of AMFI. Link - https://www.amfiindia.com/otherdata/accounts https://amc.ppfas.com/schemes/scheme-s-financial-half-yearly/ Portfolio As per SEBI Master Circular no. SEBI Master Circular for Mutual Funds no. SEBI/HO/IMD/IMD- Rebalancing – PoD-1/P/CIR/2024/90 dated June 27, 2024, as may be amended from time to time, on Portfolio rebalancing due to passive breaches, the following disclosures will be made Disclosure :i. In case the AUM of deviated portfolio is more than 10% of the AUM of main portfolio of the requirement to scheme the AMC will immediately after the expiry of the mandated rebalancing period (i.e.. 30 unitholders business days): 1. disclose the same to investors through SMS and email / letter including details of portfolio not rebalanced. 2. communicate to investors through SMS and email / letter when the portfolio is rebalanced. Further, scheme wise deviation of the portfolio (beyond the above limit) from the mandated asset allocation beyond 30 days shall also be disclosed on the website. ii Any deviation from the mandated asset allocation shall also be disclosed along with periodic portfolio disclosures as specified by SEBI from the date of lapse of mandated plus extended rebalancing timelines Annual Report The scheme wise annual report shall be hosted on the website of the AMC / Mutual Fund (www.amc.ppfas.com) and AMFI (www.amfiindia.com) not later than four months (or such other period as may be specified by SEBI from time to time) from the date of closure of the relevant accounting year (i.e. 31st March each year). Further, the physical copy of the scheme wise annual report shall be made available to the Unitholders at the registered / corporate office of the AMC at all times. In case of Unitholders whose email addresses are registered with the Fund, the AMC shall e- mail the annual report or an abridged summary thereof to such Unitholders. The Unitholders whose email addresses are not registered with the Fund may submit a request to the AMC / Registrar & Transfer Agent to update their email ids or communicate their preference to continue receiving a physical copy of the scheme wise annual report or an abridged summary thereof. Unitholders may also request for a physical or electronic copy of the annual report / abridged summary, by writing to the AMC at mf@ppfas.com from their registered email ids or calling the AMC on the toll free number 1800 266 7790 or by submitting a written request at any of the nearest investor service centers of the Fund. Further, the AMC shall publish an advertisement in all India edition of at least two daily newspapers, one each in English and Hindi, every year disclosing the hosting of the scheme wise annual report on its website and on the website of AMFI. The AMC shall provide a physical copy of the abridged summary of the annual report, without charging any cost, on specific request received from a Unitholder. Link - https://amc.ppfas.com/schemes/scheme-annual-report/ https://www.amfiindia.com/otherdata/accounts Other disclosures/ To enhance investor awareness and information dissemination to investors, SEBI prescribes Scheme Summary various additional disclosures to be made by Mutual Funds from time to time on its website / on Document the website of AMFI, stock exchanges, etc. These disclosures include Scheme Summary Documents, Investor charter (which details the Std.Obs.38 services provided to Investors, Rights of Investors, various activities of Mutual Funds with timelines, DOs and DON'Ts for Investors (https://amc.ppfas.com/statutory-disclosures/investor- charter-for-mutual-funds.pdf?070102022_15), Grievance Redressal Mechanism, etc.) Investors may refer to the same. Link-https://amc.ppfas.com/statutory-disclosures/scheme-summary-document/index.php Product Labelling The Product labeling mandated by SEBI is to provide investors an easy understanding of the risk (including Risk- involved in the kind of product / scheme they are investing to meet their financial goals. The Risk- o-meter categorizes various schemes under different levels of risk based on the investment ometer) objective, asset allocation pattern, investment strategy and typical investment time horizon of investors. Therefore, the schemes falling under the same level of risk in the Risk-o-meter r may Std.Obs.38 Page 63 of 66not be similar in nature. Investors are advised before investing to evaluate a Scheme not only on the basis of the Product labeling (including the Risk-o-meter) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc. and shall seek appropriate advise, if they are unsure about the suitability of the Scheme before investing. As per SEBI Guidelines, Risk-o-meter of the Scheme shall be reviewed on a monthly basis based on evaluation of risk level of Scheme’s month end portfolios. Notice about changes in Scheme's Risk-o-meter, if any, shall be issued. The product labeling assigned during the NFO is based on internal assessment of the scheme characteristics or model portfolio and the same may vary post NFO when the actual investments are made. For latest Risk-o-meter of the Scheme and the Benchmark, investors may refer to the monthly portfolios disclosed on the website of the Fund viz. www.amc.ppfas.com as well as AMFI website within 10 days from the close of each month. Link - https://amc.ppfas.com/statutory-disclosures/product-labelling/ Investor Charter Link-https://amc.ppfas.com/statutory-disclosures/investor-charter-for-mutual- funds.pdf?070102022_15 B. Transparency/NAV Disclosure The AMC will calculate and disclose the first NAV of the Scheme within 5 business days from the date of allotment. Subsequently, the AMC will calculate and disclose the NAV of the Scheme at the close of every Business Day. The AMC shall update the NAVs on the website of the Mutual Fund (http://amc.ppfas.com) and on the website of Association of Mutual Funds in India - AMFI (www.amfiindia.com) by 11.00 p.m. on every Business Day. In case of any delay, the reasons for such delay would be explained to AMFI in writing. If the NAVs are not available before commencement of Business Hours on the following day due to any reason, the Mutual Fund shall issue a press release giving reasons and explaining when the Mutual Fund would be able to publish the NAVs. Unitholders may also avail a facility of receiving latest NAVs through SMS on their registered mobile numbers, by submitting a specific request in this regard to the AMC / Registrar & Transfer Agent. C. Transaction charges and stamp duty- Pursuant to Securities and Exchange Board of India (SEBI) vide Circular No. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2025/115 dated August 08, 2025, the charges or commission, as prescribed under the paragraph 10.4.1.b and paragraph 10.5 of Master Circular, shall be done away with immediate effect. In compliance with the above, the Scheme shall no longer deduct transaction charges from the subscription amount. The entire amount received from the investor shall be invested in the Scheme subject to applicable stamp duty charges. Stamp duty - Investors/ Unit holders of all Schemes of PPFAS Mutual Fund are requested to note that, pursuant to Part I of Chapter IV of the Notification dated February 21, 2019, issued by the Legislative Department, Ministry of Law and Justice, Government of India, on the Finance Act, 2019, read with subsequent notifications including Notification dated March 30, 2020 issued by Department of Revenue, Ministry of Finance, Government of India, a stamp duty at the rate of 0.005% of the transaction value would be levied on applicable mutual fund investment transactions such as purchases (including switch-in, Reinvestment of Income Distribution cum capital withdrawal option) with effect from July 1, 2020. Accordingly, pursuant to levy of stamp duty, the number of units allotted on purchases, switch-ins, Systematic Investment Plan (SIP) installments, Systematic Transfer Plan (STP) installments, Reinvestment of Income Distribution cum capital withdrawal option etc. to the unit holders would be reduced to that extent. The stamp duty will be deducted from the net investment amount i.e. gross investment amount less any other deduction like transaction charge. Units will be created only for the balance amount i.e. Net Investment Amount as reduced by the stamp duty. The stamp duty will be computed at the rate of 0.005% on an inclusive method basis. Transfer of mutual fund units (such as transfers between demat accounts) are subject to payment of stamp duty @ 0.015% D. Associate Transactions- Please refer to Statement of Additional Information (SAI) E. Taxation- For details on taxation please refer to the clause on Taxation in the SAI apart from the following: Equity oriented Fund: Tax implications on distributed income (hereinafter referred to as either 'Dividend' or 'Capital Gains') by Mutual Funds: Page 64 of 66Tax Status of Capital Gains Tax TDS on Tax on TDS on investor capital gain distributed distributed Short term Long term income under income capital gain capital gain dividend under (period of (period of scheme dividend holding less holding more scheme or equal than than 12 12 months) months) Resident 20% 12.5% Nil At the applicable 10% Individual/ (without slab rate HUF / AOP / BOI indexation Domestic and foreign Nil 10% Companies exchange NRIs fluctuation) STCG: 20% 20% LTCG: 12.5% Notes: 1. The following amounts would be deductible from full value of consideration to arrive at the amount of capital gain: -Cost of acquisition of units and -Expenditure incurred wholly and exclusively in connection with the transfer of units. Further, cost of acquisition to compute long-term capital gains is to be higher of (a) Actual cost of acquisition; and (b) Lower of (i) fair market value as on 31 January 2018; and (ii) full value of consideration received upon transfer. 2. In the case of Resident Individuals and HUF, whose total income (as reduced by such short- term capital gain/ long term capital gain) is below the basic exemption limit, then such capital gains shall be reduced by the amount of basic exemption limit not exhausted by any other income and only balance capital gain will be taxed. Long-term capital gains from the sale of equity-oriented units, taxed under section 112A of the Income-tax Act, 1961 (Act’), are not taxable up to Rs.1,25,000. 3. Equity Oriented Funds will also attract Securities Transaction Tax at applicable rates. 4. Surcharge is applicable on the above depending on the total income. In addition, “Health and Education Cess” @ 4% shall be applicable on aggregate of base tax and surcharge (Marginal relief in surcharge, if applicable). The surcharge rate applicable to capital gains taxable under section 112, 112A and 111A of the Act is capped to 15%. 5. There shall be no TDS deductible if dividend income paid / credited in respect of units of a mutual fund held by resident is below ₹ 10,000 in a financial year. Accordingly, income tax may have to be deducted at source at the following rates in case of a non- resident (other than foreign companies), unless a lower withholding tax certificate is obtained from the tax authorities: Where tax is deductible under the Act, and the deductee has not furnished a Permanent Account Number (PAN) to the deductor, tax should be deducted at source at the highest of the following rates: ● At the rate specified in the Act ● At the rates in force ● At the rate of 20% (plus applicable surcharge and Health and Education Cess) Where the Permanent Account Number provided to the deductor is invalid or does not belong to the deductee, it shall be deemed that the deductee has not furnished his Permanent Account Number to the deductor and the provisions of sub-section (1) shall apply accordingly. The rates of TDS in case of Non-resident will further be increased by applicable Surcharge and Cess. 6. Short term/ long term capital gain tax will be deducted at the time of redemption of units in case of NRI investors only. However, as per section 196A of the Act, withholding tax would be lower of the rate of 20% (plus applicable surcharge and cess) or rates provided in the tax treaty on any income in respect of units of mutual fund in case of non-residents as per section 196A of the Act. The non-resident unitholders have to provide the required documents for claiming the benefit of tax treaty. For the purpose of withholding tax obligations, taxes will be withheld as per the provisions of the Income tax Act, 1961 (without applying tax treaty rates). The NRIs can claim the benefit of tax treaty while filing the return of income. Page 65 of 667. As per the provisions of section 196D of the Act which is specifically applicable in case of FPI/FII, the withholding tax rate of 20% (plus applicable surcharge and cess) on any income in respect of securities referred to in section 115AD(1)(a) credited / paid to FII shall apply. The proviso to section 196D(1) of the Act provides for claiming the tax treaty benefits at the time of withholding tax on income with respect to securities of FPIs, subject to furnishing of tax residency certificate and such other documents as may be required. As per section 196D(2) of the Act, no TDS shall be made in respect of income by way of capital gain arising from the transfer of securities referred to in section 115AD of the Act. 8. The Finance Bill (No 2) ,2024 provides that in case of domestic company, the rate of income-tax shall be 25% subject to satisfaction of condition relating to turnover or gross receipts. The corporate tax rates for domestic companies (not claiming specified incentives and deductions) at the rate of 22% under section 115BAA and domestic manufacturing companies (not claiming specified incentives and deductions) set-up and registered on or after 1 October 2019 and manufacturing commenced on or before 31 March 2024 at the rate of 15% under section 115BAB. The tax computed in case of domestic companies whose income is chargeable to tax under section 115BAA or section 115BAB shall be increased by a surcharge at the rate of 10%. The information given herein is as per the prevailing tax laws. Further details on taxation, please refer to the Section on Taxation on investing in Mutual Funds in Statement of Additional Information (SAI). Investors should be aware that the fiscal rules/ tax laws may change and there can be no guarantee that the current tax position may continue indefinitely. In view of the individual nature of tax implications, investors are advised to consult their professional tax advisor. F. Rights of Unitholders- Please refer to SAI for details: https://amc.ppfas.com/downloads/kim-sid-and-sai/ G. List of official points of acceptance: Kindly refer the below link for list of Official points of acceptance. https://amc.ppfas.com/downloads/disclosure-related-to-offer-documents/ and https://amc.ppfas.com/contact/official-points-of-acceptance-opa/ https://www.camsonline.com/Investors/Support/CAMS-Location&Service-center H. 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: Std.Obs.48 Kindly refer the link for details: https://amc.ppfas.com/downloads/disclosure-related-to-offer-documents/ Note: (a)Further, any amendments / replacement / re-enactment of SEBI (MF) Regulations subsequent to the date of the Scheme Information Document shall prevail over those specified in this Scheme Information Document. (b)Notwithstanding anything contained in this Scheme Information Document, the provisions of the SEBI (Mutual Funds) Regulations, 1996 and the guidelines thereunder shall be applicable. Std.Obs.63 For and on behalf of PPFAS Asset Management Private Limited. Sd/- Neil Parag Parikh Place: Mumbai Chief Executive Officer & Director Date: September 12, 2025 Page 66 of 66