The Wealth Company Equity Savings Fund

Scheme Information Document SECTION I Con. Std. Obs. 1 THE WEALTH COMPANY EQUITY SAVINGS FUND (An open ended scheme investing in Equity, Arbitrage & Debt) (Scheme Code __________) Product Labelling: To provide investors an easy understanding of the kind of product/scheme they are investing in and its suitability to them, the product labelling is as under: Con. Std. Obs. 3 Riskometer and Product Label This Product is suitable for investors who are Scheme Risk-o-meter Benchmark Risk-o-meter seeking*: i.e. NIFTY Equity Savings TRI • Long term capital appreciation. • Investment in equity and equity related securities of companies across market capitalization. • Seeking to generate income by investing in fixed The Risk of The Benchmark Is Moderate income securities and using arbitrage and other derivative strategies * Investors should consult their financial advisers if in doubt about whether the product is suitable for them. The Risk of The Benchmark Is Moderate The above product labelling assigned during the New Fund Offer is based on internal assessment of the Scheme Characteristics or model portfolio and the same may vary post NFO when actual investments are made. Offer of Units of Rs. 10/- each for cash during the New Fund Offer and Continuous offer for Units at NAV based prices New Fund Offer Opens on: _______ New Fund Offer Closes on: _______ Scheme Re-opens on: __________ NAME OF THE NAME OF MUTUAL FUND NAME OF TRUSTEE COMPANY ASSET MANAGEMENT COMPANY The Wealth Company Mutual Fund Wealth Company Asset Management Holdings Pantomath Trustee Private Limited Private Limited (The AMC) Pantomath Nucleus House, Saki Vihar Pantomath Nucleus House, Saki Vihar Road, Andheri East, Mumbai, Pantomath Nucleus House, Saki Vihar Road, Road, Andheri East, Mumbai, Maharashtra 400072. Andheri East, Mumbai, Maharashtra 400072. Phone: 022-65786200 Maharashtra 400072. Phone: 022-65786200 Website: Phone: 022-65786200 Website: www.wealthcompanyamc.com www.wealthcompanyamc.com Website: www.wealthcompanyamc.com E-mail: investorcare@wealthcompany.in E-mail: investorcare@wealthcompany.in E-mail: investorcare@wealthcompany.in CIN: U64300MH2025PTC438726 Registration Code: MF/086/25/12\\ CIN:U67200MH2018PTC314896 The particulars of the Scheme have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations 1996, (hereinafter referred to as SEBI (MF) Regulations) as amended till date and circulars issued thereunder filed with SEBI, along with a Due Diligence Certificate from the AMC. The units being offered for public subscription have not been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy of the Scheme Information Document. The Scheme Information Document sets forth concisely the information about the scheme that a prospective investor ought to know before investing. Before investing, investors should also ascertain about any further changes to this Scheme Information Document after the date of this Document from the Mutual Fund / Investor Service Centres / Website / Distributors or Brokers. The investors are advised to refer to the Statement of Additional Information (SAI) for details of The Wealth Company Mutual Fund, Standard Risk Factors, Special Considerations, Tax and Legal issues and general information on https://www.wealthcompanyamc.com/ SAI is incorporated by reference (is legally a part of the Scheme Information Document). For a free copy of the current SAI, please contact your nearest Investor Service Centre or log on to our website. The Scheme Information Document (Section I and II) should be read in conjunction with the SAI and not in isolation. This Scheme Information Document is dated Mutual Fund investments are subject to market risks, read all scheme related documents carefullyTHE WEALTH COMPANY MUTUAL FUND TABLE OF CONTENTS Sr. No. Particulars Page No. SECTION – I I. HIGHLIGHTS/SUMMARY OF THE SCHEME 3 A HIGHLIGHTS/SUMMARY OF THE SCHEME 3 B DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY 9 II. INFORMATION ABOUT THE SCHEME 10 A. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? 10 B. WHERE WILL THE SCHEME INVEST? 13 C. WHAT ARE THE INVESTMENT STRATEGIES? 14 D. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? 18 E. WHO MANAGES THE SCHEME? 19 F. HOW IS THE SCHEME DIFFERENT FROM EXISTING SCHEMES OF THE MUTUAL FUND? 19 G. HOW HAS THE SCHEME PERFORMED? 19 H. ADDITIONAL SCHEME RELATED DISCLOSURES 19 III. OTHER DETAILS A. COMPUTATION OF NAV 21 B. NEW FUND OFFER (NFO) EXPENSES 21 C. ANNUAL SCHEME RECURRING EXPENSES 21 D. LOAD STRUCTURE 23 SECTION - II I. INTRODUCTION A. DEFINITIONS/INTERPRETATION 24 B. RISK FACTORS 28 C. RISK MITIGATION STRATEGIES 37 II. INFORMATION ABOUT THE SCHEME A. WHERE WILL THE SCHEME INVEST? 39 B. WHAT ARE THE INVESTMENT RESTRICTIONS? 42 C. FUNDAMENTAL ATTRIBUTES 46 D OTHER SCHEME SPECIFIC DISCLOSURES 47 III. OTHER DETAILS A. IN CASE OF FUND OF FUNDS 58 B. PERIODIC DISCLOSURES 58 C. TRANSPARENCY/NAV DISCLOSURE 58 D. STAMP DUTY 59 E. ASSOCIATE TRANSACTIONS 59 F. TAXATION 59 G. RIGHTS OF UNITHOLDERS 60 H. LIST OF OFFICIAL POINTS OF ACCEPTANCE 60 I. PENALTIES, PENDING LITIGATION OR PROCEEDINGS 61 2SCHEME INFORMATION DOCUMENT (SID) PART I: HIGHLIGHTS/SUMMARY OF THE SCHEME Sr. No. Title Description I. Name of the Scheme The Wealth Company Equity Savings Fund II. Category of the Scheme Hybrid - Equity Savings Fund III. Scheme Type An open ended scheme investing in equity, arbitrage and debt. IV. Scheme Code (To be disclosed after obtaining Scheme Code) Con. Std. Obs. 7 V. Investment Objective To provide long-term growth in capital and income through active management of a diversified portfolio across equity, arbitrage, and debt. Con. Std. Obs. 5 There is no assurance or guarantee that the investment objective of the Scheme will be achieved. VI. Liquidity /Listing Details Liquidity: The Scheme is open for Subscription/Switch-in and Redemption/Switch-out of Units on every Business Day on an ongoing basis, commencing not later than five business days from the date of allotment. In other words, the Scheme shall be available for ongoing repurchase / sale within five business days of allotment. As per SEBI Regulations, the Mutual Fund shall dispatch redemption proceeds within 3 working days of receiving a valid Redemption request. Under normal circumstances, the Mutual Fund will endeavor to dispatch the Redemption proceeds within 1-3 working days from the acceptance of a valid redemption request. However, in case of exceptional circumstances mentioned in para 14.1.3 of SEBI Master Circular for Mutual Funds dated June 27, 2024, redemption or repurchase proceeds will be transferred to investors within the timeframe prescribed for such exceptional circumstances Please refer to the section on ‘Redemption’ which is provided in the later part of the SID. Listing: As the units of the Scheme will be offered for subscription 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. VII. Benchmark (Total Return Tier I Benchmark : NIFTY Equity Savings TRI. Index) Justification: NIFTY Equity Savings Index captures performCoann.c Set do.f Oa bpso. r2tf5o lio having exposure to equity, equity arbitrage and debt instruments. This index is a total return index capturing price return and dividend/coupon income. The index has 35% exposure to Nifty 50 TRI, 30% exposure to equity arbitrage, 30% exposure to Nifty Short Duration Debt Index and 5% exposure to Nifty 1D Rate Index. The benchmark would be most appropriate to compare the performance of the Scheme. As required under Para 1.9 of the SEBI Master Circular on Mutual Funds, 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 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 NAV will be calculated and disclosed for every Business Day. The NAVs of the Scheme will be calculated up to two decimals. AMC shall update the NAV on the AMFI website (www. amfiindia.com) and on the website of the Mutual Fund www.wealthcompanyamc.com/mutual-fund-scheme/nav- update by 11.00 pm on the day of declaration of the NAV/business day. Con. Std. Obs. 40 09:00 am of the following business day – In case of Scheme invests in ETCDs. For Further details on NAV disclosure, please refer Section II IX. Applicable timelines • Dispatch of redemption proceeds The Mutual Fund shall dispatch redemption proceeds within 3 working days of receiving a valid Redemption request. However, under normal circumstances, the Mutual Fund will endeavor to dispatch the Redemption proceeds within 1 - 3 working days from the acceptance of a valid redemption request. In the event of failure to dispatch the redemption proceeds within the above 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). It may be noted that AMFI vide circular dated January 16, 2023, has provided list of exceptional instances wherein additional time has been allowed for payment of redemption proceeds. For further information, please refer to the SAI. Please refer to the section on ‘Redemption’ which is provided in the later part. • Dispatch of IDCW (if applicable) The warrants/cheque/demand draft issued under IDCW option shall be dispatched to the Unit Holders within 7 working days from the record date. In the event of failure to dispatch the warrants/cheque/demand draft within the stipulated 7 working days period, the AMC shall be liable to pay interest @15 percent per annum for the delayed period, to the Unit holders. The proceeds under the IDCW option will be paid by way of ECS/EFT/NEFT/RTGS/Direct 3THE WEALTH COMPANY MUTUAL FUND credits/any other electronic manner if sufficient banking details are available with the Mutual Fund for the Unitholder. In case of specific request for payouts by warrants/ cheques/ demand drafts or unavailability of sufficient details with the Mutual Fund, the payout under IDCW option will be paid by warrant/ cheques/demand drafts and payments will be made in favour of the Unit holder (registered holder of the Units or, if there are more than one registered holder, only to the first registered holder) with bank account number furnished to the Mutual Fund. X. Plans and Options The Scheme offers Regular Plan and Direct Plan. Plan/Options and sub options 1. Regular Plan: This Plan is for investors who wish to route their investment through any under the Scheme distributor. 2. Direct Plan: This Plan is for investors who invest directly without routing the investments through any distributor. Direct Plan has a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid/charged under the Direct Plan. Both the Plans will have a common portfolio and separate NAVs. Both Regular and Direct Plan(s), offer the below options/sub-options/facilities: a. Growth option b. Income Distribution cum Capital Withdrawal option (‘IDCW’) • Payout of Income Distribution cum Capital Withdrawal option (‘IDCW Payout’) • Reinvestment of Income Distribution cum Capital Withdrawal option (‘IDCW Reinvestment’) Please note that where the Unitholder has opted for IDCW Payout Option and in case the amount of IDCW payable to the Unitholder is Rs. 100/- or less under a Folio, the same will be compulsorily reinvested in the Scheme. Investors subscribing under Direct Plan of a Scheme will have to indicate “Direct Plan” in the application form e.g. ”The Wealth Company Equity Savings Fund - Direct Plan”. Investors should also indicate “Direct” in the ARN column of the application form. The Trustee may decide to distribute by way of IDCW option, the surplus by way of realised profit, dividends and interest, net of losses, expenses and taxes, if any, to Unit Holders in the IDCW option of the Scheme if such surplus is available and adequate for distribution in the opinion of the Trustee. The IDCW will be due to only those Unit Holders whose names appear in the register of Unit Holders in the IDCW option of the Scheme on the record date. Default Option: Growth option In case of valid application received without indicating choice between options under the scheme, the same shall be considered as Growth Option and processed accordingly. Income Distribution cum Capital Withdrawal (IDCW) Frequency: IDCW Payout and IDCW Re-investment options are available. Default Facility under IDCW Option- If the investor selects IDCW Option but fails to mention the facility, it will be deemed that the investor has opted for IDCW – Payout Default Plan: Investors are requested to note the following scenarios for the applicability of “Direct Plan or Regular Plan” for valid applications received under the Scheme. For detailed disclosure on default plans and options, kindly refer to SAI Scenario Broker (ARN) Code Plan mentioned by Default plan to be mentioned by the investor the investor captured 1 Not mentioned Not mentioned Direct Plan 2 Not mentioned Direct Direct Plan 3 Not mentioned Regular Direct Plan 4 Mentioned Direct Direct Plan 5 Direct Not mentioned Direct Plan 6 Direct Regular Direct Plan 7 Mentioned Regular Regular Plan 8 Mentioned Not mentioned Regular Plan 4SCHEME INFORMATION DOCUMENT (SID) XI. Load Structure Entry Load: Nil Con. Std. Obs. 47 Exit Load: 0.25% - If redeemed/switched out within 7 days from the date of allotment. Nil - if redeemed/switched out after 7 days from the date of allotment. Further, the Trustees shall have a right to prescribe or modify the load structure with prospective effect subject to the maximum prescribed under the Regulations. For any change in load structure Wealth Company Asset Management Holdings Private Limited will issue an addendum and display it on the website/ Investor Service Centers. Pursuant to Para 10.6 titled 'No Load on Bonus Units and Units allotted on Reinvestment of Dividend' of the SEBI Master Circular, no entry load or exit load shall be charged in respect of bonus units and units allotted on IDCW reinvestment. The AMC/Trustee reserves the right to change / modify the Load structure of the Scheme prospectively, subject to maximum limits as prescribed under the Regulations XII. Minimum Application During NFO: Amount/ Switch-in Minimum initial investment in the scheme / plan / option: Rs. 1,000/- and in multiples of Rs. 1/- thereafter. As per Para 6.10 of the Master Circular on ‘Alignment of interest of Designated Employees of Asset Management Companies (AMCs) with the Unitholders of the Mutual Fund Schemes’ read with SEBI Circular no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/36 dated March 21, 2025, SEBI has, inter alia mandated that a part of compensation (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. In accordance with the regulatory requirement, the minimum application amount specified in the SID of the Fund will not be applicable for investments made in schemes of the Fund in compliance with the aforesaid circular(s). Further, the minimum application amount wherever specified in the SID will not be applicable for auto or systematic transfer of funds from any other Scheme (transferor scheme) of The Wealth Company Mutual Fund to this Scheme (transferee scheme). On continuous basis: Purchase (Incl. Switch-in) Minimum of Rs. 1,000/- and in multiples of Rs.1 thereafter • Weekly SIP: Rs. 250/- (and in multiples of Rs. 1/-) Minimum installments: 12 • Fortnightly SIP: Rs. 250/- (and in multiples of Rs. 1/-) Minimum installments: 12 • Monthly SIP: Rs. 250/- (and in multiples of Rs. 1/-) Minimum instalments: 12 • Quarterly SIP: Rs. 250/- (and in multiples of Rs. 1/-) Minimum instalments: 12 The applicability of the minimum amount of instalment mentioned is at the time of registration only. There is no minimum balance requirement. XIII. Minimum Additional Minimum of Rs. 1,000/- and in multiples of Rs.1/- thereafter. Purchase Amount Subject to the provisions of SEBI (Mutual Funds) Regulations, 1996, as amended from time to time and circulars issued thereunder, the AMC reserves the right to change the minimum additional application amount from time to time. XIV. Minimum Redemption/ ‘Any amount’ or ‘any number of units’ as requested by the investor. Switch-out Amount The Redemption would be permitted to the extent of credit balance in the Investor’s account of the Scheme (subject to release of pledge / lien or other encumbrances). As per Para 6.10 of the Master Circular on ‘Alignment of interest of Designated Employees of Asset Management Companies (AMCs) with the Unitholders of the Mutual Fund Schemes’ read with SEBI Circular no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2025/36 dated March 21, 2025, SEBI has, inter alia mandated that a part of compensation (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. In accordance with the regulatory requirement, the minimum application amount specified in the SID of the Fund will not be applicable for investments made in schemes of the Fund in compliance with the aforesaid circular(s). XV. New Fund Offer Period NFO opens on: Con. Std. Obs. 34 This is the period during NFO closes on: which a new scheme sells Minimum duration to be 3 working days and will not be kept open for more than 15 days. its units to the investors. Any changes in dates will be published through addendum on AMC website i.e. www.wealthcompanyamc.com XVI. New Fund Offer Price The units being offered will have a face value of Rs. 10 /- per unit. This is the price per unit that the investors have to pay to invest during the NFO. 5THE WEALTH COMPANY MUTUAL FUND XVII. Segregated Portfolio/ Side The Scheme has enabling provisions to create a Segregated PCoortnfo. lSiotd .u Ondbes.r 5c4e rtain Pocketing Disclosure circumstances. For further details, kindly refer to the SAI. Con. Std. Obs. 53 XVIII Swing Pricing Disclosure The provisions of swing pricing are not applicable since this is not an open ended debt mutual fund scheme. XIX. Stock Lending/ The scheme may engage in stock lending activities as permitted under SEBI (MF) Short Selling Regulations from time to time. The Scheme may engage in short selling of securities in accordance with the applicable guidelines / regulations. For further details, kindly refer to the SAI. XX. How to Apply Investors can obtain application forms and Key Information Memorandum from the Official Points of Acceptance (OPAs) of AMC and RTA’s (KFin) branch office. Investors can also Con. Std. Obs. 35 download application form / Key Information Memorandum or apply through the website of AMC viz. www.wealthcompanyamc.com Applications for purchase/redemption/switches to be submitted at any of the Designated Investor Service Centers (DISC) mentioned in this Scheme Information Document or any other location designated as such by the AMC, at a later date. The addresses of the DISC are given at the end of this Scheme Information Document and also on the website, www.wealthcompanyamc.com Investors in cities other than where the DISC are located, may forward their application forms to any of the nearest DISC, or apply online on our website www.wealthcompanyamc.com Applications for subscription/ redemption/ switches can also be submitted on platforms of various channel partners like MF Central. For further details, please refer to Section II of the SID. XXI. Where can applications for Applications for purchase/redemption/switches be submitted at any of the Designated subscription/ redemption/ Investor Service Centres (DISC) mentioned in this Scheme Information Document or any switches be submitted other location designated as such by the AMC, at a later date. The addresses of the DISC are given at the end of this Scheme Information Document and also on the website www.wealthcompanyamc.com Investors in cities other than where the DISC are located, may forward their application forms to any of the nearest DISC, accompanied by Demand Draft/s payable locally at that DISC or apply online on our website www.wealthcompanyamc.com Applications for subscription/ redemption/ switches can also be submitted on platforms of various channel partners like MF Central. For further details, please refer Section II of the SID. XXII. Investor Services Contact details for general service requests & complaint resolution: Investors may contact at toll free number 1800 267 3454 Email: investorcare@wealthcompany.in Investor Relations Officer: Mr. Sachin Shah Wealth Company Asset Management Holdings Private Limited Pantomath Nucleus House, Saki Vihar Road, Andheri East, Mumbai – 400072 Email: investorcare@wealthcompany.in The AMC will at all times endeavor to handle transactions efficiently and to resolve any investor grievances promptly. For any grievances with respect to transactions through Stock Exchange Platform for Mutual Funds, the investors should approach either the stockbroker or the investor grievance cell of the respective stock exchange. It may be noted that all grievances/ complaints with regard to demat mode of holding shall be routed only through the DP/NSDL/CDSL. Please refer Investor Charter in our Website for more and latest information about Grievance Redressal Mechanism, Service Standards, etc. Investors also have an option to approach SEBI, by logging a complaint on SEBI’s complaints redressal system (SCORES 2.0), the website address is : https://scores.sebi.gov.in. 6SCHEME INFORMATION DOCUMENT (SID) In addition to SCORES, investors can go for online dispute resolution (ODR) mechanism https://smartodr.in/login, which includes mediation and/or conciliation and/or arbitration, in accordance with the procedure specified by the SEBI. XXIII Specific attribute of the Not Applicable scheme (such as lock in, duration in case of target maturity scheme/ close ended schemes) (as applicable) XXIV Special Product/ Facility Systematic Investment Plan (SIP) / Systematic Withdrawal Plan (SWP) / Systematic available during the NFO Transfer Plan (STP) facilities would be available to the investors. For further details and on Ongoing Basis of above special products / facilities, investors/ unit holders are kindly requested to refer SAI. Systematic Transfer Plan (STP) STP is a facility wherein unitholders can opt to transfer a fixed amount at regular intervals to another designated open ended scheme of The Wealth Company Mutual Fund. STP facility will only be available on an on-going basis and will not be available during the NFO period. The minimum amount per STP installment and minimum number of installments under all frequencies of STP are as follows: Frequency under STP Minimum Installments Minimum Amount and in Facility multiples of Daily 6 Rs. 100 and in multiples of Re. 1/- thereafter Weekly 6 Rs. 100 and in multiples of Re. 1/- thereafter Monthly 6 Rs. 100 and in multiples of Re. 1/- thereafter Quarterly 6 Rs. 100 and in multiples of Re. 1/- thereafter Systematic Withdrawal Plan (SWP) Investors of the Scheme have the facility of enrolling themselves in a Systematic Withdrawal Plan (SWP). The SWP facility allows the investor to withdraw a specified sum of money periodically from their investments in the scheme. An SWP is ideal for investors seeking a regular inflow of funds for their needs. A fixed sum will be paid to the investor from their investments and the remaining part of the corpus will continue to earn returns. SWP facility will only be available on an on-going basis and will not be available during the NFO period. The minimum amount per SWP installment and minimum number of installments under all frequencies of SWP are as follows: Frequency under SWP Minimum Installments Minimum Amount and in Facility multiples of Weekly 6 Rs. 500 and in multiples of Re. 1/- thereafter Monthly 6 Rs. 500 and in multiples of Re. 1/- thereafter Quarterly 6 Rs. 500 and in multiples of Re. 1/- thereafter Stock Exchange Infrastructure Facility: Transactions through Stockbrokers/ Clearing Members/ Depository Participants: The facility enables an applicant to purchase/ redeem units through the Stock Exchange Infrastructure. Transactions through Mutual Fund Distributors: SEBI, vide its Circulars no. CIR/MRD/DSA/32/2013 dated October 4, 2013 and CIR/MRD/DSA/33/2014 dated December 9, 2014, read with Clause 16.2.7 and 16.2.10 of SEBI Master Circular for Mutual Funds dated June 27, 2024 has permitted Mutual Fund Distributors to use recognized Stock Exchange infrastructure to purchase/redeem units directly from Mutual Fund/Asset Management Companies on behalf of their clients. The Mutual Fund may (at its sole discretion and without being obliged in any manner to do so and without being responsible and /or liable in any manner whatsoever), allow subscriptions of Units by electronic mode (web/ electronic transactions) including 7THE WEALTH COMPANY MUTUAL FUND subscriptions through the various web sites with which the AMC would have an arrangement from time to time Registration of Multiple Bank Accounts in respect of an Investor Folio (non-demat mode): Individuals and HUF investors can register up to 5 bank accounts and non-individuals can register upto 10 bank accounts with the Fund. Facility will not be available under demat mode of holding units. Facility to transact through MFCentral Platform: Pursuant to Clause 16.6 of SEBI Master Circular for Mutual Funds dated June 27, 2024 on ‘Registrar & Transfer Agents (RTA) interoperable Platform for enhancing investors’ experience in Mutual Fund transactions / service requests, the Qualified RTAs, KFin Technologies Limited (KFin) and Computer Age Management Services Limited (CAMS) have jointly developed MFCentral – A digital platform for Mutual Fund investors (the PlatforSm). The investors can submit both financial and non-financial transactions through the said Platform. Transactions through execution-only platforms (EOPs): Under Chapter 16B of SEBI Master Circular for Mutual Funds dated June 27, 2024, SEBI has issued regulatory framework for “Execution Only Platforms” (“EOPs”) for facilitating transactions in direct plans of schemes of Mutual Funds. Under this facility, investors can submit transactions such as subscription, redemptions, switch etc. through these EOPs. These platforms shall also support non-financial transactions including change of email id or contact number or bank account details on its platform with respect to Mutual Funds. SIP Top-Up Facility: • Under this facility, the investor can increase the SIP instalment at pre-defined intervals. This aims to provide the investor with a simplified method of aligning SIP instalment amounts with an increase in the investor’s earnings over the tenure of SIP. This facility is available for all investors. • Investors can opt for SIP Top-up facility by specifying an amount or percentage along with the frequency of top-up. Frequency and Mode of SIP Top-Up: Investors can choose to increase their SIP instalments either by a fixed amount , to be applied after a set frequency: Half-Yearly Top-Up: Applicable after every 6 SIP instalments. Yearly Top-Up: Applicable after every 12 SIP installments. (Only yearly frequency is allowed for quarterly SIPs.) • Minimum Top-Up Amount: Rs.100 and in multiples of Rs.1. • If the investor fails to specify either the frequency or amount , it shall be deemed as Yearly Top-Up of Rs. 100. • If both are not specified, the application may be processed as a normal SIP, subject to all other details being complete. Top-Up Cap amount: Investor has an option to freeze the SIP Top-Up amount once it reaches a fixed predefined amount. The fixed pre-defined amount should be lower than or equal to the maximum amount mentioned by the investor in the OTM / bank mandate. In case of difference between the Cap amount and the maximum amount mentioned in the mandate, then the amount which is lower of the two amounts shall be considered as the default amount of SIP Cap amount. Where Top-Up Cap amount is not provided, the Top-Up would be capped at the maximum amount mentioned in the OTM / bank mandate. SIP Top-Up facility shall not be available in case of Micro-SIP. SIP Pause facility: • SIP Pause facility allows investors to pause their existing SIP for a temporary period, without discontinuing the existing SIP and SIP would restart from the immediate next installment after completion of the pause period specified by the investor. SIP Pause can be for a minimum period of 1 month to a maximum period of 6 months. • The minimum gap between the pause request and next SIP instalment date should be at least 10 calendar days (excluding the request date and the next SIP instalment date). For further details, please refer SAI. XXV. Weblink The Total Expense Ratio (TER) shall be made available to the investors on the website of the AMC at www.wealthcompanyamc.com/downloads/statutory-disclosure/total-expense- ratio The Scheme factsheet shall be made available to the investors on the website of the AMC at www.wealthcompanyamc.com/downloads/factsheet 8SCHEME INFORMATION DOCUMENT (SID) B. DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY Con. 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. 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 thereunder shall be applicable. viii. The Trustees have ensured that The Wealth Company Equity Savings Fund approved by them is a new product offered by The Wealth Company Mutual Fund and is not a minor modification of any existing scheme/fund/product. For Wealth Company Asset Management Holdings Private Limited (Asset Management Company to The Wealth Company Mutual Fund) Sd/- Prasanna Pathak Deputy CEO Date: Place: 9THE WEALTH COMPANY MUTUAL FUND PART II: INFORMATION ABOUT THE SCHEME A. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? Con. Std. Obs. 29 The below mentioned table provides a broad classification of assets and indicative exposure level in percentage terms for the asset allocation. Indicative allocations (% of total assets) Instruments Minimum Maximum A. Equity & Equity related Instruments, of which 65 90 -Hedged – arbitrage opportunities*: 25% - 80% -Unhedged – Net long equity positions: 15%-40% B. Debt Securities and Money Market Instruments and Government 10 35 Securities C. Exchange Traded Commodity Derivatives 0 10 D. Units issued by REITS and InVITs 0 10 Debt securities includes TREPS/ reverse repos, Credit default swaps, equity linked debentures margin money and securitized debt *This denotes equity positions by investing in arbitrage opportunities in the equity market. The Fund Manager in the above case can therefore take exposure to equivalent stock/ index futures & create completely covered positions to avail arbitrage between spot & futures market. Thus, the entire position is primarily used to lock arbitrage profit. The margin money requirement for the purposes of derivative exposure may be held in the form of Term Deposit/G-sec/T-bills/Cash/Money Market instruments etc. Money market instruments include call or notice money, term money, repo, reverse repo, certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity up to one year as the Bank may specify from time to time. It will also include the arbitrage opportunities arising out of corporate actions (e.g. – FPO, delisting, open offers, demergers, mergers etc). This is not an exhaustive list as every corporate action could offer a different and unique opportunity. Special Situations (including but not limited to Corporate Actions) The situations that present an investment opportunity like merger of businesses or companies, demergers which may result in separation / spin – off business operation/activity, share repurchases wherein the companies buys-back their own shares from the market, rights-issues, delisting, open-offer, debt restructuring i.e. a company may change its capital structure by means of reducing debt as higher debt can lead to lower profits and cash flows. There could by many other situations/events/corporate actions that may result in share price appreciation. Such situations may include turnarounds, corporate restructuring, asset plays, and regulatory changes and primary market listings etc. Unhedged denotes only net long equity exposures aimed to gain from potential capital appreciation of these positions. Thus, it is a directional equity exposure which will not be hedged. In situations when adequate arbitrage opportunities are not available in the derivative / equity markets or on defensive considerations, the asset allocation of the Scheme would be as given below, at the discretion of the fund manager: Indicative Allocation (% of Total Assets) Instruments Minimum Maximum A. Equity & Equity related Instruments, of which 15 90 - Hedged – arbitrage opportunities* : 5%-80% - Unhedged – Net long equity positions – 10%-40% B. Debt Securities and Money Market Instruments and Government Securities 10 85 C. Exchange Traded Commodity Derivatives 0 10 D. Units issued by REITS and InVITs 0 10 Debt securities includes TREPS/ reverse repos, Credit default swaps, equity linked debentures margin money and securitized debt *This denotes equity positions by investing in arbitrage opportunities in the equity market. The Fund Manager in the above case can therefore take exposure to equivalent stock/ index futures & create completely covered positions to avail arbitrage between spot & futures market. Thus, the entire position is primarily used to lock arbitrage profit. The margin money requirement for the purposes of derivative exposure may be held in the form of Term Deposit/G-sec/T-bills/Cash/Money Market instruments etc. Defensive circumstances are when the arbitrage opportunities in the market are negligible, or returns are lower than alternative investment opportunities as per the allocation pattern. The allocation under defensive circumstances will be made keeping in view the interest of the Unit holders. Such position will be closely monitored by the Fund Managers and necessary rebalancing will be done at suitable opportunity but not later than 30 days. Unhedged denotes only net long equity exposures aimed to gain from potential capital appreciation of these positions. Thus, it is a directional equity exposure which will not be hedged. The Scheme may utilise internal proprietary model to monitor the markets to decide the asset allocation mix in various asset classes. This model may provide broad guidance regarding the relative valuation levels and scope of the asset allocation opportunities in the market. Given the dynamic nature of the market, while the Fund manager may utilise this model as a broad indicator; the Fund manager shall have the final authority to apply his/her own discretion and judgement while determining the allocation percentage, the allocation interval, and the allocation approach as may be appropriate to pursue the investment objective of the fund. The internal proprietary model may use parameters like Adjusted Price to Book Value of Equity market 10SCHEME INFORMATION DOCUMENT (SID) indices (with an overlay of ROE), Ratio of G-Sec Yield to Earning Yield of Equity market indices, VIX and Equity and Debt Momentum while deciding the Asset Allocation levels of the portfolio. This internal proprietary model may go through periodic revision (as and when required), resulting in addition or deletion of parameters and the weightages assigned to them. Illustration: 1. A very high Ratio of G-Sec Yield/ Earning yield of Index and Adjusted P/BV compared to long term average, indicates higher model value, may result in lower equity allocation say between 10-20%. 2. Ratio of G-Sec Yield/ Earning yield of Index and Adjusted P/BV closer to long term average, indicates median model value, may result in equity allocation say between 20-30%. 3. A very low Ratio of G-Sec Yield/ Earning yield of Index and Adjusted P/BV compared to long term average, indicates lower model value, may result in higher equity allocation say between 30-40%. Note: These are tentative numbers for illustration purpose only. The final asset allocation % will be decided based on prevailing market conditions, other parameters like VIX, Momentum etc. along with the primary indicators mentioned above. Participation in Exchange Traded Commodity Derivatives (ETCDs) will be in line with para 12.26 of SEBI Master Circular on Mutual Funds on Exchange Traded Commodity Derivatives (ETCDs) as well as any subsequent amendments thereto. Pursuant to Para 12.24 of SEBI Master Circular on Mutual Funds dated June 27, 2024, the cumulative gross exposure to equity, equity related instruments, debt, derivative positions (including ETCDs), REITs/INvTs, repo transactions, credit default swaps in corporate debt securities such other securities/assets as may be permitted by the Board from time to time subject to regulatory approvals, if any should not exceed 100% of the net assets of the scheme Con. Std. Obs. 17 Con. Std. Obs. 18 Con. Std. Obs. 19 Indicative Table Sl. No. Type of Instrument Percentage of Exposure Circular References* a. Equity Derivatives for hedging a. Investments in Equity derivative instruments shall Para 12.25 of the SEBI Master purposes be up to 50% of the Equity portfolio of the scheme. Circular b. Debt Derivatives b. Investments in Debt derivative instruments shall be up to 20% of the Debt portfolio of the scheme. Con. Std. Obs. 20 The investment in Debt derivative instruments shall only be for the purpose of hedging. 2. Exchange Traded Commodity Para 12.26 of the SEBI Master Derivatives (ETCDs) The participation in ETCDs shall not exceed Circular on Mutual Funds dated June 27, 2024. 10% of net asset value of the scheme. 3. Securitized Debt Upto 20% of the net assets of the debt Para 12.15 of SEBI Master Circular component. on Mutual Funds dated June 27, 2024. 4. Debt instruments having Structured Not exceeding 10% of the debt portfolio of the Para 12.3 of SEBI Master Circular Obligations / Credit Enhancements Scheme and the group exposure in such instruments on Mutual Funds dated June 27, shall not exceed 5% of the debt portfolio of the 2024. 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. 5. Investments in instruments having Investment in Debt Instruments with special features Para 12.2 of the SEBI Master special features – AT1 and AT2 Bonds (AT1 and AT2 Bonds) – upto 10% of NAV of the debt Circular on Mutual Funds, dated portfolio of the scheme; and not more than 5% of June 27, 2024. NAV of the debt portfolio of the scheme in instruments issued by a single issuer. 6. Repo/ reverse repo transactions in Not exceeding 10% of the net assets of the Para 12.18 of SEBI Master Circular corporate debt securities scheme. for Mutual Funds dated June 27, 2024 7. Tri – Party Repos Investment in Tri-Party Repo - upto 20% of the net In line with the Asset Allocation of assets of the scheme the scheme 8 Credit Default Swaps should not exceed 10% of the AUM of the scheme clause 12.28 of SEBI Master and shall be within overall limits of derivative Circular dated June 27, 2024, read exposure with SEBI Circular No. SEBI/HO/IMD/PoD2/P/CIR/2024/1 25 dated September 20, 2024 9 Short selling of securities The Scheme may engage in short selling of Para 12.11 of SEBI Master Circular Securities in accordance with the applicable for Mutual Funds dated June guidelines / regulations 27,2024 11THE WEALTH COMPANY MUTUAL FUND 10 Securities Lending 1. Not more than 20% of the net assets of the Subject to the SEBI (MF) Scheme. Regulations and in accordance with 2. Not more than 5% of the net assets of the Scheme Securities Lending Scheme, 1997, in Securities Lending to any single approved Para 12.11 of SEBI Master Circular intermediary. on Mutual Funds dated June 27, 2024 and framework for short selling and borrowing and lending of securities notified by SEBI vide circular No MRD/DoP/ SE/Dep/Cir14/2007 dated December 20, 2007, as may be amended from time to time. 11 Investment in the units of Infrastructure Not more than 10% of the net assets of the Scheme Para 12.21 of SEBI Master Circular Investment Trusts (InvITs) and Real and not more than 5% of the net assets of the Scheme on Mutual Funds dated June Estate Investment Trusts (REITs) in InvITs and REITs of any single issuer. 27,12024 12 Covered Call As per Regulatory limits Clause 12.25.8 of SEBI Master circular 13 Units of other mutual fund schemes Investment in units of other mutual fund schemes Clause 4 of Seventh Schedule of the upto 5% of the net assets of the scheme without SEBI Mutual Fund Regulations, 1996 charging any fees subject to prevailing regulatory limits of aggregate interscheme investment made by all schemes under the same management or in schemes under the management of any other asset management company which shall not exceed 5% of the net asset value of the mutual fund. As per the regulatory requirement, the Scheme may deploy NFO proceeds in Tri Party repo before the closure of NFO period. However, the AMC shall not charge any investment management and advisory fees on funds deployed in Tri Party repo during the NFO period. Security wise hedge positions using derivatives such as Interest Rate Swaps, call options written under the covered call Strategy and any other positions specifically exempted under SEBI guidelines from time to time, will not be considered in calculating above exposure. For the purpose of calculating the gross exposure limits, Government Securities, T-Bills and repo on Government Securities with residual maturity of less than 91 days shall only be considered as Cash and Cash Equivalent. Apart from this, no other securities shall be considered as Cash and Cash Equivalent for the purpose of calculating the gross exposure limits. Con. Std. Obs. 14 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. Pending deployment of funds in securities in terms of investment objective of the Scheme, the AMC may park the funds of the Scheme in short term deposits of Scheduled Commercial Banks, subject to the guidelines issued by SEBI vide Para 12.16 of the SEBI Master Circular on Mutual Funds dated June 27, 2024, as may be amended from time to time. Investments in equity will be made through secondary market purchases, initial public offers, other public offers, placements and right offers (including renunciation). Investment in debt will be made through secondary market purchases, public offers and placements. The securities could be listed / unlisted, privately placed, secured / unsecured, rated / unrated in accordance with various SEBI regulations. Con. Std. Obs. 15 The Schemes shall not invest in the below securities: Sr.No. Type of Instrument 1. Overseas Securities and Overseas ETFs 2. Foreign Securitized Debt Investment in Tri-party Repo before the closure of NFO The Mutual Fund/AMC shall make investment out of the NFO proceeds in various securities only on or after the closure of the NFO period. However, Mutual Funds/AMC is allowed to deploy the NFO proceeds in triparty repo on Government securities or treasury bills before the closure of NFO period. However, AMC shall not charge any investment management and advisory fees on funds deployed in triparty repo on Government securities or treasury bills during the NFO period. The appreciation received from investment in triparty repo on Government securities or treasury bills shall be passed on to investors. Further, in case the minimum subscription amount is not garnered by the scheme during the NFO period, the interest earned upon investment of NFO proceeds in triparty repo on Government securities or treasury bills shall be returned to investors, in proportion of their investments, along-with the refund of the subscription amount. Deployment of funds collected during NFO period The AMC shall deploy the funds garnered in an 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 in 30 business days, reasons in writing, including details of efforts taken to deploy the funds, shall be placed before the Investment Committee of the AMC. Basis root cause analysis, The Investment Committee may extend the timeline by 30 business days, while also making recommendations on how to ensure deployment within 30 business days going forward and monitoring the same. Trustees shall also need to 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. In case the funds are not deployed as per the asset allocation mentioned in the SID as per the aforesaid mandated plus extended timelines, AMC shall: i. not be permitted to receive fresh flows in the same scheme till the time the funds are deployed as per the asset allocation mentioned in the SID. ii. not be permitted to levy exit load, if any, on the investors exiting such scheme(s) after 60 business days of not complying with the 12SCHEME INFORMATION DOCUMENT (SID) asset allocation of the scheme. iii. inform all investors of the NFO, about the option of an exit from the concerned scheme without exit load, via email, SMS or other similar mode of communication. iv. report deviation, if any, to Trustees at each of the above stages. Portfolio Rebalancing & Change in Investment Pattern Subject to the 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. • Portfolio Rebalancing Con. Std. Obs. 24 Pursuant to Para 2.9 related to 'Timelines for Rebalancing of Portfolios of Mutual Fund Schemes' of the SEBI Master Circular, in the event where the asset allocation is falling outside the limits specified in the asset allocation table due to passive breaches (occurrence of instances not arising out of omission and commission of AMC), the Scheme will rebalance the portfolio within thirty (30) business days. However, if market conditions do not permit the Fund Manager to rebalance the portfolio of the Scheme within the stipulated period of thirty (30) business days, justification in writing includes details of efforts taken to rebalance the portfolio for the same shall be provided to the Investment Management Committee. The Investment Management Committee shall then decide on the course of action and if they so desire can extend the timelines up to sixty (60) business days from the date of completion of the mandated rebalancing period. Further, compliances relating to disclosures etc. shall be adhered in line with the said circular. All the reporting and disclosure requirements as mentioned in Para 2.9 of SEBI Master Circular o n Mutual Funds dated June 27, 2024 shall be complied with. It may please be noted that the AMC shall adhere to all the SEBI guidelines regarding the rebalancing of the asset allocation as stipulated from time to time. Con. Std. Obs. 22 • Internal Asset Allocation Model Parameters The scheme may employ an internal model to guide asset allocation. The model is indicative only and the Fund Manager retains discretion. Model Inputs Include: • Volatility (e.g., VIX) • Quality • Value • Equity & Debt Momentum • G-Sec Yield / Equity Earnings Yield Ratio The model is periodically reviewed and parameters/weightages may be changed as needed. Note: Equity allocation ranges (e.g., 10–40%) are indicative based on model signals, but not hard limits. • Change in Investment Pattern due to Short Term Defensive Consideration Con. Std. Obs. 23 Pursuant to Para 1.14.1.2.b related to 'Investment Pattern' of the SEBI Master Circular, the tentative portfolio break-up mentioned above with minimum and maximum asset allocation range can be altered due to market conditions for a short-term period on defensive considerations. In this event where the asset allocation falls outside the limits specified in the asset allocation table due to defensive considerations (active breaches), the Scheme will rebalance the portfolio within thirty (30) calendar days from the date of deviation. However, justification for the same shall be provided to the Investment Management Committee in writing. The Investment Management Committee shall then decide on the course of action. Con. Std. Obs. 29 B. WHERE WILL THE SCHEME INVEST? Subject to the Regulations, the corpus of the Scheme can be invested in any (but not exclusively) of the following securities as permitted by SEBI/ RBI from time to time: • Equity and Equity Related Instruments including equity derivatives for hedging. • Debt & Money Market Instruments [Certificate of Deposits (CD), Commercial Paper (CP), Non-convertible preference shares and non-convertible debentures, Bills Rediscounting (BRD), Securities issued by the Central and State Governments as may be permitted by RBI etc. , Treasury Bills (T-Bills) , Tri-party repo, Repos/reverse repos in Government Securities, Debt securities domestic, Credit enhanced Debt, Corporate debt and securities (of both public and private sector undertakings), investments in corporate bond repo, Money market instruments permitted by SEBI/RBI, in Tri Party repo market or in alternative investment, Non-convertible part of convertible securities; • Investments in units of mutual fund schemes • Investment in Short Term Deposits • Debt Derivative instruments only for hedging • Interest Rate Futures. • Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvIT). • Debt instruments having structured obligations / credit enhancements, Credit Default Swaps (CDS) • Investment in Securitized Debt • Cash & cash equivalents • Securities issued by banks (both public and private sector) as permitted by SEBI from time to time and development financial institutions • Any other instruments, as may be permitted by RBI / SEBI / such other Regulatory Authority, from time to time, subject to Regulatory approvals. Investments in equity will be made through secondary market purchases, initial public offers, other public offers, placements and right 13THE WEALTH COMPANY MUTUAL FUND offers (including renunciation). Investment in debt will be made through secondary market purchases, public offers and placements. The securities could be listed / unlisted, privately placed, secured / unsecured, rated / unrated in accordance with various SEBI regulations. Detailed definition and applicable regulations/guidelines for each instrument shall be included in Section II of this document. C. WHAT ARE THE INVESTMENT STRATEGIES? Con. Std. Obs. 27 The scheme will be an actively managed fund. The Scheme shall endeavour to provide capital appreciation and income to the investors using arbitrage opportunities, investment in equity/equity related instruments and debt/money market instruments. Under its Equity component, the scheme would invest across market cap/sectors/industries providing the benefit of diversification. The aim of the equity component will be to build a portfolio, representing a cross section of companies diversified across major industries, economic sectors and market capitalization that offer an acceptable risk reward balance. Under its Debt component, the scheme would aim to generate income by investing in debt (including securitised debt), money market instruments. Fixed income allocation will be made based on the evaluation of macroeconomic factors, market dynamics, credit quality, liquidity, interest rates etc. For Arbitrage the Scheme may seek to generate income through arbitrage opportunities (including dividend arbitrage, buy back / open offer arbitrage, commodity arbitrage etc.) and adopt strategies depending on market conditions and regulatory compliance. The scheme shall also invest in REITs/InvITs for the purpose of overall portfolio diversification. The Fund Manager will have the final authority to apply their discretion and judgment while determining the actual allocation percentage, the allocation interval, and the allocation approach as may be appropriate to pursue the investment objective of the Scheme. To achieve the investment objective, the scheme will invest in equity and equity linked instruments across market capitalization viz. Large cap, mid cap and small companies. Definition of Large Cap, Mid Cap and Small Cap: a) Large Cap: 1st - 100th company in terms of full market capitalization. b) Mid Cap: 101st - 250th company in terms of full market capitalization. c) Small Cap: 251st company onwards in terms of full market capitalization. Subsequent to any updation in the above list, the portfolio would be re-balanced in line with the updated list within a period of one month. This definition and updation will continue till such time that it may be revised or modified by SEBI or any other agency as prescribed by SEBI. For Equity Segment: At The Wealth Company Mutual Fund we follow an active investment strategy based on fundamental research and an eclectic approach to benefit from bottom-up stock selection after duly considering the top-down structural trends. We intend to use an in-house screening process based on scientific and analytical approach to arrive at an investible universe for our funds. Additionally, we intend to use the research and diligence of a private equity approach in our portfolio construction process. We believe ‘CHANGE’ is the only constant. While investing in any company, we will leverage the positive impact brought in due to ‘C.H.A.N.G.E.’ Our C.H.A.N.G.E. framework encompasses factors like Capable Management, Historical Performance, Attractive Valuations, Navigating the business cycles with strategy, Good Governance, Earnings Growth and Execution Excellence. We utilise our proprietary screening model to evaluate businesses based on such factors and build investible universe of stocks. We will also leverage a multi- dimensional lens to assess market direction and positioning based on ‘E.D.G.E.’ which comprises of E-Exchange and market specific indicators, D- Domestic economic indicators, G-Global indicators, E- Exit/Rebalancing Strategy Our investment philosophy is to generate consistent, long-term, risk-adjusted returns. We will adopt a combination of top down and bottom-up investment approach focused on adding value through our stock selection framework. We will evaluate investment opportunities considering: 1. Macro-economic factors and changing trends 2. Domestic and overseas business environment 3. Scalability, longevity and profitability of businesses 4. Other tangible and intangible factors affecting the company 5. Any other factors the fund management team considers to be material in nature The Schemes will invest minimum 65% dynamically into Indian equity and equity related instruments across market capitalization. This is namely, large cap (1-100th company in terms of full market capitalization), mid cap companies (101st -250th company in terms of full market capitalization) and small cap (251st company onwards in terms of full market capitalization) as defined under Para 2.7 of the SEBI Master Circular as may be amended by SEBI from time to time. From time to time, the fund manager may also participate in debt and debt related securities up to 35% of its total assets for optimal portfolio construction. For Debt Segment: Principles The Fund management team will endeavour to maintain a consistent performance by maintaining a balance between safety, liquidity and return parameters of various investments while considering the investment objectives of the scheme. The Fixed income portion of any non-debt- oriented Fund would be based on the following broad principles: a. It should act as a stable anchor. b. Its duration to be managed actively but it should not be such that it becomes a source of risk. c. Ensuring that there is enough liquidity at all times to ensure smooth rebalancing of the portfolio. The Fund Management team would adhere to the above principles while managing the debt portion of the scheme. Process 14SCHEME INFORMATION DOCUMENT (SID) The investment process that the Fund Management Team follows can be summarized by the acronym EPOCH. Broadly, this entails the following steps: Understanding the economic environment which is the core of fixed income investing. An assessment of macroeconomic indicators such as GDP growth, inflation trends, external conditions, liquidity conditions and probable central bank policy would be undertaken which would enable the team to shape a forward-looking view of market conditions that impact interest rates, yield curve and credit spreads. Next, pricing and relative value analysis would allow the team to identify mispriced securities and opportunities across different segments of the yield curve, credit spectrum, and sectors. This would ensure capital is allocated where risk-adjusted returns are most compelling, avoiding expensive or overbought areas of the market. With this foundation, the team would determine the optimal positioning of the portfolio through strategic asset allocation. This involves aligning duration, sector weights, and credit exposure with the fund’s investment horizon and risk tolerance. It would also ensure that the structure of the portfolio is resilient under different market scenarios while staying true to investment objectives. A thorough credit quality analysis would then be conducted to assess the financial health and resilience of issuers. This would include evaluating industry outlook, promoter background, financial strength including leverage, cash flow stability and covenant structures. Such analysis helps mitigate default risk and avoid excessive exposure to complex or opaque instruments. Finally, hedging and risk control measures would be implemented to safeguard the portfolio against adverse market movements. This could involve fixed income derivatives, use of floating rate instruments, portfolio laddering, liquidity analysis, credit derivatives, or duration overlays, ensuring that unexpected volatility does not derail long-term performance. Credit Quality Analysis The credit quality analysis would form the basis for inclusion of issuers in a COVERAGE LIST. For each initial investment in a company, a research report would be prepared incorporating the beforementioned factors. Thereafter, the same would be updated on a regular basis. An update would, however, be made in the event of any material developments with respect to the company fundamentals, in the interim. The investment team may look at external research (external credit ratings/Buy side/sell side reports etc) as one of the inputs while preparing the research reports. All investments will necessarily be made from the active Coverage list. Investments may be added/deleted from the Coverage list based on any change in company fundamentals. Risk Management Investment Risk The Fund Management team will perform the following actions to manage investment risk: • Only those securities that form a part of the COVERAGE list can be added to the portfolio • Controlled Issuer/sector concentration limits • Fund may take offsetting hedges (including use of fixed income derivatives, floating rate instruments, cash levels etc.) to control the interest rate risk in the portfolio • Scenario analysis to evaluate portfolio sensitivity to interest rate changes • Ladder portfolio to mitigate risks associated with interest rate volatility • Monitoring issuer/sector level concentration • Monitoring investor concentration along with flows • Early Warning system basis yield movement and stock price, if available • Monitoring of any adverse news/rumors in the media Credit Risk • In-house credit risk assessment before inclusion of securities in the Coverage list and on a regular basis thereafter • Analysis/evaluation of external credit rating agencies’ ratings as well as other Coverage/sell side research reports • Use of early warning signals basis yield/price signals and/or any adverse news or rumors in the media • Concentration limits on issuer/group/sectoral basis as outlined elsewhere in the document • Utilizing default studies to stress test the portfolio for possible credit migration impact(s) Liquidity Risk • Liability side analysis • Portfolio diversification • Ladder portfolio • Portfolio liquidity • For Arbitrage the Scheme may seek to generate income through arbitrage opportunities (including dividend arbitrage, buy back / open offer arbitrage, commodity arbitrage etc.) and adopt strategies depending on market conditions and regulatory compliance. The Fund Manager would identify arbitrage opportunities and execute the deals simultaneously in both the markets. In terms of the SEBI guidelines, the Scheme shall not short sell in the cash market at all times. The debt component of the Scheme would be invested in debt securities and money market instruments. The duration of the debt portfolio would primarily be managed with a view to generate income with minimum interest rate risk. Some of the arbitrage strategies that may be adopted by the fund manager from time to time include: Cash-Future Arbitrage: : For example, let's say the price of XYZ stock in the spot market is Rs 102, while the price of the same stock in the futures market is Rs 105. After adjusting for taxes and other costs, the Scheme will buy the stock in the spot market for Rs 102 and simultaneously sell the same stock in the futures market for Rs 105, earning the cost of carry between the stock and its futures. If the futures are quoting at a discount to the price in the cash market before the expiry the trade may be reversed by buying the futures and selling the shares in the cash market which, will enhance the profit potential to the extent of discount between future as compared to cash market. 15THE WEALTH COMPANY MUTUAL FUND Normally the price between cash and future segment tend to converge on the expiry day. The cash and future trade would be reversed on the expiry day to book the locked arbitrage profit. Rolling over of the futures transaction: Rolling over of the futures transaction means: 1) Unwinding the short position in the futures and simultaneously selling futures of a subsequent month; and 2) Holding onto the spot position. There could also be instances of unwinding both the spot and the future position before the expiry of the current month future if it proves advantageous or to meet redemption. If suitable arbitrage opportunities are not available in the opinion of the Fund Manager, the Scheme may invest in short term debt and money market securities. The Fund Manager will evaluate the difference between the price of a stock in the futures market and in the spot market. If the price of a stock in the futures market is higher than in the spot market, after adjusting for costs and taxes the scheme shall buy the stock in the spot market and sell the same stock in equal quantity in the futures market, simultaneously. The Scheme would also look to avail of opportunities between one futures contract and another. The margin money requirement for the purposes of derivative exposure will be held in the form of Term Deposits, cash or cash equivalents. Index Arbitrage: The Nifty 50 derives its value from fifty constituent stocks; the constituent stocks (in their respective weights) can be used to create a synthetic index matching the Nifty Index. Also, theoretically, the fair value of a future is equal to the spot price plus the cost of carry. Theoretically, therefore, the pricing of Nifty Index futures should be equal to the pricing of the synthetic index created by futures on the underlying stocks. One of the more well-known examples of this trading strategy includes attempting to capture the difference between where the Nifty futures are trading and the published prices of the Nifty Index itself. The Nifty Index arbitrage is often called basis trading. The basis is the spread between cash and futures market prices. The theoretical price of this index should be accurate when totalled as a capitalization-weighted calculation of all 50 stocks in the index. Any difference between that number, in real-time, and the futures trading price, should represent an opportunity. If the components were cheaper, then executing a buy order on all 50 stocks instantaneously and selling the equivalent amount of higher-priced futures contracts should yield a risk-free transaction. Another example shall be if Nifty Index futures trades at a discount to the synthetic Index due to large volumes of stock hedging being done using the Nifty Index futures giving rise to arbitrage opportunities. One instance in which an index arbitrage opportunity exists is when Index future is trading at a discount to the index (spot) and the futures of constituent stocks are trading at a cumulative premium. The fund manager shall endeavor to capture such arbitrage opportunities by taking long positions in the Nifty Index futures and short positions in the synthetic index (constituent stock futures). Based on the opportunity, the reverse position can also be initiated. Other Derivative Strategies: As allowed under the SEBI guidelines on derivatives, the fund manager will employ various other stock and index derivative strategies by buying or selling stock/index futures and/or options. For eg. trading strategy that involves matching a long position with a short position in two stock futures with a high correlation Corporate Action / Event Driven Strategies 1) Dividend Arbitrage: Usually during the period prior to dividend declaration, the stock futures/options can provide a profitable opportunity. Generally, the stock price declines by the dividend amount when the stock goes ex-dividend. 2) Buy-Back Arbitrage: when the company announces the buy-back of its own shares, there could be opportunities due to price differential in buy-back price and traded price. 3) Merger: When the company announces any merger, amalgamation, hive-off, demerger, etc., there could be opportunities due to price differential in the cash and derivative market. 4) Delisting Arbitrage: When a company intends to delist from the stock exchanges, it goes for a Reverse Book Building process and offers an exit price to all existing shareholders. The scheme can take a long position in a stock in case the traded price is below the expected exit price. 5) Convertible Securities Arbitrage (when available): This strategy attempts to extract value from options embedded in convertible securities. Typically, the strategy involves purchasing a convertible security and then hedging the underlying equity security. 6) Merger/ Risk Arbitrage: When the Company announces any merger, amalgamation, hive off, de-merger, etc., there could be opportunities due to price differential in the cash and the derivative market. In case the merger is between 2 listed companies, the arbitrage can be based on the differential between the announced swap ratio and the actual traded prices for the 2 stocks. 7) Rights Offer Arbitrage : When the company announces Right offers at a discounted price , there could be opportunities due to price differential in the Cash and Derivatives market. The scheme can Buy Rights at discounted price and Sell Equilavant Quantity in Futures. Though every endeavour will be made to achieve the objectives of the Scheme, the AMC/Sponsors/Trustees do not guarantee that the investment objectives of the Scheme will be achieved. No guaranteed returns are being offered under the Scheme. For Derivatives Segment: The Scheme may take derivatives position based on the opportunities available subject to the guidelines issued by SEBI from time to time and in line with the overall investment objective of the Scheme. These may be taken to hedge the portfolio, rebalance the same or to undertake any other strategy as permitted under the SEBI Regulations. 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. The fund management team depending on its view and subject to there being an opportunity, may trade in securities, which will result in increase in portfolio turnover. There may be an increase in transaction cost such as brokerage paid, if trading is done frequently. However, the cost would be negligible as compared to the total expenses of the Scheme. 16SCHEME INFORMATION DOCUMENT (SID) Frequent trading may increase the profits which will offset the increase in costs. The fund manager will endeavour 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 measure of accuracy the likely turnover in the portfolio of the Scheme. The Scheme has no specific target relating to portfolio turnover. 1) RISK MEASUREMENT / CONTROL: Risk is an inherent part of the investment function. Effective risk management is critical to fund management for achieving financial soundness. Investments by the Scheme shall be made as per the investment objectives of the Scheme and provisions of SEBI regulations. AMC has incorporated adequate safeguards to manage risk in the portfolio construction process. Risk control would involve managing risk in order to keep it in line with the investment objective of the Scheme. The AMC has systems that enable the fund manager to calculate various risk ratios, average duration etc. The Investment Committee may from time to time define internal investment norms for the scheme. The Fund Management proposes to use analytic risk management tools like VAR/convexity/ modified duration for effective portfolio management. Equity Liquidity Risk: The fund will try to maintain a proper asset liability match to ensure redemption payments are made on time and not affected by illiquidity of the underlying stocks. Concentration Risk: The fund will endeavour to have a well-diversified equity portfolio comprising stocks across various sectors of the economy. This would aid in managing concentration risk and sector specific risks. Generally, diversification across market cap segments also aids in managing volatility and ensuring adequate liquidity at all times. Derivatives Risk: The fund will endeavour to maintain adequate controls to monitor the derivatives transactions entered into. Risk Mitigants specifically for Debt Segment: The limits at an issuer level are defined based on following parameters: • Eligible Instruments: Defines the eligible instruments where the scheme can invest. • Minimum Liquidity: Defines the instruments considered as liquid instruments and the minimum investments in these instruments as a percentage of total net assets. • Rating: Defines minimum and/ or maximum investment in a particular rating as a percentage of total portfolios. • Maturity: Defined the weighted average maturity of a portfolio. Also defines the weighted average maturity, maximum and maturity for certain asset types like corporate bonds, PTCs, Gilts etc. Liquidity Risks The liquidity of the Scheme’s investments may be inherently restricted by trading volumes, transfer procedures and settlement periods. Liquidity Risk can be partly mitigated by diversification, staggering of maturities as well as internal risk controls that lean towards purchase of liquid securities. Interest Rate Risk Changes in interest rates affect the prices of bonds. If interest rates rise the prices of bonds fall and vice versa. A well-diversified portfolio may help to mitigate this risk. Hence, while the interim NAV will fluctuate in response to changes in interest rates, the final NAV will be more stable. To that extent the interest rate risk will be mitigated at the maturity of the scheme. Further, the Scheme may use Interest rate derivatives to mitigate the interest rate risks and rebalance the portfolio. Credit Risks Credit risk shall be mitigated by investing in rated papers of the companies having the sound background, strong fundamentals, and quality of management and financial strength of the Company. Volatility Risks There is the risk of volatility in markets due to external factors like liquidity flows, changes in the business environment, economic policy etc. The scheme will manage volatility risk through diversification. To that extent the Volatility risk will be mitigated in the scheme. Credit Evaluation Policy The credit evaluation policy of the AMC entails evaluation of credit fundamentals of each underlying exposure. Some of the major factors that could be evaluated are: a) Outlook on the sector b) Strength & Support of the Parent c) Quality of management d) Overall financial strength of the credit as determined by key financial ratios. Ratings of recognized rating agencies are taken as a reference point in the credit evaluation process. Investments in bonds and debenture are made usually in instruments that have high investment grade ratings by a recognized rating agency. 2) DERIVATIVES Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor. Execution of such strategies depends upon the ability of the fund manager to identify such opportunities. Identification and execution of the strategies to be pursued by the fund manager involve uncertainty and decision of fund manager may not always be profitable. No assurance can be given that the fund manager will be able to identify or execute such strategies. The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Con. Std. Obs. 28 For detailed derivative strategies, please refer to SAI. In Addition to the above, SEBI has also prescribed derivative limits: As per provision no. 5.2, 7.5, 7.6, 12.25, of SEBI Master Circular on Mutual Fund dated June 27, 2024 Mutual Funds are allowed to trade in derivatives Mutual Funds can trade in index futures, index options, stock options and stock futures contracts. Earlier Mutual Funds were only allowed to use derivatives for hedging and portfolio balancing. The exposure to derivatives will be as per SEBI Regulations/ Guidelines/ Circulars issued time to time. 17THE WEALTH COMPANY MUTUAL FUND 3) INVESTMENT PROCESS: As part of the investment process, the investments team may use / rely on internal or external research. Internal research would mean research done primarily by the internal team of analysts and fund managers while external research could be from brokers, investment banks, external research agencies, investor- relation firms or agencies like CRISIL etc. As per SEBI Regulations and SEBI Circular MFD/CIR/6/73/2000, dated 27 July 2000, all mutual funds are required to prepare and retain a research report detailing reasons for the purchase of shares of a company for the first time. The initial research report carrying the date of publication would be signed off by the respective analyst and the fund manager. The research report along with the rationale for the transaction will be documented and preserved for future reference and audit purposes, by the Investment team. The copy of the research report shall be maintained either in physical or electronic form. • Equity Research Report would contain: • Name of the company • Date of report • Business description and analysis • Investment rationale • Summary of Financials • Liquidity Management & Cash Position: When the Fund Management Team constructs the scheme portfolio, it will try to stay invested to the maximum possible extent, in line with the asset allocation pattern mentioned in the SID. However, higher allocation to cash can be made under extreme conditions or to meet any exigencies. Overview of Debt Market in India: The instruments available in the Indian Debt Market are classified into two categories, namely Government and Non - Government debt. Activity in the Primary and Secondary Market is dominated by Central Government Securities including Treasury Bills. Mutual Funds, Pension Funds, Insurance companies has led to higher participation by issuers in debt markets which was earlier dominated by banks. The key instruments available for investment are Government securities, Corporate Bonds, Treasury Bills, Commercial Papers, Certificate of Deposits, Government guaranteed bonds, etc. Brief details about the instruments are given below as on June 30, 2025: Instruments Current Yield Range Liquidity Risk Profile Central Government Securities 5.25% - 7.25% High Low Corporate Debentures/ PSU Bonds 5.75% - 7.15% Moderate Medium CDs (Short Term) 5.50% - 6.35% High Low Commercial Paper (CP) 5.60% - 6.80% High Low Call Money 5.25% - 5.50% High Low *Current Yield Range for G-SEC and PSU is between 1 year and 15 year A brief description about yields presently available on Central Govt. Securities/ Bonds & Debentures of various maturities is as follows: Annualised yields (as on Mar 24, 2025) are: Years =< 1yr 1yr - 5yr 5yr - 10 yr 10 yr - 30 yrs Central Government Securities 5.25% - 5.60% 5.60% - 6.10% 6.10% - 6.40% 6.40% - 7.00% Debentures/Bonds (AAA rated) 5.75% - 6.45% 6.45% - 6.80% 6.45% - 7.05% 7.05% - 7.15% The price and yield on various debt instruments fluctuate from time to time depending upon the macro-economic situation, inflation rate, overall liquidity position, foreign exchange scenario, etc. Also, the price and yield varies according to maturity profile, credit risk etc. D. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? The performance of the scheme will be benchmarked to the performance of the NIFTY Equity Savings TRI, AMFI prescribed Benchmark. Justification for use of benchmark The NIFTY Equity Savings TRI is designed to be a broad representation of the Indian market. Since the fund is a Equity Savings Fund and has no bias towards sector or market cap allocation, the NIFTY Equity Savings TRI is an appropriate benchmark. As required under Para 1.9 of SEBI Master Circular 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 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. E. WHO MANAGES THE SCHEME? Con. Std. Obs. 33 Name of the Fund Age Educational Type and Nature of past experience Tenure as Fund Name of the Manager Qualification including assignments held during Manager of the Other Scheme the past 10 years Scheme managed 18SCHEME INFORMATION DOCUMENT (SID) Equity Portion Mrs. Aparna 57 MBA (Finance), PGD Over 32 years of experience in the From the inception No other Scheme Shanker Years in Treasury & Forex Mutual Fund industry across various has been Management, B.Sc., domains including 13 years as a Fund launched of The LLB Manager at SBI Mutual Fund. Wealth Company Mutual Company She has also worked with Unit Trust of India, Birla Global Finance and Sahara Mutual Fund in the past. Debt Portion Mr. Umesh 47 CA, CS, CFA Mr. Umesh Sharma has over two From the inception No other Scheme Sharma decades of experience, including the has been last 14 years at Franklin Templeton launched by The Mutual Fund. Prior to Franklin Wealth Company Templeton, he has worked at Invesco Mutual Company Mutual Fund, ICICI Bank, JM Financial Mutual Fund and UTI Mutual Fund. Mr. Varun 31 B.COM and Credit rating of Large Corporate Group - From the inception No other Scheme Nanavati Chartered Crisil Ratings Ltd (2022 - 2025) has been Accountant launched by The Credit rating of Large Corporate Group Wealth Company (EMEA) - Citi (2021 - 2022) Mutual Company Internal & Risk Audit - KPMG India (2018 - 2021) F. HOW IS THE SCHEME DIFFERENT FROM EXISTING SCHEMES OF THE MUTUAL FUND? Not Applicable since this is the first scheme in the Hybrid Category being launched by The Wealth Company Mutual Fund and currently there are no other existing schemes available under the Hybrid category. G. HOW HAS THE SCHEME PERFORMED? Not applicable as it is a new scheme. However, appropriate disclosures in this respect will be available at www.wealthcompanyamc.com/downloads H. ADDITIONAL SCHEME RELATED DISCLOSURES i. Scheme’s portfolio holdings (top 10 holdings by issuer and fund allocation towards various sectors to be provided through a functional website link that contains detailed description.) Not applicable as this a new scheme. However, appropriate disclosures in this respect will be available at www.wealthcompanyamc.com/downloads/portfolio Disclosure of name and exposure to Top 7 issuers, stocks, groups and sectors as a percentage of NAV of the scheme in case of debt and equity ETFs/index funds through a functional website link that contains detailed description Not Applicable ii. Functional website link for Portfolio Disclosure – Fortnightly/Monthly/Half-Yearly. The fortnightly, monthly and half-yearly portfolio of the scheme will be available on the weblink: www.wealthcompanyamc.com/downloads/portfolio Portfolio Turnover Rate particularly for equity-oriented schemes shall also be disclosed. Not applicable as it is a new scheme. iii. Aggregate investment in the Scheme by: Sr. No. Category of Persons Net Value 1 Concerned scheme’s Fund Manager Units NAV Per Unit Not Applicable The above disclosures are not applicable since this scheme is a new scheme and does not contain any details. For any other disclosure w.r.t investments by key personnel and AMC directors including regulatory provisions in this regard, kindly refer the SAI. 19THE WEALTH COMPANY MUTUAL FUND iv. Investments of AMC in the Scheme: AMC shall invest in the scheme based on the risk associated with the scheme as specified in para 6.9 of SEBI Master Circular for Mutual Funds dated June 27, 2024 read with AMFI Best Practice Guidelines Circular 135/BP/100/2022-23 dated April 26, 2022 and any other circulars issued there under, from time to time. During the NFO period, AMC’s investment shall be made during the allotment of units and shall be calculated as a percentage of the final allotment value excluding AMC’s investment pursuant to this circular. In line with SEBI Regulations and circulars issued by SEBI from time to time, the AMC may invest its own funds in the scheme(s). Further, AMC shall not charge any fees on its investment in the Scheme (s), unless allowed to do so under SEBI Regulations in the future. Further, the details of investment of AMC in the scheme can been viewed on the weblink: www.wealthcompanyamc.com/downloads/statutory- disclosure Con. Std. Obs. 58 20SCHEME INFORMATION DOCUMENT (SID) PART III: OTHER DETAILS A. COMPUTATION OF NAV The Net Asset Value (NAV) of the Units will be determined daily or as prescribed by the Regulations. The NAV shall be calculated in accordance with the following formula, or such other formula as may be prescribed by SEBI from time to time. Market/Fair value of Scheme’s Investments + Current Assets – Current Liabilities and Provisions NAV = No. of units outstanding under Scheme/ Plan Illustration: Assumptions - on the day of calculation of NAV: Con. Std. Obs. 42 Market or Fair Value of the Scheme’s Investments = 10600 Current Assets = 250 Current Liabilities & provisions = 150 No of units outstanding in the plan = 1000 NAV = (10600+250-150)/1000 = 10.70 Methodology of calculating the sale price: The price or NAV an investor is charged while investing in an open-ended scheme is called sale / subscription price. Pursuant to clause 10.4.1.a of the SEBI Master circular for Mutual Funds dated June 27, 2024, no entry load will be charged by the Scheme to the investors. Therefore, Sale / Subscription price = Applicable NAV Methodology of calculating the repurchase price Repurchase or redemption price is the price or NAV at which an open-ended scheme purchases or redeems its units from the investors. It may include exit load, if applicable. The exit load, if any, shall be charged as a percentage of Net Assets Value (NAV) i.e. applicable load as a percentage of NAV will be deducted from the “Applicable NAV” to calculate the repurchase price. Therefore, Repurchase / Redemption Price = Applicable NAV *(1 – Exit Load, if any) For example, If the Applicable NAV of the Scheme is Rs. 10 and the Exit Load applicable at the time of investment is 1% if redeemed before completion of 1 year from the date of allotment of units and the investor redeems units before completion of 1 year, then the repurchase/redemption price will be: = Rs. 10*(1-0.01) = Rs. 9.90 Con. Std. Obs. 42 Rounding off policy for NAV: Net Asset Value of the Units in the Scheme is calculated in the manner provided in this Scheme Information Document or as may be prescribed by Regulations from time to time. The NAV will be computed up to two decimal places. The Fund will ensure that the Redemption Price is not lower than 95% of the NAV. The valuation of investments shall be based on the principles of fair valuation specified in the Schedule VIII of the SEBI (Mutual Funds) Regulations, 1996 and guidelines issued by SEBI /AMFI from time to time. The broad valuation norms are detailed in the Statement of Additional Information. B. NEW FUND OFFER (NFO) EXPENSES These expenses are incurred for the purpose of various activities related to the NFO like sales and distribution fees paid marketing and advertising, registrar expenses, printing and stationery, bank charges etc. NFO expenses shall be borne by the AMC and will not be charged to the scheme. 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 and other expenses as given in the table below. The AMC has estimated that the following % of the daily net assets of the scheme will be charged to the scheme as expenses. The AMC would update the current expense ratios on the website of the mutual fund at least three working days prior to the effective date of the change. Further Actual Expense ratio will be disclosed at the following weblink: www.wealthcompanyamc.com/downloads/statutory-disclosure/total-expense-ratio % p.a. of daily Net Assets* Expense Head (Estimated p.a.) Investment Management & Advisory Fees (AMC Fees) Audit fees/fees and expenses of trustees Custodial Fees Registrar & Transfer Agent Fees including cost of providing account statements / IDCW / redemption cheques/ warrants Marketing & Selling Expenses including Agents Commission and statutory Advertisement Costs related to investor communications Upto 2.25% Costs of fund transfer from location to location Con. Std. Obs. 43 ^Cost towards investor education & awareness Brokerage & transaction cost pertaining to distribution of units Goods & Services Tax on expenses other than investment and advisory fees Goods & Services Tax on brokerage and transaction cost 21THE WEALTH COMPANY MUTUAL FUND Other Expenses (to be specified as per Reg 52 of SEBI MF Regulations) Maximum Total Expenses Ratio (TER) permissible under Regulation 52 (6)(c) Upto 2.25% Additional expenses under Regulations 52 (6A)(c)$ Upto 0.05% Additional expenses for gross new inflows from specified cities under Regulation 52 (6A)(b) to Upto 0.30% improve geographical reach of scheme. Con. Std. Obs. 46 Impact of TER on returns of both Direct plan and Regular plan is provided in an illustration below: Con. Std. Obs. 44 Illustration – Impact of Expense Ratio on the Returns Particulars Regular Plan Direct Plan Amount Invested at the beginning of the year 10,000 10,000 Returns before Expenses 1,500 1,500 Expenses other than Distribution Expenses 150 150 Distribution Expenses 50 – Returns after Expenses at the end of the Year 1,300 1350 The purpose of the above table is to assist the investor in understanding the various costs and expenses that an investor in the scheme will bear directly or indirectly. The above estimates for recurring expense are for indicative purposes only and have been made in good faith as per the information available to the AMC based on past experience and are subject to change inter-se. The total recurring expenses that can be charged to the Scheme will be subject to limits prescribed from time to time under the SEBI (MF) Regulations. Notes: a. The TER of the Direct Plan will be lower to the extent of the distribution expenses/ commission, which is charged in the Regular Plan. No commission for distribution of Units will be paid/charged under 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. b. $The AMC shall not charge additional expenses under Regulation 52(6A)( c) in case the exit load is not levied/not applicable. c. ^In terms of Para 10.1.16 related to 'Investor Education and Awareness' of the SEBI Master Circular, 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. Con. Std. Obs. 43 d. Pursuant to Para 10.1.14 of the SEBI Master Circular, Brokerage and transaction cost incurred for the purpose of execution 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 (Mutual Finds) Regulations, 1996. e. The expense of 30 bps shall be charged if the new inflows from B30 cities from retail investors as specified from time to time are at least (i) 30 percent of gross new inflows in the scheme, or (ii) 15 percent of the average assets under management (year to date) of the scheme, whichever is higher. Provided that if inflows from B30 cities from retail investors cities is less than the higher of sub-clause (i) or sub- clause (ii) such expenses on daily net assets of the scheme shall be charged on a proportionate basis. Provided further that expenses charged under this clause shall be utilized for distribution expenses incurred for bringing inflows from B30 cities from retail investors. Provided further that amount incurred as expense on account of inflows from B30 cities from retail investors 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. f. In case inflows from retail investors from beyond top 30 cities is less than the higher of (i) or (ii) above, additional TER on daily net assets of the scheme shall be charged as follows: Daily net assets X 30 basis points X New inflows from individuals from beyond top 30 cities 365* X Higher of (i) or (ii) above * 366, wherever applicable. For the above purposes, ‘B30 cities’ shall be beyond Top 30 cities as at the end of previous financial year as communicated by AMFI. Retail investors would mean individual investors from whom inflows into the Scheme would amount upto Rs. 2,00,000/- per transaction. Note: Pursuant to AMFI email dated March 2, 2023 with respect to keeping the B-30 incentive structure in abeyance, the AMC will not charge additional 30 bps on new inflows garnered from retail investors from B-30 cities till further notice. g. In terms of Para 10.3 on 'Restriction on charging Goods & Service Tax' of the SEBI Master Circular, AMC may charge GST on following Fees and expenses as below: • Investment Management and Advisory Fees: AMC may charge GST on investment management and advisory fees to the scheme in addition to the maximum limit of Total Expense Ratio as prescribed under Regulation 52 of the SEBI (MF) Regulations • Other than Investment Management and Advisory Fees: AMC may charge GST on expenses other than investment management and advisory fees to the scheme within the maximum limit of Total Expense Ratio as prescribed under Regulation 52 of the SEBI (MF) Regulations. Further, GST on Brokerage and transaction cost incurred for execution of trades, will be within the maximum limit of Total Expense Ratio as prescribed under Regulation 52 of the SEBI (MF) Regulations. h. As per Regulation 52(6)(c) of SEBI (MF) Regulations, the total expenses of the scheme, including Investment Management and Advisory Fees, shall be subject to following limits as specified below: Assets Under Management Slab (In Rs. crore) Total Expense Ratio Limits on the first Rs. 500 crores of the daily net assets 2.25% on the next Rs. 250 crores of the daily net assets 2.00% on the next Rs. 1,250 crores of the daily net assets 1.75% 22SCHEME INFORMATION DOCUMENT (SID) on the next Rs. 3,000 crores of the daily net assets 1.60% on the next Rs. 5,000 crores of the daily net assets 1.50% On the next Rs. 40,000 crores of the daily net assets TER reduction of 0.05% for every increase of Rs. 5,000 crores of daily Net assets or part thereof. On balance of the assets 1.05% Maximum Permissible Expense: The said maximum TER shall either be apportioned under various expense heads as enumerated above, without any sub limit or allocated to any of the said expense head(s) at the discretion of AMC. Also, the types of expenses charged shall be as per the SEBI (MF) Regulations. The total expenses of the scheme including investment management and advisory fee shall not exceed beyond the limits as prescribed under clause 52(6) of SEBI (Mutual Funds) Regulations, 1996. D. LOAD STRUCTURE: Con. Std. Obs. 47 Exit Load is an amount which is paid by the investor to redeem the units from the scheme. Load amounts are variable and are subject to change from time to time. For the current applicable structure, please refer to the website of the AMC www.wealthcompanyamc.com/mfscheme/equity-fund/{scheme-name}/exitload or may call at toll free no. 1800-267-3454 or your distributor. Type of Load Load Chargeable (as % of NAV) Entry Load Nil 0.25% - If redeemed/switched out within 7 days from the date of allotment. Exit Load Nil - if redeemed/switched out after 7 days from the date of allotment. No load on IDCW reinvestment or bonus units Please note that no Exit Load shall be levied for switching between Plans within the said Scheme. Units issued on Re-investment of Income Distribution cum capital withdrawal shall not be subject to exit load. The AMC reserves the right to introduce a load structure, levy a different load structure or remove the load structure in the scheme at any time after giving notice to that effect to the investors. Goods & Service tax on exit load shall be paid out of the exit load proceeds and exit load net of goods & service tax shall be credited to the scheme. The investor is requested to check the prevailing load structure of the scheme before investing. Any imposition or enhancement in the load shall be applicable on prospective investments only. At the time of changing the load structure, the mutual fund may consider the following measures to avoid complaints from investors about investment in the schemes without knowing the loads: i. The AMC shall be required to issue an addendum and display the same on its website immediately ii. The addendum shall be circulated to all the distributors/brokers/Investor Service Centre (ISC) so that the same can be attached to all KIM and SID already in stock till it is updated. iii. Latest applicable addendum shall be a part of KIM and SID. (E.g. in case of changes in load structure the addendum carrying the latest applicable load structure shall be attached to all KIM and SID already in stock till it is updated). iv. Further, the account statements shall continue to include applicable load structure In accordance with SEBI Regulations, the repurchase price will not be lower than 95% of the NAV The investor is requested to check the prevailing load structure of the Scheme before investing. 23THE WEALTH COMPANY MUTUAL FUND SECTION - II I. INTRODUCTION A. DEFINITIONS/INTERPRETATION The definitions are mentioned on the website link: https://www.wealthcompanyamc.com/ In this Scheme Information Document, the following words and expressions shall have the meaning specified below, unless the context otherwise requires: Aadhaar Aadhaar number issued by the Unique identification Authority of India (UIDAI) Applicable Net Asset Value The NAV applicable for purchase or redemption or switching of Units based on the time of the Business (NAV) Day on which the application is accepted, subject to the provisions of ‘realisation of funds’ and 'cut off timings' as described in this Scheme Information Document. AMFI Association of Mutual Funds in India, the apex body of all the registered AMCs incorporated on August 22, 1995 as a non-profit organisation. ARN AMFI Registration Number Arbitrage Arbitrage implies taking advantage of a difference in price of the same item in two different situations, at the same time, which enables one to buy at a cheaper price and sell the same at a higher price, resulting in profit. In capital markets, arbitrage means a transaction that involves buying of a security in one market and selling the same in another market and locking in the profit. For the purpose of the Scheme, it would mean buying equity and equity related instruments in the cash or spot market and selling the same in the forward or futures market and locking in the spread also known as arbitrage return. Asset Management Wealth Company Asset Management Holdings Private Limited, the Asset Management Company Company (AMC)/ incorporated under the Companies Act, 2013, and authorized by SEBI to act as the Investment Manager Investment Manager to the Schemes of The Wealth Company Mutual Fund. Business Day/ Working A Business Day/Working Day means any day other than: Day 1. Saturday and Sunday; or 2. a day on which The Bombay Stock Exchange, Mumbai or National Stock Exchange Limited or Reserve Bank of India or Banks in Mumbai are closed; or 3. a day on which there is no RBI clearing/settlement of securities; or 4. a day which is a public and /or bank Holiday at an Investor Service Centre/Official Point of Acceptance where the application is received; 5. a day on which the sale and/or redemption and /or switches of Units is suspended by the Trustees or AMC or 6. a book closure period as may be announced by the Trustees/Asset Management Company or 7. a day on which normal business could not be transacted due to storms, floods, or bandhs, strikes or any other events as the AMC may specify from time to time. The AMC reserves the right to declare any day as a Business Day or otherwise at any or all DISC. Presently 9.30 a.m. to 5.30 p.m. on any Business Day or such other time as may be applicable from Business Hours time to time. CDSL Central Depository Services (India) Limited Branches of Banks for the time being authorized to receive application(s) for units, as mentioned in this Collecting Bank document. Continuous Offer Offer of the Units when the scheme becomes open-ended after the closure of the New Fund Offer. 24SCHEME INFORMATION DOCUMENT (SID) Consolidated Account Consolidated Account Statement contain details relating to all Purchases, redemptions, switches, Statement (“CAS”) “IDCW Payouts”, “IDCW Reinvestments”, SIPs, SWPs and STPs (“Transactions”) carried out by the investor across all schemes of all mutual funds during the month and holding at the end of the month Custodian Custodian means a person who has been granted a certificate of registration to carry on the Business of custodian of securities under the Securities and Exchange Board of India (Custodian of Securities) Regulations, 1996. Presently, HDFC Bank, registered vide registration number IN/CUS/001 is appointed as Custodian of securities for all the schemes of The Wealth Company Mutual Fund, or any other custodian as may be appointed by the Trustees. Depository Depository as defined in the Depositories Act, 1996 (22 of 1996). Derivative Derivative includes (i) a security derived from a debt instrument, share, loan whether secured or unsecured, risk instrument or contract for differences or any other form of security; (ii) a contract which derives its value from the prices or index of prices of underlying securities. Designated Investor Any location as may be defined by the Asset Management Company from time to time, where investors can tender the request for subscription, redemption or switching of units, etc. Service Centres (DISC)/ (Official point of acceptance for transaction) Income Distribution cum Income distributed by the Scheme on the Units. Capital Withdrawal (IDCW) DP Depository Participant means a person registered as such under sub-regulation (1A) of section 12 of SEBI Act, 1992 (15 of 1992). Entry Load Load on subscriptions/switch in. Equity Related Include convertible debentures, convertible preference shares, warrants carrying the right to obtain Instruments/ Securities equity shares, equity derivatives, and such other instruments as may be specified by SEBI from time to time. Exit Load Load on redemptions/switch out. InvITs or Infrastructure InvITs are companies that own infrastructure assets. Investment Trust Investment The Agreement entered into between Trustee Company and AMC has been appointed the Investment Management Manager for managing the funds raised by The Wealth Company Mutual Fund under the various Agreement (IMA) Schemes and all amendments thereof. KIM Key Information Memorandum as required in terms of clause 29(4) of SEBI (MF) Regulation. Large Cap Companies Large cap Companies means 1st - 100th company in terms of full market capitalization or such other companies as may be specified by SEBI from time to time. Load A charge that may be levied as a percentage of NAV at the time of entry into the scheme/plans or at the time of exiting from the scheme/ plans. Local Cheque A Cheque handled locally and drawn on any bank, which is a member of the banker’s clearing house located at the place where the application form is submitted. Mid Cap Companies Mid cap companies mean 101st - 250th company in terms of full market capitalization or such other companies as may be specified by SEBI from time to time. Money Market Instruments As per Clause 45 U.(b) of RBI Act, 1934, “money market instruments” include call or notice money, term money, repo, reverse repo, certificate of deposit, commercial usance bill, commercial paper and such other debt instrument of original or initial maturity up to one year as the Bank may specify from time to time Net Asset Value (NAV) Net Asset Value of the Units in each plan of the Scheme is calculated in the manner provided in this Scheme Information Document or as may be prescribed by Regulations from time to time. The NAV will be computed upto two decimal places. No Load Scheme A Scheme where there is no initial Entry or Exit Load. NRI Non-Resident Indian. Person resident outside India who is either a citizen of India or a Person of Indian Origin. NSDL The National Securities Depository Limited PIO Person of Indian Origin. A citizen of any country other than Bangladesh or Pakistan, if (a) he at any time held an Indian passport; or (b) he or either of his parents or any of his grandparents was a citizen of India by virtue of Constitution of India or the Citizenship Act, 1955 (57 of 1955); or (c) the person is a spouse of an Indian citizen or person referred to in sub-clause (a) or (b). Purchase Price/ Purchase Price to the investor of Units of any of the plans computed in the manner indicated in this Subscription Price Scheme Information Document. 25THE WEALTH COMPANY MUTUAL FUND Rating An opinion regarding securities, expressed in the form of standard symbols or in any other standardized manner assigned by a credit rating agency and used by the issuer of such securities, to comply with any requirement of the SEBI (Credit Rating Agencies) Regulations, 1999 as may be amended from time to time. Redemption Price Redemption Price to the investor of Units of any of the plans computed in the manner indicated in this Scheme Information Document. “REIT” or “Real Estate “REIT” or “Real Estate Investment Trust” shall have the meaning assigned in clause (zm) of sub- Investment Trust” regulation 1 of regulation 2 of the Securities and Exchange Board of India (Real Estate Investment Trusts) Regulations, 2014. Registrar KFin Technologies Limited (KFin), who has been appointed as the Registrar or any other Registrar who is appointed by AMC. Reserve Bank of India (RBI) Reserve Bank of India, established under the Reserve Bank of India Act, 1934. Scheme An open ended scheme investing in Equity, Arbitrage & Debt Scheme Information Scheme Information Document issued by The Wealth Company Mutual Fund, offering units of The Document (SID) Wealth Company Equity Savings Fund for Subscription. Statement of Additional Statement of Additional Information, the document issued by The Wealth Company Mutual Fund Information (SAI) containing details of The Wealth Company Mutual Fund, its constitution, and certain tax, legal and general information. SAI is legally a part of the Scheme Information Document. SEBI (Mutual Funds) Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 as amended from time to time Regulations/ SEBI (MF) and such other regulations (including the Rules, Guidelines or Circulars) as may be in force from time to Regulations time to regulate the activities of Mutual Funds. SEBI Master Circular SEBI Master Circular for Mutual Funds dated June 27, 2024 which is a consolidated compendium of all circulars issued by SEBI till March 31, 2024. (referred to as the SEBI Master Circular) Small Cap Companies Small cap companies means 251st company onwards in terms of full market capitalization or such other companies as may be specified by SEBI from time to time. Sponsor Sponsor of The Wealth Company Mutual Fund i.e. Pantomath Capital Advisors Private Limited Switching Option Investors may opt to switch Units between the IDCW Plan and Growth Plan of the Scheme at NAV based prices after completion of lock in period, if any. Switching will also be allowed into/from any other eligible open- ended Schemes of the Fund either currently in existence or a Scheme(s) that may be launched/ managed in future, as per the features of the respective scheme. Tri-party repo Tri-party repo is a type of repo contract where a third entity (apart from the borrower and lender), called a Tri- Party 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. Trustee/Trustee Company Pantomath Trustee Private Limited, a Company incorporated under the Companies Act, 2013, and authorized by SEBI and by the Trust Deed to act as the Trustee of The Wealth Company mutual fund. Mutual Fund/ the Fund The Wealth Company Mutual Fund, a Trust under Indian Trust Act, 1882 and registered with SEBI. Trust Deed The Trust Deed entered into between the Sponsor and the Trustee, and all amendments thereof. Trust Fund The corpus of the Trust, unit capital and all property belonging to and/or vested in the Trustee. Unit The interest of the investors in any of the plans, of the scheme which consists of each Unit representing one undivided share in the assets of the corresponding plan of the scheme. Unitholder A person who holds Unit(s) under the scheme. Unitholders Record Unitholders whose names appear on the unitholders register of the concerned plan/(s) on the date of determination of IDCW option, subject to realisation of the cheque. Website Website of The Wealth Company Mutual Fund namely www.wealthcompanyamc.com Words and Expressions used in this Scheme Information Document and not defined would have the same meaning as in Regulations. INTERPRETATION: For all purposes of this Scheme Information Document, except as otherwise expressly provided or unless the context otherwise requires: • All references to the masculine shall include the feminine and all references to the singular shall include the plural and vice-versa. • All references to "dollars" or "$" refer to United States Dollars and "Rs" refer to Indian Rupees. A "crore" means "ten million" and a "lakh" means a "hundred thousand". • All references to timings relate to Indian Standard Time (IST). • References to a day are to a calendar day including a non-business Day 26SCHEME INFORMATION DOCUMENT (SID) ABBREVIATIONS Act The Income Tax Act, 1961 AMC Asset Management Company AMFI Association of Mutual Funds in India ARN AMFI Registration Number AOP Association of Persons BSE BSE Limited BSE Star MF System BSE Stock Exchange Platform for Allotment and Repurchase of Mutual Funds Units. CAGR Compound Annual Growth Rate CAS Consolidated Account Statement CDSL Central Depository Services (India) Limited DP Depository Participant ECS Electronic Clearing System EFT Electronic Fund Transfer EOP Execution Only Platform FATCA Foreign Account Tax Compliance Act FATF Financial Action Task Force FCNR A/c Foreign Currency (Non-Resident) Account FPI Foreign Portfolio Investors (erstwhile FII’s – Foreign Institutional Investors) GST Goods and Service Tax HUF Hindu Undivided Family IDCW Income Distribution cum Capital Withdrawal IFSC Indian Financial System Code IPO Initial Public Offering ISC Investor Service Centre KIM Key Information Memorandum KRA KYC Registration Agency KYC Know Your Customer MFSS Mutual Fund Services System of the National Stock Exchange of India Ltd. MIBOR Mumbai Inter Bank Offer Rate NAV Net Asset Value NECS National Electronic Clearing Service NEFT National Electronic Funds Transfer NFO New Fund Offer NRE A/c Non-Resident (External) Rupee Account NRI Non-Resident Indian NRO A/c Non-Resident Ordinary Rupee Account NSDL National Securities Depositories Limited NSE National Stock Exchange of India Limited PAN Permanent Account Number PEKRN PAN Exempt KYC Reference Number PEP Politically Exposed Person PIO Person Of Indian Origin POA Power Of Attorney RBI Reserve Bank of India Rs. Indian Rupee (s) RIA SEBI Registered Investment Advisor RTA Registrar and Transfer Agent RTGS Real Time Gross Settlement SAI Statement of Additional Information SEBI Securities and Exchange Board of India SID Scheme Information Document SIP Systematic Investment Plan STP Systematic Transfer Plan SWP Systematic Withdrawal Plan TREPS Tri-Party Repos 27THE WEALTH COMPANY MUTUAL FUND B. RISK FACTORS 1. Standard Risk Con. Std. Obs. 8 a. Standard Risk Factors for investments in Mutual Fund • Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal. • As the price / value / interest rates of the securities in which the scheme invests fluctuates, the value of your investment in the scheme may go up or down. • Mutual Funds and securities investments are subject to market risks and there can be no assurance and no guarantee that the Scheme will achieve its objective. • Past performance of the Schemes, the Sponsors or its Group / Affiliates / AMC / Mutual Fund does not guarantee the future performance of the scheme of the Mutual Fund. • Investment in equity and equity related securities including option contracts involve high degree of risks and investors should not invest in the schemes unless they can afford to take the risk of losing their investment. • The sponsors are not responsible or liable for any loss resulting from the operations of the scheme beyond the initial contribution of Rs. 1 lakh made by them towards setting up of the mutual fund. • The name of the Scheme does not in any manner indicate either the quality of the Scheme, its future prospects or the returns. • Growth, appreciation, IDCW and income, if any, referred to in this Scheme Information Documentary subject to the tax laws and other fiscal enactments as they exist from time to time. • The NAVs of the Scheme may be affected by changes in the general market conditions, factors and forces affecting capital market, in particular, level of interest rates, various market-related factors, trading volumes, settlement periods and transfer procedures. • IDCW, if any are/will be subject to the availability of distributable surplus of the Scheme. b. Scheme Specific Risk Factors: Some of the specific risk factors related to the schemes include, but are not limited to the following: Risk factors associated with investing in Debt securities and Money Market Instruments The Scheme will invest in debt securities and money market instruments, which are subject to credit risk, interest rate risk, and settlement risk. Credit risk arises from the possibility that the issuer of a security may default on its payment obligations. Interest rate risk affects the valuation of money market instruments, while settlement risk may delay the realization of proceeds from the sale of these instruments. • Credit Risk: Bonds / debentures as well as other money market instruments issued by corporates run the risk of down grading by the rating agencies and even default as the worst case. Securities issued by Central/State governments have lesser to zero probability of credit / default risk in view of the sovereign status of the issuer. • Interest - Rate Risk: The Net Asset Value (NAV) of the Scheme, to the extent that it is invested in Debt and Money Market instruments, will be influenced by changes in general interest rates. A decrease in interest rates is expected to result in an increase in the NAV, while an increase in interest rates would adversely affect the NAV. • Liquidity Risk: While money market instruments are relatively liquid, they lack a well developed secondary market, which may limit the Scheme's ability to sell these instruments and could result in losses until the securities are eventually sold. • Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities in the 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. • Prepayment Risk: Some fixed-income securities give the issuer the right to call back the securities before their maturity date, particularly in periods of declining interest rates. This prepayment risk may force the Scheme to reinvest the proceeds at lower yields, resulting in reduced interest income • Settlement Risk: Different segments of the Indian financial markets have varying settlement periods, which may be extended due to unforeseen circumstances. Settlement delays could lead to periods where the Scheme's assets are uninvested, resulting in no returns. Additionally, the Scheme may miss certain investment opportunities if it is unable to make intended securities purchases due to settlement issues. Similarly, the inability to sell securities held in the Scheme’s portfolio due to a lack of a well-developed and liquid secondary market for debt securities could result in potential losses if the value of these securities declines. • Risks associated with investment in unlisted securities: Except for any security of an associate or group company, the scheme may invest in securities which are not listed on a stock exchange (“unlisted Securities”) which in general are subject to greater price fluctuations, less liquidity and greater risk than those which are traded in the open market. Unlisted securities may lack a liquid secondary market and there can be no assurance that the Scheme will realize their investments in unlisted securities at a fair value. The AMC may choose to invest in unlisted securities that offer attractive yields, which could increase the risk of the portfolio. • Price Risk: Government securities where a fixed return is offered run price-risk like any other fixed income security. Generally, when interest rates rise, prices of fixed income securities fall 29 and when interest rates drop, the 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. The new level of interest rate is determined by the rates at which government raises new money and/or the price levels at which the market is already dealing in existing securities. The price-risk is not unique to Government Securities. It exists for all fixed income securities. However, Government Securities are unique in the sense that their local currency credit risk generally remains zero. Therefore, their prices are primarily influenced by movements in interest rates within the financial system. • Different types of fixed income securities in which the Scheme would invest as given in the Scheme Information Document carry different levels and types of risk. Accordingly, the Scheme(s) risk may increase or decrease depending upon its investment pattern. e.g. corporate bonds carry a higher level of risk than Government securities. Further even among corporate bonds, AAA rated bonds are comparatively less risky than AA rated bonds. • As zero-coupon securities do not provide periodic interest payments to the holder of the security, these securities are more sensitive to changes in interest rates. Therefore, the interest rate risk of zero-coupon securities is higher. The AMC may choose to invest in zero coupon securities that offer attractive yields. This may increase the risk of the portfolio. 28SCHEME INFORMATION DOCUMENT (SID) c. Systematic Risk The Scheme is exposed to systematic risks that affect the entire market, such as economic recessions, changes in interest rates, geopolitical tensions, and natural disasters. These risks cannot be mitigated through diversification, and any negative macroeconomic developments could impact the overall performance of the scheme. d. Legal and Regulatory Risks Changes in laws, regulations, or accounting standards governing the scheme's operations could have adverse implications for the scheme and its investors. Regulatory actions, legal disputes, or changes in taxation could also affect the scheme’s performance, NAV, and the investors' returns. e. Risks associated with Securities Lending Engaging in securities lending is subject to risks related to fluctuations in collateral value and settlement / liquidity and counterparty risks. The risks in lending portfolio securities, as with other extensions of credit, consist of the failure of another party, in this case the approved intermediary, to comply with the terms of agreement entered into between the lender of securities i.e. the Scheme and the approved intermediary. Such failure to comply can result in the possible loss of rights in 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. The Mutual Fund may not be able to sell such lent securities and this can lead to temporary illiquidity. f. Trading in debt and equity derivatives involves certain specific risks like: • Credit Risk: This is the risk of default by the counter party. This is usually to the extent of difference between actual position and contracted position. This risk is substantially mitigated where derivative transactions happen through clearing corporation. • Market Risk: Market movement may also adversely affect the pricing and settlement of derivative trades like cash trades. • Illiquidity Risk: The risk that a derivative product may not be sold or purchased at a fair price due to lack of liquidity in the market. • An exposure to derivatives can lead to losses. Success of dealing in derivatives depends on the ability of the Fund Manager to correctly assess the future market movement and in the event of incorrect assessment, if any, performance of the scheme could be lower. • Interest Rate Swaps (IRSs) and Forward Rate Agreements (FRAs) do also have inherent credit and settlement risks. However, these risks are substantially less as they are limited to the interest stream and not the notional principal amount. • Participating in derivatives is a highly specialized activity and entails greater than ordinary investment risks. Notwithstanding such derivatives being used for limited purpose of hedging and portfolio balancing, the overall market in these segments could be highly speculative due to action of other participants in the market. • Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor. Execution of such strategies depends upon the ability of the fund manager to identify such opportunities. Identification and execution of the strategies to be pursued by the fund manager involve uncertainty and decision of fund manager may not always be profitable. No assurance can be given that the fund manager will be able to identify or execute such strategies. • The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments. g. The aggregate value of “illiquid securities” of the scheme, which are defined by SEBI as non traded, thinly traded and unlisted equity shares, shall not exceed 15% of the total assets of the scheme and any illiquid securities held above 15% of the total assets shall be assigned zero value. h. In the event of receipt of inordinately large number of redemption requests or a restructuring of the schemes’ portfolio, there may be delays in the redemption of units. i. Different types of securities in which the scheme would invest as given in the Scheme Information Document carry different levels and types of risk. Accordingly, the scheme’s risk may increase or decrease depending upon its investment pattern. For e.g. Corporate bonds carry a higher amount of risk than Government securities. Further even among corporate bonds, bonds which are AAA rated are comparatively less risky than bonds which are AA rated. j. the aggregate value of “illiquid securities” of the scheme, which are defined by SEBI as non- traded, thinly traded and unlisted equity shares, shall not exceed 15% of the total assets of the scheme and any illiquid securities held above 15% of the total assets shall be assigned zero value. k. In the event of receipt of inordinately large number of redemption requests or a restructuring of the schemes’ portfolio, there may be delays in the redemption of units. l. Different types of securities in which the scheme would invest as given in the Scheme Information Document carry different levels and types of risk. Accordingly, the scheme’s risk may increase or decrease depending upon its investment pattern. For e.g. Corporate bonds carry a higher amount of risk than Government securities. Further even among corporate bonds, bonds which are AAA rated are comparatively less risky than bonds which are AA rated. m. Risks associated with different derivative strategies Con. Std. Obs. 28 AMC may use various derivative instruments, from time to time, in an attempt to protect or hedge the portfolio values. • Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investors. 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 involved uncertainty and decision of Fund Manager may not always be profitable. No assurance can be given that the Fund Manager will be able to identify or execute such strategies. • Derivative products are specialized instruments that require investment techniques and risk analysis different from those associated with stocks and bonds. Derivatives require the maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative add to the portfolio and the ability to forecast price of securities being hedged and interest rate movements correctly. There is a 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. Other 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, 29THE WEALTH COMPANY MUTUAL FUND rates and indices. • 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. • The schemes may invest in floating rate instruments and / or interest rate derivatives. The duration of these instruments is linked to the interest rate reset period. The interest rate risk in a floating rate instrument or in a fixed rate instrument hedged with derivatives is likely to be less than that in an equivalent maturity fixed rate instrument. Under some market circumstances the volatility may be of an order greater than what may ordinarily be expected considering only its duration. Hence investors are recommended to consider the unadjusted portfolio maturity of the scheme as well and exercise adequate due diligence when deciding to make their investments • The Scheme may face execution risk, whereby the rates seen on the screen may not be the rate at which the ultimate execution of the derivative transaction takes place. • The Scheme may find it difficult or impossible to execute derivative transactions in certain circumstances. For example, when there are insufficient bids or suspension of trading due to price limit or circuit breakers, the Scheme may face a liquidity issue. • Investments in index futures face the same risk as the investments in a portfolio of shares representing an index. The extent of loss is the same as in the underlying stocks. • 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. • 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 "counter party") to comply with the terms of the derivatives contract. The counter party may default on a transaction before settlement and therefore, the Scheme is compelled to negotiate with another counterparty at the then prevailing (possibly unfavorable) market price. • The risk of loss in trading futures contracts can be substantial, because of the low margin deposits required, the extremely high degree of leverage involved in futures pricing and the potential high volatility of the futures markets. • Where derivatives are used for hedging, such use may involve a basic risk where the instrument used as a hedge does not match the movement in the instrument/underlying asset being hedged. The risk may be interrelated also e.g., interest rate movements can affect equity prices, which could influence specific issuer/industry assets. • 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. Risks specific to certain derivative strategies are highlighted below: (i) Risk Factors of SWAP Risks associated with Swaps: Interest rate risk is significant because interest rates do not always move as expected. Both parties have interest rate risk. The holder of the fixed rate risks the floating interest rate going higher, thereby losing interest that it would have otherwise received. The holder of the floating rate risks interest rates going lower, which results in a loss of cash flow since the fixed rate holder still has to make streams of payments to the counterparty. The other main risk associated with swaps is counterparty risk. This is the risk that the counterparty to a swap will default and be unable to meet its obligations under the terms of the swap agreement. If the holder of the floating rate is unable to make payments under the swap agreement, the holder of the fixed rate has credit exposure to changes in the interest rate agreement. This is the risk the holder of the fixed rate was seeking to avoid. Risks associated with Forward Rate Contracts: When entering into an FRA, both parties to the contract entail credit risk exposure. The additional risks could be on account of lack of opportunity, illiquidity. (ii) 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. Risk of Writing of Call Option Under a Cover Call Strategy: Under a delivery settlement a call writer will have to part with the physical holding of security which was originally intended for long-term holding. n. Risk pertaining to covered call strategy Incorrectly pricing the option premium before writing the covered call by ignoring factors which determine pricing like number of days to expiry, adjustment with respect to announced corporate actions like dividend etc. Other Scheme specific risks factors a. Investors may note that AMC/Fund Manager’s investment decisions may not always be profitable, even though it is intended to generate capital appreciation and maximize the returns by actively investing in equity/ equity related securities. b. The value of the investments in the scheme, 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 policies of any appropriate authority and other political and economic developments and closure of stock exchanges which may have an adverse bearing on individual securities, a specific sector or all sectors including equity and debt markets. Consequently, the NAV of the Units of the Scheme may fluctuate and can go up or down. 30SCHEME INFORMATION DOCUMENT (SID) c. Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the equity and equity related investments made by the Scheme which could cause the scheme to miss certain investment opportunities. Different segments of the 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 inability of the Scheme to make intended securities purchases due to settlement problems could also cause the Scheme to miss certain investment opportunities. By the same rationale, the inability to sell securities held in the scheme’s portfolio due to the absence of a well developed and liquid secondary market for debt securities would result, at times, in potential losses to the Scheme, in case of a subsequent decline in the value of securities held in the scheme’s portfolio. d. Securities, which are not quoted on the stock exchanges, are inherently illiquid in nature and carry a larger amount of liquidity risk, in comparison to securities that are listed on the exchanges or offer other exit options to the investor, including a put option. Within the regulatory limits, the AMC may have chosen to invest in unlisted securities as permitted for investment by the scheme. Listed securities which may become unlisted in future may increase the risk in the portfolio. e. The Scheme may use various derivative products as permitted by the Regulations. Use of derivatives requires an understanding of not only the underlying instrument but also of the derivative itself. Other risks include the risk of mispricing or improper valuation and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. Usage of derivatives will expose the Scheme to certain risks inherent to such derivatives. f. The scheme intends to deploy funds in money market instruments to maintain liquidity. To the extent that some assets/funds are deployed in money market instruments, the scheme will be subject to credit risk as well as settlement risk, which might affect the liquidity of the scheme Risks associated with investment in units of mutual fund: Investment in Mutual Fund Units involves investment risks, including but not limited to risks such as liquidity risk, volatility risk, default risk including the possible loss of principal. Liquidity risk – The liquidity of the scheme’s investments is inherently restricted by trading volumes and settlement periods. In the event of an inordinately large number of redemption requests, or of a restructuring of the scheme’s investment portfolio, these periods may become significant. In view of the same, the Trustees may limit redemptions (including suspending redemptions) under certain circumstances as specified under the Scheme Information Document. Volatility risks: There is the risk of volatility in markets due to external factors like liquidity flows, changes in the business environment, economic policy etc. The scheme will manage volatility risk through diversification across companies and sectors within PSUs. Default risk - Credit risk is risk resulting from uncertainty in counterparty's ability or willingness to meet its contractual obligations. This risk pertains to the risk of default of payment of principal and interest. Government Securities have zero credit risk while other debt instruments are rated according to the issuer's ability to meet the obligations. Risks associated with investing in ETFs: ETFs are passively managed and may be affected by a general decline in the Indian markets relating to its Underlying Index. ETFs invests in the securities included in its Underlying Index regardless of their investment merit. The AMC does not attempt to individually select stocks or to take defensive positions in declining markets. ETFs are listed on a stock exchange/s, however, there can be no assurance that an active secondary market will develop or be maintained. Investment in ETFs is subject to tracking error. Factors such as the fees and expenses of the Scheme, corporate actions, cash balance, changes to the Underlying Index and regulatory policies may affect the AMC‟s ability to achieve close correlation with the Underlying Index of the Scheme. The AMC will endeavour to constantly minimize the tracking error and track the index as closely as possible. Risk factors of repo market a. Illiquidity Risk The repo market for corporate debt securities is over the counter (OTC) and illiquid. Hence, repo obligations cannot be easily sold to other parties. Therefore, to mitigate such risks, it has been stipulated that gross exposure to Repo in corporate bonds would be limited to 10% of net assets of the concerned scheme. Further, the tenor of repo would be taken based on nature and unit holders’ pattern of the scheme. b. Counter-party Risk Credit risk would arise if the counter-party fails to repurchase the security as contracted or if counterparty fails to return the security or interest received on due date. To mitigate such risks, the schemes shall carry out repo transactions with only those counter parties, which has a credit rating of ‘A1+’or ‘AA- and above’. In case of lending of funds as a repo buyer, minimum haircuts on the value of the collateral security have been stipulated, and we would receive the collateral security in the scheme’s account before the money is lent to the counter-party. Overall, we would have a limited number of counter-parties, primarily comprising of Mutual Funds, Scheduled Commercial banks, Financial Institutions and Primary dealers. Similarly, in the event of the scheme being unable to pay back the money to the counter party as contracted, the counter-party may hurriedly dispose of the assets (as they have sufficient margin) and the net proceeds may be refunded to the Scheme. Thus, the Scheme may suffer losses in such cases. Sufficient funds flow management systems are in place to mitigate such risks. c. Collateral Risk (as a repo buyer) Collateral risks arise due to fall in the value of the security (change in credit rating and/or interest rates) against which the money has been lent under the repo arrangement. To mitigate such risks, we have stipulated the minimum credit rating of the issuer of collateral security (‘AA’ for long-term instruments /A1+ for money market instruments), maximum duration of the collateral security (10 years) and minimum haircuts on the value of the security. Risk Factors Associated with Investments in Exchange Traded Commodity Derivatives (ETCDs) (1). An exchange traded commodity derivative (ETCDs) is a derivative instrument that replicates the price movements of an underlying commodity, allowing exposure to the commodity without physical purchase. (2). The AMC, on behalf of the Scheme may use ETCDs from time to time, in an attempt to protect the value of the portfolio and / or enhance unit holders' interest. Investors should understand that ETCDs are specialized instruments that require investment techniques and risk analysis different from those associated with stocks and bonds. The use of a ETCDs requires an understanding not only of the underlying commodity but of the ETCD itself. Other risks include but are not limited to the risk of mispricing or improper valuation and the inability of ETCDs to correlate perfectly with underlying commodity, rates and indices. There may be a cost attached to selling or buying ETCDs. Further there could be an element of settlement risk, which could be different from the risk in settling physical commodity. The possible lack of a liquid secondary market for a ETCDs may result in inability to close ETCDs prior to their maturity date. (3). ETCDs 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 31THE WEALTH COMPANY MUTUAL FUND the strategies to be pursued by the fund manager involve uncertainty and decision of fund manager may not always be profitable. (4). No assurance can be given that the fund manager will be able to identify or execute such strategies. The risks associated with the use of ETCDs are different from or possibly greater than, the risks associated with investing directly in commodity and other traditional investments. (5). The ETCDs will entail a counter-party risk to the extent of amount that can become due from the party. (6). An exposure to ETCDs can also limit the profits from a genuine investment transaction. (7). Efficiency of a ETCDs market depends on the development of a liquid and efficient market for underlying commodity and also on the suitable and acceptable benchmarks. (8). The risks associated with the use of ETCDs are different from or possibly greater than, the risks associated with investing directly in commodity Risk factors associated with investments in REITs and InvITs – The REITs & InvITs distributions will be based on the Net Distributable Cash Flows available for distribution, and not on whether the REITs & InvITs makes an accounting profit or loss. The amount of cash available for distribution principally depends upon the amount of cash that the REIT/InvIT 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 • Economic cycles and risks inherent in the business which may negatively impact valuations, returns and profitability of portfolio assets • Force majeure events related such as earthquakes, floods etc. rendering the portfolio assets inoperable • Debt service requirements and other liabilities of the portfolio assets • Fluctuations in the working capital needs of the portfolio assets • Ability of portfolio assets to borrow funds and access capital markets • Changes in applicable laws and regulations, which may restrict the payment of dividends by portfolio assets • Amount and timing of capital expenditures on portfolio assets • Insurance policies may not provide adequate protection against various risks associated with operations of the REIT/InvIT such as fire, natural disasters, accidents OPERATIONAL AND RESIDUAL RISKS • REIT & InvITs Assets are subject to various risks that we may not be insured against, adequately or at all, including: (i) Changes in governmental and regulatory policies; (ii) Shortages of, or adverse price movement for, materials, equipment and plants; (iii) Design and engineering defects; (iv) Breakdown, failure or substandard performance of the underlying assets and other equipments; (v) Improper installation or operation of the underlying assets and other equipment; (vi) Terrorism and acts of war; (vii) Inclement weather and natural disasters; (viii) Environmental hazards, including earthquakes, flooding, tsunamis and landslide • • Any additional debt financing or issuance of additional Units may have a material, adverse effect on the REITs & InvITs distributions. • Any future issuance of Units by REITs & InvITs or sales of Units by the Sponsor or any of other significant Unitholders may materially and adversely affect the trading price of the Units. • The Valuation Report, and any underlying reports, and the valuation contained therein may not be indicative of the true value of the Project SPVs' assets. • Risk related to business or industry sector. • There can be no assurance that REITs & InvITs will be able to successfully undertake future acquisitions. Market Risk: REITs and InvITs are volatile and prone to price fluctuations on a daily basis owing to market movements. AMC/Fund Manager’s investment decisions may not always be profitable, as actual market movements may be at variance with the anticipated trends. 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. Liquidity Risk: As the liquidity of the investments made by the scheme(s) could, at times, be restricted by trading volumes and settlement periods, the time taken by the Mutual Fund for liquidating the investments in the scheme may be high in the event of immediate redemption requirement. Investment in such securities may lead to increase in the scheme portfolio risk. 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 dividend pay-outs, etc. Consequently, the proceeds may get invested in assets providing lower returns. Price-Risk or Interest-Rate Risk: REITs & InvITs run price-risk or 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. Credit Risk: In simple terms this risk means that the issuer of a debenture/ bond or a money market instrument may default on interest payment or even in paying back the principal amount on maturity. REITs & InvITs are likely to have volatile cash flows as the repayment dates would not necessarily be pre scheduled 32SCHEME INFORMATION DOCUMENT (SID) Risk associated with Securitized Debt A securitization transaction involves sale of receivables by the originator (a bank, non-banking finance company, housing finance company, microfinance companies or a manufacturing/service company) to a Special Purpose Vehicle (SPV), typically set up in the form of a trust. Investors are issued rated Pass-Through Certificates (PTCs), the proceeds of which are paid as consideration to the originator. In this manner, the originator, by selling his loan receivables to an SPV, receives consideration from investors much before the maturity of the underlying loans. Investors are paid from the collections of the underlying loans from borrowers. Typically, the transaction is provided with a limited amount of credit enhancement (as stipulated by the rating agency for a target rating), which provides protection to investors against defaults by the underlying borrowers. Generally available asset classes for securitization in India are: • Commercial vehicles • Auto and two-wheeler pools • Mortgage pools (residential housing loans) • Personal loan, credit card and other retail loans • Corporate loans/receivables • Microfinance receivables In pursuance to SEBI communication dated: August 25, 2010, given below are the requisite details relating to investments in Securitized debt. Risk profile of securitized debt vis-à-vis risk appetite of the scheme Securitized debt instruments are relatively illiquid in the secondary market and hence they are generally held to maturity which would match with the long-term investment horizon of these investors. Investment in these instruments will help the Scheme in aiming at reasonable returns. These returns come with a certain degree of risks which are covered separately in the Scheme Information Document. Policy relating to originators based on nature of originator, track record, NPAs, losses in earlier securitized debt, etc Risk mitigation strategies for investments with each kind of originator For a complete understanding of the policy relating to selection of originators, the AMC has first analysed below risks attached to a securitization transaction. In terms of specific risks attached to securitization, each asset class would have different underlying risks, however, residential mortgages are supposed to be having lower default rates as an asset class. On the other hand, repossession and subsequent recovery of commercial vehicles and other auto assets is fairly easier and better compared to mortgages. Some of the asset classes such as personal loans, credit card receivables etc., being unsecured credits in nature, may witness higher default rates. As regards corporate loans/receivables, depending upon the nature of the underlying security for the loan or the nature of the receivable the risks would correspondingly fluctuate. However, the credit enhancement stipulated by rating agencies for such asset class pools is typically much higher, which helps in making their overall risks comparable to other AAA/AA rated asset classes. The Scheme may invest in securitized debt assets. These assets would be in the nature of Asset Backed Securities (ABS) and Mortgage-Backed Securities (MBS) with underlying pool of assets and receivables like housing loans, auto loans and single corporate loan originators. The Scheme intends to invest in securitized instruments rated AAA/AA by a SEBI recognized credit rating agency. Before entering into any securitization transaction, the risk is assessed based on the information generated from the following sources: (1) Rating provided by the rating agency (2) Assessment by the AMC (1) Assessment by a Rating Agency In its endeavor to assess the fundamental uncertainties in any securitization transaction, a credit rating agency normally takes into consideration following factors: Credit Risk: Credit risk forms a vital element in the analysis of securitization transaction. Adequate credit enhancements to cover defaults, even under stress scenarios, mitigate this risk. This is done by evaluating following risks: • Asset risk • Originator risk • Portfolio risk • Pool risks The quality of the pool is a crucial element in assessing credit risk. In the Indian context, generally, pools are ‘cherry-picked’ using positive selection criteria. To protect the investor from adverse selection of pool contracts, the rating agencies normally take into consideration pool characteristics such as pool seasoning (seasoning represents the number of installments paid by borrower till date: higher seasoning represents better quality), over dues at the time of selection and Loan to Value (LTV). To assess its risk profile vis-à-vis the overall portfolio, the pool is analyzed with regard to geographical location, borrower profile, LTV, and tenure. Counterparty Risk There are several counterparties in a securitization transaction, and their performance is crucial. Unlike in the case of credit risks, where the risks emanate from a diversified pool of retail assets, counterparty risks result in either performance or non-performance. The rating agencies generally mitigate such risks through the usage of stringent counterparty selection and replacement criteria to reduce the risk of failure. The risks assessed under this category include: • Servicer risk • Commingling risk • Miscellaneous other counterparty risks Legal Risks The rating agency normally conducts a detailed study of the legal documents to ensure that the investors' interest is not compromised, and relevant protection and safeguards are built into the transaction. Market Risk Market risks represent risks not directly related to the transaction, but other market related factors, stated below, which could have an impact on transaction performance, or the value of the investments to the investors. • Macro-economic risks • Prepayment risks • Interest rate risks Other Risks associated with investment in securitized debt and mitigation measures: 33THE WEALTH COMPANY MUTUAL FUND Limited Liquidity and 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. Risk Mitigation: Securitized debt instruments are relatively illiquid in the secondary market and hence they are generally held to maturity. The liquidity risk and HTM nature is taken into consideration at the time of analyzing the appropriateness of the securitization. Please refer Liquidity Risk Framework and Stress testing under Risk mitigation section for additional risk mitigation. 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 of the Seller, Issuer and Originator. No financial recourse is available to the Certificate Holders against the Investors' Representative. Delinquencies and credit losses may cause depletion of the amount available under the Credit Enhancement and thereby the Investor Payouts 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 realize the sale proceeds on such sales. In addition, the price at which such Asset may be sold may be lower than the amount due from that Obligor. Risk Mitigation: In addition to careful scrutiny of credit profile of borrower/pool, additional security in the form of adequate cash collaterals and other securities may be obtained to ensure that they all qualify for similar rating. Risks due to possible prepayments: Weighted Tenor / Yield Asset securitization is a process whereby commercial or consumer credits are packaged and sold in the form of financial instruments. Full prepayment of underlying loan contract may arise under any of the following circumstances; • Obligor pays the Receivable due from him at any time prior to the scheduled maturity date of that Receivable; or • Receivable is required to be repurchased by the Seller consequent to its inability to rectify a material misrepresentation with respect to that Receivable; or • The Servicer recognizing a contract as a defaulted contract and hence repossessing the underlying Asset and selling the same • In the event of prepayments, investors may be exposed to changes in tenor and yield. Risk Mitigation: A certain amount of prepayments is assumed in the calculations at the time of purchase based on historical trends and estimates. Further a stress case estimate is calculated and additional margins are built in. Bankruptcy of the Originator or Seller If originator becomes subject to bankruptcy proceedings and the court in the bankruptcy proceedings concludes that the sale from originator to Trust was not a sale, then an Investor could experience losses or delays in the payments due. All possible care is generally taken in structuring the transaction so as to minimize the risk of the sale to Trust not being construed as a “True Sale”. Legal opinion is normally obtained to the effect that the assignment of Receivables to Trust in trust for and for the benefit of the Investors, as envisaged herein, would constitute a true sale Risk Mitigation: Normally, specific care is taken in structuring the securitization transaction so as to minimize the risk of the sale to the trust not being construed as a 'true sale'. It is also in the interest of the originator to demonstrate the transaction as a true sell to get the necessary revenue recognition and tax benefits. Bankruptcy of the Investor’s Agent If Investor’s agent becomes subject to bankruptcy proceedings and the court in the bankruptcy proceedings concludes that the recourse of Investor’s Agent to the assets/receivables is not in its capacity as agent/Trustee but in its personal capacity, then an Investor could experience losses or delays in the payments due under the swap agreement. All possible care is normally taken in structuring the transaction and drafting the underlying documents so as to provide that the assets/receivables if and when held by Investor’s Agent is held as agent and in Trust for the Investors and shall not form part of the personal assets of Investor’s Agent. Legal opinion is normally obtained to the effect that the Investors Agent’s recourse to assets/receivables is restricted in its capacity as agent and trustee and not in its personal capacity. Risk Mitigation: All possible care is normally taken in structuring the transaction and drafting the underlying documents so as to provide that the assets/receivables if and when held by Investor’s Agent is held as agent and in Trust for the Investors and shall not form part of the personal assets of Investor’s Agent. Credit Rating of the Transaction / Certificate: The credit rating is not a recommendation to purchase, hold or sell the Certificate in as much as the ratings do not comment on the market price of the Certificate or its suitability to a particular investor. There is no assurance by the rating agency either that the rating will remain at the same level for any given period of time or that the rating will not be lowered or withdrawn entirely by the rating agency. 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 34SCHEME INFORMATION DOCUMENT (SID) 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 originator in its capacity as Servicer fails to remit such funds due to Investors, the Investors may be exposed to a potential loss. (2) Assessment by the AMC Mapping of structures based on underlying assets and perceived risk profile. The scheme may invest in securitized debt originated by Banks, NBFCs and other issuers.The AMC may evaluate following factors, while investing in securitized debt: · Originator Acceptance Evaluation Parameters (For Pool Loan and Single Loan Securitization Transactions) · Track record The AMC ensures that there is adequate past track record of the Originator before selection of the pool including a detailed look at the number of issuances in past, track record of issuances, experience of issuance team, etc. Willingness to pay As the securitized structure has underlying collateral structure, depending on the asset class, historical NPA trend and other pool / loan characteristics, a credit enhancement in the form of cash collateral, such as fixed deposit, bank, guarantee etc. is obtained, as a risk mitigation measure. · Ability to pay This assessment is based on a strategic framework for credit analysis, which entails a detailed financial risk assessment. Management analysis is used for identifying company specific financial risks. One of the most important factors for assessment is the quality of management based on its past track record and feedback from market participants. In order to assess financial risk a broad assessment of the issuer’s financial statements is undertaken to review its ability to undergo stress on cash flows and asset quality. Business risk assessment, wherein following factors may be considered: • Outlook for the economy (domestic and global) • Outlook for the industry • Company specific factors In addition, a detailed review and assessment of rating rationale is done including interactions with the company as well as agency. Critical Evaluation Parameters (For Pool Loan and Single Loan Securitization Transactions) Typically, the AMC would avoid investing in securitization transaction (without specific risk mitigant strategies / additional cash/security collaterals/ guarantees) if there are concerns on the following issues regarding the originator / underlying issuer: · High default track record/ frequent alteration of redemption conditions / covenants · High leverage ratios – both on a standalone basis as well on a consolidated level/ group level · Higher proportion of re-schedulement of underlying assets of the pool or loan, as the case may be · Higher proportion of overdue assets of the pool or the underlying loan, as the case may be · Poor reputation in market · Insufficient track record of servicing of the pool or the loan, as the case may be Advantages of Investments in Single Loan Securitized Debt ·Wider Coverage: A Single Loan Securitized Debt market offers a more diverse range of issues / exposures as the Banks / NBFCs lend to larger base of borrowers. ·Credit Assessment: Better credit assessment of the underlying exposure as the Banks / NBFCs ideally co-invest in the same structure or take some other exposure on the same borrower in some other form. ·Better Structuring: Single Loan Securitized Debt investments facilitates better structuring than investments in plain vanilla debt instruments as it is governed by Securitization guidelines issued by RBI. ·Better Legal documentation: Single Loan Securitized Debt structures involve better legal documentation than Non-Convertible Debenture (NCD) investments. ·End use of funds: Securitized debt has better standards of disclosures as well as limitation on end use of funds as compared to NCD investments wherein the end use is general corporate purpose. ·Yield enhancer: Single Loan Securitized Debt investments give higher returns as compared to NCD investments in same corporate exposure. ·Regulator supervision: Macro level supervision from RBI in Securitization Investments as compared to NCD investments. ·Tighter covenants: Single Loan Securitized Debt structures involve tighter financial covenants than NCD investments. Disadvantages of Investments in Single Loan Securitized Debt ·Liquidity risk: Investments in Single Loan Securitized Debts have relatively less liquidity as compared to investments in NCDs ·Co-mingling risk: Servicers in a securitization transaction normally deposit all payments received from the obligors into a collection account. However, there could be a time gap between collection by a servicer and depositing the same into the collection account. In this interim period, collections from the loan agreements by the servicer may not be segregated from other funds of the servicer. If the servicer fails to remit such funds due to investors, investors in the Scheme may be exposed to a potential loss. Size of the Loan The AMC generally analyses the size of each loan on a sample basis and analyze a static pool of the originator to ensure the same matches the Static pool characteristics. Also indicates whether there is excessive reliance on very small ticket size, which may result in difficult and costly recoveries. To illustrate, the ticket size of housing loans is generally higher than that of personal loans. Hence in the construction of a housing loan asset pool for say Rs.1,00,00,000/- it may be easier to construct a pool with just 10 housing loans of Rs.10,00,000 each rather than to construct a pool of personal loans as the ticket size of personal loans may rarely exceed Rs.5,00,000/- per individual. Also to amplify this illustration further, if one were to construct a pool of Rs.1,00,00,000/-consisting of personal loans of Rs.1,00,000/- each, the larger number of contracts (100 as against one of 10 housing loans of Rs.10 lakh each) automatically diversifies 35THE WEALTH COMPANY MUTUAL FUND the risk profile of the pool as compared to a housing loan based asset pool. Average Original Maturity of the Pool Indicates the original repayment period and whether the loan tenors are in line with industry averages and borrower’s repayment capacity. To illustrate, in a car pool consisting of 60 - month contracts, the original maturity and the residual maturity of the pool viz. number of remaining installments to be paid gives a better idea of the risk of default of the pool itself. If in a pool of 100 car loans having original maturity of 60 months, if more than 70% of the contracts have paid more than 50% of the installments and if no default has been observed in such contracts, this is a far superior portfolio than a similar car loan pool where 80% of the contracts have not even crossed 5 installments. Geographical Distribution Regional/state/ branch distribution is preferred to avoid concentration of assets in a particular region/state/branch. Loan to Value Ratio Indicates how much % value of the asset is financed by borrower’s own equity. The lower LTV, the better it is. This Ratio stems from the principle that where the borrowers own contribution of the asset cost is high, the chances of default are lower. To illustrate for a Truck costing Rs.20 lakhs, if the borrower has himself contributed Rs.10 lakh and has taken only Rs.10 lakh as a loan, he is going to have lesser propensity to default as he would lose an asset worth Rs.20 lakhs if he defaults in repaying an installment. This is as against a borrower who may meet only Rs.2 lakh out of his own equity for a truck costing Rs.20 lakh. Between the two scenarios given above, the latter would have higher risk of default than the former. Average seasoning of the pool Indicates whether borrowers have already displayed repayment discipline. To illustrate, in the case of a personal loan, if a pool of assets consist of those who have already repaid 80% of the installments without default, this certainly is a superior asset pool than one where only 10% of installments have been paid. In the former case, the portfolio has already demonstrated that the repayment discipline is far higher. Risk Tranching Typically, the AMC may avoid investing in mezzanine debt or equity of Securitized debt in the form of subordinate tranche, without specific risk mitigant strategies / additional cash / security collaterals/ guarantees, etc. The mechanism to tackle conflict of interest when the mutual fund invests in securitized debt of an originator and the originator in turn makes investments in that particular scheme of the fund Investments made by the scheme in any asset are done based on the requirements of the scheme and are in accordance with the investment policy. All Investments are made entirely at an arm's length basis with no consideration of any existing / consequent investments by any party related to the transaction (originator, issuer, borrower etc.). Investments made in Securitized debt are made as per the Investment pattern of the Scheme and are done after detailed analysis of the underlying asset. There might be instances of Originator investing in the same scheme but both the transactions are at arm's length and avoid any conflict of interest. In general, the resources and mechanism of individual risk assessment with the AMC for monitoring investment in securitized debt. The risk assessment process for securitized debt, as detailed in the preceding paragraphs, is similar to any other credit. The investments in securitized debt are done after appropriate research. The ratings are monitored for any movement. Note: The information contained herein is based on current market conditions and may change from time to time based on changes in such conditions, regulatory changes and other relevant factors. Accordingly, our investment strategy, risk mitigation measures and other information contained herein may change in response to the same. Risk Associated with investment in Instruments having Special Features Credit Risk / Principal at Risk: Instruments such as AT1 and AT2 bonds are unsecured and subordinated. The issuer has the option to write off the principal in times of severe financial stress. Investors have no recourse or only limited recourse to recover their investment if the principal is written off. These bonds may also be converted into equity upon the occurrence of certain pre- defined trigger events. The Central Bank may instruct the issuer to write down the entire value of outstanding or AT2 bonds if it determines that the bank has reached the Point of Non-Viability (PONV) or requires capital infusion to remain a going concern. Additionally, interest payments—especially on AT1 bonds—may be skipped under certain conditions and are non-cumulative, meaning they cannot be recovered later. Interest Rate Risk: Instruments without a defined maturity may yield lower returns in a rising interest rate environment, leading to opportunity loss. Liquidity Risk: There is no assurance that the bondholder will receive the principal on the call date, as the issuer may choose to extend the bond’s tenure. While these bonds can be sold in the secondary market, they may trade at a discount to the purchase price. Moreover, some of these bonds are thinly traded, making it difficult to find buyers. Risk 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. The scheme may not be able to sell lent out securities, which can lead to temporary illiquidity & loss of opportunity. 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 36SCHEME INFORMATION DOCUMENT (SID) underlying instrument but of the derivative itself. Other risks include, the risk of mispricing or improper valuation and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. • Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor. Execution of such strategies depends upon the ability of the fund manager to identify such opportunities. Identification and execution of the strategies to be pursued by the fund manager involve uncertainty and decision of fund manager may not always be profitable. No assurance can be given that the fund manager will be able to identify or execute such strategies. • The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments. • Credit Risk: The credit risk in derivative transaction is the risk that the counter party will default on its obligations and is generally low, as there is no exchange of principal amounts in a derivative transaction. • Market Risk: Market movements may adversely affect the pricing and settlement of derivatives. Illiquidity risk: This is the risk that a derivative cannot be sold or purchased quickly enough at a fair price, due to lack of liquidity in the market. Risk factors associated with Short Selling Short-selling is the sale of shares which are not owned by the seller at the time of trade. Instead, he borrows it from someone who already owns it. Later, the short seller buys back the stock he shorted and returns the stock to close out the loan. If the price of the stock corrects, Short seller can buy the stock back for less than he received for selling it and earn profit (the difference between higher short sale price and the lower purchase price). If, the price of stock appreciates, short selling results in loss. Thus, Short positions carry the risk of losing money and these losses may grow theoretically unlimited if the price increases without limit and shall result into major losses in the portfolio. Risk associated with investment in Credit Default Swaps Mutual Funds can buy Credit Default Swap (CDS) to hedge credit risk of corporate bond holdings in the portfolio. The following risks are associated with CDS: Counterparty Risk: This is the risk that the seller of the CDS might default on their obligation. If the counterparty fails to pay in the event of default by the bond issuer, the scheme could face significant losses. Market Liquidity Risk: The CDS market can become illiquid during periods of financial stress. This means that the scheme might find it difficult to buy or sell CDS contracts at favorable prices when required. Regulatory Risk: SEBI has specific guidelines for mutual fund schemes participating in buying/selling CDS. Any change in these regulations could impact the scheme’s ability to effectively use CDS for hedging. Credit risk of the CDS seller: The credit worthiness of the CDS seller may deteriorate. If the seller’s credit rating is impacted negatively, the protection offered by the CDs might become less reliable. C. RISK MITIGATION STRATEGIES Con. Std. Obs. 9 Investments in equity, debt and derivative securities carry various risks such as inability to sell securities, trading volumes and settlement periods, market risk, interest rate risk, liquidity risk, default risk, reinvestment risk etc. Whilst such risks cannot be eliminated, they may be mitigated by diversification and hedging. In order to mitigate the various risks, the portfolio of the Scheme will be constructed in accordance with the investment restriction specified under the Regulations which would help in mitigating certain risks relating to investments in securities market. The AMC has necessary framework in place for risk mitigation at an enterprise level. The Risk Management division is an independent division within the organization. Internal limits are defined and judiciously monitored. Risk indicators on various parameters are computed and are monitored on a regular basis. For risk control, the following may be noted: Risk & Description specific to the Scheme Risk mitigants / management strategy Market risk Endeavour to have a well diversified portfolio of good companies with the ability to use cash/derivatives for hedging Risk arising due to vulnerability to price fluctuations and volatility, having material impact on the overall returns of the scheme Derivatives risk Continuous monitoring of the derivatives positions and strictly adheres to the regulations and internal norms. Exposure with respect to Various inherent risks arising as a consequence of investing in derivatives shall be in line with regulatory limits and the limits specified derivatives. in the SID Credit risk Investment universe carefully selected to only include issuers with high credit quality Understand the working of the markets and respond Risk associated with repayment of investment Performance risk Risk effectively to market movements arising due to change in factors affecting the market Concentration risk Invest across the spectrum of issuers and keeping flexibility to invest across tenor Risk arising due to over exposure in few securities Liquidity risk Control portfolio liquidity at portfolio construction stage. Having optimum mix of cash & cash equivalents along with the debt papers in Risk arising due to inefficient Asset Liability Management, resulting in the portfolio high impact costs Interest rate risk Control the portfolio duration and periodically evaluate the portfolio structure with respect to existing interest rate scenario 37THE WEALTH COMPANY MUTUAL FUND Price volatility due to movement in interest rates Event risk Understand businesses to respond effectively and speedily to events. Usage of derivatives: Hedge portfolios, if required, in case of predictable Price risk due to company or sector specific event events with uncertain outcomes While these measures are expected to mitigate the above risks to a large extent, there can be no assurance that these risks would be completely eliminated. The scheme may use various derivative products as permitted by the Regulations. Participating in derivatives is a highly specialized activity and entails greater than ordinary investment risks. Primarily, derivatives including Interest Rate Futures would be used for purpose of hedging and portfolio balancing. The AMC has necessary framework in place for risk mitigation at an enterprise level. The Risk Management division is an independent division within the organization. Risk indicators & internal limits are defined and judiciously monitored on a regular basis. There is a Board level Committee, the Risk Management Committee of the Board, which enables a dedicated focus on risk factors and the relevant risk mitigation measures. Exposure limits as per provision no. 12.24.1 and 12.25.1 to 12.25.7 of para 12.24 and 12.25 under Chapter 12 of SEBI Master Circular for Mutual Funds: a. The cumulative gross exposure through equity, debt, derivative positions (including commodity and fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), and such other securities/assets as may be permitted by the SEBI from time to time should not exceed 100% of the net assets of the scheme: Con. Std. Obs. 17 b. Mutual Funds shall not write options or purchase instruments with embedded written options. c. The total exposure related to option premium paid must not exceed 20% of the net assets of the scheme. d. Cash or cash equivalents with residual maturity of less than 91 days may be treated as not creating any exposure. Con. Std. Obs. 14 e. Exposure due to hedging positions may not be included in the above mentioned limits subject to the following:- (i) Hedging positions are the derivative positions that reduce possible losses on an existing position in securities and till the existing position remains. (ii) Hedging positions cannot be taken for existing derivative positions. Exposure due to such positions shall have to be added and treated under limits mentioned in Point a. (iii) Any derivative instrument used to hedge has the same underlying security as the existing position being hedged. (iv) 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. f. Mutual Funds may enter into plain vanilla interest rate swaps for hedging purposes. The counter party in such transactions has to be an entity recognized as a market maker by RBI. Further, the value of the notional principal in such cases must not exceed the value of respective existing assets being hedged by the scheme. Exposure to a single counterparty in such transactions should not exceed 10% of the net assets of the scheme. g. Exposure due to derivative positions taken for hedging purposes in excess of the underlying position against which the hedging position has been taken, shall be treated under the limits mentioned in point a. 38SCHEME INFORMATION DOCUMENT (SID) II. INFORMATION ABOUT THE SCHEME: A. WHERE WILL THE SCHEME INVEST? Con. Std. Obs. 29 The corpus of the Scheme will be predominantly invested in Equity & Equity Related Instruments of companies across market capitalization, Debt, Arbitrage and Money Market Instruments and other permitted securities. The instruments listed below could be listed, unlisted, privately placed, secured, unsecured, rated or unrated acquired through primary or secondary market through stock exchanges, over the counter or any other dealing mechanisms. Coupon bearing (fixed or floating), zero coupon discounted instruments or any other type. Weights in the portfolio may not have any correlation to the order of listing. Subject to the regulations and prevailing laws as applicable, the portfolio will consist of permissible instruments, most suitable to meet the investment objectives The following investment categories are likely to cover most of the available investment universe. Subject to the Regulations, the corpus of the Scheme can be invested in any (but not exclusively) of the following securities as permitted by SEBI/ RBI from time to time: Equity and Equity Related Instruments including Warrants and Convertible Instruments: Equity share - Equity Share is a security that represents ownership interest in a company. It is issued to those who have contributed capital in setting up an enterprise. Equity Related Instruments - These are securities which give the holder of the security right to receive equity shares on pre agreed terms. It includes convertible debentures, convertible preference shares, warrants carrying the right to obtain equity shares, equity derivatives and such other instruments as may be specified by SEBI from time to time. Equity Derivatives including Index/Stock Futures & Options - Equity derivatives are financial instruments, generally traded on an exchange, the price of which is directly dependent upon (i.e. “derived from”) the value of equity shares or equity indices. Derivatives involve the trading of rights or obligations based on the underlying, but do not directly transfer property. Futures - Futures are exchange-traded contracts to sell or buy financial instruments for future delivery at an agreed price. There is an agreement to buy or sell a specified quantity of financial instrument on a designated future date at a price agreed upon by the buyer and seller at the time of entering into a contract. To make trading possible, the exchange specifies certain standardized features of the contract. A futures contract involves an obligation on both the parties to fulfill the terms of the contract. SEBI has permitted futures contracts on indices and individual stocks with maturity of 1 month, 2 months and 3 months on a rolling basis. The futures contracts are settled on last Thursday (or immediately preceding trading day if Thursday is a trading holiday) of each month. The final settlement price is the closing price of the underlying stock(s)/index. However, pursuant to SEBI Circular No. SEBI/HO/MRD/DOPI/ CIR/P/2018/161 dated December 31, 2018, stock derivatives are physically settled. Option - Option is a contract which provides the buyer of the option (also called holder) the right, without the obligation, to buy or sell a specified asset at the agreed price on or upto a particular date. For acquiring this privilege, the buyer pays a premium (fee) to the seller. The seller on the other hand has the obligation to buy or sell specified asset at the agreed price and for this obligation he receives a premium. The premium is determined by considering number of factors such as the market price of the underlying asset/security, number of days to expiry, risk free rate of return, strike price of the option and the volatility of the underlying asset. Option contracts are of two types viz: Call Option - The option that gives the buyer the right to buy a specified quantity of the underlying asset at the strike price is a call option. The buyer of the call option (known as the holder of call option) can call upon the seller of the option (writer of the option) and buy from him the underlying asset at the agreed price at any time on or before the expiry of the option. The seller (writer of the option) on the other hand has the obligation to sell the underlying asset if the buyer of the call option decides to exercise his option to buy. Put Option - The right to sell is called put option. A Put option gives the holder (buyer) the right to sell specified quantity of the underlying asset at the strike price. The seller of the put option (one who is short Put) however, has the obligation to buy the underlying asset at the strike price if the buyer decides to exercise his option to sell. There are two kinds of options based on the date of exercise of right. The first is the European Option which can be exercised only on the maturity date. The second is the American Option which can be exercised on or before the maturity date. Example on options: Buying a Call Option: Assume that the Scheme buys a call option at the strike price of Rs. 2,000 and pays a premium of Rs. 100. If the market price of the underlying stock is Rs. 1,900, the Scheme will not exercise the option and it shall lose the premium of Rs. 100. Thus, in the above example, the loss for the Scheme, as the buyer of the option, is limited to the premium paid by him while the gains are unlimited. Buying a Put Option: Assume that the Scheme buys a put option at the strike price of Rs. 2,000 and pays a premium of Rs. 100.If the market price of the underlying stock decreases to Rs. 1,850 the Scheme would be protected from the downside and would be able to gain Rs. 50 (Strike Price – Spot Price of underlying – Premium paid) whereas if the stock price moves up to say Rs. 2,150 the Scheme may let the option expire and forego the premium of Rs. 100. Writing a Call Option: Assume that the Scheme writes a call option at the strike price of Rs. 2,050 and earns a premium of Rs.100. If the market price of the underlying stock on the date of expiry increases to Rs. 2,200 (i.e. more than Rs. 2,050) then the option is exercised. The Scheme earns the premium of Rs. 100 but loses the difference between the market price and the exercise price i.e. Rs. 150. In case the market price of the underlying stock decreases to Rs. 2,000, the Scheme gets to keep the premium of Rs. 100. Writing a Put Option: Assume that the Scheme writes a put option at the strike price of Rs. 2,050 and earns a premium of Rs. 50. If the market value of the underlying stock decreases to Rs. 2,000 the put option will be exercised and the Scheme will earn the premium of Rs. 50 but loses the difference between the exercise price and the market price which is Rs. 50. However, if the market price of the underlying stock is Rs. 2,100, the option-holder will not exercise the option. As a result of which the option will expire and the Scheme will earn the premium income of Rs. 50. The option premium received shall be the part of covered call strategy and shall be invested in Debt and once the contract expires it shall get adjusted in NAV of the scheme. Exposure on account of call option written under the covered call strategy: The Scheme will write call options only under a covered call strategy for constituent stocks of NIFTY 50 and BSE SENSEX subject to the following: a) The total notional value (taking into account strike price as well as premium value) of call options written shall not exceed 15% of the total 39THE WEALTH COMPANY MUTUAL FUND market value of the underlying equity shares held at all points in time. In case of any passive breach, the Scheme shall have 7 trading days to rebalance the portfolio. During the rebalancing period, no additional call options will can be written in the Schemes. b) The total number of shares underlying the call options written shall not exceed 30% of the unencumbered shares of the particular company held in the Scheme at all points in time. 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) 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 (a) and (b) above while selling the securities d) The Scheme shall not 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. e) The total gross exposure related to option premium paid and received will not exceed 20% of the net assets of the Schemes. In case of any passive breach of the requirement at Paragraph (a), the respective scheme shall have 7 trading days to rebalance the portfolio. During the rebalancing period, no additional call options can be written in the said scheme Con. Std. Obs. 13 Debt Instruments: 1. Treasury Bills (T-Bills) are issued by the Government of India to meet their short term borrowing requirements. 2. 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. 3. 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. 4. Bills Rediscounting (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. 5. Repos/Reverse Repo: 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. The transaction results in collateralized borrowing or lending of funds. Presently in India, corporate debt securities, Government Securities, State Government Securities and T-Bills are eligible for Repo/Reverse Repo. The Scheme may undertake repo or reverse repo transactions in accordance with the directions issued by RBI and SEBI from time to time. 6. 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 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 coordination with the RBI. 7. “Tri-party repo” means a repo contract where a third entity (apart from the borrower and lender), called a Tri-Party 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. 8. Money market instruments permitted by SEBI/RBI, having unexpired maturities upto 1 year and shall include CP, CD, T-Bills, Repo, Reverse repo, BRDS, TREPS etc., 9. Investment in Short Term Deposits – In line with Para 12.16 of the SEBI Master Circular related to ‘Investments in Short Term Deposits (STDs) of Scheduled Commercial Banks’, pending deployment of funds the Funds may be parked in short term deposits of the Scheduled Commercial Banks, in line with the guidelines. 10. In line with Para 12.18 related to ‘Participation of mutual funds in repo in corporate debt Securities’ of the SEBI Master Circular, investments in corporate bond repo shall be made based on the policy approved by the Board of AMC and Trustee Company. The significant features are as follows: i. The base of eligible securities for mutual funds to participate in repo in corporate debt securities, is only in AA and above rated corporate debt securities. ii. The Gross exposure of the scheme to repo transactions in corporate debt securities shall not be more than 10% of the net asset scheme. iii. The cumulative gross exposure through repo transactions in corporate debt securities along with corporate debt and money market instruments and derivative positions shall not exceed 100% of the net assets of the scheme. iv. In terms of Regulation 44 (2) of the SEBI (MF) Regulations, the scheme shall borrow through repo transactions only if the tenor of the transaction does not exceed a period of six months. v. The Mutual Fund shall ensure compliance with the Seventh Schedule of the SEBI (MF) Regulations about restrictions on investments, wherever applicable, with respect to repo transactions in corporate debt securities 11. 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 and bodies. They can be issued at discount, par or premium. 12. 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 and lower the risk of default. 13. The non-convertible part of convertible securities - Convertible securities are securities which can be converted from Debt to Equity shares. The non-convertible part cannot be converted into Equity shares and work like a normal debt instrument. 14. Investments in units of mutual fund schemes – The Scheme may invest in units of mutual fund schemes in conformity with the investment objective of the Scheme and in terms of the prevailing SEBI (MF) Regulations and in line with the disclosure made in this Scheme Information Document. 15. The scheme may engage in stock lending activities as permitted under SEBI (MF) Regulations from time to time. Provided that such lent securities would not be available for sale and can lead to temporary illiquidity. 6) 16. Securitised Debt Obligations - Securitization is a structured finance process which involves pooling and repackaging of cashflow producing financial assets into securities that are then sold to investors. They are termed as Asset Backed Securities (ABS) or Mortgage Backed 40SCHEME INFORMATION DOCUMENT (SID) 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 Mortgages could be either residential or commercial properties. Further, the scheme will invest in debt instruments having Structured Obligations/Credit Enhancements in line with the guidelines and restrictions prescribed under Para 12.3 related to ‘Restrictions on Investment in debt instruments having Structured Obligations / Credit Enhancements’ of the SEBI Master Circular. 17. Derivative Instruments like Interest Rate Swaps, Forward Rate Agreement and such other derivative instruments as may be permitted under the Regulations. a) 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. b) 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. c) Interest 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 ● Obligation to buy or sell a bond at a future date. ● Standardized contract. ● Exchange traded. ● Physical/ Cash settlement. ● Daily mark to market. 18. Derivative instruments: 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. 19. Any other instruments as may be permitted by RBI/SEBI/ such other Regulatory Authority from time to time. Investments in securities will be as per the limits specified in the asset allocation table of the Scheme, subject to permissible limits laid under SEBI (MF) Regulations. For applicable regulatory investment limits, please refer to paragraph “Investment Restrictions”. 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. For applicable regulatory investment limits, please refer to paragraph “Investment Restrictions”. 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. For the purpose of further diversification and liquidity, the Scheme may invest in another scheme managed by the same AMC or by the AMC of any other Mutual Fund without charging any fees on such investments, provided that aggregate inter-scheme investment made by all schemes managed by the same AMC or by the AMC of any other Mutual Fund shall not exceed 5% of the net asset value of the Fund. 1. GUIDELINES FOR PARTICIPATION IN REPO TRANSACTIONS IN CORPORATE DEBT SECURITIES: The Scheme shall participate in repo transactions in corporate debt securities subject to following guidelines. Category and Credit Rating of Counterparty: The Scheme will enter into repo transactions only with those counterparties which are rated AA and above and which are approved by Fixed Income team and with whom the Fund has approved credit limits. In case if counterparty has more than one rating from Credit Rating Agencies, then the most conservative publicly available rating would be considered. Eligible Collateral: The Scheme will participate in repo transactions only in AAA or equivalent rated corporate debt securities and tenure of collateral shall not exceed 5 years residual maturity where the Scheme is lending. For repo transactions where the Scheme is borrowing, collateral rated AA and above will be eligible and no tenor restrictions will apply. Tenor of Repo: As per the current RBI guidelines, repo in corporate debt securities shall be undertaken for a minimum period of one day and a maximum period of one year. Accordingly, where the Scheme is lending money in repo transactions, then the tenor of repo shall not exceed a period of one week. For tenor exceeding one week, prior approval of the Investment Committee of AMC will be obtained. Where the Scheme is borrowing money in repo transactions, then the tenor of transaction shall not exceed 6 (Six) months. Applicable Hair-Cut: As per RBI guidelines, Collaterals shall be priced transparently at prevailing market prices, in the first leg of a repo. The price for the second leg shall be the price for the first leg of transaction plus interest. Currently, RBI circular provides below guidelines on haircut / margins which will be decided either by the clearing house or may be bilaterally agreed upon, in terms of the documentation governing repo transactions: i. Listed corporate bonds and debentures shall carry a minimum haircut of 2% of market value. Additional haircuts may be charged based on tenor and illiquidity of the security. ii. CPs and CDs shall carry a minimum haircut of 1.5% of market value. iii. Securities issued by a local authority shall carry a minimum haircut of 2% of market value. Additional haircut may be charged based 41THE WEALTH COMPANY MUTUAL FUND on tenor and illiquidity of the security. The above are minimum hair-cut percentages and AMC may apply higher hair-cuts depending upon various factors i.e. residual maturity, counterparty, liquidity of collateral etc. Note: The above guidelines for counterparty and hair-cuts are applicable only for transaction which are OTC trades. For Electronic Trading Platform (‘ETP’) and trades reported on Exchange, the guidelines as prescribed by the Exchange shall be applicable 2. SECURITIES LENDING: Securities lending means the lending of securities to approved intermediary 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 approved intermediary on the expiry of stipulated period. Subject to the SEBI Regulations, the Scheme may engage in securities lending. Such lending shall be made when, in view of the fund manager, it could provide reasonable returns commensurate with risks associated with such lending and shall be made in accordance with the investment objective of the Scheme. The Scheme may lend securities from its portfolio in accordance with the Regulations and applicable SEBI guidelines. Securities lending shall enable the Scheme to earn income in the form of lending fees that may partially offset its expenses and thereby reduce the effect these expenses have on the Scheme’s ability to provide investment returns that correspond generally to the performance of its Benchmark Index. The Scheme will pay administrative and other expenses / fees in connection with the lending of securities. The Scheme will comply with the guidelines for securities lending specified by SEBI/ Clearing House of stock exchange(s). The Scheme shall not deploy more than 20% of its net assets in securities lending. In addition to the above limit, in case of debt instruments, the Scheme shall not deploy more than 5% of the net assets in securities lending to any single intermediary. The Scheme will comply with all the applicable circulars issued by SEBI as regard to securities lending viz. SEBI Circular no. MFD/ CIR/01/047/99 dated February 10, 1999 and SEBI Circular No. SEBI/IMD/CIR No 14/ 187175/2009 dated December 15, 2009 and framework for short selling and borrowing and lending of securities notified by SEBI vide its circular reference no. MRD/DoP/SE/ Dep/ Cir- 14/2007 dated December 20, 2007 as may be amended from time to time. SEBI vide its circular reference no. MRD/DoP/SE/Dep/Cir-14.2007 dated December 20, 2007 has laid down a broad framework for Securities Lending & Borrowing (SLB) Mechanism. The guidelines were amended subsequently vide SEBI circulars dated October 31, 2008, January 6, 2010, October 7, 2010, November 22, 2012, May 30, 2013, November 17, 2017, and August 24, 2018. SLB is operated through the Clearing House of the Stock Exchange(s) on an automated, screen based, order-matching platform and this platform is independent of other trading platforms. All the securities traded in the Futures & Option (Derivatives) Segment and Liquid Index Exchange Traded Funds (ETFs) (An Index ETF shall be deemed ‘liquid’ provided the Index ETF has traded on at least 80% of the days over the past 6 months and its impact cost over the past 6 months is less than or equal to 1%) are eligible for lending & borrowing under the SLB. In addition to above, the scrip that fulfills the following criteria shall be considered eligible for SLB: • Scrip classified as ‘Group I security’ as per SEBI circular MRD/DoP/SE/Cir-07/2005 dated February 23, 2005; and • (b) Market Wide Position Limit (MWPL) of the scrip, as defined at para 12 (a) of Annexure 2 of the MRD/DoP/SE/Dep/Cir-14/2007 dated December 20, 2007, shall not be less than Rs.100 crores; and • (c) Average monthly trading turnover in the scrip in the Cash Market shall not be less than Rs.100 crores in the previous six months. SLB presently offers contracts of different tenures ranging from 1 day to 12 months. SLB also permits rollover facility whereby any lender or borrower who wishes to extend an existing lent or borrow position shall be permitted to roll-over such positions. The total duration of the contract after taking into account rollovers shall not exceed 12 months from the date of the original contract and multiple rollovers of a contract is permitted. However, rollover shall not permit netting of counter positions, i.e. netting between the ‘borrowed’ and ‘lent’ positions of a client. All categories of investors including retail, institutional etc. will be permitted to borrow and lend securities. Trading hours for SLB shall be from 9 AM to 5 PM on the SLB market segment of the stock exchange. Quotations (Lending Fees) are quoted per share and lot size for SLB is 1 share. First Thursday of every month is the reverse leg settlement day and in that case, the first Thursday is the non- business day, and the next working day is the settlement day for SLB transactions. SLB transactions are guaranteed by the clearing house and hence there is no settlement risk and counterparty risk. SLB provides facility for early recall/ early repayment of shares however early recall or early repayment is at the market determined rate. Clearing houses are required to frame suitable risk management systems to guarantee delivery of securities to borrower and return of securities to the lender. In case the borrower fails to meet the margin obligation, the clearing house shall obtain securities and square off the position of such defaulting borrower, failing which there will be financial close out. The treatment of corporate actions during the lending period a security is lent is follows: i. Dividend: The amount of dividend is worked and recovered from the borrower on the book closure/ record date and passed on to the lender. ii. Stock Split: The position of the borrower would be proportionately adjusted so that the lender receives the revised quantity of shares. iii. In case of other corporate actions like bonus/merger/amalgamation/open offer etc., the contracts would be foreclosed on the ex-date and the lending fees would be recovered on a pro-rata basis from the lender and returned to the borrower. iv. In the event of the corporate actions which is in nature of AGM/EGM, there shall be two set of contracts for each security available for trading: a. Contracts which shall continue to be mandatorily foreclosed in the event of AGM/EGM b. Contracts which shall not be foreclosed in the event of AGM/EGM B. WHAT ARE THE INVESTMENT RESTRICTIONS? As per the Trust Deed read with the Regulations, the following investment restrictions apply in respect of the Scheme at the time of making investments. However, all investments by the Scheme will be made in accordance with the investment objective, investment strategy and investment pattern described previously. Further, the Trustee Company/AMC may alter the above restrictions from time to time, and also to the extent the Regulations change and as permitted by RBI, so as to permit the Scheme to make its investments in the full spectrum of permitted investments in order to achieve its investment objectives. 1. The Mutual Fund under all its schemes shall not own more than 10% of any company’s paid-up capital carrying voting rights. Further, Sponsor, associate or group companies of Sponsor including Asset Management Company, through schemes of the Mutual Fund or otherwise, individually or collectively, directly or indirectly, shall not own 10% or more of the shareholding or voting rights in the asset management company. 42SCHEME INFORMATION DOCUMENT (SID) 2. As per the current regulations, a mutual fund scheme shall not invest more than 10% of its NAV in debt and money market securities issued by a single issuer which are rated AAA. Such investment limit may be extended to 12% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of directors of the asset management company. 3. Similarly, for an issuer with debt and money market securities rated AA, the single issuer exposure limit shall be 8% of the NAV (extendable up to 10% of the NAV with prior approval of the Board of Trustees and the Board of directors of the asset management company). Similarly, for an issuer with debt and money market securities rated A and below, the single issuer exposure limit shall be 6% of the NAV (extendable up to 8% of the NAV with prior approval of the Board of Trustees and the Board of directors of the asset management company). 4. The Scheme may invest in other schemes of the Mutual Fund or any other mutual fund without charging any fees, provided the aggregate inter-scheme investment made by all the schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the Net Asset Value of the Fund. 5. The Scheme shall not make any investment in: a. any unlisted security of an associate or group company of the sponsor; or b. any security issued by way of private placement by an associate or group company of the sponsor; or c. the listed securities of group companies of the sponsor which is in excess of 25% of the net assets. 6. The Mutual Fund shall get the securities purchased transferred in the name of the Fund on account of the concerned Scheme, wherever investments are intended to be of a long-term nature. 7. Mutual Funds/AMCs shall ensure that total exposure of debt schemes of mutual funds in a group (excluding investments in securities issued by Public Sector Units, Public Financial Institutions and Public Sector Banks) shall not exceed 20% of the net assets of the scheme. Such investment limit may be extended to 25% of the net assets of the scheme with the prior approval of the Board of Trustees. For this purpose, a group means a group as defined under regulation 2(mm) of SEBI (Mutual Funds) Regulations, 1996 (Regulations) and shall include an entity, its subsidiaries, fellow subsidiaries, its holding company and its associates. 8. 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 following: a. Investments 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 (Mutual Fund) Regulations, 1996 and various circulars issued thereunder. b. Exposure of mutual fund schemes in such instruments, shall not exceed 5% of the net assets of the schemes. c. All such investments shall be made with the prior approval of the Board of AMC and the Board of trustees. d. For the purpose of investment in Bills Re Discounting Scheme (BRDS), the single issuer limit and the group exposure limit shall be calculated at the issuing bank level as it is issued with recourse to the issuing bank. 9. Transfers of investments from one scheme to another scheme in the Mutual Fund shall be allowed only if: Con. Std. Obs. 30 a. Such transfers are done at the prevailing market price for quoted instruments on spot basis; b. The securities so transferred shall be in conformity with the investment objectives & policies of the Scheme to which such transfer has been made. Further, Para 12.30 of the SEBI Master Circular has prescribed elaborate guidelines for inter-scheme transfer of Securities (IST). The key extracts are as follows: a. IST shall be permitted only if other resources such as cash and cash equivalent, market borrowing, and selling securities in the market are exhausted. b. ISTs will be permitted for rebalancing of portfolio only if there is a passive breach of regulatory limits or where duration, issuer, sector, and group rebalancing are required in both the transferor and transferee schemes. c. No inter-scheme transfer of a security shall be allowed, if there is negative news or rumors in the mainstream media or an alert is generated about the security, based on internal credit risk assessment. d. If the security gets downgraded within a period of four months following such a transfer, the fund manager of the buying scheme will have to provide detailed justification to the trustees for buying such a security. 10. The Scheme may invest in another scheme being managed by the same investment manager or in any other mutual fund without charging any fees, provided the aggregate inter scheme investments made by the Scheme under the same management or in schemes under the management of any other AMC shall not exceed 5% of NAV of the Scheme. [Provided that clause shall not apply to any fund of funds scheme. 11. The fund may buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relative securities and in all cases of sale, deliver the securities: Provided that a 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 the Board. Provided that a mutual fund may enter into derivatives transactions in a recognised stock exchange, subject to such Guidelines as may be specified by the Board. 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. 12. The Fund shall get the securities purchased transferred in the name of the Fund on account of the concerned scheme, wherever investments are intended to be of a long-term nature. 13. The fund’s schemes shall not make any investment in: a. Any unlisted security of an associate or group company of the sponsor b. Any security issued by way of private placement by an associate or group company of the sponsor. c. The listed securities of group companies of the sponsor which is in excess of 25 % of the net assets. d. The investments by debt mutual fund schemes in debt and money market instruments of group companies of both the sponsor and the asset management company shall not exceed 10% of the net assets of the scheme. Such investment limit may be extended to 15% of the net assets of the scheme with the prior approval of the Board of Trustees. For this purpose, a group means a group as defined under regulation 2 (mm) of SEBI (Mutual Funds) Regulations, 1996 (Regulations) and shall include an entity, its subsidiaries, fellow subsidiaries, its holding company and its associates. 43THE WEALTH COMPANY MUTUAL FUND 14. The Scheme shall not invest in a fund of funds scheme. 15. No term loans for any purpose will be advanced by the Scheme. 16. Transactions in government securities can only be undertaken in dematerialised form. 17. The AMC may invest in the Scheme either in the initial offer or subsequently. However, it shall not charge any investment management fee on such amounts invested by it. 18. The scheme may engage in stock lending only to the extent of 20% of its total net assets. 19. 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 payout under IDCW option to the Unitholders. Provided that the Fund shall not borrow more than 20% of the net assets of any individual Scheme and the duration of the borrowing shall not exceed a period of 6 months. 20. In terms of Para 12.18 of the SEBI Master Circular titled "Participation of Mutual funds in repo transactions on Corporate Debt Securities" and SEBI circular ref. SEBI/HO/IMD/IMD PoD-2/P/CIR/2023/85 dated June 08, 2023, investments in corporate bond repo shall be made on the basis of the policy approved by the Board of AMC and Trustee Company. The significant features are as follows: 21. The Mutual Funds can participate in repos on following corporate debt securities: a. Listed AA and above rated corporate debt securities. b. Commercial Papers (CPs) and Certificate of Deposits (CDs). 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. The Gross exposure of the scheme to repo transactions in corporate debt securities shall not be more than 10% of the net asset scheme. The cumulative gross exposure through repo transactions in corporate debt securities along with corporate debt and money market instruments and derivative positions shall not exceed 100% of the net assets of the scheme. In terms of Regulation 44 (2) of the SEBI (MF) Regulations, the scheme shall borrow through repo transactions only if the tenor of the transaction does not exceed a period of six months. The Mutual Fund shall ensure compliance with the Seventh Schedule of the SEBI (MF) Regulations about restrictions on investments, wherever applicable, with respect to repo transactions in corporate debt securities. 22. All the Schemes investment will be in transferable securities (whether in capital markets or money markets or in privately placed debentures or securitised debts or bank deposits or money at call). 23. A mutual fund scheme shall not invest – a. more than 10% of its NAV in the units of REIT and InvIT; and b. more than 5% of its NAV in the units of REIT and InvIT issued by a single issuer. The fund house under all its schemes shall not own more than 10% of units issued by a single issuer of REIT and InvIT. 24. The Scheme will not enter into any transaction, which exposes it to unlimited liabilities or results in the encumbering of its assets in any way so as to expose them to unlimited liability. Total exposure of the scheme in a particular sector (excluding investments in Bank CDs, Tri- Party Repo, G-Secs, T-Bills and AAA rated securities issued by Public Financial Institutions and Public Sector Banks and such other instruments if any, as may be specified by SEBI from time to time) shall not exceed 20% or such other percentage of the net assets of the scheme, as prescribed by SEBI from time to time, unless the scheme has specifically been exempted from the requirement by SEBI. An additional exposure to financial services sector (over and above the limit of 20%) not exceeding 10% of the net assets of the scheme shall be allowed by way of increase in exposure to Housing Finance Companies (HFCs) rated AA and above and registered with National Housing Bank (NHB). Further, an additional exposure of 5% of the net assets of the scheme has been allowed for investments in securitized debt instruments based on retail housing loan portfolio and/or affordable housing loan portfolio. However, such total investment/ exposure in HFCs shall not exceed 20% of the net assets of the scheme or such other percentage of the net assets of the scheme, as prescribed by SEBI from time to time. Con. Std. Obs. 31 In order to clarify, the Investment in BRDS by the scheme shall be considered as exposure to financial services sector for the purpose of sector exposure limits. Further, to clarify please note that all the above - mentioned provisions and investments made in line with the above-mentioned circumstances/variations are independent of this scenario. 25. In line with the Para 12.16 of the SEBI Master Circular, pending deployment of the funds of the Scheme in securities in terms of the investment objective of the Scheme, the AMC may park the funds of the Scheme in short term deposits of scheduled commercial banks, subject to the guidelines issued by SEBI from time to time. Currently, the following guidelines/restrictions are applicable for parking of funds in short term deposits: i. “Short Term” for such parking of funds by the Scheme 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 the net assets in short term deposit(s) of all the scheduled commercial banks put together. However, such a limit may be raised to 20% with prior approval of the Trustee. iv. 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. v. The Scheme shall not park more than 10% of the net assets in short term deposit(s),with any one scheduled commercial bank including its subsidiaries. vi. The Scheme shall not park funds in short term deposits of a bank which has invested in that Scheme. vii. The AMC shall not charge any investment management and advisory fees for parking of funds in short term deposits of scheduled commercial banks in case of liquid and debt-oriented schemes. The above provisions will not apply to term deposits placed as margins for trading in the cash and Derivatives market. However, all term deposits placed as margins shall be disclosed 44SCHEME INFORMATION DOCUMENT (SID) in the half yearly portfolio statements under a separate heading. Details such as name of bank, amount of term deposits, duration of term deposits, and percentage of NAV should be disclosed. 26. The scheme shall not invest in unlisted debt instruments including commercial papers (CPs), other than i. government securities, ii. other money market instruments and iii. derivative products such as Interest Rate Swaps (IRS), Interest Rate Futures (IRF), etc. which are used by mutual funds for hedging. However, the scheme 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 upfront, without any credit enhancements or structured obligations) and are rated and secured with coupon payment frequency on monthly basis. (listed debt instruments shall include listed and to be listed debt instruments.) 27. The scheme shall not invest more that 10% of the portfolio of the schemes and the group exposure in the below mentioned instruments shall not exceed 5% of the debt portfolio of the schemes in: • Unsupported rating of debt instruments (i.e. without factoring - in credit enhancements) is below investment grade and • Supported rating of debt instruments (i.e. after factoring - in credit enhancement) is above investment grade. For the purpose of this provision, ‘Group’ shall have the same meaning as defined in paragraph 12.9.3.3. of the SEBI Master Circular. 28. The Scheme will invest minimum 10% in liquid assets like Cash, Government Securities, T-bills and Repo on Government Securities. 29. 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. 30. The AMC shall ensure that the investment in debt instruments having credit enhancements are 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, the AMC will initiate necessary steps to ensure protection of the interest of the investors. 31. The cumulative gross exposure through equity, debt, derivative positions (including commodity and fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by the Board from time to time should not exceed 100% of the net assets of the scheme. For further investment restrictions w.r.t. investment in derivatives please refer to the para on "Derivatives and Hedging". 32. Pursuant to Para 12.2 related to ‘Investment in Instruments having Special Features’ of the SEBI Master Circular, the mutual fund shall not invest more than 10% in instruments having special features viz. subordination to equity (absorbs losses before equity capital) and /or convertible to equity upon trigger of a pre-specified event for loss absorption. Additional Tier I bonds and Tier 2 bonds issued under Basel III framework are some instruments which may have above referred special features. In such scenarios, the scheme shall not invest: a. more than 10% of its NAV of the debt portfolio of the scheme in such instruments; and b. more than 5% of its NAV of the debt portfolio of the scheme in such instruments issued by a single issuer. 33. The Trustee Company in consultation with AMC may alter these above stated limitations from time to time, and also to the extent the Regulations change, so as to permit the Scheme to make its investments in the full spectrum of permitted investments in order to achieve its investment objectives & policies. Currently, the AMC shall follow only the said investment restrictions and not any other internal norms. As such, all investments of the Scheme will be made in accordance with the Regulations including Schedule VII thereof and the Fundamental Attributes of this Scheme. 34. The Scheme will comply with any other regulations applicable to the investments of mutual funds from time to time. All investment restrictions stated above shall be applicable at the time of making investment. 35. Participation in ETCDs shall be subject to the following investment limits: a) The exposure to ETCDs shall not be more than 10% of the net asset value of the scheme. Mutual fund schemes shall invest in ETCDs of a particular goods or commodity (single), not exceeding 10% of net asset value of the scheme. However, the limit of 10% is not applicable for investments through Gold ETFs in ETCDs having gold as underlying b) The cumulative gross exposure through equity, debt and derivative positions (including commodity derivatives) shall not exceed 100% of net asset value of the scheme. c) No mutual fund scheme shall have net short positions in ETCDs on any particular good, considering its positions in physical goods as well as ETCDs, at any point of time. The scheme shall have net short positions in ETCDs on any particular good, considering its positions in physical goods as well as ETCDs, at any point of time . d) Before investing in ETCDs having gold as the underlying, mutual funds shall put in place a written policy with regard to such investment with due approval from the Board of the AMC and the Trustees. The policy shall be reviewed by the Board of AMC and Trustees at least once a year. e) The following exposures shall not be considered in the cumulative gross exposure: a. Short position in Exchange Traded Commodity Derivatives (ETCDs) not exceeding the holding of the underlying goods received in physical settlement of ETCD contracts b. Short position in ETCDs not exceeding the long position in ETCDs on the same goods. c. Further, the mutual funds shall not write options, or purchase instruments with embedded written options in goods or on commodity futures. 45THE WEALTH COMPANY MUTUAL FUND C. FUNDAMENTAL ATTRIBUTES: Con. Std. Obs. 59 Following are the Fundamental Attributes of the scheme, in terms of Regulation 18 (15A) of the SEBI (MF) Regulations: 1. Type of scheme: An open ended scheme investing in equity, arbitrage and debt. 2. Investment Objectives: Main Objective: To provide long-term growth in capital and income through active management of a diversified portfolio across equity, arbitrage, and debt. Con. Std. Obs. 5 There is no assurance or guarantee that the investment objective of the Scheme will be achieved.. i. Investment Pattern: Refer to Section I - Part II – Section A: How will the Scheme allocate its assets? 3. Terms of Issue: i. Liquidity provisions such as Listing, Repurchase, Redemption: Being an open-ended scheme, the units are not proposed to be listed on any stock exchange. However, the Trustee reserves the right to list the units as and when open-ended Schemes are permitted to be listed under the Regulations, and if the Trustee considers it necessary in the interest of unitholders of the Scheme. Under Normal circumstances, the redemption or repurchase proceeds shall be dispatched to the unit holders within 3 Business Days from the date of redemption or repurchase. However, on exceptional circumstances, timelines may get extended as specified in the AMFI guidelines. The Scheme will offer Subscription/ Switch-in and Redemption/Switch-out of Units on every Business Day on an ongoing basis. ii. Aggregate fees and expenses charged to the scheme: a. New Fund Offer (NFO) Expenses: Refer to Section I - Part III - B. New Fund Offer (NFO) Expenses. b. Annual Scheme Recurring Expenses: Refer to Section I - Part III – Section C: Annual Scheme Recurring Expenses. iii. Any safety net or guarantee provided: Not Applicable In accordance with Regulation 18(15A) of the SEBI (MF) Regulations and as amended, and Para 1.14 related to 'Fundamental attributes' of the SEBI Master Circular, the Trustees shall ensure that no change in the fundamental attributes of the Scheme(s) and the Plan(s)/Option(s) there under or the trust or fee and expenses payable or any other change which would modify the Scheme(s) and the Plan(s)/Option(s) there under and affect the interests of Unitholders is carried out unless: • SEBI has reviewed and provided its comments on the proposal; • a written communication about the proposed change is sent to each unitholder 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 unitholders are given an option to exit at the prevailing Net Asset Value without any exit load for a period of atleast 30 days. D. INDEX METHODOLOGY (FOR INDEX FUNDS, ETFS AND FOFS HAVING ONE UNDERLYING DOMESTIC ETF) - Disclosures regarding the index, index eligibility criteria, methodology, index service provider, index constituents, impact cost of the constituents: Not applicable. E. PRINCIPLES OF INCENTIVE STRUCTURE FOR MARKET MAKERS (FOR ETFS): Not applicable. F. FLOORS AND CEILING WITHIN A RANGE OF 5% OF THE INTENDED ALLOCATION AGAINST EACH SUB CLASS OF ASSET, AS PER CLAUSE 13.6.2 OF SEBI MASTER CIRCULAR FOR MUTUAL FUNDS DATED JUNE 27, 2024 (ONLY FOR CLOSE ENDED DEBT SCHEMES): Not applicable. 46SCHEME INFORMATION DOCUMENT (SID) G. OTHER SCHEME SPECIFIC DISCLOSURES: Listing and transfer of units Listing: Being an open-ended scheme, the Units of the Scheme will not be listed on any stock exchange, at present. The AMC may, at its sole discretion, cause the Units under the Scheme to be listed on one or more Stock Exchanges. Notification of the same will be made through Customer Service Centers of the AMC and as may be required by the respective Stock Exchanges. Transfer & Transmission of Units The Unit holders are given an option to hold the Units by way of an Account Statement (physical form) or in Dematerialized (demat form). Con. Std. Obs. 57 (a) Transfer of units held in Demat mode: Units held in Demat form are transferable (subject to lock-in period, if any and subject to lien, if any marked on the units) in accordance with the provisions of SEBI (Depositories and Participants) Regulations, 2018, as may be amended from time to time. Transfer can be made only in favor of transferees who are capable of holding Units and having a Demat Account. The delivery instructions for transfer of Units will have to be lodged with the DP in requisite form as may be required from time to time and transfer will be effected in accordance with such rules / regulations as may be in force governing transfer of securities in dematerialized mode. Further, for the procedure of release of lien, the investors shall contact their respective DP. Since, any addition/deletion of name(s) from a folio is deemed as transfer of Units, additions/deletions of names are not allowed in any folio(s) of any Scheme offered by the Mutual Fund. However, a person becoming entitled to hold the Units in consequence of the death, insolvency, or winding up of the sole holder or the survivors of joint holders, upon producing evidence and documentation to the satisfaction of the Fund and upon executing suitable indemnities in favor of the Fund and the AMC, shall be registered as a Unit holder if the transferee is otherwise eligible to hold the Units. Transfer of units held in non-Demat [Statement of Account (‘SoA’)] mode: For units held in paper / physical form, if an applicant so desires to transfer units, the same can be done post conversion of units from paper / physical form to demat form. The AMC, upon submission of documents which will be prescribed from time to time, shall issue units in dematerialized form to a unit holder in a scheme within two working days of the receipt of request from the unitholder. In addition, pursuant to AMFI Best Practices Guidelines Circular No.135/BP/116/2024-25 dated August 14, 2024, read with AMFI Best Practice Guidelines Circular No. 119/2024-25 dated May 08, 2025 on ‘Standard Process for Transfer of Units held in Non-Demat [Statement of Account (‘SoA’)] mode’ all investors under Resident /non- resident Individual category can transfer units through online mode via the transaction portals of the RTA and the MF Central. The facility for transfer of units held in SoA mode shall be available only through online mode via the transaction portals of the RTA and the MF Central, i.e., the transfer of units held in SoA mode shall not be allowed through physical/ paper-based mode or via the stock exchange platforms, MFU, channel partners and EOPs etc. Partial transfer of units held in a folio shall be allowed. If the request for transfer of units is lodged on the record date, the IDCW payout/ reinvestment shall be made to the transferor. In order to mitigate the risk, redemption under the transferred units shall not be allowed for 10 days from the date of transfer. This will enable the investor to revert in case the transfer is initiated fraudulently. For details on pre-requisites, payment of stamp duty on transfer of units please refer the section ‘Transfer of units held in Non-Demat [Statement of Account (‘SOA’)] mode’ in SAI. Processing of Transmission-cum-transaction requests: If an investor submits either a financial or non-financial transaction request along with transmission request, then such transaction requests will be processed after the Units are transferred in the name of new unit holder and only upon subsequent submission of fresh request from the new unit holder post transmission. Under normal circumstances, the Fund will endeavor to process the transmission request within 10 business days, subject to receipt of complete documentation as applicable. Subject to the provisions of SEBI (Mutual Funds) Regulations, 1996 as amended from time to time and circulars issued thereunder, the AMC reserves the right to insist on transmission along with redemption request by the claimant at any point deemed necessary. For further details, please refer to SAI. Dematerialization of units a. The Unit holders are given an Option to hold the units by way of an Account Statement (Physical Con. Std. Obs. 57 (b) form) or in Dematerialized (‘Demat’) form. b. Unit holders opting to hold the units in Demat form must provide their valid Demat Account details in the specified section of the application form. c. The Applicant intending to hold the units in Demat form are required to have a valid and active beneficiary account with a Depository Participant (DP) registered with NSDL/ CDSL, KYC compliant (as per DP records) and will be required to indicate in the application the DP’s name, DP ID Number and the Beneficiary Account Number of the applicant held with the DP at the time of purchasing Units. Unitholders are requested to note that request for conversion of units held in Account Statement (non-demat) form into Demat (electronic) form or vice versa should be submitted to their Depository Participants. d. In case, Unit holders do not provide their demat account details or the demat details provided in the application form are incomplete/ incorrect or do not match with the details with the Depository records, the Units will be allotted in account statement mode provided the application is otherwise complete in all respect and accordingly, an account statement shall be sent to them. e. Further, investors also have an option to convert their physical holdings into the dematerialized mode at a later date. f. Each Option under each Plan under the Scheme held in the dematerialized form shall be identified on the basis of an International Securities Identification Number (ISIN) allotted by National Securities Depositories Limited (NSDL) and Central Depository Services Limited 47THE WEALTH COMPANY MUTUAL FUND (CDSL). The ISIN No. details of the respective option under the respective Plan can be obtained from your Depository Participant (DP) or you can access the website link www.nsdl.co.in or www.cdslindia.com.The holding of units in the dematerialized mode would be subject to the guidelines/ procedural requirements as laid by the Depositories viz. NSDL/CDSL from time to time. g. Conversion of Units from Physical mode to Dematerialized mode: If the Unit holder desires to convert the Units in a dematerialized form at a later date, the unitholder will be required to have a beneficiary account with a DP of the NSDL/CDSL and will have to submit the account statement along with a request form viz. Conversion Request Form (CRF)/ Demat Request Form (DRF) to the DP asking for the conversion of units into demat form. It may be noted that it is necessary to mention ISIN No. of the respective Option under the respective Plan on the CRF/ DRF. Re-materialization process: Re-materialization of Units will be in accordance with the provisions of SEBI (Depositories & Participants) Regulations, 1996 as may be amended from time to time. Minimum Target Amount Rs. 10,00,00,000/- (Indian rupees ten crores) (This is the minimum amount Required to operate the scheme and if this is not collected during the NFO period, then all the investors would be refunded the amount invested without any return.) Maximum Amount to be There is no upper limit on the total amount to be collected in the New Fund Offer. raised (if any) Dividend Policy (IDCW) The Trustee will endeavor to declare the IDCW as per the specified frequencies, subject to availability of distributable surplus calculated in accordance with the SEBI (Mutual Funds) Regulations, 1996 (‘SEBI (MF) Regulations’). The actual declaration of pay-out under IDCW and frequency will inter-alia, depend on availability of distributable surplus calculated in accordance with SEBI (MF) Regulations and the decisions of the Trustee shall be final in this regard. There is no assurance or guarantee to the Unit holders as to the rate of pay-out under IDCW nor the payout will be paid regularly. When units are sold, and sale price (NAV) is higher than the face value of the unit, a portion of the sale price that represents realized gains is credited to an Equalization Reserve Account which can be used to IDCW payout. The amounts can be distributed out of investors’ capital (Equalization Reserve), which is part of the sale price that represents realized gains. The quantum of IDCW and the record date may be fixed by the Trustee in their meeting. IDCW so decided shall be paid subject to availability of distributable surplus. Record date is the date that will be considered for the purpose of determining the eligibility of investors whose name appears on the register of unitholders. The AMC shall issue a notice to the public communicating the decision of IDCW declaration including the record date, within one calendar day of the decision of the Trustee, 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. The record date shall be two working days from the date of publication in at least one English newspaper or in a newspaper published in the language of the region where the Head Office of the mutual fund is situated, whichever is issued earlier. The investors should note that the Fund does not assure or guarantee declaration of IDCW under the Income Distribution cum Capital Withdrawal Option. The actual declaration of IDCW, frequency and the rate of IDCW will inter alia, depend on availability of distributable surplus calculated in accordance with SEBI (MF) Regulations and the decisions of the Trustee shall be final in this regard. There is no assurance or guarantee to the unitholders as to the rate of IDCW nor that the IDCW will be paid regularly. Post declaration of IDCW, the NAV of the Units under the Income Distribution cum Capital Withdrawal Option will stand reduced by the amount of IDCW declared and applicable statutory levy. Even though the asset portfolio will be common at the scheme level, the NAVs of the growth option and Income Distribution cum Capital Withdrawal Option in each respective Plan under the Scheme will be distinctly different after declaration of the first IDCW to the extent of distributed income, applicable tax and statutory levy, if any, and expenses relating to the distribution of the IDCW. Please note that it is mandatory for the unitholders to provide the bank account details as per SEBI guidelines. The warrants/cheque/demand draft issued under IDCW option shall be dispatched to the Unit Holders within 7 working days. from the record date. In the event of failure to dispatch the warrants/cheque/ demand draft within the stipulated 7 working days period, the AMC shall be liable to pay interest @ 15 percent per annum for the delayed period, to the Unit holders. The proceeds under IDCW option will be paid by way of ECS/EFT/NEFT/RTGS/Direct credits/any other electronic manner if sufficient banking details are available with the Mutual Fund for the Unitholder. In case of specific request for payouts by warrants/cheques/demand drafts or unavailability of sufficient details with the Mutual Fund, the payout under IDCW option will be paid by warrant/cheques/demand drafts and payments will be made in favour of the Unit holder (registered holder of the Units or, if there are more than one registered holder, only to the first registered holder) with bank account number furnished to the Mutual Fund. In case of Units under the Income Distribution cum Capital Withdrawal Option held in dematerialized mode, the IDCW pay-out will be credited to the bank account of the investor, as per the bank account details recorded with the DP. Pursuant to Para 14.2 of the SEBI Master Circular, in the event of failure to dispatch - a. Redemption or repurchase proceeds within three working days from the date of receipt of such requests and/ or b. Dividend within the stipulated seven working days period. Interest for the period of delay in transfer of redemption or repurchase or IDCW shall be payable to unitholders at the rate of 15% per annum along with the proceeds of redemption or repurchase or IDCW, as the case may be. However, under exceptional circumstances where the schemes would be unable to transfer the redemption / repurchase / IDCW proceeds to investors within the time as stipulated above, the redemption/ repurchase / IDCW proceeds shall be transferred to unitholders within such time frame, as 48SCHEME INFORMATION DOCUMENT (SID) prescribed by AMFI, in consultation with SEBI. For further details in this regard, please refer the Statement of Additional Information (SAI). However, the AMC shall not be liable to pay any interest or compensation in case of any delay in processing the redemption application beyond 3 Business Days (in case of IDCW beyond 7 working days), in case of any deficiency in the redemption application or if the AMC/RTA is required to obtain from the Investor/Unit holders any additional details for verification of identity or bank details or such additional information under applicable regulations or as may be requested by a Regulatory Agency or any government authority, which may result in delay in processing the application. Allotment (Detailed procedure) Subject to the receipt of the minimum subscription amount, allotment would be made to all the valid applications of the Unitholders received during the New Fund Offer (NFO) period. Full allotment will be made to all valid applications received during the New Fund Offer Period, subject to realization of funds. Con. Std. Obs. 60 Allotment of Units shall be completed not later than 5 business days after the close of the New Fund Offer Period. On acceptance of the application for subscription, an allotment confirmation specifying the number of units allotted by way of e-mail and/or SMS within 5 business days from the date of closure of NFO period will be sent to the Unitholders/ investors registered email address and/or mobile number. An applicant in a scheme whose application has been accepted shall have the option either to receive the statement of accounts or to hold the units in dematerialized form and the asset management company shall issue to such applicant, a statement of accounts specifying the number of units allotted to the applicant or issue units in the dematerialized form as soon as possible but not later than five working days from the date of closure of the initial subscription list or from the date of receipt of the application. In cases where the email does not reach the Unitholder/investor, the Fund/its Registrar & Transfer Agents will not be responsible, but the Unitholder/investor can request for fresh statement/ confirmation. The Unitholder/ investor shall from time to time intimate the Fund/its Registrar & Transfer Agents about any changes in his e-mail address. 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. Applicants under both the Direct and Regular Plan(s) offered under the Scheme will have an option to hold the Units either in physical form (i.e. account statement) or in dematerialized form. Where investors/Unitholders have provided an email address, an account statement reflecting the units allotted to the Unitholder shall be sent by email on their registered email address. However, in case of Unit Holders holding units in the dematerialized mode, the Fund will not send the account statement to the Unit Holders. The statement provided by the Depository Participant will be equivalent to the account statement. All Units will rank pari passu, among Units within the same Option in the Scheme concerned as to assets, earnings and the receipt of IDCW distributions, if any, as may be declared by the Trustee. Units in dematerialised form: Unit holders will have an Option to hold the units by way of an Account Statement or in Dematerialized (‘Demat’) form. Unit holders opting to hold the units in Demat form must provide their Demat Account details in the specified section of the application form. The Applicant intending to hold the units in Demat form are required to have a beneficiary account with a Depository Participant (DP) registered with NSDL / CDSL and will be required to indicate in the application the DP’s name, DP ID Number and the Beneficiary Account Number of the applicant held with the DP at the time of purchasing Units. Unitholders are requested to note that request for conversion of units held in Account Statement (non-demat) form into Demat (electronic) form or vice versa should be submitted to their Depository Participants. In case Unit holders do not provide their demat account details or the demat details provided in the application form are incomplete / incorrect or do not match with the details with the Depository records, the Units will be allotted in account statement mode provided the application is otherwise complete in all respect and accordingly an account statement shall be sent to them. Post NFO allotment: All Applicants whose cheques/payments towards purchase of Units have been realised will receive a full and firm allotment of Units, provided that the applications are complete in all respects and are found to be in order. Pursuant to Clause 8.4 of SEBI Master Circular for Mutual Funds dated June 27, 2024, in respect of purchase of units of the Scheme, including switch-in and systematic transactions (Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs)), the closing NAV of the day is applicable on which the funds are available for utilization irrespective of the size and time of receipt of such application with effect from February 01, 2021. For further details, refer provisions specified under “Cut off timing for subscriptions/redemptions/switches” in this SID. Any redemption or switch out transaction in the interim is liable to be rejected at the sole discretion of the AMC. Subject to the SEBI Regulations, the AMC / Trustee may reject any application received in case the application is found invalid/incomplete or for any other reason in their sole discretion. The Mutual Fund reserves the right to recover from an investor any loss caused to the Scheme on account of dishonour of cheques issued by him/her/it for purchase of Units. No unit certificates will be issued. Refund The AMC will refund the application money to applicants whose applications are found to be incomplete, invalid or have been rejected for any other reason whatsoever. The Refund proceeds will be paid by way of NEFT/RTGS/ Direct credits/IMPS/any other electronic manner if sufficient banking details are available with the Mutual Fund for the Unitholder or else through dispatch of Refund instruments within 5 business days of the closure of NFO period. In absence of the required banking details to process the refund through electronic manner, the refund instruments will be dispatched within 5 business days of the closure of NFO period. If there are delays in ascertainment of credits, the refunds are made within 5 business day from the date of ascertaining the credit to the scheme/AMC account or matching of transaction whichever is later. In the event of delay beyond 5 business days, the AMC shall be liable to pay interest at 15% per annum or such other rate of interest as may be prescribed from time to time. Refund orders will be marked “A/c Payee only” and drawn in the name of the applicant (in the case of a sole applicant) and in the name of the first applicant in all other cases, or by any other mode of payment as authorised by the applicant. All refund orders will be sent by registered post or as permitted by Regulations. 49THE WEALTH COMPANY MUTUAL FUND Who can Invest This is an indicative list, and prospective investors are advised to satisfy themselves that they are not prohibited by any law governing them and any Indian law from investing in the Scheme and are This is an indicative list, and authorized to purchase units of mutual funds as per their respective constitutions, charter documents, investors shall consult their corporate/other authorizations and relevant statutory provisions. financial advisor to ascertain 1. Indian Resident adult individuals either singly or jointly (not exceeding three) or on an Anyone or whether the scheme is suitable to Survivor basis their risk profile. 2. Hindu Undivided Family (HUF) through Karta 3. Minor through parent/legal guardian 4. Partnership Firms including limited liability partnership firms 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 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 authorized 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. Army, Air Force, Navy and other paramilitary units and bodies created by such institutions 12. Scientific and Industrial Research Organizations 13. Multilateral Funding Agencies/Bodies Corporate incorporated outside India with the permission of Government of India/RBI 14. Provident/ Pension/ Gratuity Fund to the extent they are permitted 15. Other schemes of The Wealth Company mutual fund or any other mutual fund subject to the conditions and limits prescribed by SEBI Regulations 16. Trustee, AMC or Sponsor or their associates may subscribe to Units under the Scheme 17. NPS Trust 18. Non-Profit Organization (NPO) / Non-Government Organization (NGO) / FCRA 19. Such other person/entity/institution as be decided by the AMC from time to time. 20. 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 details, PAN details as mentioned under the paragraph “Anti Money Laundering and Know Your Customer”, updated bank account details including cancelled original cheque leaf of the new account and his specimen Signature duly authenticated by his banker. No further transactions shall be allowed till the status of the minor is changed to major. Pursuant to clause 17.6 of SEBI Master Circular No. SEBI/HO/IMD/IMD-PoD- 1/P/CIR/2024/90 dated June 27, 2024 investors are required to note that the minor shall be the sole unit holder in a folio. Joint holders will not be registered. Note: Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) residing abroad / FPIs 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, 2017 for investing in / redeeming units of the mutual funds subject to conditions set out in the aforesaid regulations. 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 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. Dishonoured cheques are liable not to be presented again for collection, and the accompanying application forms are liable to be rejected. 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. Pursuant to Clause 17.6 of SEBI Master Circular for Mutual Funds dated June 27, 2024, the following process shall be applicable for investments made in the name of a minor through a guardian: a. 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. For existing folios, the AMCs shall insist upon a Change of Pay-out Bank mandate before redemption is processed. Irrespective of the source of payment for subscription, all redemption proceeds shall be credited only in the verified bank account of the minor, i.e. the account the minor may hold with the parent/ legal guardian after completing all KYC formalities. b. 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 details, updated bank account details including cancelled original cheque leaf of the new account. This in regard, the investors are required to submit the ‘Minor attaining majority – request form to change status’ available on the AMC’s website www.unionmf.com. Upon the minor attaining the status of major, no further transactions shall be allowed till the status of the minor is changed to major. c. Any instructions registered for Systematic Investment Plan (SIP), Systematic Transfer Plan (STP) and Systematic Withdrawal Plan (SWP) shall be suspended when the minor attains majority, till the status is changed to major. 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 50SCHEME INFORMATION DOCUMENT (SID) 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. For further details, please refer SAI. Who cannot Invest It should be noted that the following persons cannot invest in the Scheme: 1. Any individual who is a foreign national or any other entity that is not an Indian resident under the Foreign Exchange Management Act, 1999 (FEMA Act) except where registered with SEBI as a FPI or otherwise explicitly permitted under FEMA Act/ by RBI/ by any other applicable authority, or as stated in the exception in point no. 5 here under. 2. Pursuant to RBI A.P. (DIR Series) Circular No. 14 dated September 16, 2003, Overseas Corporate Bodies (OCBs) cannot invest in Mutual Funds. 3. NRIs residing in Non-Compliant Countries and Territories (NCCTs) as determined by the Financial Action Task Force (FATF), from time to time. 4. Residents of Canada as defined under the applicable laws of Canada. 5. U.S. Person* (including all persons residing in U.S., U.S. Corporations or other entities organized under the laws of U.S), except lump sum subscription and switch transaction requests received from Non- resident Indians/Persons of Indian origin who at the time of such investment, are physically present in India and submit only a physical transaction request along with such documents/ undertakings, etc. as may be prescribed by the AMC/Mutual Fund from time to time, and subject to compliance with all applicable laws and regulations prior to investing in the Scheme, and provided that such persons shall not be eligible to invest through the SIP route/systematic transactions. 6. As per 12.26.11 of SEBI Master Circular dated June 27, 2024, AMC shall not onboard Foreign Portfolio Investors (FPIs) in schemes investing in ETCDs until FPIs are permitted to participate in ETCDs. Hence FPIs shall not be allowed to invest in this scheme. *The term “U.S. Person” means any person that is a U.S. Person within the meaning of Regulations under the Securities Act of 1933 of the United States or as defined by the U.S. Commodity Futures Trading Commission or as per such further amended definitions, interpretations, legislations, rules etc., as may be in force from time to time. The physical application form(s) for transactions (in non-demat mode) from such U.S. persons will be accepted only at the AMC official points of acceptance of transactions of the Fund in India. Additionally, such transactions in physical application form(s) will also be accepted through Distributors of the AMC and other platforms in India, subject to receipt of such additional documents/undertakings, etc., as may be stipulated by the AMC/ Trustee from time to time. The investor shall be responsible for complying with all applicable laws for such investments. The AMC/ Trustee reserves the right to put the application form/transaction request on hold/reject the subscription/ transaction request and redeem the units, if already allotted, as the case may be, as and when identified by the AMC that the same is not in compliance with the applicable laws, the terms and conditions stipulated by the AMC/Trustee from time to time and/or the documents/undertakings provided by such investors are not satisfactory. Such redemption will be processed at the applicable Net Asset Value and subject to applicable taxes and exit load, if any. If an existing Unit Holder(s) subsequently becomes a U.S. Person or Resident of Canada or having tax residency in these countries, then such Unit Holder(s) will not be able to purchase any additional Units in any of the Schemes of the Fund except in the manner stated in point no. 5 above. The Mutual Fund reserves the right to include/exclude new/existing categories of investors to invest in the Scheme from time to time, subject to SEBI Regulations and other prevailing statutory regulations, if any. The Mutual Fund/Trustee/ AMC may redeem Units of any Unitholder in the event it is found that the Unitholder has submitted information either in the application or otherwise that is false, misleading or incomplete or Units are held by any person in breach of the SEBI Regulations, any law or requirements of any governmental, statutory authority. If an existing Unit Holder(s) subsequently becomes a U.S. Person or Resident of Canada, then such Unit Holder(s) will not be able to purchase any additional Units in any of the Schemes of the Fund except in the manner stated in point no. 5 above. The Mutual Fund reserves the right to include/exclude new/existing categories of investors to invest in the Scheme from time to time, subject to SEBI Regulations and other prevailing statutory regulations, if any. The Mutual Fund/Trustee/ AMC may redeem Units of any Unitholder in the event it is found that the Unitholder has submitted information either in the application or otherwise that is false, misleading or incomplete or Units are held by any person in breach of the SEBI Regulations, any law or requirements of any governmental, statutory authority. 51THE WEALTH COMPANY MUTUAL FUND How to Apply and • Investors can obtain application form and Key Information Memorandum from the Official Points of Other Details Acceptance (OPAs) of AMC, and RTA’s (KFin) branch office. Investors can also download application form / Key Information Memorandum or apply through the website of AMC viz. Con. Std. Obs. 35 www.wealthcompanyamc.com/locate-us • The list of official points of acceptance, collecting banker details etc. is available on the link https:// For further details, please refer to Section ‘How to Apply’ of the SAI and Application form for the instructions. The policy regarding reissue Not applicable 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, on the The Units of the Schemes held in demat and non-demat mode may be transferable in line with applicable right to freely retain or statutory requirements. dispose of units being In view of the same, additions/deletions of names will not be allowed under any folio of the scheme. offere However, the said provisions will not be applicable in case a person (i.e. a transferee) becomes a holder of the units by operation of law or upon enforcement of pledge, then the AMC shall, subject to production of satisfactory evidence and submission of such documents, proceed to effect the transfer, if the intended transferee is otherwise eligible to hold the units of the scheme. The said provisions in respect of deletion of names will not be applicable in case of death of a unit holder (in respect of joint holdings) as this is treated as transmission of units and not transfer. RIGHT TO RESTRICT REDEMPTION AND/OR SUSPEND REDEMPTION OF THE UNITS: 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 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 above mentioned eventualities have the ability to impact 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 (i.e. within 1-4 Business Days) 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 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. Right to Limit Fresh Subscription The Trustees reserves the right at its sole discretion to withdraw / suspend the allotment / Subscription of Units in the Scheme temporarily or indefinitely, at the time of NFO or otherwise, if it is viewed that increasing the size of such Scheme may prove detrimental to the Unit holders of such Scheme. An order to Purchase the Units is not binding on and may be rejected by the Trustees or the AMC unless it has been confirmed in writing by the AMC and/or payment has been received. Such restrictions can be placed by the Trustees or the AMC for any other exceptional circumstances which may be deemed fit for the purpose of national/investor safety, calamities beyond imagination, subject to SEBI (MF) Regulations / guidelines issued from time to time. 52SCHEME INFORMATION DOCUMENT (SID) Cut off timing for Cut off timing for subscriptions/ redemptions/ switches: 3.00 p.m. subscriptions/ redemptions/ switches Where a request for purchase / redemption / switch is received after the cut-off time as mentioned above, the request will be deemed to have been received on the next Business Day. This is the time before which The below cut-off timings and applicability of NAV shall be applicable in respect of valid applications your application (complete in received at the Official Point(s) of Acceptance on a Business Day. all respects) should reach the Applicable NAV for Purchase/Subscription of units: official points of acceptance. • In respect of valid applications received upto 3.00 p.m. and where the funds for the entire amount are available for utilization before the cut-off time i.e., 3.00 p.m. without availing any credit facility, whether intra-day or otherwise - the closing NAV of the day shall be applicable. • In respect of valid applications received after 3.00 p.m. and where the funds for the entire amount are available for utilization on the same day or before the cut-off time of the next business day without availing any credit facility, whether intra-day or otherwise - the closing NAV of the next Business Day shall be applicable. • Irrespective of the time of receipt of application, where the funds are not available for utilization before the cut-off time without availing any credit facility, whether intra-day or otherwise – the closing NAV of the Business Day on which the funds are available for utilization, shall be applicable. For allotment of units in respect of purchase application it shall be ensured that: (i) Application is received before the applicable cut-off time. (ii) Funds for the entire amount of subscription / purchase as per the application are credited to the bank account of the schemes before the cut-off time. (iii) The funds are available for utilization before the cut-off time without availing any credit facility whether intra-day or otherwise, by the schemes. Applicable NAV for Switch-ins: In case of switch from one scheme to another scheme received, applicable NAV for switch-out transaction shall be based on the time of receipt of application as per the cut-off time as applicable to the concerned switch-out scheme. The applicable NAV for switch-in transaction shall be based on the time of availability of funds for utilization by the switch-in scheme as per applicable cut-off time of the switch- in scheme. Funds allocation from switch-out scheme to switch-in scheme shall be in line with the timelines for redemption payout. For allotment of units in respect of switch-in request it shall be ensured that: (i) Application for switch-in is received before the applicable cut-off time. (ii) Funds for the entire amount of subscription / purchase as per the switch-in request are credited to the bank account of the respective switch-in schemes before the cut-off time. (iii) The funds are available for utilization before the cut-off time without availing any credit facility whether intra-day or otherwise, by the switch-in scheme. Further, it may be noted that: a) Where funds are transferred / received first and application is submitted thereafter, date and time of receipt of the application shall be considered for NAV applicability. b) In case of systematic transactions, NAV will be applied basis realization of funds in the scheme account. This shall be applicable for all Systematic transactions (Systematic Investment Plans as well as for Systematic Transfer Plans) irrespective of amount and registration date of the systematic transactions. Applicable NAV for redemptions including switch-outs: In respect of valid applications received upto 3.00 pm on a business day by the Mutual Fund, same day’s closing NAV shall be applicable. In respect of valid applications received after the cut off time by the Mutual Fund: the closing NAV of the next business day. Note: The Fund shall calculate NAV for each business day in respect of the Scheme. Valid applications for ‘switch-out’ shall be treated as applications for Redemption and valid applications for ‘switch-in’ shall be treated as applications for Purchase, and the provisions of the Cut-off time, purchase / redemption price, minimum amounts for Purchase /Redemption and the Applicable NAV as applicable to Purchase and Redemption, as mentioned in above paragraph, shall be applied respectively to the ‘switch-in’ and ‘switch-out’ applications. Repurchase / Redemptions including Switch-outs for Segregated Portfolio is not allowed. However, the unit of Segregated Portfolio will be listed on the recognized Stock Exchange. Where can the applications Applications for purchase/redemption/switches be submitted at any of the Designated Investor Service for purchase/redemption Centres mentioned in this Scheme Information Document or any other location designated as such by switches be submitted? the AMC, at a later date. The addresses of the Designated Investor Service Centres are given at the end of this Scheme Information Document and also on the website, www.wealthcompanyamc.com/contact-us. Investors in cities other than where the Designated Investor Service Centres (DISC) are located, may forward their application forms to any of the nearest DISC, or apply online on our website www.wealthcompanyamc.com 53THE WEALTH COMPANY MUTUAL FUND Application/transaction request can be submitted via AMC digital properties, RTA Digital properties / MF Central / Exchange Infrastructure (MFSS and BSE StAR, EOPs, Authorized Platforms, etc. Minimum Amount for Purchase (Incl. Switch-in) Additional Purchase Repurchase/ Purchase/ Redemption/ (Incl. Switch-in) Redemption Switches Minimum of Rs. 1,000/- and Minimum of Rs. 1,000/- and ‘Any amount’ or ‘any in multiples of any amount in multiples of any amount number of units’ as Con. Std. Obs. 61 thereafter thereafter requested by the investor. The same will not be applicable for any investment made in compliance with para 6.10 of SEBI Master Circular related to ‘Alignment of interest of Designated Employees of Asset Management Companies (AMCs) with the Unitholders of the Mutual Fund Schemes’. Minimum balance to be There is no minimum balance requirement. maintained and consequences Con. Std. Obs. 36 of non-maintenance Accounts Statements FOR INVESTORS WHO OPT TO HOLD UNITS IN PHYSICAL (NON-DEMAT) MODE AND DO NOT HAVE DEMAT ACCOUNT: Con. Std. Obs. 60 Account Statements: AMC shall send allotment confirmation specifying the number of units allotted to the investor by way of email and/ or SMS to the investors’ registered email address and/or mobile number not later than 5 (five) business days from the date of receipt of application. Thereafter, a Consolidated Account Statement (CAS) shall also be sent to the unit holder, in whose folio transactions viz. subscriptions, redemptions, switches, IDCW pay-out, etc. have taken place during that month, on or before 12th of the succeeding month by e-mail/on or before 15th day of the succeeding month by physical mode where valid email is not registered. CAS shall contain details relating to all the transactions** carried out by the investor, across all schemes of all mutual funds, during the month and holding at the end of the month. **The word ‘transaction’ shall include purchase, redemption, switch, IDCW pay- out, IDCW reinvestment, and Systematic Withdrawal Plan, Systematic Transfer Plan and bonus transactions. In case of specific request is received from investors, account statement shall be issued to the investors within 5 (five) business days from the receipt of such request without any charges. The unit holder may request for a physical account statement by writing/calling the AMC/ISC/R&T. Half Yearly Consolidated Account Statements: A CAS detailing holding across all schemes of all mutual funds at the end of every six months (i.e. September/ March), shall be sent by mail/e-mail on or before 21st day of succeeding month by physical (18th day by email), to all such Unit holders in whose folios no transaction has taken place during that period. The half yearly consolidated account statement will be sent by e-mail to the Unit holders whose e- mail address is available, unless a specific request is made to receive in physical. Investors should note that, no separate account statements will be issued to investors opted to hold units in electronic (demat) mode since the statement of account furnished by depository participants will contain the details of transactions. The half-yearly CAS shall also provide the details of actual commission paid and such other disclosures in line with Para 14.4.3. related to 'disclosures in the Consolidated Account Statement' of the SEBI Master Circular. Further, the Disclosure on the Half Yearly Consolidated Account Statement is also mentioned in the SAI. FOR INVESTORS WHO OPT TO HOLD UNITS IN DEMAT MODE: The Unitholders are given an Option to subscribe to/hold the units by way of an Account Statement or in Dematerialized (‘Demat’) form. Unitholders opting to hold the units in electronic (demat) form must provide their Demat Account details in the specified section of the application form. The Unit holder intending to hold the units in Demat form are required to have a beneficiary account with a Depository Participant (DP) (registered with NSDL / CDSL) and will be required to indicate in the application the DP's name, DP ID Number and the beneficiary account number of the applicant held with the DP at the time of subscribing to the units. Applicants must ensure that the sequence of the names as mentioned in the application form matches with that of the beneficiary account held with the DP. Names, PAN details, KYC details etc. mentioned in the Application Form will be verified against the Depository records. In case the unit holders do not provide their Demat Account details or provide incomplete details or the details do not match with the records as per Depository(ies), units shall be allotted in physical (non-demat) form, subject to it being complete in all other aspects. Unitholders who have opted to hold and thereby allotted units in electronic (demat) form will receive payment of redemption / IDCW proceeds into bank account linked to their Demat account. However, Special Products/ Facilities such as Systematic Transfer Plan, Systematic Withdrawal Plan, Switching etc. offered by Wealth Company AMC/Mutual Fund under the scheme shall be available for unitholders in case the units are held/opted to be held in physical (non-demat) mode. Further, the 54SCHEME INFORMATION DOCUMENT (SID) Investors also have an option to subscribe to / hold units in demat form through fresh investment applications for SIP. Under SIP option, units will be allotted based on the applicable NAV as per provisions of this SID and will be credited to demat account of the investors upon realisation of funds. The allotment of units in demat form shall be subject in terms of the guidelines/ procedural requirements as laid by the Depositories (NSDL/CDSL) from time to time. In case, the Unitholder desires to hold the Units in a Dematerialized /Rematerialized form at a later date, the request for conversion of units held in physical (non-demat) mode into demat form or vice-versa should be submitted along with a Demat/Remat Request Form to their Depository Participant(s). Investors should ensure that the combination of names in the account statement is the same as that in the demat account. Communication through Email: For those unit holders who have provided an email address, the AMC will send the communication by email. Unitholders who receive email statements may download the documents after receiving e-mail from the Mutual Fund. Should the Unit holder experience any difficulty in accessing the electronically delivered documents, the Unit holder 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. Dividend/IDCW The payment of dividend/IDCW to the unitholders shall be made within seven working days from the record date. For further details, please refer the section ‘Dividend Policy (IDCW)’ above. Redemption The redemption or repurchase proceeds shall be dispatched to the unitholders within three working days from the date of redemption or repurchase. All redemption requests received prior to the cut-off time (i.e., 3.00 p.m.) on any Business Day at the Official Points of Acceptance of Transactions will be considered accepted on that Business Day, subject to the redemption requests being complete in all respects and will be priced on the basis of Redemption Price for that day. Requests received after the cut-off time (i.e., 3:00 p.m.) will be treated as though they were accepted on the next Business Day. Further, as per AMFI circular no. AMFI/35P/MEM-COR/74/2022-23 dated January 16, 2023, in case of exceptional situations the AMC might follow the additional timelines for making redemption payments. For further information, please refer to the SAI. Bank Mandate 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. Payment will be made only in the Bank. Con. Std. Obs. 61 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 and the SAI. Further, please refer to “Bank Account details mandatory for all investors” in the SAI. Any one of the following documents: 1.1. Cancelled original cheque leaf (where first Unit holder name and bank account number printed on the face of the cheque). Unit holders should without fail cancel the cheque and write 'Cancelled' on the face of it to prevent any possible misuse; 1.2. Self attested copy of the bank passbook or a statement of bank account with current entries not older than 3 months having the name and address of the first Unit holder and account number; 1.3. Letter from the bank on its letterhead certifying that the Unit holder maintains an account with the bank, the bank account information like bank account number, bank branch, account type, the MICR code of the branch & IFSC Code (where available) and specimen signature of the Unit holder. And Self attested copy of any one of the documents admissible as Proof of Identity (PoI) as may be prescribed by SEBI from time to time. Note: The above documents shall be submitted in Original. If copies are furnished, the same must be submitted at the Investor Service Centres of AMC (ISCs) where they will be verified with the original documents to the satisfaction of the Fund. The original documents will be returned across the counter to the Unit holder after due verification. In case the original of any document is not produced for verification, then the copies should be attested by the bank manager with his / her full signature, name, employee code, bank seal and contact number. In case of folios held on behalf of minors, when a minor attains the age of majority, the documents pertaining to the major investor's bank details registration must be submitted to the Fund. In case of those unit holders, who hold units in demat form, the bank mandate available with the respective DP will be treated as the valid bank mandate for the purpose of pay-in at the time of subscription or purchase/ pay-out at the time of maturity or at the time of any corporate action. In view of the above, Multiple Bank Mandate registration facilities with the AMC will not be applicable to Demat account holders For more details, kindly refer to SAI. Delay in payment of The Asset Management Company shall be liable to pay interest to the unitholders at rate as specified redemption /repurchase vide clause 14.2 of SEBI Master Circular for Mutual Funds dated June 27, 2024, by SEBI for the period proceeds/dividend (IDCW) of such delay. Delay in payment of IDCW proceeds: As per Chapter 11 of the Master Circular, or as amended from time to time, the AMC shall dispatch payment of the IDCW proceeds within 7 working days from the record date. However, in the event of failure to dispatch/ credit the IDCW proceeds within the above time, interest @ 15% per annum or such rate as may be specified by SEBI, would be paid to the Unit holders for the period of delay from the stipulated period for the dispatch/payment of IDCW payments. Delay in payment of redemption / repurchase proceeds: As per Para 14.1.1 of the Master Circular, or as amended from time to time, the AMC shall transfer the redemption / repurchase proceeds within 3 working Days*, from the date of acceptance of redemption request at any of the Investor Service Centers. In the event of failure to dispatch the redemption proceeds within the above time, the Asset Management Company 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). SEBI has further advised the mutual funds that in the event of payment of interest to the Unit holders, such Unit holders should be informed about the rate and the amount of interest paid to them. 55THE WEALTH COMPANY MUTUAL FUND * As per AMFI circular no. AMFI/35P/MEM-COR/74/2022-23 dated January 16, 2023, in case of exceptional situations the AMC might follow the additional timelines for making redemption payments. For further information, please refer to the SAI. If the Unit holder fails to provide the Bank mandate, the request for redemption would be considered as not valid and the Fund retains the right to reject/withhold the redemption until a proper bank mandate is furnished by the Unitholder and the provision with respect of penal interest in such cases will not be applicable/ entertained. The mode of payment may be direct credit/ECS/cheque, or any other mode as may be decided by AMC in the interest of investors. If the investor(s)/unitholder(s) submit(s) redemption request accompanied with request for change of Bank mandate or submits a redemption request within 7 days from the date submission of a request for change of Bank mandate details, the Asset Management Company will process the redemption but the release of redemption proceeds shall be deferred on account of additional verification, but will be within the regulatory limits as specified by Securities and Exchange Board of India time to time. Unclaimed Redemption and The Unclaimed Redemption amounts and through IDCW option amounts may be deployed by the Fund Income Distribution cum in money market instruments and/or in a separate plan of Liquid scheme / Money Market Mutual Fund Capital Withdrawal Amount scheme floated by the Fund specifically for deployment of these Unclaimed amounts. Further, the AMC shall not charge any exit load in this plan and TER (Total Expense Ratio) of such plan shall be capped at 50 bps. Investors who claim the unclaimed amounts during a period of three years from the due date shall be paid Con. Std. Obs. 52 initial unclaimed amount along-with the income earned on its deployment. Investors, who claim these amounts after 3 years, shall be paid initial unclaimed amount along-with the income earned on its deployment till the end of the third year. After the third year, the income earned on such unclaimed amounts shall be used for the purpose of investor education. The AMC shall provide on its website www.wealthcompanyamc.com, the list of names and addresses of investors in whose folios there are unclaimed amounts. The details of such unclaimed redemption/amount received from IDCW option, if any, shall be disclosed in the Abridged Scheme wise Annual Report sent to the Unit Holders. The website of the AMC shall also provide information on the process of claiming the unclaimed amount and the necessary forms / documents required for the same. Further, the information on unclaimed amount along-with its prevailing value (based on income earned on deployment of such unclaimed amount), shall be separately disclosed to investors through the periodic statement of accounts / Consolidated Account Statement sent to the investors. Disclosure w.r.t investment In addition to the details mentioned in the SAI, the following procedures shall apply to the investments by minors made on behalf of Minors:- a. The minor shall be the sole Unitholder in a folio. Joint holders will not be registered. Con. Std. Obs. 37 b. The minor Unitholder should be represented either by a natural parent (i.e. father or mother) or by a legal guardian i.e., a court appointed guardian. c. Payment for investment by means of Cheque, Demand Draft or any other mode shall be accepted from the bank account of the minor or from a joint account of the minor with the guardian only. For existing folios, the AMCs shall insist upon a Change of Pay-out Bank mandate before redemption is processed. d. Copies of birth certificate/passport evidencing the date of birth of the minor, relationship proof of the natural parent/ Court Order appointing the legal guardian (as the case may be) should be mandatorily provided while placing a request for subscription on behalf of a minor investor. Upon attainment of majority by the minor, the folio/s should be regularised forthwith. The AMC may specify such procedures for regularisation of the Folio/s, as may be deemed appropriate from time to time. Post attainment of majority by the minor Unitholder, the Mutual Fund/ AMC will not be obliged to accept any instruction or transaction application made under the signature of the representing guardian of the Folio/s. The folio/s will be frozen for operation by the representing guardian on the day the minor Unitholder attains the age of majority and no transactions will be permitted till the documents for changing the status are received by the AMC / Mutual Fund. e. The AMC/ Mutual Fund will register standing instructions like SIP/ STP/SWP etc. for a folio held by a minor Unitholder (either for existing folio or new folio) from the parent/ legal guardian only till the date when the minor Unitholder attains the age of majority, even though such instructions may be for a period beyond that date. Change of Status from Minor to Major: All financial transactions/standing instructions/ systematic and non-systematic transactions etc. will be suspended i.e. the folio(s) will be frozen for operation by the parent/ legal guardian from the date the minor Unitholder attains the age of majority as per the records maintained by the AMC. Prior to the minor Unitholder attaining the age of majority, the AMC/ Mutual Fund will send a notice to the minor Unitholder at the registered correspondence address advising such minor Unitholder to submit, on attaining the age of majority, an application form along with prescribed documents to change the status of the folio/s from ‘minor’ to ‘major’. Till the receipt of such intimation/information from the minor turned major Unitholder, the existing contract as signed by the parent/ legal guardian of the minor Unitholder will continue. Ongoing price for Units of the Scheme shall be available for subscription (purchase)/switch- in at the Applicable NAV. subscription (purchase)/ In terms of Para 10.4.1 titled to 'Empowering investors through transparency in payment of commission switch-in (from other and load structure' of the SEBI Master Circular, SEBI has prohibited charging of entry load for all the schemes/ plans of the schemes of Mutual Fund. mutual fund) by investors. Pursuant to Para 10.6 titled 'No Load on Bonus Units and Units allotted on Reinvestment of Dividend' of This is the price you need to the SEBI Master Circular, no entry load or exit load shall be charged in respect of bonus units and units pay for purchase/ switch-in. allotted on IDCW reinvestment. Ongoing Price for redemption The Redemption Price of the Units will be based on the Applicable NAV (for respective plan and option of This is the price you will receive the Scheme) subject to the prevalent exit load provisions. for redemptions/switch outs. The repurchase price, however, will not be lower than 95% of the NAV subject to SEBI (Mutual Funds) Regulations, 1996 as amended from time to time. The Redemption Price of the Units will be computed as follows: Redemption Price = Applicable NAV (for respective plan and option of the Scheme) * (1-Exit Load as applicable to the investor). The applicable exit load shall be subject to the tenure of investment of the investor in the scheme vis-à- 56SCHEME INFORMATION DOCUMENT (SID) vis the exit load structure applicable when investor had invested in the scheme. Example: An investor invests on April 1, 2024, when the applicable exit load for the scheme was 2% if redeemed within 1-year, else nil. Scenario 1) In case investor redeems before April 1, 2025, then applicable exit load would be 2%. Now suppose the same investor decides to redeem his 1000 units. The prevailing NAV is Rs 25/-. Hence, the sale or redemption price per unit becomes Rs. 24.50/- i.e., 25*(1-2%). The investor therefore gets 1000 x 24.50 = Rs. 24,500/-. Scenario 2) In case investor redeems on or after April 1, 2025, then applicable exit load would be nil. Now suppose the same investor decides to redeem his 1000 units. The prevailing NAV is Rs 30/-. Hence, the sale or redemption price per unit will be Rs. 30/- i.e., 30*(1- 0). The investor therefore gets 1000 x 30 = Rs. 30,000/-. Requirement of Minimum The Scheme shall have a minimum of 20 investors, and no single investor shall account for more than investors in the Scheme 25% of the corpus of the Scheme. The two conditions mentioned above shall be complied with in each calendar quarter, on an average basis, as specified by SEBI/AMFI. In case the Scheme does not have a minimum of 20 investors in the stipulated period, the provisions of Regulation 39(2)(c) of the SEBI (Mutual Funds) Regulations, 1996, would become applicable automatically without any reference from SEBI and accordingly the Scheme shall be wound up and the units would be redeemed at applicable NAV. If there is a breach of the 25% limit by any investor over the quarter, a rebalancing period of one month would be allowed and thereafter the investor who is in breach of the rule shall be given 15 days’ notice to redeem his exposure over the 25% limit. Failure on the part of the said investor to redeem his exposure over the 25% limit within the aforesaid 15 days would lead to automatic redemption by the Mutual Fund at the applicable Net Asset Value on the 15th day of the notice period. The Scheme shall adhere to the requirements prescribed by SEBI from time to time in this regard. 57THE WEALTH COMPANY MUTUAL FUND III. OTHER DETAILS A. In case of Fund of Funds Scheme, Details of Benchmark, Investment Objective, Investment Strategy, TER, AUM, Year wise performance, Top 10 Holding/ link to Top 10 holding of the underlying fund should be provided. Not applicable as the Scheme is not a Fund of Fund Scheme. B. PERIODIC DISCLOSURES SUCH AS HALF YEARLY DISCLOSURES, HALF YEARLY RESULTS, ANNUAL REPORT Portfolio Disclosures: In terms of SEBI Regulation, Mutual Funds/ AMCs will disclose portfolio (along with ISIN) as on the last day of the month/half-year for all Schemes on its website and on the website of AMFI (www.amfiindia.com) within 10 days from the close of each month/ half-year respectively in a user-friendly and downloadable spreadsheet format. The Mutual Fund/AMCs will send to Unit holders a complete statement of the scheme portfolio, within ten days from the close of each month/half-year whose email addresses are registered with the Mutual Fund. Further, the Mutual Fund/AMC shall publish an advertisement disclosing the hosting of such half yearly scheme portfolios on its website and on the website of AMFI (www.amfiindia.com). Mutual Funds/ AMCs will also provide a physical copy of the statement of its scheme portfolio, without charging ay cost, on specific request received from a unit holder. The same is available on the AMC’s website on the link: www.wealthcompanyamc.com/downloads/portfolio Half Yearly Results: Mutual Fund/AMC shall within one month from the close of each half year, (i.e. 31st March and on 30th September), host a soft copy of its unaudited financial results on its website (https://www.wealthcompanyamc.com/) and AMFI’s website. Further, the Mutual Fund/AMC shall publish an advertisement disclosing the hosting of such unaudited half yearly financial results on their website and in atleast one English daily newspaper having nationwide circulation and, in a newspaper, having wide circulation published in the language of the region where the Head Office of the Mutual Fund is situated. The same is available on the AMC’s website on the link: https://www.wealthcompanyamc.com/ Annual Report: The scheme-wise annual report or an abridged summary thereof shall be provided to all Unit holders not later than four months from the date of closure of the relevant accounting year whose email addresses are registered with the Mutual Fund. The physical copies of Scheme wise Annual report will also be made available to the unit holders, at the registered offices at all times. The scheme wise annual report will also be hosted on its website (link: www.wealthcompanyamc.com/downloads/portfolio /) and on the website of AMFI (www.amfiindia.com). The physical copy of the abridged summary shall be provided to the investors without charging any cost, if a specific request through any mode is received from the unit holder. Further, the Mutual Fund/AMC shall publish an advertisement disclosing the hosting of scheme wise annual reports on its website (link: www.wealthcompanyamc.com/downloads/) and on the website of AMFI (www.amfiindia.com). Con. Std. Obs. 38 Periodic disclosure of Risk-o-meter of the Scheme and of the Benchmark: As per Clause 17.4 of SEBI Master Circular for Mutual Funds dated June 27, 2024, the Risk-o-meter of the Scheme shall be evaluated on a monthly basis and any change in risk-o-meter shall be communicated to the unitholders of the Scheme by way of Notice cum Addendum and by way of an e-mail or SMS. The Mutual Fund/ AMC shall disclose the Risk-o-meter along with portfolio disclosure for all schemes on its website and on AMFI website within 10 days from the close of each month. The Mutual Fund/AMC shall disclose the risk level of schemes as on March 31 of every year, along with number of times the risk level has changed over the year, on its website and AMFI website. The Mutual Fund/ AMC shall publish the scheme wise changes in Risk-o-meter in scheme wise Annual Reports and Abridged summary as per the prescribed format. The product label of the Scheme shall be disclosed on the front page of initial offering application form, SID, KIM, common application form and scheme advertisements as prescribed. As per Clause 5.16.1 of SEBI Master Circular for Mutual Funds dated June 27, 2024, the AMC is required to disclose risk-o-meter of the Scheme wherever the performance of the Scheme is disclosed; and risk-o-meter of the Scheme and benchmark wherever the performance of the Scheme vis-à-vis that of the benchmark is disclosed, including promotional material or the disclosures stipulated by SEBI from time to time. Investment by the Designated Employees of AMC in the Scheme: Pursuant to para 6.10 of SEBI Master circular no. SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/90 dated June 27, 2024, pertaining to ‘Alignment of interest of Designated Employees of AMC’s with the Unitholders of the Mutual Fund Schemes’, investors are requested to note that a part of compensation of the Designated Employees of AMC, as defined by SEBI, shall be mandatorily invested in units of the schemes in which they have a role/oversight effective October 01, 2021. Further, investors are requested to note that such mandatory investment in units of the scheme shall be made on the day of payment of salary and in proportion to the AUM of the schemes in which such Designated Employee has a role/oversight. AMC shall ensure compliance with the provisions of the said circular and further, the disclosure of such investment shall be made at monthly aggregate level showing the total investment across all relevant employees in scheme on website of AMC (Link: https://www.wealthcompanyamc.com/StatutoryDisclosure and quarterly on Stock Exchange Further, in accordance with the said regulatory requirement, the minimum application amount and minimum redemption amount as specified for the scheme will not be applicable for investment made in scheme in compliance with the aforesaid guidelines. Monthly Average Asset Under Management: The Mutual Fund shall disclose the Monthly AAUM under different categories of schemes as specified by SEBI in the prescribed format on a monthly basis on its website viz. https://www.wealthcompanyamc.com/ and forward to AMFI within 7 working days from the end of the month. Scheme Summary Document The AMC shall provide on its website the Scheme Summary Document which is a standalone scheme document which contains all the applicable details of the Scheme in the prescribed format. The document shall be updated by the AMC on a monthly basis or on changes in any of the specified fields, whichever is earlier. The document shall be uploaded on the websites of the AMC, AMFI and Stock Exchanges in 3 data formats, namely PDF, Spreadsheet and a machine-readable format (either JSON or XML). 58SCHEME INFORMATION DOCUMENT (SID) C. Transparency/NAV Disclosure (Details with reference to information given in Section I) Con. Std. Obs. Q • The AMC will calculate and disclose the first NAV of the Scheme within 5 business days from the date of allotment. Subsequently, the NAV will be calculated and disclosed for every Business Day. The NAVs of the Scheme will be calculated up to two decimals. AMC shall update the NAV on the AMFI website (www.amfiindia.com) and on the website of the Mutual Fund www.wealthcompanyamc.com/mutual- fund-scheme/nav-update by 11.00 pm on the day of declaration of the NAV/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 the 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 NAV. Con. Std. Obs. 41 • The NAV will be calculated in the manner as provided in this SID or as may be prescribed by the SEBI Regulations from time to time. The NAV will be computed up to two decimal places. D. STAMP DUTY Stamp Duty: A stamp duty @ 0.005% of the transaction value would be levied on applicable mutual fund transactions. Accordingly, pursuant to levy of stamp duty, the number of units allotted on purchase/switch-in transactions (including IDCW reinvestment) to the unitholders would be reduced to that extent. Note: Transaction charges have been removed pursuant to SEBI Circular No.: SEBI/HO/IMD/PoD1/CIR/P/2025/115 dated August 08, 2025 E. ASSOCIATE TRANSACTIONS Please refer to Statement of Additional Information (SAI) for details. F. TAXATION For details on taxation, please refer to the clause on "Taxation" in the SAI apart from the following: Tax implications on distributed income (hereinafter referred to as either 'Income from units of Mutual Funds' or 'capital gains') by Mutual Funds: Registered Taxation Details Resident Investors Mutual Fund (I) Income from Unit of Mutual Fund (IDCW) Tax on Distributed Resident: Nil Income under Dividend Income tax rate applicable to the Unit holders as per their income slabs Option Non-Resident: Income tax rate applicable to the Unit holders as per their income slabs Withholding Tax rate Resident: Nil 10% (if income from units of Mutual fund exceeds INR 10,000 in a financial year) Non-Resident: 20%2 + applicable surcharge + 4% Cess3 (II) Equity Oriented Mutual Funds Long Term (as units are Resident: procured after July 23, 12.5% without indexation7 + applicable Surcharge + 4% Cess3 2024) Non-Resident: (period of holding more 12.5% without indexation and foreign currency fluctuation benefit + than 12 months) applicable surcharge + 4% Cess3 Short Term (period of Resident: holding less than or equal 20% + applicable surcharge + 4% Cess3 to 12 months for listed units and 24 months for Non-Resident: unlisted units) 20% + applicable surcharge + 4% Cess3 TDS on Capital Gain Resident: Nil Nil Non-Resident: 20% + applicable surcharge + 4% Cess i (III) Other than Equity Oriented Funds (including specified mutual funds8): Tax Rates Resident: Nil Individual/ HUF Income tax rate applicable to the Unit holders as per their income slabs + applicable Surcharge + 4% Cess3 Domestic Company: 30% + Surcharge as applicable + 4% Cess3 25%4 + Surcharge as applicable + 4% Cess3 22%5 + 10% Surcharge + 4% Cess3 15%5 + 10% Surcharge5 + 4% Cess3 Non-Resident: Income tax rate applicable to the Unit holders as per their income slabs 59THE WEALTH COMPANY MUTUAL FUND TDS on Capital Gain Resident: Nil Nil Non-Resident: 20% + applicable surcharge + 4% Cess3 (IV) Other than Equity Oriented Funds (other than specified mutual funds): Capital Gains L] Resident: Nil 12.5% without indexation7 + applicable Surcharge + 4% Cess3 Non-Resident: 12.5% without indexation and foreign currency fluctuation benefit + applicable surcharge + 4% Cess3 Short Term (period of Resident: Nil holding less than or equal Individual/ HUF to 12 months for listed Income tax rate applicable to the Unit holders as per their income slabs units and 24 months for + applicable Surcharge + 4% Cess3 Domestic unlisted units) Company: 30% + Surcharge as applicable + 4% Cess3 25%4 + Surcharge as applicable + 4% Cess3 22%5 + 10% Surcharge + 4% Cess3 15%5 + 10% Surcharge5 + 4% Cess3 Non-Resident: Income tax rate applicable to the Unit holders as per their income slabs. TDS on Capital Gain Resident: Nil Nil Non-Resident: 20% + applicable surcharge + 4% Cess3 Notes: 1 Equity Oriented Funds will also attract Securities Transaction Tax at applicable rates. 2 Section 196A of the Act provides that a person responsible for paying to a non-resident (other than FPI) any income in respect of units of mutual fund shall withhold taxes at the rate of 20% (plus applicable surcharge and cess) or rate provided in the relevant DTAA. whichever is lower, provided the payee furnishes a tax residency certificate and such other information and documents as may be prescribed to claim treaty benefit. 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 grants relevant 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. 3 Health and education Cess shall be applicable at 4% on aggregate of base tax and surcharge. 4 In case of domestic company, the rate of income-tax shall be 25% if its total turnover or gross receipts in the financial year 2023-24 does not exceed Rs. 400 crores. 5 In case of a domestic company whose income is chargeable to tax under section 115BAB or section 115BAA of the Income-Tax Act, 1961, tax rate @15% or @ 22% shall be applicable respectively, subject to conditions mentioned therein. 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%. 6 Short term/ long term capital gain tax will be deducted at the time of redemption of units in case of non-resident investors only (other than FPI). However, as per section 196A of the Act the withholding tax of 20% (plus applicable surcharge and cess) is applicable on any income in respect of units of mutual fund in case of non-residents. 7Section 112A provides that long term capital gains arising from transfer of a long-term capital asset being a unit of an equity-oriented fund shall be taxed at 12.5% (without indexation and foreign currency fluctuation benefit) of such capital gains exceeding one lakh twenty five thousand rupees. The concessional rate of 12.5% shall be available only if STT has been paid on transfer in case of units of equity-oriented mutual funds. Specified Mutual Fund means a Mutual Fund by whatever name called, where not more than thirty five per cent of its total proceeds is invested in the equity shares of domestic companies. As per the Finance (No. 2) Act 2024 (applicable from financial year 2025-26) the “specified mutual fund” means: a. a mutual Fund by whatever name called, which invest more than sixty five percent of the total proceeds in debt and money market instrument or; b. a fund which invests sixty five percent or more of its proceeds in units of fund referred to in sub-clause (a) The information given above is as per the prevailing tax laws and might be subject to change. Refer more information in SAI. In view of the individual nature of the tax consequences for each individual/non-individual/NRIs, each investor is advised to consult his/her own professional tax advisor. AMC has the right to higher TDS on conservative basis and in line with the Income Tax provisions (including for IDCW), if PAN is not provided or PAN found to be Invalid as per the Income Tax database. G. RIGHTS OF UNITHOLDERS Please refer to SAI for details. H. LIST OF OFFICIAL POINTS OF ACCEPTANCE: The details pertaining to official points of acceptance of AMC and RTA are available on the website of the AMC at www.wealthcompanyamc.com 60SCHEME INFORMATION DOCUMENT (SID) Details of the Registrar and Transfer Agent: Name KFin Technologies Limited Selenium Building, Tower-B, Plot No 31 & 32, Address Financial District, Nanakramguda, Serilingampally, Hyderabad, Rangareddy, Telangana India - 500 032. Website Address wwww.kfintech.com I. PENALTIES, PENDING LITIGATION OR PROCEEDINGS, FINDINGS OF INSPECTIONS OR INVESTIGATIONS FOR WHICH ACTION MAY HAVE BEEN TAKEN OR IS IN THE PROCESS OF BEING TAKEN BY ANY REGULATORY AUTHORITY There have been no penalties or pending litigation on the AMC in the last financial year since incorporation. The investors may refer to the details on the website of the Company at link: www.wealthcompanyamc.com/mfscheme/equity- fund/{scheme-name}/SID Con. Std. Obs. 48 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. Con. Std. Obs. 63 The Board of Directors of Pantomath Trustee Private Limited and the Board of Directors of Wealth Company Asset Management Holdings Private Limited have approved the Scheme Information Documents, as per their resolutions dated July 22, 2025. Con. Std. Obs. 66 Mutual Fund investments are subject to market risks, read all scheme related documents carefully. For Wealth Company Asset Management Holdings Private Limited (Asset Management Company to The Wealth Company Mutual Fund) Sd/- Prasanna Pathak Deputy CEO Date: Place: 61