WSIF Equity Ex-Top 100 Long-Short Fund

INVESTMENT STRATEGY INFORMATION DOCUMENT SECTION I WSIF Equity Ex-Top 100 Long-Short Fund SO. 1 (An open ended investment strategy investing in equity and equity related instruments including limited short exposure in equity through derivative instruments, of stocks other than large cap stocks) This product is suitable for investors Risk-band* Benchmark Risk- band (as who are seeking SO. 3 applicable) To generate long-term capital appreciation by investing in a diversified portfolio of equity and equity related instruments while employing limited short exposure through derivatives. Risk band Level 5 Risk band Level 5 NIFTY 500 Total Return Index (TRI) *The Risk Band has been as specified by AMFI. Product labelling assigned during the New Fund Offer (NFO) is based on internal assessment of the investment strategy characteristics or model portfolio and the same may vary post NFO when the 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: Investment strategy re-opens on: investment strategy will re-open for continuous Sale and Repurchase within 5 business days from the date of allotment of units under NFO Name of SIF : WSIF(offered by The Wealth Company Mutual Fund) Name of the Mutual Fund : The Wealth Company Mutual Fund Name of Asset Management Company : Wealth Company Asset Management Holdings Private Limited Name of Trustee Company : Pantomath Trustee Private Limited Address, Website of the entities (including SIF) : Pantomath Nucleus House, Saki Vihar Road, Andheri East, Mumbai, Maharashtra 400072, https://www.wealthcompanyamc.in/wsif/ 1The particulars of the investment strategy have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations 1996, (herein after referred to as SEBI (MF) Regulations) as amended till date and circulars issued thereunder filed with SEBI, along with a Due Diligence Certificate from the AMC. The units being offered for public subscription have not been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy of the Investment Strategy Information Document. The Investment Strategy Information Document sets forth concisely the information about the investment strategy that a prospective investor ought to know before investing. Before investing, investors should also ascertain about any further changes to this Investment Strategy Information Document after the date of this Document from the SIF/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 WSIF, Mutual Fund, Standard Risk Factors, Special Considerations, Tax and Legal issues and general information on https://www.wealthcompanyamc.in/wsif/ SAI is incorporated by reference (is legally a part of the Investment Strategy Information Document). For a free copy of the current SAI, please contact your nearest Investor Service Centre or log on to our website https://www.wealthcompanyamc.in/wsif/ The Investment strategy Information Document (Section I and II) should be read in conjunction with the SAI and not in isolation. Investors are advised to note that investments in Specialized Investment Fund involves relatively higher risk including potential loss of capital, liquidity risk and market volatility. Please read all investment strategy related documents carefully before making the investment decision. This Investment Strategy Information Document is dated ___________. 2INDEX SECTION 1 ......................................................................................................................................................................... 4 PART I. HIGHLIGHTS/SUMMARY OF THE INVESTMENT STRATEGY ............................................................. 4 DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY .......................................................................... 10 PART II. INFORMATION ABOUT THE INVESTMENT STRATEGY .................................................................... 11 A.HOW WILL THE INVESTMENT STRATEGY ALLOCATE ITS ASSETS? .............................................................. 11 B.WHERE WILL THE INVESTMENT STRATEGY INVEST? ....................................................................................... 14 C.WHAT IS THE INVESTMENT APPROACH? .............................................................................................................. 15 D.HOW WILL THE INVESTMENT STRATEGY BENCHMARK ITS PERFORMANCE? ........................................... 16 E.WHO MANAGES THE INVESTMENT STRATEGY? ................................................................................................. 17 F.HOW IS THE INVESTMENT STRATEGY DIFFERENT FROM EXISTING INVESTMENT STRATEGIES OF THE SIF? ........................................................................................................................................... 17 G.HOW HAS THE INVESTMENT STRATEGY PERFORMED .................................................................................... 17 H.ADDITIONAL INVESTMENT STRATEGY RELATED DISCLOSURES ................................................................ 17 PART III- OTHER DETAILS .........................................................................................................................................19 A. COMPUTATION OF NAV .......................................................................................................................................... 19 B.NEW FUND OFFER (NFO) EXPENSES ..................................................................................................................... 20 C.ANNUAL RECURRING EXPENSES .......................................................................................................................... 20 D.LOAD STRUCTURE .................................................................................................................................................... 23 SECTION II ......................................................................................................................................................................24 I.INTRODUCTION ..........................................................................................................................................................24 A.DEFINITIONS/INTERPRETATION ............................................................................................................................ 24 B.RISK FACTORS ........................................................................................................................................................... 24 II. INFORMATION ABOUT THE INVESTMENT STRATEGY: ...............................................................................33 A.WHERE WILL THE INVESTMENT STRATEGY INVEST ....................................................................................... 33 B.WHAT ARE THE INVESTMENT RESTRICTIONS? ................................................................................................. 41 C. FUNDAMENTAL ATTRIBUTES ............................................................................................................................... 50 D.OTHER INVESTMENT STRATEGY SPECIFIC DISCLOSURES ............................................................................. 51 III. OTHER DETAILS .....................................................................................................................................................65 A.PERIODIC DISCLOSURES SUCH AS HALF YEARLY DISCLOSURES, HALF YEARLY RESULTS, ANNUAL REPORT ......................................................................................................................................................... 65 B.SCENARIO ANALYSIS FOR DERIVATIVES POSITIONS (AS SPECIFIED BY AMFI) ........................................ 67 C. LIQUIDITY RISK MANAGEMENT TOOLS AND ITS APPLICABILITY .............................................................. 68 D. TRANSPARENCY/NAV DISCLOSURE ................................................................................................................... 68 E. TRANSACTION CHARGES AND STAMP DUTY ................................................................................................... 68 F. ASSOCIATE TRANSACTIONS .................................................................................................................................. 69 G. TAXATION ................................................................................................................................................................. 69 H. RIGHTS OF UNITHOLDERS ..................................................................................................................................... 70 I. LIST OF OFFICIAL POINTS OF ACCEPTANCE ....................................................................................................... 70 J. 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 .......................................................................................................... 71 3SECTION 1 PART I. HIGHLIGHTS/SUMMARY OF THE INVESTMENT STRATEGY Sr. No. Title Description Name of the Investment WSIF Equity Ex-Top 100 Long-Short Fund I. Strategy Category of the Equity Ex-Top 100 Long-Short Fund II. Investment Strategy Type of Investment An open ended investment strategy investing in equity and equity related Strategy instruments including limited short exposure in equity through derivative III. instruments, of stocks other than large cap stocks. IV. Investment strategy code (To be disclosed after obtaining investment strategy code) SO. 7 Investment objective To generate long-term capital appreciation by investing primarily in equity and equity-related instruments of stocks outside the top 100 by market capitalization, while utilizing limited short exposure through derivative. V. There is no assurance that the investment objective of the Investment strategy will be achieved. SO. 5 Liquidity/listing details Units of the Investment Strategy may be purchased or redeemed on all Business Days at NAV based prices subject to the prevailing load structure. Under normal circumstances the AMC shall dispatch the redemption proceeds within three working days from date of receipt of valid redemption VI. request from the Unit holder. The Investment Strategy being open ended, sale and repurchase is available on a continuous basis and therefore the Units of the Investment Strategy are presently not proposed to be listed on any stock exchange. VII. Benchmark (Total NIFTY 500 Total Return Index (TRI) Return Index) SO. 25 Justification: The NIFTY 500 TRI is an ideal benchmark for an equity long-short fund because it offers broad market representation across large, mid, and small-cap stocks, aligning with the diverse investment universe of such funds. Its total return framework, accounting for both capital gains and dividends, accurately reflects the fund’s potential returns, while its diversified sector exposure and balanced risk profile mirror the market- neutral strategies often employed by long-short funds. Subscription frequency Daily (only Business days) VIII. Redemption frequency Daily (only Business days) IX. 4X. NAV disclosure The AMC will prominently calculate and disclose the first NAV under the Investment Strategy not later than 5 Business Days from the date of allotment. The AMC will calculate and disclose the NAVs on all Business Days. The AMC shall update the NAVs on website of the Association of Mutual Funds in India - AMFI (www.amfiindia.com) before 11.00 p.m. on every Business Day and shall also update the NAVs on the website of AMC SIF https://www.wealthcompanyamc.in/wsif/ 11.00 p.m. on every Business Day. SO. 41 Further Details in Section II. XI. Applicable timelines Time line for: Dispatch of redemption proceeds: 3 working days from the date of redemption or repurchase (under normal circumstances). Further, in exceptional situations additional timelines in line with AMFI letter no. AMFI/35P/MEM -COR/74/2022-23 dated January 16, 2023 will be applicable for transfer of redemption or repurchase proceeds to the unitholders. Dispatch of IDCW (if applicable): Within 7 working days from the record date. XII. Plans and Options Investors are offered the following Investment Plan(s) to invest in the Investment strategy: Plans/Options and sub options under the Investment strategy Each Plan offers Regular Plan and Direct Plan. i. Direct Plan: Direct Plan is only for investors who purchase /subscribe Units in Investment strategy directly with the Fund and is not available for investors who route their investments through a Distributor. ii. Regular Plan: Regular Plan is available for all type of investors investing through a Distributor. All the plans will have common portfolio. Options under each Plan(s) – i. Growth ii. Income Distribution cum Capital Withdrawal (IDCW) (Payout and Re- investment Facility) Default Plan Options – - Between “Growth” or “IDCW ” option, the default will be treated as “Growth”. - In “IDCW” option between “IDCW Payout” or “IDCW Reinvestment”, the default will be treated as “IDCW Payout” For detailed disclosure on default plans and options, kindly refer SAI. 5XIII. Load Structure Entry Load : NIL Exit Load: NIL XIV. Minimum Application Minimum amount of initial investment during NFO and On an Amount/switch in Ongoing basis under all Plans and Options: • During NFO: Rs.10,00,000/- and in multiples of Re. 100/- thereafter • On continuous basis: Rs.10,00,000/- and in multiples of Re. 100/- thereafter • Minimum amount for accredited investor during NFO and Continuous basis: Rs.1,00,000/- and in multiples of Re. 100/- thereafter. Systematic Investment Plan (SIP) / Systematic Withdrawal Plan (SWP) /Systematic Transfer Plan (STP) shall only commence upon re-opening of the Investment Strategy. On continuous basis: The clauses on SWP and STP will be subject to compliance with provisions mentioned under “Minimum investment threshold” as stated under Clause “Minimum threshold requirement and consequences of non- maintenance” of this ISID. Note: Allotment of units will be done after deduction of applicable stamp duty. SIP Rs. 1000/- and in multiples of Re. 100 thereafter [Minimum 6 installments] SWP Rs. 1000/- and in multiples of Re. 100 thereafter [Minimum 6 installments] STP Rs. 1000/- and in multiples of Re. 100 thereafter [Minimum 6 installments] Rs. 10,000/- and in multiples of Re. 100/- thereafter XV. Minimum Additional Purchase Amount XVI. Minimum Redemption/switch Rs. 1,000/- and in multiples of Re. 1/- thereafter out amount The redemption will be subject to compliance with provisions mentioned under “Minimum investment threshold” as stated under Clause “Minimum threshold requirement and consequences of non- maintenance” of this ISID. XVII. Notice Period Not Applicable. This is an open-ended investment strategy. XVIII. New Fund Offer Period NFO Opens on: This is the period during which a NFO closes on: new investment strategy sells its units to the investors. Minimum duration to be 3 working days and will not be kept open for more than 15 days. Any changes in dates will be published through addendum on AMC SIF website i.e. https://www.wealthcompanyamc.in/wsif/ SO. 34 6XIX. New Fund Offer Price: This is Rs. 10/- per unit the price per unit that the investors have to pay to invest during the NFO. XX. Segregated portfolio/ side The AMC / Trustee shall decide on the creation of segregated portfolio of pocketing disclosure the Investment strategy in case of a credit event/actual default at issuer level. Accordingly, Investor holding units of segregated portfolio may not able to liquidate their holding till the time recovery of money from the issuer. SO. 53 For Details, kindly refer SAI. XXI. Swing pricing disclosure Not Applicable SO. 54 XXII. Stock lending/short Stock Lending by the Investment Strategy selling The Investment Strategy shall adhere to the following limits should it engage in Stock Lending: 1. Not more than 20% of the net assets of the Investment Strategy can generally be deployed in Stock Lending. 2. Not more than 5% of the net assets of the Investment Strategy can generally be deployed in Stock Lending to any single approved intermediary i.e the limit of 5% will be at broker level. Short Selling by the Investment Strategy The Investment Strategy may engage in short selling of securities in accordance with the framework relating to Short Selling as specified by SEBI. For Details, kindly refer SAI XXIII. 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 download application form / Key SO. 35 Information Memorandum or apply through the website of SIF viz. https://www.wealthcompanyamc.in/wsif/ Applications for purchase/redemption/switches to be submitted at any of the Designated Investor Service Centers (DISC) mentioned in this ISID or any other location designated as such by the AMC, at a later date. The addresses of the DISC are given on the website https://www.wealthcompanyamc.in/wsif/ 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 https://www.wealthcompanyamc.in/wsif/ More Details in section II. 7XXIV. 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. 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 XXV. Specific attribute of the None investment strategy (such as lock-in, duration in case of close ended investment strategies as applicable) 8XXVI. Special product/facility The Investment Strategy offers following facilities during NFO: available during the NFO and 1. Systematic Investment Plan on ongoing basis For investors, the SIF offers a Systematic Investment Plan (SIP) at all our Official point of acceptance of the AMC locations. Under this Facility, an investor can invest a fixed amount per frequency. The Investment Strategy offers daily, weekly, fortnightly, monthly or quarterly Systematic Investment Plan. On continuous basis: Systematic Investment Plan (SIP) / Systematic Withdrawal Plan (SWP) /Systematic Transfer Plan (STP) shall only commence upon re-opening of the Investment Strategy. (i) Systematic Investment Plan - daily, weekly, fortnightly, monthly or quarterly (ii) Systematic Withdrawal Plan - monthly, quarterly (iii) Systematic Transfer Plan - daily, weekly, fortnightly, monthly, quarterly basis SIP Rs. 1000/- and in multiples of Re. 100 thereafter [Minimum 6 installments] SWP Rs. 1000/- and in multiples of Re. 100 thereafter [Minimum 6 installments] STP Rs. 1000/- and in multiples of Re. 100 thereafter [Minimum 6 installments] Applications Supported by Blocked Amount (ASBA) facility ASBA facility will be provided to the investors subscribing to NFO of the Investment Strategy. It shall co-exist with the existing process, wherein cheques / demand drafts are used as a mode of payment. Please refer ASBA application form for detailed instructions. Stock Exchange Infrastructure Facility*: The investors can subscribe to the Units of the Investment Strategy through Mutual Fund Service System (“MFSS”) platform of National Stock Exchange and “BSEStAR MF” platform of Bombay Stock Exchange Ltd. MF Utility (MFU)*: Investor can also subscribe to the Units of the Investment Strategy through MFU which allows transacting in multiple Investment Strategies of various Specialized Investment Funds with a single form / transaction request and a single payment instrument / instruction. The list of Point of Services of MFUI is published on the website of MFUI at http://www.mfuindia.com/ and may be updated from time to time. Further, Systematic Investment Plan (SIP) / Systematic Withdrawal Plan (SWP) / Systematic Transfer Plan (STP) facilities would be available to the investors. For further details of above special products / facilities, investors/ unit holders are kindly requested to refer SAI. *If these are offered by the respective intermediaries and permitted by SEBI XXVII. Weblink TER for last 6 months, Daily TER and Investment strategy factsheet are not applicable as this is a new investment strategy. 9DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY SO. 55 It is confirmed that: (i) The Investment Strategy 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 Investment strategy 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 Investment Strategy Information Document are true, fair and adequate to enable the investors to make a well informed decision regarding investment in the Investment Strategy. (iv) The intermediaries named in the Investment Strategy Information Document and Statement of Additional Information are registered with SEBI and their registration is valid, as on date. (v) The contents of the Investment Strategy Information Document including figures, data, yields etc. have been checked and are factually correct (vi) A confirmation that the AMC has complied with the compliance checklist applicable for Investment Strategy Information Document other than cited deviations/ that there are no deviations from the regulations (vii) Notwithstanding anything contained in this Investment Strategy Information Document, the provisions of the SEBI (Mutual Funds) Regulations, 1996 and the guidelines there under shall be applicable. (viii) The Trustees have ensured that the WSIF Ex-Top 100 Equity Long-Short Fund approved by them is a new product offered by WSIF and is not a minor modification of any existing Investment Strategy. Sd/- Date: Suruchi Wanare Chief Compliance Officer Place: Mumbai 10PART II. INFORMATION ABOUT THE INVESTMENT STRATEGY A. HOW WILL THE INVESTMENT STRATEGY ALLOCATE ITS ASSETS? This includes asset allocation table giving the broad classification of assets and indicative exposure level in percentage terms. The asset allocation should be consistent with the investment objective of the Investment Strategy and SEBI circular on Regulatory framework for Specialized Investment Funds (SIF). Under normal circumstances, asset allocation will be as follows: Instruments Indicative allocations (% of total assets) Minimum Maximum Investment in equity and equity related instruments of companies excluding the 65 100 top 100 companies by market capitalization (including unhedged short exposure)* Investment in equity and equity related instruments of companies - top 100 0 35 companies by market capitalization Investments in Debt & Money Market Instruments 0 35 Investments in InVITS 0 20 *Maximum short exposure through unhedged derivative positions in equity and equity related instruments : 25% In accordance with the clause 3.2 and 6.1.5 of the SEBI Circular Regulatory framework for Specialized Investment Funds (‘SIF’) dated February 27, 2025, clause 12.24.1 of the SEBI Master Circular for Mutual Funds (‘Master Circular’) dated June 27, 2024, the cumulative gross exposure through equity, debt, derivative positions (including commodity and fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by SEBI from time to time should not exceed 100% of the net assets of the investment strategy. In terms of clause 2.7.1 of the SEBI Master Circular – “Large Cap” shall consist of 1st to 100th company in terms of full market capitalization; “Mid Cap” shall consist of 101st to 250th company in terms of full market capitalization; “Small Cap” shall consist of 251st company onwards in terms of full market capitalization; SO.17 Indicative Table (Actual instrument/percentages may vary subject to applicable SEBI circulars) SO. 18 Sl. Type of Instrument Percentage of exposure to net assets Circular references no 1. Securities Lending The Investment strategy shall adhere to Clause 12.11 of SEBI Master Circular on the following limits should it engage in Mutual Funds dated June 27, 2024 Stock Lending: 1. Not more than 20% of the net assets of the Investment strategy can generally be deployed in Stock Lending. 2. Not more than 5% of the net assets of the Investment strategy can generally be deployed in Stock Lending to any single approved intermediary i.e. the limit of 5% will be at broker level. 2. Derivatives for non- hedging and other than for portfolio rebalancing purposes Unhedged Short Exposure: Upto 25% in Clause 3 of SEBI Circular dated February equity and equity related instruments of 27, 2025 on Regulatory Framework for SO. 19 SO. 20 other than large cap stocks Specialized Investment Funds (‘SIF’) 113. Securitized Debt Upto 10% of the debt portion of the Clause 12.15 of SEBI Master Circular on investment strategy Mutual Funds dated June 27, 2024. 4. Overseas Securities Upto 20% of the net assets of the Clause 12.19 of the SEBI Master circular Investment strategy. on Mutual Funds dated June 27, 2024 SO. 15 5. InVITS Upto 20% of the net assets of the Clause 13 in the Seventh Schedule and Investment strategy and not more than 10 Regulation 49AA of SEBI (Mutual per cent of its NAV in the units of InvIT Funds) Regulations, 1996 issued by a single issuer. 6. Debt Instruments Up to 10% of the debt portfolio of the Clause 12.3 of SEBI Master Circular on having Structured Investment strategy and the group Mutual Funds dated June 27, 2024 Obligation (SO rating) exposure in such instruments shall not and / or Credit exceed 5% of the debt portfolio of the Enhancements (CE Investment strategy rating) 7 Debt Instruments with upto 10% of the NAV debt portfolio of Clause 12.2 of SEBI Master Circular on special features i.e. investment strategy ; and not more than Mutual Funds dated June 27, 2024 Additional Tier I 5% of the NAV debt portfolio in (AT1)/ Perpetual instruments issued by a single issuer Bonds and Tier 2 Bonds 8. Triparty Repo Upto 20% of the net assets of the Clause 1 of Seventh Schedule of SEBI (TREPS) investment strategy (Mutual Funds) Regulations, 1996 on Government securities or treasury bills. 9. Repo/ reverse repo Not exceeding 10% of the net assets of Clause 12.18 of SEBI Master Circular for the investment strategy Mutual Funds dated June 27, 2024. transactions in corporate debt securities 10. Clause 12.25 of SEBI Master Circular for Hedged positions in Mutual Funds dated June 27, 2024. Upto 100 % of the net assets of the equity and equity investment strategy related instruments 11 Clause 12.25.8 of SEBI Master circular Covered call option As per regulatory limit The Investment strategy shall not invest in the below securities: Sr.No. Type of Instrument 1. Credit Default Swaps 2. foreign securitized debt Cash or cash equivalents with residual maturity of less than 91 days may be treated as not creating any exposure. SEBI vide letter dated November 3, 2021 has clarified that Cash Equivalent shall consist of Government Securities, T-Bills and Repo on Government Securities. SO. 14 The fund will use any of the following strategies for portfolio construction / rebalancing i.e. an unhedged long-only portfolio, partially-hedged long-only portfolio using index / stock futures or index / stock options, fully-hedged portfolio using index / stock futures or index / stock options, unhedged-long-short portfolio with 25% naked-short positions using stock futures or stock optionsri, partially-hedged long-short portfolio with 25% naked-short using index / stock futures or 12index / stock options, fully-hedged long portfolio along with 25% naked-short using index / stock futures or index / stock options TIMELINES FOR DEPLOYMENT OF FUNDS DURING NEW FUND OFFER (NFO) PERIOD: As per Regulation 35(5) of MF Regulations and SEBI Circular dated February 14, 2025, the AMC shall deploy the funds garnered in the NFO within 30 business days from the date of allotment of units. In an exceptional case, if Wealth Company Asset Management Holdings Private Limited 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 Wealth Company Asset Management Holdings Private Limited . 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. The Investment Committee shall examine the root cause for delay in deployment before granting approval for part or full extension. The Investment Committee shall not ordinarily give part or full extension where the assets for any investment strategies are liquid and readily available. In case the funds are not deployed as per the asset allocation mentioned in the ISID as per the aforesaid mandated plus extended timelines, AMC shall: i. not be permitted to receive fresh flows in the investment strategy till the time the funds are deployed as per the asset allocation mentioned in the ISID. ii. not be permitted to levy exit load, if any, on the investors exiting the investment strategy after 60 business days of not complying with the asset allocation of the investment strategy. iii. inform all investors of the NFO, about the exit option 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. To effectively manage the fund flows in NFO, the fund manager(s) may extend or shorten the NFO period, based on their view of the market dynamics, availability of assets and their ability to deploy funds collected in NFO. However, the same shall be subject to compliance with Para 1.10.1 and 1.10.1A of the SEBI Master Circular for Mutual Funds dated June 27, 2024. CHANGES IN ASSET ALLOCATION PATTERN / PORTFOLIO REBALANCING: SO. 23 Short Term Defensive Consideration: Subject to SEBI (MF) Regulations the asset allocation pattern indicated above may change from time to time, keeping in view market conditions, market opportunities, applicable regulations and political and economic factors. It must be clearly understood that the percentages stated above are only indicative and not absolute and that they can vary substantially depending upon the perception of the Investment Manager, the intention being at all times to seek to protect the interests of the Unit holders. As per clause 1.14.1.2.b of SEBI Master Circular on Mutual Funds dated June 27, 2024, as may be amended from time to time, such changes in the investment pattern will be for short term and for defensive consideration only. In the event of change in the asset allocation, the fund manager will carry out portfolio rebalancing within 30 calendar days or such other timeline as may be prescribed by SEBI from time to time. Portfolio Rebalancing (in case of passive breaches): SO. 22 SO. 24 As per clause 2.9 of SEBI Master Circular on Mutual Funds dated June 27, 2024, as may be amended/ clarified from time to time, in the event of change in the asset allocation due to passive breaches (occurrence of instances not arising out of omission and commission of the AMC), the fund manager is required to carry out portfolio rebalancing within 30 Business Days. In case the portfolio is not rebalanced within the period of 30 Business Days, justification in writing, including details of efforts taken to rebalance the portfolio shall be placed before the Investment Committee. The Investment Committee, if it so desires, can extend the timeline for rebalancing up to 60 Business Days from the date of completion of mandated rebalancing period. In case the portfolio of the investment strategy is not rebalanced within the aforementioned mandated plus extended timelines, the AMC shall follow the requirements specified under the aforesaid circular including reporting the deviation to Trustees at each stage. 13B. WHERE WILL THE INVESTMENT STRATEGY INVEST? SO. 29 Equity and equity related instruments 1. Equity Instruments 2. Equity related instruments including convertible bonds and debentures and warrants carrying the right to obtain equity shares 3. Equity Derivatives including stock futures/options and index futures/options Debt & Money Market Instruments SO. 13 1. Non-convertible debentures 2. Non-Convertible Preference Shares (NCPS)* 3. Floating rate debt instruments 4. Securitised Asset 5. Pass Through Certificate 6. Securities created and issued by the Central and State Governments as may be permitted by RBI 7. Debt Instruments with special features i.e. Additional Tier I (AT1) / Perpetual Bonds and Tier 2 Bonds 8. Debt Instruments having Structured Obligation (SO rating) and / or Credit Enhancements (CE rating) 9. Debt Derivative Instrument like Interest Rate Swaps, Forward Rate Agreement and such other derivative instruments as may be permitted under the Regulations 10. Certificate of Deposits 11. Commercial Paper 12. Treasury Bills 13. Tri-party Repo 14. Reverse Repo in securities other than corporate debt securities 15. Cash Management Bills 16. Bills Rediscounting 17. Units of Debt Schemes of Mutual Fund 18. Pending deployment of funds, the Investment strategy may park funds in Short Term Deposits of Scheduled commercial banks 19. Obligations/ Term Deposits of banks (both public and private sector) and development financial institutions to the extent permissible under SEBI Regulations 20. Any other securities as permitted by SEBI/RBI from time to time. 21. Any other securities as permitted by SEBI/RBI from time to time *As per clause 12.10 of SEBI Master Circular on Mutual Funds dated June 27, 2024, Non-Convertible Preference Shares (NCPS) shall be treated as Debt instruments. Securitised debt may be held up to 10% of debt portfolio. The securities/debt instruments mentioned above could be listed or unlisted, secured or unsecured, rated and of varying maturities and other terms of issue. The securities may be acquired through Initial Public Offerings (IPOs), secondary market operations, private placement, rights offer or negotiated deals. The Investment strategies may also enter into repurchase and reverse repurchase obligations in all securities held by it as per guidelines/regulations applicable to such transactions. Investment in IPOs/FPO/OFS/QIBs: This strategy attempts to make investments in companies through Initial Public offers or secondary offers through Follow-on Public Offers or OFS or Qualified Institutional Buyers route. Transfer of investments from one strategy to another strategy in the same SIF, shall be allowed, in lines with clause 12.30 of SEBI Master Circular on Mutual Funds dated June 27, 2024. Foreign Securities 1. Investments in overseas securities 2. Investments in overseas mutual fund schemes (including ETFs), subject to applicable regulations Foreign Securities: In accordance with paragraph 12.19.3.4 of SEBI Master Circular for Mutual Funds dated June 27, 2024, the following conditions shall apply to the participation of Investment Strategy in the overseas investments. Please note that the investment restrictions applicable to the Investment Strategy’s participation in overseas investments will be as prescribed or varied by SEBI or by the Trustees (subject to SEBI requirements) from time to time. The regulations pertaining to investment in ADRs/ GDRs/Foreign Securities and Overseas ETFs have now been decided as under: The aggregate ceiling for overseas investments is US $7 billion as per the above mentioned SEBI Circulars. Within the overall limit of US $ 7 billion, Investment Strategy can make overseas investments subject to a maximum of US $1 billion per mutual fund. Further, SIFs can make investments in Overseas Exchange Traded Fund (ETFs) subject to a maximum of US $300 14million per mutual fund, within the overall industry limit of US $ 1 billion. Investment may be made after NFO period only after limits are made available by SEBI and RBI. Real Estate Investment Trusts (REITs) & Infrastructure Investment Trusts (InVITs) SO. 27 C. WHAT IS THE INVESTMENT APPROACH? This fund employs active dynamic investment strategy focused on mid- and small-cap companies, allocating at least 65% of its net assets to equity and equity-related instruments of firms outside the top 100 by market capitalization, targeting undervalued or high-growth opportunities in these segments. To enhance flexibility, up to 35% of net assets may be invested in the top 100 companies by market cap. The fund complements its long equity positions, which can range from 65% to 100% of the portfolio, with up to 25% in unhedged short derivative positions (such as futures or options on mid- or small-cap stocks) to capitalize on overvalued or declining securities. For liquidity and risk management, up to 35% of the portfolio may be held in cash or money market instruments. Beyond the 25% cap, additional derivative exposure is allowed for full hedging of the long portfolio and for rebalancing, enabling the fund to adaptively manage risk and optimize returns in varying market conditions. Tentative list of derivative strategies to be deployed for short exposure. Short Description Max Profit Max Loss Risk When will the Strategies Level strategy be used Short Shorting Index or Stock Futures High (if Theoretically Very High Strong bearish Futures to benefit from price decline market falls) unlimited. Risk outlook management to ensure adherence to internally defined risk limits Synthetic Buy a put and sell a call at the High (if Theoretically Very high Strong bearish Short same strike and expiration to market falls) unlimited. Risk outlook mimic a short stock position. management to Profits from a significant price ensure adherence decline to internally defined risk limits Long Put Buy a put option to profit from a High (if Premium paid Low Strong bearish decline in the asset price below market falls) outlook the strike Bear Put Buy a put at a higher strike and Moderate Premium paid Low Moderate Spread sell a put at a lower strike, same bearish view expiration. Profits from a moderate price decline Short Call Sell a call option, profiting if the Premium Theoretically Very high Bearish to asset price stays below the strike received unlimited. Risk neutral, risky management to ensure adherence to internally defined risk limits 15Bear Call Sell a call at a lower strike and Premium Limited Moderate Mild bearish Spread buy a call at a higher strike, same received or neutral expiration. Profits if price stays below the lower strike Long Put Buy one put at a lower strike, Limited Premium paid Low Limited Butterfly sell two puts at a middle strike, bearish move buy one put at a higher strike, same expiration. Profits from a limited move to the middle strike Long Put Sell a near-term put and buy a Moderate to Premium paid Low Expect Calendar longer-term put at the same high gradual strike. Profits from a gradual bearish move price decline and time decay Long Put Sell a near-term put at a lower Moderate to Premium paid Low Moderate Diagonal strike and buy a longer-term put high bearish with at a higher strike. Profits from a income moderate decline and premium collection Ratio Put Buy one put at a higher strike Moderate Theoretically High Bearish with Spread and sell multiple puts at a lower unlimited. Risk premium strike, same expiration. Profits management to collection from a moderate decline with ensure adherence premium collection to internally defined risk limits For detailed derivative strategies, please refer to SAI. Portfolio Turnover: The investment strategy being an open-ended strategy, 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 an increase in portfolio turnover. There may be an increase in transaction costs such as brokerage paid, if trading is done frequently. However, the cost would be negligible as compared to the total expenses of the strategy. 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 investment strategy. The investment strategy has no specific target relating to portfolio turnover. D. HOW WILL THE INVESTMENT STRATEGY BENCHMARK ITS PERFORMANCE? NIFTY 500 Total Return Index (TRI) Justification: The NIFTY 500 TRI is an ideal benchmark for an equity long-short fund because it offers broad market representation across large-, mid-, and small- cap stocks, aligning with the diverse investment universe of such funds. Its total return framework, accounting for both capital gains and dividends, accurately reflects the fund’s potential returns, while its diversified sector exposure and balanced risk profile mirror the market-neutral strategies often employed by long-short funds. 16E. WHO MANAGES THE INVESTMENT STRATEGY? SO. 33 Name and Qualification Tenure for Type and nature of past Other Investment Age investment strategy experience including Strategy Managed management assignment held during the last 10 years Chinmay B.E, PGDM NA, since it is a first Mr. Sathe brings with him over - Sathe investment Strategy of 21 years of experience in the Age : 48 WSIF Asset Management Services industry, with expertise in fund management, equity research and across diverse asset classes. He has spent over 11 years at SO. 32 Bajaj Allianz Life as as Senior Fund Manager. His earlier stints where with L&T Mutual Fund, DSP Merrill Lynch and UTI Mutual Fund as Equity Research Analyst. WSIF Ex-Top 100 Equity Long-Short Fund shall not invest in overseas securities till the AMC appoints a fund manager to invest in overseas securities in line with clause 12.19.3.1 of SEBI Master Circular issued on June 27, 2024. F. HOW IS THE INVESTMENT STRATEGY DIFFERENT FROM EXISTING INVESTMENT STRATEGIES OF THE SIF? This investment strategy is a new and first strategy and hence not applicable. G. HOW HAS THE INVESTMENT STRATEGY PERFORMED This investment strategy is a new strategy and hence not applicable. H. ADDITIONAL INVESTMENT STRATEGY RELATED DISCLOSURES This investment strategy is a new strategy and hence additional investment strategy related disclosures not applicable. i. Investment Strategy’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.) ii. Functional website link for Portfolio Disclosure – https://www.wealthcompanyamc.in/wsif/ iii. Portfolio Turnover Rate particularly for equity oriented Investment Strategies shall also be disclosed. iv. Aggregate investment in the Investment Strategy by: Sr. No. Category of Persons Net Value 1. Concerned Investment Strategy’s Fund Units - NIL NAV per unit- NIL Manager(s) For any other disclosure w.r.t investments by key personnel and AMC directors including regulatory provisions in this regard kindly refer SAI. 17v. Investments of AMC in the Investment Strategy – This is a new Investment Strategy and hence not applicable. The AMC reserves the right to invest its own funds in the Investment Strategy as may be decided by the AMC from time to time. Under the Regulations, the AMC is not permitted to charge any investment management and advisory services fee on its own investment in the Investment Strategy. SO. 58 Subject to the Regulations, the AMC may invest either directly or indirectly, in the Investment Strategy during Ongoing Offer Period. However, the AMC shall not charge any investment management fee on such investment in the Investment Strategy. As per the amended regulations i.e. sub-regulation 16(A) in Regulation 25 of SEBI (Mutual Funds) Regulations, 1996 (‘MF Regulations’), the asset management companies (‘AMCs’) are required to invest such amount in such Investment Strategy (s) of the Specialized Investment Fund, based on the risk associated with the investment strategy, as may be specified by the Board from time to time. Accordingly, it is decided that based on the risk band assigned to the Investment Strategy(s), in terms of Clause 17.4 of SEBI Master Circular on Mutual Funds dated June 27, 2024, the AMC shall invest minimum amount as a percentage of assets under management (‘AUM’) in their Investment Strategy (s) in line with the Clause 6.9 of SEBI Master Circular on Mutual Funds dated June 27, 2024. 18PART III- OTHER DETAILS A. COMPUTATION OF NAV The Net Asset Value (NAV) per Unit under the Investment Strategy will be computed by dividing the net assets of the Investment Strategy by the number of Units outstanding on the valuation day. The Specialized Investment Fund will value its investments according to the valuation norms, as specified in Schedule VIII of the SEBI (MF) Regulations, or such norms as may be specified by SEBI from time to time. The broad valuation norms policies w.r.t computation of NAV, rounding off, procedure in case of delay in disclosure of NAV etc. are detailed in the SAI. 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 Investment strategy’s Investments + Current Assets – Current Liabilities and Provision NAV = ________________________________________________________________________________________ No. of units outstanding under Investment strategy/ Plan Where the assets include the value of securities and liquid cash. The securities in which the Investment Strategy has invested include both equity, debentures, bonds, bills of exchange, commercial paper. It also includes the interest accrued and dividend earned. The liabilities and expenses include the money payable, interest payable, fund management expenses. The NAV shall be calculated up to two decimal places. However, the AMC reserves the right to declare the NAVs up to additional decimal places as it deems appropriate. Separate NAV will be calculated and disclosed for each Option. The NAVs of the Growth Option and the IDCW Option under each of the Plans will be different after the declaration of the first IDCW. The AMC will calculate and disclose the first NAV of the Investment Strategy within a period of 5 business days from the date of allotment. Subsequently, the NAVs will be calculated and disclosed on all the Business Days. Illustration on Computation of NAV: SO. 42 Illustration: Assumptions - on the day of calculation of NAV: Market or Fair Value of the Investment strategy’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 Any change in Load structure will be effective on prospective basis and will not affect the existing Unit holder in any manner. However, the Specialized Investment Fund will ensure that the Redemption Price will not be lower than 97% of the Applicable NAV. The Purchase Price shall be at applicable NAV. Methodology of calculating the sale price: The price or NAV an investor is charged while investing in an open-ended strategy 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 investment strategy to the investors. Therefore, Sale / Subscription price = Applicable NAV 19Methodology of calculating the repurchase price Repurchase or redemption price is the price or NAV at which an open-ended investment strategy 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 investment strategy 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 B. NEW FUND OFFER (NFO) EXPENSES These expenses are incurred for the purpose of various activities related to the NFO like marketing and advertising, registrar expenses, printing and stationary, bank charges etc. The NFO expenses for launch of investment strategy will be borne by the AMC. C. ANNUAL RECURRING EXPENSES These are the fees and expenses for operating the Investment Strategy. These expenses include Investment Management and Advisory Fee charged by the AMC, Registrar and Transfer Agents’ fee, marketing and selling costs etc. as given in the table below: The AMC has estimated that upto 2.25 % of the daily net assets of the daily average net assets of the Investment Strategy will be charged to the Investment Strategy as expenses. For the actual current expenses being charged, the investor should refer to the AMC SIF website https://www.wealthcompanyamc.in/wsif/ % p.a. of daily Expense Head Net Assets* Investment Management & Advisory Fee 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 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 Other Expenses* Maximum Total expenses ratio (TER) permissible under Regulation 52 (6) (c) Additional expenses under Regulations 52(6A)(c) Upto 0.05% Additional expenses for gross new inflows from specified cities under regulation Upto 0.30% 52(6A)(b) SO. 46 *Any other expenses which are directly attributable to the Investment Strategy, may be charged with the approval of the 20Trustee within the overall limits as specified in the Regulations except those expenses which are specifically prohibited. 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 Regular Plan. Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid/ charged under Direct Plan. The expenses towards Investment Management and Advisory Fees under Regulation 52 (2) and the various sub-heads of recurring expenses mentioned under Regulation 52 (4) of SEBI (MF) Regulations can be apportioned under various expense heads/ sub heads without any sub limit, as permitted under the applicable regulations. Thus, there shall be no internal sub-limits within the expense ratio for expense heads mentioned under Regulation 52 (2) and (4) respectively. Further, the additional expenses under Regulation 52(6A)(c) may be incurred either towards investment & advisory fees and/or towards other expense heads as stated above. These estimates have been made in good faith as per the information available to the Investment Manager and are subject to change inter-se or in total subject to prevailing Regulations. The recurring expenses of the Investment Strategy (including the Investment Management and Advisory Fees) shall be as per the limits prescribed under the Regulation 52(6) of SEBI (MF) Regulations. These are as follows: 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. 1250 crores of the daily net assets 1.75% On the next Rs. 3000 crores of the daily net assets 1.60% On the next Rs. 5000 crores of the daily net assets 1.50% On the next Rs. 40,000 crores of the daily net assets Total expense ratio reduction of 0.05% for every increase of Rs. 5,000 crores of daily net assets or part thereof. On the balance of the assets 1.05% The total expenses of the Investment Strategy(s) including the investment management and advisory fee shall not exceed the limit stated in Regulation 52(6) of the SEBI (MF) Regulations and amendments thereto. Expenses charged to the Investment Strategy: A. In addition to the limits as specified in Regulation 52(6) of SEBI (MF) Regulations 1996 or the Total Recurring Expenses (Total Expense Limit) as specified above, the following costs or expenses may be charged to the Investment Strategy namely- Additional expenses for gross new inflows from specified cities. a) expenses not exceeding of 0.30 per cent of daily net assets, if the new inflows from such cities as specified by SEBI/AMFI from time to time are at least - i. 30 per cent of gross new inflows in the Investment strategy, or; ii. 15 per cent of the average assets under management (year to date) of the Investment Strategy, whichever is higher: Provided that if inflows from such cities is less than the higher of sub-clause (i) or sub- clause (ii), such expenses on daily net assets of the Investment Strategy shall be charged on proportionate basis. Provided further that, expenses charged under this clause shall be utilised for distribution expenses incurred for bringing inflows from such cities. Provided further that amount incurred as expense on account of inflows from such cities shall be credited back to the Investment Strategy in case the said inflows are redeemed within a period of one year from the date of investment. @Additional expenses for gross new inflows from specified cities under Regulation 52 (6A)(b) to improve geographical reach of investment strategy which were earlier kept in abeyance by AMFI are now been omitted vide Securities and Exchange Board of India ( Mutual Funds) (Second Amendment) Regulation 2025 dated October 31, 2025. 21Provided further that, additional TER can be charged based on inflows only from retail investors in terms of Clause 10.1 of SEBI Master Circular on Mutual Funds dated June 27, 2024. For this purpose, inflows of amount upto Rs 2,00,000/- per transaction, by individual investors shall be considered as inflows from “retail investor”. b) additional expenses, incurred towards different heads mentioned under Regulations 52(2) and 52(4), not exceeding 0.05 per cent of daily net assets of the Investment Strategy; c) GST payable on investment and advisory service fees (‘AMC fees’) charged by Wealth Company Asset Management Holdings Private Limited ; Further, brokerage and transaction costs which are incurred for the purpose of execution of trade and is included in the cost of investment shall not exceed 0.12 per cent in case of cash market transactions and 0.05 per cent in case of derivatives transactions. B. Within the Total Expense Limit chargeable to the investment strategy, following will be charged to the Investment Strategy: a) GST on other than investment and advisory fees, if any, (including on brokerage and transaction costs on execution of trades) shall be borne by the Investment Strategy b) Investor education and awareness initiative fees of at least 2 basis points on daily net assets of the Investment Strategy. C. AMC fees charged by Wealth Company Asset Management Holdings Private Limited to the investment strategy will be within the Total Expense Limit as prescribed by SEBI Regulations, as amended from time to time. Expenses over and above the prescribed limit shall be charged / borne in accordance with the Regulations prevailing from time to time. The Specialized Investment Fund would update the current expense ratios on its website https://www.wealthcompanyamc.in/wsif/) atleast three working days prior to the effective date of the change. Investors can refer ‘Total Expense Ratio of SIF Investment Strategy’ section on https://www.wealthcompanyamc.in/wsif/ for Total Expense Ratio (TER) details. Illustration of impact of expense ratio on Investment Strategy’s returns For any Investment Strategy, NAV is computed on a daily basis factoring in all the assets as well as liabilities of the Investment Strategy (including expenses charged). Expenses charged to the Investment Strategy bring down its NAV and hence the investor's net returns on a corresponding basis. Illustration: SO. 44 Regular Plan Direct Plan Particulars (Amount in Rs.) (Amount in Rs.) 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 1300 1350 Please Note: • The purpose of the above illustration is purely to explain the impact of expense ratio charged to the Investment Strategy and should not be construed as providing any kind of investment advice or guarantee of returns on investments. • It is assumed that the expenses charged are evenly distributed throughout the year. The expenses of the Direct Plan under the Investment Strategy may vary with that of the Regular Plan under the Investment Strategy. • Calculations are based on assumed NAVs, and actual returns on your investment may be more, or less. • Any tax impact has not been considered in the above example, in view of the individual nature of the tax implications. Each investor is advised to consult his or her own financial advisor. 22D. LOAD STRUCTURE Exit Load is an amount which is paid by the investor to redeem the units from the Investment Strategy. Load amounts are variable and are subject to change from time to time. For the current applicable structure, please refer to the website of WSIF (https://www.wealthcompanyamc.in/wsif/) . SO. 47 Type of Load Load chargeable (as %age of NAV) Exit Load NIL Units issued on reinvestment of IDCW shall not be subject to Load. No load shall be levied on switches between options and sub-options of the Investment strategy. The above mentioned load structure shall be equally applicable to the special products such as switches, STP, SWP, etc. offered by the AMC. Further, for switches between the Growth and IDCW Option, no load will be charged by the Investment Strategy. Also, for switches between the Plans i.e. between Regular and Direct Plan or vice versa, no load will be charged by the Investment Strategy. Exit load, if any, charged to the investors will be credited back to the Investment Strategy net of GST. The Investor is requested to check the prevailing Load structure of the Investment Strategy before investing. For any change in Load structure, AMC will issue an addendum and display it on the website/ Investor Service Centres. Under the Investment Strategy, the AMC/ Trustee reserves the right to change / modify the Load structure if it so deems fit in the interest of smooth and efficient functioning of the Specialized Investment Fund. The AMC/ Trustee reserves the right to introduce / modify the Load depending upon the circumstances prevailing at that time subject to maximum limits as prescribed under the Regulations. The Redemption Price however, will not be lower than 97% of the NAV. Any imposition or enhancement of Load in future shall be applicable on prospective investments only. SO. 47 At the time of changing the Load Structure: 1. An Addendum detailing the changes will be attached to Investment Strategy Information Document and Key Information Memorandum. The addendum may be circulated to all the distributors / brokers so that the same can be attached to all Investment Strategy Information Document and Key Information Memorandum already in stock. 2. The addendum will be displayed on the website of the AMC SIF and arrangements will be made to display the addendum in the form of a notice in all the Investor Service Centres and distributors / brokers office. 3. The introduction of the Exit Load alongwith the details may be stamped in the acknowledgement slip issued to the Investors on submission of the application form and may also be disclosed in the statement of accounts issued after the introduction of such Load. 4. Any other measure which the Specialized Investment Fund may consider necessary. The Trustee/AMC reserves the right to change the load structure subject to the limits prescribed under the Regulations. Any change in load structure shall be only on a prospective basis i.e. any such changes would be chargeable only for Redemptions from prospective purchases (applying first in first out basis). 23Section II I. Introduction A. Definitions/interpretation Please refer to AMC SIF website at https://www.wealthcompanyamc.in/wsif/ B. Risk factors SO. 8 Investment strategy Specific Risk Factors Some of the specific risk factors related to the Investment strategy include, but are not limited to the following: (i) Risk factors associated with investing in equities and equity related instruments • Equity shares and equity related instruments are volatile and prone to price fluctuations on a daily basis. Investments in equity shares and equity related instruments involve a degree of risk and investors should not invest in the Investment strategy unless they can afford to take the risks. • Securities, which are not quoted on the stock exchanges, are inherently illiquid in nature and carry a larger amount of liquidity risk, in comparison to securities that are listed on the exchanges. Investment in such securities may lead to increase in the investment strategy portfolio risk. • While securities that are listed on the stock exchange carry lower liquidity risk, the ability to sell these investments is limited by the overall trading volume on the stock exchanges and may lead to the Investment strategy incurring losses till the security is finally sold. • Investment strategy's performance may differ from the benchmark index to the extent of the investments held in the debt segment, as per the investment pattern indicated under normal circumstances. (ii) Risk factors associated with investing in Fixed Income Securities • The Net Asset Value (NAV) of the Investment strategy, to the extent invested in Debt and Money Market instruments, will be affected by changes in the general level of interest rates. The NAV of the Investment strategy is expected to increase from a fall in interest rates while it would be adversely affected by an increase in the level of interest rates. • Money market instruments, while fairly liquid, lack a well developed secondary market, which may restrict the selling ability of the Investment strategy and may lead to the Investment strategy incurring losses till the security is finally sold. ● Investments in money market instruments involve credit risk commensurate with short term rating of the issuers. • Investment in Debt instruments are subject to varying degree of credit risk or default (i.e. the risk of an issuer's inability to meet interest or principal payments on its obligations) or any other issues, which may have their credit ratings downgraded. Changes in financial conditions of an issuer, changes in economic and political conditions in general, or changes in economic or and political conditions specific to an issuer, all of which are factors that may have an adverse impact on an issuer's credit quality and security values. The Investment Manager will endeavour to manage credit risk through in-house credit analysis. This may increase the risk of the portfolio. The Investment Manager will endeavour to manage credit risk through in-house credit analysis. • Prepayment Risk: Certain fixed income securities give an issuer the right to call back its securities before their maturity date, in periods of declining interest rates. The possibility of such prepayment may force the Investment strategy to reinvest the proceeds of such investments in securities offering lower yields, resulting in lower interest income for the Investment strategy. • Reinvestment Risk: This risk refers to the interest rate levels at which cash flows received from the securities in the Investment strategy 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. • Settlement risk: Different segments of Indian financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances. Delays or other problems in settlement of transactions could result in temporary periods when the assets of the Investment strategy are uninvested and no return is earned thereon. The inability of the Investment strategy to make intended securities purchases, due to settlement problems, could cause the Investment strategy to miss certain investment opportunities. Similarly, the inability to sell securities held in the Investment strategy's portfolio, due to the absence of a well developed and liquid secondary market for debt securities, may result at times in potential losses to the Investment strategy in the event of a subsequent decline in the value of securities held in the Investment strategy's portfolio. • 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 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 24the 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 credit risk generally remains zero. Therefore, their prices are influenced only by movement in interest rates in the financial system. • Different types of fixed income securities in which the Investment strategy would invest as given in the Investment strategy Information Document carry different levels and types of risk. Accordingly, the Investment strategy 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. • The AMC may, considering the overall level of risk of the portfolio, invest in lower rated / unrated securities offering higher yields as well as zero coupon securities that offer attractive yields. This may increase the absolute level of risk of the portfolio. • 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 and are subject to issuer default risk. 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. Zero coupon or deep discount bonds are debt obligations that do not entitle the holder to any periodic payment of interest prior to maturity or a specified date when the securities begin paying current interest and therefore, are generally issued and traded at a discount to their face values. The discount depends on the time remaining until maturity or the date when securities begin paying current interest. It also varies depending on the prevailing interest rates, liquidity of the security and the perceived credit risk of the Issuer. The market prices of zero coupon securities are generally more volatile than the market prices of securities that pay interest periodically. • The Investment strategy at times may receive large number of redemption requests, leading to an asset-liability mismatch and therefore, requiring the investment manager to make a distress sale of the securities leading to realignment of the portfolio and consequently resulting in investment in lower yield instruments. • Risks associated with investment in unlisted securities: Except for any security of an associate or group company, the investment strategy can 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 Investment strategy will realise their investments in unlisted securities at a fair value. • Investment in unrated instruments may involve a risk of default or decline in market value higher than rated instruments due to adverse economic and issuer-specific developments. Such investments display increased price sensitivity to changing interest rates and to a deteriorating economic environment. The market values for unrated investments tends to be more volatile and such securities tend to be less liquid than rated debt securities. (iii) Risks associated with Investing in Structured Obligation (SO) & Credit Enhancement (CE) rated securities The risks factors stated below for the Structured Obligations & Credit Enhancement are in addition to the risk factors associated with debt instruments. • Credit rating agencies assign CE rating to an instrument based on any identifiable credit enhancement for the debt instrument issued by an issuer. The credit enhancement could be in various forms and could include guarantee, shortfall undertaking, letter of comfort, etc. from another entity. This entity could be either related or non-related to the issuer like a bank, financial institution, etc. Credit enhancement could include additional security in form of pledge of shares listed on stock exchanges, etc. SO transactions are asset backed/ mortgage backed securities, securitized paper backed by hypothecation of car loan receivables, securities backed by trade receivables, credit card receivables etc. Hence, for CE rated instruments evaluation of the credit enhancement provider, as well as the issuer is undertaken to determine the issuer rating. In case of SO rated issuer, the underlying loan pools or securitization, etc. is assessed to arrive at rating for the issuer. • Liquidity Risk: SO rated securities are often complex structures, with a variety of credit enhancements. Debt securities lack a well-developed secondary market in India, and due to the credit enhanced nature of CE securities as well as structured nature of SO securities, the liquidity in the market for these instruments is adversely affected compared to similar rated debt instruments. Hence, lower liquidity of such instruments, could lead to inability of the investment strategy to sell such debt instruments and generate liquidity for the investment strategy or higher impact cost when such instruments are sold. • Credit Risk: The credit risk of debt instruments which are CE rated is based on the combined strength of the issuer as well as the structure. Hence, any weakness in either the issuer or the structure could have an adverse credit impact on the debt instrument. The weakness in structure could arise due to inability of the investors to enforce the structure due to issues such as legal risk, inability to sell the underlying collateral or enforce guarantee, etc. In case of SO transactions, comingling risk and risk of servicer increases the overall risk for the securitized debt or assets backed transactions. Therefore apart from issuer level credit risk such debt instruments are also susceptible to structure related credit risk. 25(iv) Risk factors associated with investment in Tri-Party Repo The SIF is a member of securities segment and Triparty Repo trade settlement of the Clearing Corporation of India (CCIL). All transactions of the SIF in government securities and in Tri-party Repo trades are settled centrally through the infrastructure and settlement systems provided by CCIL; thus reducing the settlement and counterparty risks considerably for transactions in the said segments. The members are required to contribute an amount as communicated by CCIL from time to time to the default fund maintained by CCIL as a part of the default waterfall (a loss mitigating measure of CCIL in case of default by any member in settling transactions routed through CCIL). As per the waterfall mechanism, after the defaulter's margins and the defaulter's contribution to the default fund have been appropriated, CCIL's contribution is used to meet the losses. Post utilization of CCIL's contribution if there is a residual loss, it is appropriated from the default fund contributions of the non-defaulting members. Thus the investment strategy is subject to risk of the initial margin and default fund contribution being invoked in the event of failure of any settlement obligations. In addition, the fund contribution is allowed to be used to meet the residual loss in case of default by the other clearing member (the defaulting member). CCIL shall maintain two separate Default Funds in respect of its Securities Segment, one with a view to meet losses arising out of any default by its members from outright and repo trades and the other for meeting losses arising out of any default by its members from Triparty Repo trades. The fund is exposed to the extent of its contribution to the default fund of CCIL, in the event that the contribution of the fund is called upon to absorb settlement/default losses of another member by CCIL, as a result the investment strategy may lose an amount equivalent to its contribution to the default fund. (v) Risk factors associated with Repo in Corporate Debt Securities In repo transactions, also known as a repo or sale repurchase agreement, securities are sold with the seller agreeing to buy them back at later date. The repurchase price should be greater than the original sale price, the difference effectively representing interest. A repo in corporate debt securities is economically similar to a secured loan, with the buyer receiving corporate debt securities as collateral to protect against default. Some of the risks associated with repo in corporate debt are given below: • Counterparty Risk: Counterparty risk refers to the inability of the seller to meet the obligation to buy back securities at the contracted price on the contracted date. In case of over the counter (OTC) repo trades, the investment manager will endeavour to manage counterparty risk by dealing only with counterparties having strong credit profiles. Also, the counter-party risk is to an extent mitigated by taking collateral equivalent in value to the transaction after knocking off a minimum haircut on the intrinsic value of the collateral. In the event of default by the repo counterparty, the investment strategy shall have recourse to the corporate debt securities. In case the repo transaction is executed on exchange platform approved by RBI/SEBI, the exchange may also provide settlement guarantee. • Collateral Risk: Collateral risk arises when the market value of the securities is inadequate to meet the repo obligations. This risk can be partly mitigated by restricting participation in repo transactions only in corporate debt securities which are approved by credit risk team. Additionally, to address the risk related to reduction in market value of corporate debt security held as collateral due to credit rating downgrade, the repo contract can incorporate either an early termination of the repo agreement or call for fresh margin to meet the minimum haircut requirement or call for replacement of security with eligible security. Moreover, the investment manager may apply a higher haircut on the underlying security than required as per RBI/SEBI regulation to adjust for the illiquidity and interest rate risk on the underlying instrument. To mitigate the risk of price reduction due to interest rate changes, the adequacy of the collateral can be monitored on a daily basis by considering the daily market value & applying the prescribed haircut. The investment manager or the exchange can then arrange for additional collateral from the counterparty, within a prespecified period. If the counterparty is not able to top-up either in form of cash / collateral, it would tantamount to early termination of the repo agreement, and the outstanding amount can be recovered by sale of collateral. (vi) Risk factors associated with investing in Non- Convertible Preference Shares • Credit Risk: Credit risk is the risk that an issuer will be unable to meet its obligation of payment of dividend and/ or redemption of principal amount on the due date. Further, for non-cumulative preference shares, issuer also has an option to not pay dividends on preference shares in case of inadequate profits in any year. • Liquidity Risk: The preference shares generally have limited secondary market liquidity and thus we may be forced to hold the instrument till maturity. • Unsecured in nature - Preference shares are unsecured in nature and rank lower than secured and unsecured debt in hierarchy of payments in case of liquidation. Thus there is significant risk of capital erosion in case the company goes into liquidation. (vii) Related to WSIF Equity Ex-Top 100 Long-Short Fund A. The primary objective of WSIF Equity Ex-Top 100 Long-Short Fund is to generate long-term capital appreciation by identifying and capitalizing on investment opportunities in equity and equity-related instruments while employing limited short exposure through derivatives outside the top 100 stocks by market capitalization to enhance returns and 26manage risk. The identification and execution of long and short strategies involve inherent uncertainties, and no assurance can be given that the Fund Manager will successfully locate profitable opportunities or accurately predict market movements. Market conditions, such as reduced volatility or limited pricing inefficiencies, may constrain the fund’s ability to generate alpha, potentially impacting returns. The fund’s active management approach may lead to high portfolio turnover, resulting in elevated transaction costs. Additionally, there may be instances where market liquidity is insufficient to execute trades at optimal prices, increasing the cost and risk of implementing the strategy. While the portfolio typically includes liquid equities, differences in stock liquidity can pose challenges, making the long-short strategy complex, costly, and occasionally difficult to execute effectively. B. Risk factors associated with potential change in tax structure An equity oriented fund has been defined under the Income Tax Act as a investment strategy where the investible funds are invested in equity shares of domestic companies to the extent of more than 65 per cent of the total assets of such fund. The percentage of equity shareholding of the fund shall be computed with reference to the annual average of the monthly averages of the opening and closing figures. As per the asset allocation, under normal circumstances, the Investment strategy shall invest minimum 80% of its total assets in Equity and Equity Related instruments. However, under defensive circumstances, where the debt / money market instruments offer better returns than the arbitrage opportunities available in cash and derivatives segments of equity markets, then the investment manager may choose to have a lower equity exposure for a prolonged period. In such a case, the fund may be regarded as a debt oriented fund as per extant Income Tax laws and consequently may not enjoy the favourable tax provisions available for equity oriented funds in that particular financial year. In such situation, a Unitholder who has redeemed the units during that financial year may end up paying capital gain tax as applicable to a debt fund and consequently would also not be able to derive any benefit of STT paid at the time of redemption. In view of the forgoing and individual nature of tax consequences, each Unit holder is advised to consult his / her own professional tax advisor. (viii) General Risk factors • Trading volumes, settlement periods and transfer procedures may restrict the liquidity of the investments made by the Investment strategy. Different segments of the Indian financial markets have different settlement periods and such periods may be extended significantly by unforeseen circumstances leading to delays in receipt of proceeds from sale of securities. The NAV of the Units of the Investment strategy can go up or down because of various factors that affect the capital markets in general. • As the liquidity of the investments made by the Investment strategy could, at times, be restricted by trading volumes and settlement periods, the time taken by the Fund for redemption of Units may be significant in the event of an inordinately large number of redemption requests or restructuring of the Investment strategy. In view of the above, the Trustee has the right, in its sole discretion, to limit redemptions (including suspending redemptions) under certain circumstances. • At times, due to the forces and factors affecting the capital market, the Investment strategy may not be able to invest in securities falling within its investment objective resulting in holding the monies collected by it in cash or cash equivalent or invest the same in other permissible securities / investments amounting to substantial reduction in the earning capability of the Investment strategy. The Investment strategy may retain certain investments in cash or cash equivalents for its day-to-day liquidity requirements. • Investment strategy to be adopted by the Investment strategy may carry the risk of significant variance between the portfolio allocation of the Investment strategy and the Benchmark particularly over a short to medium term period. • Performance of the Investment strategy may be affected by political, social, and economic developments, which may include changes in government policies, diplomatic conditions, and taxation policies. SO. 11 (ix) Risk factors associated with investing in Foreign Securities • Currency Risk: Moving from Indian Rupee (INR) to any other currency entails currency risk. To the extent that the assets of the Investment strategy will be invested in securities denominated in foreign currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by changes in the value of certain foreign currencies relative to the Indian Rupee. • Interest Rate Risk: The pace and movement of interest rate cycles of various countries, though loosely co-related, can differ significantly. Hence by investing in securities of countries other than India, the Investment strategy stand exposed to their interest rate cycles. • Credit Risk: Investment in Foreign Debt Securities are subject to the risk of an issuer's inability to meet interest and principal payments on its obligations and market perception of the creditworthiness of the issuer. This is substantially reduced since the SEBI (MF) Regulations stipulate investments only in debt instruments with rating not below investment grade by accredited/registered credit rating agency. • Taxation Risk: Investment in Foreign Securities poses additional challenges based on the tax laws of each respective country or jurisdiction. The investment strategy may be subject to a higher level of taxes than originally anticipated and or dual taxation. The Investment strategy may be subject to withholding or other taxes on income and/or gains arising from its investment portfolio. Further, such investments are exposed to risks associated with the changing / 27evolving tax / regulatory regimes of all the countries where the Investment strategy invests. All these may entail a higher outgo to the Investment strategy by way of taxes, transaction costs, fees etc. thus adversely impacting its NAV; resulting in lower returns to an Investor. • Legal and Regulatory Risk: Legal and regulatory changes could occur during the term of the Investment strategy which may adversely affect it. If any of the laws and regulations currently in effect should change or any new laws or regulations should be enacted, the legal requirements to which the Investment strategy and the investors may be subject could differ materially from current requirements and may materially and adversely affect the Investment strategy and the investors. Legislation/ Regulatory guidelines could also be imposed retrospectively. • Country Risk: The Country risk arises from the inability of a country, to meet its financial obligations. It is the risk encompassing economic, social and political conditions in a foreign country, which might adversely affect foreign investors' financial interests. In addition, country risks would include events such as introduction of extraordinary exchange controls, economic deterioration, bi-lateral conflict leading to immobilisation of the overseas financial assets and the prevalent tax laws of the respective jurisdiction for execution of trades or otherwise. • To manage risks associated with foreign currency and interest rate exposure, the fund may use derivatives for efficient portfolio management including hedging and in accordance with conditions as may be stipulated by SEBI/ RBI from time to time. SO. 28 (x) Risk factors associated with investing in Derivatives • The AMC, on behalf of the Investment strategy may use various derivative products, from time to time, in an attempt to protect the value of the portfolio and enhance Unit holders' interest. Derivative products are specialized instruments that require investment techniques and risk analysis different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument but of the derivative itself. Other risks include, the risk of 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. (xi) Risks Factors associated with investing in Derivatives for short exposure • Derivative strategies are designed to capitalize on price movements in underlying assets. However, significant market volatility may lead to substantial losses, particularly in directional strategies or uncovered positions, where unexpected price swings could impact performance. • Strategies employing options, are subject to time decay, where the value of options decreases as expiration nears. If anticipated price movements do not materialize within the option’s lifespan, these positions may become unprofitable, affecting returns. • Derivative trading involves costs such as premiums, commissions, and bid-ask spreads, which can erode returns. This is particularly relevant for strategies with narrow profit margins, or complex strategies like spreads and combinations requiring multiple transactions. • Certain derivatives may exhibit lower liquidity, resulting in wider bid-ask spreads or challenges in entering or exiting positions at optimal prices. This may increase costs or complicate trade execution, especially in advanced strategies like diagonal spreads or synthetic positions. • Sudden market events or shifts in implied volatility can disrupt strategies, which rely on the underlying asset remaining within a specific price range. Misalignment with market conditions may lead to losses. • Strategies involving short positions, such as synthetic stock or income generation through writing options, may require significant margin reserves. Failure to meet margin obligations could result in forced liquidations at unfavorable prices, 28impacting portfolio performance. (xii) Additional Risk viz. Basis Risk associated with imperfect hedging using Interest Rate Futures (IRF): The imperfect correlation between the prices of securities in the portfolio and the IRF contract used to hedge part of the portfolio leads to basis risk. Thus, the loss on the portfolio may not exactly match the gain from the hedge position entered using the IRF. (xiii) Risk factors associated with Securities Lending: As with other modes of extensions of credit, there are risks inherent to securities lending, including the risk of failure of the other party, in this case the approved intermediary, to comply with the terms of the agreement entered into between the lender of securities i.e. the Investment strategy 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 investment strategy may not be able to sell lent out securities, which can lead to temporary illiquidity & loss of opportunity. (xiv) Risk factors associated with investing in Securitised Debt : The Risks involved in Securitised Papers described below are the principal ones and does not represent that the statement of risks set out hereunder is exhaustive. • Limited Liquidity & Price Risk There is no assurance that a deep secondary market will develop for the Certificates. This could limit the ability of the investor to resell them. • Limited Recourse, Delinquency and Credit Risk The Credit Enhancement stipulated represents a limited loss cover to the Investors. These Certificates represent an undivided beneficial interest in the underlying receivables and do not represent an obligation of either the Issuer or the Seller or the originator, or the parent or any affiliate of the Seller, Issuer and Originator. No financial recourse is available to the Certificate Holders against the Investors' Representative. Delinquencies and credit losses may cause depletion of the amount available under the Credit Enhancement and thereby the Investor Payouts 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 a Obligor to repay his obligation, the Servicer may repossess and sell the Asset. However many factors may affect, delay or prevent the repossession of such Asset or the length of time required to realise the sale proceeds on such sales. In addition, the price at which such Asset may be sold may be lower than the amount due from that Obligor. • Risks due to possible prepayments and Charge Offs In the event of prepayments, investors may be exposed to changes in tenor and yield. Also, any Charge Offs would result in the reduction in the tenor of the Pass Through Certificates (PTCs). • Bankruptcy of Bank with Liquidity facility If the Bank with Liquidity facility, becomes subject to bankruptcy proceedings then an investor could experience losses or delays in the payments. • Risk of Co-mingling With respect to the Certificates, the Servicer will deposit all payments received from the Obligors into the Collection Account. However, there could be a time gap between collection by a Servicer and depositing the same into the Collection account especially considering that some of the collections may be in the form of cash. In this interim period, collections from the Loan Agreements may not be segregated from other funds of originator. If originator in its capacity as Servicer fails to remit such funds due to Investors, the Investors may be exposed to a potential loss. (xv) Risk factors associated with investments in Perpetual Debt Instrument (PDI) Perpetual Debt instruments are issued by Banks, NBFCs and corporates to improve their capital profile. Some of the PDIs issued by Banks which are governed by the RBI guidelines for Basel III Capital Regulations are referred to as Additional Tier I (AT1 bonds). While there are no regulatory guidelines for issuance of PDIs by corporate bodies, NBFCs issue these bonds as per guidelines issued by RBI. The instruments are treated as perpetual in nature as there is no fixed maturity date. The key risks associated with these instruments are highlighted below: Key Risk Factors: - • Risk on coupon servicing Banks As per the terms of the instruments, Banks may have discretion at all times to cancel distributions/ payment of coupons. In the event of non-availability of adequate distributable reserves and surpluses or inadequacy in terms of capital requirements, RBI may not allow banks to make payment of coupons. NBFCs 29While NBFCs may have discretion at all times to cancel payment of coupon, coupon can also be deferred (instead of being cancelled), in case paying the coupon leads to breach of capital ratios. Corporates Corporates usually have discretion to defer the payment of coupon. However, the coupon is usually cumulative and any deferred coupon shall accrue interest at the original coupon rate of the PDI. • Risk of write-down or conversion into equity Banks As per the regulatory requirements, Banks have to maintain a minimum Common Equity Tier-1 (CET-1) ratio of Risk Weighted Assets (RWAs), failing which the AT-1 bonds can get written down. Further, AT-1 Bonds are liable to be written down or converted to common equity, at the discretion of RBI, in the event of Point of Non Viability Trigger (PONV). PONV is a point, determined by RBI, when a bank is deemed to have become non-viable unless there is a write off/ conversion to equity of AT-1 Bonds or a public sector capital injection happens. The write off/conversion has to occur prior to public sector injection of capital. This risk is not applicable in case of NBFCs and Corporates. • Risk of instrument not being called by the Issuer Banks The issuing banks have an option to call back the instrument after minimum specified period from the date of issuance and thereafter, subject to meeting the RBI guidelines. However, if the bank does not exercise the call on first call date, the Investment strategy may have to hold the instruments for a period beyond the first call exercise date. NBFCs The NBFC issuer has an option to call back the instrument after minimum specific period as per the regulatory requirement from date of issuance and thereafter, subject to meeting the RBI guidelines. However, if the NBFC does not exercise the call option the Investment strategy may have to hold the instruments for a period beyond the first call exercise date. Corporates There is no minimum period for call date. However, if the corporate does not exercise the call option, the Investment strategy may have to hold the instruments for a period beyond the call exercise date. (xvi) 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. (xvii) Risk factors associated with processing of transaction through Stock Exchange Mechanism The trading mechanism introduced by the stock exchange(s) is configured to accept and process transactions for fund units in both Physical and Demat Form. The allotment and/or redemption of Units through NSE and/or BSE or any other recognised stock exchange(s), on any Business Day will depend upon the modalities of processing viz. collection of application form, order processing/settlement, etc. upon which the Fund has no control. Moreover, transactions conducted through the stock exchange mechanism shall be governed by the operating guidelines and directives issued by respective recognized stock exchange(s). (xviii) Risk factors associated with REITs and InvITs: • Price Risk: Securities/Instruments of REITs and InvITs are volatile and prone to price fluctuations on a daily basis owing to market movements. The extent of fall or rise in the prices is a fluctuation in general market conditions, factors and forces affecting capital market, Real Estate and Infrastructure sectors, level of interest rates, trading volumes, settlement periods and transfer procedures. • Interest Rate Risk: Securities/Instruments of REITs and InvITs run interest rate risk. Generally, when interest rates rise, prices of units fall and when interest rates drop, such prices increase. • Credit Risk: Credit risk means that the issuer of a REIT/InvIT security/ instrument may default on interest payment or even on paying back the principal amount on maturity. Securities/ Instruments of REITs and InvITs are likely to have volatile cash flows as the repayment dates would not necessarily be pre scheduled. • Liquidity Risk: This refers to the ease with which securities/instruments of REITs/InvITs can be sold. There is no assurance that an active secondary market will develop or be maintained. Hence there would be time when trading in the units could be infrequent. The subsequent valuation of illiquid units may reflect a discount from the market price of comparable securities/instruments for which a liquid market exists. As these products are new to the market they are likely to be exposed to liquidity risk. • Reinvestment Risk: Investments in securities/instruments of REITs and 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. • Legal and Regulatory Risk: The regulatory framework governing investments in securities/instruments of REITs 30and InvITs comprises a relatively new set of regulations and is therefore untested, interpretation and enforcement by regulators and courts involves uncertainties. Presently, it is difficult to forecast as to how any new laws, regulations or standards or future amendments will affect the issuers of REITs/InvITs and the sector as a whole. Furthermore, no assurance can be given that the regulatory system will not change in a way that will impair the ability of the Issuers to comply with the regulations, conduct the business, compete effectively or make distributions. (xix) Risk factors associated for investments in SIF Investment strategy 1. Movements in the Net Asset Value (NAV) of these Investment strategy may impact the performance. Any change in the investment policies or fundamental attributes of these Investment strategy will affect the performance of the Investment strategy to the extent of investment in such investment strategy. 2. Redemptions by in these Investment strategy would be subject to applicable exit loads. (xx) 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. C. Risk mitigation strategies SO. 9 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 investment strategy 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. Debt • Interest Rate Risk: The Fund seeks to mitigate this risk by keeping the maturity of the investment strategy in line with the interest rate expectations. • Credit risk or default risk: Management analysis will be used for identifying company specific risks. Management’s past track record will also be studied. In order to assess financial risk a detailed assessment of the issuer’s financial statements will be undertaken. • Reinvestment Risk: Reinvestment risks will be limited to the extent of coupons received on debt instruments, which will be a very small portion of the portfolio value. • The Investment strategy may invest in derivative for the purpose of hedging, portfolio balancing and other purposes as may be permitted under the Regulations. Interest Rate Swaps will be done with approved counter parties under pre-approved ISDA agreements. Interest rate swaps and other derivative instruments will be used as per local (RBI and SEBI) regulatory guidelines. • Liquidity or Marketability Risk: Liquidity risk may be high on select securities due to duration and/or issue structure and/ or issuer-specific risk. Liquidity Risk can be partly mitigated by diversification, staggering of maturities as well as internal risk controls that lean towards purchase of liquid securities. Trading in Derivatives The Investment strategy may invest in derivatives based on the opportunities available subject to the guidelines provided by SEBI from time to time and in line with the overall investment objective of the Investment strategy. The Investment strategy may invest in derivative instruments like Futures, Options, Interest Rate Swaps, Forward Rate Agreements, and such other derivative instruments as may be permitted by SEBI from time to time. Derivative investments may be undertaken to hedge the portfolio, re-balance the same or to undertake any other strategy as permitted under SEBI (MF) Regulations from time to time. Hedging could be perfect or imperfect. In case the Investment strategy has investment in foreign securities, then it may hedge the exchange rate risk on all receivables on these instruments through various derivative products such as forwards, currency futures/ options, etc. Derivatives can be traded over the exchange or can be structured between two counter-parties. Those transacted over the exchange are called Exchange Traded derivatives whereas the other category is referred to as OTC (Over the Counter) derivatives. Some of the differences of these two derivative categories are as under: Exchange traded derivatives: These are quoted on the exchanges like any other traded asset class. The most common amongst these are the Index Futures, Index Options, Stock Futures and Options on individual equities / securities. The 31basic form of the futures contract is similar to that of the forward contract, a futures contract obligates its owner to purchase a specified asset at a specified exercise price on the contract maturity date. Futures are cash-settled and are traded only in organised exchanges. Exchange traded derivatives are standardised in terms of amount and delivery date. Standardisation and transparency generally ensures a liquid market together with narrower spreads. On the other hand, for delivery dates far in the future, there may be insufficient liquidity in the futures market whereas an OTC price may be available. OTC derivatives: OTC derivatives require the two parties engaging in a derivatives transaction to come together through a process of negotiation. It is a derivative that is customised in terms of structure, amount, tenor, underlying assets, collateral etc. Some of the common examples are interest rate and currency swaps, Forward Rate Agreements (FRAs) etc. Trading in derivatives for short exposure • Investment team will select derivatives with high liquidity to minimize the impact of wide bid-ask spreads, ensuring smoother entry and exit from positions. This reduces transaction costs and enables trade execution at desired prices, especially for complex strategies requiring multiple transactions. • Investment team will enforce rigorous risk management protocols to limit potential losses, particularly in speculative or volatility-sensitive strategies. By setting predefined loss thresholds for automatic position exits, AMC will prevent significant drawdowns and preserve capital. • To reduce concentration risk, investment team will diversify its positions across various assets, strategies, and expiration dates. This approach mitigates the impact of unfavorable price movements in any single position, enhancing portfolio stability in volatile market conditions. • Investment team will ensure sufficient margin reserves to cover potential obligations, especially for strategies involving short positions. This prevents forced liquidations at unfavorable prices and supports portfolio stability during adverse market movements. • Investment team will continuously monitor implied volatility and market trends to make dynamic adjustments to positions. By exiting options early to minimize time decay or rebalancing complex strategies to align with market trends, AMC will enhance profitability and reduce exposure to unexpected market shifts. • Investment team will select cost-effective derivatives and partner with low-cost brokers to minimize transaction expenses. This ensures that premiums and commissions do not erode returns, particularly in high-frequency or low- margin strategies like arbitrage, preserving overall profitability Exposure to Derivatives Please refer to Asset Allocation of the investment strategy for the details of maximum exposure to investment in Derivatives by the Investment strategy. Exposure Limits The exposure limits for trading in derivatives by SIF will be same as the Mutual Funds specified by SEBI vide its Master Circular for Mutual Fund dated June 27, 2024 and SEBI Circular dated February 27, 2025 for Regulatory Framework for Specialized Investment Funds (‘SIF’) as amended from time to time are as follows: 1. The cumulative gross exposure through equity, debt, derivative positions (including fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by SEBI from time to time shall not exceed 100% of the net assets of the investment strategy. 2. Specialized Investment shall not write options or purchase instruments with embedded written options. 3. The total exposure related to option premium paid must not exceed 20% of the net assets of the strategy. 4. Cash or cash equivalents i.e. Government Securities, T-Bills and Repo on Government Securities having residual maturity of less than 91 days may be treated as not creating any exposure. 5. Exposure due to hedging positions may not be included in the above mentioned limits subject to the following: a. Hedging positions are the derivative positions that reduce possible losses on an existing position in securities and till the existing position remains. b. Hedging positions cannot be taken for existing derivative positions. Exposure due to such positions shall have to be added and treated under limits mentioned in Point 1. c. Any derivative instrument used to hedge has the same underlying security as the existing position being hedged. d. The quantity of underlying associated with the derivative position taken for hedging purposes does not exceed the quantity of the existing position against which hedge has been taken. 6. (a) Specialized Investment may enter into plain vanilla Interest Rate Swaps (IRS) for hedging purposes. The value of the notional principal in such cases must not exceed the value of respective existing assets being hedged by the investment strategy. (b) In case of participation in IRS is through over the counter transactions, the counter party has to be an entity recognized as a market maker by RBI and exposure to a single counterparty in such transactions should not exceed 10% of the net assets of the investment strategy. However, if Specialized Investment Fund are transacting in IRS through an electronic 32trading platform offered by the Clearing Corporation of India Ltd. (CCIL) and CCIL is the central counterparty for such transactions guaranteeing settlement, the single counterparty limit of 10% shall not be applicable. 7. Exposure due to derivative positions taken for hedging purposes in excess of the underlying position against which the hedging position has been taken, shall be treated under the limits mentioned in point 1. 8. Definition of Exposure in case of Derivative Positions: Each position taken in derivatives shall have an associated exposure as defined under. Exposure is the maximum possible loss that may occur on a position. However, certain derivative positions may theoretically have unlimited possible loss. Exposure in derivative positions shall be computed as follows: Position Exposure Long Future Futures Price * Lot Size * Number of Contracts Short Future Futures Price * Lot Size * Number of Contracts Option Bought Option Premium Paid * Lot Size * Number of Contracts Option Sold Market price of the underlying * Lot size * Number of contracts 9. In case of any other derivative exposure, the exposure shall be calculated as the notional market value of the contract. 10. The total exposure at any point of time shall be the sum of exposure through instruments in both the cash market and derivatives market II. Information about the investment strategy: SO. 29 A. Where will the investment strategy invest– In terms of Regulation 49Z of SEBI MF Regulations, detailed description of the instruments as permitted under Regulation 43(1) for investment strategies (including overview of debt markets in India, if applicable) is mentioned in Section I The corpus of the investment strategy, subject to the enabling provisions of asset allocation pattern, will be invested in securities/ instruments which will include but not limited to: • Equity and equity related instruments: Equity and Equity related instruments include convertible debentures, equity warrants, convertible preference shares and equity derivatives. • Foreign Securities The Investment Strategy may also invest in suitable investment avenues in foreign securities in overseas financial markets for the purpose of diversification, commensurate with the investment strategy objectives and subject to necessary stipulations by SEBI / RBI. Towards this end, the Specialized Investment Fund may also appoint overseas investment advisors and other service providers, to the extent permissible under the Regulations. The investment strategy may, with the approval of SEBI / RBI, where required invest in: - ADRs (American Depository Receipts)/ GDRs (Global Depository Receipts) issued by Indian or foreign companies - Equity of overseas companies listed on recognized stock exchanges overseas - Initial and follow on public offerings for listing at recognized stock exchanges overseas - Foreign debt securities in the countries with fully convertible currencies, short term as well as long term debt instruments with rating not below investment grade by accredited/registered credit rating agencies - Money market instruments rated not below investment grade - Repos in the form of investment, where the counterparty is rated not below investment grade; repos shall not however, involve any borrowing of funds by the mutual funds - Government securities where the countries are rated not below investment grade - Derivatives traded on recognized stock exchanges overseas only for hedging and portfolio balancing with underlying as securities - Short term deposits with banks overseas where the issuer is rated not below investment grade - Units/securities issued by overseas mutual funds or unit trusts registered with overseas regulators and investing in (a) aforesaid securities, or (b) unlisted overseas securities (not exceeding 10% of their net assets). Note: The investment strategy will not invest in foreign securitized debt. 33Investment in overseas securities shall be made in accordance with the requirements including appointment of a dedicated Fund Manager stipulated by SEBI and RBI from time to time. • Debt Securities: Debt instruments (in the form of non-convertible debentures, bonds, secured premium notes, zero interest bonds, deep discount bonds, floating rate bonds/notes, securitised debt, pass through certificates, asset backed securities, mortgage backed securities and any other domestic fixed income securities including structured obligations etc.) include, but are not limited to: 1. Debt issuances of the statutory bodies (which may or may not carry a state/central government guarantee), 2. Debt securities that have been guaranteed by Government of India and State Governments, 3. Debt securities issued by Corporate Entities (Public /Private sector undertakings), 4. Debt securities issued by Public/Private sector banks and development financial institutions, 5. Securitized Debt, Structured Obligations, Credit enhanced Debt, 6. Non Convertible Preference Shares. • Money Market Instruments include: 1. Commercial papers 2. Commercial bills 3. Tri-party Repos on Government securities or treasury bills (TREPS) 4. Certificate of deposit 5. Usance bills 6. Permitted securities under a repo/reverse repo agreement 7. Any other like instruments as may be permitted by RBI/SEBI for liquidity requirements from time to time. Investments In Derivative Instruments As part of the Fund Management process, the Trustee may permit the use of derivative instruments such as index futures, stock futures and options contracts, warrants, convertible securities, swap agreements, Forward Rate Agreement (FRA) or any other derivative instruments that are permissible or may be permissible in future under applicable regulations and such investments shall be in accordance with the investment objectives of the investment strategy. Index futures/options are meant to be an efficient way of buying/selling an index compared to buying/selling a portfolio of physical shares representing an index for ease of execution and settlement. Index futures/options can be an efficient way of achieving the investment strategy’s investment objective. On the fixed income side, an interest rate swap agreement from fixed rate to floating rate is an example of how derivatives can be an effective hedge for the portfolio in a rising interest rate environment. Derivatives can be either exchange traded or can be over the counter (OTC). Exchange traded derivatives are listed and traded on Stock Exchanges whereas OTC derivative transactions are generally structured between two counterparties. Derivatives may be high risk - high return instruments, upon leveraging. As they are highly leveraged, a small price movement in the underlying security could have a large impact on their value and may also result in a loss. Position Limits: The investment strategy may enter into derivative transactions in line with the guidelines prescribed by SEBI from time to time. The exposure limit per scrip/instrument shall be to the extent permitted by the SEBI Regulation for the time being in force. These limits will be reviewed by the AMC from time to time. Trading in derivatives by the investment strategy shall be restricted to hedging, portfolio balancing purposes and upto 25% unhedged short derivative exposure. Currently, the position limits for Specialized Investment and its investment strategies, as permitted by the SEBI Regulations, are as under: The cumulative gross exposure through equity, debt and derivative positions (including commodity and fixed income derivatives), and repo transactions in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by SEBI from time to time) should not exceed 100% of the net assets of the investment strategy. Exposure due to hedging positions may not be included in the above mentioned limit subject to the following: • Hedging positions are the derivative positions that reduce possible losses on an existing position in securities and till the existing position remains. • Hedging positions cannot be taken for existing derivative positions. Exposure due to such positions shall have to be added and treated under limits mentioned above. • Any derivative instrument used to hedge has the same underlying security as the existing position being hedged. • The quantity of underlying associated with the derivative position taken for hedging purposes does not exceed the quantity of the existing position against which hedge has been taken. • Exposure due to derivative positions taken for hedging purposes in excess of the underlying position against which the hedging position has been taken, shall be treated under the limits mentioned above. Further, the total exposure related to option premium paid must not exceed 20% of the net assets of the investment strategy. Pursuant to SEBI letter dated November 03, 2021, Cash or cash equivalents shall consist of following securities having residual maturity of less than 91 days which are not considered for the purpose of calculating gross exposure limit: 341) Government Securities 2) T-Bills 3) Repo on Government Securities Exposure to Derivatives The exposure limits for trading in derivatives by Specialized Investment specified by SEBI vide its clause 12.25 of Master Circular dated June 27, 2024 and as amended from time to time are as follows: A. Position limit for Specialized Investment in index options contracts: 1. The Specialized Investment Fund position limit in all index options contracts on a particular underlying index shall be Rs. 500 crore or 15% of the total open interest of the market in index options, whichever is higher, per Stock Exchange. 2. This limit would be applicable on open positions in all options contracts on a particular underlying index. B. Position limit for Specialized Investment in index futures contracts: 1. The Specialized Investment Fund position limit in all index futures contracts on a particular underlying index shall be Rs. 500 crore or 15% of the total open interest of the market in index futures, whichever is higher, per Stock Exchange. 2. This limit would be applicable on open positions in all futures contracts on a particular underlying index. C. Additional position limit for hedging In addition to the position limits at point (A) and (B) above, Specialized Investment Fund may take exposure in equity index derivatives subject to the following limits: 1. Short positions in index derivatives (short futures, short calls and long puts) shall not exceed (in notional value) the Specialized Investment Fund’s holding of stocks. 2. Long positions in index derivatives (long futures, long calls and short puts) shall not exceed (in notional value) the Specialized Investment Fund’s holding of cash, government securities, T-Bills and similar instruments D. Position limit for Specialized Investment for stock based derivative contracts: The Specialized Investment Fund position limit in a derivative contract on a particular underlying stock, i.e. stock option contracts and stock futures contracts shall be 20% of the applicable Market Wide Position Limit (MWPL). Position limit for each investment strategy of a Specialized Investment Fund. The position limits for each investment strategy of Specialized Investment Fund and disclosure requirements shall be identical to that prescribed for a sub-account of a FII. Therefore, the investment strategy-wise position limit/disclosure requirements shall be – 1. For stock option and stock futures contracts, the gross open position across all derivative contracts on a particular underlying stock of a investment strategy of a Specialized Investment Fundshall not exceed the higher of: 1% of the free float market capitalisation (in terms of number of shares) Or 5% of the open interest in the derivative contracts on a particular underlying stock (in terms of number of contracts) 2. This position limits shall be applicable on the combined position in all derivative contracts on an underlying stock at a Stock Exchange. 3. For index based contracts, Mutual Funds shall disclose the total open interest held by its investment strategy or all investment strategies put together in a particular underlying index, if such open interest equals to or exceeds 15% of the open interest of all derivative contracts on that underlying index. Purpose of investment: − Trading in derivatives by the investment strategy shall be restricted to hedging, portfolio balancing and upto 25% unhedged short exposure. − The investment strategy shall fully cover its positions, except for the permissible short position, in the derivatives market by holding underlying securities/cash or cash equivalents/option and/or obligation for acquiring underlying assets to honour the obligations contracted in the derivatives market. − Separate records shall be maintained for holding the cash and cash equivalents/securities for this purpose. − The securities held shall be marked to market by the AMC to ensure full coverage of investments made in derivative products at all time. • The Investment strategy may take position in derivative instruments like Futures, Options, and such other derivative instruments as may be permitted 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. 35Futures - 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 investment strategy 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 investment strategy will not exercise the option and it shall lose the premium of Rs. 100. Thus, in the above example, the loss for the investment strategy, 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 investment strategy 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 investment strategy 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 investment strategy may let the option expire and forego the premium of Rs. 100. Writing a Call Option: Assume that the investment strategy 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 investment strategy 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 investment strategy gets to keep the premium of Rs. 100. Writing a Put Option: Assume that the investment strategy 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 investment strategy 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 investment strategy 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 investment strategy. Exposure on account of call option written under the covered call strategy: The investment strategy 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 market value of the underlying equity shares held at all points in time. In case of any passive breach, the investment strategy shall have 7 trading days to rebalance the portfolio. During the rebalancing period, no additional call options will can be written in the investment strategy. 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 investment strategy at all points in time. The unencumbered shares in a investment strategy 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 investment strategy needs to sell securities on which a call option is written under a covered call strategy, it must 36ensure compliance with (a) and (b) above while selling the securities d) The investment strategy 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 investment strategy. In case of any passive breach of the requirement at Paragraph (a), the respective investment strategy shall have 7 trading days to rebalance the portfolio. During the rebalancing period, no additional call options can be written in the said investment strategy. (a) The fund has an existing equity portion invested in a basket of stocks. In case the fund manager has a view that the equity markets are headed downwards, the fund can then hedge the exposure to equity either fully or partially by initiating short futures positions in the index. A similar position in the long direction can also be initiated by the fund to hedge its position of cash and permissible equivalents. The extent to which this can be done is determined by existing guidelines. (b) To the extent permissible by extant regulations the investment strategy can initiate a naked short position in an underlying index future traded on a recognized stock exchange. Further the Investment strategy may use index and stock futures and options to create an unhedged 25% short derivative exposure. For example: The investment strategy may buy put options of stocks that it does not hold in cash market, thus creating a net short exposure. In case the Nifty near month future contract trading at say, 1500, and the fund manager has a view that it will depreciate going forward, the fund can initiate a sale transaction of nifty futures at 1500 without holding a portfolio of equity stocks or any other underlying long equity position. Once the price falls to 1400 after say, 20 days the fund can initiate a square- up transaction by buying the said futures and book a profit of 100. Correspondingly the fund can take a long position without an underlying cash/ cash equivalent subject to the extant regulations. Risks: • The risks associated with index futures are similar to those associated with equity investments. Additional risks could be on account of illiquidity and potential mis– pricing of the futures and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. • The Long position in the Nifty will have as much loss as the gain in the short portfolio if hedged completely and would be vice versa if we were holding long portfolio, short Index. Strategies that employ Stock Futures: Sell Spot Buy Future: To illustrate, let us assume the fund holds the stock XYZ Ltd which is trading @ Rs. 100/- at the spot market. If for some reasons the stock trades at Rs. 98 in the futures, the fund may sell the stock and buy the futures. On the date of expiry, the fund may reverse the transactions (i.e. Buy Spot & Sell futures) and earn a risk-free Rs. 2/- (2% absolute) on its holdings. Since this is done without diluting the fund’s view on the underlying stock, the fund will benefit from any upside move i.e. if on the date of futures expiry, the stock is trading at Rs. 110/- the futures too will be trading at Rs. 110- and the fund will capture the 10% upside the stock provided and along with it the 2% arbitrage too, thereby enhancing returns to 12% Risks: • While Futures markets are typically more liquid than the underlying cash market, there can be no assurance that ready liquidity would exist at all points in time for investment strategy to purchase or close out a specific futures contract. • The risks associated with stock futures are similar to those associated with equity investments. Additional risks could be on account of illiquidity and potential mis– pricing of the futures. Buy Spot Sell Future: If the fund holds a stock XYZ Ltd which trades @ Rs 100/- at the spot market and is trading at Rs. 102/- in the futures market. The fund may buy the spot and sell the futures and earn the premium of Rs.2 /- which is risk-free. However this strategy can be used only when the fund is sitting in cash and is looking at enhancing the returns on the cash. Risks: • While Futures markets are typically more liquid than the underlying cash market, there can be no assurance that ready liquidity would exist at all points in time for investment strategy to purchase or close out a specific futures contract. SECURITIES LENDING. If permitted by SEBI under extant regulations/guidelines, the Investment strategy may also engage in scrip lending as provided under Securities Lending Investment Strategy 1997, as per Para 12.11 of SEBI Master Circular on Mutual Funds dated June 27, 2024, and other applicable guidelines/regulations, as amended from time to time. Scrip lending means lending a security to another person or entity for a fixed period of time, at a negotiated compensation. The security lent will be returned by the borrower on or before the expiry of the stipulated period. The AMC will comply with the required reporting obligations and the Trustee will carry out the reviews required under SEBI/RBI guidelines. Further a maximum of 20% of net assets will be deployed in securities lending and the maximum single party exposure will be restricted to 5%# of net assets outstanding at any point of time. # Presently, Securities lending and borrowing (SLB) is an Exchange traded product. Counterparty is not known for transactions carried out under SLB segment and they are guaranteed by Clearing Corporations and hence do not carry any counter party risk. Accordingly, single party exposure limit will not apply to trades on Stock Exchange platform. Single party exposure limits can only apply in case of OTC (over the counter) trades where counterparty can be identified. Engaging in scrip lending is subject to risks related to fluctuations in the collateral value / settlement / liquidity / counter 37party. INVESTMENT IN SECURITISED DEBT 1. How the risk profile of securitized debt fits into the risk appetite of the investment strategy Securitization is the fact or process of securitizing assets i.e. the conversion of loans into securities, usually in order to sell them on to other investors. This is done by assigning the loans to a special purpose vehicle (a trust), which in turn issues Pass-Through-Certificates (PTCs). These PTCs are transferable securities with fixed income characteristics. The risk of investing in securitized debt is similar to investing in debt securities. However, it differs mainly in two respects. One, the liquidity of securitized debt is less than similar debt securities. Two, for certain types of securitized debt (backed by mortgages, personal loans, credit card debt, etc.), there is an additional pre-payment risk. Pre-payment risk refers to the possibility that loans are repaid before they are due, which may reduce returns if the re-investment rates are lower than initially envisaged. Because of these additional risks, securitized debt typically offers higher yields than debt securities of similar credit rating and maturity. After considering these additional risks, the investment is no different from investment in a normal debt security. Considering the investment objective of the investment strategy, these instruments with medium risk profile can be considered in the investment universe. Thus if the Fund Manager judges that the additional risks are suitably compensated by the higher returns, he may invest in securitized debt up to the limits specified in the asset allocation table. 2. Policy relating to originators based on nature of originator, track record, NPAs, losses in earlier securitized debt, etc Investments in securitized debt will be done based on the assessment of the originator and the securitized debt which is carried out by the Fixed Income team based on the in-house research capabilities as well as the inputs from the independent credit rating agencies and by following WSIF’s internal credit process. Specifically, in order to mitigate the risk at the issuer/originator level the Fixed Income team will consider various factors which will include - - Track record of the originator in the specific business to which the underlying loans correspond to; - size and reach of the issuer/originator; - Collection infrastructure & collection policies; - Post default recovery mechanism & infrastructure; - Underwriting standards & policies followed by originator; - Management information systems; - Financials of the originators including an analysis of leverage, NPAs, earnings, etc.; - Future strategy of the company for the specific business to which the underlying loans correspond to; - Performance track record of Originator’s portfolio & securitized pools, if any; - Utilization of credit enhancement in the prior securitized pools; - The quality of information disseminated by the issuer/ originator; and - The credit enhancement for different types of issuer/originator. Also, assessment of business risk would be carried out which includes - - Outlook for the economy (both domestic and global); and - Outlook for the industry In addition, the fund analyses the specific pool and the broad evaluation parameters are as follows: - Average seasoning of the loans in the pool - Average Loan to value ratio of the loans in the pool - Average ticket size of the loans - Borrower profile (salaried / self employed, etc) - Geographical profile of the pool - Tenure profile of the pool - Obligor concentration - Credit enhancement cover available over and above the historic losses on Originator’s portfolio - Expected Prepayment rate in the specific asset class experienced by the originator in the past as well as the industry - Limited Liquidity and Price Risk. The investment strategy will invest in securitized debt which are rated investment grade and above by a credit rating agency recognized by SEBI. The investment team analyses the Rating Rationale in detail before investing in any PTCs, and also discusses with the concerned rating agency on a need basis. The rating agency would normally take in to consideration the following factors while rating a securitized debt: Credit risk at the asset/originator/portfolio/pool level - 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 - This includes Servicer Risk, co-mingling risk etc. The rating agencies generally mitigate such risks though the usage of stringent counterparty selection and replacement criteria to reduce the risk of failure. Bankruptcy risk - Of the Originator – o 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. - Of the Investors’ agent 38o 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 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. o Various market risks like interest rate risk, macro-economic risks o Assessment of risks related to business for example outlook for the economy, outlook for the industry and factors specific to the issuer/originator. 3. Risk mitigation strategies for investments with each kind of originator The examples of securitized assets which may be considered for investment by the Investment strategy and the various risk mitigation parameters (please read in continuation with point 2 above) which will be considered include; A) Asset backed securities issued by banks or non-banking finance companies. Underlying assets may include receivables from loans against cars, commercial vehicles, construction equipment or unsecured loans such as personal loans, consumer durable loans. The various factors which will be usually considered while making investments in such type of securities include profile of the issuer, analysis of underlying loan portfolio – nature of asset class, seasoning of loans, geographical distribution of loans and coverage provided by credit-cum-liquidity enhancements. B) Mortgage backed securities issued by banks or housing finance companies, where underlying assets are comprised of mortgages/home loan. The various factors which will be usually considered while making investments in such type of securities include issuer profile of the issuer, quality of underlying portfolio, seasoning of loans, coverage provided by credit-cum-liquidity enhancements and prepayment risks. C) Single loan securitization, where the underlying asset comprises of loans issued by a bank/non-banking finance company. The factors which will be usually considered while making investments in such type of securities include assessment of credit risk associated with the underlying borrower as well as the originator. The Fixed Income team will adhere to WSIF’s internal credit process and perform a detailed review of the underlying borrower prior to making investments. This analysis is no different from the analysis undertaken by Fund when it invests in Debentures or Commercial papers issued by the same borrower. Critical Evaluation Criteria Typically the Fund would avoid investing in securitization transaction (without specific risk mitigation strategies / additional cash/security collaterals/ guarantees) if there are concerns on the following issues regarding the originator / underlying issuer: 1. High default track record/ frequent alteration of redemption conditions/covenants 2. High leverage ratios – both on a standalone basis as well on a consolidated level/ group level 3. Higher proportion of re-schedulement of underlying assets of the pool or loan, as the case may be 4. Higher proportion of overdue assets of the pool or the underlying loan, as the case may be 5. Poor reputation in market 6. Insufficient track record of servicing of the pool or the loan, as the case may be. Further, investments in securitized debt will be done in accordance with the investment restrictions specified under the SEBI Regulations/ this Investment Strategy Information Document which would help in mitigating certain risks. Currently, as per the Regulations, the Investment strategy cannot invest more than 10% of its net assets in debt instruments (irrespective of residual maturity) issued by a single issuer which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the Act. Such investment limit may be extended to 12% of the net assets of the Investment strategy with the prior approval of the Board of Trustees and the Board of the AMC. 4. The level of diversification with respect to the underlying assets, and risk mitigation measures for less diversified investments The framework which will generally be applied by the Fund Manager while evaluating the investment decision with respect to securitized debt will be as follows: Characteristics/ Mortgage Commercia1 CAR 2 wheelers Micro Personal Single Others Type of Pool Loan Vehicle and Finance Loans Sell Construction Pools down$ Equipment 39Approximate Upto 10 Upto 5years Upto 5 Upto 48 Upto 80 Upto 3 years Case by As and when Average years years months weeks case new maturity basis (in Months) Collateral In excess of In excess of 4% In excess In excess of In excess of In excess of Case by asset margin 3% of 4% 4% 5% 5% case classes of securitized (including cash, basis debt are guarantees, introduced, excess interest the invest spread, ments such subordinate instrument tranche) s will be evaluated on a case by case basis Average Loan to 95% or 100% or lower ** 95% or 95% or lower Unsecured Unsecured Case by Value Ratio lower lower case basis Average Minimum 2 Minimum 2 Minimum Minimum 2 Minimum 2 Minimum 2 Case by seasoning of the months months 2 months months weeks months case Pool basis Maximum single < 5% < 5% NA NA NA NA NA exposure range * (retail (retail pool) (Very Small (retail pool) pool) retail pool) Average single < 5% 5% < 2% < 1% < 1% < 1% NA exposure range% * * denotes % of a single ticket/loan size to the overall assets in the securitized pool. ** LTV Based on chassis value $ Broad evaluation criteria as per point 3 above Notes: a. Retail pools are the loan pools relating to Car, 2 wheeler, micro finance and personal loans, wherein the average loan size is relatively small and spread over large number of borrowers. b. The information illustrated in the table above is based on current scenario relating to securitized debt market and is subject to change depending upon the change in the related factors. In addition to the framework stated in the table above, in order to mitigate the risks associated with the underlying assets where the diversification is less, at the time of investment the Fixed Income team could consider various factors including but not limited to – - Size of the loan - the size of each loan is generally analysed on a sample basis and an analysis of the static pool of the originator is undertaken to ensure that the same matches with the static pool characteristics. It also indicates whether there is high reliance on very small ticket size borrower which could result in delayed and expensive recoveries. - Average original maturity of the pool of underlying assets - The analysis of average maturity of the pool is undertaken to evaluate whether the tenor of the loans are generally in line with the average loans in the respective industry and repayment capacity of the borrower. - Loan to value ratio, average seasoning of the pool of underlying assets - these parameters would be evaluated based on the asset class as mentioned in the table above. - Default rate distribution - the Fixed Income team generally ensures that all the contracts in the pool are current to ensure zero default rate distribution. - Geographical distribution - the analysis of geographical distribution of the pool is undertaken to ensure prevention of concentration risk. 40- Credit enhancement facility - credit enhancement facilities in the form of cash collateral, such as fixed deposits, bank guarantee etc could be obtained as a risk mitigation measure. - Liquidity facility - these parameters will be evaluated based on the asset class as mentioned in the table above. - Structure of the pool of underlying assets - The structure of the pool of underlying assets would be either single asset class or combination of various asset classes as mentioned in the table above. We could add new asset class depending upon the securitization structure and changes in market acceptability of asset classes. 5. The minimum retention period of the debt by the originator prior to securitization The minimum retention period of the debt by the originator prior to securitization and the minimum retention percentage by originator of debts will be as per the guidelines/regulations issued by the RBI/other regulatory agencies from time to time. Also, please refer the table in point 4. The Fund will adopt that policy, whichever is stricter. 6. Minimum retention percentage by originator of debts to be securitized Same as point 5 above. 7. 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 investment strategy of the fund An investment by the investment strategy in any security is done after detailed analysis by the Fixed Income team and in accordance with the investment objectives and the asset allocation pattern of a investment strategy. All investments are made on an arm’s length basis without consideration of any investments (existing/potential) in the investment strategies made by any party related/involved in the transaction. The robust credit process ensures that there is no conflict of interests when a investment strategy invests in securitized debt of an originator and the originator in turn makes investments in that particular investment strategy. 8. The resources and mechanism of individual risk assessment with the AMC for monitoring investment in securitized debt The resources for and mechanisms of individual risk assessment with the AMC for monitoring investment in securitized debt are as follows: - - Fixed Income Team – Currently, the AMC has a well experienced team, which is responsible for credit research, monitoring and fund management, for all exposures including securitized debt. - Ratings are monitored for any movement – Based on the cash flow report and Fixed Income Team’s view, periodic review of company credit appraisal shall be conducted & monitored accordingly. As per the prevailing SEBI guidelines, the investments in securitised debt instruments will be shown as a separate category under debt instruments in the half yearly disclosure of investment strategy portfolio. • Usage of Short Term Deposits: Pending deployment of the funds in securities in terms of investment objective of the Investment strategy, the AMC may park the funds of the Investment strategy in short term deposits of the Scheduled Commercial Banks, subject to the guidelines issued by SEBI vide Para 12.16 of SEBI Master Circular on Mutual Funds dated June 27, 2024, as may be amended from time to time. B. What are the investment restrictions? In pursuance of the Regulations, the following restrictions are currently applicable to the investment strategy: 1. The Investment strategy shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relevant securities and in all cases of sale, deliver the securities; provided that the Investment strategy may engage in short selling of securities in accordance with the framework relating to short selling and securities lending and borrowing specified by SEBI; provided further that the Investment strategy may enter into derivatives transactions in a recognised stock exchange, subject to the framework specified by SEBI; provided further that sale of government security already contracted for purchase shall be permitted in accordance with the guidelines issued by the Reserve Bank of India in this regard. 2. The Specialized Investment shall, get the securities purchased or transferred in the name of the Specialized Investment on account of the concerned investment strategy, wherever investments are intended to be of long term nature. 3. No investment shall be made in any Fund of Funds investment strategy. 414. The Specialized Investment Fund shall not advance any loans for any purpose. 5. The Investment strategy may invest in any other investment strategy without charging any fees, provided that aggregate interinvestment strategy investment made by all investment strategies under the management of Wealth Company Asset Management Holdings Private Limited or in investment strategies under the management of any other AMC shall not exceed 5% of the net asset value of the Specialized Investment fund. 6. Specialized Investment Fund, under all its investment strategies should not own more than fifteen per cent of any company’s paid up capital carrying voting rights or fifteen per cent of units of REITs issued by a single issuer, as the case may be Provided that investment in the asset management company or the trustee company of a Specialized Investment fund shall be governed by clause (a) of sub-regulation (1) of regulation 7B: Provided further that the limit mentioned above shall be inclusive of ten per cent limit for mutual fund schemes as specified under clause 2 of Seventh Schedule. Explanation: If a mutual fund under all its schemes owns ten per cent of any company’s paid up capital carrying voting rights or ten per cent of units of REITs issued by a single issuer, as the case may be, then the Specialized Investment fund under all its investment strategies shall not own more than five per cent of that company’s paid up capital carrying voting rights or five per cent of units of REITs issued by a single issuer respectively, as the case may be. 7. All investments by the investment strategy in equity shares and equity related instruments shall only be made provided such securities are listed or to be listed. 8. The investment strategy shall not invest more than 10% of its net assets in the equity or equity related instruments of any entity. 9. Investment in unlisted debt instruments: 9.1. The investment strategy shall not invest in unlisted debt instruments including commercial papers (CPs), other than (a) government securities, (b) other money market instruments and (c) derivative products such as Interest Rate Swaps (IRS), Interest Rate Futures (IRF), etc. which are used for hedging. However, the investment strategy may invest in unlisted Non-Convertible Debentures (NCDs) not exceeding 10% of the debt portfolio of the investment strategy subject to the condition that such unlisted NCDs have a simple structure (i.e. with fixed and uniform coupon, fixed maturity period, without any options, fully paid up upfront, without any credit enhancements or structured obligations) and are rated and secured with coupon payment frequency on monthly basis. 10. 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 the investment strategy 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 the investment strategy in such instruments, shall not exceed 5% of the net assets of the investment strategy. c. All such investments shall be made with the prior approval of the Board of AMC and the Board of Trustees. d. The Investment strategy may enter into plain vanilla Interest Rate Swaps (IRS) for hedging purposes. The value of the notional principal in such cases must not exceed the value of respective existing assets being hedged by the investment strategy. e. In case of participation in IRS is through over the counter transactions, the counter party has to be an entity recognized as a market maker by RBI and exposure to a single counterparty in such transactions should not exceed 10% of the net assets of the investment strategy. However, if Investment strategy is transacting in IRS through an electronic trading platform offered by the Clearing Corporation of India Ltd. (CCIL) and CCIL is the central counterparty for such transactions guaranteeing settlement, the single counterparty limit of 10% shall not be applicable. 11. a. Sector Exposure – The exposure in a particular sector (excluding investments in Bank CDs, TREPs, GSecs, T-Bills and AAA rated securities issued by Public Financial Institutions and Public Sector Banks) under the portfolio will not exceed 20% of the net assets on account of purchase. An additional exposure to financial services sector (over and above the limit of 20%) not exceeding 10% of the net assets of the investment strategy on account of purchase shall be allowed by way of increase in exposure to Housing Finance Companies (HFCs) only. SO. 31 Further, an additional exposure of 5% of the net assets of the investment strategy shall be allowed for investments in securitized debt instruments based on retail housing loan portfolio and/or affordable housing loan portfolio. Provided that the additional exposure to such securities issued by HFCs are rated AA and above and these HFCs are registered with National Housing Bank (NHB) and the total investment/ exposure in HFCs shall not exceed 20% of the net assets of the investment strategy on account of purchase. The above restriction will not be applicable to the equity portion of the Investment strategy’s portfolio (where applicable). b. Group Exposure - The total exposure of Investment strategy in a Group (excluding investments in securities issued by Public Sector Units, Public Financial Institutions and Public Sector Banks) will not exceed 20% of the net assets of the Investment strategy. Such investment limit may be extended to 25% of 42the net assets of the Investment strategy with the prior approval of the Board of Trustees. Investments by the Investment strategy 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 investment strategy. Such investment limit may be extended to 15% of the net assets of the Investment strategy 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. The above restrictions will not be applicable to the equity portion of the Investment strategy’s portfolio. 12. Debentures, irrespective of any residual maturity period (above or below one year), shall attract the investment restrictions as applicable for debt instruments as specified under Clause 1 and 1A of Seventh Schedule to SEBI Regulations. 13. Transfers of investments from one investment strategy to another will be done in inconformity with as per Para 12.30 of SEBI Master Circular on Mutual Funds dated June 27, 2024. 14. No investment shall be made in - any unlisted security of an associate or group company of the sponsor; or - any security issued by way of private placement by an associate or group company of the sponsor; or - the listed securities of group companies of the sponsor which is in excess of 25% of the net assets. 15. Pending deployment of funds in securities in terms of investment objectives of the Investment strategy, the Specialized Investment Fund can invest the funds of the investment strategy in short term deposits of scheduled commercial banks in line with Para 12.16 of SEBI Master Circular on Mutual Funds dated June 27, 2024 as amended from time to time. The Investment strategy shall abide by the following guidelines for parking of funds in short term deposits:  Such short term deposits shall be held in the name of the investment strategy.  The investment strategy 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 limit may be raised to 20% with prior approval of the Trustees.  Parking of funds in short term deposits of associate and sponsor scheduled commercial banks together shall not exceed 20% of total deployment by the Specialized Investment fund in short term deposits.  The investment strategy shall not park more than 10% of the net assets in short term deposit(s), with any one scheduled commercial bank including its subsidiaries.  The Investment strategy shall not park funds in short-term deposit of a bank, which has invested in the Investment strategy. The bank in which the investment strategy has short-term deposit shall not be permitted to invest in the said investment strategy until the investment strategy has short-term deposit with such bank.  AMC shall not charge any investment management and advisory fees for parking of funds in short term deposits of scheduled commercial banks. • The aforesaid limits are not applicable to term deposits placed as margins for trading in cash and derivatives market. 16. Restrictions on Investment in debt instruments having Structured Obligations / Credit Enhancements: • Investment of the investment strategy in the following instruments shall not exceed 10% of the debt portfolio of the investment strategy and the Group exposure in such instruments shall not exceed 5% of the debt portfolio of the investment strategy: a) Unsupported rating of debt instruments (i.e. without factoring-in credit enhancements) is below investment grade.; and b) Supported rating of debt instruments (i.e. after factoring-in credit enhancement) is above investment grade. For this purpose, a group means a Group as defined under regulation 2 (mm) of SEBI (Mutual Funds) Regulations, 1996 (Regulations) and shall include an entity, its subsidiaries, fellow subsidiaries, its holding company and its associates. • These investment limits mentioned above shall not be applicable on investments in securitized debt instruments, as defined in SEBI (Public Offer and Listing of Securitized Debt Instruments) Regulations 2008. • 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. AMC may 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, AMC shall initiate necessary steps to ensure protection of the interest of the investors. 17. Repo transactions in corporate debt securities • The gross exposure of any mutual fund investment strategy to repo transactions in corporate debt securities shall not be more than 10 % of the net assets of the concerned investment strategy. • The cumulative gross exposure through repo transactions in corporate debt securities along with equity, debt and derivatives shall not exceed 100% of the net assets of the concerned investment strategy. 18. The investment strategy may invest in certain debt instruments with special features viz. subordination to equity 43(absorbs losses before equity capital) and /or convertible to equity upon trigger of a pre-specified event for loss absorption (For eg. Additional Tier I bonds and Tier 2 bonds issued under Basel III framework) subject to the following: a) Specialized Investment Fund under all its investment strategies shall not own more than 10% of such instruments issued by a single issuer b) A Specialized Investment Fund investment strategy shall not invest: a. more than 10% of its NAV of the debt portfolio of the investment strategy in such instruments; and b. more than 5% of its NAV of the debt portfolio of the investment strategy in such instruments issued by a single issuer. The above investment limit for a mutual fund investment strategy shall be within the overall limit for debt instruments issued by a single issuer, as specified at clause 1 of the Seventh Schedule of SEBI (Mutual Funds) Regulations, 1996, and other prudential limits with respect to the debt instruments. 19. The investment strategy may consider investment in other financial market investments as per guidelines issued by the Central Government/SEBI/RBI from time to time. The AMC/Trustee may alter these investment restrictions from time to time to the extent SEBI regulations/applicable rules change/permit so as to achieve the investment objective of the investment strategy. Such alterations will be made in conformity with SEBI regulations. Further, apart from the investment restrictions prescribed under SEBI regulations, the investment strategy may follow any internal norms vis-à-vis limiting exposure to a particular scrip or sector, etc. The investment restrictions specified as a percentage of net assets will be computed at the time of making the investment and it is clarified that changes need not be effected, merely by reason of appreciation or depreciation in value or by reason of factors beyond the control of the investment strategy (such as receipt of any corporate or capital benefits or amalgamations). In case the limits are exceeded due to reasons beyond its control, the AMC shall adopt necessary measures of prudence to reset the situation having regard to the interest of the investors. 1. Transfer of instruments from one investment strategy to another investment strategy in the same Specialized Investment fund is permitted provided: a. Such transfers are done at the prevailing market price for quoted instruments on spot basis (spot basis shall have the same meaning as specified by a Stock Exchange for spot transactions); and b. the securities so transferred shall be in conformity with the investment objective of the investment strategy to which such transfer has been made. However, in terms of Clause 12.30 of SEBI Master Circular dated June 27, 2024, ISTs are allowed only in case of raising liquidity and for duration/Issuer/Sector/Group rebalancing with the following conditions: In case of Raising Liquidity, ISTs permitted if: SO. 30 a) Use of investment strategy cash & cash equivalent b) Use of market borrowings c) Selling of investment strategy securities in the market d) After attempting all the above, if there is still a investment strategy level liquidity deficit, then out of the remaining securities, outward Inter Investment strategy Transfers (ISTs) of the optimal mix of low duration paper with highest quality shall be effected. The use of market borrowing before ISTs will be optional and Fund Manager may at his discretion take decision on borrowing in the best interest of unitholders. In case of Duration/Issuer/Sector/Group rebalancing, ISTs permitted if: a) ISTs shall be allowed only to rebalance the breach of regulatory limit. b) ISTs can be done where any one of duration, issuer, sector and group balancing is required in both the transferor and transferee investment strategies. No ISTs 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 in terms of clause 12.30 of SEBI Master Circular dated June 27, 2024 during the previous four months. 1. The Specialized Investment Fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relevant securities and in all cases of sale, deliver the securities: Provided that the Specialized Investment 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 further that the Specialized Investment Fund may enter into derivatives transactions in a recognized stock exchange, subject to the framework specified by SEBI. 44Provided 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. 2. The Investment strategy shall not make any investment in any fund of funds investment strategy. 3. The Investment strategy will comply with the following restrictions for trading in exchange traded derivatives, as specified by SEBI vide its Clause 7.5 of SEBI Master Circular dated June 27, 2024: i. Position limit for the Specialized Investment Fund in equity index options contracts a. The Specialized Investment Fund position limit in all index options contracts on a particular underlying index shall be Rs. 500 crores or 15% of the total open interest of the market in index options, whichever is higher, per stock exchange. b. This limit would be applicable on open positions in all options contracts on a particular underlying index. ii. Position limit for the Specialized Investment Fund in equity index futures contracts: a. The Specialized Investment Fund position limit in all index futures contracts on a particular underlying index shall be Rs.500 crores or 15% of the total open interest of the market in index futures, whichever is higher, per stock exchange. b. This limit would be applicable on open positions in all futures contracts on a particularunderlying index. iii. Additional position limit for hedging In addition to the position limits at point (i) and (ii) above, the Specialized Investment Fund may take exposure in equity index derivatives subject to the following limits: a. Short positions in index derivatives (short futures, short calls and long puts) shall not exceed (in notional value) the Specialized Investment Fund's holding of stocks. b. Long positions in index derivatives (long futures, long calls and short puts) shall not exceed (in notional value) the Specialized Investment Fund's holding of cash, government securities, Treasury Bills and similar instruments. iv. Position limit for Specialized Investment Fund for stock based derivative contracts The combined futures and options position limit shall be 20% of the applicable Market Wide Position Limit (MWPL). v. Position limit for each investment strategy of a Specialized Investment The investment strategy-wise position limit / disclosure requirements shall be: i. For stock option and stock futures contracts, the gross open position across all derivative contracts on a particular underlying stock of an investment strategy of a Specialized Investment Fund shall not exceed the higher of 1% of the free float market capitalization (in terms of number of shares) or 5% of the open interest in the derivative contract on a particular underlying stock (in terms of number of contracts). ii. This position limits shall be applicable on the combined position in all derivative contracts on an underlying stock at a Stock Exchange. iii. For index based contracts, Specialized Investment Funds shall disclose the total open interest held by its investment strategy or all investment strategies put together in a particular underlying index, if such open interest equals to or exceeds 15% of the open interest of all derivative contracts on that underlying index. vi. Offsetting of transactions: As per the provisions of the SEBI SIF circular dated February 27, 2025, the investment strategy is allowed to offset certain derivative transactions. Below are some of the illustrative scenarios for offsetting of positions on the same underlying security. Sr. Position 1 Position 2 Offsetting Net exposure to be considered No. allowed/not? 1 Equity Long Futures Short Yes Equity Long only 2 Equity /Futures Long Call option Short Yes Equity /Futures Long only 3 Equity /Futures Long Put option Long Yes Equity /Futures Long only 4 Futures Short Call option Long Yes Futures Short only 5 Futures Short Put option Short Yes Futures Short only 6 Call option Long Call option Short Yes Call option Short only 7 Put option Long Put option Short Yes Put option short only 8 Equity Long Futures Long No Equity Long + Futures Long 9 Equity /Futures Long Call option Long No Equity /Futures Long + Call option Long 10 Equity /Futures Long Put option Short No Equity /Futures Long + Put option Short 4511 Futures Short Call option Short No Futures short + Call option short 12 Futures Short Put option Long No Futures short + Put option Long 13 Call option Long Put option Short No Call option Long + Put option Short 14 Call option Short Put option Long No Call option Short + Put option Long *For offsetting of positions, the futures and options contracts shall be on the same underlying security and having same expiry date. 4. Pending deployment of the funds of the Investment strategy in securities in terms of the investment objective of the Investment strategy, the AMC may park the funds of the Investment strategy in short term deposits of scheduled commercial banks, subject to the guidelines issued by SEBI: The Investment strategy will comply with the following guidelines/restrictions for parking of funds in short term deposits: i. “Short Term” for such parking of funds by the Investment strategy shall be treated as a period not exceeding 91 days. Such short-term deposits shall be held in the name of the Investment strategy. ii. The Investment strategy 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 limit may be raised to 20% with prior approval of the Trustee. iii. Parking of funds in short term deposits of associate and sponsor scheduled commercial banks together shall not exceed 20% of total deployment by the Specialized Investment Fund in short term deposits. iv. The Investment strategy shall not park more than 10% of the net assets in short term deposit(s), with any one scheduled commercial bank including its subsidiaries. v. The Investment strategy shall not park funds in short term deposit (STD) of a bank which has invested in that Investment strategy. Further Trustees/ AMCs shall also ensure that the bank in which the Investment strategy has STD do not invest in the said investment strategy until the Investment strategy has STD with such bank. vi. The AMC will not charge any investment management and advisory fees for funds parked in short term deposits of scheduled commercial banks. However, the above provisions will not apply to term deposits placed as margins for trading in cash and derivatives market. 5. The Investment strategy shall not advance any loans. 6. The Investment strategy shall not borrow except to meet temporary liquidity needs of the Investment strategy for the purpose of repurchase / redemption of Units or payment of interest and/or dividend to the Unit holders. Provided that the Fund shall not borrow more than 20% of the net assets of the individual Investment strategy and the duration of the borrowing shall not exceed a period of 6 months. The Investment strategy will comply with the other Regulations applicable to the investments of Mutual Funds from time to time. 7. SEBI vide its Clause 12.25 of Master Circular dated June 27, 2024 and Clause 6 of Circular dated February 27, 2025 has prescribed the following investment restrictions w.r.t. investment in derivatives: Sr. Particulars No. 1 The cumulative gross exposure through equity, debt, derivative positions (including commodity and fixed income derivatives), repo transactions and credit default swaps in corporate debt securities, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs), other permitted securities/assets and such other securities/assets as may be permitted by the Board from time to time should not exceed 100% of the net assets of the Investment strategy. Cash or cash equivalents with residual maturity of less than 91 days shall be treated as not creating any exposure. SO. 14 2 The Investment strategy shall not write options or purchase instruments with embedded written options except call options under a covered call strategy as specified in Clause 12.25 of Master Circular dated June 27, 2024 as amended from time to time. 3 The total exposure related to option premium paid shall not exceed 20% of the net assets of the investment strategy. 464 Exposure due to hedging positions may not be included in the above mentioned limits subject to the following: a. Hedging positions are the derivative positions that reduce possible losses on an existing position in securities and till the existing position remains. b. Hedging positions cannot be taken for existing derivative positions. Exposure due to such positions shall have to be added and treated under limits mentioned in Point 1. c. Any derivative instrument used to hedge has the same underlying security as the existing position being hedged. 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. 5 Exposure due to derivative positions taken for hedging purposes in excess of the underlying position against which the hedging position has been taken, shall be treated under the limits mentioned in point 1. 6 Each position taken in derivatives shall have an associated exposure as defined under. Exposure is the maximum possible loss that may occur on a position. However, certain derivative positions may theoretically have unlimited possible loss. Exposure in derivative positions shall be computed as follows: Position Exposure Long Future Futures Price * Lot Size * Number of Contracts Short Future Futures Price * Lot Size * Number of Contracts Option bought Option Premium Paid * Lot Size * Number of Contracts. Option Sold Market price of the underlying * Lot size * Number of contracts 477 a) The Investment strategy may enter into plain vanilla interest rate swaps for hedging purposes. The value of the notional principal in such cases must not exceed the value of respective existing assets being hedged by the investment strategy. b) In case of participation in IRS is through over the counter transactions, the counter party has to be an entity recognized as a market maker by RBI and exposure to a single counterparty in such transactions should not exceed 10% of the net assets of the investment strategy. However, if Specialized Investment Funds are transacting in IRS through an electronic trading platform offered by the Clearing Corporation of India Ltd. (CCIL) and CCIL is the central counterparty for such transactions guaranteeing settlement, the single counterparty limit of 10% shall not be applicable. 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 shall not exceed the value of respective existing assets being hedged by the investment strategy. Exposure to a single counterparty in such transactions shall not exceed 10% of the net assets of the investment strategy. 8 In case of any other derivative exposure, the exposure shall be calculated as the notional market value of the contract 9 The total exposure at any point of time shall be the sum of exposure through instruments in both the cash market and derivatives market 8. The Investment strategy may write call options only under a covered call strategy for constituent stocks of NIFTY 50 and BSESENSEX subject to the following: (i) The total notional value (taking into account strike price as well as premium value) of call options written by a investment strategy shall not exceed 15% of the total market value of equity shares held in that investment strategy. (ii) The total number of shares underlying the call options written shall not exceed 30% of the unencumbered shares of a particular company held in the investment strategy. The unencumbered shares in a investment strategy shall mean shares that are not part of Securities Lending and Borrowing Mechanism(SLBM), margin or any other kind of encumbrances. (iii) At all points of time the Specialized Investment Fund Fund investment strategy shall comply with the provisions at paragraph (i) and (ii) above. In case of any passive breach of the requirement at paragraph (i), the respective investment strategy shall have 7 trading days to rebalance the portfolio. During the rebalancing period, no additional call options can be written in the said investment strategy. (iv) In case the Investment strategy needs to sell securities on which a call option is written under a covered call strategy, it must ensure compliance with paragraphs (i) and (ii) above while selling the securities. (v) In no case, the investment strategy shall write a call option without holding the underlying equity shares. A call option can be written only on shares which are not hedged using other derivative contracts. (vi) The premium received shall be within the requirements prescribed in terms of Clause 12.25 of Master Circular dated June 27, 2024 i.e. the total gross exposure related to option premium paid and received must not exceed 20% of the net assets of the investment strategy. (vii) The exposure on account of the call option written under the covered call strategy shall not be considered as exposure in terms of Clause 12.25 of Master Circular dated June 27, 2024. a. The Investment strategy shall participate in repos in corporate debt securities as per the guidelines issued by SEBI and/ or RBI from time to time and the guidelines framed by the Board of Directors of Trustee Company and the Asset Management Company, from time to time. At present the following conditions and norms shall apply to repo in corporate debt securities: (i) The gross exposure of the Investment strategy to repo transactions in corporate debt securities shall not be more than 10% of the net assets of the Investment strategy. (ii) The cumulative gross exposure through repo transactions in corporate debt securities along with equity, debt, units issued by REITs & InvITs and derivatives shall not exceed 100% of the net assets of the Investment strategy. (iii) The Investment strategy shall participate in repo transactions only in AA and above rated corporate debt securities. (iv) The Investment strategy shall borrow through repo transactions only if the tenor of the transaction does not exceed a period of six months. (v) The Trustee and the Asset Management Company have framed guidelines interalia considering the following aspects: i. Category of counterparty ii. Credit rating of counterparty iii. Tenor of collateral iv. Applicable haircuts (vi) Counterparty selection & credit rating The counterparty must be an acceptable counterparty for debt transactions. The Specialized Investment Fund follows a counterparty empanelment process for fixed income transactions and the same shall be used for selectionof counterparties for corporate bond repos. All repo transactions in corporate bonds will be governed by a repo agreement as 48specified by FIMMDA and / or other specified authorities. (vii) Collateral tenor & quality The exposure limit/investment restrictions prescribed under the Seventh Schedule of the Regulations and circulars issued there under (wherever applicable) shall be applicable to repo transactions in corporate bonds. The Investment strategy shall further follow guidelines framed by Trustee and the AMC from time to time. (viii) Applicable haircuts Currently Specialized Investment funds are permitted to carry out repo transactions in government securities without any haircuts. The Reserve Bank of India has notified a minimum haircut based on rating of the corporate bond and other securities. In addition, the Fixed Income and Money Market Dealers Association (FIMMDA) would maintain a rating-haircut matrix on an ongoing basis. The Investment strategy shall further follow guidelines framed by Trustee and the AMC from time to time. The haircuts seek to protect the lender of funds from the event of the counterparty failing to honor the repurchase leg of the repo. In such a circumstance, the Fund would suffer a loss if the value of the collateral depreciates by more than the haircut. The fall in the value of the collateral could be on account of higher yields and/ or deterioration of credit quality. As the typical tenor of repos is short (typically overnight), the haircuts represent a relatively high degree of safety in relation to the interest rate risk on the collateral. The risk of collateral depreciation based on historical volatility is given in the table below: Bond Tenor (yrs) 1 3 5 10 Price Volatility (%) (annualized) 0.6 1.2 1.7 3.4 Repo Tenor Number of standard deviations needed to lose 10% 1 day 258 136 94 48 7 days 98 52 36 18 In the above table, the price volatility of a 10-year bond is about 3.4% annualized. That is a 10% price move represents nearly a 3-sigma event on an annualized basis. For overnight tenors, this represents a 48-sigma event (for comparison a 6-sigma event occurs about once in a million observations). It is apparent that the haircuts stipulated by RBI are more than sufficient to mitigate interest rate risk. Credit event risk remains (the collateral could default during the tenor of the repo). This risk is to be mitigated by ensuring that the collateral is acceptable from a credit point of view. 9. As per Regulation 49AA of SEBI (Mutual Funds) Regulations, 1996 and SEBI Circular dated February 27, 2025, Restrictions on investments are as follows: (1) An investment strategy under Specialized Investment Fund shall not invest more than 20 per cent of its NAV in debt instruments comprising money market instruments and non-money market instruments issued by a single issuer which are rated not below investment grade by a credit rating agency authorised to carry out such activity under the Act. Such investment limit may be extended to 25 per cent of the NAV of the investment strategy with the prior approval of the Board of Trustees and Board of Directors of the asset management company: Provided that such limit shall not be applicable for investments in Government Securities, treasury bills and triparty repo on Government securities or treasury bills: Provided further that investments within such limit can be made in mortgaged backed securitised debt which are rated not below investment grade by a credit rating agency registered with the Board: Provided further that such limit shall not be applicable for investments in case of debt exchange traded funds or such other funds as may be specified by the Board from time to time. (2) No Specialized Investment Fund under all its investment strategies should own more than fifteen per cent of any company’s paid up capital carrying voting rights: or fifteen per cent of units of REITs issued by a single issuer, as the case may be :Provided that investment in the asset management company or the trustee company of a mutual fund shall be governed by clause (a) of sub-regulation (1) of regulation 7B: Provided further that the limit mentioned above shall be inclusive of ten per cent limit for mutual fund schemes as specified under clause 2 of Seventh Schedule. Explanation: If a mutual fund under all its schemes owns ten per cent of any company’s paid up capital carrying voting rights, or ten per cent of units of REITs issued by a single issuer, as the case may be then the SIF under all its investment strategies shall not own more than five per cent of that company’s paid up capital carrying voting rights or five per cent of units of REITs issued by a single issuer respectively, as the case may be.. (3) No investment strategy of a Specialized Investment Fund shall invest more than 10 per cent of its NAV in the 49equity shares and equity-related instruments of any entity. (4) A Specialized Investment Fund may invest in the units of InvITs subject to the following: (a) No Specialized Investment Fund under all its investment strategies shall own more than 20 per cent of units issued by a single issuer of InvIT: Provided that the limit mentioned in clause (a) of sub-regulation 4 above shall be inclusive of 10 per cent limit for mutual fund scheme as specified under clause 13 (a) of Seventh Schedule. (b) An investment strategy under Specialized Investment Fund shall not invest – (i) more than 20 per cent of its NAV in the units of InvITs; and (ii) more than 10 per cent of its NAV in the units of InvIT issued by a single issuer: Provided that the limits mentioned in sub-clauses (i) and (ii) above shall not be applicable for investments in case of index fund or sector or industry specific investment strategy pertaining to InvIT. (5) All other investment restrictions applicable for schemes of mutual funds as specified under Seventh Schedule shall apply to investment strategies under the Specialized Investment Fund. (6) An investment strategy under SIF shall not invest more than 20% of its NAV in debt and money market securities issued by a single issuer and rated AAA or 16% in securities rated AA or 12% in securities rated A and below. These instrument limits may be extended by up to 5% of the NAV of investment strategy with prior approval of trustees of MF and board of AMC. (7) An investment strategy under the SIF shall not invest more than 25% of its NAV in debt and money market securities of a particular sector. (8) The investment strategies under the SIF may take exposure of up to 25% of the net assets in permissible exchange traded derivative instruments, specifically for purposes other than hedging and portfolio rebalancing The Specialized Investment Fund/AMC shall make investment out of the NFO proceeds only on or after the closure of the NFO period. The Specialized Investment Fund/ AMC can however deploy the NFO proceeds in TREPS before the closure of NFO period. However, AMCs shall not charge any investment management and advisory fees on funds deployed in TREPS during the NFO period. The appreciation received from investment in TREPS shall be passed on to investors. Further, in case the minimum subscription amount is not garnered by the investment strategy during the NFO period, the interest earned upon investment of NFO proceeds in TREPS shall be returned to investors, in proportion of their investments, along with the refund of the subscription amount. The exposure limit/ investment restrictions prescribed under the Seventh Schedule of the Regulations and circulars issued there under (wherever applicable) shall be applicable to repo transactions in corporate bonds. The investment strategy will comply with the other Regulations applicable to the investments of Specialized Investment Funds from time to time. All the investment restrictions will be applicable at the time of making investments. The AMC/Trustee may alter these above stated restrictions from time to time to the extent the Regulations change, so as to permit the Investment Strategy to make its investments in the full spectrum of permitted investments for specialized investment fund to achieve its respective investment objective. C. Fundamental Attributes SO. 59 Following are the Fundamental Attributes of the investment strategy, in terms of Clause 1.14 of SEBI Master Circular for Mutual Funds dated June 27, 2024: (i) Type of investment strategy: • An open ended investment strategy investing in equity and equity related instruments including limited short exposure in equity through derivative instruments, of stocks other than large cap stocks • Equity Oriented (ii) Investment Objective Main Objective - Growth. To generate long-term capital appreciation by investing primarily in equity and equity-related instruments of stocks outside the top 100 by market capitalization, while utilizing limited short exposure through derivative. There is no assurance that the investment objective of the Investment strategy will be achieved 50• Investment pattern - Please refer to ‘How will the Investment Strategy Allocate its Assets?’ under the Part II ‘INFORMATION ABOUT THE INVESTMENT STRATEGY’. (iii) Terms of Issue • Liquidity provisions such as listing, repurchase, redemption. (please refer to relevant provisions on listing, repurchase, redemption in section II ‘Other Investment Strategy Specific Disclosures’) • Aggregate fees and expenses charged to the investment strategy (please refer to Annual Investment Strategy Recurring Expenses under Part III – Other Details). • Any safety net or guarantee provided - This Investment Strategy does not provide any guaranteed or assured return. In accordance with Regulation 18(15A) of the SEBI (MF) Regulations and Clause 1.14.1.4 of SEBI Master Circular for Mutual Funds dated June 27, 2024, the Trustees shall ensure that no change in the fundamental attributes of the investment strategy or the trust or fee and expenses payable or any other change which would modify the investment strategy thereunder and affect the interests of Unitholders is carried out unless: • SEBI has reviewed and provided its comments on the proposal • A written communication about the proposed change is sent to each 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 Fund is situated; and • The Unitholders are given an option for a period of atleast 30 calendar days to exit at the prevailing Net Asset Value without any exit load. D. Other Investment Strategy Specific Disclosures Listing and transfer of units The Investment Strategy is an open-ended Investment Strategy under which sale and repurchase will be made on a continuous basis and therefore listing on stock exchanges is not envisaged. However, the Trustee reserves the right to list the units as and when considered necessary in the interest of Unit holders of the Fund. Dematerialization of units The Unit holders would have an option to hold the Units in demat form or account statement (non-demat) form. Units held in Demat Form are freely transferable. The Applicant intending to hold Units in demat form will be required to have a beneficiary account with a Depository Participant (DP) of the NSDL/ CDSL and will be required to mention in the application form DP's Name, DP ID No. and Beneficiary Account No. with the DP at the time of purchasing Units. SO. 57(a) (b) Minimum Target amount Rs. 10 crores. (This is the minimum amount required to operate the investment strategy and if this is not collected during the NFO period, then all the investors would be refunded the amount invested without any return.) Redemption and subscription frequency Daily (only Business Days) of the investment strategy Notice period of the investment strategy Not Applicable Maximum Amount to be raised (if any) Not Applicable Dividend Policy (I DCW) Under the IDCW option, the Trustee will have the discretion to declare the IDCW, subject to availability of distributable surplus calculated in accordance with the Regulations. The actual declaration of IDCW and frequency will inter-alia, depend on availability of distributable surplus calculated in accordance with SEBI (MF) Regulations and the decisions of 51the Trustee shall be final in this regard. There is no assurance or guarantee to the Unit holders as to the rate of IDCW nor that it will be paid regularly. The AMC/Trustee reserves the right to change the frequency of declaration of IDCW or may provide for additional frequency for declaration of IDCW. IDCW Distribution Procedure In accordance with Clause 11 of SEBI Master Circular on Mutual Funds dated June 27, 2024, the procedure for distribution would be as under: 1. Quantum of IDCW and the record date will be fixed by the Trustee. IDCW so decided shall be paid, subject to availability of distributable surplus. 2. Within one calendar day of the decision by the Trustees, AMC shall issue notice to the public communicating the decision including the record date. The record date shall be 2 working days from the date of publication in at least one English newspaper or in a newspaper published in the language of the region where the Head Office of the fund is situated, whichever is issued earlier. 3. Record date shall be the date, which will be considered for the purpose of determining the eligibility of investors whose names appear on the register of Unit holders for receiving IDCW. 4. The notice will, in font size 10, bold, categorically state that pursuant to payment of dividend, the NAV of the Investment strategy would fall to the extent of payout and statutory levy (if applicable). 5. The NAV will be adjusted to the extent of IDCW distribution and statutory levy, if any, at the close of business hours on record date. Before the issue of such notice, no communication indicating the probable date of IDCW declaration in any manner whatsoever will be issued by Fund. However, the requirement of giving notice shall not be applicable for IDCW options having frequency up to one month. Allotment (Detailed procedure) All Applicants whose monies towards purchase of Units have been realised by the Fund will receive a full and firm allotment of Units, provided also the applications are complete in all respects and are found to be in order. Any SO. 60 application for subscription of units may be rejected if found invalid, incomplete or due to unavailability of underlying securities, etc. For applicants applying through 'Applications Supported By Blocked Amount (ASBA)', on allotment, the amount will be unblocked in their respective bank accounts and account will be debited only to the extent required to pay for allotment of Units applied in the application form. Units will be allotted upto 3 decimals. Face Value per unit of all Plans/ Options under the Investment strategy is Rs. 10-/. Any application for subscription of units may be rejected if found invalid, incomplete or due to unavailability of underlying securities, etc. Applicants under the Investment strategy will have an option to hold the Units either in physical form (i.e. account statement) or in dematerialized form. Accordingly, the AMC shall allot units either in physical form (i.e. account statement) or in dematerialized form within 5 working days from the date of closure of the NFO period. Dematerialization: The Applicants intending to hold the Units in dematerialized mode will be required to have a beneficiary account with a Depository Participant (DP) of the NSDL/CDSL and will be required to mention in the application form DP's Name, DP ID No. and Beneficiary Account No. with the DP at the time of purchasing Units. The Units allotted will be credited to the DP account of the Unit holder as per the details provided in the application form. The statement of holding of the beneficiary account holder for units held in demat will be sent by the respective DPs periodically. Units held in demat form are freely transferable. If the Unit holder desires to 52hold the Units in a Dematerialized / Rematerialized form at a later date, the request for conversion of units held in Account Statement (non demat) form into Demat (electronic) form or vice versa should be submitted alongwith a Demat/Remat Request Form to their Depository Participants. However, the Trustee / AMC reserves the right to change the dematerialization / rematerialization process in accordance with the procedural requirements laid down by the Depositories, viz. NSDL/ CDSL and/or in accordance with the provisions laid under the Depositories Act, 1996 and Regulations thereunder. All Units will rank pari passu, among Units within the same Option in the Investment strategy concerned as to assets, earnings and the receipt of Distributions, if any, as may be declared by the Trustee. Allotment Confirmation An allotment confirmation specifying the units allotted shall be sent by way of email and/or SMS within 5 working days of the closure of the NFO Period to the Unit holder's registered e-mail address and/or mobile number. Note: Allotment of units will be done after deduction of applicable stamp duty. Note: For the purpose of allotment of units / refund of monies under NFO the term "working days" shall include Business Days but shall not include Holidays. Refund If application is rejected, full amount will be refunded within 5 working days of closure of NFO. If refunded later than 5 working days @ 15% p.a. for delay period will be paid and charged to the AMC. Who can invest this is an indicative list The following persons (i.e. an indicative list of persons) are eligible and may and investors shall consult their financial apply for subscription to the Units of the Investment strategy provided they advisor to ascertain whether the are not prohibited by any law/ Constitutive documents governing them: investment strategy is suitable to their 1. Resident adult individuals either singly or jointly (not exceeding three) or risk profile. on an Anyone or Survivor basis; 2. Karta of Hindu Undivided Family (HUF); 3. Minor (as the first and the sole holder only) through a natural guardian (i.e. father or mother, as the case may be) or a court appointed legal guardian. There shall not be any joint holding in a minor’s folio . Payment for investment 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 the parent or legal guardian. 4. Partnership Firms & Limited Liability Partnerships (LLPs); 5. Companies, Bodies Corporate, Public Sector Undertakings, Association of Persons or bodies of individuals and societies registered under the Societies Registration Act, 1860, Co-operative Societies registered under the Co-Operative Societies Act, 1912, One Person Company; 6. Banks & Financial Institutions; 7. Mutual Funds/ Alternative Investment Funds registered with SEBI; 8. Religious and Charitable Trusts, Wakfs or endowments of private trusts (subject to receipt of necessary approvals as required) and Private trusts authorised to invest in mutual fund schemes under their trust deeds; 9. Non-resident Indians (NRIs)/Persons of Indian Origin residing abroad (PIO)/ Overseas Citizen of India (OCI) on repatriation basis or on non- repatriation basis; 10. Foreign Portfolio Investors (FPI) registered with SEBI in accordance with applicable laws; 11. Army, Air Force, Navy and other paramilitary units and bodies created by such institutions; 12. Council of Scientific and Industrial Research, India; 13. Multilateral Financial Institutions/ Bilateral Development Corporation Agencies/ Bodies Corporate incorporated outside India with the permission of Government of India/Reserve Bank of India; 14. Other investment strategies of WSIF (offered by The Wealth Company 53Mutual Fund) subject to the conditions and limits prescribed by SEBI (MF) Regulations; 15. Trustee, AMC, Sponsor and their associates may subscribe to Units under the Investment strategy; 16. Such other category of investors as may be decided by the AMC / Trustee from time to time provided their investment is in conformity with the applicable laws and SEBI (MF) Regulations. Note: 1. Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs) residing abroad / Overseas Citizens of India (OCI) / Foreign Portfolio Investors (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, 2000 for investing in / redeeming units of the mutual funds subject to conditions set out in the aforesaid regulations. 2. In case of application(s) made by Individual Investors under a Power of Attorney, the original Power of Attorney or a certified true copy duly notarised should be submitted. In case of applications made by Non- Individual Investors, the authorized signatories / officials of Non-Individual investors should sign the application under their official designation and as per the authority granted to them under their Constitutive Documents/Board resolutions, etc. A list of specimen signatures of the authorized officials, duly certified / attested should also be attached to the Application Form. The Fund/AMC/Trustees shall deem that the investments made by the Investors are not prohibited by any law/Constitutive documents governing them and they possess the necessary authority to invest/transact. 3. Investors desiring to invest / transact in investment strategies are required to mandatorily furnish PAN (PAN of the guardian in case minor does not have a PAN) and comply with the KYC norms applicable from time to time. Under the KYC norms, Investors are required to provide prescribed documents for establishing their identity and address including in case of non-individuals copy of the Memorandum and Articles of Association / bye- laws/trust deed/ partnership deed/ Certificate of Registration along with the proof of authorization to invest, as applicable, to the KYC Registration Agency (KRA) registered with SEBI. The Fund / AMC / Trustees / other intermediaries will rely on the declarations/affirmations provided by the Investor(s) in the Application/Transaction Form(s) and the documents furnished to the KRA that the Investor(s) is permitted/ authorised by the Constitution document/their Board of Directors etc. to make the investment / transact. Further, the Investor shall be liable to indemnify the Fund / AMC / Trustee / other intermediaries in case of any dispute regarding the eligibility, validity and authorization of the transactions and / or the applicant who has applied on behalf of the Investors. The Fund / AMC / Trustee reserves the right to call for such other information and documents as may be required by it in connection with the investments made by the investor. Where the Units are held by a Unit holder in breach of any Regulations, AMC / the Fund may effect compulsory redemption of such units. Returned cheques are liable not to be presented again for collection, and the accompanying application forms are liable to be rejected. In case the returned cheques are presented again, the necessary charges are liable to be debited to the investor. 4. Subject to the SEBI (MF) Regulations, the Trustee may inter-alia reject any application for the purchase of Units if the application is invalid or incomplete or non-permissible under law or if the Trustee for any other reason does not believe that it would be in the best interest of the Investment strategy or its Unitholders to accept such an application 54Who cannot invest The aforementioned persons/entities as specified under section “Who Can Invest?” shall not be eligible to invest in the Investment strategy, if such persons/entities are: 1. United States Person (U.S. person*) as defined under the extant laws of the United States of America, except the following: a. NRIs/PIOs may invest/transact, in the Investment strategy, when present in India, as lump sum subscription, redemption and/or switch transaction and registrations of systematic transactions only through physical form and upon submission of such additional documents/undertakings, etc., as may be stipulated by AMC/ Trustee from time to time and subject to compliance with all applicable laws and regulations prior to investing in the Investment strategy. b. FPIs may invest in the Investment strategy as lump sum subscription and/or switch transaction (other than systematic transactions) through submission of physical form in India, subject to compliance with all applicable laws and regulations and the terms, conditions, and documentation requirements stipulated by the AMC/Trustee from time to time, prior to investing in the Investment strategy. The Trustee/AMC reserves the right to put the transaction requests received from such U.S. person on hold/reject the transaction request/redeem the units, if allotted, as the case may be, as and when identified by the AMC that the same is not in compliance with the applicable laws and/or the terms and conditions stipulated by Trustee/AMC from time to time. Such redemptions will be subject to applicable taxes and exit load, if any. The physical application form(s) for transactions (in nondemat mode) from such U.S. person will be accepted only at the Investor Service Centres (ISCs) of Wealth Company Asset Management Holdings Private Limited (AMC). Additionally, such transactions in physical application form(s) will also be accepted through Distributors and other platforms subject to receipt of such additional documents/undertakings, etc., as may be stipulated by AMC/ Trustee from time to time from the Distributors/ Investors. 2. Residents of Canada; 3. Investor residing in any Financial Action Task Force (FATF) designated High Risk jurisdiction. *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 U.S. 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. How to Apply (details) The Applications Forms shall be made available at Investor Service Centers (ISCs)/Official Points of Acceptance (OPAs) of the Fund and/ or may be downloaded from the AMC SIF website SO. 35 https://www.wealthcompanyamc.in/wsif/ For further details, refer to the SAI and Application form for the instructions. 1. The list of the Investor Service Centers (ISCs)/Official Points of Acceptance (OPAs) of the Specialized Investment Fund will be provided on the website of the AMC SIF website https://www.wealthcompanyamc.in/wsif/ 2. Please our website for Name, address and contact no. of Registrar and Transfer Agent (R&T), email id of R&T, website address of R&T, official points of acceptance, collecting banker details etc. at end of ISID. As per the directives issued by SEBI it is mandatory for an investor to 55declare his/her bank account number. SO. 61 To safeguard the interest of Unitholders from loss or theft of their refund orders/redemption cheques, investors are requested to provide their bank details in the Application Form. In case an existing Unitholder is submitting a request for Change in his Bank Details, he needs to submit a copy of cancelled cheque leaf of the new bank account or Bank statement of the new bank account attested by his banker with seal & signature of banker or letter from the Banker of the investor. In the absence of the same, the request for Change in Bank Mandate is liable to be rejected. Investors are required to note that it is mandatory to mention their bank account numbers in their applications/requests for redemption. At the time of redemption, investors can select the bank account to receive the amount. The policy regarding reissue of The number of Units held by the Unit holder under his folio / Demat Account repurchased units, including the will stand reduced by the number of Units redeemed. maximum extent, the manner of reissue, the entity (the investment strategy or the Presently, the AMC does not intend to reissue the repurchased units. AMC) involved in the same. However, the Trustee reserves the right to reissue the repurchased units at a later date after issuing adequate public notices and taking approvals, if any, from SEBI. Restrictions, if any, on the right to freely SUSPENSION OF SALE OF UNITS OF THE INVESTMENT retain or dispose of units being offered. STRATEGY The Specialized Investment Funds at its sole discretion reserves the right to withdraw the Sale of Units i.e. subscriptions in the Investment strategy(s) (including any one Plan/ Option) temporarily or indefinitely, if in the opinion of the AMC the general market conditions are not favourable and / or suitable investment opportunities are not available for deployment of funds or if in the view of AMC/Trustee changing the size of the corpus may prove detrimental to the existing Unit holders of the Investment strategy(s) or for any other reason deemed fit by the AMC / Trustee. Further, the indicative list of circumstances under which sale of units may temporarily be suspended is as follows: 1. When one or more stock exchanges or markets, which provide basis for valuation for a substantial portion of the assets of the Investment strategy are closed otherwise than for ordinary holidays. 2. In case of natural calamities, war, strikes, riots and bandhs. 3. In the event of any force majeure or disaster that affects the normal functioning of the AMC or the Official Point(s) of Acceptance. 4. If so directed by SEBI. RIGHT TO RESTRICT REDEMPTION AND / OR SUSPEND REDEMPTION OF THE UNITS (as per para 1.12 of SEBI Master Circular dated June 27, 2024 as may be amended from time to time): The Fund at its sole discretion reserves the right to restrict Redemption (including switch-out) of the Units (including Plan /Option) of the Investment strategy 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 56Redemption of the Units in the Investment strategy of the Fund on account of circumstances leading to a systemic crisis or event(s) that severely constrict market liquidity or the efficient functioning of the markets. A list of such circumstances under which the restriction on Redemption or suspension of Redemption of the Units in the Investment strategy of the Fund may be imposed are as follows: 1. Liquidity issues- when market at large becomes illiquid affecting almost all securities rather than any issuer specific security; or 2. Market failures / exchange closures; or 3. Operational issues; or 4. If so directed by SEBI. It is clarified that since the occurrence of the abovementioned eventualities have the ability to 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, if any mentioned by the Fund in the investment strategy 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 Investment strategy(s) of the Specialized Investment 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 Investment strategy of the Fund. Cut off timing for subscriptions/ The below cut-off timings and applicability of NAV shall be applicable in redemptions/ switches respect of valid applications received at the Official Point(s) of Acceptance on a Business Day: This is the time before which your application (complete in all A] For Purchase (including switch-in) of any amount: respects) should reach the official points • In respect of valid applications received upto 3.00 p.m. and where the of acceptance.) funds for the entire amount are available for utilization before the cut-off time i.e. credited to the bank account of the investment strategy before the cut-off time - 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 credited to the bank account of the investment strategy either at any time on the same day or before the cut-off time of the next Business Day i.e. available for utilization before the cut-off time of the next Business Day - the closing NAV of the next Business Day shall be applicable. • Irrespective of the time of receipt of application, where the funds for the entire amount are credited to the bank account of the investment strategy before the cut-off time on any subsequent Business Day i.e. available for utilization before the cut-off time on any subsequent Business Day - the closing NAV of such subsequent Business Day shall be applicable. B] For Switch-ins of any amount: For determining the applicable NAV, the following shall be ensured: • Application for switch-in is received before the applicable cutoff time. •Funds for the entire amount of subscription/purchase as per the switch-in request are credited to the bank account of the Investment Strategy before the cut-off time. • The funds are available for utilization before the cut-off time. • In case of ‘switch’ transactions from one Investment Strategy to another, the allocation shall be in line with redemption payouts. 57C]Redemptions including Switch - outs: ● In respect of valid applications received up to 3.00 p.m. – same day’s closing NAV shall be applicable. ● In respect of valid applications received after 3.00 p.m. - the closing NAV of the next Business Day shall be applicable. ● With respect to investors who transact through the stock exchange, a confirmation slip given by the stock exchange mechanism shall be considered for the purpose of determining Applicable NAV for the Investment Strategy and cut off timing for the transactions. To clarify, for investments through systematic investment routes such as Systematic Investment Plans (SIP), Systematic Transfer Plans (STP), etc. the units will be allotted as per the closing NAV of the day on which the funds are available for utilization by the Investment Strategy irrespective of the installment date of the SIP, STP or record date of dividend etc. Where can the applications for The Applications Forms shall be made available at Investor Service Centres purchase/redemption switches be (ISCs)/Official Points of Acceptance (OPAs) of Fund and/ or may be submitted? downloaded from the AMC SIF website https://www.wealthcompanyamc.in/wsif/ For further details, refer to the SAI and Application form for the instructions. 1. The list of the Investor Service Centres (ISCs)/Official Points of Acceptance (OPAs) of the Fund will be provided on the AMC SIF website https://www.wealthcompanyamc.in/wsif/ 2. Please refer our website for Name, address and contact no. of Registrar and Transfer Agent (R&T), email id of R&T, website address of R&T, official points of acceptance, collecting banker details etc. As per the directives issued by SEBI it is mandatory for an investor to declare his/her bank account number. Minimum amount for purchase/ Minimum amount of investment during NFO and On an Ongoing basis redemption/ switches under all Plans and Options: • During NFO: Rs.10,00,000/- and in multiples of Re. 100/- thereafter • On continuous basis: Rs.10,00,000/- and in multiples of Re. 100/- thereafter Systematic Investment Plan (SIP) / Systematic Withdrawal Plan (SWP) /Systematic Transfer Plan (STP) shall only commence upon re-opening of the Investment Strategy. The clauses on SWP and STP will be subject to compliance with provisions mentioned under “Minimum investment threshold” as stated under Clause “Minimum threshold requirement and consequences of non- maintenance” of this ISID. Note: Allotment of units will be done after deduction of applicable stamp duty and transaction charges, if any. 58For Additional Purchases: Rs. 10,000/- and in multiples of Re. 100/- thereafter For Redemption/Switches: Rs. 1,000/- and in multiples of Re. 1/- thereafter Minimum threshold requirement and The AMC shall ensure that an aggregate investment by an investor across consequences of non- maintenance all investment strategies offered by the SIF, at the Permanent Account Number (‘PAN’) level, is not less than INR 10 lakh. Provided that the requirement of minimum investment amount shall not SO. 36 apply to an accredited investor. Provided that, the above provisions shall not be applicable for mandatory investments made by AMC for designated employees under paragraph 6.10 of the Master Circular for Mutual Funds dated June 27, 2024. The AMC shall monitor compliance with the Minimum Investment Threshold on a daily basis and ensure that there are no active breaches. The AMC shall ensure that the investor's total investment value does not fall below the Minimum Investment Threshold due to redemption transactions initiated by the investor. Passive reaches (occurrence of instances not arising out of omission and commission by AMC), such as those caused by a decline in Net Asset Value (NAV), shall not be treated as a violation of the Minimum Investment Threshold. However, if the total investment value falls below the threshold due to a passive breach, the investor shall only be permitted to redeem the entire remaining investment amount from the SIF. Active Breaches shall mean fall in the aggregate value of an investor’s total investment across all investment strategies of SIF, below the Minimum Investment Threshold of INR 10 lakh, on account of any transactions (i.e. redemption, transfer, sale etc.) initiated by the investor. In case of any active breach of the Minimum Investment Threshold by an investor including through transactions on stock exchanges or off-market transfers: (a) all units of such investor held across investment strategies of the concerned SIF shall be frozen for debit, and (b) a notice of 30 calendar days shall be given to such investor to rebalance the investments in order to comply with the Minimum Investment Threshold. Pursuant to the said notice issued to the investor: (i) in case investor rebalances his/her investments in SIF within the notice period of 30 calendar days, the units of SIF of such investor shall be unfreezed, and no further action shall be taken with regard to compliance with Minimum Investment Threshold. (ii) in case the investor fails to rebalance the investments within the aforesaid 30 calendar day period, the frozen units shall be automatically redeemed by the AMC, at the applicable Net Asset Value of the next immediate business day after the 30th calendar day of the notice period. Accounts Statements The AMC shall send an allotment confirmation specifying the units allotted by way of email and/or SMS within 5 business days of receipt of valid application/transaction to the Unit holders registered e-mail address and/ or mobile number (whether units are held in demat mode or in account statement form). A consolidated Account Statement and Monthly CAS shall be issued to investors that have opted for delivery via electronic mode (e-CAS) by the twelfth (12th) day from the month end, detailing all the transactions across all investment strategies of Specialized Investment Fund and to investors that have opted for delivery via physical mode by the fifteenth (15th) day from the month end. 59The CAS will be dispatched by email to all the investors whose email addresses are registered with the Depositories and AMCs/MF-RTAs. However, where an investor does not wish to receive CAS through email, option shall be given to the investor to receive the CAS in physical form at the address registered with the Depositories and the AMCs/MF-RTAs. The depositories shall also intimate the investor on quarterly basis through the SMS mode specifying the email id on which the CAS is being sent. If there is any transaction in any of the demat accounts of the investor or in any of his Specialized Investment Fund folios, then CAS shall be sent to that investor through email on monthly basis. In case there is no transaction in any of the Specialized Investment Fund and demat accounts then CAS with holding details shall be sent to the investors by email on half yearly basis. The depositories shall dispatch the CAS to investors that have opted for delivery via electronic mode, on or before the eighteenth (18th) day of April and October and to investors that have opted for delivery via physical mode, on or before the twenty-first (21st) day of April and October. However, where an investor does not wish to receive CAS through email, option shall be given to the investor to receive the CAS in physical form at the address registered with the Depositories and the AMCs/MF-RTAs. In the event the account has more than one registered holder, the first named Unit holder shall receive the CAS/ account statement. The transactions viz. purchase redemption, switch, etc., carried out by the Unit holders shall be reflected in the CAS on the basis of Permanent Account Number (PAN). The CAS shall not be received by the Unit holders for the folio(s) not updated with PAN details. The Unit holders are therefore requested to ensure that the folio(s) are updated with their PAN. In case of a specific request received from the Unit holders, the AMC will provide an account statement (reflecting transactions of the Fund) to the investors within 5 Business Days from the receipt of such request, by mail/email. The Unit holder without any charges may request for a physical account statement by writing to/calling the AMC/ISC/RTA. The Specialized Investment Fund / AMC shall dispatch an account statement within 5 Business Days from the date of the receipt of request from the Unit holder. Half Yearly CAS shall be issued to investors that have opted for e-CAS on or before the eighteenth (18th) day of April and October, to all investors providing the prescribed details across all investment strategies of Specialized Investment Fund and to investors that have opted for delivery via physical mode by the twenty first (21st) day of April and October. The statement of holding of the beneficiary account holder for units held in demat will be sent by the respective DPs periodically. The Account Statement shall state that the net investment as gross subscription less transaction charges, if any and specify the no. of units allotted against the net investment. CAS for investors having Demat account: • Investors having MF investments and holding securities in Demat account shall receive a single Consolidated Account Statement (CAS) from the Depository. • Consolidation of account statement shall be done on the basis of Permanent Account Number (PAN). In case of multiple holding, it shall 60be PAN of the first holder and pattern of holding. The CAS shall be generated on a monthly basis. • If there is any transaction in any of the Demat accounts of the investor or in any of his Specialized Investment Fund folios, depositories shall send the CAS within ten days from the month end. In case, there is no transaction in any of the Specialized Investment Fund folios and demat accounts then CAS with holding details shall be sent to the investor on half yearly basis. • In case an investor has multiple accounts across two depositories, the depository with whom the account has been opened earlier will be the default depository. • No Account Statements will be issued by the AMC to Unit holders who hold units in dematerialized mode. For Units in dematerialised mode, the Account Statements may be obtained by the Investor from the depository participants with whom the investor holds the DP account. The dispatch of CAS by the depositories would constitute compliance by the AMC/ the Specialized Investment Fund with the requirement under Regulation 36(4) of SEBI (Mutual Funds) Regulations and as per SEBI Circular Reference no. SEBI/HO/MRD/PoD1/CIR/P/2025/16 dated February 14, 2025. For further details, refer SAI. Dividend/ IDCW The payment of dividend/IDCW to the unitholders shall be made within seven working days from the record date. Redemption The redemption or repurchase proceeds shall be dispatched to the unitholders within three working days from the date of redemption or repurchase. For list of exceptional circumstances refer Clause 14.1.3 of SEBI Master Circular for Mutual Funds dated June 27, 2024 For investment strategies investing atleast 80% of total assets in permissible overseas investments (as per Clause 12.19 of SEBI Master Circular for Mutual Funds), the transfer of redemption or repurchase proceeds to the unitholders shall be made within five working days from the date of redemption or repurchase. Bank Mandate As per the directives issued by SEBI it is mandatory for an investor to declare his/her bank account number. To safeguard the interest of Unitholders from loss or theft of their refund orders/redemption cheques, investors are SO. 61 requested to provide their bank details in the Application Form. In case an existing Unitholder is submitting a request for Change in his Bank Details, he needs to submit a copy of cancelled cheque leaf of the new bank account or Bank statement of the new bank account attested by his banker with seal & signature of banker or letter from the Banker of the investor. In absence of the same, the request for Change in Bank Mandate is liable to be rejected. Investors have an option of registering multiple bank accounts, by submitting the necessary forms & documents. At the time of redemption, investors can select the bank account to receive the amount. Delay in payment of redemption / The Asset Management Company shall be liable to pay interest to the repurchase proceeds/dividend unitholders at rate as specified vide clause 14.2 of SEBI Master Circular for Mutual Funds dated June 27, 2024 for the period of such delay. Unclaimed Redemption and Income The unclaimed Redemption and IDCW amounts shall be deployed by the Distribution cum Capital Withdrawal Fund in money market instruments and such other instruments/securities as Amount maybe permitted from time to time. The investment management fee charged SO. 52 by the AMC for managing such unclaimed amounts shall not exceed 50 basis points. The circular also specifies that investors who claim these amounts during a period of three years from the due date shall be paid at the prevailing 61NAV. Thus, after a period of three years, this amount can be transferred to a pool account and the investors can claim the said amounts at the NAV prevailing at the end of the third year. In terms of the circular, the onus is on the AMC to make a continuous effort to remind investors through letters to take their unclaimed amounts. The details of such unclaimed amounts shall be disclosed in the annual report sent to the Unit Holders. Disclosure w.r.t investment by minors 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 AMC shall accept a Change of Pay-out Bank mandate before redemption is processed. SO. 37 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 parent/legal guardian after completing all KYC formalities. 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. No further transactions shall be allowed till the status of the minor is changed to major. The claimant has to submit the Transmission Request Form (TRF) and NOC form along with the prescribed common set of documents. All such forms and formats are available on AMC website, RTA and AMFI. AMCs shall not accept requests for redemption from a claimant pending completion of the transmission of units in his / her favour. The Stamp duty is payable by the claimant with respect to the indemnity bond and affidavit, shall be in accordance with the stamp duty prescribed by law. Acceptance of financial transactions Non-individual Investors are requested to note the following: through email in respect of non-individual 1. Risks Involved in Transacting via Email the Non-individual investor investor acknowledges and accepts the inherent risks associated with conducting financial transactions via email. These risks include, but are not limited to, the possibility of unauthorized access to email communications, transmission delays, data loss, or alteration due to technical glitches or cyberattacks, which could impact the completeness or accuracy of the transaction. Additionally, emails may be susceptible to interception, unauthorized access, and other security vulnerabilities, which could lead to fraudulent transactions. Therefore, investors must be cautious while initiating financial transactions via email and should ensure the confidentiality and integrity of their communication. 2. Limitation of Liability of AMC / RTA The Asset Management Company (AMC) and the Registrar and Transfer Agent (RTA) shall not be held liable for any loss or damage caused by the non-receipt or delay in receiving any transaction sent by the investor via email. This includes situations where emails are not delivered, are delayed, or are intercepted due to issues beyond the control of the AMC or RTA, including but not limited to, technical failures, service provider errors, or unauthorized access to the email account. The AMC and RTA will not be responsible for any transactions that are erroneously processed or not processed due to such issues. The liability of the AMC and RTA is limited solely to the extent of ensuring that the transaction is processed once received in the proper format and within a reasonable timeframe, subject to system availability and security checks. 3. Security Measures to Ensure Safe Email Communication The AMC and RTA are committed to ensuring the highest level of security for email 62communications and shall implement appropriate safeguards. These measures include the use of encrypted email services, secure authentication protocols, and virus/malware scanning for all incoming and outgoing emails. Additionally, access to email accounts and transaction systems shall be restricted to authorized personnel only, and multi-factor authentication will be employed to verify the identity of the individuals initiating transactions. The AMC shall take all reasonable steps to prevent unauthorized access, disclosure, or alteration of the financial data transmitted via email. 4. Retention of Transaction Records The AMC and RTA will retain records of all transactions routed via email in accordance with applicable laws and regulations. These records will include, but are not limited to, transaction requests, email correspondence, and confirmation receipts, for a minimum period as mandated by regulatory authorities. The Non- Individual investor agrees that these records shall be stored in a secure digital format to ensure their integrity and availability for future reference. In addition, the AMC shall maintain an audit trail for each transaction, allowing for the traceability of emails and the status of each request submitted via email. 5. Procedure for Addition/Deletion of Authorized Signatories The facility to transact via email shall follow an appropriate procedure for the addition or deletion of authorized signatories. Such changes must be communicated to the AMC through a formal notification, in the form of a signed letter or email from the authorized representative of the entity, accompanied by the requisite board resolution or authority letter. The AMC shall process these changes only upon receipt of valid documentation confirming the updated list of authorized signatories. These changes will only be effective once the AMC has acknowledged receipt and validation of the notification. 6. Authorization for Non-Individual Investors For non-individual investors, including registered Specialized Investment Fund distributors or third parties authorized by the investor, to submit financial transactions via email on behalf of the entity, the AMC and RTA require prior written authorization from the investor. This authorization should clearly state the scope of authority granted to the third party and must be submitted with each transaction request. The AMC will accept such transactions only if the relevant authorization documents are in place and the email corresponds with the pre-registered contact information for the entity or authorized third party. 7. Security Procedures for Transaction Confirmation To confirm and authenticate email-based financial transactions, the AMC will employ a range of security procedures, including digital signatures, encrypted communication, and multi-step verification processes. These procedures are designed to verify that the transaction is genuinely authorized by the investor and ensure that the instructionshave not been tampered with. Upon receipt of an email transaction, the AMC will conduct thorough checks to confirm the authenticity of the request, including comparing it against the pre-registered information (email addresses, signatories, etc.). Only upon successful verification will the transaction be processed. 8. Electronic Time Stamping and Audit Trail for Email Transactions Each transaction processed via email shall be subject to an electronic time- stamping mechanism that records the exact time and date of receipt. This time stamp will serve as a reference point for any future inquiries or disputes regarding the transaction. Furthermore, AMC shall maintain an audit trail, tracking all actions related to the email transaction, including receipt, verification, and processing. The audit trail will provide transparency, ensure accountability, and facilitate the resolution of any issues related to email-based transactions. 639. Change in Registered Email Address / Contact Details Any change in the registered email address or contact details of the entity must be communicated to the AMC via a physical letter, including a scanned copy, signed by the designated authorized officials of the entity. This change request must also be supported by a copy of the relevant board resolutions or authority letter from the entity, issued on the official letterhead. The AMC will not accept email requests for such changes. Further, changes in the registered email address will not be processed unless the request complies with these requirements. This ensures that only authorized personnel can modify the contact details associated with the Non-individual investor’s account. 10. Changes in Bank Mandate No changes to the bank mandate (including adding or modifying bank account details) will be accepted via email. Such changes must be submitted using the prescribed service request form, duly signed by the entity’s authorized signatories. The form must also be accompanied by the wet signatures of the designated officials of the entity. This ensures the authenticity and validity of any change in the bank details associated with the Non- individual Investor’s account, and that no unauthorized modifications are made via email. 11. Digital Signatures and Validity of Electronically Executed Documents In case of any document executed electronically, the AMC recognizes the validity of Digital Signature Certificates (DSCs) or Aadhaar-based e- signatures provided by the authorized officials of the entity. These digitally signed documents will be treated as legally binding and valid, even if they are not sent from the registered email address of the authorized officials. However, the email domain from which the document is sent must match the official domain name of the entity. Such documents, when executed with a valid DSC or e-signature, will be processed by the AMC without requiring further verification through physical signatures. 64III. Other Details A. Periodic Disclosures such as Half yearly disclosures, half yearly results, annual report Alternative Monthly and Half yearly The SIF shall disclose portfolio (along with ISIN), including derivative Disclosures: Portfolio / Financial Results instruments, as on the last day of every alternate month (i.e. as on the end of May, July, September, November, January and March) for all its This is a list of securities where the corpus investment strategies (including debt based investment strategies) on the of the investment strategy is currently respective AMC SIF website https://www.wealthcompanyamc.in/wsif/ invested. The market value of these and on the website of AMFI within 10 days from the close of such month investments is also stated in portfolio in a user friendly and downloadable spreadsheet format. All other disclosures. provisions regarding portfolio disclosure applicable to Mutual Fund scheme, shall also be applicable to the investment strategies under SIF. Further, AMC shall publish an advertisement in an all India edition of one national English daily newspaper and one Hindi newspaper, every half year, disclosing the hosting of the half-yearly statement of its investment strategies’ portfolio on the website of WSIF and AMFI and the modes through which unitholder(s) can submit a request for a physical or electronic copy of the statement of investment strategy portfolio. The AMC will also provide a dashboard, in a comparable, downloadable (spreadsheet) and machine readable format, providing performance and key disclosures like Investment strategy’s AUM, investment objective, expense ratios, portfolio details, investment strategy’s past performance etc. on website. Half Yearly Results The Specialized Investment Fund shall within one month from the close of each half year, that is on 31st March and on 30th September, host a soft copy of its unaudited financial results on the website of the AMC SIF website and AMFI. The Specialized Investment Fund shall publish an advertisement disclosing the hosting of such financial results on their website, 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 Specialized Investment Fund is situated. The unaudited financial results will also be displayed on the website of the AMC SIF https://www.wealthcompanyamc.in/wsif/ and AMFI website. 65Annual Report The Investment strategy annual report or an abridged summary thereof shall be mailed (emailed, where e mail id is provided unless otherwise required) to all Unit holders not later than four months (or such other period as may be specified by SEBI from time to time) from the date of closure of the relevant accounting year (i.e. 31st March each year) and full annual report shall be available for inspection at the Head Office of the Specialized Investment Fund and a copy shall be made available to the Unit holders on request on payment of nominal fees, if any. Investment strategy wise annual report shall also be displayed on the AMC SIF website (https://www.wealthcompanyamc.in/wsif/) and on the website of Association of Mutual Funds in India (www.amfiindia.com ). Unitholders whose email addresses are not registered with the WSIF may ‘opt-in’ to receive a physical copy of the annual report or an abridged summary thereof. Further, AMC shall provide a physical copy of the abridged summary of the Annual Report, without charging any cost, on a specific request received from a unitholder. AMC shall also publish an advertisement every year, in an all India edition of one national English daily newspaper and in one Hindi newspaper, disclosing the hosting of the investment strategy wise annual report on the website of the AMC SIF and AMFI and the modes through which a unitholder can submit a request for a physical or electronic copy of the annual report or abridged summary thereof. Risk Band Risk band forms part of the Product labeling and depicts Risk band of the investment strategy. The risk band of the investment strategy shall be in accordance with Paragraph 12 of SEBI Circular dated February 27, 2025 and circulars issued thereunder from time to time and regulatory framework issued by AMFI communication No. 35P/ MEM-COR/ 14 / 2025-26 dated April 21, 2025. Disclosure of Risk band of investment In terms of Clause 5.16 of SEBI Master Circular on Mutual Funds dated strategies and benchmark June 27, 2024 and SEBI Circular dated November 05, 2024 and regulatory framework issued by AMFI communication No. 35P/ MEM- COR/ 14 / 2025-26 dated April 21, 2025., the risk band of the investment SO. 38 strategies and benchmark shall be disclosed while disclosing the performance of the investment strategies from time to time. Disclosure of Investment Strategy The Investment Strategy Summary Document of each investment Summary Document strategy shall be disclosed on AMC SIF website and to be uploaded AMFI portal in three different formats, ie. Pdf, excel and xml. 66B. Scenario Analysis for Derivatives Positions (As specified by AMFI) Equity Oriented Investment Strategies The following table shows the performance of Nifty50 index and individual performance of other indices: Nifty50 10.00% IT Sector -15.00% Banking Sector 8.50% Total AUM of Investment Strategy ₹ 100,000,000 Scenario 1: Without any unhedged short derivative exposure Weight (NAV/Total Net Asset PnL (Nifty up by PnL (Nifty down Portfolio NAV) Value(NAV) 10%) by 10%) ₹ ₹ ₹ - Equity Nifty50 95.0% 95,000,000 9,500,000 9,500,000 ₹ ₹ ₹ Cash - 5.0% 5,000,000 - - ₹ ₹ ₹ - Total 100.0% 100,000,000 9,500,000 9,500,000 9.50% -9.50% Scenario 2: 25% short exposure in IT Sector Weight (NAV/Total Net Asset PnL (Nifty up by PnL (Nifty down Portfolio NAV) Value(NAV) 10%) by 10%) ₹ ₹ ₹ - Equity Nifty50 70.0% 70,000,000 7,000,000 7,000,000 Unhedged Futures ₹ ₹ ₹ - Short IT Sector 25.0% 25,000,000 3,750,000 3,750,000 ₹ ₹ ₹ Cash 5.0% 5,000,000 - - ₹ ₹ ₹ - Total 100.000% 100,000,000 10,750,000 10,750,000 10.75% -10.75% Scenario 3: 25% short exposure in Banking Sector Weight (NAV/Total Net Asset PnL (Nifty up by PnL (Nifty down Portfolio NAV) Value(NAV) 10%) by 10%) ₹ ₹ ₹ - Equity Nifty50 70.0% 70,000,000 7,000,000 7,000,000 Unhedged Futures Banking ₹ ₹ - ₹ Short Sector 25.0% 25,000,000 2,125,000 2,125,000 ₹ ₹ ₹ Cash 5.0% 5,000,000 - - ₹ ₹ ₹ - Total 100.000% 100,000,000 4,875,000 4,875,000 4.88% -4.88% Scenario 4: 15% short exposure in IT Sector and 10% short exposure in Banking sector 67Weight (NAV/Total Net Asset PnL (Nifty up by PnL (Nifty down Portfolio NAV) Value(NAV) 10%) by 10%) ₹ ₹ ₹ - Equity Nifty50 70.0% 70,000,000 7,000,000 7,000,000 Unhedged Futures ₹ ₹ ₹ - Short IT Sector 15.0% 15,000,000 2,250,000 2,250,000 Unhedged Futures Banking ₹ ₹ - ₹ Short Sector 10.0% 10,000,000 850,000 850,000 ₹ ₹ ₹ Cash 5.0% 5,000,000 - - ₹ ₹ ₹ - Total 100.000% 100,000,000 8,400,000 8,400,000 8.40% -8.40% Note: 1 Equity Derivatives may include exchange traded Futures and Options on equity securities 2 NAV is representative of the market value at the asset level and aggregates to 100% at the fund level C. Liquidity risk management tools and its applicability – Not Applicable, as it is an open ended equity investment strategy. D. Transparency/NAV Disclosure (Details with reference to information given in Section I) SO. 41 Net Asset Value The AMC will calculate and disclose the first NAV of the Investment Strategy within a period of 5 business days from the date of allotment. This is the value per unit of the Subsequently, the NAVs will be calculated and disclosed on all the investment strategy on a particular day. Business Days. The AMC shall update the NAVs on the website You can ascertain the value of your Association of Mutual Funds in India - AMFI (www.amfiindia.com ) investments by multiplying the NAV before 11.00 p.m. on every Business Day and shall also update the NAVs with your unit balance. on the AMC SIF website (https://www.wealthcompanyamc.in/wsif/) before 11.00 p.m. on every Business Day for a given business day. If the NAVs are not available before the commencement of Business Hours on the following day due to any reason, the Specialized Investment Fund shall issue a press release giving reasons and explaining when the Specialized Investment Fund would be able to publish the NAV. Information regarding NAV can be obtained by the Unit holders / Investors by calling or visiting the nearest ISC. E. Transaction charges and stamp duty Transaction Charges Not Applicable Stamp Duty Specialized Investment Fund units issued against Purchase transactions (whether through lump-sum investments or SIP or STP or switch-ins or reinvestment under IDCW Option) would be subject to levy of stamp duty @ 0.005%* of the amount invested. Transfer of Specialized Investment Fund units (such as transfers between demat accounts) are subject to payment of stamp duty @ 0.015%. The rate and levy of stamp duty may vary as amended from time to time. *Pursuant to Notification No. S.O. 4419(E) dated December 10, 2019 issued by Department of Revenue, Ministry of Finance, Government of India, read with Part 68I of Chapter IV of Notification dated February 21, 2019 issued by Legislative Department, Ministry of Law and Justice, Government of India on the Finance Act, 2019, and subsequent Notification dated March 30, 2020 issued by Department of Revenue, Ministry of Finance, Government of India. The stamp duty will be deducted from the net investment amount i.e. gross investment amount less any other deduction like transaction charge. Units will be created only for the balance amount i.e. net investment amount as reduced by the stamp duty. The stamp duty will be computed at the rate of 0.005% on an inclusive method basis. F. Associate Transactions- Please refer to Statement of Additional Information (SAI) G. Taxation - For details on taxation please refer to the clause on Taxation in the SAI apart from the following: The information is provided for general information purposes only. However, in view of the individual nature of tax implications, each investor is advised to consult his or her own tax adviser with respect to the specific tax implications arising out of his or her participation in the investment strategy. Tax Resident Investors Non-Resident Investors Specialized Investment Fund Tax on Income Slab rates plus 20% plus applicable Distribution under applicable surcharge surcharge and cess 2 IDCW Option and cess Capital Gains 1 12.50% (without indexation 12.50%2 (without indexation & benefit) plus applicable surcharge foreign exchange fluctuation Long Term and cess on gains exceeding benefit) plus applicable surcharge (period of holding: Rs.1,25,000 in a year and cess on gains exceeding NIL Rs.1,25,000 in a year more than 12 months) 20% plus applicable surcharge Short Term 20% plus applicable surcharge and and cess 2 cess (period of holding: up to 12 months) 1. Securities Transaction Tax (STT) @ 0.001% is applicable on redemption of units of equity-oriented specialized investment funds. 2. The Specialized Investment Fund will pay/deduct taxes as per the applicable tax laws on the relevant date considering the provisions of the Income-tax Act, 1961 read with the Income-tax Rules, 1962 and any circulars or notifications or directives or instructions issued thereunder. Please note that grant of DTAA benefit, if any, is subject to fulfilment of stipulated conditions under the provisions of the Income-tax Act, 1961 and the relevant DTAA as well as interpretation of relevant Article of such DTAA. In case of Resident Investors: TDS is applicable at the rate of 10% on income distributed in excess of Rs.10,000 by a Specialized Investment Fund. In case of Non-Resident Investors: TDS is applicable on any income in respect of units of a Specialized Investment Fund at lower of 20% (plus applicable surcharge and cess) or rate of income-tax provided in the relevant DTAA (read with CBDT Circular no. 3/2022 dated 3rd February 2022), provided such investor furnishes valid Tax Residency Certificate (TRC) for concerned FY. Tax will be deducted on Short-term/Long-term capital gains at the tax rates (plus applicable Surcharge and Health and Education Cess) specified in the Finance Act 2025 at the time of redemption of units in case of Non-Resident investors (other than FIIs) only. 69TDS at higher rates: In case PAN is not furnished or PAN is inoperative, then TDS as per Section 206AA of the Income-tax Act, 1961 would apply (higher of specified rate or rates in force or 20%) would apply, subject to Rule 37BC of the Income- tax Rules, 1962. Withholding tax applicability on payments to non-filers of return: As per section 206AB of Income-tax Act, 1961, tax to be deducted at twice the applicable rate in case of payments to specified person (except nonresident not having permanent establishment in India or person who is not required to furnish the return of income as notified by the Central Government) who has not furnished the return of income for the assessment year relevant to previous year immediately preceding the financial year in which tax is required to be deducted: • For which time limit for filing return has expired; and • The aggregate of tax deducted at source or tax collected at source in his case is Rs. 50,000 or more in the said previous year. Additionally, if provisions of section 206AA are also applicable then tax to be deducted at higher of the two rates provided i.e. rate as per section 206AB or section 206AA. Investors are requested to note that the tax position prevailing at the time of investment may change in future due to statutory amendment(s). The Specialized Investment Fund will pay/deduct taxes as per the applicable tax laws on the relevant date considering the provisions of the Income-tax Act, 1961. Additional tax liability, if any, imposed on investors due to such changes in the tax structure, shall be borne solely by the investors and not by the AMC or Trustee. 3. Under section 10(23D) of the Income tax Act, 1961, income earned by a Specialized Investment Fund registered with SEBI is exempt from income tax. WSIF (offered by The Wealth Company Mutual Fund) is registered with Securities and Exchange Board of India (SEBI) and is as such eligible for benefits u/s. 10(23D) of the Income-tax Act, 1961. H. Rights of Unitholders- Please refer to SAI for details. I. 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 https://www.wealthcompanyamc.in/wsif/ 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 wwww.kfintech.com Address In addition to the existing official points of acceptance (“OPA”) for accepting transactions in the units of the investment strategies of the Fund as disclosed in the I S I D , online transactions may also be done on the transaction portal of MFU i.e. https://www.mfuindia.com/ 70SO. 48 J. Penalties, Pending Litigation or Proceedings, Findings of Inspections or Investigations for which action may have been taken or is in the process of being taken by any Regulatory Authority SO. 49 Please refer AMC SIF website https://www.wealthcompanyamc.in/wsif/ for latest updates. The Investment Strategy under this Investment Strategy Information Document was approved by the Trustee Company on November 27, 2025. The Trustees have ensured that the wsif Ex-Top 100 Equity Long-Short Fund approved by them is a new product offered by WSIF (offered by The Wealth Company Mutual Fund) and is not a minor modification of any existing Investment Strategy. Notwithstanding anything contained in this Investment Strategy Information Document, the provisions of the SEBI (Mutual Funds) Regulations, 1996 and the guidelines there under shall be applicable. SO. 63 For and on behalf of Wealth Company Asset Management Holdings Private Limited Sd/- Suruchi Wanare Chief Compliance Officer Date: Place: Mumbai INVESTMENTS IN SPECIALIZED INVESTMENT FUND INVOLVES RELATIVELY HIGHER RISK INCLUDING POTENTIAL LOSS OF CAPITAL, LIQUIDITY RISK AND MARKET VOLATILITY. PLEASE READ ALL INVESTMENT STRATEGY RELATED DOCUMENTS CAREFULLY BEFORE MAKING THE INVESTMENT DECISION 71