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DISCLOSURE DOCUMENT
PRITHVI FINMART PRIVATE LIMITED 6 B Corpora, 6th floor, LBS Marg, Near Shangrilla Biscuit Company, Bhandup (west), Mumbai – 400078
Tel No. - 022-61404444, Fax - 022 – 61404427 Website: www.prithvifinmart.com
SEBI Reg No.INP000004441 Date:-28th March 2013 Compliance Office: Mrs. Shraddha N Karia Tele No.: 022-61404447 / 9320342203 Email ID: [email protected] CEO Name: Mr. Kunal Kirti Kothari Tele No.: 022-61404456 / 9769929456 Email ID: [email protected] For any grievances / dispute please contact Prithvi Finmart Pvt Ltd at the above address or [email protected] and phone no. : +91 022-61404444. If not satisfied with the response of the intermediary you can lodge your grievance with SEBI at http//scores.gov.in or you may also write to any of the offices of SEBI for any queries, feedback or assistance please contact SEBI office on Toll Free Helpline at 1800 227 575/ 1800 266 7575 Securities and Exchange Board of India Plot No.C4-A,'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai 400051 Tel: +91-22-26449000 / 40459000 Fax: +91-22-26449019-22 / 40459019-22 E-mail: [email protected] Interactive Voice Response System (IVRS): Tel : +91-22-26449950 / 40459950
DISCLOSURE DOCUMENT (As per the requirement of Fifth Schedule of Regulation 14 of Securities and Exchange Board of India (Portfolio Managers) Regulation 1993)
I) The Disclosure Document has been filed with the Securities & Exchange Board of India along with the certificate in the prescribed format in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993.
ii) The purpose of the Document is to provide essential information about the portfolio management services in a manner to assist and enable the investors in making informed decision for engaging Prithvi Finmart Private Limited as a Portfolio Manager.
iii) The Disclosure Document contains the necessary information about the Portfolio Manager, required by an investor before investing, and the investor may also be advised to retain the document for future reference.
iv) The name, phone number, e-mail address of the principal officer so designated by the Portfolio Manager is:
Name of the principal officer
Janak Kotecha
Phone
91-2261404426
Address 6 B corpora, Near Shangrilla Biscuit Company, LBS Marg, Bhandup (West), Mumbai - 400078
Date: 22nd April 16
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Index of contents
Item No.
Contents
Page No.
1 Disclaimer clause
2
2 Definitions
3
3 Description
7
4 Penalties, pending litigations or proceedings, findings of inspections or investigations for which actions may have been taken or initiated by any regulatory authority.
10
5 Services offered
11
6 Risk Factors
14
7 Client Representation
16
8 The Financial Performance of Portfolio Manager
17
9 Portfolio Management Performance of the Portfolio Manager
18
10 Nature of Expenses
20
11 Taxation
21
12 Accounting Policies
22
13 Investor Services
23
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1. Disclaimer Clause:
The particulars given in this Document have been prepared in accordance with the SEBI (Portfolio Managers) Regulations, 1993 and filed with SEBI. This Document has neither been approved nor disapproved by SEBI nor has SEBI certified the accuracy or adequacy of the contents of the document. This document is not for public distribution and has been furnished to you solely for your information and may not be reproduced or redistributed to any other person.
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2) Definitions: Unless the context or meaning thereof otherwise requires, the following expressions shall have the meaning assigned to them hereunder respectively:- “Act” means the Securities and Exchange Board of India, Act 1992 (15 of 1992).
“Agreement” means agreement between Portfolio Manager and its Client and shall include all Schedules and Annexure attached thereto. “Application” means the application made by the Client to the Portfolio Manager to place its funds and/or securities with the Portfolio Manager for Portfolio Management Services. Upon execution of the Agreement by the Portfolio Manager, the Application shall be deemed to form an integral part of the Agreement. Provided that in case of any conflict between the contents of the Application and the provisions of the Agreement, the provisions of the Agreement shall prevail. “Assets” means (i) the Portfolio and/or (ii) the Funds. “Body Corporate” shall have the meaning assigned to it in or under clause (7) of section 2 of the Companies Act, 1956 (91of 1956); “Bank Account” means one or more accounts opened, maintained and operated by the Portfolio Manager with any of the Scheduled Commercial Banks in accordance with the agreement entered into with the Client. “Board” means the Securities and Exchange Board of India established under sub-section (1) of Section 3 of the Securities and Exchange Board of India Act.
“Client” means the person who enters into an Agreement with the PortfolioManager for managing its portfolio and /or funds. “Custodian” means any person who carries on or proposes to carry on the business of providing custodial services in accordance with the regulations issued by SEBI from time to time. “Depository” means depository as defined in the Depositories Act, 1996. “Depository Account” means one or more account or accounts opened, maintained and operated by the Portfolio Manager with any depository or depository participant registered under the SEBI (Depositories and Participants) Regulations, 1996 in accordance with the agreement entered into with the Client. “Disclosure Document” means this Disclosure Document for offering Portfolio Management Services submitted to SEBI from time to time.
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“Discretionary Portfolio Management Services” means the portfolio management services rendered to the Client by the Portfolio Manager on the terms and conditions contained in the agreement, where under the Portfolio Manager exercises any degree of discretion in the investments or management of assets of the Client. “Discretionary Portfolio Manager” means a Portfolio Manager who exercises or may, under a contract relating to portfolio management, exercise any degree of discretion as to the investments or management of the portfolio of securities or the funds of the Client, as the case may be. “Document” means this Disclosure Document. “Financial Year” means the year starting from April 1 and ending on March 31 of the following year. “Funds” means the monies managed by the Portfolio Manager on behalf of the Client pursuant to Portfolio Investment Management Agreement and includes the monies mentioned in the Application, any further monies placed by the Client with the Portfolio Manager for being managed pursuant to Portfolio Investment Management Agreement, the proceeds of the sale or other realization of the Portfolio and interest, dividend or other monies arising from the Assets, so long as the same is managed by the Portfolio Manager “Funds managed” means the market value of the Portfolio of the Client as on date “HUF” means the Hindu Undivided Family as defined in Section 2 (31) of the Income Tax Act, 1961. “Initial Corpus” means the value of the Funds and the market value of readily realizable Securities brought in by the Client at the time of commencing of his relationship as a Client with the Portfolio Manager and accepted by the Portfolio Manager. The Securities brought in by the Client in the form of Securities shall be taken at the last available closing price on the day of transfer of Securities in the Depository Account. The Portfolio Manager shall not accept from client, funds or securities worth less than twenty five lacs rupees. “NRI” means Non Resident Indian as defined in Section 2 (30) of the Income Tax Act, 1961. “NAV” means Net Asset Value, which is the price that the Investment would ordinarily fetch on sale, in the open market on the relevant date, less any receivables and fees due. “Parties” means the Portfolio Manager and the Client; and “Party” shall be construed accordingly. “Person” includes any individual, partners in partnership, central or state government,
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company, body corporate, cooperative society, corporation, trust, society, Hindu Undivided Family or any other body of persons, whether incorporated or not. “Portfolio” means the Securities managed by the Portfolio Manager on behalf of the Client pursuant to the Portfolio Investment Management Agreement and includes any Securities mentioned in the Application, any further Securities placed by the Client with the Portfolio Manager for being managed pursuant to the Portfolio Investment Management Agreement, Securities acquired by the Portfolio Manager through investment of Funds and bonus and rights shares or otherwise in respect of Securities forming part of the Portfolio, so long as the same is managed by the Portfolio Manager. “Portfolio Manager” shall have the same meaning as given in regulation 2(cb) of the SEBI (Portfolio Managers) Regulations, 1993 as amended from time to time. “Principal Officer” means an employee of the Portfolio Manager who has been designated as such by the Portfolio Manager. “RBI” means Reserve Bank of India. “Regulations” means the Securities and Exchange Board of India (Portfolio Managers) Regulations, 1993, as may be amended from time to time. “Portfolio Management Services” means the Discretionary Portfolio Management Services or Non Discretionary Portfolio Management Services or Investment Advisory Services, as the context may require. “Product / Option” means any of the current investment Product/Option or such Product/Option that may be introduced at any time in the future by Portfolio Manager. “Prithvi Finmart” means Prithvi Finmart Private Limited. “Rules” means the Securities and Exchange Board of India (Portfolio Managers) Rules, 1993. “Scheduled Commercial Bank” means any bank included in the second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934). “SEBI” means the Securities and Exchange Board of India established under sub-section (1) of Section 3 of the SEBI Act. “Securities” includes: “Securities” as defined under the Securities Contracts (Regulation) Act, 1956 as amended from time to time and includes:
(i) Shares, scrips, stocks, bonds, debentures, debenture stock or other marketable
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securities of a like nature in or of any incorporated company or other body corporate; (ii) Derivative; (iii) Units or any other instrument issued by any collective investment scheme to the
investors in such schemes; (iv) Security receipt as defined in clause (zg) of section 2 of the Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002; (v) Units or any other such instrument issued to the investors under any mutual fund
scheme; (vi) Government securities; (vii)Such other instruments as may be declared by the Central Government to be
Securities; (vii) Rights or interest in securities; (viii) Exchange Traded Funds; and (ix) Liquid Funds.
“Strategy” means any of the current investment Strategy or such Strategies / Portfolio that may be introduced at any time in future by the Portfolio Manager. Words and expressions used in this disclosure document and not expressly defined shall be interpreted according to their general meaning and usage. The definitions are not exhaustive. They have been included only for the purpose of clarity and shall in addition be interpreted according to their general meaning and usage and shall also carry meanings assigned to them in regulations governing Portfolio Management Services.
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3) DESCRIPTION:
(i) History, Present Business and Background of the Portfolio Manager Prithvi Finmart Pvt Ltd. is currently amongst the most reputed broking house known for its integrity and expertise in securities market. It is a member of the Bombay Stock Exchange Limited, National Stock Exchange of India Limited, MCX Stock Exchange Limited and It is also a depository participant of Central Depository Services (India) Limited. Its business includes stock broking, depository services, portfolio management and commodity derivatives by its group company - Prithvi Broking Pvt Ltd. The Company's core specialty lies in its non-institutional distribution with a large network of branches and sub brokers/ authorized persons. Its strength lies in its investment research capabilities. Its research division has analysts continuously monitoring global, national and regional political, economic and social situations so as to assess their impact on the economy in general, the sectors and companies they research which helps them in offering quality research and advice to clients. The company's Portfolio Management division will be managed by professionals having expertise in the following disciplines: Equity Commodities Derivatives Equity Research Portfolio Management Mutual Fund Advisory Retirement solutions
(ii) Promoters of the Portfolio Manager, Directors and their background
Mr.Janak Bharat Kotecha (B.Com, Chartered Accountant) Mr.Janak B Kotecha is the Director in Alliance Finstock Ltd., Member of Bombay Stock Exchange Ltd. from 17.12.2008 to 20.10.2010.Worked with Morgan Stanley Advantage Services Pvt. Ltd. from 15.5.2007 to 31.1.2008 as an Associate. Investment Advisor and Derivatives Sales in R. K. Consultancy (Sub-broker of BSE) & in R.K.Securities (Sub-broker of NSE) from Sept-06 to Apr-2007. Director in Prithvi Finmart Pvt.Ltd. (formerly known as Prithvi Currencies Pvt. Ltd.) member of NSE-Currencies Derivatives Segment & member of MCX-SX Stock Exchange from 25.11.2008 to till date.
Mr. Kunal Kothari (Inter Commerce) Mr. Kunal K Kothari Director in Prithvi Broking Pvt. Ltd. since April 2008 to till date. Director in Prithvi Currencies Pvt. Ltd., Director in Alliance Finstock Ltd., Partner in Samarth Commodities from 2004 till 2008.
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Mr. Mahendra R Kothari (BE Electrical) Mr. Mahendra R Kothari is a proprietor of Krishna Investment. He was affiliated as Sub Broker with Ghalla Bhansali Stock Brokers & Securities since 1997.He was sub broker with Trimbak Investment & with Mitra Equities till 2001. Currently he is director in Prithvi Finmart Pvt. Ltd
(iii) Names and activities of associate Companies/concerns
A) Prithvi Broking Private Limited member of MCX, NCDEX, NSEL, ACE, NMCE
&NCDEX - Spot exchange – Broking Business B) Prithvi Finlease India Limited – NBFC Activities C) Prithvi Bricks & mortar - Constructions D) Prithvi Infraworks India Private Limited – Private &Govt contract related to
infrastructure E) Prithvi Lifesciences Private Limited - Sale & Buy Biological Food & Products &
Services F) Prithvi Insurance service India Private Limited - Insurance Services G) Prithvi natural resources Private Limited - Mining Related activies H) Prithvi Talkies Private Limited - Movie & TV Production House I) Milestone foresight Solutions Private Limited - Outdoor Media Company
(Advertising) J) Torchbearer Advisors Private Limited - Investment Banking
(iv) Details of the services being offered: Discretionary/ Non discretionary/
Advisory.
Discretionary Services
Under these services, the choice as well as the timings of the investment decisions rest solely with the portfolio manager. In other words the portfolio manager shall have the sole and absolute discretion to invest clients’ funds in any type of securities and in any market as it deems fit as per the executed agreement. The Securities invested/ disinvested by the portfolio manager for client in the same Strategy may differ from client to client. The portfolio managers’ decision ( taken in good faith ) in deployment of the Clients’ account is absolute and final and cannot be called in question or be open to review at any time during the currency of the agreement or any time thereafter except on the ground of malafide intent, fraud, conflict of interest or gross negligence etc. Periodical statements in respect of client’s portfolio are sent to the respective clients
Non discretionary Services Under this Strategy Portfolio Manager manages the funds / securities in accordance with the directions of the client.
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Advisory Services
The Portfolio Manager will also provide Advisory Portfolio Management Services, in terms of the Regulations, which shall be in the nature of investment advisory and shall include the responsibility of advising on the portfolio strategy and Investment and divestment of individual securities on the client’s portfolio, for an agreed fee structure, entirely at the Client’s risk. The Portfolio Manager shall be solely acting as an advisor to the portfolio of the client and shall not be responsible for the investment/ divestment of securities and/ or administrative activities on the client’s portfolio. The Portfolio Manager shall, provide advisory services in accordance with such guidelines and /or directives issued by the regulatory authorities and/ or the Client, from time to time, in this regard. The clients of the portfolio managers could be Indian resident investors and / or offshore investors.
The services provided to clients are in accordance with the legal agreements / other documents executed with them.
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4) Penalties, pending litigation or proceedings, findings of inspection or investigations for which action may have been taken or initiated by any regulatory authority:
1. All cases of penalties imposed by the Board or the directions issued by the Board
under the Act or Rules or Regulations made there under relating to Portfolio Management Services.
N.A.
2. The nature of the penalty/direction. N.A. 3. Penalties imposed for any economic offence and/or for violation of any securities
laws relating to Portfolio Management Services. N.A.
4. Any pending material litigation/legal proceedings against the Portfolio Manager/key personnel with separate disclosure regarding pending criminal cases, if any.
N.A.
5. Any deficiency in the systems and operations of the Portfolio Manager observed by the Board or any regulatory agency in relation to Portfolio Management Services for which action may have been taken or initiated.
N.A.
6. Any enquiry/adjudication proceedings initiated by the Board against the Portfolio Manager or its directors, principal officer or employee or any person directly or indirectly connected with the Portfolio Manager or its directors, principal officer or employee, under the Act or Regulations made there under relating to Portfolio Management services.
N.A.
No penalties / directions have been issued by the SEBI under the SEBI Act or Regulations made there under relating to Portfolio Management Services. There are no pending material litigations or legal proceedings, findings of inspections or investigations for which action has been taken or initiated by any regulatory authority against the Portfolio Manager or its Directors, principal officers or employees or any person directly or indirectly connected with the Portfolio Manager under the SEBI Act and Regulations made there under relating to Portfolio Management Services.
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5) Services Offered:
(i) The portfolio Manager may provide Discretionary, Non Discretionary and Advisory Portfolio Management services.
Discretionary Portfolio Management indicate that, the portfolio manager has full discretion to manage the clients portfolio, however investment will be made taking inconsideration the risk profile of the client. In case of non discretionary portfolio, the client directs the portfolio manager to the avenues of investments while the portfolio manager passively manages and executes transaction based on the client’s decision. Under a non discretionary portfolio, the portfolio manager executes the investment instructions and follows up with the payments, settlements, custody and other back office function. Under the Advisory option the portfolio manager, based on the risk profile of the client, offers his advice from time to time, however the final decision and execution of the transaction rests with the client. Our investment management team follows a very disciplined process of fundamental and technical analysis of equity instruments to create a comprehensive range of disciplined strategies. Each open position is closely monitored on daily basis. The investments are made using a sophisticated stock selection methodology.
(ii) The Portfolio funds will not be invested in any of the Prithvi Finmart Pvt. Ltd.group companies or its associates so as to avoid any conflict of interest.
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Prithvi- Long Term Strategic Portfolio: 1) PRITHVI 4 A.M. PORTFOLIO
OBJECTIVE Endeavour to create wealth over the medium to long term through investment in equities, across market capitalization by focusing solely on companies which are at their infant stage of growth.
FEATURES STOCK PICKING based on hidden valuations or future growth prospectus, rather than on absolute market capitalisation. Be contrarian at times and bet on unpopular and unknown business having potential to deliver much superior returns. Seek to capture value by investing during the early stages of the growth cycle. Suitable for medium to high risk investors, with a long term perspective. Weightage to any stock would not be more than 20 percent to the entire size of the portfolio Weightage to any sector would not be more than 25 percent to the entire size of portfolio. The key parameters: a) Strength and quality of management and Promoters. b) Business Model c) Valuation d) Future Growth Prospectus INDICATIVE ASSET ALLOCATION Equities: 0-100 percentage Cash & cash equivalents: 0-100 percentage Fees, Charges & Expenses:
Fixed Fee 2% p.a. calculated on weighted average daily NAV of portfolio payable at the end of each quarter
Performance Fee (Shall be charged on high watermark concept)
Returns on the portfolio (pre tax)
Fees charged (Payable at the end of anniversary year or at the time of full redemption)
[A] 0 – 15% NIL [B] Above 15% 20% of the returns Brokerage to broker Prithvi Finmart Pvt Ltd
Del Brok 0.30% Min.03 Rs.
Fut 0.02 % Min 0.02 Rs.
Option Rs. 20.00 Per lot
Depository Charges (Broker – Prithvi Finmart Pvt Ltd)
Rs. 600.00 (IND 2) - Off-market transfer other than DP A/cs held with Prithvi Finmart Pvt ltd will be charged Rs.25.00 per transaction (market/off market). Rs. 2.00 per certificate (Subject to minimum of Rs. 15.00 request) + Rs. 35.00 postal charges per DRF.
Service Tax, STT, Stamp duty and other statutory levies
As per actual
Custodian Fees As Applicable (Currently NIL) Exit Load (before the expiry of lock-in period)
Complete withdrawal – 1% of the portfolio value. Partial Withdrawal – 0.5% on the amount withdrawn. However after withdrawal, portfolio value should not be less than the minimum portfolio size.
INVESTMENT HORIZON RISK RETURN Benchmark
18-24 MONTHS. Above AVERAGE HIGH BSE 500
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Prithvi- Balanced Portfolio: Objective: Endeavour to provide capital appreciation over the medium to longer term by predominantly investing in companies having large market capitalisation. FEATURES 1) Principles of Value and Growth investing followed. 2) Focus on capital preservation 3) Minimum 50 percent allocation to companies having market CAP above 5000 crores, 30 percent in above 2000Crores market CAP and rest in below 2000 crores market CAP 4) Suitable to medium risk investors, with a long term perspective. The key parameters: a) Strength and quality of management and Promoters. b) Business Model c) Valuation d) Future Growth Prospectus INDICATIVE ASSET ALLOCATION Equites: 0-100 percent Cash & cash equivalents: 0-100 percent Fees, Charges & Expenses:
Fixed Fee 2% p.a. calculated on weighted average daily NAV of portfolio payable at the end of each quarter
Performance Fee (Shall be charged on high watermark concept)
Returns on the portfolio (pre-tax)
Fees charged (Payable at the end of anniversary year or at the time of full redemption)
[A] 0 – 15% NIL [B] Above 15% 20% of the returns Brokerage to broker Prithvi Finmart Pvt Ltd
Del Brok 0.30% Min.03 Rs.
Fut 0.02 % Min 0.02 Rs.
Option Rs. 20.00 Per lot
Depository Charges (Broker – Prithvi Finmart Pvt Ltd)
Rs. 600.00 (IND 2) - Off-market transfer other than DP A/cs held with Prithvi Finmart Pvt ltd will be charged Rs.25.00 per transaction (market/off market). Rs. 2.00 per certificate (Subject to minimum of Rs. 15.00 request) + Rs. 35.00 postal charges per DRF.
Service Tax, STT, Stamp duty and other statutory levies
As per actual
Custodian Fees As Applicable (Currently NIL) Exit Load (before the expiry of lock-in period)
Complete withdrawal – 1% of the portfolio value. Partial Withdrawal – 0.5% on the amount withdrawn. However after withdrawal, portfolio value should not be less than the minimum portfolio size.
INVESTMENT HORIZON RISK RETURN Benchmark
18-24 MONTHS. BELOW AVERAGE Above Average CNX Nifty
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6) RISK FACTORS:
The investments made in securities are subject to market risk and there is no assurance or guarantee that the objectives of investments will be achieved. Following are the risk factors as perceived by management: Investment in equities, derivatives and mutual funds and Exchange Traded Index Funds are subject to market risks and there is no assurance or guarantee that the objective of investments will be achieved. As with any investment in securities, the Net Asset Value of the portfolio can go up or down depending upon the factors and forces affecting the capital markets. The performance of the portfolio may be affected by changes in Government policies, general levels of interest rates and risks associated with trading volumes, liquidity and settlement systems in equity and debt markets. The past performance of the Portfolio Manager does not indicate its future performance. Investors are not being offered any guarantee returns. The performance of the Assets of the Client may be adversely affected by the performance of individual securities, changes in the market place and industry specific and macro economic factors. The investment strategies are given different names for convenience purpose and the names of the Strategies do not in any manner indicate their prospects or returns. Investments in debt instruments and other fixed income securities are subject to default risk, liquidity risk and interest rate risk. Interest rate risk results from changes in demand and supply for money and other macroeconomic factors and creates price changes in the value of the debt instruments. Consequently, the Net Asset Value of the portfolio may be subject to fluctuation. Investments in debt instruments are subject to reinvestment risks as interest rates prevailing on interest amount or maturity due dates may differ from the original coupon of the bond, which might result in the proceeds being invested at a lower rate. The Portfolio Manager may invest in non-publicly offered debt securities and unlisted equities. This may expose the Client's portfolio to liquidity risks. Engaging in securities lending is subject to risks related to fluctuations in collateral value/settlement/liquidity/ counter party. The Portfolio Manager may use derivatives instruments like index futures, stock futures and options contracts, warrants, convertible securities, swap agreements or any other derivative instruments for the purpose of hedging and portfolio balancing, as permitted under the Regulations and guidelines. Usage of derivatives will expose the Portfolio to certain risks inherent to such derivatives. As and when the Portfolio Manager deals in the derivatives
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market on behalf of the Client, there are risk factors and issues concerning the use of derivatives that investors should understand. Derivative products are specialized instruments that require investment techniques and risk analyses 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. Derivatives require the maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and the ability to forecast price or interest rate movements correctly. There is the possibility that a loss maybe sustained by the portfolio as a result of the failure of another party (usually referred to as the “counter party”) to comply with the terms of the derivatives contract. Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indices. Thus, derivatives are highly leveraged instruments. Even a small price movement in the underlying security could have a large impact on their value. The Net Asset Value may be affected by changes in settlement periods and transfer procedures. Decisions regarding investments in the scheme are made only after careful analysis and research by the PRITHVI FINMART PRIVATE LIMITED research team. Such investment decisions are taken keeping the SEBI Rules and Regulations in mind. Investment in the equity markets are subject to market risks. PRITHVI FINMART PRIVATE LIMITED gives no assurance or guarantee that the objectives of the scheme will be achieved. Performance of the equity portion of the scheme may be adversely affected by price fluctuation risks, company or sectoral risks or other macro economic factors. The debt instrument and fixed income securities portion may be affected by interest rate risk, liquidity risk, credit risk and reinvestment risk.
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7) CLIENT REPRESENTATION
i)
ii) Complete disclosure as per provisional unaudited balance sheet as on 31st March 2016 in respect of transactions with related parties as per the standards specified by the Institute of Chartered Accountants of India.
Note: The Following shall be treated as related party: 1. Key Management Personnel 2. Relative of Key Management Personnel 3. Enterprise in which Key Management Personnel and their relatives/ companies are able to exercise significant influence in the enterprise 4. Subsidiaries of enterprise specified at (3) above Related Party Disclosure:
Sr. No.
Name of the Related Party
Nature of Relationship
Nature of Payment
Amount paid during FY 2015-16 (In Rs)(un- audited)(as on 31-03-
2016) 1 Janak Kotecha Director Salary 13,40,000 2 Kunal K Kothari Director Salary 6,70,000
3 Prithvi Broking Pvt Ltd
Group Company Rent 10,78,656
Category of clients
No. of Clients as on March 31, 2014
Funds managed March 14
No. of Clients as on
March 31, 2015
Funds managed March 31,
2015
No. of Clients as on March
31, 2016
Funds managed March 31,
2016
Discretionary/ Non
Discretionary (if available)
Associates/ group compani
es
NIL
NIL
NIL
NIL
NIL
NIL
NA
Others
4
10,970,323.54
4
13,125,242.65
2
5,072,411.73
Discretionary
Total
4
10,970,323.54
4
13,125,242.65
2
5,072,411.73
Discretionary
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8) FINANCIAL PERFORMANCE OF PORTFOLIO MANAGER:
FINANCIAL PERFORMANCE OF PORTFOLIO MANAGER:
Company Name Prithvi Finmart Pvt. Ltd.
Prithvi Finmart Pvt. Ltd.
Prithvi Finmart Pvt.
Ltd.
PARTICULARS 2013-14 (Audited)
2014-15 (Audited)
2015-16(un-Audited)
Income 24,202,822.92
52,668,576.35
72,382,121.85
Expenditure 19,004,424.89
22,454,061.98
45,591,819.09
NP before Tax 5,198,398.03
30,214,514.37
26,790,302.76
Prov. For Tax 1,705,544.22
9,667,373.84
9,108,702.94
Profit after Tax 3,492,853.81
20,547,140.53
17,681,599.82
PARTICULARS 2013-14
(Audited) 2014-15 (Audited)
2015-16(un-Audited)
Share Capital 50,000,000.00
50,000,000.00
50,000,000.00
Reserves 13,956,936.07
34,504,076.60
52,185,676.42
Borrowed Capital 133,767,917.68
126,074,775.55
259,251,059.03
Total of Liabilities 197,724,853.75
210,578,852.15
361,436,735.45
Fixed Assets 1,230,814.97
807,166.97
1,382,210.57
Investments - - -
Net Current Assets 196,494,038.78
209,771,685.18
360,054,524.88
Deferred tax Assets - -
Total of Assets 197,724,853.75
210,578,852.15
361,436,735.45
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9) Portfolio Management performance of the portfolio manager for the last three years, and in case of discretionary portfolio manager disclosure of performance indicators
calculated using weighted average method in terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993:
We are registered portfolio manager vide SEBI Registration No.INP000004441dated28th March 2013. The company has commenced the PMS activity from May 2013 and hence no returns are available for the previous financial years. Since the investments are made according to the specific needs of the clients, it is difficult to exactly quantify the performance. However, based on weighted average method, the returns made by us in the last years had been as under:
Prithvi- 4 A.M.
Portfolio
Period: (27-Nov-13 to
31-Mar-14)
Period: 01-Apr-14 to
31-Mar-15)
Current Year Period: 01-April-15 to 31-Mar-16)
Portfolio Performance
(%)
10.66 30.54
-11.95
Benchmark Performance (%)
11.29 33.19
-3.81
Inception Date: 27 Nov 2013 Benchmark– Long Term Strategic Portfolio: - BSE 500 INDEX
Prithvi- Balance
Portfolio
Period: (27-Nov-13 to
31-Mar-14)
Period: 01-Apr-14 to
31-Mar-15)
Current Year Period: 01-April-15 to 31-Mar-16)
Portfolio Performance
(%)
9.50 15.92
-12.74
Benchmark Performance
(%) 10.31 26.65
-2.65
Inception Date: 27 Nov 2013 Benchmark: - CNX NIFTY
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10) NATURE OF EXPENSES:
(i) Investment management and advisory fees: Management and Advisory fees charged may be a fixed fee or a return based fee or a combination of both as detailed in the Schedule to the Portfolio Management Services agreement. The Fees may be charged upfront and/or at the end of a specified tenure as agreed between the Client and the Portfolio Manager.
(ii) Custodian Fees: As may be decided between the Client and the Portfolio Manager
(iii) Registrar & Transfer Agent Fees: NIL
(iv) Brokerage& Transaction Cost: The investments under Portfolio Management
would be done through registered members of the Stock Exchange(s) who charge brokerage up to a maximum of 2.5% of contract value. In addition to the brokerage, transaction cost like turnover charges, stamp duty, transaction costs, turnover tax, Securities transaction tax or any other tax levied by statutory authority (ies), foreign transaction charges (if any) and other charges on the purchase and sale of shares, stocks, bonds, debt, deposits, other financial instruments would also be levied by the broker (including Prithvi Finmart Pvt. Ltd.) Entry or exit loads (if any) on units of Mutual Funds will also be charged from Clients. Stock Broking services of Prithvi Finmart Pvt Limited will be utilized for executing the order / trade related to PMS services.
For further details please refer tariff.
(v) Service Tax: As applicable from time to time.
(vi) Depository Charges: Depository services of Prithvi Finmart Pvt Limited will be utilized for holding the shares in Demat form related to PMS services. As may be applicable from time to time. For further details please refer tariff.
(vii) Entry Load/Exit Load: As may be mutually agreed to between the Client and the
Portfolio Manager.
(viii) Certification and Professional charges: Charges payable for out sourced professional services like accounting, auditing, taxation, and legal services etc. for documentation, notarisations, certifications, attestations required by bankers or regulatory authorities including legal fees etc.
(ix) Incidental expenses: Charges in connection with day-to-day operations like courier
expenses stamp duty, service tax, postal, telegraphic, opening and operation of bank account, distribution charges or any other out of pocket expenses as may be incurred by the Portfolio Manager.
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11) TAXATION:
Investment in securities is subject to the provisions of the Indian Income Tax Act, 1961. Special reference needs to be made in respect of provisions related to capital gains, business income and all other provisions of the Income Tax Act. Provisions related to tax deduction at source shall also apply, wherever applicable. Interest and dividends would be subject to tax as per the provisions of the Income Tax Act 1961.
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12) ACCOUNTING POLICIES:
The following Accounting policy will be applied for the investments of Clients: a) Investments in Equities, Mutual funds, Exchange Traded Funds and Debt instruments will
be valued at closing market prices of the exchanges (BSE or NSE as the case may be) or the Repurchase Net Asset Value declared for the relevant scheme on the date of the report or any cut-off date or the market value of the debt instrument at the cut-off date. Alternatively, the last available prices on the exchange or the most recent NAV will be reckoned. In case of structured products, the portfolio will be valued at the face value of the product until the expiry of the tenure.
b) Realized gains/ losses will be calculated by applying the first in / first out and/or weighted
average principle. The Portfolio Manager and the Client can adopt any specific norms or methodology for valuation of investments or accounting the same as may be mutually agreed between them on a case specific basis.
c) For derivatives and futures and options, unrealised gains and losses will be calculated by
marking to market the open positions. d) Unrealised gains/losses are the differences in between the current market values/NAV
and the historical cost of the securities. e) Dividends on shares and units in mutual funds, interest etc. shall be accounted on receipt
basis. The interest on debt instruments shall be accounted on accrual basis.
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13) INVESTOR SERVICES:
(i) Details of investor relation officer who shall attend to the investor queries and complaints is mentioned herein below:
Name of the person:
Shraddha Karia
Designation:
Compliance Officer
Address:
6 B corpora, Near Shangrilla Biscuit Company, LBS Marg, Bhandup (West), Mumbai - 400078
Email:
Telephone:
022-61404447
(ii) Grievance redressal and dispute settlement mechanism:
Grievances, if any, that may arise pursuant to the Portfolio Investment Management Agreement entered into shall as far as possible be redressed through the administrative mechanism by the Portfolio Manager and are subject to SEBI (Portfolio Managers) Regulations 1993 and any amendments made thereto from time to time. However, all the legal actions and proceedings are subject to the jurisdiction of court in Mumbai only and are governed by Indian laws. The CRM team of Portfolio Manager will endeavour to address all complaints regarding service deficiencies or causes for grievance, for whatever reason, in a reasonable manner and time. All cases remaining unresolved for a period exceeding one month shall be internally reported to the Compliance Officer/ Director. The investor may also contact the compliance officer in case he is not satisfied with the resolution provided by the CRM team. The contact details of Compliance officer is provided elsewhere in the Disclosure Document. If the Investor remains dissatisfied with the remedies offered or the stand taken by the Compliance Officer/ Director of the Portfolio Manager, then investor may also register/lodge complaints online on SCORES (SEBI COMPLAINT REDRESS SYSTEM) portal i.e. http://scores.gov.in/ by clicking on “Complaint Registration” under “Investor Corner” or on Toll Free help line at 1800 227 575/1800 266 7575
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For Prithvi Finmart Private Limited: Kunal K Kothari Director
Janak B Kotecha Director
Place: Mumbai Date: 22nd April 16
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FORM C
SECURITIES AND EXCHANGE BOARD OF INDIA
(PORTFOLIO MANAGERS) REGULATIONS, 1993
(Regulation 14)
Name of the Portfolio Manager: Janak Kotecha
Prithvi Finmart Pvt Ltd SEBI Reg No.INP000004441
Address:
6B Corpora, Near Shangrilla Biscuit co., L B S marg, Bhandup west, Mumbai 400078 We confirm that:
i) The Disclosure Document forwarded to the Board is in accordance with the SEBI (Portfolio Manager) Regulations, 1993 and the guidelines and directives issued by the Board from time to time.
ii) The disclosures made in the document are true, fair and adequate to enable the investors to investment in the Portfolio Management Strategy.
iii) The Disclosure Document has been duly certified by an independent Chartered Accountant — CA. Kinjal Shah, Proprietor of KMS & Associates, Chartered Accountants having Membership No. 111420 having office at address 1004, Gold crest Business Centre, L.T. Road, Borivali (W), Mumbai-92.
For and on behalf of
Prithvi Finmart Private Limited
Principal Officer: Janak Kotecha
Date: 22nd April 16
Place: Mumbai