KARVY CAPITAL LIMITED PORTFOLIO MANAGEMENT … PMS RDD_01.10.2015.pdf · KARVY CAPITAL LIMITED ....
Transcript of KARVY CAPITAL LIMITED PORTFOLIO MANAGEMENT … PMS RDD_01.10.2015.pdf · KARVY CAPITAL LIMITED ....
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KARVY CAPITAL LIMITED
PORTFOLIO MANAGEMENT SERVICES
DISCLOSURE DOCUMENT
[As required under Regulation 14 of SEBI (Portfolio Managers) Regulation, 1993]
1. This document supercedes the Disclosure document dated_ March 30, 2015 filed
with Securities and Exchange Board of India (SEBI) on March 31, 2015.
2. This Disclosure Document has been filed with SEBI along with the certificate from
independent chartered accountant in the prescribed format in terms of Regulation
14 of the SEBI (Portfolio Managers) Regulations, 1993 as amended till date.
3. The purpose of this Disclosure Document is to provide essential information about
the portfolio management services offered by Karvy Capital Limited in such manner
as to assist and enable the investors in making informed and considered decision for
engaging Karvy Capital Limited as a Portfolio Manager.
4. This document contains the necessary information about the Portfolio Manager
required by an investor.
5. Karvy Capital Limited is permitted to provide Portfolio Management Services
pursuant to its registration as a Portfolio Manager with SEBI vide Registration
number INP000004524 dated June 10, 2014.
6. Investors should carefully read this entire document before making a decision to
avail portfolio management services from Karvy Capital Limited and retain this
document for future reference. Any other relevant information may be provided
upon request.
7. No person has been authorized to give any information or to make any
representations not confirmed in this draft Disclosure Document in connection with
the services proposed to be provided by the Portfolio Manager, and any information
or representations not contained herein must not be relied upon as having been
authorized by the Portfolio Manager.
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8. The Principal Officer designated by Karvy Capital Limited, the Portfolio Manager is:
Name of the Principal Officer Ms. KANIKA KHORANA
Tel No: 022 6149 1500
Email : [email protected]
Address: 702, Hallmark Business Plaza,
Sant Dnyaneshwar Marg,
Bandra (E), Mumbai 400 051
* The Principal Officer has been changed from Mr. Swapnil Pawar to Ms. Kanika Khorana
with effect from March 13, 2015.
9. This disclosure document is dated October 1, 2015
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Portfolio Management Services KARVY CAPITAL LIMITED
INDEX
Sr No Contents Page
Number
1 Disclaimer 4
2 Definitions 4
3 Description - The Portfolio Manager 6
i History, Present Business and background of the Portfolio Manager.
8
ii Promoters of the Portfolio Manager, Directors and their background. 09
iii Details of the top 10 group companies of the Portfolio manager
based on turnover as on March 31, 2014
11
iv Details of Services being offered. 12
4 Penalties/Pending Litigations/Proceedings etc 12
5 Services offered 13
6 Risk Factors 16
7 Client Representation 20
i Category of clients as onAugust 31,2015 20
ii Complete disclosure in respect of transactions with related parties as
per the standards specified by the Institute of Chartered
Accountants of India (as on March 31,2014)
21
8 Financial Performance of Portfolio Manager, Karvy Capital Limited
22
9 Portfolio Management Performance of the Portfolio Manager for last
3 years
23
10 Nature of Expenses 24
11 Taxation 25
12 Accounting Policies 30
13 Investor Services 32
14 Grievances Redressal 32
15 Dispute Settlement Mechanism 32
16 General 33
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Section 1: DISCLAIMER
This document has been prepared in accordance with the Securities Exchange Board of India
(Portfolio Managers) Regulations, 1993, as amended from time to time and other circulars
issued by SEBI from time to time and has been 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 this Document.
This information 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.
Section 2: DEFINITIONS
In this Agreement, unless otherwise clearly indicated by or inconsistent with the context, the
following expressions shall have the meaning assigned to them hereunder respectively:
“Act” – means the Securities and Exchange Board of India Act, 1992.
“Agreement” means the agreement that shall be entered between Karvy Capital Limited, the
Portfolio Manager and the client for the management of funds or securities of the client in
terms of Regulation 14 of the SEBI (Portfolio Managers) Regulations, 1993 and SEBI (Portfolio
Managers) Amendment Regulations, 2002 issued by the Securities and Exchange Board of
India and as may be modified from time to time and shall include all schedules and
annexures thereto and shall also include all modifications, alterations, additions or deletions
made thereto in accordance with the terms thereof.
“Board” means the Securities and Exchange Board of India.
“Bank Account” means one or more bank accounts opened, maintained and operated by
the Portfolio Manager in the name of clients or a pool account in the name of the Portfolio
Manager in which the funds handed over by the client shall be held by the Portfolio Manager
on behalf of the Client.
“Chartered Accountant” means a chartered accountant as defined in clause (b) of sub-
section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) and who has
obtained a certificate of practice under sub-section (1) of section 6 of that Act.
“Client” means any body corporate, partnership firm, individual, HUF, association of person,
body of individuals, trust, statutory authority, or any other person who enters into
agreement with Karvy Capital limited, the Portfolio Manager for availing the Portfolio
Management Services
“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.
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“Depository” means Depository as defined in the Depositories Act, 1996 (22 of 1996) and
currently includes National Securities Depository Limited (NSDL) and Central Depository
Services (India) Limited (CDSL).
“Depository Account” means any account of the client or for the client with an entity
registered as depository participant under sub-section 1A of Section 12 of the Act or any
other law for the time being relating to registration of depository participants in which the
securities comprising part of the Portfolio of the Client are kept by the Portfolio Manager.
“Discretionary Portfolio Management Services” means the discretionary portfolio
management services to be rendered to a Client by Karvy Capital limited, the Portfolio
Manager pursuant to the terms and conditions contained in the Portfolio Management
Services Agreement, where under the Portfolio Manager exercises absolute and unfettered
discretion, with regards to the investments and management of the portfolio of securities or
the funds of the client, as the case may be.
“Disclosure Document” means this draft disclosure document for offering Portfolio
Management Services.
“Financial year” means the period of twelve months commencing on 1st April every year and
ending on 31st March of the following year.
“Funds” means the monies placed by the Client with the Portfolio Manager and any
accretions thereto and also includes any further monies placed by the client with the
Portfolio Manager to be managed pursuant to the Agreement, the proceeds of the sale or
realization of the portfolio and any interest, dividend or other monies so long as the same is
being managed by the Portfolio Manager.
“Funds managed” means the market value of the Portfolio of the Client as on date.
“Fund Manager” (FM) means the individual/s appointed by the portfolio manager who
manages, advises or directs or undertakes on behalf of the client (whether as a discretionary
portfolio manager or otherwise) the management or administration of a portfolio of
securities or funds of the client, as the case may be.
“Initial Corpus” means the value of the funds and the market value of securities brought in
by the client and accepted by the Portfolio Manager at the time of registering with the
Portfolio Manager for the portfolio management services. The Initial corpus brought in by
the Client in the form of securities shall be valued at the closing market price of such
securities, prevailing on recognised stock exchange [NSE/ BSE (only if security is not listed on
NSE)] on the previous working date of activation of client’s portfolio management account
by the Portfolio Manager or of the previous working day of the transfer of such securities
from client’s account to the Depository account whichever is later. The Portfolio Manager
shall not accept from the client, funds or securities worth less than Twenty five lakh rupees.
“Investment Advisory Services” means the non exclusive, non binding services, where the
Portfolio Manager advises Clients on investments in general or gives specific advice
required by the Clients as agreed upon in the Agreement. Advice,whether general or specific
is non-binding in nature and it is entirely at client’s discretion to follow the advice.
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“Non-Discretionary Portfolio Management Services” means the non-discretionary portfolio
management services to be rendered to a Client by the Portfolio Manager on the terms and
conditions pursuant to the Agreement, where under the Portfolio Manager invests and
manages the Funds of the Client based on the instructions of the Client.
“Net Asset Value” or “NAV” means the market value of the Assets managed by the Portfolio
Manager, as calculated by the Portfolio Manager from time to time, depending on the
Strategy chosen by the Client.
“Person directly or indirectly connected” means any person being an associate, subsidiary,
inter connected company or a company under the same management within the meaning of
section 370(1B) of the Companies Act, 1956 or in the same group.
“Portfolio” means the total holdings of securities and / or funds belonging to the client.
“Portfolio Manager” (PM) means Karvy Capital Ltd., a company incorporated under the
Companies Act, 1956 and registered with SEBI as a Portfolio Manager in terms of SEBI
(Portfolio Managers) Regulations 1993 vide registration no. INP000004524 and having its
Registered Office at its PMS dealing office at 702, Hallmark Business Plaza, Sant
Dnyaneshwar Marg, Bandra (E), Mumbai 400 051[ but may add more dealing offices in
future] and who pursuant to a contract or arrangement with a client, advises or directs or
undertakes on behalf of the client (whether as a discretionary Portfolio Manager or
otherwise) the management or administration of a portfolio of securities or the funds of the
client, as the case may be.
“Portfolio Management Services” means the Discretionary Portfolio Management Services, and/or the Non-Discretionary Portfolio Management Services, and/or the Investment Advisory Services, as the case may be. “Portfolio Value” means the aggregate of the Portfolio Funds and Value of Portfolio
Securities.
“Principal Officer” means a director/an employee of the portfolio manager who is
responsible for the activities of portfolio management and has been designated as principal
officer by the portfolio manager.
“Regulations” – means the Securities and Exchange Board of India (Portfolio Managers)
Regulations, 1993, as amended by SEBI from time to time and includes Securities and
Exchange Board of India (Portfolio Managers) Amendment Regulations, 2012, and rules,
guidelines or circulars issued in relation thereto from time to time.
“Strategy” means any of the Portfolio Investment categories mentioned herein or that may
be introduced by the Portfolio Manager from time to time. The Term Strategy may be
interchanged with Plans/Products/Options.
“SEBI” 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, 1992.
“Securities” means securities as defined under the Securities Contracts (Regulation) Act,
1956 and includes:
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(i) shares, scrips, stocks, bonds, debentures, debenture stock or other marketable securities of a like nature in or of any incorporated company or other body corporate
(ia) derivative;
(ib) units or any other instrument issued by any collective investment Strategy to the
investors in such Strategies;
(ic) 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;
(id) units or any other such instrument issued to the investors under any mutual fund
Strategy;
(ii) Government securities;
(iia) such other instruments as may be declared by the Central Government to be
securities; and
(iii) rights or interest in securities.
A descriptive, but not the exhaustive list of “Securities” is given hereunder:
Shares (whether dematerialized or otherwise), derivatives (futures and options, Interest rate
swaps & Forward rate agreements etc), scrip, stocks, bonds (whether dematerialized or
otherwise), warrants, convertible debentures (whether dematerialized or otherwise), non-
convertible debentures (whether dematerialized or otherwise), securitised debt (whether
dematerialized or otherwise), fixed return investments, floating rate instruments linked to
MIBOR/ call money etc., equity shares and equity linked instruments or other marketable
securities of a like nature in or of any incorporated company or other body corporate,
negotiable instruments, including usage bills of exchange, trade bills, deposits or other
money market instruments, derivatives, commercial paper, certificates of deposits, units
issued by Unit Trust of India, units issued by Mutual Funds, units issued by SEBI registered
Alternative Investment Funds, mortgage backed or other asset backed securities issued by
any institution or corporate, cumulative convertible preference shares issued by any
incorporated Company and securities issued by the Central Government or a State
Government , Pass Through Certificates , RBI auctions, open market sales conducted by RBI
or any other securities that may be issued from time to time.
“Securities lending” means the securities lending as per the Securities Lending Scheme, 1997
and related guidelines specified by SEBI.
“Structured Products” means products returns on which may be linked to Equity Index, Debt
instruments, Non Convertible Debentures and may also be based on Basket of stock, index or
stock futures with pre-defined capital protection. These are normally third party products.
The terms that are used herein and not defined herein, except where the context otherwise
so requires, shall have the same meanings as are assigned to them under the Act, the
Regulations or the Rules.
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Words importing the singular include the plural and vice-versa. Words importing a gender include the other gender.
Section 3 DESCRIPTION
i. HISTORY, PRESENT BUSINESS AND BACKGROUND OF THE PORTFOLIO MANAGER :
Karvy Capital Limited, a wholly owned subsidiary of Karvy Stock Broking Limited, was
incorporated under the Companies Act, 1956 as amended from time to time as a Private
Limited Company on December 31, 1981 with the name ‘Grant Holding and Trading
Company Private Limited’. On June 30, 2011, the name of the company was changed to
Karvy Capital Private Limited. The name of the company was further changed from Karvy
Capital Private Limited to Karvy Capital Limited with effect from February 8, 2012 and
presently Karvy Capital Limited is a Public Company domiciled in India.
Karvy Capital Limited has its Registered Office at 702, Hallmark Business Plaza, Sant
Dnyaneshwar Marg, Bandra (E), Mumbai – 400051.
Karvy Capital Limited is principally engaged in business of trading of shares and securities.
Karvy Capital Limited has been registered with Reserve Bank of India (‘RBI’) to carry on the
business of non-banking financial institution with effect from March 24, 1998.
Karvy Capital Limited is also acting as a Sponsor and Manager to Karvy Capital Alternative
Investment Fund (Trust) for which it has obtained Category III License on April 10, 2013.
Karvy Capital Limited is registered with SEBI as a Portfolio Manager vide registration number
INP000004524, for the period 10th June 2014 to 9th June 2017.
Karvy Capital Limited started proprietary trading in August 2010 with a focus on Quantitative
and Absolute Return strategies. Currently, Karvy Capital Limited acts as an Investment
Manager to Karvy Capital Alternative Investment Fund – a category III Alternative Investment
Fund.
Karvy Capital Limited also has a retail debt business and acts as a facilitator for structured
finance deals. Karvy Capital Limited is also a direct sales associate and main distributor to the
various products and services being offered by Karvy Group.
Karvy Capital Limited aims to be a reputable asset manager providing comprehensive
investment solutions across asset classes to its investors. To diversify the set of offerings,
Karvy Capital Limited intends to provide customized and focused portfolio management
solutions to investors. These services would include discretionary portfolio management
services, non discretionary portfolio management services and advisory services.
Karvy Capital Limited is a group company of the KARVY Group, which is a premier integrated
financial services provider, and ranked amongst the leading corporate in the country in all its
business segments, servicing over millions of individual investors in various capacities, and
provides investor services to many corporates, comprising the who’s who of Corporate
India. KARVY group companies cover the entire spectrum of financial services such as Stock
Broking, Depository Participants, Distribution of financial products – mutual funds, bonds,
fixed deposit, equities, Insurance Repository , Commodities Broking, Personal Finance,
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Advisory Services, Merchant Banking & Corporate Finance, placement of equity, IPOs,
services related to data management and Non Banking Financial company among others.
KARVY Group has a professional management team and ranks among the best in technology
and operations.
ii. DETAILS OF PROMOTERS,DIRECTORS AND THEIR BACKGROUND:
The directors of Karvy Capital Limited as on October 1, 2015 and their background are as
follows:
Name and age: Mr. Kedar Ramesh Deshpande, aged 42 years
Designation: Whole-time Director.
Qualification: BE Civil Engineering and MBA Marketing
Experience (General and specific Intermediaries activity):
Over 19 years of wide-ranging retail broking and market
research experience and founder director of Repeat
Purchase India Pvt. Ltd., an ecommerce company and COS
and Financial Catalysts Private Limited for imparting
training for retail BFSI sector.
Has been associated with ICICI group for period of 7 years. Headed the retail broking business, commodities segment, retail demat business. Has set up the retail broking business at Edelweiss Financial Services Ltd. and played a key role in designing website to give clients simplified execution.
Date of appointment: August 10, 2015
Other directorships: Name of Company Date of appointment
Repeat Purchase India
Private Limited
10/08/2012
COS and Financial
Catalysts Private Limited
25/08/2013
Previous Positions held: Country Head Retail Broking in Karvy Stock Broking Limited prior to Business Head Retail Broking in Edelweiss Financial Services Ltd and Deputy General Manager in ICICI Bank Ltd.
Name and age: Mr. G. Krishna Hari, aged 57 years
Designation: Director
Qualification: Bachelors degree in Commerce and an associate member
of the Institute of Chartered Accountants of India (ICAI)
Experience (General and specific Intermediaries activity):
He has over 27 years of experience in the areas of finance
and accounts functions encompassing fund raising,
financial reporting, management accounting, working
capital management, budgeting and forecasting and
financial due diligence reviews for mergers & acquisitions
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and investment proposals. He has been associated with
the Karvy Group for the past 15 years.
Date of appointment: September 27, 2012
Other directorships: Name of Company Date of appointment
Karvy Holdings Limited March 1, 2013
Karvy Realty & Services
Limited
March 2 , 2015
Previous Positions held: Prior to joining Karvy, he was the head of finance & accounts division in Asia Pacific Investment Trust Limited, Hyderabad (Formerly Nagarjuna Investment Trust Limited) an NBFC Company.
Name and age: Mr. V. Mahesh, aged 50 years
Designation: Director
Qualification: Graduate in BA - Corporate Secretary ship from University
of Madras. He also holds a Post Graduate degree in
Commerce from University of Madras (M.Com) and a Post
Graduate Diploma in Computer Applications.
Experience (General and specific Intermediaries activity):
He has work experience spanning over two decades and
has in depth exposure to operations on most financial
services businesses. Commencing his professional stint
with Karvy’s Registry business where he has to his credit
managing over 300 Initial Public Offerings and other forms
of offerings, he was amongst the first few to work closely
on the Book Building process initiated by SEBI in 1995
Date of appointment: June 29, 2011
Other directorships: Name of Company Date of appointment
Buoyant Consultants Pvt. Ltd
April 1, 2002
Karvy Realty (India) Limited August 31, 2006
Contours Motors & Dealers Private Limited
December 14, 2007
Karvy Data Management Services Ltd. [Managing Director]
April 21, 2008
Efin Services (India) Private Limited
February 20, 2009
Karvy Financial Services Limited
July 17, 2009
Karvy Forex & Currencies Private Limited
March 10, 2011
Karvy Insurance Repository Limited
November 30, 2011
Karvy Global Services Limited
January 21, 2014
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Karvy Solar Power Limited January 28 , 2015
Karvy Insights Limited February 19, 2015
Karvy Analytics Limited March 02 , 2015
Mr. V Mahesh resigned from Karvy Holdings Limited
w.e.f.09.02.2015 and Karvy Realty & Services Limited
w.e.f.02.03.2015.
Previous Positions held: After initially working with Mass Computer Services Ltd (MCS) as an Assistant Vice President, he moved to Karvy
Name and age: Mr. K.P. Jeewan, aged 47 years
Designation: Director.
Qualification: B.Com (Hons Accounts), MBA
Experience (General and specific Intermediaries activity):
He has over 24 years of experience in investment banking,
corporate finance, fixed income, forex/interest rate
structured products.
He was also associated as a Vice President in Kotak
Mahindra Bank Limited, as in charge of structured
products desk of the treasury. The assignment involved
structuring Derivative products (Forex and Interest rate)
for Institutional clients.
Additionally, he has worked for about an year at Kotak
Mahindra Capital Company Primary Dealers in various
capacities in investment Banking & Fixed Income.
Date of appointment: May 29, 2015
Other directorships: Not Applicable
Previous Positions held: a. Head of Fixed Income Division in Karvy Stock Broking Limited
b. Vice President and In charge of structured products desk of the treasury and various capacities in investment Banking & Fixed Income in Kotak Mahindra Bank Limited
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Name and age: Mr. P. B. Ramapriyan, aged 48 years
Designation: Director.
Qualification: B.Com, PGDBA
Experience (General and specific Intermediaries activity):
He is working with Karvy for over 2 decades; He has strength of sorts in the distribution of financial products including Equity, Bonds, Fixed Deposits and Auto Finance. He has successfully marketed several financial products for large number of corporate of various sizes. He is also responsible for managing the Pan India Network of brokers and sub-brokers. He has been instrumental in Karvy’s success in distribution of debt products.
Date of appointment: May 29, 2015
Other directorships: Director in Karvy Realty (India) Limited appointed on
31.08.2006
Previous Positions held: Karvy Group - Distribution of Financial products
Name and age: Mr. Rajiv Ranjan Singh, aged 45 years
Designation: Director.
Qualification: Cost & Management Accountant
Experience (General and specific Intermediaries activity):
He has enormous experience in finance industry with capabilities in building strategy, revenue generation, business development and overall customer satisfaction.
Date of appointment: May 29, 2015
Other directorships: Not Applicable
Previous Positions held: Karvy Group- Vice President & Business Head of the Equity Broking business
Mr.Swapnil Pawar, Managing Director of Karvy Capital Limited has tendered his
resignation effective October 1 ,2015.
iii DETAILS OF THE TOP 10 GROUP COMPANIES/ FIRMS BASED ON TURNOVER AS ON
MARCH 31, 2015 [ based on audited financials]:
S. NO Name of the
Company Nature of Business Status Turnover (Rs)
1 Karvy Stock Broking Limited
SEBI Registered Stock broker, Depository Participant, Portfolio Manager
Parent Company
3,691,869,126
2 Karvy Financial Services Ltd. Financial Services-NBFC
Group company
3,579,787,839
3
Karvy Computershare Pvt. Ltd.
SEBI Registered Registrar and Share Transfer Agent
Group company
2,690,202,383
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4
Karvy Data Management Services Ltd Transaction Processing
Group company
2,025,996,810
5 Karvy Realty (India) Ltd. Realty Services
Group company
289,725,633
6 Karvy Comtrade Ltd.
FMC/ NCDEX /MCX/NMCE/ACE / ICEX/ NCDEX Spot Exchange / National Spot Exchange registered commodity broker
Group company
223,868,626
7 Karvy Holdings Limited Consulting and Advisory Services
Group company
135,598,416
8
Karvy Consultants Limited Consultancy and advisory services
Group company
118,365,390*
9
Karvy Insurance Repository Limited Insurance Repository and Other services
Group company
60,792,932
10 Karvy Middle East LLC, Dubai Commercial Broker and Advisory Services
Group company
51,549,269
* Based on unaudited financials
iv DETAILS OF THE SERVICES BEING OFFERED:
Karvy Capital Limited, Portfolio Manager, offers Discretionary, Non discretionary & Advisory
services as per the preference and agreement with the individual client. For details of the
services offered kindly refer Annexure A.
Section 4: PENALTIES, PENDING LITIGATION OR PROCEEDINGS, FINDINGS OF INSPECTION OR INVESTIGATIONS FOR WHICH ACTION MAY HAVE BEEN TAKEN OR INITIATED BY ANY REGULATORY AUTHORITY
I All cases of penalties imposed
by the Board or the directions
issued by Board under the Act
or Rules or Regulations made
there under
There are no penalties imposed or litigation
pending against the Karvy Capital Limited.
Details of litigations pending against group
companies/ associates of the portfolio manager
have been provided as Annexure B to this
document.
II The nature of penalty/direction Not Applicable
III Penalties imposed for any
economic offence and/or for
violation of any securities laws
Not Applicable
IV Any pending material
litigation/legal proceedings
against the Portfolio
Not Applicable
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Manager/key personnel with
separate disclosure regarding
pending criminal cases, if any
V Any deficiency in the systems
and operations of the Portfolio
Manager observed by the Board
or any regulatory agency
Not Applicable
VI Any enquiry/adjudication
proceedings initiated 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
Rules or Regulations made
there under
Not Applicable
Section 5: SERVICES OFFERED
5.1 The Portfolio Manager offers the following three types of Services
a. Discretionary Services
The Portfolio account of the client is managed at the full discretion and liberty of Karvy
Capital limited, the Portfolio Manager.
Under these services, the choice as well as the timings of the investment decisions on an on-
going basis rest solely with the Portfolio Manager. The Portfolio Manager may at times and
at its own discretion, adhere to the views of the Client pertaining to the investment
/disinvestment decisions in the Client’s Portfolio. The Portfolio Manager shall have the sole
and absolute discretion to invest in respect of the Client’s account in any type of security as
per the Agreement and make such changes in the investments and invest some or all of
funds in the Client’s account in such manner and in such markets as it deems fit. The Client
may give informal guidance to customize the portfolio strategies; however, the final decision
rests with the Portfolio Manager. The securities invested / disinvested by the Portfolio
Manager for Clients in the same Strategy may differ from one Client to another Client. The
Portfolio Managers’ decision (taken in good faith) in deployment of the Clients’ account is
absolute and final and can never 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, fraud, conflict of interest or gross negligence. This right of the Portfolio Manager
shall be exercised strictly in accordance with the relevant Acts, Rules, and Regulations,
guidelines and notifications in force from time to time.
Under these services, the Clients may authorize the Portfolio Manager to invest their Funds
in specific financial instruments or a mix of specific financial instruments or restrict the
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Portfolio Manager from investing in specific financial instruments or securities. Periodical
statements in respect of Client’s Portfolio shall be sent to the respective Clients.
Details of the strategies being offered by the Portfolio Manager are contained in Annexure A.
b. Non Discretionary
In Non-Discretionary Portfolio management, the Portfolio Manager would manage the
client’s portfolio in consultation with and as per the directions or consent of the client.
Under these services, the Clients decide their own investments with the Portfolio Manager
only facilitating the execution of transactions. The Portfolio Manager’s role would include
but not limited to providing research, structuring of clients’ portfolios, investment advice and
guidance and trade execution at the Client’s request. The Portfolio Manager shall execute
orders as per the mandate received or consent obtained from the Client. The deployment of
the Client’s Funds by the Portfolio Manager shall be as per the instructions or consent of the
Client. The rights and obligations of the Portfolio Manager shall be exercised strictly in
accordance with the Act, Rules and/or Regulations, guidelines and notifications in force from
time to time. Periodical statements in respect of Client’s Portfolio shall be sent to the
respective Clients. Details of strategies offered by the Portfolio manager under non
discretionary services can be viewed in Annexure A.
c. Advisory
Portfolio Manager will provide advisory services, as per the Regulations, which shall be in the
nature of investment advice and shall include the responsibility of advising on the portfolio
strategy, investment, disinvestment of the various securities in the client’s portfolio, for an
agreed fee, entirely at the client’s risk. The Portfolio Manger will render the best possible
advice to the client having regard to the client’s needs and the requirements, using his own
professional skills. This service will be purely of advisory in nature under an agreed fee
structure with the client. It is up to the client to accept the recommendations/advice of
Portfolio Manager and Portfolio Manager will not be held responsible for any consequence
arising out of acceptance of Portfolio Manager’s advice under this service.
5.2 Present Investment Objective
The General Objective is to formulate and device the investment philosophy to
achieve long term growth of capital by investing in assets, which generate
reasonable risk–adjusted return . The actual portfolio management style will vary in
line with profile of each client with regards to his risk tolerance levels and specific
preferences or concerns. (The specific objective will be as mentioned in the
agreement with the client).
5.3 Types of securities
The Portfolio Manager/Fund Manager shall invest in all such types of Securities as
defined (kindly refer to the definition) and in all such Securities as permissible from
time to time.
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5.4 Investment in Group / associate companies
The Portfolio Manager/Fund Manager may invest in Securities of the
associate/group companies subject to the applicable laws/ regulations/ guidelines.
These investments will be carried out to achieve the investment objectives and
strategies and in the normal course of investment activity subject to the applicable
laws/regulations.
The Portfolio Manager / Fund Manager may invest in any unlisted securities of any
associate/group companies of the Portfolio Manager/ promoter. The Portfolio
Manager / Fund Manager may also invest in privately placed securities issued by
Associate/Group companies of the promoter.
5.5 Minimum Investment Amount
The Portfolio Manager shall not accept funds and/or securities from new clients,
cumulative value of which is less than Rupees Twenty Five Lakhs or as specified in
the agreement with the Portfolio Manager or as amended/specified in the SEBI
(Portfolio Managers) Regulations, 1993.
5.6 Conflict of Interest
Karvy Capital Limited, Portfolio Manager is also the Investment Manager to a
Category III Alternate Investment Fund (AIF). Since the entity is the same, the
management for both the portfolio management division and Investment
Management division remains the same. However, the personnel such as fund
manager(s), teams involved in order generation and execution will be independent
of the personnel involved in the same activity for portfolio management services.
Further, the services offered by Karvy Capital Limited under the AIF offering and the
Portfolio Management services to clients are inherently very different. The key
difference is that while the investments under the AIF route are primarily in the
derivative segment, investments made as a portfolio manager may encompass the
entire gamut of products in the financial space. Further, trades in the AIF are
generated through the system by use of defined algorithms whereas the portfolio
manager uses a lot of thought process in picking the instrument based on
fundamental analysis for investment be it equity, debt or mutual funds.
Nonetheless, the management will provide their guidance and insight with relation
to monitoring of overall functioning of both the AIF and portfolio management
services and their broad macro views on the investment front shall be used for both.
As described above, due to the difference in the nature of the investments under AIF
and portfolio management services offered, it may happen that a scrip is purchased /
held for a client of the Karvy Capital Limited, the portfolio manager while the
algorithm which dictates trades in the AIF generates an opposite signal say “sell”
instruction for the same scrip usually as the trigger for a trade could be a
quantitative factor rather than a fundamental factor. Further, the holding period for
the trade may be shorter for the AIF .Therefore Karvy Capital Limited, the
P a g e 1 7 o f 3 3
Investment Manager to the AIF may sell the same scrip while maintaining “buy” for
the same scrip for its portfolio management clients. Such a situation could show
opposite trading positions in the AIF and Portfolio Management Services.
The portfolio manager being an NBFC purchases securities as a part of its routine
business activity. These securities may be bought for investment or trading
purposes. Therefore Karvy Capital as discretionary portfolio manager may buy the
securities from Karvy Capital limited {NBFC}. These securities would be purchased at
a price deemed fit by the portfolio manager and may also at times be at a premium
depending on the demand for the security. Additionally, depending on reasons such
as demand for the security prevalent at the time of purchase by Karvy Capital as
discretionary portfolio manager from itself as an NBFC , the portfolio manager may
get different prices for the same security. Effectively it is a possibility that the price
of the security bought by the portfolio manager in the above manner may differ
interse the clients of the portfolio manager on account of the same being bought at
different points of time. Karvy Capital , discretionary portfolio manager shall ensure
that its rationale for all its decisions to purchase securities in the abovesaid manner
shall be documented and approved by its Investment Committee.
Section 6: RISK FACTORS
1. Investments in securities are subject to market risks including price volatility and
liquidity risk and there is no assurance or guarantee that the objectives of the
strategy will be achieved. The investment may not be suited for all categories of
investors. The past or present performance of these strategies does not indicate the
future performance of the same strategy or any other future strategies launched
subsequently by Portfolio Manager. With reference to appreciation on the portfolio,
the investors are not being offered any guaranteed or indicative returns through any
of the strategies. The Portfolio Manager also does not guarantee any capital
protection for any strategy.
2. There are inherent risks arising out of investment objectives, investment strategy,
asset allocation and non-diversification of portfolio. The investment objective,
investment strategy and asset allocation may differ from client to client. However,
generally, highly concentrated portfolios with lesser number of stocks will be more
volatile than a portfolio with a larger number of stocks. Portfolios with higher
allocation to equities will be subject to higher volatility that portfolios with low
allocation to equities. Diversified portfolios (allocated across companies and broad
sectors) generally tend to be less volatile than non diversified portfolios. The names
of the various strategies do not in any manner indicate their prospects or returns.
3. Investment decisions made by the Portfolio Manager may not always be profitable
since actual market movement may be at variance with anticipated trends.
4. ETF may trade above or below their NAV. The NAV of ETF will fluctuate with changes
in market value of scheme’s holdings of underlying stocks. However, given that ETF
can be created and redeemed only in creation units directly with the Mutual Fund, it
P a g e 1 8 o f 3 3
is expected that large discounts or premiums to the NAVs of ETFs will not sustain due
to availability of arbitrage possibility. Any changes in trading regulations by the
Exchange (s) or SEBI may affect the ability of market maker to arbitrage resulting into
wider premium / discount to NAV for ETFs.
5. The performances of the strategies depend on the performance of the market and
the individual companies in which investment have been made under strategies
relative to industry specific and macro economic factors. The Portfolio Manager does
not assure or guarantee that Performance of Portfolio of the Investor shall better the
Performance of any Benchmark Index.
6. The tax benefits described in this Disclosure Document are as available under the
present taxation laws and are available subject to conditions. The information given is
included for general purpose only and is based on advice received by the Portfolio
Manager regarding the law and practice in force in India and the investors should be
aware that the relevant fiscal rules or their interpretation may change. As is the case
with any investment, there can be no guarantee that the current tax position or the
proposed tax position prevailing at the time of an investment in the Portfolio will
endure indefinitely. In view of the individual nature of tax consequences, each
investor is advised to consult his/her own professional tax advisor regarding the
taxation aspects of his/ her portfolio investments.
7. Prospective investors should review/ study this Disclosure Document carefully and in
its entirety and shall not construe the contents hereof or regard the summaries
contained herein as advice relating to legal, taxation, or financial/investment matters.
Prospective investors are advised to consult their own professional advisor(s) as to
the legal, tax, financial or any other requirements or restrictions relating to the
subscription, gifting, acquisition, holding, disposal (sale or conversion into money) of
Portfolio and to the treatment of income(if any), capitalization, capital gains, any
distribution, and other tax consequences relevant to their portfolio, acquisition,
holding, capitalization, disposal (sale, transfer or conversion into money) of portfolio
within their jurisdiction of nationality, residence, incorporation, domicile etc. or
under the laws of any jurisdiction to which they or any managed funds to be used to
purchase/gift portfolio of securities are subject, and also to determine possible legal,
tax, financial or other consequences of subscribing/gifting, purchasing or holding
portfolio of securities before making an investment.
8. The debt investments and other fixed income securities may be subject to interest
rate risk, liquidity risk, credit risk and reinvestment risk. Liquidity in these
investments may be affected by trading volume, settlement period and transfer
procedures. Issuer of fixed income security may default or may be unable to make
timely payments of principal and interest. Net Asset Value of portfolio may be
affected due to perceived level of credit risk as well as actual event of default.
9. The corporate debt market is relatively illiquid vis-à-vis the government securities
market. There could therefore be difficulties in exiting from corporate bonds in times
of uncertainties. Further, liquidity may occur only in specific lot sizes. Liquidity in a
security can therefore suffer. Even though the Government securities market is more
P a g e 1 9 o f 3 3
liquid compared to that of other debt instruments, on occasions, there could be
difficulties in transacting in the market due to extreme volatility or unusual
constriction in market volumes or on occasions when an unusually large transaction
has to be put through. There can be no assurance that the requirements of the
securities market necessary to maintain the listing of specified debt security will
continue to be met or will remain unchanged.
10. Exposure to select Sector(s) carries the performance risk of the relevant sector, which
could outperform or underperform the market and/or various indices.
11. Technology and pharmaceutical stocks and some of the investments in niche sectors
run the risk of volatility, high valuation, obsolescence and low liquidity.
12. Frequent rebalancing of portfolio may result in higher brokerage / transaction cost.
Also the allocation to different securities can vary from 0 to 100 %, hence there can
be a vast difference between the performance of the products and returns generated
by underlying securities.
13. Information available on some companies in which the Portfolio manager has made
investments may be limited.
14. The performance of the strategies may be affected by change in Government Policies
including taxation, and certain unforeseen developments in political or general areas
at the national or international level. Also, the investments are subject to external
risks such as war, natural calamities and policy changes of local / international
markets which affect stock markets.
15. The performance of the strategies may also be affected and investor could lose
money over short periods due to fluctuation in NAV of Portfolio arising out of
fluctuations of interest rates, credit risk, political and geopolitical risk, currency risk,
foreign exchange risks, foreign investments, risks arising from changing business
dynamics, risk associated with investment in securities debt, risk due to movement in
Futures and options markets, changes in the general market conditions, forces
affecting the capital markets, closure of stock exchange due to circuit filter rules or
otherwise and risks associated with trading volumes, settlement periods, transfer
procedures, liquidity and settlement systems in equity and debt markets.
16. There is a possibility that loss may be sustained by the Portfolio as a result of the
failure of another party (usually referred as the “Counter party”) to comply with the
terms of the derivative contract.
17. Portfolio Manager, subject to authorization in writing by the client, may participate in
securities lending. Engaging in securities lending is subject to risks related to
fluctuations in collateral value/settlement/liquidity/default from counter party,
including corporate benefits accrued thereon. This may lead to the risk of Approved
Intermediary unable to deliver back the securities. Portfolio Manager cannot be held
liable for any loss arising out of operation of such strategies.
The portfolio manager may in the course of its activities, avail the services of persons
/ bodies who are not employees of the portfolio manager. The portfolio manager
would exercise due diligence when employing such persons, however there may be
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losses incurred on account of any act or omission on part of such persons or bodies.
The portfolio manager disclaims liability for any loss in the portfolio on this account.
All portfolios under portfolio management are subject to change at anytime at the
discretion of the Portfolio Manager.
18. In the case of stock lending, risks relate to the defaults from counterparties with
regard to securities lent and the corporate benefits accruing thereon, inadequacy of
the collateral and settlement risks. The Portfolio Manager is not responsible or liable
for any loss resulting from the operations of the strategies/options.
19. Investments in the Market Linked Debentures (MLDs) are also subject to model risk.
The MLDs are created on the basis of complex mathematical models involving
multiple derivative exposures which may or may not be hedged and the actual
behavior of the securities selected for hedging may significantly differ from the
returns predicted by the mathematical models.
20. Strategies may use derivative instrument like futures and options (index as well as
individual securities), warrants, convertible securities, swap agreements, etc. for the
purpose of hedging and/or portfolio balancing, as permitted under the
Regulations/guidelines. Strategies using such derivative products may be affected by
risks different from those associated with stock and bonds. Such derivative products
are highly leveraged instruments and their use requires a high degree of skill,
expertise and diligence. Small price movements in the underlying security may have a
large impact on the value of the derivatives and futures and options and may also
result in loss. Some of the risks relate to mis-pricing or the improper valuation of the
derivatives/futures and option and the inability to correlate the positions with the
underlying assets, rates and indices. The risk of loss associated with futures contracts
is potentially unlimited due to the low margin deposits required and the extremely
high degree of leverage involved in futures pricing. Also, the derivatives/future and
options market is nascent in India.
The liquidity of the investments is guided by trading volumes in the securities in
which it invests. Although securities may be listed on the Exchange(s), there can be
no assurance that an active secondary market will develop or be maintained. This
may limit the Portfolio Manager’s ability to freely deal with securities in the Portfolio
and may lead to incurring of losses till the security is finally sold. Different segments
of the financial markets have different settlement periods and such periods may be
extended significantly due to unforeseen circumstances. The inability of a Portfolio to
make intended securities purchase due to settlement problems could cause the
portfolio to miss certain investment opportunities. Similarly, the inability to sell
securities held in the portfolio due to absence of a well developed and liquid
secondary market would at times result in potential losses in the Portfolio, in case of
a subsequent decline in the value of securities held in the Portfolio.
21. The Portfolio Manager may invest in non-publicly offered debt securities and unlisted
securities. This may expose client’s portfolio to liquidity risks.
22. Securities, which are not listed on the Stock Exchanges, are inherently illiquid in
nature and carry a larger amount of liquidity risk, in comparison to securities that are
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listed on the Exchanges or offer other exit options to the investor. The Portfolio
Manager may, at its discretion, invest in lower rated/unrated securities that offer
attractive yield, which may increase the risk of the Portfolio. Such investments shall
be subject to the scope of investments laid down in the executed agreement.
23. The Portfolio Manager may seek to create value by investing in stocks that trade
below the estimated fair value of the Company, which shall be judged by various
quantitative valuation parameters. But due to various reasons, it may so happen that
such stocks continue to languish and are not able to attain the price discovery.
Accordingly, this may have material adverse impact on the performance of the
portfolio.
24. After accepting the corpus for management, the Portfolio Manager may not get an
opportunity to deploy the same or there may be delay in deployment. In such
situation the clients may suffer opportunity loss.
i. Category of clients as on August 31, 2015:
Category of Clients as on h August 31,2015
:
Category of Clients No of
Clients
Funds
Managed
Remarks
(Rs. In Crs)
Associate/ Group Companies
As on August 31,2015 0 0 Discretionary
As on 30th Sept, 2014. 0 0 Discretionary
As on 31st March 2014. 0 0 Discretionary
As on 31st March 2013. 0 0 Discretionary
As on 31st March 2012. 0 0 Discretionary
Others
As on August 31, 2015. 265 108.28 Discretionary
As on 31st March 2015. 167 65.81 Discretionary
As on 31st March 2014.
As on 31st March 2013. 0 0 Discretionary
As on 31st March 2012. 0 0 Discretionary
Total
As on 28th Feb, 2015.
265
108.28
Discretionary
As on 31st March 2014. 0 0 Discretionary
As on 31st March 2013. 0 0 Discretionary
As on 31st March 2012. 0 0 Discretionary
Section 7: CLIENT REPRESENTATION
P a g e 2 2 o f 3 3
ii. Complete disclosure in respect of transactions with related parties as per the standards specified by the Institute of Chartered Accountants of India (as on 31st March 2015)
Sr. No
Name of the related party Nature of Transaction
Amount
2014-15 2013-14
1 Karvy Stock Broking Limited
Loans given / (refunded)# -
19,15,50,000
Loans taken / (repaid)#
9,10,00,000
3,90,00,000
Interest income
-
31,47,865
Interest expense
7,98,331
1,06,669
Brokerage on trading in securities*
26,336
1,45,576
Shared Services of Expenses/ (revenue), net
1,26,93,952
4,01,65,888
2 Karvy Financial Services Limited
Loans taken / (repaid)# -
1,80,00,000
Interest expense -
80,814
3 Karvy Realty (India) Limited
Loans given / (refunded)# -
70,00,000
Interest income -
5,178
Shared Services of Expenses/ (revenue), net
-
(2,49,70,000
)
4 Karvy Comtrade Limited
Brokerage on trading in securities*
-
15,789
5 Karvy Investor Services Limited
Loans taken / (repaid)# (2,00,00,00
0)
2,00,00,000
Interest expense 1,19,836
22,192
6 Karvy Forex & Currencies Pvt. Ltd.
Shared Services of Expenses/ (revenue), net
-
10,548
7 Karvy Capital Alternative Investment Fund
Investments made -
2,75,00,000
Dividend received 4,62,867
-
Fee income 7,87,831
33,31,551
8 Mr. Hrishikesh Parandekar
Loans taken / (repaid)# -
1,00,00,000
Interest expense -
26,302
9 Mr. Swapnil Pawar Managerial Remuneration paid 80,02,401
74,56,464
# Maximum loan given / taken at any time during the year
* Trading in Securities is carried out in the normal course of business at the prevailing market prices
P a g e 2 3 o f 3 3
Section 8: FINANCIAL PERFORMANCE OF PORTFOLIO MANAGER (BASED ON AUDITED FINANCIAL STATEMENTS})
As at As at As at
31-Mar-15 31-Mar-14 31-Mar-13
Rs in Lakhs
(Audited)
Rs in Lakhs (Audited)
Rs in Lakhs (Audited)
SOURCES OF FUNDS
Shareholders' Funds 1,157.46 859.15 599.52
Share Application Money
-
- -
Loan Funds 2,100.39 2,080.62 1,127.39
Deferred Tax Liability - 0.53 -
Total 3,257.86 2,940.30 1,726.91
APPLICATION OF FUNDS
Net Fixed Assets 37.88 48.64 42.51
Stock Exchange Membership Cards - - -
Investments 275.00 279.00 4.00
Current Assets 3,079.66 2,719.06 1,708.53
Less: Current Liabilities and Provisions (136.13) (106.41) (118.57)
Net Current Assets 2,943.53 2,612.66 1,589.96
Deferred Tax Asset 1.45 - 90.44
Total 3,257.86 2,940.30 1,726.91
Summarized Financial Statement - Profit and Loss Account
For the year
ended
For the year ended
For the year ended
31-Mar-15 31-Mar-14 31-Mar-13
Rs. In Lakhs Rs. In Lakhs Rs. In Lakhs
Total Income 1,305.84 1,403.95 682.50
Total Expenses (837.59) (1,023.70) (753.34)
Profit before Depreciation and Tax 468.25 380.25 (70.84)
Depreciation/Amortisation (22.34) (15.00) (12.11)
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Profit before Tax 445.91 365.25 (82.95)
Provision for Tax (147.60) (105.61) 20.09
Profit After Tax 298.31 259.64 (62.86)
Section 9: PORTFOLIO MANAGEMENT PERFORMANCE OF PORTFOLIO MANAGER FOR THE LAST THREE YEARS. IN CASE OF DISCRETIONARY PORTFOLIO MANAGER, DISCLOSURE OF PERFORMANCE INDICATORS CALCULATED USING WEIGHTED AVERAGE METHOD IN TERMS OF REGULATION 14(2)(b)(iv) OF THE SEBI (PORTFOLIO MANAGERS) REGULATIONS, 1993
Period
01.07.2014
–
31.03.20152
8.02.2015*
01.04.2015 –
31.08.2015
01.04.2012 –
31.03.2013
Discretionary PMS Resident
Portfolio
Performance
Demeter Strategy 15.15% 7.87%
-
Benchmark
Performance
S&P BSE India
Corporate Bond
Index**
8.76% 3.36%
-
Discretionary PMS Non- Resident
Portfolio
Performance Demeter Strategy - - -
Benchmark
Performance
S&P BSE India
Corporate Bond
Index** - - -
*The first client in the portfolio was activated on July 1, 2014. Hence, the performance has
been provided from July 1, 2014 instead of April 1, 2014.
**Disclaimer: Earlier NSE Gsec 1-3 year Sub-maturity Index was used as Benchmark. Due to
the discontinuation of its publication by NSE, beginning this month, we have changed the
benchmark to “S&P BSE India Corporate Bond Index”.
Section 10: NATURE OF EXPENSES
The following are the general costs and expenses to be borne by the Client availing the
services by the Portfolio Manager. However, the exact nature of expenses relating to each of
the following services is provided in the annexure to this Risk Disclosure Document and in
the Schedule of Charges signed by the client in respect of each of the services provided.
P a g e 2 5 o f 3 3
(i) Portfolio Management and Advisory Fees
This fee relates to the portfolio management services offered by Portfolio Manager
(including advisory services) to the clients. The fee may be a Fixed Charge on the quantum of
the funds being managed (or) charges linked to portfolio return (or) combination of both. For
details kindly refer the annexure to this Risk Disclosure Document.
(ii) Premature Redemption Charges
If the redemption is done prematurely at the option of the client, the Portfolio Manager shall
levy the Premature Redemption Charges. For details kindly refer the annexure to this Risk
Disclosure Document.
(iii) Custodian/Depository Participant fee
The charges relating to opening and operation of demat accounts, custody and transfer
charges for shares, bonds and units, dematerialization and rematerialization, pledge and
removal of pledge, etc. will be as per the actual charged by the Depository
Participant/Custodian. For details kindly refer the annexure to this Risk Disclosure
Document.
(iv) Registrar and transfer agent fee
Charges payable to the Registrar and Share Transfer Agents in connection with effecting
transfer of securities and bonds, units, etc. including stamp charges, cost of affidavits, notary
charges, postage/courier charges and other related charges will be recovered on actual. For
details kindly refer the annexure to this Risk Disclosure Document.
(v) Placement fee :
A Placement fee not exceeding 5% on the investment value will be charged in some of the
strategies over and above the fixed management fee and performance fee. The placement
fee, if charged, shall be deducted from client’s initial corpus. For details kindly refer the
annexure to this Risk Disclosure Document.
(vi) Brokerage and transaction cost
The Brokerage and other charges like Service tax and related charges such as Education cess,
Stamp duty, Security Transaction Tax, SEBI Fees, Bank charges, Turnover tax, and other
charges (if any), as per the rates existing from time to time, will be charged on actual. For
details kindly refer the annexure to this Risk Disclosure Document.
The investment by Portfolio Manager will be done through such SEBI registered Stock
Broker(s) as may be empanelled by the Portfolio manager only and would as per the rates
negotiated between Portfolio Manager and such stock broker. The charges relating to
brokerage as per the related party transactions charged by Karvy Capital Limited or through
any SEBI Registered stock broker will be recovered on actual by the Portfolio Manager
(vii) Securities Lending Charges
If utilized, the charges pertaining to lending of securitiesand costs associated with transfer of
securities connected with lending transfer operations, Depository Participant Charges, Share
P a g e 2 6 o f 3 3
Transfer Agent Charges, etc. would be recovered on actual. For details kindly refer the
annexure to this Risk Disclosure Document.
(viii) Certification Charges or Professional Charges
Any charges payable for outsourced professional services like accounting, taxation, auditing,
and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio
Manager, will be charged from the client on actual. For details kindly refer the annexure to
this Risk Disclosure Document.
(ix) Incidental Expenses
Charges in connection with day to day operations like courier charges incurred in providing
physical reports relating to client’s portfolio / welcome letter / other communication to
clients , stamp duty, service tax, postal, telegraphic expenses, opening and operation of bank
and demat accounts or any other out of pocket expenses incurred by the Portfolio Manager,
on behalf of the client, would be recovered from the client. For details kindly refer the
annexure to this Risk Disclosure Document.
Section 11: TAXATION
General
It may be noted that the information given hereinafter is only for general information
purposes and is based on the advice received by the Portfolio Manager regarding the law
and practice currently in force in India and the Investors should be aware that the relevant
fiscal rules or their interpretation may change or it may not be acceptable to the tax
authorities. As is the case with any interpretation of any law, there can be no assurance that
the tax position or the proposed tax position prevailing at the time of an investment in the
strategy/plan/option will be accepted by the tax authorities or will continue to be accepted
by them indefinitely.
Further statements with regard to tax benefits mentioned herein below are mere
expressions of opinion and are not representations of the Portfolio Manager to induce any
investor to invest whether directly from the Portfolio Manager or indirectly from any other
persons by the secondary market operations. In view of the above, and since the individual
nature of tax consequences may differ in each case on its merits and facts, each Investor is
advised to consult his / her or its own professional tax advisor with respect to the specific tax
implications arising out of its participation in the PMS strategy/plan/option, as an investor.
In view of the above, it is advised that the investors appropriately consult their investment /
tax advisors in this regard.
Portfolio Manager cannot be held responsible for assisting or completing the fulfillment of
the client’s tax obligations.
Income arising from purchase and sale of securities under Portfolio Management Services can give rise to business income or capital gains in the hands of the Client. The issue of characterization of income is relevant as the tax computation and rates differ in either of the two situations. The said issue is essentially a question of fact and depends on whether the
P a g e 2 7 o f 3 3
shares are held as business trading assets or on capital account. Based on judicial decisions, the following factors need to be considered while determining the nature of assets as above:
a. Motive for the purchase of securities
b. Frequency of transactions
c. Length of period of holding of the securities
d. Treatment of the securities and profit or loss on their sale in the accounts of the assessee and disclosure in notes thereto
e. Source of funds out of which the securities were acquired - borrowed or own
f. Existence of an objects clause permitting trading in securities – relevant only in the case of corporate.
g. Circumstances responsible for the sale of securities
h. Acquisition of the securities -from primary market or secondary market Infrastructure and set - up employed for undertaking the securities transactions by the client
Any single factor discussed above in isolation cannot be conclusive to determine the exact nature of the shares. All factors and principles need to be construed harmoniously.
Investors may refer to CBDT instruction no. 1827 dated August 31, 1989 read with CBDT Circular no. 4 dated June 15, 2007 for further guidance on the matter.
Tax implications under the Income Tax Act, 1961 ("IT Act") arise in the hands of the Clients
(resident as well as the non-resident) under both the scenarios, viz:
a. Securities in the Portfolio held as business asset; and
b. Securities in the Portfolio held on capital account.
Additionally, non-residents (including Flls/FPIs) are governed by the applicable Double Tax
Avoidance Agreement ("DTAA), which lndia has entered into with the country of residence of
the non-resident, if that is more beneficial. The same would have to be considered on a case-
to-case basis depending upon the applicable DTAA. Ordinarily, capital gains and interest
income are taxable in lndia in the manner and at the rates prescribed under the relevant
DTAA or the relevant rates applicable in India, whichever is beneficial to the assessee.
Further, business income is normally not taxable in lndia.
Tax Deducted at Source
Presently, tax is withheld at source for non-residents. If any tax is required to be withheld on
account of any future legislation, Portfolio Manager shall be obliged to act in accordance
with the regulatory requirements in this regard.
Advance Tax installment obligations
It shall be the client’s responsibility to meet the advance tax obligation installments payable
on the due dates under the Income Tax Act, 1961.
Tax Implications - Investment in Shares or units of Equity Oriented Mutual Fund
P a g e 2 8 o f 3 3
Dividend
Dividend received by shareholders is exempt from tax- section 10 (34) of IT Act.
Profits from sale / transfer of shares (or units of equity oriented mutual fund) • If considered as capital gains: (capital gains = sale consideration – cost of acquisition–expenses incurred in connection with such transfer)
Capital Gains Long term Capital Gains (LTCG) Short term Capital Gains (STCG)
Period of holding
Rate Period of holding
Rate
Listed Shares (Where STT is paid)
More than 1 year
Exempt u/s. 10(38)
1 year or less 15%
Listed Shares (Where STT is not paid)
More than 1 year
20% with indexation or 10% without indexation
(whichever is more beneficial
to clients)
1 year or less maximum marginal rate of
tax or at slab rates, as the case may be
Unlisted Shares More than 1 year
20% with indexation
1 year or less maximum marginal rate of
tax or at slab rates, as the case may be
• If considered as business income - net income taxable at maximum marginal rate of tax or
at slab rates, as the case may be.
Note: Education Cess & Surcharge &Higher Education Cess and surcharge (if applicable) will
be charged additionally. Clients are requested to contact their tax consultant to determine
their exact tax status.
Tax Implications - Investment in Derivative instruments
Investment in derivative instruments is considered as business income & is taxable at
maximum marginal rate of tax or at slab rates, as the case may be.
Note: E.Cess & S.&H.E.Cess and surcharge (if applicable) will be charged additionally. Clients
are requested to contact their tax consultant to determine their exact tax status.
Tax Implications - Investment in Debentures or bonds
Interest income
Interest received by debenture holder is taxable under the head “Income from other
sources” at slab rates or at maximum marginal rate of tax as the case may be
Profits from sale / transfer of Debentures (or bonds)
P a g e 2 9 o f 3 3
• If considered as capital gains: (capital gains = sale consideration – cost of acquisition–expenses incurred in connection with such transfer)
Capital Gains Long term Capital Gains (LTCG) Short term Capital Gains (STCG)
Period of holding
Rate Period of holding
Rate
Listed Debenture or bonds
More than 1 year
20% with indexation or 10% without indexation
(whichever is more beneficial
to clients)
1 year or less maximum marginal rate of
tax or at slab rates, as the case may be
Unlisted Debenture or bonds
More than 3 years
20% with indexation
3 years or less maximum marginal rate of
tax or at slab rates, as the case may be
• If considered as business income - net income taxable at maximum marginal rate of tax or
at slab rates, as the case may be.
Note: Education Cess & Surcharge &Higher Education Cess and surcharge (if applicable) will
be charged additionally. Clients are requested to contact their tax consultant to determine
their exact tax status.
Tax Implications - Investment in Debt Oriented Mutual Fund
Dividend
Dividend received by shareholders is exempt from tax- section 10 (34) of IT Act.
Profits from sale / transfer of units • If considered as capital gains: (capital gains = sale consideration – cost of acquisition–expenses incurred in connection with such transfer)
Capital Gains Long term Capital Gains (LTCG) Short term Capital Gains (STCG)
Period of holding
Rate Period of holding
Rate
Debt MF units More than 3 years
20% with indexation
3 years or less maximum marginal rate of
tax or at slab rates, as the case may be
• If considered as business income - net income taxable at maximum marginal rate of tax or
at slab rates, as the case may be.
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Note: Education Cess & Surcharge &Higher Education Cess and surcharge (if applicable) will
be charged additionally. Clients are requested to contact their tax consultant to determine
their exact tax status.
Capital loss
Losses under the head 'capital gains' cannot be set off against income under any other head.
Further, within the head 'capital gains', long-term capital losses cannot be adjusted against
short-term capital gains. However, short-term capital losses can be adjusted against any
capital gains. Unabsorbed long-term capital loss can be carried forward and set off against
the long-term capital gains arising in subsequent eight assessment years. Unabsorbed short-
term capital loss can be carried forward and set off against the income under the head
capital gains in subsequent eight assessment years
Securities Transaction Tax
Securities Transaction Tax is the tax leviable on the taxable securities transactions i.e.
transaction of:
(a) Purchase or sale of an equity share of a listed companies (whether delivery based or non-
delivery based) or a derivative or a unit of an equity oriented fund, entered into in a
recognized stock exchange; or
(b) Sale of a Unit of an equity oriented fund to the Unit Trust of India or Mutual Fund.
The income arising from the securities transactions shall be taxed at applicable rates under
the Income Tax Act, 1961 if Securities Transaction Tax is not applicable in respect of such
transactions.
Section 12: ACCOUNTING POLICIES
The following is the accounting policy followed by the Portfolio Manager while accounting
for the portfolio investments of the clients.
Investment in equities will be valued on the closing price of that equity at NSE. In case of any
investments done in any equity listed on BSE only, the same will be valued based on the
closing price of that equity in BSE. In case the prices are not available from NSE or BSE Stock
exchange, then any other stock exchange shall be considered. These shall include the Equity
shares including Indian Depository Receipts and other instruments, as the case may be. In
case a share is not traded on a valuation date, latest closing price of either principal /
secondary or any other stock exchange would be used.
Equity shares which are not listed on stock exchanges are included in portfolio valuation at
fair/cost value. In case an Equity share is suspended/non-traded/ awaiting Corporate
Actions, then the valuation of such equity share shall be done on the basis of good faith
relying upon prevailing practices elsewhere.
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In case of the warrants been traded separately they would be valued as an equity share and
valued accordingly. In case of the non traded warrants, the warrants will be valued at the
value of the share which would be obtained on exercise of the warrant less the amount
payable on exercise of the warrant. On exercise of warrant, the warrants would be
transferred to the normal equity and valued accordingly.
For valuation of the derivatives contract, the open positions, as on the date of valuation,
shall be valued as per the last traded prices available from the relevant stock exchange, and
will be valued on the mark to market method.
In case of Mutual Fund, investments in mutual funds shall be valued at the latest available
NAV of the respective scheme. Investment in Exchange listed (ETF) shall be valued at the
closing price on the relevant exchange. If on a valuation date Exchange Traded Funds (ETF) is
not traded either on the primary or secondary stock exchange, ETF shall be valued at the
latest available NAVs of the ETF Scheme.
Investment in debt instruments will be valued at the market value of the debt instrument as
on cut off date (or) the latest available price on the relevant exchange or the most recent
NAV will be reckoned. For illiquid securities, the valuation may be provided by the issuer on a
periodic basis and/or as required by the portfolio manager.
Realised gains/losses will be calculated on the basis of First in First out (FIFO) basis.
Transaction date will be the trade date and not the settlement or auction date.
For derivatives transactions (if any), the unrealized gains/losses on open position will be
calculated on the mark to market method.
Unrealized gain/losses means the profit/loss not yet booked and the same will be the
difference of the current market price or NAV minus the actual purchase price (or) the
historical cost of the securities.
All income will be accounted on accrual or receipt basis, whichever is earlier. All expenses
will be accounted on due or payment basis, whichever is earlier.
Purchase and sale transactions are accounted for on contract date basis. Cost of purchase
and sale includes consideration for scrip and brokerage but excludes Securities Transaction
Tax, Service Tax & other charges paid on purchase/sale of securities. Other expenses like
Custodian charges (Safe keeping charges, Transaction charges, Fund Accounting charges, Out
of Pocket expenses) shall beaccounted for as & when debited by the Custodian.
Any corporate benefits like dividend on shares, mutual fund units, interest on debt
instruments, stock lending fees etc. shall be accounted on accrual basis except interim
dividend which would be accounted on receipt basis.
Bonus shares are recorded on the ex-benefit date (ex-date). Dividend income is recorded on
the ex-dividend date (ex-date)
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Tax deducted at source on interest on instruments such as Fixed Deposits etc. /Dividend is
considered as withdrawal of corpus and debited accordingly.
Portfolio Manager and the Client, on case to case basis, can mutually agree to any specific
norms or methodology for valuation of investment and/or accounting
The Client may contact the Portfolio Manager for the purpose of clarifying or elaborating on
any of the above.
Section 13: INVESTOR RELATIONS OFFICER - IRO
The below mentioned employee has been nominated as the Investor Relations Officer by
Portfolio Manager who will attend to the investor queries and complaints:
Mr. Pankaj Bhagat
Karvy Capital Limited 702, Hallmark Business Plaza, Sant Dnyaneshwar Marg, Bandra (E), Mumbai 400 051. Tel No. (B) 022-33055000 Tel No. (D) 02261491622
Fax No. 022-61491577 Email ID – [email protected]
Section 14: GRIEVANCE REDRESSAL
The Portfolio Manager has dedicated an email id
[email protected] for all the investors to lodge their grievance. Apart from this,
the portfolio clients can get in touch with the IRO in person, over phone or through written
communication.
Portfolio Manager will ensure that the above IRO attends to all investor grievance/service
issues with promptness and Portfolio Manager will ensure that this IRO is vested with
necessary authority, independence and the means to handle investor grievance effectively
and immediately, within reasonable period of time.
If not satisfied with our response, you may approach SEBI with your grievance through SEBI’s
web based centralized grievance redressal system (SCORES) on http://scores.gov.in or may
also write to SEBI in physical form.
Section 15: DISPUTE SETTLEMENT MECHANISM
All disputes, differences, claims and questions, whatsoever, which shall arise either during
the subsistence of the agreement with the Client or afterwards, with regard to the terms
thereof or any clause or thing contained therein or otherwise in any way relating to or arising
there from or the interpretation of any provisions therein shall be, at the first instance,
settled by mutual discussions, failing which the same shall be referred settled in accordance
A. Discretionary Portfolio Management Services
1. Demeter Portfolio
Introduction
Demeter Portfolio is designed for investors seeking income and capital appreciation from
their asset allocation to debt.
Investment Objective
The investment objective of the strategy is to generate long term capital appreciation and
income through interest and trading (both in the short term and over the long term) of
securities in the secondary markets. The portfolio will primarily consist of high yielding debt
securities.
Investment Horizon and Risk Return Profile
Demeter portfolio is recommended for investors seeking to hold a debt portfolio with
moderate to high risk appetite expecting a moderate return over a long term horizon.
Asset Allocation
The portfolio will be predominantly invested in debt using the securities defined below. The
portfolio manager may decide to hold cash/liquid funds if required.
Securities
Investments would be made in all types of debt securities (which may or may not be in
dematerialized form) including but not limited to debentures of any maturity (fixed, floating,
Variable Coupon, and equity index /stocks /stocks basket linked, real estate backed) which
may be listed, unlisted, convertible, non-convertible, secured, unsecured, rated or unrated,
Securitised Debt, instruments with debt like features (eg. Compulsorily redeemable
preference shares), Pass Through Certificates, Bonds, Government securities issued or
guaranteed by Central or State Government, corporate debt of both public and private
sector undertakings, securities issued by banks (both public and private sector) and
development financial institutions, fixed deposits, commercial papers, certificate of deposit,
trade bills, treasury bills and other money market instruments, units of mutual funds,
Exchange Traded Funds, units of SEBI registered Alternative Investment Funds, floating rate
debt securities and fixed income derivatives like interest rate swaps, forward rate
agreements and the like as may be permitted by the Act, Rules and/or Regulations,
guidelines and notifications in force from time to time. These securities may be acquired
through primary market issuances such as subscription to Initial public offers, Follow on
Public offers, Rights issues and private placements of securities, secondary market
purchases, auctions held by the Reserve Bank of India, open market sales of securities
conducted by Reserve Bank of India and the like.
The Portfolio manager may buy securities which have equity like nomenclature while the
features in terms of returns and convertibility will be like debt. These instruments would
include but not be limited to securities like non convertible compulsorily redeemable
preference shares and some Optionally convertible debentures.
Investment in listed/publicly traded securities will be valued on the day end’s NAV/closing
price. Investment in other debt instruments will be valued as per valuation provided by the
Issuer.
With respect to the debentures being bought by Karvy Capital Limited as Discretionary
Portfolio Manager for its clients in Demeter strategy, clients may please note the following:
Karvy Capital Limited as an NBFC / any Karvy Group entity has assisted the Issuer to
structure the debenture issuance for the purpose of raising capital through the private
placement route. Karvy Capital Limited as an NBFC / any Karvy Group entity has actively
associated with the Issuer for structuring of the security in relation to the debentures,
preparation of the term sheets and related documents for sharing product details with
prospective clients and for appointment of key agents such as trustee, escrow agent, legal
counsel and the like.
Karvy Capital Limited is also the “Debenture Holder Representative and Calculating Agent”
thereby having the power to approve amongst other things - dilution of promoter stake in
the Issuer company, disbursal of amounts from escrow account to the Issuer , any change in
the security cover for the debentures and without whose consent the above cannot occur.
As a Calculating Agent, Karvy Capital Limited calculates the amount of interest and final
redemption amount due to the debenture holders.
For this, Karvy Capital Limited as an NBFC / any Karvy Group entity has received a payment
from the Issuer which could be structured as advisory fee, discount on such debentures to
Karvy Capital Limited [NBFC] or the Karvy group entity at the time of first purchase or a
combination of the two.
Karvy Capital Limited as an NBFC / any Karvy Group entity is also the first subscriber to such
privately placed debentures. Therefore Karvy Capital as discretionary portfolio manager will
buy the debentures from Karvy Capital limited {NBFC} or any Karvy Group entity [first
subscriber]. Such down selling by Karvy Capital Limited {NBFC} to Karvy Capital Limited
{Portfolio manager} / any Karvy Group entity may be done at a premium.
Alongside, Karvy Capital Limited as an NBFC shall continue to undertake distribution activity
with regard to the said debentures i.e to down sell the debentures to prospective clients
other than the PMS customers.
In addition to down selling by Karvy Capital Limited {NBFC} as mentioned above, Karvy
Capital Limited (Portfolio Manager) may purchase debentures for clients of the Demeter
strategy through the below routes as well:
a. Primary issuance of debentures by an Issuer debentures by Karvy Capital PMS
b.
Purchase of debentures by Karvy Capital PMS.
Additionally,
a. the debentures which the Portfolio Manager may invest in for the client
will usually have some form of collateral backing them. Such collateral
may include one or more amongst the following – real estate assets,
shares of the issuing company, shares of other companies related to the
issuing company, other listed or unlisted shares, escrow of cashflows,
brand, patents, fixed assets of the company etc. However, depending on
the specific collateral used and as per the interpretation of the
Companies Act, 2013 the debentures may be deemed to be secured or
unsecured in nature.
b. Owing to the credit risk of high yield debt that the strategy is investing
into, the preservation of capital is not guaranteed. In case of a default by
issuer in any of the underlying securities, the trustees would endeavour
to recover the principal and the interest for the investors but there is a
risk of erosion of the principal invested in the strategy by the investor.
Additionally, the recovery process in case of a default may take time to
be implemented. Hence, at the level of each individual instrument, there
exists a risk of partial or complete capital erosion in case of a default by
the issuer.
c. The high yield debentures invested into by the Demeter strategy will
have credit quality of a wide range and hence a varying amount of credit
risk. Such debentures may be rated or unrated. The issuing company
may be rated or unrated and if rated, the latest available credit rating
will be considered.. The rating of the debentures or the issuing company
may be investment grade or speculative grade.
The debentures investments in the Demeter strategy could carry their own set of risks. Some
of these could include:
(i) Operational Risk: The risks that arise out of systemic issues within an
organization. Operational risk is intrinsic to any business. Every company may
have sector and company specific risks which may affect operations.
(ii) Regulatory Changes
These risks may arise if various concerned authorities amend the regulatory
framework, which could impact the Issuing Company.
(iii) Downturn in the market
There can be a down turn in the market in which the issuing Company operates
which can lead to decrease in profit margins of the Issuing Company.
The Demeter strategy will undertake to an extent as deemed fit by the Portfolio Manager,
opportunistic buying and selling of debt securities to improve the returns earned by
investors. However, in this endeavour, the portfolio manager may on some occasions not
receive suitable exit for the securities thus bought in the portfolio. In such cases, the
portfolio manager may either decide to hold such security to maturity or to exit it at a loss
when compared with the purchase price. For investors entering the strategy partially or
wholly through their current holdings of debt instruments, the portfolio manager will seek to
diversify these holdings to reduce concentration of credit risk. As a possible implication, the
yield in Internal Rate of Return [IIR] terms and income paid out through regular coupons of
the portfolio thus achieved may be different (and lower) from that of their current holdings.
Kindly refer Section III below for other features of this strategy.
Fees and Expenses: Defined in Section II below
2. Soteria Portfolio
Introduction
Soteria Portfolio is a strategy focusing on debt investments across maturities, credit quality
and yields aiming to provide investors regular income and capital appreciation from their
investments.
Investment Objective
The investment objective of the strategy is to generate long term capital appreciation and
income through interest and trading of securities (both in the short term and over the long
term) in the secondary markets.
Investment Horizon and Risk Return Profile
Soteria portfolio is recommended for investors seeking to hold a debt portfolio with low to
moderate risk appetite expecting a moderate return over a long term horizon using short
term transactions in fixed income instruments.
Asset Allocation
The portfolio will be predominantly invested in debt using the securities defined below. The
portfolio manager may decide to hold cash/liquid funds if required.
Securities
Investments would be made in all types of debt securities (which may or may not be in
dematerialized form) including but not limited to debentures of any maturity (fixed, floating,
Variable Coupon, and equity index /stocks /stocks basket linked, real estate backed) which
may be listed, unlisted, convertible, non-convertible, secured, unsecured, rated or unrated,
Securitised Debt, instruments with debt like features (eg. Compulsorily redeemable
preference shares), Pass Through Certificates, Bonds, Government securities issued or
guaranteed by Central or State Government, corporate debt of both public and private
sector undertakings, securities issued by banks (both public and private sector) and
development financial institutions, fixed deposits, commercial papers, certificate of deposit,
trade bills, treasury bills and other money market instruments, units of mutual funds,
Exchange Traded Funds, units of SEBI registered Alternative Investment Funds, floating rate
debt securities and fixed income derivatives like interest rate swaps, forward rate
agreements and the like as may be permitted by the Act, Rules and/or Regulations,
guidelines and notifications in force from time to time. These securities may be acquired
through primary market issuances such as subscription to Initial public offers, Follow on
Public offers, Rights issues and private placements of securities, secondary market
purchases, auctions held by the Reserve Bank of India, open market sales of securities
conducted by Reserve Bank of India and the like.
The Portfolio manager may buy securities which have equity like nomenclature while the
features in terms of returns and convertibility will be like debt. These instruments would
include but not be limited to securities like non convertible compulsorily redeemable
preference shares and some Optionally convertible debentures.
Investment in listed/publicly traded securities will be valued on the day end’s NAV/closing
price. Investment in other debt instruments will be valued as per valuation provided by the
Issuer.
Kindly refer Section III below for other features of this strategy.
Fees and Expenses: As defined in Section II below
3. Metis Portfolio
Introduction
Metis Portfolio is designed for investors who seek long-term capital appreciation from their
asset allocation to equities. The portfolio will invest in stocks across sectors, market
capitalization categories and investment themes.
Investment Objective
The investment objective of the strategy is to generate growth of capital through a blend of
value, growth opportunistic and event driven investing.
Investment Horizon and Risk Return Profile
This Portfolio is recommended for investors seeking to hold a diversified equity portfolio
with moderate risk appetite expecting a moderate return over medium term horizon.
Asset Allocation
The Portfolio will seek to remain substantially invested in Equities or Equities related
instruments at all times. Cash in the portfolio may be invested in Liquid schemes of Mutual
Funds or Liquid Bees.
Securities
Investments will be made in various equity and equity related securities including but not
limited to stocks, convertible/non-convertible and/or cumulative/non-cumulative preference
shares, convertible and/or cumulative/non-cumulative debentures, bonds and warrants
carrying the right to obtain equity shares, units of mutual funds, Exchange Traded Funds and
other eligible modes of investment as may permitted by the Regulations from time to time.
Investments may be made in securities acquired through secondary market purchases, open
market sales/auctions, Initial Public Offers (IPOs), other public offers, placements, rights,
offers and the like. These securities may be listed or unlisted.
The Portfolio will also use derivative instruments – Futures and Options – for hedging and
rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of
NRI investors.
Kindly refer Section III below for other features of this strategy.
Fees and Expenses: As defined in Section II below
4. Aegis Portfolio
Aegis Portfolio is designed for those investors who seek long-term capital appreciation from
their asset allocation to equities, debt, gold and other asset classes which are available
through either exchange traded products or through mutual funds.
Investment Objective
The investment objective of the Strategy is to generate long term capital appreciation of
wealth through a portfolio of debt, equity, gold ETFs and other asset classes which are
available through either exchange traded products or through mutual funds.
Investment Horizon and Risk Return Profile
This Portfolio is recommended for investors seeking to hold a diversified multi asset portfolio
with moderate risk appetite expecting a moderate return over medium term horizon.
Asset Allocation
The portfolio will be invested in Equities, Debt, Gold ETFs and other asset classes in a
proportion deemed appropriate for the investor and the in accordance with the market
scenario.
Securities
Investments will be made in various equity and equity related securities including but not
limited to stocks, convertible/non-convertible and/or cumulative/non-cumulative preference
shares, convertible and/or cumulative/non-cumulative debentures, bonds and warrants
carrying the right to obtain equity shares, units of mutual funds, ETFs and other eligible
modes of investment as may permitted by the Regulations from time to time. Investments
may be made in securities acquired through secondary market purchases, open market
sales/auctions, Initial Public Offers (IPOs), other public offers, bilateral offers, placements,
rights, offers, negotiated deals, etc. These securities may be listed or unlisted.
Investments would be made in all types of debt securities (which may or may not be in
dematerialized form) including but not limited to listed, unlisted, convertible, non-
convertible, secured, unsecured, rated or unrated debentures of any maturity, and acquired
through secondary market purchases, RBI auctions, open market sales conducted by RBI etc.,
other public offers, bilateral offers, placements, rights, offers, negotiated deals, etc. They
could include Securitised Debt, instruments with debt like features (eg. Compulsorily
redeemable preference shares), Pass Through Certificates, Debentures (fixed, floating,
Variable Coupon, and equity index /stocks /stocks basket linked, real estate backed), Bonds,
Government securities issued or guaranteed by Central or State Government, corporate
debt of both public and private sector undertakings, securities issued by banks (both public
and private sector) and development financial institutions, fixed deposits, commercial
papers, certificate of deposit, trade bills, treasury bills and other money market instruments,
units of mutual funds, ETFs, units of SEBI registered AIFs, floating rate debt securities and
fixed income derivatives like interest rate swaps, forward rate agreements etc. as may be
permitted by the Act, Rules and/or Regulations, guidelines and notifications in force from
time to time.
Investments will also be made in gold ETFs and other asset classes which are available
through either exchange traded products or through mutual funds.
The Portfolio will also use derivative instruments – Futures and Options – for hedging and
rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of
NRI investors.
Investment in equities will be valued on the closing price of that equity at NSE. In case of
investments in any stocks listed on BSE only, the same will be valued based on the closing
price of that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day
end’s NAV.
Debt investment in listed/publicly traded securities will be valued on the day end’s
NAV/closing price. Investment in other debt instruments will be valued as per valuation
provided by the Issuer.
Kindly refer Section III below for other features of this strategy.
Fees and Expenses: As defined in Section II below
5. Caerus Portfolio
Caerus Portfolio is designed for those investors who seek long-term capital appreciation
through opportunistic and event driven trades taken in their portfolio having an allocation to
equities (listed & unlisted), debt (listed & unlisted) and other asset classes which are
available through either exchange traded products or through mutual funds.
Investment Objective
The investment objective of the Strategy is to generate long term capital appreciation of
wealth through a portfolio of debt, equity and other asset classes which are available
through either exchange traded products or through mutual funds. Capital appreciation will
be generated through opportunistic and event driven trades taken in securities.
Investment Horizon and Risk Return Profile
This Portfolio is recommended for investors seeking to hold a diversified portfolio with
moderate risk appetite expecting a moderate return over medium term horizon.
Asset Allocation
The portfolio will be invested in Equities, Debt and other asset classes in a proportion
deemed appropriate for the investor and the in accordance with the market scenario.
Securities
Investments will be made in various equity and equity related securities including but not
limited to stocks, convertible/non-convertible and/or cumulative/non-cumulative preference
shares, convertible and/or cumulative/non-cumulative debentures, bonds and warrants
carrying the right to obtain equity shares, units of mutual funds, ETFs and other eligible
modes of investment as may permitted by the Regulations from time to time. These
securities may be acquired through primary market issuances such as subscription to Initial
public offers, Follow on Public offers, Rights issues and private placements of securities ,
secondary market purchases, open market sales/auctions and the like. These securities may
be listed or unlisted.
Investments would be made in all types of debt securities (which may or may not be in
dematerialized form) including but not limited to listed, unlisted, convertible, non-
convertible, secured, unsecured, rated or unrated debentures of any maturity, and acquired
through secondary market purchases, RBI auctions, open market sales conducted by RBI etc.,
other public offers, bilateral offers, placements, rights, offers, negotiated deals, etc. They
could include Securitised Debt, instruments with debt like features (eg. Compulsorily
redeemable preference shares), Pass Through Certificates, Debentures (fixed, floating,
Variable Coupon, and equity index /stocks /stocks basket linked, real estate backed), Bonds,
Government securities issued or guaranteed by Central or State Government, corporate
debt of both public and private sector undertakings, securities issued by banks (both public
and private sector) and development financial institutions, fixed deposits, commercial
papers, certificate of deposit, trade bills, treasury bills and other money market instruments,
units of mutual funds, ETFs, units of SEBI registered AIFs, floating rate debt securities and
fixed income derivatives like interest rate swaps, forward rate agreements etc. as may be
permitted by the Act, Rules and/or Regulations, guidelines and notifications in force from
time to time.
Investments will also be made in other asset classes which are available through either
exchange traded products or through mutual funds.
The Portfolio will also use derivative instruments – Futures and Options – for hedging and
rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of
NRI investors.
Investment in equities will be valued on the closing price of that equity at NSE. In case of
investments in any stocks listed on BSE only, the same will be valued based on the closing
price of that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day
end’s NAV.
Debt investment in listed/publicly traded securities will be valued on the day end’s
NAV/closing price. Investment in other debt instruments will be valued as per valuation
provided by the Issuer.
Kindly refer Section III below for other features of this strategy.
Fees and Expenses: As defined in Section II below
6. Eos Portfolio
Eos Portfolio is designed for those investors who seek long-term capital appreciation
primarily through Private Investment in Public Equity. The portfolio may consist of
investments in Equity & debt.
Investment Objective
The investment objective of the Strategy is to generate long term capital appreciation of
wealth through Private Investment in Public Equity. Investments may be done in the form of
Equity or debt. Investments will also be made in the primary market.
Investment Horizon and Risk Return Profile
This Portfolio is recommended for investors seeking to hold a diversified portfolio with
moderate risk appetite expecting a moderate return over medium term horizon.
Asset Allocation
The portfolio will be invested primarily in Equities & Debt. Allocation will be decided on the
availability of opportunities and as deemed appropriate for the investor.
Securities
Investments will be made in various equity and equity related securities including but not
limited to stocks, convertible/non-convertible and/or cumulative/non-cumulative preference
shares, convertible and/or cumulative/non-cumulative debentures, bonds and warrants
carrying the right to obtain equity shares, units of mutual funds, ETFs and other eligible
modes of investment as may permitted by the Regulations from time to time. These
securities may be acquired through primary market issuances such as subscription to Initial
public offers, Follow on Public offers, Rights issues and private placements of securities,
secondary market purchases, open market sales/auctions and the like. These securities may
be listed or unlisted.
Investments would be made in all types of debt securities (which may or may not be in
dematerialized form) including but not limited to listed, unlisted, convertible, non-
convertible, secured, unsecured, rated or unrated debentures of any maturity, and acquired
through secondary market purchases, RBI auctions, open market sales conducted by RBI etc.,
other public offers, bilateral offers, placements, rights, offers, negotiated deals, etc. They
could include Securitised Debt, instruments with debt like features (eg. Compulsorily
redeemable preference shares), Pass Through Certificates, Debentures (fixed, floating,
Variable Coupon, and equity index /stocks /stocks basket linked, real estate backed), Bonds,
Government securities issued or guaranteed by Central or State Government, corporate
debt of both public and private sector undertakings, securities issued by banks (both public
and private sector) and development financial institutions, fixed deposits, commercial
papers, certificate of deposit, trade bills, treasury bills and other money market instruments,
units of mutual funds, ETFs, units of SEBI registered AIFs, floating rate debt securities and
fixed income derivatives like interest rate swaps, forward rate agreements etc. as may be
permitted by the Act, Rules and/or Regulations, guidelines and notifications in force from
time to time.
Investments will also be made in other asset classes which are available through either
exchange traded products or through mutual funds.
The Portfolio will also use derivative instruments – Futures and Options – for hedging and
rebalancing of the portfolio. Derivative Instruments shall, however, not be used in case of
NRI investors.
Investment in equities will be valued on the closing price of that equity at NSE. In case of
investments in any stocks listed on BSE only, the same will be valued based on the closing
price of that equity at BSE. Investment in Mutual Funds and ETFs will be valued on the day
end’s NAV.
Debt investment in listed/publicly traded securities will be valued on the day end’s
NAV/closing price. Investment in other debt instruments will be valued as per valuation
provided by the Issuer.
Kindly refer Section III below for other features of this strategy.
Fees and Expenses: As defined in Section II below
For all strategies mentioned above, the Portfolio Manager shall be entitled to issue one or more series of the strategy. The portfolio manager may also decide to make periodic payouts to investors.
The fee portion below is common for all strategies mentioned in Annexure A
PLACEMENT FEE: A placement fee not exceeding 5.00% on the investment will be charged
over and above the Fixed Management Fee and Performance fee as defined below. The
placement fee, if charged, shall be deducted from client’s corpus both initial and at time of
making fresh infusion.
ADDITIONAL DETAIL REGARDING CALCULATION OF PERFORMANCE SHARING FEE:
In case where the portfolio comprises of debentures, the issuers may deduct TDS before
paying out funds to the investors. In case TDS has been deducted, for the purpose of
calculation of profit made by the investor, the TDS amount will be added back. This profit
arrived at (after adding back the TDS amount) will be used to calculate the applicable
performance sharing fee.
Some instruments may provide return on post tax basis. This would essentially mean that the
income received by the investor is tax free for them. Since all returns for NCDs etc are
considered on a pre tax basis, pre tax equivalent of the returns from instruments providing
post tax returns will be considered for the purpose of calculation of portfolio performance
and performance fee. The Portfolio Manager shall charge audit fees, custodial/ AMC charges
and other charges/costs, attributable to the Portfolio Management Services at actual.
The Client will also have to bear brokerage charges not exceeding @2.50% of the transaction
value and other incidental charges/fees/duties and taxes including Securities Transaction Tax
at actual.
Clients have the following fee options:
Option 1: Fixed Management Fee up to 5.00% p.a.
FIXED MANAGEMENT FEE: The Fixed fee for all strategies above(without profit sharing)
charged by the Portfolio Manager will not exceed 5.00% p.a. charged up to 1.25% at the
beginning of every quarter on the Net Asset Value of the Portfolio (inclusive of all securities
and cash/bank balance) or the outstanding capital as detailed in the agreement between the
client and the portfolio manager. The portfolio manager may charge the management fee for
the first year on an upfront basis at the time of investment.
Following charges shall be payable by the client upon withdrawal from all strategies above
under Option 1:
Withdrawal when made Charges payable by Client
SECTION II: FEES AND EXPENSES PERTAINING TO THE PORTFOLIO STRATEGIES
In case of withdrawal before 60 months of date from
which client account is activated
a) Fixed Management Fee up to 5% p.a.
and
b) Exit fees up to 5%
When exiting, after completing a period of 60 months
of date from which client account is activated
Fixed management fee up to 5% p.a. till
the day client exits the strategy.
Option 2: Fixed Management Fee NIL & Performance fees up to 30% on all gains
PERFORMANCE FEE: The Performance fee in this option will not exceed 30% of incremental
gains beyond annualized hurdle rate not exceeding 0% on the basis of High Water Mark
Principle over the life of the investment. The performance fee will be charged on quarterly
basis.
Following charges shall be payable by the client upon withdrawal from all strategies above
under Option 2:
Withdrawal when made Charges payable by Client
In case of withdrawal before 60
months of date from which client
account is activated
a) Performance fee up to 30% of incremental gains beyond
annualized hurdle rate not exceeding 0% will be charged
(Performance fee payable will be calculated on the NAV on the
day of exit) and
a) Exit fees up to 5%
When exiting, after completing a
period of 60 months of date from
which client account is activated
Performance Fee up to 30% of incremental gains beyond
annualized hurdle rate not exceeding 0% on the basis of High
Water Mark Principle based on the NAV of the day of exit.
Option 3: Fixed Management Fee up to 5% p.a. & Performance fees up to 30%
FIXED MANAGEMENT FEE: The Fixed fee for all strategies above (without profit sharing) will
not exceed 5.00% p.a. which is up to 1.25% at the beginning of every quarter on the Net
Asset Value of the Portfolio (inclusive of all securities and cash/bank balance) or the
outstanding capital as detailed in the agreement between the client and the portfolio
manager. The portfolio manager may charge the management fee for the first year on an
upfront basis at the time of investment.
PERFORMANCE FEE: The Performance fee in this option will not exceed 30% of incremental
gains beyond annualized hurdle rate not exceeding 15% (or a specific benchmark pre-
decided with the client) on the basis of High Water Mark Principle over the life of the
investment. The performance fee will be charged on quarterly basis.
Following charges shall be payable by the client upon withdrawal from all strategies above
under Option 3:
Withdrawal when made Charges payable by Client
In case of withdrawal
before 60 months of date
from which client account is
activated
a) Fixed management fee payable up to 5.00% p.a. and
b) Performance fee payable up to 30% of incremental gains
beyond annualized hurdle rate not exceeding 15% (or a
specific benchmark pre-decided with the client) will be
charged (Performance fee payable will be calculated on the
NAV on the day of exit) and
a) Exit fees up to 5%
When exiting, after
completing a period of 60
months of date from which
client account is activated
a) Fixed Management fee up to 3% p.a. and
b) Performance Fee up to 30% of incremental gains beyond
annualized hurdle rate not exceeding 15% (or a specific
benchmark pre-decided with the client) on the basis of High
Water Mark Principle based on the NAV of the day of exit.
The final fee structure and fee charging frequency may vary with every client and would be
pre decided between the portfolio manager and the client. This may be changed during the
term of the PMS arrangement upon mutual consent by the investor and the portfolio
manager.
SECTION III: COMMON FEATURES OF THE PORTFOLIO STRATEGIES {common features applicable to all strategies}
Minimum investment amount is Rs. 25 Lakhs.
Liability of a client shall not exceed client’s investment with the portfolio manager.
The Portfolio Manager shall charge audit fees, custodial/ AMC charges and other
charges/costs, attributable to the Portfolio Management Services on actual.
Any charges payable for outsourced professional services like accounting, taxation, auditing,
and any legal services, notarizations, etc., incurred on behalf of the Client by the Portfolio
Manager, will be charged from the client on actual.
The Client may withdraw whole or part of the funds or securities from the portfolio account
by giving advance notice and the Portfolio Manager will endeavor to liquidate the securities
held in the strategy and return the funds or securities of the strategy, as the case may be, to
the client within reasonable time. In case the Portfolio Manager is for any reason unable to
sell the securities, the Client shall be obliged to accept the securities in the portfolio.
The Portfolio Manager will provide periodical reports as required under the regulations at
the communication address provided by the client at time of account opening. In case
Portfolio Manager is unable to provide the periodic reports in physical copy, the same shall
be provided to clients via email at the email id registered by clients at time of account
opening.
The portfolio account will be audited by the Independent Chartered Accountant every year
and copy of the Certificate issued by the Chartered Accountant will be given to the Client.
A. Non – Discretionary Portfolio Management Services
The following are illustrative, but not exhaustive, investment strategies which would be
available for client availing Non-Discretionary Portfolio Management Services.
1. Equity oriented strategies
These strategies would include equity focused strategies with the flexibility to invest
across Equity instruments available and across market capitalizations. The strategy
may invest in non convertible debentures with performance linked to an equity
instrument. Specific details of the portfolio would depend on the requirement of the
client.
2. Debt Focused strategies
These strategies would include debt focused strategies with the flexibility to invest
across Debt instruments available including mutual funds, bonds and non convertible
debentures. The strategy may also invest in debentures providing capital protection
and offering debt like returns which may have an equity index, basket of stocks or
commodities as the underlying. Specific details of the portfolio would depend on the
requirement of the client.
3. Multi Asset strategies
These strategies would include investments across Equity, debt, gold and other asset
classes which may be available through exchange traded products or mutual funds.
Non convertible debentures (other than equity or debt) will also be included here.
Specific details of the portfolio would depend on the requirement of the client.
GLOSSARY OF TERMS USED IN THE RISK DISCLOSURE DOCUMENT AND ANNEXURE A
Discretionary portfolio: A portfolio where the funds of each client are managed individually
and independently by the fund manager in accordance with the needs of the client.
Non discretionary Portfolio: A portfolio where the funds are managed by the fund manager in
accordance with the directions of the client.
Hurdle rate: The rate over which profit sharing / performance related fees are usually charged by
portfolio managers. This is not a fixed number and would be specified in the agreement signed with
the client.
High Water Mark Principle: As defined by SEBI, High Water Mark shall be the highest value that the
portfolio/account has reached. Value of the portfolio for computation of high watermark shall be
taken to be the value on the date when performance fees are charged. The portfolio manager shall
charge performance based fee only on increase in portfolio value in excess of the previously achieved
high water mark
Asset allocation: Asset allocation is an investment strategy that attempts to balance risk versus
reward by adjusting the percentage of each asset in an investment portfolio according to the investors
risk tolerance, goals and investment time frame.
Asset Classes: A group of securities that exhibit similar characteristics, behave similarly in the
marketplace, and are subject to the same laws and regulations. Asset classes include but are not
limited to Equities, fixed-income and cash equivalents.
Non convertible debentures: A debenture is a document that either creates a debt or acknowledges
it, and it is a debt without collateral (hence, unsecured debt). Non-convertible debentures are regular
debentures which cannot be converted into equity shares of the liable company.
Investment vehicles: An investment vehicle is a product used by investors with the intention of having
positive returns. Investment vehicles can be low-risk, such as certificates of deposit (CDs) or bonds, or
can carry a greater degree of risk such as with stocks, options and futures.
1
ANNEXURE B - Details of all settled and pending disputes against directors/associates of Karvy Capital Limited as on August 15, 2015
There have been no pending disputes or imposition of any major strictures by any financial sector regulator or by a court of law against Karvy Capital Limited/ its directors/associates, except as mentioned below:
A. DETAILS REGARDING SEBI ACTIONS INITIATED/TAKEN/ PENDING AGAINST KARVY STOCK BROKING LIMITED
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
(a) (b) (c) (d) (e)
1 Inspection of Karvy
Stock Broking Limited
(KSBL) conducted in
2003-04.
Based on the findings of
inspection, adjudication
proceedings were
initiated against the
Company.
(i)Based on the findings of
inspection, adjudication
proceedings were initiated
against the Company.
(ii)The adjudicating officer vide
his order dated November 18,
2005 imposed a penalty of Rs. 2
lakhs on the company which
has been paid.
(i) Copy of order book is maintained
physically and in case of telephonic
orders through voice loggers. Records
of all such transactions are also being
maintained in the system.
(ii) Separate teams have been formed
for monitoring different activities
relating to trading and automation of
various processes like pay-in and pay-
out of securities, providing
confirmations to clients on trades
executed etc., getting the LBC’s and
other confirmation documents from the
clients.
NIL
2
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
2 Two enquiry proceedings were initiated against Karvy Securities Limited (now merged with Karvy Stock Broking Limited).
No deviation observed by SEBI in the processes.
One of the proceedings was
dropped vide order dated April
23, 1999 and another was
dropped by Board Decision in
the meeting held on November
09, 2002. The proceedings have
been dropped by SEBI and no
action has been taken / no
penalty was levied / no warning
has been issued to the
Company.
- NIL
3 (i).Administrative
warning issued in the
matter of Software
Technology Group
International Limited
on August 3, 2004
(ii). Administrative
warning issued in the
matter of 10 scrip
report (Aarti
Industries Limited,
Aarti Drugs Limited,
Havells India Limited,
Jindal Polyester
With respect to the administrative
warnings dated 03.08.2004 and
12.10.2007 received by the Company
from SEBI, the company has redefined
the policy on risk monitoring and has
adopted various measures for
improving the processes systems and
surveillance for effective control and
monitoring on the trades done by
clients.
The complete broking operations based
on the feedback received from the
exchanges were redefined and
activities/processes reorganized
NIL
3
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
Limited, Kajaria
Ceramics Limited,
KRBL Limited, Lyka
Lab Limited, Nirma
Limited, Opto Circuit
(I) Limited, Tasc
Pharmaceuticals
Limited on October
12, 2007.
subsequent to the issuance of
adjudication order and administrative
warnings to the company.
i. Risk monitoring and surveillance
team has been strengthened for
monitoring the trades done by
clients continuously.
ii. Separate teams have been formed
for monitoring different activates
relating to trading and automation
of various processes like pay-in and
pay out of securities, providing
confirmations to clients on trades
executed, etc, have been
implemented for strengthening the
monitoring procedures and to
reduce manual errors.
iii. SMS alerts are sent to clients at the
end of the day for trades done by
them. Trade confirmations are also
sent to clients through emails at
the end of the day.
iv. The company has ensured that only
individuals/entities registered with
4
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
SEBI act as sub brokers and all
clients dealing through sub brokers
mandatorily open the trading
account with the company by
submitting proper KYC
documentation.
v. Trading platform has been
enhanced by incorporating
mechanisms for effective control
on the trades done by clients based
on value, scrip and quantity.
There have also been multiple
inspections by both the Exchanges and
there has been no untoward
observation with regard to any of the
activities pointed out in the adjudication
order of the administrative warnings.
5
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
4 Administrative warning
issued by IVD-ID 4 ON
January 19,2009 in the
matter of IPO
irregularities
(complaint
of Shri Vimal Kumar
Surana). This warning
was not issued in the
matter of IPO
irregularities, but
regarding opening of
Beneficial Owner
accounts.
- (i) The Company has ensured that
demat accounts are opened only on
receipt of valid and completely filled
application form along with proper
supporting KYC documents towards
Proof of Identity and Proof of Address.
(ii) The company strictly follows the
maker – checker concept for all
processes relating to depository
services. On receipt of the application,
the application form and supporting
documents are verified at the branch
and a receipt is issued to the client. The
documents provided as POI and POA are
verified with the originals and certified
by the official accepting the application
form.
(iii) A detailed scrutiny and verification
of the application forms and the
documentation is done once again at
the Head Office before the accounts are
opened and activated. The accounts
opened are subject to a 100%
concurrent audit by an external agency.
A welcome kit providing complete client
master information of the demat
6
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
account opened, DIS booklet etc. is
dispatched to the clients for their
reference.
(iv) Training is also provided to the staff
/ officials involved in the activities of
account opening and are kept informed
about the circulars and guidelines
issued by the regulatory authorities
regarding demat account opening from
time to time.
5 SEBI vide order dated
26.05.2006,
directed, Karvy Stock
Broking Ltd. (KSBL),
not to act as a
depository
participant, pending
enquiry and passing
of final orders, except
for acting on the
instructions of
existing beneficial
owners ('BOs’). SEBI
also directed KSBL, as
- (i) Subsequent to the enquiry
and hearing with the whole
time member, SEBI in its final
order dated June 22, 2007,
directed that KSBL as a DP is
prohibited from opening
new demat accounts till
December 31, 2007. SEBI also
passed an order that the
certificate of KSBL as a broker
be suspended for a period of 3
months.
(ii) KSBL as a broker had filed
an appeal no 75 of 2007 on
(i) Subsequent to PAN being made
mandatory by regulators, the Company
has developed a software application
wherein the PAN details provided by the
applicants are validated online with the
Income Tax website. Only such
applications where PAN details are valid
in all respects are processed for opening
BO accounts. The Company has taken
permission from the depository for such
online validation.
(ii) The concurrent audit has been
strengthened by way of 100% audit of
account opening application forms by
NIL
7
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
a stock broker, not to
undertake any
proprietary trades in
securities, either off-
market or on market,
pending enquiry and
passing of final
orders.
June 25, 2007. SAT had stayed
the order on July 4, 2007.
(iii) KSBL as a DP had filed an
appeal no 111 of 2007 on July
17, 2007. SAT had stayed the
order on August 8, 2007.
(iv) SAT in its final order dated June 30, 2008 set aside the impugned order dated June 22, 2007, remanding the matter back to SEBI with a direction to pass separate orders against KSBL – as a Broker as well as a DP with regard to the violations emanating from the enquiry officer’s report.
The Whole Time Member had granted a personal hearing as per the order of Hon’ble SAT, wherein submissions to SEBI have been made by the company. SEBI issued final order in respect of KSBL – Depository
external agency with regard to
compliance and fulfillment of the
documents required as per KYC
norms.Extensive training sessions to all
the DP front office employees has been
conducted educating them on the
scrutiny required to be done while
accepting account opening application
form
(iii) Front office personnel of some of
the branches have also been nominated
for NSDL / CDSL training for the purpose
of compliance of NCFM / NCDO
certification requirement. Fortnightly
review of the Demat accounts opened
with the same address is undertaken by
a senior resource
(iv) No applications are accepted and
accounts are opened without an “in-
person” verification and re-verification
of original documents, required as a
part of KYC, by an employee of the
Company. Reporting of off-market
transactions submitted for execution to
the DP and Compliance Head on a
8
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
Participant on 28th January, 2014 and has in paragraph 20 such order clearly concluded that KSBL – Depository participant has already undergone prohibition from taking up any new assignment for a period of 18 months and 26 days and hence there need not be any further penalty on KSBL – Depository Participant.
SEBI issued final order in respect of KCPL – RTI on 3rd February, 2014 and in such order stated that since KCPL has already undergone prohibition from acting as RTI for approximately 10 months no further penalty is warranted.
In the matter of enquiry proceedings conducted against the Company, Securities Exchange Board of
fortnightly basis.
(v) The above corrective actions taken
by the Company have been intimated to
SEBI in our various correspondences
during the process. An inspection has
also been conducted by SEBI during
October 2009 to review if the
procedures and processes adopted are
in order. There has been no adverse
observation by the inspection team.
9
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
India (SEBI) had passed order dated 14 March 2014 prohibiting the Company from taking up any new assignment or contract or launch a new scheme (i.e., not to take new clients/customers) for a period of 6 months in respect of its business as a stock broker. The Company had preferred an appeal before Hon’ble Securities Appellate Tribunal (SAT) against the order. Hon’ble SAT, vide order dated 16 April 2014, granted a stay on SEBI’s order dated 14 March 2014. Further, SAT vide order dated 21 January 2015 has set aside the SEBI’s order dated 14 March 2014 and directed SEBI to pass appropriate order after hearing by the Whole Time Member, preferably
10
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
within a period of four months considering the fact that substantial time has elapsed. Subsequently hearing was held before the WTM SEBI on 7th April, 2015. SEBI issued final order dated 15th June, 2015 disposing off the proceedings against KSBL by directing it to not undertake new primary market assignment including acting as syndicate member or providing syndication services (procuring IPO applications and bidding in IPOs), directly or indirectly , in IPOs for a period of one year. SEBI has also clarified that this direction shall not hinder the activities for which KSBL was already engaged for undertaking primary market activities before
11
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
the date of the order.
6 A matter
between Shri Jaidev
Kumar Jain
, KSBL & others is
going on
before District
Consumer Disputes
Redressal Forum,
Gwalior (EFD DRA
I).The complainant is
a client of our
subsidiary company
Karvy Comtrade Ltd.,
a member of MCX,
We have received a
letter from SEBI that the
complaint does not
come under the
purview of SEBI.
Karvy Comtrade Limited approached the
client, Mr. Jaidev Kumar Jain and
resolved the investor Grievance. Mr.
Jaidev Kumar Jain vide its letter dated
17.04.2012 addressed to Karvy
Comtrade Limited submitted the letter
of satisfaction.
NIL
12
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
NCDEX, National Spot
Exchange Ltd. The
case was actually filed
against Karvy
Comtrade Ltd. As the
order of the District
Consumer Forum was
unreasonable and
also the same
pertains to Karvy
Comtrade Ltd, an
appeal was filed
before the State
Consumer Forum. MP
State Consumer
Dispute Redressal
Commission, Bhopal
in its order dated
24.09.2011 stated
that the Appellant is
not a consumer
within the meaning
under sec2(1)(d) of
the act and does not
fall within the
parameters of the
explanation
13
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
hereinabove. Under
these circumstances,
MP State Consumer
Dispute Redressal
Commission found
that both the appeals
are not maintainable
before the consumer
forum. Both the
appeals are
dismissed. As a result,
complaint is also
dismissed.
7 Administrative
Warning dated July
13, 2010 issued in the
case of PAN
mismatches in IDR
issue of SCPLC/IPO of
Parabolic Drug Ltd.
The PAN mismatches have been
identified as those of walk-in clients
who are not registered with clients and
have utilized the distribution services of
the company. KSBL has already
developed a bidding software
application for entry of the information
provided in the IPO bid application form
by the client and has also obtained
required permission from the Stock
Exchanges for utilizing the software for
IPO bidding. The bidding application
software also has an in built provision
NIL
14
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
where by the applicant’s details are
validated if they are the registered
clients of the Company. KSBL, as a stock
broker, is not currently authorized to
utilize the bulk PAN verification facility
provided by NSDL and is therefore not
able to validate the PAN of walk in
clients. To avoid these PAN mismatches,
the Company is in the process of
requesting NSDL to provide the utility
for bulk verification of PAN with the ITD
website already provided to the
Depository participants and registrars so
that the utility can be incorporated in
the bidding application software
developed and validation of PAN is done
online at the time of bidding the
application itself.
The Company is also checking and
analyzing the viability and methodology
of implementing the concept of maker
checker in the IPO bidding process to
minimize the errors as the time frame
available for bidding of the application
is very less.
15
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
8 SEBI had initiated proceedings under section 24 of the SEBI act, against the three directors of the company, viz. Mr. C. Parthasarathy, Mr M. Yugandhar, Mr. M. S. Ramakrishna, and Karvy Stock Broking Limited which are pending before the additional chief metropolitan magistrate, Mumbai.
-- -- -- Pending
9 A complaint was lodged by SEBI with Central Bureau of Investigation, Mumbai on 20.02.2006 alleging frauds committed by certain individuals / entities, in connivance with certain bank officials and depository participants in the IPOs of IDFC and Yes Bank to obtain undue
-- -- -- Pending
16
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
pecuniary benefits by illegally cornering large number of shares which were offered to Retail Investors by opening various fictitious / benami bank accounts and demat accounts. It was stated by SEBI in the complaint that Karvy Stock Broking Ltd had purportedly relied upon the bogus documents furnished by the individuals who acted as front entities (key operators) to the ultimate beneficiaries who had financed the fictitious applications. Karvy Stock Broking Ltd had accepted letters purportedly issued by BhOB as POI and POA of the persons for opening demat accounts and such documents purportedly received prima facie appeared
17
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
to be forged and hence it appears that Karvy Stock Broking Ltd had not done Know Your Client verifications.
10 Two cases - BS & FC (RC 3(E)/ 2006 and 4(E)/ 2006) under Sections 120 B r/w 420, 467, 468 & 471 of IPC, under Section 68(A) of the Companies Act 1956 and under Section 13(2) r/w 13 (1) (d) of the PC Act, 1988 were registered by CBI in the matter of Yes Bank and IDFC Ltd. after arraying Karvy Stock Broking Limited, Karvy Computershare
-- -- -- Pending
18
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
Pvt. Ltd and Karvy Consultants Ltd and other officers of these entities including Mr. C. Parthasarathy, as co-accused. The matter is pending before the Hon’ble Special judge.
11 Subsequently, the Enforcement Directorate, after relying on the investigations of CBI and that of SEBI and on the premise that Section 467 of IPC framed against the co-accused represents a predicate offence which is categorized as a scheduled offence under Section 2(u) of the Prevention of Money Laundering Act-2002 (PMLA), has
-- -- -- Pending
19
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
filed a prosecution complaint bearing no.04/2013, in terms of the provisions of PMLA. The matter is pending before The Appellate Tribunal PMLA New Delhi.
12 Inspection of Portfolio
Management services
business of Karvy
Stock Broking Limited
(KSBL) conducted in
2013-14.
Based on the findings of
inspection, the
company has received a
show cause notice as to
why adjudication
proceedings should not
be initiated against the
Company.
Based on the findings of inspection, the company has received a show cause notice as to why adjudication proceedings should not be initiated against the Company. The Company has responded to the said show cause notice in writing. Personal Hearing in this matter was held on June 29, 2015 by the Adjudicating Officer as requested by KSBL. Further to the Hearing, the Adjudicating Officer required KSBL to submit certain documents. The said documents have been
1. The PMS Operations team actively
ensures in coordination with the
operations team at Hyderabad
that KYC details of clients who
opt for PMS are uploaded to
KRA
2. The PMS Operations team
routinely scrutinizes account
opening forms and any
difference in ink if observed
between signatures of client
and text written by client is
immediately escalated and the
form rejected for clarification
NIL
20
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
submitted on July 31, 2015. Further directions are awaited from the Adjudication Officer. Meanwhile KSBL is awaiting directions from SEBI as regards the consent application dated January 23, 2015 for settlement filed by it in this matter.
and confirmation by client
3. All teams are being repeatedly
sensitized to fact that the word
“scheme” is not to be used with
respect to PMS documents
4. The PMS Product team is in the
process of introducing a risk
profiling tool.
B. DETAILS REGARDING SEBI ACTIONS INITIATED/ TAKEN/ PENDING AGAINST ASSOCIATES OF KARVY STOCK BROKING LIMITED
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
(a) (b) (c) (d) (e)
1 In the matter of IPO of
Rajesh Exports Ltd.,
A warning letter dated October, 10, 2002, directing us to be cautious in future and to adhere to all the Rules, Regulations, Circulars and Guidelines issued by SEBI strictly.
NIL
21
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
2 In the matter of transfer of
equity shares of Bellary
Steels and Alloys Limited
The following alleged violations have been cited in the notice (i) failure to comply with SEBI Circular No. 001 (2000-2001) dated 09-05-2001 (clauses 7 & 11) and (ii) failure to exercise due diligence, care and skill expected from a professional SEBI registered market intermediary (clause 2,3 & 16 of Schedule III read with Regulation 13 of Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agent) Regulations, 1993.
After receipt of the copies of the documents relied upon by SEBI, reply to the notice was filed on 09-04-2009. KCPL attended a personal hearing on May 11, 2009 and also subsequently submitted the written submissions on 15th May, 2009. After a detailed investigation and personal hearing, the adjudication proceedings were disposed off in favour of the company vide order dated January 5, 2010, without levying any penalty, monetary or otherwise.
Not applicable as the
Company has not been
reprimanded / warned for
non-compliance nor was
any penalty levied / action
taken against the
company.
NIL
3 (i) SEBI had initiated
enquiry proceedings
against Karvy
Consultants Limited
(KCL) (whose Certificate
of Registration was
transferred to Karvy
Computershare Private
Limited (KCPL) under
regulation 6(1) of the
KCL which acted as registrars to the IPO of UCO Bank Limited in September 2003 had not abided by the code of conduct as specified by SEBI in schedule III read with Regulation 13 of SEBI (Registrar to Issues and Share Transfer Agents) Regulations 1993.
Subsequent to the personal
hearing on November 6, 2009,
with the enquiry officer, the
proceedings against the
company were disposed off vide
order dated 12th July, 2010
in favour of the company,
without levying any penalty.
A penalty of Rs. 10 lakhs was
imposed by the AO which was
The Company had
reviewed the processes
and had ensured a second
level verification of the
details captured from the
IPO application forms to
ensure that such errors do
not occur again. Also, the
company has been strictly
adhering to the various
NIL
22
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
Enquiry Regulations.
(ii) SEBI had initiated
adjudication
proceedings in the year
2004 in matter of
issuance of physical
shares against the
applications for
electronic allotment
(DEMAT).
subsequently reduced to Rs.
1.50 lakhs by Hon’ble Securities
Appellate Tribunal (SAT).
norms, rules and
regulations laid down by
SEBI and other regulatory
authorities in IPO
processing from time to
time.
4 Vide order dated
26.05.2006, KCPL was
directed not to act as a
registrar to an issue and as a
share transfer agent,
pending enquiry and passing
of final order, except for the
assignment already
contracted before passing
of interim order dated April
27, 2006. The direction was
not applicable to KCPL as
Registrar and Transfer
Agent to Mutual Funds.
Failure to exercise due
diligence in weeding out
multiple and fictitious /
benami applications, issuance
of consolidated refund orders
and failure to maintain arms
length distance with other
Karvy entities
Subsequent to the enquiry and
hearing with the whole time
member, SEBI in its order dated
22.02.2007 lifted the directions
issued vide an earlier order
dated 26.5.2006 without
prejudice to the pending enquiry
proceedings against its associate
company Karvy stock Broking
Limited (KSBL), without any
further directions. Subsequent to
the enquiry and hearing granted
to the associate company, KSBL,
SEBI passed a another order
dated June 22, 2007 wherein it
The company has already
undergone prohibition of
not acting as a RTI for
more than 10 months. The
changes in the regulations
such as making PAN
mandatory has helped in
implementing the revised
process for verifying
duplication of PAN
numbers in weeding out
multiple applications in
addition to matching the
names, addresses and the
DP ID and Client IDs of the
NIL
23
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
reiterated that KCPL is prohibited
to act as Registrars to the issue
for a period of 9 months and
since KCPL had already
undergone prohibition for more
than the said 9 months period,
therefore, there shall be no
further directions against KCPL.
KCPL had filed an appeal no 153
of 2007 before Securities
Appellate Tribunal (SAT)
challenging the order dated June
22, 2007. SAT after the hearing,
vide it order dated June 30, 2008
set aside the impugned order
dated June 22, 2007 and referred
the matter back to SEBI for
passing a separate and distinct
order after giving a fresh hearing
to the company.
SEBI issued final order in respect
of KCPL – RTI on 3rd February,
2014 and in such order stated
that since KCPL has already
undergone prohibition from
applicants. The refund
amounts are being
credited electronically
directly to the bank
accounts of the applicants
through RTGS, ECS and
NEFT.
24
Sl.no. Details of the case SEBI observation(s) SEBI Action Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
acting as RTI for approximately
10 months no further penalty is
warranted.
C. Details of action initiated / taken/pending, i f any , by SEBI against Karvy Investor Services Limited., Group Company.
Sl.no. Details of the case SEBI observation(s) SEBI Action
Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
(a) (b) (c) (d) (e)
1 Advisory letter was issued to Karvy investor
services Limited as a Merchant Banker in the year
2005.
SEBI has given an
administrative
warning vide letter
dated IVD/ID-
5/MSR/PB/47713/05
dated August 22,
2005for providing
incorrect and
misleading
information /
particulars to the
Board that no pre-IPO
presentations were
made by the
company, Fortune
Informatics Ltd.
KISL vide its letter
dated September 10,
In depth training has been imparted to
the personnel involved in the merchant
banking activities. Scrutiny of every
document diligently is being done by a
senior official and verification of all the
facts and figures mentioned in the
document is also done before the same
is filed with SEBI. Checklist of
documents being filed done to ensure
all the documents and information is
being provided to SEBI.
NIL
25
Sl.no. Details of the case SEBI observation(s) SEBI Action
Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
2 An administrative warning was given by SEBI vide letter reference no CFD/DIL/ISSUES/SC/65284/2006 dated April 20, 2006 when DRHP of Shirt Company (India) Ltd. was filed without incorporating the suggestions made earlier by SEBI in respect of the risk element when the DHRP Opto Circuits Ltd. was filed.
In reply, KISL has submitted that the DRHP of Shirt Company (India) Ltd was filed much before the DRHP of Opto Circuits Ltd. and hence the observations suggested by SEBI could be incorporated
It was confirmed vide letter dated April
24, 2006 to SEBI that adequate steps
have been taken to ensure that the risk
element is reflected appropriately in
the headings of risk factors appearing
in the DRHPs submitted.
NIL not be incorporated.
26
Sl.no. Details of the case SEBI observation(s) SEBI Action
Corrective steps taken by Company towards observations made by SEBI
Pending actions, if any
3 SEBI has given a warning vide letter reference no
CFD/DIL/ SC /ISSUES/54996/2005 dated November
30, 2005 highlighting the deficiencies such as,
inconsistent disclosures, statements without
supporting facts and non-compliance with various
provisions of the SEBI (DIP) Guidelines, 2000 in the
draft Letter of Offer of Agro Dutch Industries Ltd.
In response, it was informed by KISL to SEBI vide
letter dated April 13, 2006 that KISL would ensure
that it shall henceforth submit offer documents of
good standard quality.
In depth training was imparted to the
personnel involved in the merchant
banking activities. Scrutiny of every
document diligently is being done by a
senior official and verification of all the
facts and figures mentioned in the
document is also done before the same
is filed with SEBI. Checklist of documents
being filed done to ensure all the
documents and information is being
provided to SEBI.
NIL
C.DETAILS REGARDING ANY OTHER LITIGATION PERTAINING TO KARVY STOCK BROKING LIMITED OR ITS ASSOCIATES
(I) ARBITRATION PENDING AT NSE PERTAINING TO KARVY STOCK BROKING LIMITED
Name of the Applicant
NSE/ BSE Region
Remarks Status Amount in INR
Mr. Baljit Singh Dagar
Delhi We have filed Appeal u/s 34 at District court New Delhi, Court proceedings are going on
Appeal under process 108700
Mr. Ram Chandra Nayak
Kolkata We have filed Appeal u/s 34 at District court Cuttack, Court proceedings are going on
Appeal under process 176099
27
Name of the Applicant
NSE/ BSE Region
Remarks Status Amount in INR
Mr. Sanjeev Kumar Chadha
Delhi We have filed Appeal u/s 34 at District court New Delhi, Court proceedings are going on
Appeal under process 271792
Ms. Aarthi Acharaya Chennai We have filed Appeal u/s 34 at District court Bangalore, Court proceedings are going on
Appeal under process 100000
Mr. Sonam Gailson Delhi We have filed Appeal u/s 34 at District court Jammu, Court proceedings are going on
Appeal under process 303531
Mr. B K Mishra Kolkata We have Appealed u/s 34 at District court Jamshedpur, Court proceedings are going on
Appeal under process 534592
Mr. Radheshyam Biyani
Delhi Arbitration and Appeal award against us. We have Appealed at district court Delhi u/s 34. Court proceedings are going on
Appeal under process 600527
Mr. Harbans Kaur Khalsa
Delhi Arbitration and Appeal award against us. We have Appealed at district court Delhi u/s 34. Court proceedings are going on
Appeal under process 131231
Ms. Poonam Sharma Delhi Arbitration and Appeal award against us. We have Appealed at district court Delhi u/s 34. Court proceedings are going on
Appeal under process 96477
Mr. Vimal Kumar Gupta
Kanpur Arbitration and Appeal award against us. We have Appealed at district court Kanpur u/s 34. Court proceedings are going on
Appeal under process 129280
Mr. G .Babu Rao Hyderabad Arbitration award against us. We have appealed at NSE, Hyderabad
Appeal under process 16250
Mr. K N Raju Bangalore NSE Appeal award against us. We have Appealed at District court, Bangalore
Appeal under process 513960
Ms. Manasi Vasudeo Deshpande
Mumbai Arbitration Pending at NSE Arbitration under process 262500
Ms. Dipali Vijaykumar Damle
Mumbai Arbitration Pending at NSE Arbitration under process 905000
Mr. Pishori Lal Delhi Arbitration award against us. We are in process to Appeal at NSE, Delhi
Appeal under process 55000
28
Name of the Applicant
NSE/ BSE Region
Remarks Status Amount in INR
Mr. Arjan Singh Chandigarh Arbitration award against us. We have appealed at NSE, Delhi
Appeal under process 218750
Mr. Anurag Yadav Lucknow Arbitration award against us. We are in process to Appeal at NSE, Lucknow
Appeal under process 400000
Mr. Raziya Begum Bangalore Arbitration Pending at NSE Arbitration under process 949232
Mr. Krishan Murari Sharma
Delhi Arbitration Pending at NSE Arbitration under process 50384
Ms. S.Uma Devi Chennai Arbitration Pending at NSE Arbitration under process 295555
Mr. Udesingh.M.Padhiyar
Baroda Arbitration Pending at NSE Arbitration under process 803614
Ms. Duraiya Bombaywala
Baroda Arbitration Pending at NSE Arbitration under process 342428
Mr. Abidbhai Bombaywala
Baroda Arbitration Pending at NSE Arbitration under process 12335
Ms. Ranjana Das Kolkata Arbitration Pending at NSE Arbitration under process 116378
Mr. Pramod Shankar Ghag
Mumbai Arbitration Pending at NSE Arbitration under process 900000
Mr. Pramod Shankar Ghag
Mumbai Arbitration Pending at BSE Arbitration under process 900000
Mr. C.Vijay Kumar Reddi
Bangalore Arbitration Pending at NSE Arbitration under process 13873311
(II) DETAILS OF LEGAL CASES PENDING AGAINST KARVY STOCK BROKING LIMITED
Sl No Name Amount Case No. Status/Remarks
1 T P Pramaleela 1,00,000 OS:305/2011 The client has preferred Civil Suit against the order of Consumer Forum in Complaint No. 48/2010 which was awarded in our
29
Sl No Name Amount Case No. Status/Remarks
favour. The matter is presently posted for arguments and next date of Hearing is September 7, 2015
2 S Manu 2,15,000
Appeal No. 1049/2011
Complaint No. 64/2010 was awarded in our favour at Consumer forum in Tumkur Branch, aggrived by the order of the CF, the client has preferred appeal before the State Commission - Bangalore, appeal admitted awaiting the further legal process, argument complete by both the parties posted for orders. (Member retired fresh hearing). Matter is posted for fresh arguments before new member on next date of hearing viz October 5, 2015.
3 G V Ramachandra
4,50,000
Appeal: 2323/2011
Claiming for losses on the ground of old age, health and ignorance of trade done in his account, client is disputing signature on contract and the same was referred to handwriting experts. The complaint was dimssed on the grounds that he is not a consumer on 10/11/2010, now after 190 days he has filed the appeal before the State Commission. On August 5, 2015 , the appeal too has been dismissed in favour of KSBL.
4 Shashikanth Thimmapur
5400000 CRP No: 258/2012
Setting aside the impugned order dated 30/3/12 and B Report filed by IO of Market Police Station in Crime No. 29/2009 at IV JMFC, Belgaum. The matter is under process.Next date of Hearing is on October 5, 2015.
5 ARVIND KUMAR
3,44,830
1328/2009 Delays in payments of dues by the client. Arbitration award was in favor of KSBL. Client filed the case in alipore court against arbitration award.
6 TAPAN KUMAR BISWAL
63,000
174/2009 Cheque bounce case against the client. Arbitration award was in favor of KSBL. Client filed the case in district court against arbitration award
7 MOHAN SINGH
3,63,112
CCN.602/2009
Cheque bounce case against the client. Client has filed counter case in Sahibgunj Court alleging unauthorized trade and debit.
8 SANJAY KUMAR AGARWAL
4,77,429
CCN.604/2009
Cheque returned uncleared. Arbitration award was in favor of KSBL. Client has filed appeal petition against Arbitration Award in Dist Judge Darjeeling.
9 SHOBHA SONI 2,89,624
F&O/M-072/2008/C
The Client refused to pay the outstandings. We had filed for arbitration against the client and got award in our favour. In between the client got transferred from Ambikapur to Dhamtari. We have filed a recovery suite against the client in Dhamtari Court. Last time after a lot of dates and persuasion we were supposed to get the case registered against the client, in between the judge got transferred. Now again the hearing process is going on.
30
Sl No Name Amount Case No. Status/Remarks
10 ASHISH SHARMA
93,278
F&O/K-0041/2009
Delays in payments of dues by the client. Arbitration award was in favor of KSBL. Execution petition has been filed before the Chief Judge at City Civil Court Bilaspur.
11 AJAY CHANDRA SATPATHY
84,057
127/2009 Cheque bounce case against the client. Arbitration award was in favor of KSBL. Execution Petition has been filed in Kolkata, however client has moved to undisclosed location and cannot be contacted.
12 SANJAY BHATTER
1106/08 The client has filed arbitration against us. Arbitration Award was in our favour but the client is absconding and is not traceable.
9 ASIM CHATTERJEE
1788/2011 The criminal complaint filed against the Company along with Aritration case. But the Arbitrator passed award against the Client. Based on the award passed by the Arbitrator, we are asking for dismiss of complaint filed by the Client. 10 AJOY KRISHNA
ROY 75,000
Client filed the complain for unauthorised trade in his trading a/c in Consumer Forum.
11 LAL BAHADUR SINGH
1,12,000
60/2011 Client sent legal notice through District Comsumer forum , Buxar, for oppurtunity loss due to trade square-up by KSBL.
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
1 Srichand Rupeja
600/2011 CDRF, Lucknow
The client has filed this complaint against KSBL before the CDRF, Lucknow, and has claimed Rs.1,50,000/- alongwith 18% interest. He has made allegation that many unauthorised trades have been executed in his trading account without his instruction between October 2009 to Feb 2010. KSBL has filed its written submission and evidence and case is posted for arguments on November 16, 2015
2 Ankur Mahal 334/2011 CDRF, Meerut The complainant has claimed that due to deficiency in service of the O. P. his late father Mr. Rajpal Singh suffered a loss of Rs. 2,25,490/- from his demat account No.366407. Which he has prayed to be compensated alongwith 18% interest. This case has been dismissed, as per branch.
31
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
3 Vidya Sagar awasthi
R.S.No.13/2006
D. J. , Lucknow
The client had claimed through arbitration Rs.32,857/- for loss against unauthorised trades which was rejected on account of lack of merrits by the arbitrator on18-02-2006. Thereafter, the application of the client u/s 34 of the arbitration act was dismissed by the D. J. , Lucknow, on 06-02-13.
4 Durgesh N. Khanna
Complaint No.08/2008
CDRF, Kanpur Nagar
The complaint/claim of the client for for rs.1,77,549/- was dismissed by the consumer Forum, Kanpur, by the order dated 29-12-12 on account of lack of evidences against which this Appeal has been filed by the client for a decree of Rs.1,10,992.75 and 50000/- for mental agony and rs.2000/- as cost of the case. hence his total claim is for Rs.1,62,992.75. The case was dismissed on 29/12/2012 as the complainant was not been considered to be a consumer.
5 Manish Kumar vs KK Sharma & Others
Mrs. Suruchi Atreja Singh, J. M., Rohtak.
Mr. Manish Kumar (the complainant) has filed this complaint against Mr. K. K. Sharma, Rakesh Negi & Sarvesh Pandey due to dispute in payment for computer systems supplied by him to Karvy branches. As per complaint the claim amount is Rs.1,66,799/-
6 Rakesh chandra
R. S. No.12/2006
D. J., Lucknow The client had claimed Rs. 1,36,880/- through arbitration against the unauthorised trades which was rejected by the arbitrator on account of merrits on 18-02-2006. Thereafter, the application of the client u/s 34 of the arbitration act was dismissed by the D. J. Lucknow on 06-02-13. Case was dismissed by D. J. , Lucknow on 06-02-13
7 Parth Singh Rai
Case No.418/12
CDRF, Jaipur This complaint has been filed by Parth Singh Roy (UCC - 111591) against the loss of Rs. 300000/- (Rs. Three Lacs) caused by employees of Jaipur branch of KSBL in his Trading account which was adjusted by sale of shares from his demat account. KSBL has filed its written submission and evidence and case is posted for arguments on November 18, 2015
8 Surendra Singh
690/2007 CDRF -II, Lko This complaint has been filed by Mr. Surendra Singh (Client Id. - 21177324) against the fraudulent transfer and sale of 50 shares of Matrix Lab Limited on 21-12-2004 and 35 shares on 23-12-2004 from his demat account without his instruction. KSBL has filed its written submission and evidence
32
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
and case is posted for arguments on November 21, 2015
9 Gurbux Singh 691/2007 CDRF -II, Lko This complaint was filed by Guru Bux Singh (died on 19-03-2009) and his wife Smt. Sheela Kaur who's joint demat a/c no. is 21160811. They alleged that O. P. no. (1) , (2) and (3) have fraudulently transferred and sold 300 equity shares of HDFC from their joint demat account in collusion with each other . So, they have claimed the shares or the value of the same along with 15% interest. KSBL has filed its written submission and evidence and case is posted for arguments on November 21, 2015
10 Harsh Kr.Chawla
1111/2009 CDRF-I, Lko This complaint has been filed by Harsh Kumar Chawala U C C - 233L 4263 and Clint Id - 21332619. He has alleged that unauthorised trades were executed in his trading account from 18-05-2007 to 07-06-2007 due to which he incurred a loss of Rs. 80000/- in his trading account. So, this amount he has claimed along with other reliefs. This case has been dismissed by CDRF, Lucknow, on 21-07-15.
11 Ayodhya Nath Chaturvedi vs Dhirendra Mohan Chaturvedi & others
407/2012 Civil Judge(S.D) -II,Mathura
As per para (25) of the Plaint, this suit / Injunction petition has been filed by the plaintiff Ayodhyanath Chturvedi for order of injunction against the defendant no. (1) Dhirendra Mohan Chaturvedi and defendant no. (2) Virendra Mohan Chaturvedi and all the other defendants that the shares which have been transferred by the defendant no. (1) and (2) by way of cheating from the demat account of the plaintiff be not further transferred to any other's demat or trading account and the same be not sold by any of the defendants or the proceeds of the same be not given to defendant no. (1) or (2) by any other defendant. So, the court has summoned KSBL i. e. defendant no. (3) and (4) for submission of the status of the demat or trading acounts lying with Karvy in the name of the plaintiff and the defendant no. (1) and (2). No specific claim of any amount has been made by the complainant from Karvy in this case. KSBL has filed its written submission and evidence and case is posted for arguments. Last Hearing date was April 9, 2015.
12 Daya Shankar Dubey
451/2012 CDRF, Jaipur In this complaint, the client Mr. Daya Shankar Dubey has denied from his trades and has allegated that the trades have been executed in his trading account without his instruction except a few trades. And, he has claimed for the amount of cheques he had given for purchase of some particular shares i. e. valued at Rs.6,20,000/- along with compensations. KSBL has filed its written submission and evidence and case is posted for arguments. Last Hearing date was March 3, 2015.
33
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
13 Raj Narayan Tandan
Case no.87/09
CDRF Sitapur As per complaint, the client Mr. Raj Narain Tandon has clained Rs.44795/- for the loss caused to him because 60 shares of Imfosys Technology could not be sold as per his instruction and time and he had to pay Rs.3430/- for the shares auctioned. Hence, he suffered a loss of Rs.48225/-. further, he has claimed Rs. 10000/- as cost of the case and Rs.15000/- for mental agony and harassment and Rs.23000/- for deficiency in service. Therefore, total claim = Rs.96225/- which he has wrongly mentioned in complaint as Rs.98225/- along with interest @ 18% per month. KSBL has filed its written submission and evidence and case is posted for arguments on September 21, 2015
14 Ram Gopal Verma
Case No.137/2008
CDRF Mirzapur
As per complaint, client Ram Gopal Verma has claimed the value of 300 shares of allahabad bank @ Rs.99/- per share = Rs. 29700/- along with 5% interest from 02-01-05 = Rs.35640/- , Rs. 25000/- for mental agony and harassment and Rs.20000/- for cost of the case. hence, Total = Rs.80640/- In this case written submission on behalf of KSBL has been filed. Submission of evidence by Complainant is awaited. Last Hearing date was August 26, 2015.
15 Nirupama Shrivastava
326 / 2009 CDRF - I, Lucknow
The complainant Nirupama Srivastav has claimed 1000 shares of DCW Ltd., 1000 shares of IGL, 50 shares of Maruti Suzuki India Ltd. And 37 shares of Allahabad Bank from the O.P. KSBL along with cost of mental agony and the cost of the case. This case has been dismissed by CDRF, Lucknow, on 18-09-14.
16 Amisha 47 / 2011 A D J - Mandsaur
As per arbitration award dated 10-11-2008 Amisha Modi had to pay to the applicant Karvy Rs.3,10,796/- within 30 days from the date of award against which the client has filed an application u/s 34 of the arbitration act before the D. J. Mandsaur, is pending. The counter claim of the client of Rs.15,55000/- was rejected by the arbitrator. A Revision is pending for final argument. Last Hearing date is July 29, 2015.
17 Smt. Santosh 46 / 2011 A D J - Mandsaur
As per arbitration award dated 07-11-2008 Smt. Santosh had to pay to the applicant Karvy the claim amount of Rs. 1,14,539.89 within 30 days from the date of award against which the client has filed an application u/s 34 of the arbitration act before the D. J. , Mandsaur, which is pending thereat now. And, the counter claim of the client of Rs.7,50,000/- was rejected by the arbitrator. In this case , a Revision is pending for final argument. Last Hearing date is July 29, 2015.
34
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
18 Banita Jain Comp 517/2008
CDRF, Kanpur Dehat
The complainant has alleged that she had given a cheque of Rs.300400/- to the O.P. towards her Trading account no.285500003 which was duly received by the O.P. on 11-08-2007. But she had not given any instruction for execution of any trade in her account. Whereas, the O.P. has executed many trades without her instruction and has caused loss to the complainant to the tune of Rs. 300400/- and again a debit of Rs.70022.35 is reflecting in her trading account for which the O.P. is responsible. So, the complainant has claimed a sum of Rs. 300400/- along with cost and compensation towards the interest, cost and litigation. Case was dismissed against the complainant on 13-09-13 for non presentation of evidences by the Complainant.
19 Priti Poddar 706 /2009 Civil Judge (S D), Kanpur Nagar
This suit has been filed by the plaintiffs for mandatory injunction against the defendants. In this suit the value of shares have been mentioned in three parts such as Rs.7,41,629.95 and Rs.2,01,821.35 and Rs.9,43,451.30 which have been transferred fraudulently from the demat accounts of the plaintiffs and proforma defendant no.4 and 5. In this suit, defendant no. 3. (1) and (2) i.e. Karvy Stock broking Limited, are the proforma parties. And the demat accounts related to this suit have been frozen as per instruction of the court. KSBL has filed its written submission and evidence and case is posted for arguments on September 30, 2015
20 Sudesh Kr. Gupta
D. J., Patiala House,
This objection petition u/s 34 of the Arbitration Act has been filed by Mr. Sudesh Kumar Gupta against the award dated 11-08-2012 passed by the Arbitrator in favour of KSBL. As per award, the amount of Rs.8,18,026.16 is recoverable from the the respondent Sudesh Kumar Gupta on account of trades carried out by him in his account. KSBL has filed its reply and case is posted for arguments on September 19, 2015.
35
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
21 Sanjogita Gupta
D. J., Patiala House,
This objection petition u/s 34 of the Arbitration Act has been filed by Smt. Sanjogita Gupta against the award dated 01-08-2008 passed by the arbitrator in vafour of the applicant KSBL. As per award, the respondant Sanjogita Gupta shall pay Rs.5, 04,198.84 to the applicant KSBL along with simple interest @ 10 % p a from the date of award till the date of payment. KSBL has filed its reply and case is posted for arguments on September 19, 2015.
22 Alpana Malik D. J., Patiala House,
This objection petition u/s 34 of the Arbitration Act has been filed by Smt Alpana Malik against the award dated 24-07-2008 passed by the arbitrator in favour of the applicant KSBL. As per award, the respondant shall pay Rs.1,38,916.91 to the applicant along with simple interest @ 10% p a from the date of order till the date of payment. . KSBL has filed its reply and case is posted for arguments on September 19, 2015.
23 Manju Saraswat
Execution Case No.62/2011 - In Re: Complaint No.362/2008
CDRF, Kanpur Nagar
This Execution case was filed by Smt. Manju Saraswat and her daughters for enforcement of the order dated 26-04-2011 passed by the CDRF Kanpur Nagar in complaint no. 362/2008. The Consumer Forum, Kanpur Nagar has issued certificate of recovery against the O.P. KSBL against which an Appeal has been filed by KSBL before, the State Commission at Lucknow, upon which the proceeding of recovery has been stayed. Appeal is pending for final hearing before the state Commission, Lucknow. Next Hearing date is yet to be fixed.
24 Kamala Devi Title Suit No.
Civil Judge (J D), Patiala
This suit has been filed by Smt. Kamala Devi against KSBL and others for injunction (against the respondants) on transfer or sale of her 1200 shares of ESSIL Packaging Ltd. From the demat account where the same has been wrongly transferred and for decree of declaration of title in favour of the plaintiff. The said shares were purchased by the plaintiff in her Trading account (with Karvy branch at Patiala) which were then kept in her demat account (with Karvy branch at Patiala) and thereafter transferred to the demat account of defendant no. (2), as per plaint. W. S. on behalf of Karvy has been filed. This suit has been dismissed on 17-08-15 by Civil Judge, Patiala.
36
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
25 Zakiya Sultana Execution case no.03/2013 against Complaint No. 58/2008
CDRF, Jaunpur
This complaint has been decided on 07-09-2012 in favour of the complainant. As per judgment, the complainant had opened a demat account with Karvy at Jaunpur, in which she had deposited 45 shares of Reliance Industries and 45 shares of Reliance communication. The O.P./ Karvy had already provided DIS Booklet to Zakiya. However, another DIS Booklet was erroneously issued in the name of Zakiya Sultana., to one Arshad Ali when he presented a printed application form in the name and signature of Zakiya Sultana (to karvy branch) which authorised Mr. Arshad Ali to receive DIS slips on behalf of Zakiya Sultana. And, thereafter the shares in question were transferred through two of those DIS slips bearing signature of Zakiya Sultana which were not matching with the signature of the client (given on Member - Client - Agreement) to the demat account of one Mr. Pramod Kumar Verma of Abhipra Capital at Jaunpur. The O.P. Karvy had absolutely denied the allegations of the complainant. But, as per order, the O.P. will either provide 45 shares of Reliance Industries and 45 shares of Reliance Communication to the complainant within one month or the value of those shares as per value on the date of transfer of the same along with Rs.1000/- as cost of the case. Claimed amount is approx 1,15,548/- This execution case has been closed by CDRF, Jaunpur, after Compliance of order.
26 Smt. Saroj Gupta
comp.203/2010
CDRF - I, Lucknow
The complainant Saroj Gupta has claimed Rs. 97,379.30 as cost and compensation towards the loss caused to her shares and the litigation. She has alleged that she has kept many shares in her demat account no.11153499 which was suspended by the O.P. for a long time even after depositing the A M C and the required address proof to the O.P. She could not make transaction of her shares lying in the demat account. So, she suffered loss in respect of value of the shares. KSBL has filed its written submission and evidence and case is posted for arguments on November 23, 2015
27 Praveen Kr. Singh
1091/12 CDRF, Lucknow
Complaint of unauthorized trades executed in trading account. Claim of Rs. 5,50,000/-. KSBL has filed its written submission and evidence and case is posted for arguments. Last date of Hearing was March 11, 2015
28 Banwari Pd Maurya-Complainant - 1 Brij Mohan
366/2012 CDRF, Gorakhpur
Complaint of unauthorized trades executed in trading account of Banwari Pd Maurya (Complainant - 1) who has claimed Rs.600000/- as well as Brij Mohan Maurya (Complainant -2) who has claimed Rs.6,50,000/- through Consumer Complaint. Prior to this Complaint, one Arbitration filed by Banwari Pd Maurya by A. M. No.F&O/D-0063/2012 was decided in favour of KSBL by NSE Award
37
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
Maurya -Complainant - 2
dated 30-11-2012. And, another Arbitration filed by Brij Mohan Maurya by A. M. No. F&O/D-0064/2012 was decided in favour of KSBL by NSE Award dated 30-11-2012. KSBL has filed its written submission and evidence and case is posted for arguments. However Hearing date is not yet fixed.
29 Tribhuwan Das 73/2013 CDRF, MATHURA
The complainant had claimed that the O.P. had executed unauthorized trade in his acount and caused a loss of Rs. 259903/- and Paise 75. But this claim has already been decided by the Arbitrator Mr. Divakar Dev in favour of the O.P. and the application was rejected. KSBL has filed its written submission and evidence and case is posted for arguments. However Hearing date is not yet fixed.
30 Abhinandan Jain
1529/13 CDRF, jaipur The complainant Abhinandan Jain (client of Jaipur) has claimed as follows: Rs.15000/- for the loss caused in trading, Rs. 11000/- as cost of the case and Rs. 10000/- as compensation for mental agony. KSBL has filed its written submission and evidence. The case has been posted for arguments on September 17, 2015
31 Lokpal Sharma 278/12 CDRF, Jaipur The Complainant has demanded Rs.150000/- for the loss incurred by him in his trading account and Rs. 21000/- for Advocate's fee along with other compensation. KSBL has filed its written submission and evidence. The case has been posted for arguments on October 23, 2015.
32 Anil Kumar Taneja
Contempt Case No.78/2013 In Re: Complaint No.296/2011
CDRF, Ajmer As per order of the CDRF, Ajmer, O. P. No.3, KSBL, Ajmer, has to pay Rs. 49000/- of the application amount with interest @ 9% and Rs. 1000/- as cost of the case. Case Closed on 21-11-2013 after compliance of the order passed in Complaint No.296/2011, on payment of Rs.63230/- to the complainant .
38
S.NO PARTIES NAME
CASE NO. NAME OF COURT
CASE DETAILS
33 Durgesh Narain Khanna
Appeal No. A/2013/621
State Commission, Lucknow
This appeal has been filed by Durgesh N. Khanna against the impugned order dated 29-12-12 of the CDRF, Kanpur. The complainant had claimed Rs.110992/- along with compensation in his Complaint No.08/2008 filed before the CDRF, Kanpur Nagar. KSBL has filed its reply and case is posted for arguments. However Hearing date is not yet fixed.
34 Amarjit Singh Case No. 271/2013
CDRF, Ambala City
The Complainant gave a cheque of Rs.5000/- to the O. P. for purchase of shares which was cleared by the O.P. But, this amount was wrongly crdited to the trading account No.343160 of the Complainant's wife in place of the trading account No.343197 of the Complainant, without the consent of the complainant. And, the O. P. failed to rectify the error even after legal notice from the Complainant. The Complainant has claimed Rs.5000/- with interest @ 18% and Rs.20000/- towards mental agony and Rs.5000/- as cost of the case. This Complaint has been dismissed, as per branch.
35 KailashChander Trama
Cr. Appeal ---/2013
Dist. & Sessions Judge
This appeal has been filed by the appellant against his conviction in cheque bounce case against two cheques of Rs.100000/- each. The appellant has been acquitted by the Court after payment given by appellant to KSBL by Judgement dated 12-11-2013.
36 Avtar Singh Gill
Consumer Complaint
CDRF, Ludhiana
This Complaint has been filed for reversal of 1000 shares of Idea, 4000 shares of J P Hydro and 3000 shares of R P L or the value of the shares in question along with compensation. This case has been decided and closed in favour of KSBL by judgment dated 27-03-2014 by CDRF, Ludhiana.
37 Patwant kaur Gill
Consumer Complaint
CDRF, Ludhiana
This Complaint has been filed for reversal of 2000 shares of Ispat Industries, 2000 shares of J P Hydro,2255 shares of Venkey's India Ltd. And 7000 shares of Zee News or the value of the shares in question as on 19/12/2009 along with compensation. This case has been decided and closed in favour of KSBL by judgment dated 27-03-2014 by CDRF, Ludhiana. .
39
S.No CASE NO
NAME OF THE PARTIES
COURT SUBJECT AMOUNT (Rs.) REMARKS
1 O P No. 106 of 2013
Sujatha Gattu and others Vs. KSBL and others
I Senior Civil Judge, Hyderabad
The Plaintiff filed petition before the Civil Court for granting Succession Certificate. As her deceased husband was holding some shares. The matter posted for enquiry.
Not applicable, since KSBL is formal party and there is no liability to KSBL. KSBL will implement the orders of the Court.
The matter posted for enquiry.
2 O S No. 1084 of 2013
Srivalli Vs. Jyothy and others
District Judge, L B Nagar,
The Civil Suit filed for partition and allotment of share in the property left over by deceased Sri. S Bhaskar Rao. The shares of the deceased are said to lying in DP account maitained by KSBL. Hence, suit filed for their share, both in movable and immovable.
Not applicable, since KSBL is formal party and there is no liability to KSBL. KSBL will implement the orders of the Court.
The matter posted for enquiry.
40
MATTER PERTAINING TO KARVY STOCK BROKING LIMITED PENDING BEFORE THE NATIONAL CONSUMER COMMISSION, NEW DELHI
1 Revision Petition No. 39 of 2013
C H N V Sri Ram Vs. KSBL
The National Consumer Commission, New Delhi
The Complaint filed before the District Forum, Machilipatnam for transfer of 40 shares of MRF along with costs of Rs. 10000/ and Rs. 20000/ as compensation. But the Forum granted 40 shares of MRF along with costs of Rs. 1000/ and Rs. 5000/ as compensation. Against the said orders, KSBL filed appeal before the State Commission, Hyderabad. In the said appeal the Commission set aside the orders passed by the District Forum. Now, the Complainant filed Revision Petition before the National Consumer Commission, New Delhi. On receipt of the notices from the National Commission, New Delhi, KSBL has filed vakalat before the Commission. The matter posted for arguments of Complainant's Counsel
40 shares of MRF (Rs. 9,05,650/)
S.No. Name of the Client Amount Exchange Remarks
1. Bhaskar M Pandya 13,58,486 NSE-Mumbai
On receipt of the Award passed by the Arbitrator, the Client filed appeal against the award in Bombay High Court and the same is pending for hearing.
2 Jitendra
Chaudhary 5,56,823 NSE-
Mumbai On receipt of the Award passed by the Arbitrator, the Cleint filed appeal before the High Court of Mumbai, but, the High Court dismissed the Appeal. Once again, the Client preferred an appeal before the Supreme Court of India.
No Client Name Amount Case Number Court Name
1 S.Narayanasamy 50,000 os 486/2008 1ST ADM,Coimbatore
2 P.Shanmugam 4,000 OS 851/2010 PDM,Coimbatore
3 Thilago Sulochana 15,54,000 OS 654 / 2010 1 ADJ, Coimbatore
4 Tamilarasi 3,20,856 EP 225/2010 DJ, Coimbatore
5 V Chidambaram 5,89,628 EP 226/2010 DJ, Coimbatore
41
No Client Name Amount Case Number Court Name
6 C Indhra 73,171 EP 227/2010 DJ, Coimbatore
7
V Arumugam 2,31,408 EP 228/2010 DJ, Coimbatore
Service tax matters, under dispute The Department of Central Excise and Customs has raised a demand with respect to the Service Tax on brokerage/commission earned on distribution of mutual funds of Rs. 5,157,611 (Previous year: Rs. 5,157,611) which has been contested by the erstwhile Karvy Securities Limited, now merged with the Company, before the Honourable High Court of Andhra Pradesh. The entire amount had been paid under protest. The High Court of Andhra Pradesh has quashed the said circular vide order dated 1 September 2004. Aggrieved by the said order, the Department of Central Excise and Customs has filed a Special Leave Petition with the Honourable Supreme Court of India, which is pending for hearing.
DETAILS OF LITIGATION/ DISPUTES PERTAINING TO KARVY COMPUTERSHARE PRIVATE LIMITED
Contingent Liability as of August, 2015 - Corporate Registry Division
Sl No.
Case No. Court/ Forum Complainant name Unit Nature of complainant Contingent Liability (in
Rs.)
1 66/98 Rajnandgoan Ms Sunitha Corporation Bank Non receipt of share cert after transfer
17,800.00
2 647/98 Mylapore V Ramachandran & Padma
Ramachandran IDBI - equity
return of interest & deficiency of service
1,03,120.00
3 1/99 Nalbary Dulal Deka IDBI - equity transfer of shares & mental agony
30,000.00
4 CD /98 Chennai Nitya Mohan Kolipakkam IDBI - equity non receipt of fully paid stickers & compensation
50,000.00
5 148/98 Chennai Ghanshyam Sahu IDBI - equity non receipt of fully paid stickers & compensation
2,00,000.00
6 CDRF Karnal Narendra Kumar Flexi Bonds II issue of Deep Discount Bonds or refund of amount and costs
9,500.00
42
Contingent Liability as of August, 2015 - Corporate Registry Division
Sl No.
Case No. Court/ Forum Complainant name Unit Nature of complainant Contingent Liability (in
Rs.)
7 CDRF Raebarelli Ram Prakash Trivedi Bank of Baroda
Waive interest on call money and compensation for delay in service and costs
21,000.00
8 CDRF Raebarelli Jagdish Saran Agarwal Bank of Baroda transfer of shares, compensation & costs
25,000.00
9 CDRF Karnal Pradeep Kumar Bank of Baroda issue of fully paid stickers, compensation & costs
50,000.00
10 CDRF Pratapgarh Shiripal Mishra Bank of Baroda
issue of fully paid stickers and dividend for the year 1997-98, compensation & costs
67,290.00
11 CDRF Jhunjhunu Ratan Lal Bank of Baroda
issue of fully paid stickers and dividend for the year 1997-98, compensation & costs
6,240.00
12 148/98 Chennai C L Choudhary & others Agro Dutch transfer of shares, compensation & costs
13,200.00
13 ID
584/2000 Hyderabad Sudha Rani Karvy
Matter posted for trial, cross examination
56,448.00
14 126/2008 Jhansi Meera Devi Gupta Power Grid
allotment of shares, financial loss, legal expenses, mental agony – case closed
1,25,402.00
15 244/2008 Shivpuri Lokesh Sharma Power Grid non-credit of shares and refund
16,000.00
16 214/2008 Jalandhar Ashok Kumar Arora REC non credit of shares, refund, legal expenses, travelling expenses, court
22,941.00
43
Contingent Liability as of August, 2015 - Corporate Registry Division
Sl No.
Case No. Court/ Forum Complainant name Unit Nature of complainant Contingent Liability (in
Rs.)
fee, mental agony, etc
17 131/2009 Bareilly forum Kanhaiyalal Agarwal Bank of Baroda Transmission of his name as karta in place of the deceased karta.
25,000.00
18 38/2009 Consumer forum at
Kota Arun Kumar Sharma Strides Arcolabs
Claim for 25 shares of the company in lieu of the old shares.
50,000.00
19 752/09 Jaipur forum Mohit Agarwal JSW Steel claim for 130 shares after merger and benefits.
50,000.00
20 872/09 Jaipur Forum Neeraj Gupta GMRI Non refund in IPO – case closed
15,000
DETAILS OF LITIGATION/ DISPUTES PERTAINING TO KARVY COMTRADE LIMITED
S. NO.
Client Name Client Code
Branch Region Amount involved
Appeal filed by
Court Status as on 30-August -2015
Nature of case
1 Pooja Cold Storage
Sri Ganganagar Rajasthan 22,36,703 KCTL City Civil Court Hyderabad
Judgment came in our favour
Civil suit filed for freeze other accounts of the client.
2 Amarnath Cheppali
800727 PUNE (Sub Brok)
Maharashtra 1,94,850
KCTL Criminal Court erramanzil
Case transferred to Pune Criminal court
Cheque bounce case for recovery of the amount, Criminal case.
44
S. NO.
Client Name Client Code
Branch Region Amount involved
Appeal filed by
Court Status as on 30-August -2015
Nature of case
3 Vanita Luthra
56158 MUMBAI COMM (Sub brok)
Maharashtra 59,00,000 KCTL Nampally Criminal court
Investigation by the police done
Private complaint for recovery of the amount from the client.
4 Sivashakthi 36428 ERODE Coimbatore 8,00,000
KCTL Nampally Criminal court
Investigation by the police done
Private complaint for recovery of the amount from the client.
5 Arun Kumar 36490 CHITRADURGA SOUTH KARNATAKA
36,255 KCTL Bangalore Criminal Court
Appearance of the client Cheque bounce case for recovery of the amount, Criminal case.
6 Nazar 55083 KOCHI Kerala 2,52,192
KCTL Criminal court Kochi
Investigation by the police Cheque bounce case for recovery of the amount, Criminal case.
7 Purushotam Nagapal and State of Rajasthan
Sri Ganganagar Rajasthan Client Rajasthan High court
Stay of all proceedings Cheating case filed by the client against NCDEX and also made KCTL as a party, criminal case in FIR No. 2/12. There after KCTL has filed Quash Petition in the High Court of Jodhpur, Rajasthan challanging the FIR No. 2/12. The same is pending.
45
DETAILS OF LITIGATION/ DISPUTES PERTAINING TO KARVY INVESTMENT ADVISORY SERVICESLIMITED [FORMERLY KNOWN AS KARVY INSURANCE BROKING LIMITED]
Sl.No Name of the Complainant
Matter Pending before
Case Description Amount Claimed Remarks/Next Hearing Date
1 Arvind Kumar Singh Consumer Forum
Customer was sold the policy as a single premium but the policy had a 3 year premium paying term. The customer has already sent a notice to SBI life on 16/05/2011 for which SBI has sent response on 24/05/2011 denying the refund of Rs.25000 premium
25,000
Appealed against the Judgement/Order of the consumer Forum. Next hearing date is on 1st Sep’15
2 T R Mohana Consumer Forum
Customer has taken NHP group insurance policy with NICL for 1 year. Claim rejected due to non submission of Customer id proof.
26,131
Case dismissed in our favour.
3 Kamuben Patel Consumer Forum
Customer has taken a NHP group insurance policy with sum insured for 4.00 lac. The customer was diagnosed with "Bilateral Osteoarthritis of Knee Joint" and undergone a surgery. Claim rejected due to non submission of Original Money receipt for Rs.4,01,391/- and also non submission of Customer id proof.
4,05,835 Case dismissed on 29th Oct’14
P Naeem Khan Consumer Forum
As per customer he was promised that a coverage for Rs.1,52,000 but policy was issued for SA of Rs.82,192.
40,200
Hearing date on 30th Oct’15
• Policy was not cancelled even after submission of all relevant documents
• Was not provide the free accidental cover of Rs.100,000
46
Sl.No Name of the Complainant
Matter Pending before
Case Description Amount Claimed Remarks/Next Hearing Date
• Customer is now claiming for cancellation of policy + refund of premium Rs.15200+ Rs.25000 expense for treatment on account of ill health + 10000 miscellaneous expenses.
5 Shamshad Begum Legal Notice
The complainant has taken the medical insurance policy to cover health insurance from National Insurance Company Limited vide Policy Nos.154400/46/10/8500000691, UHID No.NIC0008462907. The part settlement was already done by NICL. Remaining is pending due to submission of incomplete documentation.
2,50,000 Complaint dismissed in our favour on 8th
Nov’14.
6 Ashok Modi Consumer Forum
Claim rejected due to the complainant has declared his previous aliments. 63,457 Hearing date on 8th September 2015
7 BETHA RAMA RAO Consumer Forum
Claim rejected due to non submission of Doctor's certificate, past prescription, Original medicine bills, Original Investigation bills, Customer Id proof and age proof, etc.,
35,000
Case dismissed on 21st May 2015.
8 B Radhakrishna Consumer Forum
Customer has taken an mediclaim policy for 1.00 lac sum insured. Complaint received towards non renewal of NHP Policy.
3,711 Pending
9 Parul Saxena Legal Notice
Free Look Cancellation case. TALIC has responded confirming that the policy documents, as per their dispatch records, was received by the customer on 02nd Feb
Final Judgement awaited
47
Sl.No Name of the Complainant
Matter Pending before
Case Description Amount Claimed Remarks/Next Hearing Date
2011 & cancellation request was received on 03rd Nov 2011. Hence request for cancellation & subsequent refund has been rejected.
10 Ashok Kumar Chaubey
Legal Notice
Customer has taken a mediclaim policy under NHP. Customer's wife has undergone pregnancy & had a benefits upto to 25,000/-. Due to non submission of documents in required time, hence the claim got rejected.
25,000 Pending at Forum, Next hearing 26th November
2015
11 Kanthi Nagaraj Consumer Forum / Legal Notice
Customer has taken NHP group insurance policy with NICL for 1 year. Customer has undergone eye treatment and paid Rs.24,000/- towards treatment charges. Due to non submission of required documents in time, the claim got rejected.
24,000 Pending at Forum, Next hearing 4th September
2015
48
DETAILS OF ARBITRATION CASE FILED AGAINST KARVY INVESTOR SERVICES LIMITED
S. No.
Case No.
Name of the Party
Court & Place
Case Description Claim Amount (Rs.)
Remarks
1 NA Escorts Services Limited
Sole Arbitrator, Sri Rajeev Saxena, Advocate, New Delhi.
KISL received a legal notice dated 3/1/2005 from the Counsel, Mr Pavan Kumar Saxena, Advocate of Escorts Securities Limited, New Delhi. In the said notice, the Counsel for Escorts Securities Limited advised the KISL to pay Rs.14,86,350/- to Escorts Securities Limited towards its commission for referring an investor to invest in Onconova Therapeutics Inc. In reply to the notice, KISL sent a reply dated 15/1/2005 stating that the allegations made in the notice are not valid and far from the truth. KISL denied the conducting of meeting on 3/10/2002 at Delhi and signing of Memorandum of Understanding by Mr P B Ramanujam. In our reply notice we categorically mentioned that Mr P B Ramanujam is not at all authorised signatory of the Company and the Board of Directors has not given any power to enter into commercial terms and agreements with any other Company and further we have mentioned that if Mr P B Ramanujam signed minutes of meeting and Memorandum of Understanding the same is not binding on the Company.
1486350.00 (along with interest)
Without considering the reply Escorts Securities
Limited have filed Arbitration Petition before
the Arbitrator Mr Rajeev Saxena, Advocate,
New Delhi. At the time of filing our counter and
objections for arbitration petition filed by
Escorts Securities Limited, we have mentioned
that the allegations are not true and correct.
The sole Arbitrator posted the matter for
Escorts Securities’ reply affidavit / petition.
After filing of the reply affidavit, the Arbitrator
is conducting the proceedings. The Counsel of
Escorts Securities Limited is conducting cross
examination in the said matter. During cross
examination, Authorised Signatory of Karvy
Investor Services Limited, produced original
Minutes of the Meeting records from the date
of appointment of Mr. P B Ramanujam before
the Sole Arbitrator. After verification of the
original records, the Counsel for Escorts
requested time for further cross examination.
But, time and again, the Counsel is taking time
from the Sole Arbitrator. Meanwhile, we
requested the Arbitrator for closing of
arbitration proceedings for non-conducting of
cross examination. The Sole Arbitrator finally
posted the matter for cross examination and as