FORM C - seers.group · 1 FORM C Securities & Exchange Board of India (Portfolio Managers)...
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Transcript of FORM C - seers.group · 1 FORM C Securities & Exchange Board of India (Portfolio Managers)...
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FORM C Securities & Exchange Board of India
(Portfolio Managers) Regulations, 1993
(Regulation 14)
We confirm that:
(i) The Disclosure Document forwarded to the Board is in accordance with the SEBI (Portfolio
Managers) Regulations, 1993 and the guidelines and directives issued by the Board from
time to time.
(ii) The disclosures made in the document are true, fair and adequate to enable the investors to
make a well-informed decision regarding entrusting the management of the portfolio to
us/investment in the Portfolio Management.
(iii) The Disclosure Document has been duly certified by an independent Chartered Accountant
as on 23rd October 2019.
The details of the Independent Chartered Accountant are as follows:
Name of the firm: Mehndiratta and Associates
Proprietor: Jatin Mehndiratta
Membership Number: 511278
Address: 61, 2nd Floor, Panchkuian Road, New Delhi 110001
Telephone Number: +91-11-23586204
For Seers Fund Management Private Limited
Date: October 23, 2019
Place: Delhi
Rajesh Seth
Principal Officer
Seers Fund Management Private Limited
812, 8th Floor, Wave Silver Tower,
Sector 18, NOIDA 201301.
Telephone: +91-120-4566172, +91-9999646222
Mobile: +91-9811519025
Email: [email protected]
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DISCLOSURE DOCUMENT
SEERS FUND MANAGEMENT PRIVATE LIMITED
SEERS ENDURING PORTFOLIO
(i) This Document has been filed with the Securities and Exchange Board of India (SEBI) along
with the Certificate in the prescribed format in terms of Regulation 14 of the SEBI (Portfolio
Managers) Regulations, 1993.
(ii) The purpose of this Document is to provide essential information about the portfolio services in
a manner to assist and enable you in making informed decision for engaging Seers Fund
Management Private Limited as a Portfolio Manager.
(iii) This document gives necessary information about us as ‘Portfolio Manager’ required by you as
an investor before investing. You are advised to read this document and retain this document for
future reference.
(iv) All the intermediaries like Stock Brokers, Depository Participants and Custodians involved in
the scheme are registered with SEBI.
(v) The details of Principal Officer are as follows:
Mr. Rajesh Seth,
Chief Executive Officer,
Seers Fund Management Private Limited
812, 8th Floor, Wave Silver Tower,
Sector 18, NOIDA 201301.
Telephone: +91-120-4566172, +91-9999646222
Mobile: +91-9811519025
E-mail: [email protected]
(vi) The Disclosure Document is dated October 23rd, 2019.
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TABLE OF CONTENTS
1 Disclaimer Clause 6
2 Definitions 6
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Description –
I. History, present business and background of the Portfolio Manager
II. Promoters and Partners of the Portfolio Manager and their background
III. Group Companies/Concerns
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4 Penalties, pending litigation or proceedings, findings of inspection and investigations
for which action has been taken or initiated by any Regulatory Authority 17
5 Services offered by the Portfolio Manager 17
6 Risk Factors 18
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I. Client Representation
II. Disclosure in respect of transactions with related parties pertaining to Portfolio
Management Services
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8 Financial Performance of the Portfolio Manager 23
9 Portfolio Management Performance 24
10 Nature of expenses 24
11 Taxation 25
12 Accounting Policy 28
13 Client/Investor Services 30
14 Grievance Redressal and Dispute Settlement mechanism 31
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1. Disclaimer
This Document has been prepared in accordance with the SEBI (Portfolio Managers)
Regulations, 1993.
The Document has been filed with the Securities and Exchange Board of India (SEBI) and has
neither been approved nor disapproved by SEBI nor has SEBI certified the accuracy or
adequacy of the contents of this Document.
2. Definitions
In this Disclosure Document, unless the context otherwise requires:
“Act” means The Securities and Exchange Board of India Act, 1992 (15 of 1992);
“Affiliate” shall include any Company, Body Corporate, Individual or Other Person who or
which is an Affiliate of or who or which is in any manner associated with or related to the
Portfolio Manager or any Director or Shareholder of the Portfolio Manager or any Holding
Company or Subsidiary of the Portfolio Manager or any Company under common control of the
Portfolio Manager.
“Agreement” means the Portfolio Management Services Agreement (PMS Agreement) along
with the Schedules and Annexures attached thereto, including all the modifications, alterations,
additions or deletion thereto, made in writing, executed between the Client and the Portfolio
Manager, for providing portfolio management services to that Client, stating therein the terms
and conditions on which the Portfolio Manager shall provide such portfolio management
services to the Client;
“Application” means the application made by the Client to the Portfolio Manager to place its
funds and/or securities with the Portfolio Manager for Discretionary Portfolio Management
Services. Upon execution of the PMS Agreement by the Portfolio Manager, the Application
shall be deemed to form an integral part of the PMS Agreement. Provided that in case of any
conflict between the contents of the Application and the provisions of the PMS Agreement, the
provisions of the PMS Agreement shall prevail;
“Assets” means the Portfolio and/or the Funds;
“AUM” means the Assets under Management.
“Bank Account” means one or more accounts opened, maintained and operated by the
Portfolio Manager or the Custodian, in the name of the Client or in the name of the Portfolio
Manager, with any of the Scheduled Commercial Banks.
“Body Corporate” shall have the meaning assigned to it in or under clause (11) of section 2 of
the Companies Act, 2013
“Client” means any person who applies/registers with the Portfolio Manager, for availing the
services of portfolio management, of the Portfolio Manager.
“Custodian” means a Custodian registered under Securities and Exchange Board of India
(Custodian of Securities) Regulations, 1996 appointed by the Portfolio Manager, for
maintaining custody of funds and securities of the Client;
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“Depository Account” means one or more account or accounts opened, maintained and
operated by the Portfolio Manager or the Custodian in the name of the Client or the Portfolio
Manager/Custodian with any Depository or Depository Participant registered under the SEBI
(Depositories and Participants) Regulations 1996;
“Depositary Participant” means an entity registered under the SEBI (Depositories and
Participants) Regulations 1996.
“Disclosure Document” means Disclosure Document issued by the Portfolio Manager, as
updated from time to time, and filed with SEBI, pursuant to the Regulations.
“Discretionary Portfolio Management Services” means the portfolio management services
rendered to the Client, by the Portfolio Manager on the terms and conditions contained in the
PMS Agreement, where-under the Portfolio Manager exercises any degree of discretion in the
investments or management of assets of the Client;
“Financial Year” means the year starting from April 1 and ending on March 31 in the
following year.
“Funds” means the monies managed by the Portfolio Manager on behalf of the Client pursuant
to the PMS Agreement and includes the monies mentioned in the Application, any further
monies placed by the Client with the Portfolio Manager for being managed pursuant to the PMS
Agreement, the proceeds of the sale or other realization of the Securities, interest, dividend or
other monies arising from the Assets, so long as the same is managed by the Portfolio Manager;
“Funds Managed” means the market value of the Portfolio of the Client as on a date.
“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 a Client.
“Group Companies” means group companies where there are common directorship/
management of the Portfolio Manager
“Net Asset Value (NAV)” means the market value of Portfolio.
“Person” includes any Individual, Partners in a Partnership Firm, Central or State Government,
Company, Body Corporate, Cooperative Society, Corporation, Trust, Society, Hindu Undivided
Family or any other Body of Persons, whether incorporated or not;
“Portfolio” means the Securities managed by the Portfolio Manager on behalf of the Client
pursuant to the PMS Agreement and includes any Securities mentioned in the Application, any
further Securities placed by the Client with the Portfolio Manager for being managed pursuant
to the PMS Agreement, Securities acquired by the Portfolio Manager through investment of
funds and bonus and rights shares in respect of Securities forming part of the Portfolio, so long
as the same is managed by the Portfolio Manager;
“Portfolio Management Fees” shall have the meaning attributed thereto as provided in the
PMS Agreement;
“Portfolio Manager” shall have the same meaning as given in regulation 2 (cb) of the SEBI
(Portfolio Managers) Regulations, 1993 as amended from time to time;
“Principal Officer” means an employee of the Portfolio Manager who has been designated as
such by the Portfolio Manager
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“Regulations” means the Securities and Exchange Board of India (Portfolio Managers)
Regulations, 1993, as may be amended from time to time including any circulars, directions or
clarifications issued by SEBI or any Government Authority and as applicable to the Portfolio
Manager;
“Rules” mean Securities and Exchange Board of India (Portfolio Managers) Rules, 1993, as
may be amended from time to time.
“Scheduled Commercial Bank” means any Bank included in the second Schedule to the
Reserve Bank of India Act, 1934 (2 of 1934);
“SEBI” means the Securities and Exchange Board of India established under sub-section (1) of
Section 3 of the Securities and Exchange Board of India Act;
“Securities” means security as defined in Section 2(h) of the Securities Contract (Regulations)
Act, 1956, provided that securities shall not include any securities which the Portfolio Manager
is prohibited from investing in or advising on under the Regulations or any other law, for the
time being in force.
Securities shall include shares, stocks, bonds, warrants, convertible and non-convertible
debentures, fixed return investments, equity linked instruments, negotiable instruments (to the
extent permitted by the Regulation), deposits, units issued by the Unit Trust of India and/or by
any Mutual Fund(s), foreign currency commitments, hedged swaps and any other securities
issued by any Company or other Body Corporate, any Trust, any Entity, the Central
Government, any State Government or any Local or Statutory Authority, all money rights or
property that may at any time be offered or accrued (whether by rights, bonus, redemption
preference, option or otherwise) and whether in physical or dematerialized form, in respect of
any of the foregoing or evidencing or representing rights or interest therein; Government
Securities, Warrants, Options, Futures, Derivatives, Convertible Debentures, Securities Debt
Instruments, Fixed Return Investments, Equity Linked Investments or other Marketable
Securities of alike nature and or of any incorporated Company or other Body Corporate ,
Negotiable Instruments including issuance of Bills of Exchange, Deposits or other Money
Markets Instruments, Commercial Papers, Certificates of Deposits, units issued by Unit trust of
India and units issued by Mutual Funds, Mortgaged Backed or Other Backed Asset Securities
issued by any Institution or any Body Corporate Cumulative Convertible Preference Shares
issued by any Incorporated Company, Securities issued by Central Government or a State
Government for the purpose of raising public loan and having one of the forms specified in
clause 2 of section 2 of the Public Debt Act, 1944, Relief Bonds, Saving Bonds any other new
forms of capital or Money Market Instruments that may be issued in the future by any
Incorporated Company/Firm/Institution or Government or Reserve Bank of India. Securities
shall also include any other Instruments or Investments (including borrowing or lending of
securities) as may be permitted by applicable law from time to time.
“Sub-Delegate” means a person to whom the Portfolio Manager has delegated the performance
of its duties, its discretion, its obligations, or any of its power and authority.
“Third Party” means any person, entity other than the Portfolio Manager and the Client.
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INTERPRETATION OF WORDS AND EXPRESSIONS:
Words and expressions used herein and not defined in this Act but defined in the Companies
Act, 1956 (1 of 1956) or The Securities and Exchange Board of India Act, 1992 (15 of 1992) or
the Depositories Act, 1996 (22 of 1996) shall have the same meanings respectively assigned to
them in those Acts.
3. Description
I. History, present business and background of the Portfolio Manager
Seers Fund Management Private Limited is a company incorporated on 22 September 2016
vide CIN # U67200DL2016PTC306263.
The company got registered as a Portfolio Manager with SEBI with effect from 17th April
2017 vide registration number INP000005398, which is valid perpetually.
II. Promoters and Directors of the Portfolio Manager and their
background
The Promoters and Directors of the Company are Mr. Rajesh Seth, Chartered
Accountant and Mr. Chander Bhatia, Cost Accountant, who are holding the positions of
Chief Executive Officer and Chief Investment Officer, respectively.
CA Rajesh Seth is a Fellow Member of Institute of Chartered Accountants of India since
1987 and an Associate Member since 1982.
During his education, he had been qualifying creditably and had an excellent academic
record. He qualified Intermediate Examinations of Chartered Accountancy with 33rd rank in
All India Rank List compiled by Institute of Chartered Accountants of India.
He graduated in Bachelor of Commerce (Honors) from Shri Ram College of Commerce,
Delhi University and stood 3rd in the Delhi University in the First-Year examinations.
During his Higher Secondary examinations in 1975, he qualified with 13th rank in the
Commerce Group of Delhi Board of Education.
On becoming a Chartered Accountant, he established his own practice under the name and
style of M/s Seth & Company.
He had been specializing in the field of Accounting, Auditing & Assurance, Internal Audit,
Tax and Management Audit, Direct and Indirect Taxes, Company Law matters, Corporate
Compliances, setting up MIS Systems for Companies & Start-Ups Entities and Financial
Management & Financial Analysis of Corporates.
While pursuing his profession as a Chartered Accountant, he had a passion for reading,
understanding and analyzing financial reports.
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Carrying out fundamental research of Companies with his trait of thorough and penetrating
analysis coupled with in-depth research with a strong analytical foundation had been a part
of his professional pursuit.
Since nineties, he had been investing in the stock market based on his research. Stock
Investing is an art and needs a thorough experience which had also been an integral part of
his professional pursuit.
Once he realized that during the 23 years of work experience, he had developed a good hand
on the Art of Stock Investing, he decided to move ahead, primarily and solely in this
discipline.
An Equity Research Lab, namely M/s Tushar Investments, was setup, as a partnership firm
of CA Rajesh Seth and CMA Chander Bhatia, with an aim to carry out fundamental equity
research for long term perspective for the benefit of the partners.
Currently, he is a managing partner of M/s Tushar Investments and a SEBI registered
Advisory Firm, M/s Seers Advisors.
He is also holding the position of the Chief Executive Officer of M/s Seers Fund
Management Private Limited, a SEBI registered Portfolio Manager, looking after
Administration, Investor Relations, Business Development, Compliance, Research and a
member of the Allocation Committee taking the collective call of fund allocation.
CMA CHANDER BHATIA
CMA Chander Bhatia is a qualified Cost and Management Accountant from the Institute of
Cost Accountants of India. He is Masters in Commerce and is all through a topper and merit
holder.
He proudly served Indian Air force where he was adjudged best in trade. He also worked
with the largest bank of India i.e. State Bank of India. He served Indian Customs as
Preventive Officer for a decade, where he was rewarded many times by Government of
India for preventing smuggling. During his stint with Customs, he was regularly investing
money in equity market and generating good returns. These consistent and high returns
made him quit his stable and rewarding career with Indian customs.
He then took stake in a United Share Brokers Ltd in year 2001 and later became Director of
the same Company.
Mr. Bhatia has been a prolific reader since last 25 years, he has been spending close to 5
hours a day on reading about Macros, Industries and Companies. He is bestowed with good
numerical and analytical skills. He pays close attention to details and looks beyond the
obvious to see how data and facts can be linked together to create meaningful conclusions.
He has an innate ability of evaluating and understanding the flow of businesses and how
businesses are likely to glide in future. He displays high integrity and honesty in all his
dealings. He believes that apart from investment we must accord value to our personal
fitness.
As above said, he decided to set up an Equity Research Lab, namely M/s Tushar
Investments as a partnership firm of CA Rajesh Seth and CMA Chander Bhatia with an aim
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to carry out fundamental equity research for long term perspective for the benefit of the
partners.
Currently, he is a managing partner of M/s Tushar Investments and a SEBI registered
Advisory Firm, M/s Seers Advisors.
He is also holding the position of the Chief Investment Officer of M/s Seers Fund
Management Private Limited, a SEBI registered Portfolio Manager. He is leading equity
research, investment strategies and a member of the Allocation Committee taking the
collective call of fund allocation.
EXPERIENCE IN PORTFOLIO MANAGEMENT ACTIVITIES
Founder members of Seers Fund Management Private Limited, FCA Rajesh Seth and CMA
Chander Bhatia, had been investing in Indian Equities in their individual capacities since
early nineties.
Promoters of Seers Group joined hands in 2005 to practice ‘Value Investing’ with the help
of fundamental research on Indian Listed Companies.
They decided to leave their respective promising careers and positions in their own fields to
set up an Equity Research Lab under the name and style of M/s Tushar Investments, with
an aim to carry out “Fundamental Equity Research” with long term perspective for the
benefit of the partners.
Investment Jewels identified by Equity Research Firm, M/s Tushar Investments, with the
long-term investment horizon, were picked by the Promoters in their own individual
accounts.
Over the period, in-house and customized analytical tools and systems were developed by
the Promoters which helped them identify investment opportunities to succeed in “Value
based Investing”.
They gathered the experience and wisdom, while testing waters by investing their own
capital for over a decade, that helped them craft a well-tested investment philosophy and
strategy and carved their way to success in wealth creation.
By practicing ‘Patience’ and ‘Consistency’ for such a long time, along with the sound
knowledge of fundamentals and traits of ideal stock selection, gave them the confidence to
seed Seers Group in 2016.
Review of investments made as noted above gave a XIRR of more than 34.34 % (net of
positive and negative returns) over the period April’05 to Sept’19 to the Promoters.
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PROMOTERS’ PORTFOLIO PERFORMANCE AGAINST NIFTY
14 YEARS – 2005-2019
Yearly Returns Periodic Returns*
(Returns over 1 year are
annualized)
Portfolio
/Period SP NIFTY Portfolio
/Period SP NIFTY
FY-06 312.07% 67.15%
1 Months 10.85% 4.09%
FY-07 36.86% 12.31% 3 Months -12.18% -2.67%
FY-08 -30.09% 23.89% 6 Months -16.89% -1.29%
FY-09 -66.04% -36.19% 9 Months -10.13% 5.63%
FY-10 142.10% 73.76% 1 Year -13.40% 4.98%
FY-11 118.46% 11.14% 2 Year -18.85% 8.27%
FY-12 -21.63% -9.23% 3 Year 8.49% 10.04%
FY-13 13.22% 7.31% 4 Year 13.66% 9.61%
FY-14 29.68% 17.98% 5 Year 24.32% 7.58%
FY-15 153.79% 26.65% Since
Inception 34.34% 12.77%
FY-16 13.17% -8.86%
FY-17 83.84% 19.00%
Date of Inception 1st April
2005 FY-18 64.66% 10.25%
FY-19 -27.94% 14.93%
SP: Seers Promoter *Period under purview: Apr’05
to Sept’19
To make the research self-sustaining, the firm M/s Tushar Investments, also carried out
investing and trading in Equities and Equity Derivatives, on fundamental basis. Short-term
opportunities identified by the promoters while analyzing for the long-term perspective
were picked by ‘Tushar Investments’ with an investment as well as positional trading
perspective.
Ride in stock market is never smooth and one way, and Tushar Investments’ growth story
was no exception to it.
Out of 11 years of Trading operations between Aug’05 – Oct’16, four financial years
reported negative returns.
Effective October 2016, trading activities were completely stopped in Tushar Investments
and Promoters completely focused on research and advisory activity of Seers Advisors.
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Tushar Investments which started with the Capital of Rs. 13 lakhs, gave a return of Rs.
9.86 crores (net of all expenses) during the period between August 2005 to October
2016.
Over the period of 11 years, Promoters could fit in the quote of Benjamin Graham “An
investment in knowledge always pays the best interest”.
KEY DOCTRINES
Promoters had been investing with the following key doctrines:
• Well-carved investment philosophy;
• Well-defined professional ethics;
• Well-designed investment concepts;
• Well-tested, experience and strong investment management capability;
• High standards of Client’s servicing.
SEERS STRATEGY
During the above captioned period, Promoters innovated “SEERS STRATEGY” - an art
of wealth creation, at their own cost and carried out it’s “on the road testing” at their own
risk.
Seers Strategy can be coined as under:
o “S” - See - Seeing an investment opportunity - Seeing the dawn of an opportunity
o “E” - Evaluate - Exploring and evaluating the opportunity
o “E” - Expose - Entering the opportunity – taking an exposure
o “R” - Review - Revaluating, reviewing and continuous monitoring of the opportunity
o “S” - See Off - Seeing off the opportunity as and when exit signals clicks off.
SEERS ADVISORS – A Registered Investment Advisor
In February 2016, “Seers Strategy” was made available to interested persons, by setting up
an Advisory Firm under the name and style of M/s SEERS ADVISORS.
Permission from the Securities Exchange Board of India (SEBI) was sought in February
2016 which was granted vide registration number INA100004715 with effect from May 13,
2016
Research process followed by Seers Advisors can be summarized as follows: -
✓ Mix of Top Down and Bottom Up approach of finding investment opportunities;
✓ Weeding out process – Investment Matrix
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✓ Importance given to historic data
✓ Regular Management Meetings
✓ Meeting with various Stake-holders
✓ Close track of dynamic changes (internal factors – external factors)
✓ No impulse decisions
As on date i.e. 30th Sept 2019, the Assets under Advice (AUA) of M/s Seers Advisors is
Rs. 128.56 crores (including Promoters’ and Promoters’ family and friends)
Category of Client No. of Clients Assets Under Advice (Crores)
Promoter’s 10 73.91
Others 134 54.65
Total 144 128.56
During the operations between May 2016 till September 2019, Seers Advisors could deliver
recent returns to its Clients.
The following table displays the Growth in Portfolio (XIRR) achieved by the group of
Clients in Seers Advisors as a whole.
SEERS ADVISORS - GROWTH (%) REPORTED
DURING THE PERIOD FROM MAY 2016 UP TO 30 SEPTEMBER 2019
Particulars 1 Month 3 Months 6 Months 1 Year 3 Years
Since
Inception
(May’16)
Seers Advisors 12.78% -8.84% -12.86% -9.59% 5.96% 12.54%
Nifty 4.09% -2.67% -1.29% 4.98% 8.27% 11.65%
SEERS FUND MANAGEMENT PVT. LTD. – A Registered
Portfolio Manager
On the persistent demand from few of the Seers Advisors’ Clients to provide the Portfolio
Management Services, Promoters moved ahead to incorporate Seers Fund Management
Private Limited on 22nd September 2016 vide CIN # U67200DL2016PTC306263, under
the Companies Act, 2013 having its Registered Office at H – 11/B, Vijay Nagar, Delhi
110009 and Business/Corporate Office at 812, 8th Floor, Wave Silver Tower, Sector 18,
NOIDA, Uttar Pradesh 201301.
It received permission from SEBI to act as a Portfolio Manager with effect from 17th April
2017.
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“Seers Fund Management Private Limited” launched its first Discretionary Portfolio
Management Service and named it as “SEERS ENDURING PORTFOLIO” {“SFMPL-
SEP”} wherein the first client was taken on-board in May 2017.
SFMPL-SEP is investing in Equities/Stocks with long term perspective, in the Companies
that are emerging to have dominance or have characteristics that make them a dominant
participant in their Industry. It’s investing methodology is to blend fundamental investing
parameters, with long term measures of momentum and trend, in a systematic manner while
avoiding common behavioral biases such as herding, anchoring, confirmation and
disposition.
Its strategy is to have a very low churning ratio and to work on buy and hold strategy.
Investment objective of SFMPL-SEP is to create long-term wealth through an actively
managed portfolio of Equities.
SFMPL-SEP’s well defined investment philosophy and strategy, acting as a guiding
principle in defining the investment universe assisted with in-house tools, enables the
construction, monitoring and risk management of Client’s Portfolios.
SFMPL-SEP look forward to investing for long term (which refers to an investment horizon
of 3 years and more) and will implement robust risk management process to preserve capital
during adverse market conditions.
It aims to generate high alpha by creating focused portfolio of 8-15 shares of high quality
companies having potential to sustain superior growth for many years to come.
Seers Team takes up in-depth equity research of sectors, industries and companies to
explore ideas which can meet objectives of the scheme. These stocks are selected for
investments with a long-term perspective after going through in-house selection matrix
which focus on to identify companies with high quality of management and business.
It maintains a diversified portfolio by investing in a basket of stocks across market
capitalization, without undue concentration in any stock or sector.
At the time of purchase not more than 20% in a single stock and not more than 40% in one
sector is proposed to be allocated.
Thus, SFMPL-SEP works as a discretionary portfolio management service offering
professional management of investments aiming to deliver consistent returns.
Since the investments are managed independently and exclusively by the Portfolio
Manager, it makes an ideal investment avenue for Ultra-High and High Net Worth
Investors.
Timing of investment, one-time investment or multiple investments and capital outflow
might cause the difference in the portfolio composition of different clients at one point of
time.
Transparent working of SFMPL-SEP provides regular monthly performance statements,
portfolio holding reports, transactions statements, capital gain/loss statements and periodic
reports for convenient Tax Filing.
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SFMPL-SEP has made requisite arrangements with which the portfolio is managed by
SFMPL and the assets of the portfolio (bank balance and stocks) remains in the custody of a
SEBI’s authorized Custodian namely Orbis Financial Corporation Ltd, hence the funds and
assets of the investors are taken care by two SEBI Registered Intermediaries.
As on 30th September 2019, Assets under Management of Seers Fund Management Private
Limited was standing at Rs. 41.52 crores.
Category of Client No. of Clients Assets Under Management (Crores)
Promoter’s / Proprietary 5 10.84
Others 70 30.68
Total 75 41.52
SEERS FUND MANAGEMENT PRIVATE LIMITED SEERS ENDURING PORTFOLIO - GROWTH (%)
REPORTED FROM 12 MAY 2017 TO 30 SEPTEMBER 2019
Particulars 1 Month 3 Months 6 Months 1 Year 3 Year Inception
May'17
Inception
Apr'05
SEP 9.64% -5.93% -9.83% -3.63% -9.21%
SP 10.85% -12.18% -16.89% -13.40% 8.49% 34.34%
NIFTY 4.09% -2.67% -1.29% 4.98% 10.04% 8.71% 12.77%
SEP: Seers Enduring Portfolio (Performance of all clients in the Scheme); SP: Seers Promoters
Returns stated above are calculated on the basis of WA Capital (Weighted Average Capital).
Returns over the period of 1 year are annualized.
SFMPL looks forward to serving individual(s), Hindu Undivided Family(ies), Association
of Persons, Company(ies), Firm(s), Society(ies) or Trust(s).
Special arrangements are made for Non-resident Indians (NRIs) and/or Persons of Indian
Origin (PIO) and Foreign Nationals, to invest in shares / stocks on repatriation or non-
repatriation basis after following the prescribed procedures.
Requisite Permissions, Registrations and opening of Bank and Securities (Demat) Account
are taken care by SFMPL through the Custodian.
“Seers Fund Management Private Limited” incorporated in September 2016, has a track
record of 14 years being it was virtually conceived in August 2005 when the promoters
initiated their first joint venture (M/s Tushar Investments); got a formal clothing of a
Registered Investment Advisor (“Seers Advisors”) in May 2016 and finally got incarnated
into a “Portfolio Manager” (Seers Fund Management Private Limited) in April 2017.
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III. Group Companies/Concerns –
Name of
Associates
Concerns
Relationship
Registered
with
Authority
Registration
No. Activities
M/s Seers
Advisors
Partnership
Firm of
Promoters
SEBI INA100004715
Investment Advisory
Firm. In business since
May 2016
M/s Tushar
Investments
Partnership
Firm of
Promoters
NA NA
Research activity;
Trading in equity and
Derivatives and
Investing in Equities
carried since
August’2005.
Effective September
2016, no activity is
being carried out.
4. Penalties, pending litigation or proceedings, a finding of
inspection and investigations for which action has been
taken or initiated by any regulatory authority.
There are no instances of penalties imposed or directions issued by the Board or any
Regulatory Agency under the Act, Rules or Regulations for any economic offence or for
violation of any securities laws or for any deficiency in the systems and operations of the
Portfolio Manager.
There are no material legal proceedings, civil or criminal initiated against Seers Fund
Management Private Limited, its directors, principal officer or employee under the Act, Rules
or Regulations.
5. Services offered by the Portfolio Manager
Seers Fund Management Private Limited took an initiative to grow into the environment with
Discretionary PMS product(s).
It intends to have it as a niche business adding value to all stakeholders viz Clients,
Employees, and Shareholders.
Applicant launched a portfolio scheme under the name and style of "SEERS ENDURING
PORTFOLIO” which invests in the Companies that are emerging to have dominance or have
characteristics that make them the dominant participant in their Industry.
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A model Seers Enduring Portfolio has stocks which confirm the doctrines of Seers Strategy
and qualifies its strict stock selection filters and robust & disciplined processes.
Low debt and high capital efficient businesses are some of the financial parameters that are
the key selection criteria of Companies in Seers Enduring Portfolio.
Over the longer term, Company look forward to launching more such products to address
different section of the market universe.
In due course, Company would be offering various Thematic Strategies including Large Cap,
Mid Cap, Small Cap, Flexi Cap and Focused Products etc. to suit the specific needs of the
investors.
To start with, Client would need to invest with a minimum portfolio of Rs. Twenty-Five
Lakhs with the advisable investment horizon of three to five years.
The funds of the Client, under the portfolio management services offered by Seers Fund
Management Private Limited, are managed by both the Directors.
Financial Analysis and Research activities are being outsourced from the Associate Firm
Namely M/s Seers Advisors, a Registered Investment Advisor. Database of Companies in
radar is accessible to the Seers Fund Management Private Limited, being shared by M/s Seers
Advisors.
Decision on portfolio Investment is taken by the “Investment Allocation Committee”
based on the various reports and advices from “M/s. Seers Advisors”.
Although Seers Fund Management Services Private Limited has brokering relationship with
Master Capital Services Limited and Edelweiss Broking Limited but, till date, services of
Master Capital Services Limited, has been used for carrying out buying and selling
transactions of Seers Enduring Portfolio.
Fund Accounting, Depository and Custodian Services are being outsourced from a SEBI
registered Intermediary namely “Orbis Financial Corporation Limited”, 4A, Ocus
Technopolis, Sector 54, Golf Club Road, Gurgaon 122002.
Prime focus of Seers Fund Management Private Limited is to identify right investments so as
to have optimum wealth creation for all its stakeholders. Its investment philosophy would
underline maximizing the risk-adjusted returns depending on the Client's risk tolerance.
As of now, Seers Enduring Portfolio comprises of Indian Equities, and may include related
Instruments and Debt Securities in due course.
Long Term refers to an investment horizon of 3 - 5 years and more and will implement robust
risk management process to preserve capital during adverse market conditions.
Seers Fund Management Private Limited is also managing promoter’s funds as offered to it.
In addition, Seers Fund Management Private Limited is also managing its own proprietary
funds (available for investments) in its proprietary account.
Promoter’s and Proprietary Funds are managed by the Company on the same principles as
followed for managing Clients’ Funds. The portfolio composition of Clients against
Promoters / Company could differ depending on the timing and risk profiles of the Clients.
19
Risk Factors
1) The investments in securities may not be suitable to all the investors
2) Investment in securities, whether based on fundamental/technical analysis or otherwise,
is subject to market risks which include price fluctuations, impact cost, basis risk etc.
3) The Portfolio Manager does not assure or guarantee, hence the Investors are not being
offered any guaranteed or assured returns through any of the product/options.
4) The names of the model portfolios do not in any manner indicate their prospects or
returns.
5) Seers Fund Management Private Limited, a Company, incorporated in September 2016,
got permission to act as a Portfolio Manager with effect from April 2017, is actively
managing portfolios since May 2017. In the capacity as a Company, it has a track record
of little close to 2 years.
However, the journey of Promoters of 14 years, to set up the Portfolio Manager
Company, (right from setting up an initial Research Lab, followed by a Registered
Investment Advisor to the Registered Portfolio Manager) and their experience with a
proven track record, as given here-in-before shows that Promoters have an established
experience and track record of 14 years of delivering decent returns on investments
made for long term.
Past performance of the Portfolio Manager in its own capacity or as advisors/participant
of the Portfolio Management Service, does not indicate the future performance of the
same or any model portfolio in future of the Portfolio Manager.
6) There is no assurance that the past performances will be repeated in future.
7) The Portfolio Manager may act upon the advice of or any information obtained from
any Bankers, Accountants, Brokers, Professionals, Agents or other persons acting as
Agents or Advisors of the Portfolio Manager and the Portfolio Manager shall not be
bound to supervise the operations and activity of any such persons nor to verify the
advice or information obtained therefrom.
8) The Portfolio Manager shall not be liable for any bona fide act done or omitted or
suffered in reliance upon such advice or information nor be responsible for the
consequence of any mistake or oversight or error of judgement on the part of the
Portfolio Manager or any attorney or agent of another person appointed by it hereunder.
9) As with any investment in securities, the Net Asset Value of the portfolio can go up or
down depending upon the factors and forces affecting the capital markets.
10) At any point of time, there will be some stocks whose fundamental performance and/or
share performance may not be in line with the expectations of the Portfolio Manager and
deviate from the rest of the portfolio.
11) There can be months with a decline in capital value, but staying the course preserves the
potential of the investment, whereby notional losses are not converted into actual losses.
20
12) The performance of the Portfolio Manager and the objective of the Portfolio
Management Services may be affected by changes in Government policies, general
levels of interest rates and risks associated with trading volumes, liquidity and
settlement systems in equity and debt markets.
13) Investments in debt instruments are subject to default risk, interest rate risk and
reinvestment risks. Interest rate risk results from changes in demand and supply for
money and other macro-economic factors and creates price changes in the value of the
debt instruments. Consequently, the Net Asset Value of the portfolio may be subject to
fluctuations. Reinvestment risks may be defined as interest rates prevailing on interest or
maturity due dates may differ from the original coupon of the bond, which might result
in the proceeds being invested at a lower rate.
14) The Portfolio Manager may invest in non-publicly offered debt securities and unlisted
equities. This may expose the portfolio of the Client to liquidity risks.
15) Liquidity in the investments and performance of portfolio may be affected by trading
volumes, settlement periods and transfer procedures.
16) Appreciation in any of the model portfolio can be restricted in the event of a high asset
allocation to cash, when stock appreciates. The performance of any model portfolio may
also be affected due to any other asset allocation factors.
The PMS Strategy does not intend to hold any significant amount of cash instead of
equities at any point of time. The client understands that the portfolio will always
operate in context of the underlying markets.
17) When investments are restricted to a or few sector(s) under any model portfolio; there
arises a risk called non-diversification or concentration risk. If the sector(s), for any
reason, fails to perform, the portfolio value will be adversely affected.
18) In the case of stock lending, risks relate to the defaults from counterparties about
securities lent and the corporate benefits accruing thereon, inadequacy of collateral and
settlement risks. The Portfolio Manager is not responsible for any loss resulting from
stock lending.
19) Each portfolio will be exposed to various risks depending on the investment objective,
investment strategy and the asset allocation which may differ from Client to Client.
However, highly concentrated portfolios with lesser number of stocks generally will be
more volatile than a portfolio with a larger number of stocks.
20) The values of the Portfolio may be affected by changes in the general market conditions
and factors and forces affecting the capital markets, in particular, level of interest rates,
various market related factors, trading volumes, settlement periods, transfer procedures,
currency exchange rates, foreign investments, changes in government policies, taxation,
political, economic and other developments, closure of stock exchanges, etc.
21) Risk may also arise due to an inherent nature/risk in the stock markets such as,
volatility, market scams, circular trading, price rigging, liquidity changes, de-listing of
securities or market closure, relatively small number of scrip’s accounting for a large
proportion of trading volume among others.
21
22) The Portfolio Manager may invest in lower rated/unrated securities offering higher
yield. This may increase the risk of portfolio.
23) Any act, omission or commission of the Portfolio Manager under the PMS agreement
will be solely at the risk of the Client and the Portfolio Manager will not be liable for
any act, omission or commission taken or failure to act, save and except on the ground
of mala fide, fraud, conflict of interest, gross negligence, willful default and/or fraud of
the Portfolio Manager.
24) In case of investment in Mutual Fund Units, the Client shall bear the recurring expenses
of the Portfolio Management Services in addition to the expenses of the underlying
Mutual Fund Schemes. Hence, the Client may receive lower pre-tax returns compared to
what he/she/it may have received had he/she/it invested directly in the underlying
mutual fund schemes in the same proportions.
25) In case the Portfolio Manager invests in Mutual Funds registered with SEBI, specific
risk factors of each such underlying investment will be applicable to the Portfolio.
26) 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 a situation,
the Client suffer opportunity loss.
27) Changes in the applicable laws of the land at any time, may impact the performance of
the portfolio managed by the Portfolio Manager.
28) All risks associated with such underlying investment, including performance of the
underlying stocks, stock-lending, off-shore investments etc., will therefore be applicable
to the Portfolio.
29) Investment in Equity run the risk of volatility, high valuations, obsolescence and low
liquidity. Mid-cap and low-priced stock may suffer from extra low liquidity.
30) Industry specific stocks, like technology stocks, may be subject to volatility, high
valuations, obsolesce and low liquidity.
31) The Client undertakes all responsibilities and agrees to bear all risks arising out of
refusal by a Company or a Corporation, for whatever reasons, to register the transfer of
any of the Securities in respect of Client’s account. The Securities which are so
purchased and refused to be transferred in the name of the Client or the Portfolio
Manager, as stated herein above, by the Company or Corporation concerned, will be
sold by the Portfolio Manager, at the best available market rate, at the risk and
responsibility of the Client concerned.
32) The Client should review/study the Disclosure Document carefully and in its entirely
and shall not construe the contents thereof or regard the summaries contained herein as
advice relating to legal, taxation or financial/investment matters.
33) Clients are advised to consult their own professional advisors as to the legal, tax,
financial or any other requirement or restrictions relating to the subscription, gifting,
acquisitions, holding, disposal (sale or conversion on money) of Portfolio and to the
treatment of income (if any), capitalization, capital gains, any distribution and other tax
consequences relating to the portfolio within their jurisdiction of nationality,
22
residence,incorporation, domicile 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.
34) Clients are required to and deemed to have read and understood the risk factors of the
underlying investments.
35) The fund manager does not commit to or profess to have any expertise in timing entry
and exit into stocks or into the broader market. Instead of timing the investment, we
look forward to invest the money with three to five year’s perspective so as to
outperform market
36) All transactions, related statements, portfolio and performance reports that are managed
and published by Orbis Financial Corporation Limited, can be downloaded by the
clients 24*7 by logging on to their portal available on Seers website:
http://www.seers.group/client_login/
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6. Client Representation
I. Client Representation: Fund management business details:
Category of
Clients No. of Clients
Funds Managed
(Rs. Crores)
Discretionary/
Non-Discretionary
Associates/Group Companies
Promoters & Company’s Proprietary
F.Y 2019-2020
As on 30.09.2019 5 10.84 Discretionary
F.Y 2018-2019 5 12.20 Discretionary
F.Y 2017-2018 3 13.74 Discretionary
F.Y 2016-2017 N. A N. A N. A
F.Y 2015-2016 N. A N. A N. A
F.Y 2014-2015 N. A N. A N. A
Others
F.Y 2019-2020
As on 30.09.2019 70 30.68 Discretionary
F.Y 2018-2019 68 33.71 Discretionary
F.Y 2017-2018 69 43.04 Discretionary
F.Y 2016-2017 N. A N. A N. A
F.Y 2015-2016 N. A N. A N. A
F.Y 2014-2015 N. A N. A N. A
II. Disclosure in respect of transactions with related parties pertaining to
Portfolio Management Services:
Following is the complete disclosure of transactions with related parties, as on 30th
September 2019 based on the books of accounts, as per the accounting standards specified
by the Institute of Chartered Accountants of India.
The disclosures relating to transactions with related parties have been disclosed separately
for those carried out with parties falling under such provisions through the erstwhile
promoters
List of related parties with whom the Portfolio Manager has transactions –
I. Key Management Personnel
a. Mr. Rajesh Seth, Promoter, Director & Chief Executive Officer
b. Mr. Chander Bhatia, Promoter, Director & Chief Investment Officer
c. Mr. Shaleen Seth, Vice President – Research & Analytics
II. Enterprise over which key management personnel has significant influence.
a. M/s Seers Advisors, Partnership Firm
b. M/s Tushar Investments, Partnership Firm
24
Disclosure in respect to transactions with related parties for the period Apr 17 – Mar 18
Nature of
Transacti
ons
Name of
the
Related
Party
Subsidiary /
Associate
Entities
Key Management
Personnel
& Their Relatives
T o t a l
Current
Period
Previo
us
Period
Current
Period
Previo
us
Period
Current
Period
Previo
us
Period
Rent Tushar
Investments 1,20,000 0 0 0 1,20,000 0
Rent S K Seth /
Rajesh Seth 0 0 1,20,000 0 1,20,000 0
Advisory
Fee
Seers
Advisors 11,09,080 0 0 0 11,09,080 0
Disclosure in respect to transactions with related parties for the period Apr 18 – Mar 19
Nature of
Transacti
ons
Name of
the
Related
Party
Subsidiary /
Associate
Entities
Key Management
Personnel
& Their Relatives
T o t a l
Current
Period
Previo
us
Period
Current
Period
Previo
us
Period
Current
Period
Previo
us
Period
Rent Tushar
Investments 1,20,000 0 0 0 1,20,000 0
Rent S K Seth /
Rajesh Seth 0 0 1,20,000 0 1,20,000 0
Advisory
Fee
Seers
Advisors 15,23,045 0 0 0 15,23,045 0
Disclosure in respect to transactions with related parties for the period Apr 19 – Sep 19
Nature of
Transacti
ons
Name of
the
Related
Party
Subsidiary /
Associate
Entities
Key Management
Personnel
& Their Relatives
T o t a l
Current
Period
Previo
us
Period
Current
Period
Previo
us
Period
Current
Period
Previo
us
Period
Rent Tushar
Investments 60,000 0 0 0 60,000 0
Rent S K Seth /
Rajesh Seth 0 0 60,000 0 60,000 0
Advisory
Fee
Seers
Advisors 6,04,408 0 0 0 6,04,408 0
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7. Financial Performance of the Portfolio Manager
Portfolio Manager namely, M/s Seers Fund Management Private Limited incorporated on 22nd
September 2016, with the main objective of providing the service of a Portfolio Manager and
got permission from SEBI to act as a Portfolio Manager with effect from 17th April 2017.As
above said, first client was taken on-board on 12th May 2017 hence, the business commenced
in the month of May 2017.
The Financial Performance of the company for last three financial years and for the current
financial year till 30th September 2019 are given below:
Particulars
(in Rs. Lakhs)
30-09-2019(*)
(Unaudited)
31-03-2019
(Audited)
31-03-2018
(Audited)
31-03-2017
(Audited)
Sources of Funds:
Shareholder’s Funds 443.09 457.17 351.81 210.21
Loan Funds 0 0 0 0
Deferred Tax Liabilities 0 0 0 0.03
Total Liabilities 443.09 457.17 351.81 210.24
Application of Funds:
Net Fixed Assets 2.61 1.84 2.79 1.07
Investments 424.15 445.96 278.95 188.03
Current Assets 24.83 12.55 85.00 22.01
Less: Current Liabilities
and provisions 8.77 3.45 15.05 0.87
Net Current Assets 16.06 9.10 69.95 21.14
Deferred Tax Asset 0.27 0.27 0.12 0
Total Assets 443.09 457.17 351.81 210.24
Abstract of Profit & Loss Account:
Particulars 30-09-2019 (*)
(Unaudited)
31-03-2019
(Audited)
31-03-2018
(Audited)
31-03-2017
(Audited)
Total Income 61.29 231.69 207.93 6.90
Total Expenses before
depreciation 45.71 95.68 64.79 6.46
Profit/(Loss) before
Depreciation & Tax 15.58 136.01 143.14 0.44
Depreciation 0.00 1.51 1.70 0.19
Profit/(Loss) before
Tax 15.58 134.50 141.44 0.25
Provision for Tax 0.00 29.66 29.29 N. A
Deferred tax
(Assets)/Liability 0.00 0.15 0.16 0.04
Profit/(Loss) after Tax 15.58 104.99 112.31 0. 21
(*) These financial statements are presented on provisional basis and will be
finalized after audit by the external auditor.
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Portfolio Management Performance of the Portfolio Manager
for last 3 financial years
M/s Seers Fund Management Private Limited started operations in May 2017 only.
Particulars Name of Portfolio
Returns (%)
30-09-19
(**)
31-03-19
(*)
31-03-18
(#) 31-03-17
Portfolio Seers Enduring
Portfolio -9.75% -18.73% 18.21% N. A
Benchmarks Nifty -1.29% 14.93% 7.34% N. A
(**) Period of reporting 1 April 2019 to 30 September 2019
(*) Period of reporting 1 April 2018 to 31 March 2019
(#) Period of reporting 12 May 2017 to 31 March 2018
8.
9. Nature of expenses:
The following are indicative types of expenses which shall be borne by the Clients.
The exact basis of charge relating to each of the following services shall be annexed to the
Portfolio Management Services Agreement and the Agreements in respect of each of the
services availed at the time of execution of such agreements.
Investment Management & Advisory Fees
Management and Advisory fees charged may be a Fixed Fee or a Return Based Fee or a
combination of both as detailed in the Schedule to the PMS Agreement. The Fees may be
charged upfront and/or at the end of a specified tenure as agreed between the Client and the
Portfolio Manager.
Custodian / Depository Fees
The charges pertaining to opening and operation of dematerialized Depository Accounts,
custody and transfer charges for shares, bonds and units, dematerialisation and other charges
pertaining to the operation and management of the Depository Accounts. These charges will
be charged from the Clients on actual basis.
Registrar and Transfer Agent Fee
Charges payable to Registrar and Transfer Agents about effecting transfer of Securities,
including Stamp Charges, Cost of Affidavits, Notary Charges, Postage Stamp and Courier
Charges, etc. will be charged on actual basis.
Brokerage and Transaction Costs
The Brokerage charges and other charges like Goods and Services Tax, Securities Transaction
Tax, Service Charges, Stamp Duty, Transaction Costs, Turnover Tax, etc. will be charged on
actual basis.
27
Goods and Services Tax.
GST on the portfolio management fee will be charged as applicable from time to time.
Entry Load/ Exit Load
Entry Load/Exit Load shall be charged as mutually agreed to between Client and Portfolio
Manager as detailed in the Schedule to the PMS Agreement.
Certification and Professional charges:
Charges payable for outsourced Professional Services like Accounting, Auditing, Taxation
and Legal Services etc. for documentation, notarizations, certifications, attestations required
by Bankers or Intermediaries and Regulatory Authorities including legal fees etc. as related to
the portfolio management of the Client will be charged on actual basis.
Incidental Expenses
Charges pertaining to day-to-day operations like courier expenses, stamp duty, postal,
telegraphic, opening and operation of bank account, distribution charges or any other out of
pocket expenses as may be incurred by the Portfolio Manager will be charged on actual basis.
11. Taxation
In view of the individual nature of tax consequences, each Client is advised to consult his/her
Tax Advisor with respect to the specific tax consequences to him/her of participation in the
model portfolios.
The Clients are best advised to take independent opinion from their respective Tax
Advisors/Experts for any income earned from such investments.
The Portfolio Manager shall not be responsible for assisting in or completing the fulfillment
of the Client’s tax obligations.
The provisions of the Income Tax Act, 1961 shall apply to the Client and the Portfolio
Manager in respect of their Individual incomes.
If at any point of time, any tax is required to be withheld because of any present or future
legislation, the Portfolio Manager will be obliged to act in accordance with the regulatory
requirements in this regard.
Client shall be responsible to meet the obligation in respect of advance tax installments
payable on the due dates under the Income Tax Act.
Whether the income arising from purchase and sale of securities will be treated as a Business
Income or as an Income from Capital Gains, depends on number of factors which need to be
construed harmoniously and collectively.
28
Few of them could be as follows: -
• Whether the shares are held as Business/Trading assets or on Capital Account as
Investment Assets i.e. treatment of purchase and sale of shares and profit or loss on
their sale in the books of account of the Client;
• Intention and purpose of the Client at the time purchase of shares;
• Frequency of transactions and the length of period of holding of the shares
• Source of funds out of which the shares were acquired – borrowed or own.
In a case, where Client opts to treat amount parked under the Portfolio Management Services
as investment, the profit or loss from transfer of shares and securities shall be taxed as Capital
Gains under section 45 of the Act.
Finance Bill 2018 introduced a new section 112A which provides that where the total income
of an assessee, includes any income chargeable under the head “Capital gains”, arising from
the transfer of a long-term capital asset, being an equity share in a company or a unit of an
equity oriented fund or a unit of a business trust, subject to the conditions specified under the
section, the tax payable by the assessee on the capital gains exceeding one lakh rupees shall
be calculated at the rate of ten per cent.
Further that in the case of an individual or a Hindu undivided family, being a resident, where
the total income as reduced by such long-term capital gains is below the maximum amount
which is not chargeable to income-tax, then, such long-term capital gains shall be reduced by
the amount by which the total income as so reduced falls short of the maximum amount
which is not chargeable to income-tax.
Also, that capital gains under the said section shall be computed without giving effect to the
first and second proviso to section 48.
That the cost of acquisition for the purposes of computing capital gains under the section in
respect of capital asset acquired by the assessee before the 1st day of February 2018, shall be
as provided in the said section.
The new provisions seek to grandfather all gains accrued up to 31 January, 2018 by providing
that for computing long-term capital gains arising on transfer of listed securities, which were
acquired by the assessee before 1 February, 2018, the cost of acquisition shall be the higher of
the following: (a) Actual cost of acquisition of the asset, or (b) Lower of (i) Fair market value
of the asset or (ii) Full value of consideration received or accrued as a result of the transfer of
the capital asset. Fair market value has been defined to mean the highest price of the capital
asset quoted on any recognized stock exchange on 31 January 2018 or net asset value as on 31
January, 2018, in case of a capital asset is a unit and not listed on a recognized stock
exchange.
Short term capital gain will still be taxed @ 15% provided security transaction tax has been
paid on purchases and sales of equity.
From October 1, 2004 in case of shares and securities and units of equity-oriented schemes
sold on a recognized stock exchange, which are subject to Securities Transaction Tax
(currently 0.001% for units of equity-oriented scheme and 0.1% on equity shares) which have
29
been held as investments for the period of more than 12 months, the tax on Long Term
Capital Gain would be NIL.
Long term capital gains in respect of other listed securities or units would be subject to tax at
the lower of 20% (plus surcharge and education cess) of the gains computed after cost
indexation, or 10% (plus surcharge and education cess) of the gains computed without cost
indexation.
Short-term Capital Gains, where the holding period is less than 12 months, are added to the
total income. Total income including short-term capital gain is chargeable to tax as per the
relevant slab rates.
However, tax on short term capital gains on sale of shares and units of equity-oriented funds
on a recognized stock exchange, which are subject to Securities Transaction Tax, would be @
15% (plus applicable surcharge and an education cess).
Dividends referred to in section 115-O is exempt under section 10(34).
However, dividend received over and above Rs 10 lakhs is taxable @ 10%. Further that
dividend other than that referred to in section 115-O and interest income from securities will
be taxed under the head Income from Other Sources.
According to the provisions of Section 94(7) of the Act, losses arising from the
sale/redemption of units purchased within 3 months prior to the record date (for entitlement of
dividends) and sold within 9 months after such date, is disallowed to the extent of income on
such units (other than on sale/redemption) claimed as tax exempt.
According to the provisions of Section 94(8) of the Act, if an investor purchases units within
3 months before the record date (for entitlement of bonus) and sells/redeems the units within
9 months after that date, and by holding the original units, he becomes entitled to bonus units,
then the loss arising on transfer of original units shall be ignored for computing his income
chargeable to tax. In fact, the loss so ignored will be treated as cost of acquisition of such
bonus units.
13. Accounting policies
The following Accounting policies are normally followed by the Portfolio Manager while
accounting for the portfolio investment of the Clients
a) The Portfolio Manager shall keep and maintain proper books of accounts, records and
document, for each Client to explain transactions for each Client and to disclose at any
point of time the financial positions of each of the Client and to give a true and fair view
of the state of affairs of the Portfolio to each Client.
b) Financial statement of the Client under Portfolio Management Services shall be
prepared and maintained as per the accrual basis of accounting by the Custodian.
c) Fees and other expenses such as Investment Management Fees/Advisory Fee and other
charges shall be recognized on accrual basis as per the terms and conditions of the
agreement between the Portfolio Manager and the Client.
30
d) Dividend income earned by the Portfolio shall be recognized, not on the date the
dividend is declared, but on the date the share is quoted on the stock exchange on ex-
dividend basis.
For investments, which are not quoted on the stock exchange, dividend income would
be recognized on the declaration of dividend.
e) In case where Portfolio Manager is holding Power of Attorney (POA) to operate
Client’s bank account linked to their respective demat account, dividend received
amount are transferred to pool bank account and on date of transfer to pool bank
account, dividend is recorded as received.
In case where Portfolio Manager do not hold POA to operate Client’s bank account
linked to their respective demat accounts, dividend amount is shown as Corpus
Outward.
f) In respect of all interest-bearing investments, income shall be accrued on a day-to-day
basis as it is earned. Therefore, when such investments are purchased, interest paid for
the period from the last interest due date up to the date of purchase should not be treated
as a cost of purchase but shall be debited to interest Recoverable Account. Similarly,
interest received at the time of sale for the period from the last interest due date up to the
date of sale must not be treated as an addition to sale value but shall be credited to
interest Recoverable Account.
g) In determining the holding cost of investments and the gains or loss on sale of
investments, the “First in First Out” method shall be followed for each security. For
example, the earliest purchased quantity will be reckoned for the current/most recent
sale at the respective prices at both points in time.
h) Transactions for purchase or sale of investment shall be recognized as of the trade date
and not as of the settlement date, so that the effect of all investments traded during a
financial year are recorded and reflected in the financial statements for that year.
i) Where investment transactions take place outside the stock market, for example,
acquisition through private placement or purchases or sales through private treaty, the
transaction would be recorded, in the event of purchase, as of the date on which the
portfolio obtains an enforceable right to collect the delivery of the shares or an
enforceable obligation to pay the cost of purchases and in the event of sale, as of the
date on which the portfolio obtains an enforceable right to collect the proceeds of sale or
an enforceable obligation to deliver the instrument sold.
j) Bonus shares to which the portfolio becomes entitled shall be recognized only when the
original shares on which the bonus entitlement accrues are traded on the stock exchange
on an ex-bonus basis. Accordingly, date of recognition of bonus shares is construed as
date of acquisition for the period of holding for capital gain.
k) Rights entitlements shall be recognized only when the original shares on which the right
entitlement accrues are traded on the stock exchange on ex-right basis. Date of
application of right shares is construed as date of acquisition for computing the period of
holding for capital gain. Application for the additional shares would be recognized as
acquisition on the date of allotment.
l) In cases of corporate action like stock split, the new stock received with split face value
is recorded in books on ex-date. However, date of acquisition of original shares is
construed as date of acquisition of stock received on split for computing period of
holding for capital gain.
m) In cases of corporate action of demerger, the new shares received on de-merger is
recorded in books on ex-date but the date of purchase of original shares is reckoned as
date of acquisition for new de-merged stock for computing gain/loss. The apportionment
31
of cost between old share and new share is made based on the information provided by
the Company. However, in case where such information about cost apportionment is not
available on ex-date, cost of original share is taken as same percentage which opening
ex price of such share bear to closing cum price and balance cost is taken as cost of
demerged shares.
n) The cost of investments acquired or purchased shall include grossed-up brokerage,
stamp charges and any charge customarily included on the broker’s contract note and
transaction based fees, if any levied by Portfolio Manager except for security transaction
tax.
o) In respect of privately placed debt instruments, any front-end discount offered shall be
reduced from the cost of the investment. However, in case where such securities are
issued at discount to the face value and such discount is retained with the Portfolio
Manager as management fees, then such discount amount is added to the cost of
acquisition as transaction-based fees.
p) Portfolio Management Fees are recognized/accrued in accordance with the Agreement.
q) Securities Transaction Tax (STT) is recognized on the trade day when the securities are
accounted for on which such STT is levied.
r) In case of the investment amount being received in form of Securities, the same will be
valued at the closing price of the stock on The National Stock Exchange of India (NSE)
on the previous working day of the date on which stock is contributed as corpus. If
security is not listed on NSE but is listed on The Stock Exchange, Mumbai (BSE), the
security shall be valued as aforesaid at the closing price of the stock on BSE.
The Portfolio Manager’s system provides for capturing the original date and cost of
purchase if the Client provides the same.
The computation of capital gains for reporting to the Client will be at the original cost
and date of acquisition of the Securities received from the Client.
However, for computing performance/returns by the Portfolio Manager, date of credit of
the Securities as aforesaid shall be taken to be the date of acquisition and the value of
the Securities as stated above will be taken as cost of acquisition.
s) In case Assets are redeemed in form of Securities, the same will be valued at the closing
price of the stock on the National Stock Exchange of India (NSE) on the previous
working day of the date on which stock is recorded as corpus outward. If security is not
listed on NSE but is listed only on The Stock Exchange, Mumbai (BSE), the security
shall be valued as aforesaid at the closing price of the stock on BSE.
The Assets so redeemed in form of Securities will be shown as Investment Amount
Returned to the Client for reporting to the Client and shall not form part of the Report of
Computation of Capital Gain.
However, for computing performance/returns by the Portfolio Manager, date of debit as
aforesaid shall be taken as date of sale and the value as stated above will be taken as the
value received on sale.
t) If the corporate action results in fractional entitlement, the same will be accounted for as
gain on fractional entitlement upon receipt of money from the company towards
fractional entitlement.
u) Tax deducted at source/advance tax paid/self-assessment tax paid in respect of gains on
sale of securities in case of NRI Client shall be construed as corpus returned to
respective NRI Client the extent of tax so deducted.
v) Investments in Equities, Mutual Funds and Debt instruments will be valued at the
closing market prices of the exchange (BSE or NSE) or the Repurchase Net Asset Value
declared for the relevant model portfolio on the date of the report or any cutoff date or
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the market value of the debt instrument at the cutoff date. Alternatively, the last
available prices on the exchange or the most recent NAV will be reckoned.
w) For derivatives and futures and options, unrealized gains and losses will be calculated
by marking to market the open positions.
x) Unrealized gains/losses are the differences between the current market values/NAVs
and the historical cost of the securities.
y) In addition to above, the Portfolio Manager and the Client can adopt any specific norm
or methodology for valuation of investments or accounting the same as may be mutually
agreed between them on a case specific basis.
z) The Client may contact the Principal Officer of the Portfolio Manager for clarifying or
elaborating on any of the above policy issues.
14. Client/Investor Services
The Portfolio Manager endeavors to be in constant communication with its Client to provide
its investment views to Clients.
The Portfolio Manager is committed to put in place systems and procedures and upgrade the
same on a continuous basis, which will enable effective servicing using continually upgraded
technology.
All investment related communications may please be addressed to
Mr. Rajesh Seth,
Principal Officer,
SEERS FUND MANAGEMENT PRIVATE LIMITED,
812, 8th Floor, Wave Silver Tower,
Sector 18, NOIDA 201301.
Tel: +91-120-45166172, +91 9811519025
E-mail address: [email protected]
15. Grievance Redressal and Dispute Settlement mechanism
Seers Fund Management Private Limited shall endeavor to address and settle all queries,
complaints, grievances arising out of deficiencies in service during the subsistence of the
agreement between the Portfolio Manager and the Client.
Seers Fund Management Private Limited has put in place a suitable mechanism for receiving
and addressing complaints from its customers with specific emphasis on resolving them fairly
and expeditiously.
For the timely and proper redressal of Client’s complaints and grievances, the Portfolio
Manager has decided to treat all Investors’ Grievances as a centralized function and handle
them at the Corporate Level by Mr. Rajesh Seth, Compliance Officer.
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The Client can approach him at the following address:
Mr. Rajesh Seth,
Compliance Officer,
SEERS FUND MANAGEMENT PRIVATE LIMITED,
812, 8th Floor, Wave Silver Tower,
Sector 18, NOIDA 201301.
Tel: +91-120-4566172, +91 9811519025
E-mail address: [email protected]
All the Investor’s Grievances (hard copy or soft copy) that are received by the Compliance
Officer as above said will be incorporated in the Register of Grievance.
All such grievances thus received and recorded should be addressed within 10 working days
from the date of receipt of the grievance or complaint.
If the Client / Investor continues to be dissatisfied on any of the issues consequent to the
Portfolio Management Services and the Agreement, both the parties shall follow the
mechanism stated below:
a) All disputes, differences, claims and questions whatsoever will in the first place be
tried to be settled by mutual discussions.
b) In the event of failure of settlement through mutual discussions between the Client
and the Portfolio Manager and/or their representatives, the same shall be referred
to a sole arbitrator (who shall be a person nominated by the Portfolio Manager)
and such arbitration shall be in accordance with and subject to the provisions of
The Arbitration and Conciliation Act, 1996, or any Statutory modification or re-
enactment thereof for the time being in force.
c) The arbitration shall be held in Delhi and be conducted in English language.
d) The Agreement with the Client shall be governed by, construed and enforced in
accordance with the laws of India and all legal actions and proceedings are subject
to the jurisdiction of Court in Delhi only.
e) In the event of death, refusal, neglect, inability or incapability of the persons so
appointed to act as an arbitrator, the Portfolio Manager may appoint a new
arbitrator.
f) The arbitral award shall be in writing and shall state the reasons upon which it is
based. The award shall be final and binding on the Parties.
g) The award may include an award of costs, including reasonable attorneys' fees and
disbursements.
h) The Agreement shall always take effect as having been made, entered and to be
performed at Delhi and the Portfolio Manager and Client shall be deemed to have
submitted to the exclusive jurisdiction of the competent courts/appropriate forums
of/at Delhi in respect of all matters relating to or arising out of the arbitration
proceedings, including application for interim or interlocutory relief.
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i) Investor may also register/ lodge their complaints to SEBI through its online portal
SCORES (SEBI COMPLAINTS REDRESS SYSTEM). The link to access
SCORES is http://scores.gov.in/ and investors can file complaints by clicking
“Complaint Registration” under “Investor Corner”. SCORES facilitate investors to
lodge their complaint online with SEBI and subsequently view its status.
j) Seers Fund Management Private Limited shall endeavor to address and settle all
queries, complaints, grievances arising out of deficiencies in service during the
subsistence of the agreement between the Portfolio Manager and the Client.
This Risk Disclosure document as updated up to September 30, 2019 has been approved by the
Board of Directors of Seers Fund Management Private Limited at their meeting held on 15th of
October 2019.
Date: October 23 ,2019 For Seers Fund Management Private Limited
Place: Delhi
Rajesh Seth
Principal Officer
Seers Fund Management Private Limited
812, 8th Floor, Wave Silver Tower,
Sector 18, NOIDA 201301.
T. +91-120-4566172, +91-9999646222
M. +91-9811519025
www.seers.group
CIN Number: U67200DL2016PTC306263
A SEBI Registered Portfolio Manager vide Registration number INP000005398
Registered Office: H 11/B, 1st Floor, Vijay Nagar, Delhi 110009 GSTIN Number: 07AAXCS620P1ZF
Business Office: 812, 8th Floor, Wave Silver Tower, Sector 18, NOIDA, UP 201301 GSTIN Number: 09AAXCS6207P1ZB
Email. [email protected]
Ph. +91-120-4566172; M. +91-9999646222
Ver. Sept2019
