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Systematix Portfolio Management Services

Discussion Points:

Why Systematix Portfolio Management Services Offering from Systematix PMS Investment Process PMS Fee Structure Clarification on Key Terms

Systematix Portfolio Management Service is an investment vehicle which offer to Manage & Advise Assets of:

• High Net-Worth Individuals

• Non-resident Indian

• Indian Corporate bodies

• Financial Institutions

Systematix Portfolio Management Service

Need for Portfolio Management Service

• Discretionary Portfolio Management Service: Access to an institutional process of money management

• Customized Investment Solutions: Take into consideration unique circumstances and objectives of each investor

• Most Effective Portfolio Diversification: Reduce overall portfolio volatility and enhance risk-adjusted returns over the long-term

• Provide clients exclusivity and personalised service

Wealth creation based on a disciplined investment process is at the crux of PMS primary goals.

• Sound & Strong Management

• Smart Class of products & service offerings

• Focus on continuous innovation

• Consistency in Performance

• Widespread geographical presence and dedicated team for investors services

Why Systematix Portfolio Management Service?

• Investment Expertise across Asset Classes

• Established track record of Wealth Management & PCG Services

• Strong research set-up

• Experienced Investment Management Team

• Management enjoy strong networking with Corporates across the industries

• Consistent performance on Arbitrage Strategies arise with corporate actions including buy-back, open-offer etc is unique in industry

• Widest range of product offerings and inclination towards continuous product innovation

Our Strengths

Offering of Systematix PMS

Systematix PMS offer range of portfolios to help meet the varied need of clients requirements that provide further customization and flexibility

Discretionary Portfolio Management Service offerings include: • Value Enhancer PORTFOLIO• Dynamic Investment PORTFOLIO• Absolute Freedom PORTFOLIO

We also offer: • Non Discretionary Portfolio Management Services• Advisory Services

Value Enhancer PORTFOLIO

Objective

Value Enhancer Portfolio’s main objective is to generate long-term capital appreciation through investment in equities and equity related instruments with an emphasis on companies perceived to be “under valued” from point of view of there long term growth prospect and potential.

Features• Balanced diversification across companies and sectors by investing

in a basket of medium to large cap. companies.• Not more then 30 stocks.• Sector concentration limited to 30%• Stock concentration limited to 10%

Suitability• For investors with long term investment horizon• Moderate equity risk profile

Ideal Tenure• 36+ months

Absolute Freedom PORTFOLIO

Objective

The main objective of the Absolute Freedom Portfolio is to generate medium to long term capital appreciation through investment in equities and equity-related instruments, with an emphasis on companies across a wide range of service and manufacturing sectors. The broad nature of this Scheme is to invest in companies having long term strategies to capture high growth opportunities and poised to benefit from growth in sector.

Features• Balanced diversification across companies and sectors. Investing in a

basket of medium to large cap. companies.• Not more then 30 stocks.• Sector concentration limited to 30%• Stock concentration limited to 10%

Suitability• For investors with medium to long term investment horizon• Moderate to high equity risk profile

Ideal Tenure• 24+ months

Dynamic Investment PORTFOLIO

Objective

Dynamic Investment Portfolio follows opportunist and momentum play strategy, coupled with active profit booking. The broad nature of this scheme is to take advantage from the opportunities available by way short-term market anomalies, catching the momentum etc., which are likely to emerge from changing sector dynamics, structural changes in the sectors responsible for growth of particular business or companies.

Features• Balanced diversification across sectors and capitalization may or

may not achieve. • Dynamically concentrated portfolio of 1-10 stocks• Sector and stock concentration may be higher than the limit mention

in other schemes

Suitability• For investors with medium term investment horizon• Moderate to high equity risk profile

Ideal Tenure• 12+ months

NDPMS & Advisory Services

Non Discretionary Portfolio Management Services:

• The objective is to advice clients on various investment instruments depending on the client’s needs and risk-return profile.

• Provide administrative services for execution of transaction as per the mandate from the client.

• Client will decide his own investments.• Portfolio Manager's role is limited to providing investment advice, research and

facilitating the execution of transactions.

Advisory Services:

• Advising on the portfolio strategy, investment and divestment of individual securities on the clients' portfolio

• Client is responsible for Execution of transactions• This service is entirely at the client's risk

 Schemes Investment Universe Objective Risk -

Return   Approach Ideal Tenure/Benchmark

Value Enhancer Portfolio

All listed Cos. Irrespective of M.Cap. Based on our Value-

picking Parameters

Generate Capital

Appreciation over long-term

Moderate Value investing for long term Value unlocking

36+ months/BSE 500

Absolute Freedom Portfolio

Absolute Freedom in allocation among the Large Cap/ Mid Cap/ Small Cap.

Purely seeking  for  Medium – Long term Growth 

Opportunities

Achieve Long-Med. term growth in

Capital

Moderate-High

Identify Companies having Focused Long term Strategies

to capture high growth opportunities & poised to

benefit from growth in Sector.

24+ months/BSE 200

Key Comparison of Portfolios

Dynamic Investment 

Portfolio

Dynamically selected concentrated Port. of 1-10

stocks. irrespective of M.Cap. To Benefit from Momentum 

&  Short-term  market anomalies 

Create Wealth over Medium

term

Moderate-High

Opportunist, Momentum play, Coupled with Active 

Profit Booking

12+months/BSE SENSEX

S&P CNX Nifty

Investment Universe

PCG Research External ResearchFund Management Research

Qualitative & Quantitative Analysis

Portfolio construction

Our Approach

Combination ofTop-Down &Bottom-Up Approach

Step-1 Idea generation through mix of internal and external research

Step-2 Management contacts (combination of management meetings, plant visits and/or conference calls), analyst meetings & other background research

Step-2 Creation of earning model, Forecasting of revenue and profitability. Active monitoring based on quarterly results and fundamental news flows

Step-3 Periodic follow up meetings with management to re-evaluate earlier assumptions

Step-4 Based on earnings estimates valuation screen is created

Step-5 Valuation screen used extensively for studying absolute valuations, valuations relative to sector, peer group, own history and market conditions

Step-6 Purchase / Sale decisions formulated based on key learning from Valuation Screen

Step-7 Management quality and attractive valuations help determine weight of stock in portfolio

Stock Selection Procedure

Sectoral Bets:• Sectoral risk is mitigate through effective diversification. • Any single sectoral allocation to be caped at 30%

Stock Bets:

• Individual stock concentration is limited to 10%.• Fund Manger also try to limit exposure to any Single Corporate group

Hedging:

• Hedging Strategies to be actively used with discretion of Fund Manger

Risk Control Guidelines

PMS Fee StructureContd.

Plan2. Fixed Management Fees &Variable Profit Sharing Plan:Initial Corpus Category A : (5 lacs to 50 lacs) Category B : (50 lacs and above)

Fees Structure

Fixed Management Fees:2% p.a. of the AUM &Variable Profit Sharing Plan:> 15% Profit -- 15% p.a. profit sharing + Brokerage and Custodian charges on actual basis

High Watermark Applicable (for variable part only)

Fixed Management Fees1.0% p.a. of the AUM &Variable Profit Sharing Plan:15% Profit --15% p.a. profit sharing + Brokerage and Custodian charges on actual basis

High Watermark Applicable (for variable part only)Exit charges* 2% of AUM 1% of AUM

* Applicable only if exit before 1year

Plan 1. Variable Profit Sharing Plan:

Initial Corpus Category A : (5 lacs to 50 lacs) Category B : (50 lacs and above)

Fees Structure

20% p.a. Profit sharing + Brokerage and Custodian charges on actual basis

High Watermark Applicable

15% p.a. profit sharing + Brokerage and Custodian charges on actual basis

High Watermark ApplicableExit charges* 2% of AUM 1% of AUM

The Client has the option of selecting one of the two fee plans offered by the Portfolio Manager viz.

What is High Watermarking?

Plan 1 : 20% profit sharing and high watermark applicable

Year Opening NAV

Closing NAV (After all Charges including

Brokerage)

Absolute Incremental Return (p.a)

Incremental Returns (p.a.)

Profit sharing

Applicable

Amount on which Profit

Sharing Applicable

Total Fees Chargeable

High Watermark

(Rs. Lacs) (Rs. Lacs) (Rs. Lacs) (%) (%) (Rs. Lacs) (Rs. Lacs) (Rs. Lacs)

A B C D=C-B E=(D/B)*100 F G H=D*F I

Year- 1 100.00 140.00 40.00 40.00% 20.00% 40.00 8.00 132.00

Year -2 132.00 105.00 -27.00 -20.45% 0.00% 0.00 0.00 132.00

Year -3 105.00 130.00 25.00 23.81% 0.00% 0.00 0.00 132.00

Year -4 130.00 160.00 30.00 23.08% 20.00% 28.00 5.60 154.40

Year -5 154.40 190.00 35.60 23.06% 20.00% 35.60 7.12 182.88

“High Watermarking” means Performance based fees are charged only when there are incremental profits (see example given below) are not all the profits. This is known as High Watermarking. High Watermarking would be adjusted for infusion and withdrawal.

Example (Details on calculation of High Water Marking and Performance based management fees)

IllustrationMr. X has given Rs. 100 Lacs in cash for Portfolio management Services. Following is the performance of the portfolio with calculation for performance fees and High Water Marking.

Plan 2 : >15% profit 15% profit sharing and high water watermark applicable

What is High Watermarking?Contd.

Year Opening NAV

Closing NAV

(After all Charges including Brokerage

)

Absolute Incremental Return (p.a)

Incremental Return (p.a.)

Variable Profit

Sharing Applicable

Hurdle After

Which Profit

Sharing Applicable

Amount on which

Profit Sharing

Applicable

Variable Profit

Sharing Charge

s (@15%)

Fixed Fees (@

2% of AUM)

Total Fee Chargeable

High Watermar

k

Rs. Lacs

Rs. Lacs

Rs. Lacs

% (%) Rs.Lacs

Rs. Lacs

Rs. Lacs

Rs.Lacs

Rs. Lacs

Rs. Lacs

A B C D=C-B E=(D/B)*100 F G H=C-G (If C>G)

I=H*15% J=B*2% K=I+J I

Yr- 1 100.00 140.00 40.00 40.00% 15.00% 115.00 25.00 3.75 2.00 5.75 136.25

Yr -2 136.25 105.00 -31.25 -22.94% 0.00% 136.25 0.00 0.00 2.73 2.73 136.25

Yr -3 105.00 130.00 25.00 23.81% 0.00% 136.25 0.00 0.00 2.10 2.10 136.25

Yr -4 130.00 160.00 30.00 23.08% 15.00% 136.25 23.75 3.56 2.60 6.16 156.44

Yr- 5 156.44 190.00 33.56 21.45% 15.00% 156.44 33.56 5.03 3.13 8.16 184.97

Clarification on Key Policies &Terms

Anniversary YearSystematix PMS shares profit at the end of Anniversary year. This means after a year from the date of activation of client’s PMS account.

Taxation: Portfolio Management Services follow pass-through taxation structure i.e. liability to pay Income tax is on the investors and Systematix PMS will provide reports on the basis of that tax liability can be assessed whether gains are from short-term / long term investments or dividend income etc.

Periodic Reporting & Client Servicing

• Superior Distributor and Investor Servicing & Transparency

• Continuous interactions of PMS Relationship Managers

• Periodic interactions with PMS Portfolio Managers

• Financial summary comprising income statement, transaction details, etc.

• Annual audit of the portfolio

• Opinion from leading Tax consultants on investment related Tax issues

• Password protected interactive web-access providing updated details on the portfolio

• Daily NAV can be checked online

PMS: Risk Disclosure & Disclaimer

• Investments in Securities are subject to market and other risks and there is no assurance or guarantee that the objective of any of the scheme will be achieved.

• Investors in the PMS Product are not being offered any guaranteed/assured returns.

• Past performance does not indicate the future performance of the same scheme or any other future schemes of the Portfolio Manager.

• The names of the schemes do not in any manner indicate their prospects or return.• The investments may not be suited to all categories of investors. • The material is based upon information that we consider reliable, but we do not

represent that it is accurate or complete, and it should be relied upon as such.• Neither Systematix Shares & Stocks (I) Ltd., nor any person connected with it, accepts

any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

• Opinions expressed are our opinions as of the date of appearing on this material only. While we endeavor to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so.

• Recipient shall understand that the aforementioned statements/presentation cannot disclose all the risks and characteristics. The recipient is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile, and the like and take professional advice before investing. As with any investment in securities, the Value of the portfolio under management may go up or down depending on the various factors and forces affecting the capital market. Disclosure Document shall be obtained and read carefully before executing the PMS agreement and any time thereafter.

PMS: Risk Disclosure & Disclaimer • Prospective investors and others are cautioned that any forward - looking statements

are not predictions and may be subject to change without notice. • For tax consequences, each investor is advised to consult his / her own professional

tax advisor.• This presentation is not for public distribution and has been furnished solely for

information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. No part of this material may be duplicated in any form and/or redistributed without Systematix Shares & Stocks (I) Ltd.’s prior written consent.

• Distribution Restrictions – This material should not be circulated in countries where restrictions exist on soliciting business from potential clients residing in such countries.

Corporate Office: 3rd Floor, J.K. Somani Building, British Hotel Lane, Bombay Samachar Marg, Fort, Mumbai – 400001, Tel: +91 22-3029 8000, Fax: +91 22 30298029

Registered Office: EGA Trade Center, 4th Floor, 809, Ponamalle High Road, Kilpauk, Chennai-600010, Tel: +91 44 30588078 / 80, Fax: +91 44 26612190

Email: pms@systematixshares.com

Website: pms.systematixshares.com

SEBI PMS Registration No.: INP000002692

Contd.

Systematix Portfolio Management Service

we make money work for you!

so you get more time for you….

Thank You

Corporate Office:3rd floor, J.K. Somani Building, British Hotel Lane, Bombay Samachar Marg, Fort, Mumbai 400001.

Tel.: +91 22 30298085/ 66198085 (Direct Line), +91 22 30298000/ 66198000 (Board Line).Fax: +91 22 30238029/ 66198029. E-mail: pms@systematixshares.com

Website: pms.systematixshares.com