Hurdle rate is the rate of return (annualized return) below which the profit sharing is not applicable. The objective of hurdle rate is to ensure that the profit sharing is carried out only if the annual return (post fixed fee expenses ) exceeds the hurdle rate . Refer the working shown in the next question to understand more on this.

For example , Let us assume , the initial capital is Rs 100, Hurdle Rate is 12% , Ist year return is Rs 30 ( including unrealized gains), Fixed Fee is 1% and Profit Sharing Fee is 20% , then the working of expenses is ;

Total Returns ( including realized and unrealized gains)	=	Rs 30.00
Fixed Fee Charges	=	Rs 1.00
Returns net of Fixed Fee	=	Rs 29.00 ...........A
Less Hurdle Rate	=	Rs 12.00
Returns net of fixed fee & hurdle rate	=	Rs 17.00
Profit Sharing @ 20% to TrustLine	=	20% of Rs 17.00 = Rs 3.40 ...........B
Net Returns to the Investor = A-B	=	Rs 25.60
High Water Mark	=	Rs. 129

Refer to the Fee tool and Illustration for more details.

An investment’s high-water mark is the highest value a fund or portfolio reaches, used to determine when fund managers are paid performance fees.

Illustration of how the High-Water Mark would work:

• A client's initial contribution is Rs 1,00,00,000, which rises to Rs 1,25,00,000 in its first year. Therefore, a performance fee would be payable on the Rs 25,00,000 return.
• Next year, the portfolio value drops to Rs 1,10,00,000. Therefore, no performance fee is payable.
• In the third year, the portfolio value rises to Rs 1,40,00,000. A performance fee is payable only on the profit over the previously achieved high watermark, i.e., Rs 1,25,00,000 (Pre-performance fee).

NAV stands for Net Asset Value.
It represents the sum total of the current value of the securities plus the bank balance plus receivables less payables less PMS fees.

Fixed Fee is charged at the applicable percentage ( based on the options chosen by the investor) quarterly on the average NAV (daily NAVs averaged over the quarter) for that quarter and is charged at the end of the quarter. This will be charged at the end of every financial quarter irrespective of the joining date. If the joining date is not same as the beginning of financial quarter , it will be charged on pro-rata basis for the Ist quarter alone to make sure that it is aligned with the financial quarter from thereon.

For e.g , if average NAV is Rs 100 for the quarter and the annual fixed fee is 1% , then at the end of the quarter , 0.25% i.e. 0.25 Rs is charged and debited to the investor.

* GST & other statutory taxes will be charged extra

It is charged at the end of every 12 months or at the time of withdrawal of funds (in the interim period) based on the return structure explained above. Profit sharing is aligned with the client year , not financial year. Client year refers to the every 12 month period from the date of joining.

* GST & other statutory taxes will be charged extra

As mentioned earlier , profit sharing fee is charged at the end of every client year ( refer above definition) or at the time of withdrawal of funds. Annual returns are computed after taking into account the corpus inflows and outflows.

We have a well defined reporting process that has been put in place for periodic sharing of reports to clients. The periodicity and the nature of reports are as under : -

Transaction Statements	-	Sent on monthly Basis.
Performance and Holding Statements	-	Sent on a Quaterly Basis (Financial Quarter)
Quarterly Gain Statements*	-	For Advance Tax Purpose
Annual Gain Statements*	-	for Final Tax Computation.

* This reports would cover Income and Expense Statement, Equity Gain / Loss Statement, Mutual Fund Gain / Loss Statement, Dividend Statement.
Also, these are uploaded in our client portal link in the above-mentioned frequency.
https://appneo.trustlineindia.biz/trustlineliveweb/aspx/signin.aspx

Under the portfolio management scheme , the responsibility of the income tax payment on the income earned from PMS activities is on the investors. It will be primarily capital gains tax. However ,TrustLine will provide adequate statements ( capital gains reports etc ) to the investors periodically or on a specific request basis.Refer Disclosure Document (Page # 18, Section 8) for more details.

The sign-up procedure is simple.Once you decide to invest with TrustLine PMS, we will provide the necessary account opening documents.

For Resident Individual

You will receive:

• PMS Account Opening Kit - Application Form, PMS Agreement with SEBI Disclosure, and Demat Form, if applicable.

We require:

• KYC documents - PAN, Aadhaar/Passport/Driving Licence, cancelled cheque and other applicable documents.

For Non-Resident Individual

You will receive:

• PMS Account Opening Kit - Application Form, PMS Agreement with SEBI Disclosure, Bank form, Trading form and Demat Form, if applicable.

We require:

• KYC documents - PAN, Aadhaar/Driving Licence, Passport, OCI/PIO/Visas (as applicable), Overseas Address proof and other applicable documents.

For Non-Individual

You will receive:

• PMS Account Opening Kit - Application Form, PMS Agreement with SEBI Disclosure, and Demat Form, if applicable.

We require:

• Constitution documents, KYC documents - PAN, Aadhaar/Passport/Driving Licence for Authorised/Key personnel, cancelled cheque, and other applicable documents.

You need to:

• Complete and sign the application form and agreement.
• Return the completed documents to TrustLine.
• Once the documents are verified and all regulatory requirements are completed, your PMS account opening will be started step by step.