Penalties, Pending Litigation or Proceedings, Findings of Inspections or Investigations for Which Action May Have Been Taken Or Is In The Process Of Being Taken By Any Regulatory Authority. (As on October 30, 2024)

1. All disclosures regarding penalties and action(s) taken against foreign Sponsor(s) may be limited to the jurisdiction of the country where the principal activities (in terms of income / revenue) of the Sponsor(s) are carried out or where the headquarters of the Sponsor(s) is situated. Further, only top 10 monetary penalties during the last five years shall be disclosed.

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2. In case of Indian Sponsor(s), details of all monetary penalties imposed and/ or action taken during the last five years or pending with any financial regulatory body or governmental authority, against Sponsor(s) and/ or the AMC and/ or the Board of Trustees /Trustee Company; for irregularities or for violations in the financial services sector, or for defaults with respect to shareholders or debenture holders and depositors, or for economic offences, or for violation of securities law. Details of settlement, if any, arrived at with the aforesaid authorities during the last five years shall also be disclosed.

a. The Sponsor of JM Financial Mutual Fund has contingent liability in respect of income tax demand and service tax demand disputed in Rs.50.92 crore as on March 31, 2024 (last reported Rs.47.67 crore as on March 31, 2023).

b. The Income Tax Authorities had ongoing dispute with the Sponsor relating to them treating the long term capital gain on sale of equity shares on termination of joint venture with Morgan Stanley as taxable under the head “Business Income” and not under the head “Capital Gains”. The ITAT has ruled the appeals in favour of JM Financial Ltd (Sponsor).

c. SEBI conducted an inspection of the merchant banking operations of JM Financial Limited (“JMFL”) and issued an advisory and deficiency letter dated July 17, 2020 to JMFL in relation to its certain findings, primarily procedural/technical in nature. JMFL, vide its letter dated August 27, 2020, has submitted its representations to SEBI along with the details of proposed corrective steps to rectify the deficiencies mentioned in SEBI letter and accordingly, the matter stands closed.

d. In the matter of a proposed Initial Public Offer (“IPO”) by one of the clients of JM Financial Limited (“JMFL”), there was non- disclosure of certain facts related to the promoters of the issuer company in the Draft Red Herring Prospectus (“DRHP”). SEBI issued an administrative warning letter dated July 21, 2022 to the concerned promoters of the issuer company and the Book Running Lead Managers to the IPO, including JMFL, asking them to ensure compliance with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. JMFL took necessary corrective action and accordingly, the matter stands closed.

e. SEBI conducted an inspection of the merchant banking operations of JMFL and issued an administrative warning letter dated June 2, 2023 to JMFL in relation to its certain observations. JMFL, vide its letter dated August 7, 2023, has submitted the details of corrective steps/action taken for the observations made in SEBI letter and accordingly, the matter stands closed.

f. In the matter of an IPO by one of the clients of JMFL, SEBI issued an administrative warning letter dated August 22, 2023 to JMFL for non-reporting of bid upload failure by a Self-Certified Syndicate Bank. JMFL took necessary corrective action and accordingly, the matter stands closed.

g. In the matter of buy-back of equity shares by one of the clients of JMFL, SEBI issued an administrative warning letter dated November 22,2023 to JMFL in relation to the calculation of entitlement ratio for the general category of shareholders while preparing Letter of Offer. JMFL took necessary corrective action and accordingly, the matter stands closed.

h. SEBI conducted an inspection of the merchant banking operations of JMFL in respect of public issues of NCDs, REITs and InvITs lead managed by it and issued an administrative warning letter dated June 14, 2024 to JMFL in relation to certain observations. JMFL, vide its letter dated July 12, 2024, has submitted the details of corrective steps/action taken for the observations made in SEBI letter.

3. Details of all enforcement actions taken by SEBI in the last five years and/ or pending with SEBI for the violation of SEBI Act, 1992 and Rules and Regulations framed there under including debarment and/ or suspension and/ or cancellation and/ or imposition of monetary penalty/adjudication/enquiry proceedings, if any, to which the Sponsor(s) and/ or the AMC and/ or the Board of Trustees / Trustee Company and/ or any of the directors and/ or key personnel (especially the fund managers) of the AMC and Trustee Company were/ are a party. The details of the violation shall also be disclosed.

a. SEBI had issued a show cause notice dated November 15, 2022 to JM Financial Asset Management Limited (“the AMC”) and JM Financial Trustee Company Private Limited (“Trustee Company”), in respect of transactions executed by certain employees of the AMC in the schemes of JM Financial Mutual Fund, which was responded to by the AMC and Trustee Company. Post the submissions of the AMC and the Trustee Company, SEBI has issued an Order of the Adjudicating Officer on July 31, 2024 imposing a penalty of INR 25,00,000 and INR 10,00,000 on the AMC and the Trustee Company, respectively, as per Section 15E and 15HB of SEBI Act, 1992 for failing to comply with the provisions of SEBI Circular dated November 17, 2016 and Clause 2 of Fifth Schedule to SEBI (Mutual Funds) Regulations, 1996. The above penalty was paid by the AMC and Trustee Company on September 04, 2024 and accordingly, the matter stands closed.

b. SEBI, vide its order dated May 10, 2019, disposed of the show cause notice dated March 14, 2019 issued by it to JMFISL (since amalgamated with JMFL) under Rule 4(1) of the SEBI (Procedure for Holding Inquiry and Imposing Penalties by Adjudicating Officer) Rules, 1995 read with Section 15-I of SEBI Act, 1992. This notice was issued by SEBI in relation to the alleged violation of Clause 4 and Clause 20 of the Code of Conduct for Merchant Bankers stipulated under Regulation 13 of SEBI (Merchant Bankers) Regulations, 1992. JMFL was acquitted without any action being taken in this regard and accordingly, the matter stands closed.

c. SEBI, vide its Settlement Order dated May 21, 2024, disposed of the adjudication proceedings initiated against JMFL vide Show Cause Notice dated May 25, 2023 issued by SEBI to certain entities, including JMFL, in the matter of voluntary delisting offer by one of the clients of JMFL. The SCN was issued by SEBI in relation to the alleged violation of Regulation 29(4) of SEBI (Delisting of Equity Shares) Regulations, 2021 & Regulation 13 read with Schedule III of SEBI (Merchant Bankers) Regulations, 1992.

d. SEBI had issued an Interim Ex Parte Order (the “Interim Order”) dated March 7, 2024 in the matter of public issue of certain debt securities. Pursuant to the Interim Order, JMFL was barred by SEBI from taking any new mandate for acting as a lead manager for any public issue of debt securities. As regards the existing mandates, the Interim Order stated that JMFL could continue to act as a lead manager for public issue of debt securities for a period of 60 days from the date of the Interim Order. SEBI would undertake an investigation into the issues covered under the said Interim Order and complete the same within a period of six months from the date of the Interim Order. JMFL filed its response to SEBI in the said matter. JMFL’s authorised representatives also attended the personal hearing on April 24, 2024 before the Hon’ble Whole Time Member of SEBI, and then on June 18, 2024 wherein JMFL, inter-alia, submitted a revised undertaking to SEBI.

In continuation of the Interim Order, the Hon’ble Whole Time Member of SEBI, considering the undertaking furnished by JMFL, has passed the Confirmatory Order on June 20, 2024 (“Confirmatory Order”) thereby confirming the directions issued vide the Interim Order with a modification that JMFL shall not act as a lead manager in any public issue of debt securities till March 31, 2025 or such other date as may be specified by SEBI. The Confirmatory Order further clarified that the directions contained in the Interim Order, as confirmed by the Confirmatory Order, is limited to the functioning of JMFL as a lead manager to public issue of debt securities and does not relate to other activities of JMFL, including acting as a lead manager to public issue of equity instruments.

4. Any pending material civil or criminal litigation incidental to the business of the Mutual Fund to which the Sponsor(s) and/ or the AMC and/ or the Board of Trustees /Trustee Company and/ or any of the directors and/ or key personnel are a party should also be disclosed separately.

Nil

5. Any deficiency in the systems and operations of the Sponsor(s) and/ or the AMC and/ or the Board of Trustees/Trustee Company which SEBI has specifically advised to be disclosed in the SID, or which has been notified by any other regulatory agency, shall be disclosed.

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