IDFC FMP 3 Year Series 5 - Securities and Exchange Board of India

1. Financial statement analysis• Balance sheet analysis (Debt equity ratios, Networth, etc)• Profit & Loss statement analysis (Interest coverage ratios, ROA, Gross andnet margins)• Cash flow analysis2. Qualitative analysis by meeting the key officials of the company on a periodic basisto get a better understanding.The scheme shall invest in various securities/ instruments as mentioned below with the ratingsmentioned against the type of instrument. As per the regulations, the scheme is allowed to investwithin a range of 5% of the intended allocation (floor and cap) against each sub asset class/creditrating. The indicative allocation is as follows:InstrumentsRatingAAA/A1+ AA/AA+ A BBBCD's - - - -CP's - - - -NCD's - 100% - -Securitised Debt - - - -Others - - - -Note: Short term highest rated instruments as well as structured obligations with AAA ratings will becategorized as AAA. Further, the Fund manager shall reserve the right to improve the portfolio creditquality by deviating the asset allocation in favour of higher credit rated instruments in the samecategory of instruments.Exposure to unrated instruments shall be restricted to 25% of the net asset of the scheme.All investment shall be made based on the rating prevalent at the time of investment. However, incase of an instrument having dual ratings, the most conservative publically available rating would beconsidered.In the event of any deviations from the floor and ceiling of credit ratings specified for anyinstrument, the same shall be rebalanced within 30 days from the date of said revision.In case of non availability of CPs, NCDs (including securitized debt), the scheme may invest in T-bills, CBLO or bank CDs of highest credit rating (A1+) or equivalentGross exposure to debt, money market and cash shall not exceed 100% of the net assets of thescheme.The ratings AA, A mentioned above shall include AA+ / - or A+/- respectively. Fund shall not takeany exposure to real estate sector.17