Axis Dividend Yield Fund

SCHEME INFORMATION DOCUMENT SO - 1 Axis Dividend Yield Fund (An open ended equity scheme predominantly investing in dividend yielding stocks) This product is suitable for investors who are Scheme Risk-o-meter Benchmark Risk-o-meter seeking*:

• Capital appreciation over long term • An equity scheme investing in equity and equity related instruments (including REITs) of dividend yielding entities.

SO - 3 Nifty 500 TRI (AMFI tier I Benchmark) *Investors should consult their financial advisers if in doubt about whether the product is suitable for them. (The product labelling assigned during the New Fund Offer is based on internal assessment of the Scheme Characteristics or model portfolio and the same may vary post NFO when actual investments are made) Offer of Units of Rs. 10 each during the New Fund Offer and Continuous offer for Units at NAV based prices

New Fund Offer Opens on : _____________

New Fund Offer Closes on : _____________ Scheme re-opens on : Within five Business Days from the date of allotment

Name of Mutual Fund : Axis Mutual Fund

Name of Asset Management : Axis Asset Management Company Ltd.

Company

Name of Trustee Company : Axis Mutual Fund Trustee Ltd Addresses, Website of the entities : One Lodha Place, 22nd & 23rd Floor, Senapati Bapat Marg, Lower Parel, Mumbai, Maharashtra, Pin Code – 400013 www.axismf.com

Name of the Sponsor : Axis Bank Ltd.

The particulars of the Scheme have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations 2026, (herein after referred to as SEBI(MF) Regulations) as amended till date and circulars issued thereunder filed with SEBI, along with a Due Diligence Certificate from the AMC. The units being offered for public subscription have not been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy of the Scheme Information Document.

The Scheme Information Document sets forth concisely the information about the scheme that a prospective investor ought to know before investing. Before investing, investors should also ascertain about any further changes to this Scheme Information Document after the date of this Document from the Mutual Fund / Investor Service Centres / Website / Distributors or Brokers.

The investors are advised to refer to the Statement of Additional Information (SAI) for details of Axis Mutual Fund, Standard Risk Factors, Special Considerations, Tax and Legal issues and general information on www.axismf.com.

1 Axis Dividend Yield FundSAI is incorporated by reference (is legally a part of the Scheme Information Document). For a free copy of the current SAI, please contact your nearest Investor Service Centre or log on to our website.

The Scheme Information Document (Section I and II) should be read in conjunction with the SAI and not in isolation.

This Scheme Information Document is dated __________.

2 Axis Dividend Yield FundTABLE OF CONTENTS

SECTION I ..................................................................................................................................................................... 4 Part I. HIGHLIGHTS/SUMMARY OF THE SCHEME ........................................................................................................ 4 DUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY .................................................................................... 11 Part II. INFORMATION ABOUT THE SCHEME ............................................................................................................ 12 A. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? .......................................................................................... 12 B. WHERE WILL THE SCHEME INVEST? ............................................................................................................... 15 C. WHAT ARE THE INVESTMENT STRATEGIES? ................................................................................................... 16 D. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? ....................................................................... 22 E. WHO MANAGES THE SCHEME? .................................................................................................................... 22 F. HOW IS THE SCHEME DIFFERENT FROM EXISTING SCHEMES OF THE MUTUAL FUND? ............................... 24 H. ADDITIONAL SCHEME RELATED DISCLOSURES ............................................................................................ 25 Part III. OTHER DETAILS .............................................................................................................................................. 27 A. COMPUTATION OF NAV ............................................................................................................................... 27 B. NEW FUND OFFER (NFO) EXPENSES .............................................................................................................. 27 C. ANNUAL SCHEME RECURRING EXPENSES .................................................................................................... 28 D. LOAD STRUCTURE ........................................................................................................................................... 30 E. REQUIREMENT OF MINIMUM INVESTORS IN THE SCHEME ................................................................................ 31

Section II .................................................................................................................................................................... 33 I. Introduction ................................................................................................................................................... 33 A. Definitions/interpretation ............................................................................................................................. 33 B. Risk factors .................................................................................................................................................... 33 C. Risk mitigation strategies ............................................................................................................................. 37 II. Information about the scheme: .................................................................................................................. 40 A. Where will the scheme invest – ................................................................................................................... 40 B. What are the investment restrictions? ........................................................................................................ 44 C. Fundamental Attributes ................................................................................................................................ 50 D. Index methodology (for index funds, ETFs and FOFs having one underlying domestic ETF) .............. 51 E. Principles of incentive structure for market makers (for ETFs) ................................................................ 51 F. Floors and ceiling within a range of 5% of the intended allocation against each sub class of asset, as per clause 14.5.1 of SEBI master circular for mutual funds dated May 19, 2023 (only for close ended debt schemes) ................................................................................................................................................................... 51 G. Other Scheme Specific Disclosures: .......................................................................................................... 51 III. Other Details .................................................................................................................................................. 60 A. In case of Fund of Funds Scheme, Details of Benchmark, Investment Objective, Investment Strategy, TER, AUM, Year wise performance, Top 10 Holding/ link to Top 10 holding of the underlying fund should be

provided .................................................................................................................................................................... 60 B. Periodic Disclosures ..................................................................................................................................... 61 C. Transparency/NAV Disclosure ................................................................................................................... 62 D. Transaction charges and stamp duty- ....................................................................................................... 62 E. Associate Transactions - Please refer to Statement of Additional Information (SAI) .......................... 62 3 Axis Dividend Yield FundSECTION I Part I. HIGHLIGHTS/SUMMARY OF THE SCHEME Sr. Title Description No.

I. Name of the Axis Dividend Yield Fund (‘the Scheme’) scheme II. Category of the Dividend Yield Fund Scheme III. Scheme type An open ended equity scheme predominantly investing in dividend yielding stocks.

IV. Scheme code SO - 7 V. Investment To provide long term capital appreciation from an actively managed objective portfolio of equity and equity related instruments (including REITs) of dividend yielding entities.

SO - 5 There is no assurance that the investment objective of the Scheme will be achieved.

VI. Liquidity/listing The Scheme offers Units for Subscription and Redemption at NAV based prices details on all Business Days on an ongoing basis, commencing not later than 5 business days from the date of allotment. Under normal circumstances the AMC shall dispatch the redemption proceeds within three (3) working days from the date of receipt of request from the Unit holder. The AMC shall adhere to guidelines published by AMFI /SEBI for exceptional circumstances under which the scheme is unable to transfer redemption or repurchase proceeds within prescribed timelines.

VII. Benchmark AMFI Tier 1 Benchmark: Nifty 500 TRI (Total Return SO – 25 Index) Justifications of Benchmark:

As prescribed under SEBI Master Circular for Mutual Funds dated March 20, 2026, Nifty 500 Index (TRI) has been selected from amongst those notified by AMFI for the Scheme. The scheme’s portfolio will be market-cap agnostic and will have flexibility to invest in any sector and market capitalization. The NIFTY 500 tracks the performance of the top 500 companies across large cap, midcap and small cap universe as defined by SEBI. Hence the benchmark would be appropriate to compare performance of the Scheme. The constituents of the Index reflect the fund’s universe in the best possible way.

Tier 2 Benchmark: Not Applicable The Trustee/AMC reserves the right to change the benchmark for the evaluation of the performance of the Scheme from time to time, keeping in mind the investment objective of the Scheme and the appropriateness of the benchmark, subject to SEBI guidelines and other prevalent guidelines.

VIII. NAV disclosure The AMC will calculate and disclose the first NAV of the Scheme within a period of 5 business days from the date of allotment under the NFO.

Subsequently, by 11.00 p.m. on every Business Day on AMC SO – 41 and (www.axismf.com) and AMFI website.

42 Further Details in Section II.

IX. Applicable Timeline for

timelines Dispatch of redemption proceeds:

Under normal circumstances the AMC shall dispatch the redemption 4 Axis Dividend Yield Fundproceeds within three (3) working days from the date of receipt of request from the Unit holder. The AMC shall adhere to guidelines published by AMFI /SEBI for exceptional circumstances under which the scheme is unable to transfer redemption or repurchase proceeds within prescribed timelines.

Dispatch of IDCW:

The instruments for payment of IDCW shall be dispatched to the Unit holders within seven (7) working days from the record date.

X. Plans and Plans Options 1. Axis Dividend Yield Fund - Regular Plan Plans/Options 2. Axis Dividend Yield Fund - Direct Plan and sub options under Options under each plans the Scheme • Growth • Income Distribution cum Capital Withdrawal (IDCW) (Payout and Reinvestment Facility) Regular Plan Regular Plan is available for investors who purchase /subscribe Units in a Scheme through a Distributor.

Direct Plan Direct Plan is only for investors who purchase/ subscribe Units in a Scheme directly with the Fund and is not available for investors who route their investments through a Distributor.

All the plans will have a common portfolio.

Growth Option IDCWs will not be declared under this option. The income attributable to Units under this option will continue to remain invested in the Scheme and will be reflected in the NAV of Units under this option.

IDCW Option Under this option, IDCWs will be declared (subject to deduction of tax at source, if any) at specified frequencies at the discretion of the Trustee, subject to availability of distributable surplus calculated in accordance with SEBI (MF) Regulations. The amounts can be distributed out of investors capital (Equalization Reserve), which is part of sale price that represents realized gains.

On payment of IDCW, the NAV of the Unit under IDCW option will fall to the extent of the IDCW payout and applicable statutory levies, if any.

It must be distinctly understood that the actual declaration of IDCW and frequency thereof is at the sole discretion of the Board of Directors of Trustee Company. There is no assurance or guarantee to the Unit holders as to the rate of IDCW distribution nor that it be paid regularly. The Trustee reserves the right to declare a IDCW at any other frequency in addition to the frequencies mentioned above.

Eligible investors / modes for applying All categories of investors (whether existing or new Unitholders) as permitted under the Scheme Information Document of the Scheme are eligible to subscribe under Direct Plan. Investments under Direct Plan can be made 5 Axis Dividend Yield Fundthrough various modes offered by the Fund for investing directly with the Fund {except Platform(s) where investors’ applications for subscription of units are routed through Distributors}.

Default Option/Facility The investor must clearly specify his choice of option/facility. In the absence of such clear instruction, it will be assumed that the investor has opted for ‘default’ option / facility and the application will be processed accordingly.

The default plan/ option / facility are:

Default Option: Growth (between Growth and IDCW)

Default Facility: IDCW Reinvestment facility (between IDCW Reinvestment and IDCW Payout facility) For detailed disclosure on default plans and options, kindly refer SAI.

XI. Load Structure Entry Load: Not Applicable Para 11.7 of SEBI Master Circular on Mutual Funds as amended from time to time has decided that there shall be no entry load for all Mutual Fund schemes.

SO – 48

Exit Load: a) If redeemed / switched-out within 12 months from the date of allotment:

For 10% of investments: NIL

For remaining investments: 1% b) If redeemed / switched-out after 12 months from the date of allotment: NIL For more details on Load Structure, please refer paragraph “Load Structure”.

XII. Minimum 1. During NFO period Application Rs. 100 and in multiples of Re. 1/- thereafter Amount/switch 2. in 3. On continuous basis Rs. 100 and in multiples of Re. 1/- thereafter Minimum application amount is applicable at the time of creation of new folio and at the time of first investment in a plan.

The aforesaid requirement of minimum application shall not be applicable on the mandatory investments made by the Designated Employees of the Axis AMC in accordance with clause 7.14. of SEBI Master Circular on Mutual Funds.

XIII. Minimum Rs.100 and in multiples of Re. 1/- thereafter Additional Purchase The aforesaid requirement of minimum additional purchase amount shall not Amount be applicable on the mandatory investments made by the Designated Employees of the Axis AMC in accordance with clause 7.14 of SEBI Master

Circular on Mutual Funds.

XIV. Minimum There will be no minimum redemption criterion.

Redemption/ switch out amount XV. New Fund Offer NFO opens on:________

Period NFO closes on: ________ The AMC/Trustee reserves the right to extend / change the closing date of the New Fund Offer Period, subject to the condition that the New Fund Offer shall 6 Axis Dividend Yield Fundnot be kept open for more than 15 days.

SO – 34 Any changes in the NFO period shall be announced by way of an addendum uploaded on the website of the AMC.

XVI. New Fund Offer Rs. 10/- per unit Price XVII. Segregated The Scheme has provision for segregated portfolio. For Details, kindly refer SAI portfolio/ side pocketing SO – 54 disclosure XVIII Swing pricing The Scheme does not have provision for swing pricing.

SO – 55 disclosure XIX. Stock The Scheme may engage in stock lending / short selling subject to disclosure lending/short as specified in asset allocation. For Details, kindly refer SAI selling XX. How to Apply Investors can undertake transactions in the Schemes of Axis Mutual Fund and other details either through physical, online / electronic mode or any other mode as may be prescribed from time to time.

SO – 35 Physical Transactions For making application for subscription / redemption / switches, application form and Key Information Memorandum may be obtained fr om / submitted to the Official Points of Acceptance (OPAs) of AMC or downloaded from the website of AMC viz. www.axismf.com.

Online / Electronic Transactions Investors can undertake transactions via electronic mode through various online facilities offered by Axis AMC / other platforms specified by AMC from time to time.

For further details of online / electronic mode please refer SAI.

XXI. Investor services Contact details for general service requests and complaints:

Investors can lodge any service request or complaints or enquire about NAVs, Unit Holdings, IDCW, etc by calling the Investor line of the AMC at contact number 8108622211 (chargeable) from 9.00 am to 6.00 pm (Monday to Saturday) or (022) 6311 1001 (at local call rate for enquiring at AMC ISC’s) or email – customerservice@axismf.com. The service representatives may require personal information of the Investor for verification of his / her identity in order to protect confidentiality of information. The AMC will at all times endeavour to handle transactions efficiently and to resolve any investor grievances promptly.

Investor Relations Officer:

Mr. C P Sivakumar Nair

Address : Axis Asset Management Company Ltd.

One Lodha Place, 22nd & 23rd Floor, Senapati Bapat Marg, Lower Parel, Mumbai, Maharashtra, Pin Code – 400013 Phone no.: (022) 6311 1001 For any grievances with respect to transactions through BSE StAR and / or NSE MFSS, the investors / Unit Holders should approach either the stock broker or the investor grievance cell of the respective stock exchange.

XXII Specific Not Applicable. attribute of the scheme 7 Axis Dividend Yield FundXXIII Special The facilities offered under the Scheme during NFO are as follows: product/facility available during 1. Systematic Investment Plan (SIP) the NFO and on ongoing basis 2. Systematic Transfer Plan (STP)

3. Smart Switch Option Smart switch is allowed only as Lumpsum Transactions in eligible liquid / overnight schemes. Currently Axis Overnight Fund will act as Source Scheme. Investments would be allowed only under Growth Option of these Schemes.

4. Switching Option Switching Option During the NFO period (Switch request will be accepted upto 3.00 p.m. till the last day of the NFO), the Unit holders will be able to invest in the NFO under the Scheme by switching part or all of their Unit holdings held in the respective option(s) /plan(s) of the existing scheme(s) established by the Mutual Fund.

For detailed terms on the above and for other available special products / facilities / Modes of Transactions, kindly refer SAI.

The facilities on ongoing basis are offered under the Scheme are as follows:

A. Systematic Investments

1. Systematic Investment Plan (SIP)

2. Atmanirbhar SIP

3. Systematic Investment Plan (SIP) Switch Facility

4. Systematic Investment Plan (SIP) Top-Up Facility

5. Systematic Investment Plan (SIP) Pause/Unpause facility

6. FLEX - Systematic Investment Plan (“FLEX SIP”)

7. Choti SIP B. Systematic Transfers

1. Systematic Transfer Plan

2. Capital Appreciation Systematic Transfer Plan (“CAPSTP”)

3. FLEX - Systematic Transfer Plan (“FLEX STP”) C. Systematic Withdrawal Plan (SWP)

1. Systematic Withdrawal Plan D. Transfer of Income Distribution Cum Capital Withdrawal Plan (IDCW Transfer Plan) E. Switching Options

1. Inter – Scheme Switching option

2. Intra –Scheme Switching option F. Online Schedule Transaction Facility The details pertaining to Frequency / Minimum installments / Minimum amount of SIP / SWP / STP are as follows:

1. Systematic Investment Plan 8 Axis Dividend Yield FundAn Investors shall have an option of choosing any date of the Month from 1st to 28th or last date of the Month as his SIP date. Minimum amount and minimum installments for daily, weekly, monthly and yearly frequency under

SIP Facility is as follows:

Frequency under Minimum Minimum SIP amount SIP Facility Installments Daily 6 Installments Rs. 100/- and in multiple of Re. 1/- Weekly 6 Installments Rs. 100/- and in multiple of Re. 1/- Monthly 6 Installments Rs. 100/- and in multiple of Re. 1/- Yearly 3 Installments Rs. 6,000/- and in multiple of Re. 1/-

2. Systematic Transfer Plan Investors can opt for the Systematic Transfer Plan by investing a lumpsum amount in one scheme of the Fund and providing a standing instruction to transfer sums at following intervals into any other scheme (as may be permitted by the Scheme Information Document of the respective schemes) of the Fund.

STP Minimum Minimum Cycle Date Frequency Amount* (in Rs.) Installment Daily Monday To Friday 1,000/- 6 Weekly Monday To Friday 1,000/- 6 Fortnightly Alternate Wednesday 1,000/- 6 Monthly 1st, 7th, 10th, 15th or 25th 1,000/- 6 Quarterly 1st, 7th, 10th, 15th or 25th 3,000/- 2 o CAPITAL APPRECIATION SYSTEMATIC TRANSFER PLAN (CAPSTP) There are three options available under CapSTP viz. Weekly, Monthly and Quarterly option, the details of which are given below:

CapSTP Minimum Minimum Cycle Date Frequency Amount* (Rs.) Installment Weekly Monday To Friday 500/- 6 Monthly 1st, 7th, 10th, 15th or 500/- 6 25th Quarterly 1st, 7th, 10th, 15th or 1,000/- 2 25th o FLEX - SYSTEMATIC INVESTMENT PLAN/ SYSTEMATIC TRANSFER PLAN (“FLEX SIP”/ “FLEX STP”) The minimum number of installments for enrollment and Amount under Flex

STP:

Frequency under Minimum Minimum Flex-STP amount* Flex-STP Facility Installments (Rs.) Monthly (1st, 7th, 6 Rs. 1,000/- and in multiple 10th,15th or 25th) of Rs. 1/- Quarterly (1st, 7th, 2 Rs. 3,000/- and in multiple 10th,15th or 25th) of Rs. 1/- The minimum number of installments for enrollment and Amount under Flex

SIP:

Frequency under Minimum Minimum Flex-SIP amount 9 Axis Dividend Yield FundFlex-SIP Facility Installments (Rs.) 6 Installments for all Rs. 500/- and in multiple of Monthly schemes Rs. 1/- 3 Installments for all Rs. 12,000/- and in multiple Yearly schemes of Rs. 1/- There is no maximum duration for Flex SIP/ STP enrolment

3. Systematic Withdrawal Plan There are five options available under SWP viz. Weekly option, Monthly option, Quarterly option, Half Yearly and Yearly option. The details of which are given

below:

Weekly Monthly Quarterly Half Yearly Option Option Option Yearly Option Option Minimum value of Rs. 1,000/- SWP Additional amount in Re.1 multiples of Dates of SWP Any 1/5/10/15/25* Installment Business Day Minimum No of SWP Five Six Four Four Two * In the event that such a day is a holiday, the withdrawals would be affected on the next business day.

For detailed terms on the above and for other available special products / facilities / Modes of Transactions, kindly refer SAI.

XXIV Weblink • TER for last 6 months / Daily TER: . Not applicable as the Scheme is a new scheme to be launched. • Scheme factsheet:

Not applicable as the Scheme is a new scheme to be launched. • Addendums:

Not applicable as the Scheme is a new scheme to be launched.

INTERPRETATION For all purposes of this Scheme Information Document, except as otherwise expressly provided or unless

the context otherwise requires: • all references to the masculine shall include the feminine and all references, to the singular shall include the plural and vice-versa. • all references to "dollars" or "$" refer to United States Dollars and "Rs" refer to Indian Rupees. A "crore" means "ten million" and a "lakh" means a "hundred thousand".

• all references to timings relate to Indian Standard Time (IST). • references to a day are to a calendar day including a non-Business Day. • all references to SEBI Master Circular would refer to SEBI Master Circular for Mutual Funds dated March 20, 2026 as amended from time to time.

10 Axis Dividend Yield FundDUE DILIGENCE BY THE ASSET MANAGEMENT COMPANY SO – 56

It is confirmed that:

(i) The Scheme Information Document submitted to SEBI is in accordance with the SEBI (Mutual Funds) Regulations, 2026 and the guidelines and directives issued by SEBI from time to time.

(ii) All legal requirements connected with the launching of the Scheme as also the guidelines, instructions, etc., issued by the Government and any other competent authority in this behalf, have been duly complied with.

(iii) The disclosures made in the Scheme Information Document are true, fair and adequate to enable the investors to make a well informed decision regarding investment in the Scheme.

(iv) The intermediaries named in the Scheme Information Document and Statement of Additional Information are registered with SEBI and their registration is valid, as on date.

(v) The contents of the Scheme Information Document including figures, data, yields etc. have been checked and are factually correct.

(vi) The AMC has complied with the compliance checklist applicable for Scheme Information Documents and other than cited deviations/ that there are no deviations from the regulations.

(vii) Notwithstanding anything contained in this Scheme Information Document, the provisions of the SEBI (Mutual Funds) Regulations, 2026 and the guidelines there under shall be applicable.

(viii) The Trustees have ensured that the Scheme approved by them is a new product offered by Axis Mutual Fund and is not a minor modification of any existing scheme/fund/product.

Sd/-

Date: _______ Name: Darshan Kapadia

Place: Mumbai Designation: Compliance Officer 11 Axis Dividend Yield FundPart II. INFORMATION ABOUT THE SCHEME A. HOW WILL THE SCHEME ALLOCATE ITS ASSETS? Under normal circumstances, the asset allocation pattern will be:

Indicative allocations (% of total assets) Instruments Minimum Maximum 80 100 Equity & Equity related instruments @ Equity & Equity related instruments of dividend yielding 65 100 entities (including units of REITS) Other Equity & Equity related instruments 0 35 Money Market Instruments and Other Liquid Instruments*, 0 20 mutual fund schemes#, Gold and Silver ETFs Units issued by InVITs 0 10 SO – 13 #Investment shall be in units of Overnight funds, Liquid funds and Money Market Mutual Funds.

*Other liquid instruments shall include cash, bank deposits with Scheduled Commercial Banks, Government Securities, Treasury bills, Repo on Government securities and any other instruments as specified by SEBI.

Investment in derivatives instruments shall be to the extent of 100% of equity allocation for hedging purposes and portfolio rebalancing and upto 35% of equity allocation for non-hedging purposes. The Scheme may use derivatives for such purposes as may be permitted by the Regulations, including for the purpose of hedging and portfolio balancing, based on the opportunities available and subject to guidelines issued by SEBI from time to time. Derivative instruments include stock options, Index options, Index futures/stock futures and any such other derivative instruments permitted by SEBI/RBI from time to time.

The cumulative gross exposure through equity, equity related instruments (including REITs), money market instruments, derivative positions, Gold ETF Silver ETF, units of Overnight funds, Liquid funds and Money Market Mutual Funds, and InVITs should not exceed 100% of the net assets of the Scheme in accordance with Para 13.8.1 of Master Circular of Mutual Fund and as amended from time to time. Cash or cash equivalents with residual maturity of less than 91 days shall be treated as not creating any exposure. SEBI vide letter dated March 20, 2026 has clarified that Cash Equivalent shall consist of Government Securities, T-Bills and Repo on Government Securities having residual maturity of less than 91 days.

SO – 16 SO – 14 and 17 @Investment in Foreign Securities The Scheme may seek investment opportunities in foreign securities including ADRs / GDRs / Foreign equity and money market securities and overseas ETFs/mutual fund, subject to SEBI (MF) Regulations. Such investments may not exceed 35% of the net assets of the Scheme.

Investment in Units of Mutual Fund The Scheme may invest upto 20% of the net assets of the Scheme in units of Gold ETF, Silver ETF, Overnight funds, Liquid funds and Money Market Mutual Funds of Axis AMC or any other mutual fund in conformity with the prevailing SEBI (MF) Regulations.

Repo in Corporate debt securities The Scheme may undertake repo transactions in corporate debt securities in accordance with the directions issued by RBI and SEBI from time to time. The gross exposure of the Scheme to repo transactions in corporate debt securities shall not be more than 5% of the net assets of the Scheme or such higher limit as may be specified by SEBI. Further, such investment shall be made subject to the guidelines which may be prescribed by the Board of Directors of the Asset Management Company and Trustee Company.

12 Axis Dividend Yield FundStock Lending by the Scheme

The Scheme shall adhere to the following limits should it engage in Stock Lending:

1. Not more than 20% of the net assets of the Scheme can generally be deployed in Stock Lending.

2. Not more than 5% of the net assets of the Scheme can generally be deployed in Stock Lending to any single counter party / intermediary (as may be applicable).

Short Selling by the Scheme The Scheme may engage in short selling of securities in accordance with the framework relating to short selling and securities lending and borrowing specified by SEBI.

Investment in Short Term Deposits Pending deployment of the funds in securities in terms of investment objective of the Scheme, the AMC may in terms of Para 13.7 of Master Circular for Mutual Fund Scheme as may be amended from time to time, park the funds of the Scheme in short term deposits of the Scheduled Commercial Banks The Scheme shall not invest in Credit Default Swaps and Debt instruments having special features as specified under Master circular for Mutual Fund.

The Scheme retains the flexibility to invest across all the securities in the equity, money markets instruments, units issued by REITs & InvITs. Units of REITs are classified as Equity related instruments.

Indicative Table (Actual instrument/percentages may vary subject to applicable SEBI circulars) Sr. Type of Instrument Percentage of exposure Circular references No.

SO – 19 1 Securities Lending and Securities Lending: Para 13.6 of SEBI borrowing & Short Master Circular for Selling The Scheme shall adhere to the Mutual Funds as following limits should it engage in amended from

Stock Lending: time to time.

1. Not more than 20% of the net assets of the Scheme can generally be deployed in Stock Lending.

2. Not more than 5% of the net assets of the Scheme can generally be deployed in Stock Lending to any single counter party (as may be applicable).

Short Selling by the Scheme:

The Scheme may engage in short selling of securities in accordance with the framework relating to short selling and securities lending and borrowing specified by SEBI.

2 Equity Derivatives for Upto 35% of the equity component Para 13.15 of SEBI non- hedging Master Circular for purposes Mutual Funds.

SO – 20 3 Equity Derivatives for Upto 100% of the equity component Para 13.15 of SEBI hedging purposes Master Circular for Mutual Funds.

13 Axis Dividend Yield Fund4 InVITS Upto 10% of the net assets of the Para 13.13 of SEBI Scheme. Master Circular for The scheme shall not invest more than Mutual Funds.

5% of NAV of the scheme in the units of InvIT issued by a single issuer 6 Tri party Repo Allocation may be made to TREPS from - any amounts that are pending deployment or on account of any adverse market situation.

7 Mutual Fund Units The Scheme may invest upto 20% of the Clause 3 of Sixth net assets of the Scheme in units of Schedule of SEBI Gold ETF, Silver ETF, overnight, liquid (Mutual Fund) and money market mutual fund Regulations, 2026 schemes of Axis AMC or any other read with Para mutual fund in conformity with the 13.14 of SEBI Master prevailing SEBI (MF) Regulations. Circular on Mutual Funds dated March 20, 2026.

9. Overseas Securities The Scheme may seek investment Para 13.11 of SEBI opportunities in foreign securities Master Circular for including ADRs / GDRs / Foreign equity Mutual Funds SO – and money market securities and 11,15,16 overseas ETFs/mutual fund subject to SEBI (MF) Regulations. Such investment may not exceed 35% of the net assets of the Scheme.

10. Covered Call As per regulatory limit Para 13.15.1. 8 of Strategy SEBI Master Circular for Mutual Funds Repo and Reverse The Scheme may undertake repo Para 13.8 of SEBI repo in corporate debt transactions in corporate debt Master Circular for securities securities in accordance with the Mutual Funds directions issued by RBI and SEBI from time to time. The gross exposure of the Scheme to repo transactions in corporate debt securities shall not be more than 5% of the net assets of the Scheme or such higher limit as may be specified by SEBI. Further, such investment shall be made subject to the guidelines which may be prescribed by the Board of Directors of the Asset Management Company and Trustee Company.

The limits given above shall be subject to Schedule VI of the Regulations / circulars issued by SEBI and shall stand revised to the extent of changes in the Regulations/ circulars from time to time.

The Scheme shall not invest in following instruments:

SO – 18 Sl. No. Type of Instrument 1 Credit default swaps 2 Debt instruments (except as may be permitted by SEBI 14 Axis Dividend Yield Fundfrom time to time) 3 Debt Derivatives Timelines for deployment of funds collected in New Fund Offer (NFO) as per asset allocation of the scheme In terms of clause 7.24 of SEBI Master Circular, the AMC shall deploy the funds garnered in an NFO within 30 business days from the date of allotment of units. If the AMC is not able to deploy the funds in 30 business days, the AMC shall adhere to the requirements as laid down in the aforesaid SEBI circular.

SO – 22, 23 and 24

Portfolio rebalancing due to short term defensive considerations:

Subject to the SEBI (MF) Regulations, the asset allocation pattern indicated above may change from time to time, keeping in view market conditions, market opportunities, applicable regulations and political and economic factors. The Scheme may actively deviate from the stated asset allocation pattern outlined in the SID during extenuating circumstances. These instances may be beyond the control of the fund manager & the AMC and hence may require such deviations. Such changes in the investment pattern will be transitionary in nature and will be undertaken as defensive considerations only in accordance with Para

1.9.1(b) of SEBI Master circular for Mutual Fund and as amended from time to time. Defensive considerations may be determined by the fund manager and /or AMC from time to time. In case of deviations on account of exogenous factors, the fund manager will endeavour to rebalance the Scheme within 30 calendar days from the date of such deviation. The intention being at all times to seek to protect the interests of the Unit holders.

Portfolio rebalancing due to passive breaches:

In case of passive deviation from the asset allocation pattern or various prudential limits prescribed under SEBI (Mutual funds) Regulations, 2026 and circulars issued thereunder the AMC shall follow process specified in Para 3.11. of SEBI Master circular for Mutual Fund as amended from time to time. In line with the circular, in the event of deviation from the mandated asset allocation limits mentioned in the SID or the prudential limits due to passive breaches such as corporate action, substantial rise/ fall in the price of an underlying scrip, maturity of any underlying security, large redemptions, etc., the portfolio would be rebalanced within 30 business days from the date of deviation. Where the portfolio is not rebalanced within mandated timelines, justification in writing including details of efforts taken to rebalance the portfolio shall be placed before the Investment Committee. The Investment Committee, if so desires, can extend the timelines up to sixty (60) business days from the date of completion of mandated rebalancing period. In case the portfolio of the Scheme is not rebalanced within aforementioned mandated plus extended timelines AMC shall adhere to the requirements as laid down in the aforesaid SEBI circular. However, at all times, the portfolio will adhere to the overall investment objective of the scheme.

B. WHERE WILL THE SCHEME INVEST? SO – 29

The Scheme will invest in following instruments: • Equity & Equity related instruments including Units of Real Estate Investment Trust (REITs) • Equity Derivatives • Money Market instruments • Gold and Silver ETFs • Units of INVITs • Foreign Securities • Units of overnight, liquid and money market Mutual Fund Schemes • Other Liquid instruments i.e. cash, bank deposits with Scheduled Commercial Banks, Government Securities, Treasury bills, Repo on Government securities and any other instruments as specified by SEBI.

• Short Term Deposits The Scheme shall invest in any other instruments as may be permitted by SEBI/RBI from time to time.

Investment in overseas securities shall be made in accordance with the requirements stipulated by SEBI 15 Axis Dividend Yield Fundand RBI from time to time.

For detailed definitions and applicable regulations/guidelines for each instruments given in the Section II.

C. WHAT ARE THE INVESTMENT STRATEGIES? SO – 27 The scheme follows an active investment strategy.

The scheme aims to provide long-term capital appreciation and income by investing predominantly in equity and equity-related instruments (including units of REITs) that have the potential to provide dividend income.

The Scheme may consider investing in entities that generate total shareholder rewards in the form of dividend and/or buyback.

In addition to the dividend yield criteria, scheme will follow a bottom-up stock selection approach, focusing on identifying fundamentally strong companies with healthy cash flows, and sustainable business models.

The Scheme will consider dividend yielding securities (including REITS) which have paid dividend (or done a buyback) in atleast one of the three preceding financial years or expected to pay dividend in the future.

The investment strategy primarily focuses on investments in dividend yielding securities. Within that, the portfolio may run higher concentration towards specific sectors or instruments like REITs. The Fund will not be constrained by any specific market capitalization segment and may invest across market segment.

The scheme may invest part of its portfolio in money market instruments subject to permissible limits laid under SEBI MF Regulations and will be guided by credit and interest rates outlook.

The Scheme may also use equity derivative instruments in line with SEBI regulations. The objectives of employing derivative strategies may include portfolio hedging, generating additional income through strategies such as writing covered call options and earning option premiums.

Derivatives Strategy The Scheme may invest in various derivative instruments which are permissible under the applicable regulations. Such investments shall be subject to the investment objective and strategy of the Scheme and the internal limits if any, as laid down from time to time. These include but are not limited to futures (both stock and index) and options (stock and index).

Derivatives are financial contracts of pre-determined fixed duration, like stock futures/options and index futures and options, whose values are derived from the value of an underlying primary financial instrument

such as: interest rates, exchange rates, commodities, and equities.

Derivatives can be either exchange traded or can be over the counter (OTC). Exchange traded derivatives are listed and traded on stock exchanges whereas OTC derivative transactions are generally structured between two counterparties.

The objectives of the various strategies include earning option premium/ hedge stock / portfolio against market gyrations.

Risks The risks associated with derivatives are similar to those associated with underlying investments. The

additional risks of using derivative strategies could be on account of: • Illiquidity; • Potential mis - pricing of the Futures/Options; • Lack of opportunity; • Inability of derivatives to correlate perfectly with the underlying (Indices, Assets, Exchange Rates);

• Cost of hedge can be higher than adverse impact of market movements;

16 Axis Dividend Yield Fund• An exposure to derivatives in excess of the hedging requirements can lead to losses; • An exposure to derivatives can also limit the profits from a genuine investment transaction;

• The prices which are seen on the screen need not be the same at which execution will take place.

For detailed risks associated with use of derivatives, please refer paragraph “Scheme Specific Risk Factors”.

Exchange traded derivatives Contracts in stocks and indices in India are currently cash settled at the time of maturity.

Derivatives allowed for equity schemes are only exchange traded and not OTC.

Concepts and Examples of derivatives which may be used by the fund manager:

Futures Futures (Index & Stocks) are forward contracts traded on the exchanges & have been introduced both by BSE and NSE. Generally futures of 1 month (near month), 2 months (next month) and 3 months (far month) are presently traded on these exchanges. These futures expire on the last working Tuesday of the respective months.

Illustration with Index Futures In case the Nifty 50 near month future contract is trading at say, Rs. 17,500, and the fund manager has a view that it will depreciate going forward; the Scheme can initiate a sale transaction of Nifty futures at Rs.

17,500 without holding a portfolio of equity stocks or any other underlying long equity position. Once the price falls to Rs. 17,000 after say, 20 days, the Scheme can initiate a square-up transaction by buying the said futures and book a profit of Rs. 500.

Correspondingly, if the fund manager has a positive view he can initiate a long position in the index / stock futures without an underlying cash/ cash equivalent subject to the extant regulations.

There are futures based on stock indices as mentioned above as also futures based on individual stocks.

The profitability of index /stock future as compared to an individual security will inter-alia depends upon: • The carrying cost, • The interest available on surplus funds, and • The transaction cost.

Example of a typical future trade and the associated costs Actual Index Particulars Purchase of Future Stocks Index at the beginning of the month 17,500 17,500 Price of 1 month future 17,650 A. Execution cost: Carry and other index future costs 150 B. Brokerage cost: Assumed at 35.30 43.75

0.2% of Index Future

0.25% for spot Stocks C. Gains on surplus fund: (Assumed 8% p.a. return on 85% of the money left after

98.65 0 paying 15% margin) (8%*17650*85%*30 days/365) Total Cost (A+B-C) 87 38.75 Some strategies that employ stock /index futures and their objectives:

(a) Arbitrage

(1) Selling spot and buying future: In case the Scheme holds the stock of a company “A” at say Rs. 100 while in the futures market it trades at a discount to the spot price say at Rs. 98, then the Scheme may sell the stock and buy the futures.

17 Axis Dividend Yield FundOn the date of expiry of the stock future, the Scheme may reverse the transactions (i.e. buying at spot & selling futures) and earn a risk-free Rs. 2 (2% absolute) on its holdings without any dilution of the view of the fund manager on the underlying stock.

Further, the Scheme can still benefit from any movement of the price in the upward direction, i.e. if on the date of expiry of the futures, the stock trades at Rs. 110 which would be the price of the futures too, the Scheme will have a benefit of Rs 10 whereby the Scheme gets the 10% upside movement together with the 2% benefit on the arbitrage and thus getting a total return of 12%. The corresponding return in case of holding the stock would have been 10%.

Note: The same strategy can be replicated with a basket of Nifty- 50 stocks (Synthetic Nifty) and the Nifty future index.

(2) Buying spot and selling future: Where the stock of a company “A” is trading in the spot market at Rs.

100 while it trades at Rs. 102 in the futures market, then the Scheme may buy the stock at spot and sell in the futures market thereby earning Rs. 2.

Buying the stock in cash market and selling the futures results into a hedge where the Scheme has locked in a spread and is not affected by the price movement of cash market and futures market. The arbitrage position can be continued till expiry of the future contracts when there is a convergence between the cash market and the futures market. This convergence enables the Scheme to generate the arbitrage return locked in earlier.

Risk: On the date of expiry, when the arbitrage is to be unwound, it is not necessary for the stock price and its future contract to coincide. There could be a discrepancy in their prices even a minute before the market closes. Thus, there is a possibility that the arbitrage strategy gets unwound at different prices.

(b) Buying/ Selling Stock future When the Scheme wants to initiate a long position in a stock whose spot price is at say, Rs.100 and futures is at 98, then the Scheme may just buy the futures contract instead of the spot thereby benefiting from a lower cost.

In case the Scheme has a bearish view on a stock which is trading in the spot market at Rs.98 and the futures market at say Rs. 100, the Scheme may subject to regulations, initiate a short position in the futures contract. In case the prices align with the view and the price depreciates to say Rs. 90, the Scheme can square up the short position thereby earning a profit of Rs.10 vis a vis a fall in stock price of Rs 8.

Risk: There is risk of not being able to correctly forecast future market trends or the value of assets, indices or other financial or economic factors in establishing derivative positions for the Scheme. The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments. The risk of loss in trading futures contracts can be substantial, because of the low margin deposits required, the extremely high degree of leverage involved in futures pricing and the potential high volatility of the futures markets. Investments in index futures face the same risk as the investments in a portfolio of shares representing an index. The extent of loss is the same as in the underlying stocks.

(a) Hedging The Scheme may use exchange-traded derivatives to hedge the equity portfolio. Both index and stock futures and options may be used to hedge the stocks in the portfolio.

Risk: This may involve a basic risk where the instrument used as a hedge does not match the movement in the instrument/underlying asset being hedged. The risk may be inter-related also e.g. interest rate movements can affect equity prices, which could influence specific issuer/industry assets.

(b)Alpha Strategy The Scheme will seek to generate alpha by superior stock selection and removing market risks by selling appropriate index. For example, one can seek to generate positive alpha by buying a bank stock and 18 Axis Dividend Yield Fundselling Bank Nifty future.

Risk : Execution of these strategies depends upon the ability of the fund manager to identify and execute based on such opportunities. These involve significant uncertainties and decision of fund manager may not always be profitable. No assurance can be given that the fund manager will be able to identify or execute such strategies.

Option Contracts (Stock and Index) An Option gives the buyer the right, but not the obligation, to buy (call) or sell (put) a stock at an agreed- upon price during a certain period of time or on a specific date.

Options are used to manage risk or as an investment to generate income. The price at which underlying security is contracted to be purchased or sold is called the Strike Price.

Options that can be exercised on or before the expiration date are called American Options while, Options that can be exercised only on the expiration date are called European Options.

Options Risk / Return Pay-off Table Stock / Index Buy Call Sell Call Buy Put Sell Put Options 1 View on underlying Positive Negative Negative Positive 2 Premium Pay Receive Pay Receive 3 Risk Potential Limited to Unlimited Limited to premium Unlimited premium paid paid 4 Return Potential Unlimited Premium Received Unlimited Premium Received Option contracts are of following two types - Call and Put.

Call Option: A call option gives the buyer, the right to buy specified quantity of the underlying asset at the set strike price on or before expiration date and the seller (writer) of call option however, has the obligation to sell the underlying asset if the buyer of the call option decides to exercise the option to buy.

Put Option: A put option gives the buyer the right to sell specified quantity of the underlying asset at the set strike price on or before expiration date and the seller (writer) of put option however, has the obligation to buy the underlying asset if the buyer of the put option decides to exercise his option to sell.

Risk: The options buyer's risk is limited to the premium paid. However the gains of an options writer are limited to the premiums earned. The exchange may impose restrictions on exercise of options and may also restrict the exercise of options at certain times in specified circumstances and this could impact the value of the portfolio. The writer of a call option bears a risk of loss if the value of the underlying asset increases above the exercise price. The Scheme bears a risk that it may not be able to correctly forecast future market trends or the value of assets, indices or other financial or economic factors in establishing derivative positions for the Scheme.

Index Options / Stock Options Index options / Stock options are termed to be an efficient way of buying / selling an index/stock compared to buying / selling a portfolio of physical shares representing an index for ease of execution and settlement. The participation can be done by buying / selling either Index futures or by buying a call/put option.

The risk are also different when index /stock futures are bought/sold visa- a- vis index/ stocks options as in case of an index future there is a mark to market variation and the risk is much higher as compared to buying an option, where the risk is limited to the extent of premium paid.

The illustration below explains how one can gain using Index call / put option. These same principles of profit / loss in an Index option apply in totality to that for a stock option.

19 Axis Dividend Yield FundCall Option Suppose an investor buys a Call option on 1 lot of Nifty 50 (Lot Size: 50 units) • Nifty index (European option). • Nifty 1 Lot Size: 50 units • Spot Price (S): 17,500 • Strike Price (x): 17,550 (Out-of-Money Call Option) • Premium: 100 Total Amount paid by the investor as premium [50*100] =5,000 There are two possibilities i.e. either the index moves up over the strike price or remains below the strike price.

Case 1- The index goes up • An investor sells the Nifty Option described above before expiry:

Suppose the Nifty 50 Index moves up to 17,600 in the spot market and the premium has moved to Rs 200 and there are 15 days more left for the expiry. The investor decides to reverse his position in the market by selling his 1 Nifty call option as the option now is In the Money.

His gains are as follows: • Nifty Spot: 17,600 • Current Premium: Rs.200 • Premium paid: Rs.100 • Net Gain: Rs.200- Rs.100 = Rs.100 per unit • Total gain on 1 lot of Nifty (50 units) = Rs. 5,000 (50*100) In this case the premium of Rs.200 has an intrinsic value of Rs.100 per unit and the remaining Rs.100 is the time value of the option.

• An investor exercises the Nifty Option at expiry Suppose the Nifty index moves up to 17,700 in the spot market on the expiry day and the investor decides to reverse his position in the market by exercising the Nifty call option as the option now is ‘in The Money’.

His gains are as follows: • Nifty Spot: 17,700 • Premium paid: Rs.100 • Exercise Price: 17,550 • Receivable on exercise: 17,700-17,550 = 150 • Total Gain: Rs. 2,500 {(150-100) *50} In this case the realised gain is only the intrinsic value, which is Rs.50, and there is no time value.

Case 2 - The Nifty index moves to any level below 17,550

Then the investor does not gain anything but on the other hand his loss is limited to the premium paid:

Net Loss is Rs. 5,000 (Loss is capped to the extent of Premium Paid) (Rs 100 Premium paid*Lot Size: 50 units).

Put Option Suppose an investor buys a Put option on 1 lot of Nifty 50. • Nifty 1 Lot Size: 50 units • Spot Price (S): 17,500 • Strike Price (x): 17,450 (Out-of-Money Put Option) • Premium: 30 • Total Amount paid by the investor as premium [50*30] = Rs. 1,500 There are two possibilities i.e. either the index moves over the strike price or moves below the strike price.

Let us analyze these scenarios.

Case 1 - The index goes down 20 Axis Dividend Yield Fund• An investor sells the Nifty Option before expiry:

Suppose the Nifty 50 Index moves down to 17,400 in the spot market and the premium has moved to Rs. 80 and there are 15 days more left for the expiry. The investor decides to reverse his position in the market by selling his 1 Nifty Put Option as the option now is In The Money.

His gains are as follows: • Nifty Spot: 17,400 • Premium paid: Rs.30 • Net Gain: Rs.80 - Rs.30 = Rs.50 per unit • Total gain on 1 lot of Nifty (50 units) = Rs. 2,500 (50*50) In this case the premium of Rs.80 has an intrinsic value of Rs.50 per unit and the remaining Rs.30 is the time value of the option.

An investor exercises the Nifty Option at expiry (It is an European Option) Suppose the Nifty index moves down to 17,400 in the spot market on the expiry day and the investor decides to reverse his position in the market by exercising the Nifty Put Option as the option now is In The Money.

His gains are as follows: • Nifty Spot: 17,400 • Premium paid: Rs.30 • Exercise Price: 17,450 • Gain on exercise: 17,450-17,400 = 50 • Total Gain: Rs. 1,000 {(50-30)*50} In this case the realised amount is only the intrinsic value, which is Rs.50, and there is no time value in this case.

Case 2 - If the Nifty 50 index stays over the strike price which is 17,450, in the spot market then the investor does not gain anything but on the other hand his loss is limited to the premium paid. • Nifty Spot: >17,450 • Net Loss Rs.1,500 (Loss is caped to the extent of Premium Paid) (Rs 30 Premium paid*Lot Size: 50 units).

Covered Call Strategy The covered call strategy is a strategy where a fund manager writes call options against an equivalent long position in an underlying stock thereby giving up a part of the upside from the long position. The strategy allows the fund manager to earn premium income from the option writing in addition being able to capture the remaining part of the upside.

Assumptions:

Current price of stock A: Rs. 27.87 per share 1 contract = 100 shares

Total no of contracts: 10

Strike price: Rs. 30/- per share

Premium: Rs. 0.35 per share Suppose, on May 6, 2022, the writer of the call owns 1,000 shares of Company A, which is currently trading at Rs. 27.87 per share. The writer of the call writes 10 call option contracts for company A with a strike price of Rs. 30 per share that expires in January 2023. The writer receives premium of 0.35 per share for the calls, which equals Rs. 35.00 per contract for a total of Rs. 350.00.

Total premium = (Rs. 0.35 per share) * (100 shares per contract) * (10 contracts) = Rs. 350.

The following can be the scenarios reflecting risks and benefits at the end of the option expiry:

21 Axis Dividend Yield FundCase 1 - Stock falls below current price of Rs. 27.87 per share: The option expires worthless. Hence the loss from the stock position gets reduced to the extent of the premium income.

Case 2 - Stock goes up above current price but remains below Rs. 30 per share (strike price): The option expires worthless. Hence the income from the gains in the stock price gets further boosted to the extent of the premium income.

Case 3 - Stock goes above Rs. 30 per share: Option position goes out of the money for the writer but the losses from the option position are matched by the gains from the underlying stock position above Rs. 30 per share. Hence the return from the position is equal to the return from stock upto the strike price of Rs. 30 per share and the premium income from the option.

Benefits of using Covered Call Strategy in Mutual Funds:

The covered call strategy can be followed by the Fund Manager in order to hedge risk thereby resulting in better risk adjusted returns of the Scheme. The strategy offers the following benefits: a) Hedge against market risk - Since the fund manager sells a call option on a stock already owned by the mutual fund scheme, the downside from fall in the stock price would be lower to the extent of the premium earned from the call option.

b) Generating additional returns in the form of option premium in a range bound market. Thus, a covered call strategy involves gains for unit holders in case the strategy plays out in the right direction Risk associated with covered calls The risk associated with covered calls is the loss of upside, i.e. if the shares are assigned (called away), the option seller forgoes any share price appreciation above the option strike price. Please refer risk factors

section on detail derivatives risk factors.

Investment in derivatives are subject to certain risks, details of which are enumerated under section ‘Risks associated with investments in derivatives’.

PORTFOLIO TURNOVER The Scheme is an open-ended scheme. It is expected that there would be a number of subscriptions and redemptions on a daily basis. Consequently, it is difficult to estimate with any reasonable measure of accuracy, the likely turnover in the portfolio.

There may be an increase in transaction cost such as brokerage paid, if trading is done frequently.

However, the cost would be negligible as compared to the total expenses of the Scheme. Frequent trading may increase the profits which will offset the increase in costs. The fund manager will endeavor to optimize portfolio turnover to maximize gains and minimize risks keeping in mind the cost associated with it. However, it is difficult to estimate with reasonable accuracy, the likely turnover in the portfolio of the Scheme. The Scheme has no specific target relating to portfolio turnover.

For details pertaining to Risk Controls and Risk Mitigation refer Point no. C Part I of Section II of the Scheme Information Document.

D. HOW WILL THE SCHEME BENCHMARK ITS PERFORMANCE? For details refer Point no. VII – Part I -Section I of the Scheme Information Document.

E. WHO MANAGES THE SCHEME? SO – 32 &33 Name of Age and Experience of the Fund Names of other schemes under their Fund Qualification Manager management Manager Mr. Devang Age: 43 years Total number of years of Axis Liquid Fund

Shah experience: 22 years, his last 10 22 Axis Dividend Yield Fund(Equity and B. Com, ACA years’ experience are as Axis Short Term Fund REITs) follows: Axis Ultra Short to Short Term Fund • Fund Manager - Fixed Axis Arbitrage Fund (managing Income, Axis Asset Axis Corporate Bond Fund scheme Management Company Ltd.

since (October 16, 2012 till date) Axis Money Market Fund inception) • Fund Manager, ICICI Axis Balanced Advantage Fund Prudential Asset Management Axis Aggressive Hybrid Fund Company Ltd. (April 2008 – Axis Multi Asset Allocation Fund October 2012) Axis Dynamic Term Fund • Analyst, Deutsche Asset Management (India) Pvt. Ltd. Axis Medium Term Fund (2006-2008) Axis Equity Savings Fund • Assistant Manager, Axis Children’s Fund Pricewaterhouse Coopers Axis Retirement Fund - Aggressive (2004-2006) Plan Axis Credit Risk Fund Axis Conservative Hybrid Fund Axis Retirement Fund - Dynamic Plan Axis Income Plus Arbitrage Active FOF Axis Gilt Fund Axis Retirement Fund - Conservative Plan Axis Long Term Fund Mr. Pratik Age: 37 years Total number of years of Axis Multi Asset Allocation Fund

Tibrewal Qualifications: experience: 13 years, his last 10 Axis Gold ETF (managing B.com, LLB years’ experience are as Axis Gold Fund scheme (Gen), MBA follows: Axis Silver ETF since (Finance) Axis Asset Management Axis Silver Fund of Fund inception) Company Limited (Fund Axis Gold and Silver Passive FoF Manager – Commodities & Assistant Dealer – Fixed Income for Mutual Fund) (February 01, 2025 till date) Axis Asset Management Company Limited (Fund Manager – Debt PMS) (June 01, 2024 to January 31, 2025) Axis Asset Management Company Limited (Fund Manager – Commodities Mutual Fund) (June 01, 2022 to May 31, 2024) Inditrade Capital Limited (August 31, 2018 to May 31, 2022) Edelweiss Asset Management Limited (January 31, 2018 to August 30, 2018) Inditrade Capital Limited (November 16, 2016 to January 30, 2018) Edelweiss Commodities trading Ltd. (July 12, 2012 to November 23 Axis Dividend Yield Fund15, 2016) Ms. 30 Years Total number of years of Axis Large Cap Fund

Krishnaa experience: 6 years Axis Midcap Fund

Narayan Qualifications:

Axis Focused Fund (For Foreign Chartered • Axis Asset Management Axis Small Cap Fund Securities) Accountant Company Ltd. [Fund Manager - and Bachelor (For Foreign Securities)] - March Axis Flexi Cap Fund (Managing of Commerce 01, 2024 till date Axis Large & Mid Cap Fund Since (Accounts & • Axis Asset Management Axis Aggressive Hybrid Fund Inception) Finance) Company Ltd. (Junior Research Axis Multi Asset Allocation Fund Analyst – Equity) – May 12, 2021 Axis Innovation Fund – February 29, 2024 Axis ESG Integration Strategy Fund • Price Waterhouse & Co LLP - April 22, 2019 – May 07, 2021 Axis Quant Fund Axis Global Innovation Fund of Fund Axis Equity Savings Fund Axis Global Equity Alpha Fund of Fund Axis Children’s Fund Axis Retirement Fund - Aggressive Plan Axis Retirement Fund - Dynamic Plan Axis Value Fund Axis Greater China Equity Fund of Fund Axis Retirement Fund - Conservative Plan Axis US Specific Equity Passive FOF Axis US Specific Treasury Dynamic Debt Passive FOF Axis Service Opportunities Fund Axis Consumption Fund F. HOW IS THE SCHEME DIFFERENT FROM EXISTING SCHEMES OF THE MUTUAL FUND? Axis Dividend Yield Fund, an open ended equity scheme predominantly investing in dividend yielding stocks is a different scheme offered by Axis Mutual Fund and is not a minor modification of any other existing scheme/product of Axis Mutual Fund.

a. Reference list of existing open ended equity schemes of Axis Mutual Fund are as follows:

Sr. No. Name of the scheme(s) 1 Axis Midcap Fund 2 Axis Large Cap Fund 3 Axis Focused Fund 4 Axis Flexi Cap Fund 5 Axis Large & Mid Cap Fund 6 Axis Quant Fund 7 Axis Small Cap Fund 8 Axis Innovation Fund 9 Axis ELSS- Tax Saver Fund 10 Axis Value Fund 11 Axis Multicap Fund 12 Axis Business Cycles Fund 13 Axis India Manufacturing Fund 14 Axis ESG Integration Strategy Fund 15 Axis Consumption Fund 24 Axis Dividend Yield Fund16 Axis Momentum Fund 17 Axis Service Opportunities Fund 18 Axis Dividend Yield Fund b. For detailed comparative table on ‘How the Scheme is different from existing schemes of Axis Mutual Fund’, please refer our website: https://www.axismf.com/statutory-disclosures G. HOW HAS THE SCHEME PERFORMED? Performance of Axis Not Applicable as the scheme is a new scheme to be launched.

Dividend Yield Fund – Regular Plan - Growth Option on ______ is as follows Performance of the Axis Not Applicable as the scheme is a new scheme to be launched.

Dividend Yield Fund – Direct Plan – Growth Option as on _____ is as

follows:

H. ADDITIONAL SCHEME RELATED DISCLOSURES i. Scheme’s portfolio holdings (top 10 holdings by issuer and fund allocation towards various sectors -

Please refer the AMC website https://www.axismf.com/statutory-disclosures for said details: Not Applicable as the scheme is a new scheme to be launched ii. Disclosure of name and exposure to Top 7 issuers, stocks, groups and sectors as a percentage of NAV of the scheme in case of debt and equity ETFs/index funds through a functional website link that contains detailed description – Not Applicable iii. Functional website link for Portfolio Disclosure - Fortnightly / Monthly – Please refer the AMC website

https://www.axismf.com/statutory-disclosures for said details: Not Applicable as the scheme is a new scheme to be launched. iv. Portfolio turnover ratio for the half-year period ended_______: Not Applicable as the scheme is a new scheme to be launched.

*Based on Equity, Equity derivatives and Fixed Income securities transactions only.

TREPS/Repo/FD/Margin FD/MFU/SLB are not considered. v. Functional website link to the respective addendums to the SID after the last update of SID- please refer

https://www.axismf.com/statutory-disclosures vi. Aggregate investment in the scheme by Concerned scheme’s Fund Manager(s):

Sr. Category of Persons(Axis Dividend Yield Net Value* Market Val ue (In Rs)* No. Fund– Fund Manager(s)) Units NAV

1. Not Applicable as the scheme is a new scheme to be launched *as on ____________ For any other disclosure w.r.t investments by key personnel and AMC directors including regulatory provisions in this regard kindly refer SAI.

vii. Investments of AMC in the Scheme – SO – 59 25 Axis Dividend Yield FundSubject to the applicable Regulations, the AMC may invest either directly or indirectly, in the Scheme during New Fund Offer or Ongoing Offer Period. However, the AMC shall not charge any investment management fee on such investments in the Scheme.

Further, in terms of requirement of the Regulations, the AMC shall invest such amounts in Scheme, based on the risks associated with the Scheme, as may be specified by the SEBI from time to time.

Please refer the AMC website (https://www.axismf.com/statutory-disclosures) for detailed AMC Investments in Scheme(s) of Axis Mutual Fund.

The above disclosures are not Applicable as the scheme is a new scheme to be launched.

26 Axis Dividend Yield FundPart III. OTHER DETAILS A. COMPUTATION OF NAV The Net Asset Value (NAV) per Unit under the Scheme will be computed by dividing the net assets of the Scheme by the number of Units outstanding on the valuation day. The Mutual Fund will value its investments according to the valuation norms, as specified in Schedule VII of the SEBI (MF) Regulations, or such norms as may be specified by SEBI from time to time.

Valuation of Foreign Currency / Securities: On the valuation day, all the assets and liabilities denominated in foreign currency will be valued in Indian Rupees. The valuation price of the security will be converted to INR based on FBIL/any other designated agency, reference rate at the close of banking hours in India. If required, the AMC may change the source of determining the exchange rate. The Fund shall value its investments according to the valuation norms (Valuation Policy includes computation of NAV in case of investment in foreign securities), as specified in the Seventh Schedule of the Regulations, or such guidelines / recommendations as may be specified by SEBI from time to time. The broad valuation norms are detailed in the Statement of Additional Information.

The Net Assets Value (NAV) of the Units under the Scheme shall be calculated as shown below:

Market or Fair Value of + Current Assets including - Current Liabilities NAV (Rs.) = Scheme’s Investments Accrued Income and Provisions No. of Units outstanding under Scheme on the Valuation Day The NAV shall be calculated up to two decimal places. However, the AMC reserves the right to declare the NAVs up to additional decimal places as it deems appropriate. Separate NAV will be calculated and disclosed for each Plan / Option.

The AMC will calculate and disclose the first NAV of the Scheme within a period of 5 business days from the date of allotment under the new Fund Offer Period. Subsequently, the NAVs will be calculated and disclosed on all the Business Days.

Illustration of Computation of NAV: SO – 43

The computation of NAV per unit using various components is explained as follows:

Particulars Amount in Rs Market or Fair Value of Scheme’s Investments .... (A) 10,00,00,000.00

Add: Current Assets including Accrued Income ... (B) 75,34,345.00

Less: Current Liabilities and Provisions. .......... (C) (30,00,000.00) Net Assets (A+B-C) 10,45,34,345.00 No. of Units outstanding under Scheme on the Valuation Day: 100,00,000

The NAV per unit will be computed as follows: 10,45,34,345.34 / 100,00,000 = Rs. 10.45 per unit (rounded off to two decimals) The Mutual Fund will ensure that the Redemption Price will not be lower than 97% of the Applicable NAV.

For other details such as policies w.r.t computation of NAV, rounding off, procedure in case of delay in disclosure of NAV etc. refer to SAI B. NEW FUND OFFER (NFO) EXPENSES These expenses are incurred for the purpose of various activities related to the NFO like sales and distribution fees paid marketing and advertising, registrar expenses, printing and stationery, bank charges etc.

27 Axis Dividend Yield FundC. ANNUAL SCHEME RECURRING EXPENSES These are the fees and expenses for operating the scheme. These expenses include but are not limited to Investment Management and Advisory Fee charged by the AMC, Registrar and Transfer Agents’ fee, marketing and selling costs etc. as given in the table below:

The AMC has estimated that following expenses will be charged to the Scheme expenses as permitted under Regulation 66 and 67 of SEBI (MF) Regulations. For the actual current expenses being charged, the investor should refer to the website of the Mutual Fund.

Expense Head % of daily Net Assets Investment Management and Advisory fees Upto 2.10% A udit fees/fees and expenses of trustees Custodian fees Registrar & Transfer Agent Fees including cost of providing account statements / IDCW / redemption cheques/ warrants Marketing & Selling Expenses including fees, commission and charges t owards distribution of mutual fund schemes Cost related to investor communications Cost of fund transfer from location to location Costs of statutory Advertisements Cost towards investor education & awareness and financial inclusion (at SO – 44 least 2 bps) & Brokerage cost incurred towards execution of trades; over and above 6 bps and 2 bps of trade value for cash and derivative market trades respectively Cost of providing account statements and IDCW redemption cheques and warrants Other Expenses* Maximum base expenses ratio permissible under Regulation 66 Upto 2.10% Statutory levies (including GST) on all expenses excluding brokerage and GST of 18% or any other transaction cost rate as may be levied from time to time on the Taxable/Invoice/Contract amount.

Additionally, levies such as Stamp Duty, STT etc.

Statutory levies (including GST) on brokerage and transaction cost Will be charged on Turnover of securities which will be at prescribed rates. *Any other expenses which are directly attributable to the Scheme, may be charged with the approval of the Trustee within the overall limits as specified in the Regulations except those expenses which are specifically prohibited.

The base expense ratio of the scheme shall be sum of expenses mentioned at regulation 66(4), 66(5) and 66 (6) but excluding statutory levy applicable, if any, on the said expenses and transaction cost^ specified under regulation 66(10).

^Transaction cost incurred for the purpose of execution of a trade shall mean regulatory levies and any other expenses charged by the stock exchanges, clearing corporation, and clearing house, as applicable.

28 Axis Dividend Yield FundSuch transaction costs shall not form part of the base expense ratio. SO – 47 & Additional incentives to distributors for onboarding new individual investors from B-30 cities and women investors shall be paid from the amount set apart annually by AMCs for investor education, awareness.

1. New investments / inflows eligible for the additional commission:

(a) New individual investors (new PAN) from B-30 cities, at the mutual fund industry level;

(b) New women individual investors (new PAN) from both Top 30 and B-30 cities.

(c) The top 30 cities shall mean top 30 cities based on AMFI data on ‘AUM by Geography – Consolidated Data for Mutual Fund Industry’ as at the end of the previous financial year.

Incentive Structure:

(a) AMCs shall pay additional commission to distributors for onboarding eligible new investors, subject to the conditions specified in Point 1 above.

(b) The structure of such additional commission shall be as under:

Investment Mode Commission Structure Lump Sum Investment 1% of the amount of the first application subject to a maximum of ₹2,000, provided the investor remains invested for a minimum period of one year.

Systematic Investment Plan (SIP) 1% of the total investment made during the first year, subject to a maximum of ₹2,000.

Total Expense Ratio: “Total expense ratio” means the ratio of total of all expenses charged to the investors of the scheme to the total asset under management of the scheme, as may be specified by SEBI;

As per Regulation 67(1), the total of all expenses charged to the investors of the scheme, shall be total of expense charged within the base limit specified regulation 66 (7), brokerage cost permitted for the purpose of execution of trade, over and above the base expense ratio subject to a maximum of 0.06 per cent of trade value in case of cash market transactions and 0.02 per cent of trade value in case of derivatives transactions under regulation 66 (9), transaction cost incurred for the purpose of execution of trade, as referred under regulation 66 (10), and statutory levies charged to the investors.

Statutory Levy: “statutory levy” means levy imposed by state government and central government;

No charges other than the base expense ratio, brokerage cost, transaction cost, statutory levy and exit load including levies as may be specified by SEBI, shall be charged to the investors.

Any expenditure in excess of the expenses stated above shall be borne by the AMC or the trustees or sponsors. If any expense of the scheme is borne by the AMC or by the trustee or sponsors, the same shall be done only after the investment and advisory fees charged to the scheme, if any, is fully reversed.

The expenses towards Investment Management and Advisory Fees under Regulation 66(4) and the various sub-heads of recurring expenses mentioned under Regulation 66 (5) of SEBI (MF) Regulations can be apportioned under various expense heads/ sub heads without any sub limit, as permitted under the applicable regulations. Thus, there shall be no internal sub-limits within the expense ratio for expense heads mentioned under Regulation 66(4) and 66(5) respectively.

All fees and expenses charged in a Direct Plan (in percentage terms) under various heads including the investment and advisory fee shall not exceed the fees and expenses charged under such heads in other than Direct Plan.

Direct Plan shall have a lower expense ratio excluding distribution expenses, commission, etc. and no commission for distribution of Units will be paid/ charged under Direct Plan.

29 Axis Dividend Yield FundThese estimates have been made in good faith as per the information available to the Investment Manager and are subject to change inter-se or in total subject to prevailing Regulations.

The recurring expenses of the Scheme (including the Investment Management and Advisory Fees) shall be as per the limits prescribed under the SEBI (MF) Regulations. These are as follows:

Assets under management Slab (In Rs. crore) Base expense ratio limits On the first Rs. 500 crores of the daily net assets 2.10% On the next Rs. 250 crores of the daily net assets 1.90% On the next Rs. 1250 crores of the daily net assets 1.60% On the next Rs. 3000 crores of the daily net assets 1.50% On the next Rs. 5000 crores of the daily net assets 1.40% On the next Rs. 40,000 crores of the daily net assets Expense ratio reduction of 0.05% for every increase of Rs. 5,000 crores of daily net assets or part thereof.

On the balance of the assets 0.95% The AMC will charge the Scheme such actual expenses incurred, subject to the statutory limits, if any, prescribed in the Regulations 66 and 67 and amendments thereto.

The mutual fund would update the notice of change in base expense ratio on its website (www.axismf.com) at least three working days prior to the effective date of the change. Investors can refer ‘Total Expense Ratio of Mutual Fund Schemes’ section on https://www.axismf.com/total-expense-ratio for Total Expense Ratio (TER) details.

Illustration: Impact of Expense Ratio on Scheme's return: SO – 45 Expense ratio, normally expressed as a percentage of Average Assets under Management, is calculated by dividing the permissible expenses under the Regulations by the average net assets.

To further illustrate in rupee terms the above, for the Scheme under reference, suppose an Investor invested Rs. 10,000/- (after deduction of stamp duty and transaction charges, if any) under the Growth Option, the

impact of expenses charged will be as under:

Sr. Particulars Regular Plan Direct Plan No.

A. Amount invested at the beginning of the year (Rs.) 10,000 10,000 B. Returns before expenses (Rs.) 1,500 1,500 C. Expenses other than the expenses mentioned in ‘D’ below 50 50 (Rs.) D. Marketing & Selling expense incl. agent commission (Rs.) 150 0 E. Returns after expenses at the end of the year (Rs.) [B – (C + 1300 1450 D)] R eturns after expenses at the end of the year (in %) [(E/A) 13% 14.5% – 1] Note(s):

● The purpose of the above illustration is purely to explain the impact of expense ratio charged to the Plan(s) under the Scheme and should not be construed as providing any kind of investment advice or guarantee of returns on investments.

● It is assumed that the expenses charged are evenly distributed throughout the year. ● The expenses of the Direct Plan of the Scheme will be lower to the extent of the distribution expenses/ commission ● Any tax impact has not been considered in the above example, in view of the individual nature of the tax implications. Each investor is advised to seek appropriate advice.

D. LOAD STRUCTURE SO – 48 30 Axis Dividend Yield FundLoad is an amount which is paid by the investor to redeem the Units from the Scheme. This amount is used by the AMC to pay commission to the distributors and to take care of other marketing and selling expenses.

Load amounts are variable and are subject to change from time to time. For the current applicable structure, investors may refer to the website of the AMC (www.axismf.com) or may call at contact number 8108622211 (Chargeable) from 9.00 am to 6.00 pm (Monday to Saturday) or can contact his distributor.

Para 11.7 of SEBI Master Circular for Mutual Funds as amended from time to time has decided that there shall be no Entry Load for all Mutual Fund schemes.

Type of Load Load chargeable (as %age of NAV) Exit Load For details refer Point no. XI of Part – I of Section I of the Scheme Information Document.

Units issued on reinvestment of IDCWs shall not be subject to Load. No load shall be levied on switches between options and sub-options of the Scheme.

The above mentioned load structure shall be equally applicable to the special products such as switches, STP, SWP, etc. offered by the AMC. Further, for switches between the Growth and IDCW Option, no load will be charged by the Scheme. For switches within the Scheme from Regular to Direct Plan or vice versa, no exit load shall be charged.

Exit load, if any, charged to the investors will be credited back to the Scheme net of GST. The Investor is requested to check the prevailing Load structure of the Scheme before investing.

For any change in Load structure, AMC will issue an addendum and display it on the website/ Investor Service Centres.

Under the Scheme, the AMC/ Trustee reserves the right to change / modify the Load structure if it so deems fit in the interest of smooth and efficient functioning of the Mutual Fund. The AMC/ Trustee reserves the right to introduce / modify the Load depending upon the circumstances prevailing at that time subject to maximum limits as prescribed under the Regulations.

The Redemption Price however, will not be lower than 97% of the NAV. Any imposition or enhancement of Load in future shall be applicable on prospective investments only.

At the time of changing the Load Structure:

1. The AMC shall be required to issue an addendum and display the same on its website immediately;

2. The addendum shall be sent via email to all the distributors / brokers/ISCs, so that the same can be

provided along with Scheme Information Document and Key Information Memorandum till it is updated.

3. Latest applicable addendum shall be a part of KIM and SID of the respective Scheme(s).

4. The digital copies of SID shall have a functional website link to the respective addendums to the SID issued after the last update of SID.

5. Further, the account statements shall continue to include applicable load structure.

The Trustee/AMC reserves the right to change the load structure subject to the limits prescribed under the Regulations. Any change in load structure shall be only on a prospective basis i.e. any such changes would be chargeable only for Redemptions from prospective purchases (applying first in first out basis).

E. REQUIREMENT OF MINIMUM INVESTORS IN THE SCHEME The Scheme shall have a minimum of 20 Investors and no single Investor shall account for more than 25% of the corpus of the Scheme. However, if such limit is breached during the NFO of the Scheme, the Fund will endeavour to ensure that within a period of three months or the end of the succeeding calendar quarter from the close of the NFO of the Scheme, whichever is earlier, the Scheme complies with these two conditions. In case the Scheme does not have a minimum of 20 Investors in the stipulated period, the provisions of Regulation 36(2)(c) of the SEBI (MF) Regulations would become applicable automatically 31 Axis Dividend Yield Fundwithout any reference from SEBI and accordingly the Scheme shall be wound up and the units would be redeemed at Applicable NAV. The two conditions mentioned above shall also be complied within each subsequent calendar quarter thereafter, on an average basis, as specified by SEBI. If there is a breach of the 25% limit by any Investor over the quarter, a rebalancing period of one month would be allowed and thereafter the investor who is in breach of the rule shall be given 15 days’ notice to redeem his exposure over the 25% limit. Failure on the part of the said Investor to redeem his exposure over the 25% limit within the aforesaid 15 days would lead to automatic Redemption by the Mutual Fund at the Applicable NAV on the 15th day of the notice period. The Fund shall adhere to the requirements prescribed by SEBI from time to time in this regard.

32 Axis Dividend Yield FundSection II I. Introduction A. Definitions/interpretation

For details refer website of Axis Mutual Fund: https://www.axismf.com/statutory-disclosures.

B. Risk factors SO - 8 Scheme Specific Risk Factors • The Scheme will invest in companies with a history of dividend payments; its performance will depend on these companies' ability to maintain dividends in the future. Additionally, the volatility and/or adverse performance of these companies/REITs, would have a material adverse bearing on the performance of the Scheme.

• The scheme will be subjected to concentration risk as the fund is mandated to invest in dividend yielding companies/REITs. This may result in the Portfolio NAV to be more volatile as compared to a diversified portfolio.

• The Scheme will have relatively higher exposure to sectors characterized by strong dividend-paying companies, including Real Estate Investment Trusts (REITs). Consequently, any adverse developments affecting such sectors, including changes in economic conditions, regulatory policies, interest rates, taxation, occupancy levels, rental growth, or capital market sentiment, may have a greater impact on the Scheme's performance compared to a diversified equity portfolio.

Risks associated with investments in Equity and Equity related instruments • Equity and equity related instruments are volatile and prone to price fluctuations on a daily basis. The liquidity of investments made in the Scheme may be restricted by trading volumes and settlement periods. Settlement periods may be extended significantly by unforeseen circumstances. The inability of the Scheme to make intended securities purchases, due to settlement problems, could cause the Scheme to miss certain investment opportunities. Similarly, the inability to sell securities held in the Scheme portfolio would result at times, in potential losses to the Scheme, should there be a subsequent decline in the value of securities held in the Scheme portfolio. Also, the value of the Scheme investments may be affected by interest rates, currency exchange rates, changes in law/ policies of the government, taxation laws and political, economic or other developments which may have an adverse bearing on individual securities, a specific sector or all sectors.

• Investments in equity and equity related securities involve a degree of risk and investors should not invest in the equity Schemes unless they can afford to take the risk of losing their investment. • Securities which may be received pursuant to corporate action and which are not quoted on the stock exchanges are inherently illiquid in nature and carry a larger liquidity risk in comparison with securities that are listed on the exchanges or offer other exit options to the investors / unitholders, including put options.

Risks associated with investments in Money Market Instruments Interest-Rate Risk: Fixed income securities such as government securities money market instruments and derivatives run price-risk or interest-rate risk. Generally, when interest rates rise, prices of existing fixed income securities fall and when interest rates drop, such prices increase. The extent of fall or rise in the prices depends upon the coupon and maturity of the security. It also depends upon the yield level at which the security is being traded.

Re-investment Risk: Investments in fixed income securities carry re-investment risk as interest rates prevailing on the coupon payment or maturity dates may differ from the original coupon of the bond.

Basis Risk: The underlying benchmark of a floating rate security or a swap might become less active or may cease to exist and thus may not be able to capture the exact interest rate movements, leading to loss of 33 Axis Dividend Yield Fundvalue of the portfolio.

Spread Risk: In a floating rate security the coupon is expressed in terms of a spread or mark up over the benchmark rate. In the life of the security this spread may move adversely leading to loss in value of the portfolio. The yield of the underlying benchmark might not change, but the spread of the security over the underlying benchmark might increase leading to loss in value of the security.

Liquidity Risk: The liquidity of a fixed income instruments may change, depending on market conditions leading to changes in the liquidity premium attached to the price of the fixed income instruments. At the time of selling the security, the security can become illiquid, leading to loss in value of the portfolio.

Liquidity Risk on account of unlisted securities: The liquidity and valuation of the Schemes’ investments due to their holdings of unlisted securities may be affected if they have to be sold prior to their target date of divestment. The unlisted security can go down in value before the divestment date and selling of these securities before the divestment date can lead to losses in the portfolio.

Credit Risk: This is the risk associated with the issuer of a Money Market Instrument defaulting on coupon payments or in paying back the principal amount on maturity. Even when there is no default, the price of a security may change with expected changes in the credit rating of the issuer. It is to be noted here that a Government Security is a sovereign security and is the safest. Fixed Income instruments issued by Corporate carry a higher amount of credit risk than Government Securities. Within fixed income instruments issued by corporate also there are different levels of safety and a fixed income instruments rated higher by a particular rating agency is safer than a fixed income instruments rated lower by the same rating agency.

Settlement Risk: Fixed income securities run the risk of settlement which can adversely affect the ability of the fund house to swiftly execute trading strategies which can lead to adverse movements in NAV.

Risk factors related to Silver / Gold ETFs • The NAV of Silver / Gold ETFs is related to the value of Silver / Gold held by the Silver / Gold ETF. The value

(price) of Silver / Gold may fluctuate for several reasons and all such fluctuations will result in changes in the NAV of Silver / Gold ETFs. The factors that may affect the price of Silver / Gold, among other things, include demand and supply for Silver / Gold in India and in the global market, Indian and foreign exchange rates, interest rates, inflation trends, trading in Silver / Gold as commodity, legal restrictions on the movement/trade of Silver / Gold that may be imposed by RBI, Government of India or countries that supply or purchase Silver / Gold to/from India, trends and restrictions on import/export of Silver / Gold jewellery in and out of India, etc.

Listing of the units of the Silver / Gold ETFs does not necessarily guarantee their liquidity and there can be no assurance that an active secondary market for the units will develop or be maintained. Consequently, the ETF may quote below its face value / NAV. The market price of the Units of the ETF, like any other listed security, is largely dependent on two factors, viz., (1) the intrinsic value of the Unit (or NAV), and (2) demand and supply of Units in the market. Sizeable demand or supply of the Units in the Exchange may lead to market price of the Units to quote at premium or discount to NAV. To that extent the return from the Scheme shall differ from the return on Silver / Gold.

• The underlying gold ETF / silver ETFs have to sell gold/silver only to bullion bankers/traders who are authorized to buy the commodity. Though there are adequate number of players (commercial or bullion bankers) to whom the underlying gold ETF /Silver ETF can sell gold/silver, it may have to resort to distress sale of these commodities if there is no or low demand for gold to meet its cash needs of redemption or expenses.

Risks associated with investments in Derivatives • The Scheme may invest in derivative products in accordance with and to the extent permitted under the Regulations and by RBI. Derivative products are specialized instruments that require investment techniques and risk analysis different from those associated with stocks and bonds. The use of a derivative requires an understanding not only of the underlying instrument but of the derivative itself. Trading in derivatives carries a high degree of risk although they are traded at a relatively small amount of margin which provides the possibility of great profit or loss in comparison with the principal investment amount.

Thus, derivatives are highly leveraged instruments. Even a small price movement in the underlying security could have an impact on their value and consequently, on the NAV of the Units of the Scheme. • The derivatives market in India is nascent and does not have the volumes that may be seen in other developed markets, which may result in volatility to the values.

34 Axis Dividend Yield Fund• Investment in derivatives also requires the maintenance of adequate controls to monitor the transactions entered into, the ability to assess the risk that a derivative adds to the portfolio and the ability to forecast price or interest rate movements correctly. Even a small price movement in the underlying security could have an impact on their value and consequently, on the NAV of the Units of the Scheme.

• The Scheme may face execution risk, whereby the rates seen on the screen may not be the rate at which the ultimate execution of the derivative transaction takes place. • The Scheme may find it difficult or impossible to execute derivative transactions in certain circumstances.

For example, when there are insufficient bids or suspension of trading due to price limit or circuit breakers, the Scheme may face a liquidity issue. • The options buyer's risk is limited to the premium paid, while the risk of an options writer is unlimited.

However the gains of an options writer are limited to the premiums earned. • The exchange may impose restrictions on exercise of options and may also restrict the exercise of options at certain times in specified circumstances and this could impact the value of the portfolio.

• The writer of a call option bears a risk of loss if the value of the underlying asset increases above the exercise price. • Investments in index futures face the same risk as the investments in a portfolio of shares representing an index. The extent of loss is the same as in the underlying stocks.

• The Scheme bears a risk that it may not be able to correctly forecast future market trends or the value of assets, indices or other financial or economic factors in establishing derivative positions for the Scheme.

• The risk of loss in trading futures contracts can be substantial, because of the low margin deposits required, the extremely high degree of leverage involved in futures pricing and the potential high volatility of the futures markets.

• There is the possibility that a loss may be sustained by the portfolio as a result of the failure of another party (usually referred to as the "counter party") to comply with the terms of the derivatives contract. The counter party may default on a transaction before settlement and therefore, the Scheme is compelled to negotiate with another counterparty at the then prevailing (possibly unfavourable) market price.

• Derivatives also carry a market liquidity risk where the derivatives cannot be sold (unwound) at prices that reflect the underlying assets, rates and indices. • Where derivatives are used for hedging, such use may involve a basis risk where the instrument used as a hedge does not match the movement in the instrument/underlying asset being hedged. The risk may be inter-related also e.g. interest rate movements can affect equity prices, which could influence specific issuer/industry assets.

• Other risks in using derivatives include the risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly with underlying assets, rates and indices.

•Derivative products are leveraged instruments and can provide disproportionate gains as well as disproportionate losses to the investor / unitholder. Execution of investment strategies depends upon the ability of the fund manager(s) to identify such opportunities which may not be available at all times.

Identification and execution of the strategies to be pursued by the fund manager(s) involve uncertainty and decision of fund manager(s) may not always be profitable. No assurance can be given that the fund manager(s) will be able to identify or execute such strategies.

SO – 28 •The risks associated with the use of derivatives are different from or possibly greater than, the risks associated with investing directly in securities and other traditional investments.

35 Axis Dividend Yield FundSO - 9 Risks associated with investing in foreign securities • Subject to necessary approvals and within the investment objectives of the Scheme, the Scheme may invest in overseas markets which carry risks related to fluctuations in the foreign exchange rates, the nature of the securities market of the country, repatriation of capital due to exchange controls and political circumstances.

• Since the Scheme would invest only partially in foreign securities, there may not be readily available and widely accepted benchmarks to measure performance of such Scheme. To manage risks associated with foreign currency and interest rate exposure, the Scheme may use derivatives for efficient portfolio management and hedging and portfolio rebalancing and in accordance with conditions as may be stipulated under the Regulations and by RBI from time to time.

• Investment in Foreign Securities involves a currency risk. To the extent that the assets of the Scheme will be invested in securities denominated in foreign currencies, the Indian Rupee equivalent of the net assets, distributions and income may be adversely affected by changes in the value of certain foreign currencies relative to the Indian Rupee. The repatriation of capital to India may also be hampered by changes in regulations concerning exchange controls or political circumstances as well as the application to it of other restrictions on investment.

Risks associated with Covered Call Strategy The risk associated with covered calls is the loss of upside, i.e. if the shares are assigned (called away), the option seller forgoes any share price appreciation above the option strike price.

The Scheme may write covered call option only in case it has adequate number of underlying equity shares as per regulatory requirement. This would lead to setting aside a portion of investment in underlying equity shares. If covered call options are sold to the maximum extent allowed by regulatory authority, the scheme may not be able to sell the underlying equity shares immediately if the view changes to sell and exit the stock. The covered call options need to be unwound before the stock positions can be liquidated. This may lead to a loss of opportunity, or can cause exit issues if the strike price at which the call option contracts have been written become illiquid. Hence, the scheme may not be able to sell the underlying equity shares, which can lead to temporary illiquidity of the underlying equity shares and result in loss of opportunity.

The writing of covered call option would lead to loss of opportunity due to appreciation in value of the underlying equity shares. Hence, when the appreciation in equity share price is more than the option premium received the scheme would be at a loss.

The total gross exposure related to option premium paid and received must not exceed the regulatory limits of the net assets of the scheme. This may restrict the ability of Scheme to buy any options.

Risk Factors Associated with Investments in REITs and InvITS:

Price-Risk or Interest-Rate Risk: REITs & InvITs are volatile and prone to price fluctuations on a daily basis owing to market movements. The extent of fall or rise in the prices is a fluctuation in general market conditions, factors and forces affecting capital market, Real Estate, level of interest rates, trading volumes, settlement periods and transfer procedures.

Interest Rate Risk: REITs & InvITs run interest rate risk. Generally, when interest rates rise, prices of units fall and when interest rates drop, such prices increase.

Credit Risk: In simple terms this risk means that the issuer of the instrument may default on interest payment or even in paying back the principal amount. REITs & InvITs are likely to have volatile cash flows as the repayment dates would not necessarily be pre scheduled.

Liquidity or Marketability Risk: This refers to the ease with which REITs & InvITs units can be sold. There is no assurance that an active secondary market will develop or be maintained. Hence there would be time when trading in the units could be infrequent. The subsequent valuation of illiquid units may reflect a 36 Axis Dividend Yield Funddiscount from the market price of comparable securities for which a liquid market exists.

Reinvestment Risk: Investments in REITs & InvITs may carry reinvestment risk as there could be repatriation of funds by the Trusts in form of buyback of units or dividend pay-outs, etc. Consequently, the proceeds may get invested in assets providing lower returns.

Risk of lower than expected distributions: The distributions by the REITs or InvITs will be based on the net cash flows available for distribution. The amount of cash available for distribution principally depends upon the amount of cash that the REIT/ InvITs receives as IDCWs or the interest and principal payments from portfolio assets.

The above are some of the common risks associated with investments in REITs & InvITs. There can be no assurance that investment objectives will be achieved, or that there will be no loss of capital. Investment results may vary substantially on a monthly, quarterly or annual basis.

Risks associated with segregated portfolio

1. Investor holding units of segregated portfolio may not able to liquidate their holding till the time recovery of money from the issuer.

2. Security comprises of segregated portfolio may not realise any value.

3. Listing of units of segregated portfolio on recognised stock exchange does not necessarily guarantee their liquidity. There may not be active trading of units in the stock market. Further trading price of units on the stock market may be significantly lower than the prevailing NAV.

Risks associated with Short Selling & Securities Lending Securities Lending is lending of securities through an approved intermediary to a borrower under an agreement for a specified period with the condition that the borrower will return equivalent securities of the same type or class at the end of the specified period along with the corporate benefits accruing on the securities borrowed. There are risks inherent in securities lending, including the risk of failure of the other party, in this case the approved intermediary to comply with the terms of the agreement. Such failure can result in a possible loss of rights to the collateral, the inability of the approved intermediary to return the securities deposited by the lender and the possible loss of corporate benefits accruing thereon.

Short-selling is the sale of shares or securities that the seller does not own at the time of trading. Instead, he borrows it from someone who already owns it. Later, the short seller buys back the stock/security he shorted and returns the stock/security to the lender to close out the loan. The inherent risks are Counterparty risk and liquidity risk of the stock/security being borrowed. The security being short sold might be illiquid or become illiquid and covering of the security might occur at a much higher price level than anticipated, leading to losses.

Risks Factors associated with transaction in Units through stock exchange(s) In respect of transaction in Units of the Scheme through BSE and / or NSE, allotment and redemption of Units on any Business Day will depend upon the order processing / settlement by BSE and / or NSE and their respective clearing corporations on which the Fund has no control.

C. Risk mitigation strategies SO - 9 Risk Control Risk management is going to be an integral part of the investment process. Effective risk management is critical to fund management for achieving financial soundness. Investments by the Scheme shall be made as per the investment objectives of the Scheme and provisions of the Regulations. The investment team of the AMC will carry out rigorous in depth credit evaluation of the money market and debt instruments (other than G-Secs) proposed to be invested in. The credit evaluation will essentially be a bottom up approach and include a study of the operating environment of the issuer, the past track record as well as the future prospects of the issuer and the short term / long term financial health of the issuer. The AMC would incorporate adequate safeguards for controlling risks in the portfolio construction process, which would be periodically evaluated. The Scheme will also use derivatives and other hedging instruments, as may be 37 Axis Dividend Yield Fundpermitted by RBI, from time to time, in order to protect the value of the portfolio. Investments by the Scheme shall be made as per the investment objectives of the Scheme and provisions of SEBI regulations. AMC has implemented the Bloomberg Portfolio Order Management System as Front Office System (FOS). The system has incorporated all the investment restrictions as per SEBI guidelines and “soft” warning alerts at appropriate levels for preemptive monitoring. The system enables identifying & measuring the risk through various risk measurement tools like various risk ratios, average duration and analyzes the same and acts in a preventive manner.

Risk control measures with respect to investment Equity and Equity related instruments

Concentration Risk: Concentration risk represents the probability of loss arising from heavy exposure to a particular group of sectors or securities.

Mitigation: The scheme will try to mitigate this risk by diversifying the investment into the large number of companies and keep stock-specific concentration risk relatively low.

Market Risk: Equity and Equity related securities by nature are volatile and prone to price fluctuations on a daily basis due to both macro and micro factors.

Mitigation - Market risk is a risk which is inherent to an equity scheme. The scheme will try to reduce the market risk by undertaking active portfolio management as per the investment objective.

Liquidity risk: The liquidity of investments made in the Scheme may be restricted by trading volumes and settlement periods Mitigation- As such the liquidity of stocks that the scheme invests into could be relatively low. The scheme will try to maintain a proper asset-liability match to ensure redemption / Maturity payments are made on time.

Risk control measures with respect to Money Market Instruments Market Risk / Interest Rate Risk: Changes in interest rates may affect the Scheme’s Net Asset Value as the prices of securities generally increase as interest rates decline and generally decrease as interest rates rise.

The price movement up and down in fixed income securities will lead to possible movements in the NAV.

Mitigation - In a rising interest rates scenario the scheme may increase its investment in money market securities whereas if the interest rates are expected to fall the allocation to debt securities with longer maturity may be increased thereby mitigating risk to that extent.

Liquidity or Marketability Risk: This refers to the ease with which a security can be sold at or near to its valuation yield-to-maturity (YTM).

Mitigation- The scheme may invest in government securities, and money market instruments. While the liquidity risk for government securities, money market instruments and short maturity corporate bonds may be low, it may be high in case of medium to long maturity corporate bonds.

Credit risk or default risk: It refers to the risk that an issuer of a fixed income security may default (i.e., will be unable to make timely principal and interest payments on the security). Normally, the value of a fixed income security will fluctuate depending upon the changes in the perceived level of credit risk as well as any actual event of default. The greater the credit risk, the greater the yield required for someone to be compensated for the increased risk.

Mitigation– Apart from the basic examination, management’s past track record will also be studied. In

order to assess financial risk a detailed assessment of the issuer’s financial statements will be undertaken to review its ability to undergo stress on cash flows and asset quality. A detailed evaluation of accounting policies, off-balance sheet exposures, notes, auditors’ comments and disclosure standards will also be 38 Axis Dividend Yield Fundmade to assess the overall financial risk of the potential borrower. In case of securitized debt instruments, the Scheme will ensure that these instruments are sufficiently backed by assets.

Risk control with respect to investment in REITs & InvITs

Market Risk: REITs & InvITS are volatile and prone to price fluctuations on a daily basis owing to market movements. Investors may note that AMC/Fund Manager’s investment decisions may not always be profitable, as actual market movements may be at variance with the anticipated trends. The NAV of the Scheme is vulnerable to movements in the prices of securities invested by the scheme, due to various market related factors like changes in the general market conditions, factors and forces affecting capital market, level of interest rates, trading volumes, Real Estate, settlement periods and transfer procedures.

Mitigation- The scheme will undertake active portfolio management as per the investment objective to reduce the market risk.

Reinvestment Risk: Investments in REITs & InvITS may carry reinvestment risk as there could be repatriation of funds by the Trusts in form of buyback of units or dividend pay-outs, etc. Consequently, the proceeds may get invested in assets providing lower returns.

Mitigation- The reinvestment risk will be limited as the proceeds are not expected to be a large portion of the portfolio value. The Investment Manager also relies on their own research as well as third party research.

The analysis will focus, amongst others, on the predictability and strength of cash flows, value of assets, capital structure, business prospects, policy environment, strength of management, responsiveness to business conditions, etc.

Concentration Risk: Securities / Instruments of REITs & InvITS run concentration risk as currently there very few issuers of REITs & InvITS in India for investment in REITs & InvITS.

Mitigation- The scheme will undertake to diversify its allocation in REITs which are held as a part of the overall diversified portfolio.

Interest Rate Risk: Securities / Instruments of REITs & InvITS run interest rate risk. Generally, when interest rates rise, prices of units fall and when interest rates drop, such prices increase.

Mitigation- In a rising interest rates scenario the Fund Manager may choose to invest in money market securities / debt securities with shorter maturity / floating rate bonds instead of REITs & InvITS and thereby mitigating risk to that extent.

Risk control measures with respect to investment in units of Gold ETFs / Silver ETFs Volatility Risk – ETFs being passively managed carry lesser risk compared to active management. The underlying ETF scheme(s) where the Scheme intends to invest follow the underlying price of commodity and therefore the level of portfolio volatility would be same as that of the underlying commodity price volatility. The fund manager would also endeavour to keep minimal cash levels to keep performance deviation from the underlying ETF's to minimal.

Liquidity Risk - The underlying scheme may retain certain investments in cash or cash equivalents for its day-to-day liquidity requirements. The Trustee (subject to applicable regulations) in general interest of the Unit holders of the underlying scheme offered under its Scheme Information Document and keeping in view of the unforeseen circumstances / unusual market conditions, may limit the total number of Units, which can be redeemed on any Business Day.

Price Risk - Price risk is inherent to the prices of commodities impacting the underlying schemes NAV.

Custody Risk - There is a risk that part or all of the physical Silver / Gold belonging to the underlying Scheme could be lost, damaged or stolen. In order to ensure safety, the said Silver / Gold will be stored with custodian in its vaults. The custodian will insure/cover all such risks.

Risk control with respect to derivatives As and when the Scheme trades in the derivatives market there are risk factors and issues concerning the use of derivatives since derivative products are specialized instruments that require investment techniques 39 Axis Dividend Yield Fundand risk analysis different from those associated with stocks and bonds. The Scheme may invest in derivative for the purpose of hedging, portfolio balancing and other purposes as may be permitted under the Regulations.

Mitigation- Exposure with respect to derivatives shall be in line with regulatory limits and the limits specified in the SID. All equity derivatives trade will be done only on the exchange with guaranteed settlement.

Risk control with respect to investment in Foreign Securities Since the assets may be invested in securities denominated in foreign currency, the INR equivalent of the net assets, distributions and income may be adversely affected by changes / fluctuations in the value of the foreign currencies relative to the INR.

Mitigation - The scheme shall have the option to enter into permissible instruments (subject to applicable regulations by SEBI/RBI) for the purposes of hedging against the foreign exchange fluctuations.

II.Information about the scheme:

SO – 29 A. Where will the scheme invest – The corpus of the Scheme, subject to the enabling provisions of asset allocation pattern, will be invested in securities/ instruments which will include but not limited to:

Equity and Equity Related Instruments

1. Equity share is a security that represents ownership interest in a company.

2. Equity Related Instruments are securities which give the holder of the security right to receive Equity Shares on pre agreed terms. It includes convertible bonds, convertible debentures, equity warrants, convertible preference shares, etc.

Equity related instruments also include Real Estate Investment Trust (REITs). REIT is a trust which holds real estate assets which is managed by an investment manager. The unitholders in the trust have proportional interest in the underlying holdings of the trust.

3. Foreign Equity and Equity Related Instrument as may be permitted by SEBI/RBI from time to time.

4. Equity Derivatives are financial instruments, generally traded on an exchange, the price of which is directly dependent upon (i.e., “derived from”) the value of equity shares or equity indices. Derivatives involve the trading of rights or obligations based on the underlying, but do not directly transfer property.

Futures Futures are exchange-traded contracts to sell or buy financial instruments for future delivery at an agreed price. There is an agreement to buy or sell a specified quantity of financial instrument on a designated future date at a price agreed upon by the buyer and seller at the time of entering into a contract. To make trading possible, the exchange specifies certain standardized features of the contract. A futures contract involves an obligation on both the parties to fulfill the terms of the contract.

SEBI has permitted futures contracts on indices and individual stocks with maturity of 1 month, 2 months and 3 months on a rolling basis. The futures contracts are settled on last Thursday (or immediately preceding trading day if Thursday is a trading holiday) of each month. Currently, the futures are settled in cash. The final settlement price is the closing price of the underlying stock(s)/index.

Options Option is a contract which provides the buyer of the option (also called holder) the right, without the obligation, to buy or sell a specified asset at the agreed price on or upto a particular date. For acquiring this privilege, the buyer pays premium (fee) to the seller. The seller on the other hand has the obligation to buy or sell specified asset at the agreed price and for this obligation he receives premium. The premium is determined considering number of factors such as the market price of the underlying asset/security, number of days to expiry, risk free rate of return, strike price of the option and the volatility of the underlying asset. Option contracts are of two types viz.

Call Option - The option that gives the buyer the right but not the obligation to buy specified quantity of 40 Axis Dividend Yield Fundthe underlying asset at the strike price is a call option. The buyer of the call option (known as the holder of call option) can call upon the seller of the option (writer of the option) and buy from him the underlying asset at the agreed price at any time on or before the expiry of the option.

The seller (writer of the option) on the other hand has the obligation to sell the underlying asset if the buyer of the call option decides to exercise his option to buy.

Put Option – The option that gives the buyer the right but not the obligation to sell is called put option. A Put option gives the holder (buyer) the right to sell specified quantity of the underlying asset at the strike price.

There are two kind of options based on the date of exercise of right. The first is the European Option which can be exercised only on the maturity date. The second is the American Option which can be exercised on or before the maturity date.

Money Market Instruments Certificate of Deposit (CD) Certificate of Deposit (CD) is a negotiable money market instrument issued by scheduled commercial banks and select all-India Financial Institutions that have been permitted by the RBI to raise short term resources. The maturity period of CDs issued by the Banks is between 7 days to one year, whereas, in case of FIs, maturity is one year to 3 years from the date of issue.

Commercial Paper (CP) Commercial Paper (CP) is an unsecured negotiable money market instrument issued in the form of a promissory note, generally issued by the corporates, primary dealers and all India Financial Institutions as an alternative source of short term borrowings. CP is traded in secondary market and can be freely bought and sold before maturity.

Treasury Bill (T-Bill) Treasury Bills (T-Bills) are issued by the Government of India to meet their short term borrowing requirements.

T-Bills are issued for maturities of 14 days, 91 days, 182 days and 364 days. The Scheme may also invest in Cash Management Bill (CMB) issued by the Government of India to meet their short term borrowing requirements. CMB are generally issued for maturities of less than 91 days.

Commercial Usance Bills Bill (bills of exchange/promissory notes of public sector and private sector corporate entities) Rediscounting, usance bills and commercial bills.

Repos Repo (Repurchase Agreement) or Reverse Repo is a transaction in which two parties agree to sell and purchase the same security with an agreement to purchase or sell the same security at a mutually decided future date and price. The transaction results in collateralized borrowing or lending of funds. Presently in India, corporate debt securities, Government Securities, State Government Securities and T-Bills are eligible for Repo/Reverse Repo.

Tri-party repo means a repo contract where a third entity (apart from the borrower and lender), called a Tri-Party Agent, acts as an intermediary between the two parties to the repo to facilitate services like collateral selection, payment and settlement, custody and management during the life of the transaction.

The Scheme may undertake repo or reverse repo transactions in accordance with the directions issued by RBI and SEBI from time to time. Such investment shall be made subject to the guidelines which may be prescribed by the Board of Directors of the Asset Management Company and Trustee Company.

The Scheme may invest in Securities created and issued by the Central and State Governments as may be permitted by RBI, securities guaranteed by the Central and State Governments (including but not limited to coupon bearing bonds, zero coupon bonds and treasury bills). State Government securities (popularly 41 Axis Dividend Yield Fundknown as State Development Loans or SDLs) are issued by the respective State Government in co- ordination with the RBI.

Infrastructure Investment Trust (InvIT) InvITs is a trust which holds infrastructure assets which is managed by an investment manager. The unitholders in the trust have proportional interest in the underlying holdings of the trust.

Investment in Gold Exchange Traded Funds (Gold ETFs) Gold Exchange Traded Funds are open ended scheme(s) that invest primarily in gold or gold related instruments. As per the current SEBI MF Regulations, Gold ETFs are allowed to invest in gold. Further the Gold ETFs can invest in gold related instruments only after such instruments are specified by SEBI. The units of ETFs are listed on the stock exchange(s). Further, authorized participants and large investors can subscribe and redeem the units of Gold ETFs in creation unit size as specified by the Scheme.

Investment in Silver Exchange Traded Funds (SILVER ETFs) Silver Exchange Traded Funds are open ended scheme(s) that invest in Silver or Silver related instruments as permitted by SEBI (Mutual Funds) Regulations, 2026.

Foreign Securities The Scheme may also invest in suitable investment avenues in foreign securities in overseas financial markets for the purpose of diversification, commensurate with the Scheme objectives and subject to necessary stipulations by SEBI / RBI. Towards this end, the Mutual Fund may also appoint overseas investment advisors and other service providers, to the extent permissible under the Regulations.

The Scheme may, with the approval of SEBI / RBI, where required invest in: • ADRs (American Depository Receipts)/ GDRs (Global Depository Receipts) issued by Indian or foreign companies • Equity of overseas companies listed on recognized stock exchanges overseas • Initial and follow on public offerings for listing at recognized stock exchanges overseas • Money market instruments rated not below investment grade • Repos in the form of investment, where the counterparty is rated not below investment grade; repos shall not however, involve any borrowing of funds by the mutual funds • Government securities where the countries are rated not below investment grade • Derivatives traded on recognized stock exchanges overseas only for hedging and portfolio balancing with underlying as securities • Short term deposits with banks overseas where the issuer is rated not below investment grade • Units/securities issued by overseas mutual funds or unit trusts registered with overseas regulators and investing in (a) aforesaid securities, or (b) unlisted overseas securities (not exceeding 10% of their net assets).

Note: The Scheme will not invest in foreign securitized debt.

As per para 13.11. of SEBI Circular Master Circular, as amended from time to time, mutual fund can make overseas investments (other than overseas ETF) subject to a maximum of US $1 billion and in overseas ETF subject to a maximum $300 million or such limits as may be prescribed by SEBI from time to time. Subject to the approval of RBI / SEBI and conditions as may be prescribed by them, the Mutual Fund may open one or more foreign currency accounts abroad either directly, or through the custodian/sub-custodian, to facilitate investments and to enter into/deal in forward currency contracts, currency futures, interest rate futures / swaps, currency options for the purpose of hedging the risks of assets of a portfolio or for its efficient management. However, the use of such instruments shall be as permitted from time to time. All the requirement of the SEBI circulars as amended from time to time, would be adhered to by the AMC for investment in foreign securities. Investment in overseas securities shall be made in accordance with the requirements stipulated by SEBI and RBI from time to time.

The Fund Manager reserves the right to invest in such securities as may be permitted from time to time and which are in line with the investment objectives of the scheme.

42 Axis Dividend Yield FundShort Term Deposits Pending deployment of the funds in securities in terms of investment objective of the Scheme, the AMC may in terms of SEBI circular dated April 16, 2007, June 23, 2008, August 16, 2019 and September 20, 2019 as may be amended from time to time, park the funds of the Scheme in short term deposits of the Scheduled Commercial Bank.

Units of Mutual Fund schemes The scheme may invest in units of mutual fund schemes of Axis AMC or in the Scheme of other mutual funds in conformity with the investment objective of the Scheme and in terms of the prevailing SEBI (MF) Regulations. Provided that such investment will be within the limits specified under SEBI (MF) Regulations and will be done for cash management purposes.

The securities / instruments mentioned above and such other securities the Scheme is permitted to invest in could be listed, unlisted, privately placed, secured, unsecured, rated or unrated and of any maturity.

The securities may be acquired through initial public offering (IPOs), secondary market, private placement, rights offers, negotiated deals etc.

The Fund Manager may invest in any other security as maybe permitted from time to time and which are in line with the investment objectives of the Scheme.

Debt and Money Markets in India The money markets in India essentially consist of the call money market (i.e. market for overnight and term money between banks and institutions), repo transactions (temporary sale with an agreement to buy back the securities at a future date at a specified price), commercial papers (CPs, short term unsecured promissory notes, generally issued by corporates), certificate of deposits (CDs, issued by banks) and Treasury Bills (issued by RBI). In a predominantly institutional market, the key money market players are banks, financial institutions, insurance companies, mutual funds, primary dealers and corporates. In money market, activity levels of the Government and nongovernment debt vary from time to time. Instruments

that comprise a major portion of money market activity include but not limited to: • Overnight Call • Tri Party Repo • Repo/Reverse Repo Agreement • Treasury Bills • Government securities with a residual maturity of < 1 year.

• Commercial Paper • Certificate of Deposit Apart from these, there are some other options available for short tenure investments that include MIBOR linked debentures with periodic exit options and other such instruments. Though not strictly classified as Money Market Instruments, PSU / DFI / Corporate paper with a residual maturity of < 1 year, are actively traded and offer a viable investment option.

The market has evolved in past 2-3 years in terms of risk premia attached to different class of issuers. Bank CDs have clearly emerged as popular asset class with increased acceptability in secondary market. PSU banks trade the tightest on the back of comfort from majority government holding. Highly rated manufacturing companies also command premium on account of limited supply. However, there has been increased activity in papers issued by private/foreign banks/NBFCs/companies in high-growth sector due to higher yields offered by them. Even though companies across these sectors might have been rated on a same scale, the difference in the yield on the papers for similar maturities reflects the perception of their respective credit profiles.

The following table gives approximate yields prevailing on July 20, 2026 on some of the instruments and further illustrates this point.

Instrument Current Yield range (%) Tri-party Repo 5.20/25 43 Axis Dividend Yield FundRepo 5.20/25 3M T-bill 5.30/35 1Y T-bill 5.70/75 10Y G-sec 6.75/80 3m PSU Bank CD 6.80/85 3m Manufacturing co. CP 6.95/7.00 1Y PSU Bank CD 7.15/20 1Y NBFC CP 7.50/55 1Y Manufacturing co. CP 7.25/30 5Y AAA Institutional Bond 7.40/45 10Y AAA Institutional Bond 7.40/45

Source: Bloomberg These yields are indicative and do not indicate yields that may be obtained in future as interest rates keep changing consequent to changes in macro-economic conditions and RBI policy. The price and yield on various debt instruments fluctuate from time to time depending upon the macro economic situation, inflation rate, overall liquidity position, foreign exchange scenario etc. Also, the price and yield vary according to maturity profile, credit risk etc.

B. What are the investment restrictions? Pursuant to Regulations, specifically the Sixth Schedule and amendments thereto, the following investment

restrictions are currently applicable to the Scheme:

1. The Scheme shall not invest more than 10 per cent of its NAV in the equity shares or equity related instruments of any entity. All investments by the Scheme in equity shares and equity related instruments shall only be made provided such securities are listed or to be listed. The limit shall also be applicable for investment in units of Venture capital funds.

2. The Mutual Fund under all its Scheme(s) shall not own more than ten per cent of any company’s paid up capital carrying voting rights or ten per cent of units of REITs issued by a single issuer. Provided, investment in the asset management company or the trustee company of a mutual fund shall be governed by clause (a), of sub-regulation (1), of regulation 7B.

3. The Scheme shall not invest more than 10% of its NAV in debt instruments comprising money market instruments issued by a single issuer, which are rated not below investment grade by a credit rating agency authorized to carry out such activity under the SEBI Act, 1992. Such investment limit may be extended to 12% of the NAV of the Scheme with the prior approval of the Trustee and the Board of Directors of AMC.

Provided further that such limit shall not be applicable for investment in Government Securities, treasury bills and collateralized borrowing and lending obligations.

4. The scheme shall not invest more than: a. 10% of its NAV in money market securities rated AAA; or b. 8% of its NAV in money market securities rated AA; or c. 6% of its NAV in money market securities rated A and below issued by a single issuer.

The above investment limits may be extended by up to 2% of the NAV of the scheme with prior approval of the Board of Trustees and Board of Directors of the AMC, subject to compliance with the overall 12% limit specified in clause 1 of Sixth Schedule of MF Regulation.

The long term rating of issuers shall be considered for the money market instruments. However, if there 44 Axis Dividend Yield Fundis no long term rating available for the same issuer, then based on credit rating mapping of CRAs between short term and long term ratings, the most conservative long term rating shall be taken for a given short term rating. Exposure to government money market instruments such as TREPS on G-Sec/ T- bills shall be treated as exposure to government securities.

Provided further that such limit shall not be applicable for investment in Government Securities, treasury bills and tri-party repo on government securities and treasury bills.

4. The Mutual Funds can participate in repos on following corporate debt securities: a) Listed AA and above rated corporate debt securities b) Commercial Papers (CPs) and Certificate of Deposits (CDs) For the purpose of consideration of credit rating of exposure on repo transactions for various purposes including for Potential Risk Class (PRC) matrix, liquidity ratios, Risk-o-meter etc., the same shall be as that of the underlying securities, i.e., on a look through basis.

For transactions where settlement is guaranteed by a Clearing Corporation, the exposure shall not be considered for the purpose of determination of investment limits for single issuer, group issuer and sector level limits

5. The Scheme shall not invest in unlisted debt instruments including commercial papers, except

Government Securities and other money market instruments:

Provided further that the Scheme shall comply with the norms under this clause within the time and in

the manner as may be specified by the Board:

Provided further that the norms for investments by the Scheme in unrated debt instruments shall be as specified by the Board from time to time.

Further the investments by the Scheme shall be in compliance with Para 13.1 of Master circular for Mutual Funds and as amended by SEBI from time to time.

6. The Scheme may invest in other schemes of the Mutual Fund or any other mutual fund without charging any fees, provided the aggregate inter-scheme investment made by all the schemes under the same management or in schemes under the management of any other asset management company shall not exceed 5% of the Net Asset Value of the Fund.

7. The Scheme shall not make any investment in:

1. any unlisted security of an associate or group company of the sponsor; or

2. any security issued by way of private placement by an associate or group company of the sponsor; or

3. the listed securities of group companies of the sponsor which is in excess of 25% of the net assets.

8. The Mutual Fund shall get the securities purchased transferred in the name of the Fund on account of the concerned Scheme, wherever investments are intended to be of a long-term nature.

9. Transfer of investments from one scheme to another scheme in the same Mutual Fund is permitted

provided: a) such transfers are done at the prevailing market price for quoted instruments on spot basis (spot basis shall have the same meaning as specified by a Stock Exchange for spot transactions); and b) the securities so transferred shall be in conformity with the investment objective of the scheme to which such transfer has been made.

Further, inter scheme transfers shall be in accordance with the guidelines issued by Para 13.19 of Master

Circular of Mutual Fund as amended from time to time.

SO – 30

10. The Mutual Fund shall buy and sell securities on the basis of deliveries and shall in all cases of purchases, take delivery of relevant securities and in all cases of sale, deliver the securities:

45 Axis Dividend Yield FundProvided that the Mutual Fund may engage in short selling of securities in accordance with the

framework relating to short selling and securities lending and borrowing specified by the Board:

Provided further that the Mutual Fund may enter into derivatives transactions in a recognized stock exchange, subject to the framework specified by SEBI.

Provided further that sale of government security already contracted for purchase shall be permitted in accordance with the guidelines issued by the Reserve Bank of India in this regard.

11. The Scheme shall not make any investment in any fund of funds scheme.

12. The Scheme will comply with the following restrictions for trading in exchange traded derivatives, as

specified by SEBI vide its circulars issued from time to time: i. Position limit for the Mutual Fund in equity index options contracts a. The Mutual Fund position limit in all index options contracts on a particular underlying index shall be Rs.

500 crores or 15% of the total open interest of the market in index options, whichever is higher, per stock exchange. b. This limit would be applicable on open positions in all options contracts on a particular underlying index.

ii. Position limit for the Mutual Fund in equity index futures contracts: a. The Mutual Fund position limit in all index futures contracts on a particular underlying index shall be Rs.500 crores or 15% of the total open interest of the market in index futures, whichever is higher, per stock exchange.

b. This limit would be applicable on open positions in all futures contracts on a particular underlying index. iii. Additional position limit for hedging In addition to the position limits at point (i) and (ii) above, the Mutual Fund may take exposure in equity

index derivatives subject to the following limits: a. Short positions in index derivatives (short futures, short calls and long puts) shall not exceed (in notional value) the Mutual Fund's holding of stocks.

b. Long positions in index derivatives (long futures, long calls and short puts) shall not exceed (in notional value) the Mutual Fund's holding of cash, government securities, Treasury Bills and similar instruments.

iv. Position limit for Mutual Fund for stock based derivative contracts The combined futures and options position limit shall be 20% of the applicable Market Wide Position Limit

(MWPL). v. Position limit for each scheme of a Mutual Fund The scheme-wise position limit / disclosure requirements shall be: i. For stock option and stock futures contracts, the gross open position across all derivative contracts on a particular underlying stock of a scheme of a Mutual Fund shall not exceed the higher of 1% of the free float market capitalization (in terms of number of shares) or 5% of the open interest in the derivative contract on a particular underlying stock (in terms of number of contracts).

ii. This position limits shall be applicable on the combined position in all derivative contracts on an underlying stock at a Stock Exchange. iii. For index based contracts, Mutual Funds shall disclose the total open interest held by its scheme or all schemes put together in a particular underlying index, if such open interest equals to or exceeds 15% of the open interest of all derivative contracts on that underlying index.

13. Pending deployment of the funds of the Scheme in securities in terms of the investment objective of the Scheme, the AMC may park the funds of the Scheme in short term deposits of scheduled commercial banks, subject to the guidelines issued by SEBI:

46 Axis Dividend Yield FundThe Scheme will comply with the following guidelines/restrictions for parking of funds in short term deposits: i. “Short Term” for such parking of funds by the Scheme shall be treated as a period not exceeding 91 days. Such short-term deposits shall be held in the name of the Scheme.

ii. The Scheme shall not park more than 15% of the net assets in short term deposit(s) of all the scheduled commercial banks put together. However, such limit may be raised to 20% with prior approval of the Trustee.

iii. Parking of funds in short term deposits of associate and sponsor scheduled commercial banks together shall not exceed 20% of total deployment by the Mutual Fund in short term deposits. iv. The Scheme shall not park more than 10% of the net assets in short term deposit(s), with any one scheduled commercial bank including its subsidiaries.

v. The Scheme shall not park funds in short term deposit (STD) of a bank which has invested in that Scheme. Further Trustees/ AMCs shall also ensure that the bank in which the Scheme has STD do not invest in the said scheme until the Scheme has STD with such bank.

vi. The AMC will not charge any investment management and advisory fees for funds parked in short term deposits of scheduled commercial banks.

However, the above provisions will not apply to term deposits placed as margins for trading in cash and derivatives market.

14. The Scheme shall not advance any loans.

15.

(1) The Scheme shall not borrow except to meet temporary liquidity needs for the purpose of repurchase or redemption of units or payment of interest or Income Distribution cum Capital Withdrawal payout to the unitholders The borrowing specified above shall be subject to -

(a) such borrowing not exceeding twenty per cent of the net assets of the scheme; and

(b) duration of such borrowing not exceeding a period of six months.

(2) The limit specified at clause (a) of sub-regulation (1) shall not be applicable for intraday borrowing subject to such conditions as may be specified by SEBI.

The intraday borrowings by mutual funds shall be subject to the following conditions:

1. Mutual Funds may avail intraday borrowings for the following purposes:

All unitholder pay-outs such as redemptions, IDCW pay-outs, interest etc.

Pay-in with respect to investments made by the scheme.

MTM obligations and foreign exchange settlements.

Repayment of existing borrowings.

2. The quantum of intraday borrowings shall be limited to:

1. Guaranteed receivables such as inflows from RBI, Clearing Corporations, subscription inflows received in scheme bank accounts etc.

2. Non-guaranteed receivables sighted during the day such as inflows from maturity proceeds and/or secondary market settlement from NCDs, CP, CDs, OTC Swaps, etc. and to be received by the scheme by end of the day.

3. Intraday borrowing in addition to clause 2.2.1 and 2.2.2 may be availed by AMCs solely for the purpose of meeting redemption and other pay-out to the unitholders as specified under Regulation 42(1) of SEBI (Mutual Funds) Regulations, 2026.

3. AMCs shall be responsible for ensuring that intraday borrowings are repaid by end of the day and any intraday borrowings converted to overnight borrowings are within regulatory limits and for the purposes allowed in Regulation 42(1) of SEBI (Mutual Funds) Regulations, 2026.

The Scheme will comply with the other Regulations applicable to the investments of Mutual Funds from time to time.

47 Axis Dividend Yield Fund16. Para 13.15 of SEBI Master Circular for Mutual Funds has prescribed as amended from time to time has prescribed the following investment restrictions w.r.t. investment in derivatives:

1 The cumulative gross exposure through equity, money market instruments and other liquid instruments, Gold ETF Silver ETF, units of Overnight funds, Liquid funds and Money Market Mutual Funds, units issued by InvITs and equity derivative positions shall not exceed 100% of the net assets of the scheme. Cash or cash equivalents with residual maturity of less than 91 days shall be treated as not creating any exposure.

2 The Scheme shall not write options or purchase instruments with embedded written options.

3 The total exposure related to option premium paid shall not exceed 20% of the net assets of the scheme.

4 Exposure due to hedging positions may not be included in the above mentioned limits subject to

the following: a. Hedging positions are the derivative positions that reduce possible losses on an existing position in securities and till the existing position remains. b. Hedging positions cannot be taken for existing derivative positions. Exposure due to such positions shall have to be added and treated under limits mentioned in Point 1.

c. Any derivative instrument used to hedge has the same underlying security as the existing position being hedged. d. The quantity of underlying associated with the derivative position taken for hedging purposes does not exceed the quantity of the existing position against which hedge has been taken.

5 Exposure due to derivative positions taken for hedging purposes in excess of the underlying position against which the hedging position has been taken, shall be treated under the limits mentioned in point 1.

6 Each position taken in derivatives shall have an associated exposure as defined under. Exposure is the maximum possible loss that may occur on a position. However, certain derivative positions may theoretically have unlimited possible loss. Exposure in derivative positions shall be computed as

follows:

Position Exposure Long Future Futures Price * Lot Size * Number of Contracts Short Future Futures Price * Lot Size * Number of Contracts Option bought Option Premium Paid * Lot Size * Number of Contracts.

17. The Scheme may write call options only under a covered call strategy for constituent stocks of NIFTY 50

and BSE SENSEX subject to the following:

(i) The total notional value (taking into account strike price as well as premium value) of call options written by a scheme shall not exceed 15% of the total market value of equity shares held in that scheme.

(ii) The total number of shares underlying the call options written shall not exceed 30% of the unencumbered shares of a particular company held in the scheme. The unencumbered shares in a scheme shall mean shares that are not part of Securities Lending and Borrowing Mechanism (SLBM), margin or any other kind of encumbrances.

(iii) At all points of time the Mutual Fund scheme shall comply with the provisions at paragraph (i) and (ii) above. In case of any passive breach of the requirement at paragraph (i), the respective scheme shall have 7 trading days to rebalance the portfolio. During the rebalancing period, no additional call options can be written in the said scheme.

(iv) In case the Scheme needs to sell securities on which a call option is written under a covered call strategy, it must ensure compliance with paragraphs (i) and (ii) above while selling the securities.

(v) In no case, the scheme shall write a call option without holding the underlying equity shares. A call option can be written only on shares which are not hedged using other derivative contracts.

(vi) The premium received shall be within the requirements prescribed in terms of paragraph 13.18.3. of Master circular for Mutual Funds i.e. the total gross exposure related to option premium paid and received must not exceed 20% of the net assets of the scheme.

48 Axis Dividend Yield Fund(vii) The exposure on account of the call option written under the covered call strategy as mentioned in Paragraph 13.15.1 of Master Circular.

16. The Scheme shall participate in repos in corporate debt securities as per the guidelines issued by SEBI and/ or RBI from time to time and the guidelines framed by the Board of Directors of Trustee Company and the Asset Management Company, from time to time.

18. At present the following conditions and norms shall apply to repo in corporate debt securities:

The gross exposure of the Scheme to repo transactions in corporate debt securities shall not be more than 10% of the net assets of the Scheme.

18. The Scheme shall participate in repo transactions only in AA and above rated corporate debt securities.

19. The Scheme shall borrow through repo transactions only if the tenor of the transaction does not exceed a period of six months.

The Trustee and the Asset Management Company have framed guidelines interalia considering the

following aspects: i. Category of counterparty ii. Credit rating of counterparty iii. Tenor of collateral iv. Applicable haircuts v. Counterparty selection & credit rating The counterparty must be an acceptable counterparty for debt transactions. The Mutual Fund follows a counterparty empanelment process for fixed income transactions and the same shall be used for selection of counterparties for corporate bond repos. All repo transactions in corporate bonds will be governed by a repo agreement as specified by FIMMDA and / or other specified authorities.

Collateral tenor & quality The exposure limit/investment restrictions prescribed under the Seventh Schedule of the Regulations and circulars issued there under (wherever applicable) shall be applicable to repo transactions in corporate bonds. The Scheme shall further follow guidelines framed by Trustee and the AMC from time to time.

Applicable haircuts:

Currently mutual funds are permitted to carry out repo transactions in government securities without any haircuts. The Reserve Bank of India has notified a minimum haircut based on rating of the corporate bond and other securities. In addition, the Fixed Income and Money Market Dealers Association

(FIMMDA) would maintain a rating-haircut matrix on an ongoing basis. The Scheme shall further follow guidelines framed by Trustee and the AMC from time to time.

The haircuts seek to protect the lender of funds from the event of the counterparty failing to honor the repurchase leg of the repo. In such a circumstance, the Fund would suffer a loss if the value of the collateral depreciates by more than the haircut. The fall in the value of the collateral could be on account of higher yields and/ or deterioration of credit quality.

As the typical tenor of repos is short (typically overnight), the haircuts represent a relatively high degree of safety in relation to the interest rate risk on the collateral. The risk of collateral depreciation based on

historical volatility is given in the table below:

Bond Tenor (yrs) 1 3 5 10 Price Volatility (%) 0.6 1.2 1.7 3.4

(annualized) Repo Tenor Number of standard deviations needed to lose 10% 1 day 258 136 94 48 7 days 98 52 36 18 49 Axis Dividend Yield FundIn the above table, the price volatility of a 10-year bond is about 3.4% annualized. That is a 10% price move represents nearly a 3-sigma event on an annualized basis. For overnight tenors, this represents a 48-sigma event (for comparison a 6-sigma event occurs about once in a million observations).

It is apparent that the haircuts stipulated by RBI are more than sufficient to mitigate interest rate risk.

Credit event risk remains (the collateral could default during the tenor of the repo). This risk is to be mitigated by ensuring that the collateral is acceptable from a credit point of view.

19. The mutual fund under all its schemes shall not own more than 10% of units issued by a single issuer of InvIT.

20. The Scheme shall not invest – i. more than 10% of its NAV in the units of InvIT; and ii. more than 5% of its NAV in the units of InvIT issued by a single issuer.

21. The Mutual Fund/AMC shall make investment out of the NFO proceeds only on or after the closure of the NFO period. The Mutual Fund/ AMC can however deploy the NFO proceeds in TREPS before the closure of NFO period. However, AMCs shall not charge any investment management and advisory fees on funds deployed in TREPS during the NFO period. The appreciation received from investment in TREPS shall be passed on to investors.

22. Further, in case the minimum subscription amount is not garnered by the scheme during the NFO period, the interest earned upon investment of NFO proceeds in TREPS shall be returned to investors, in proportion of their investments, along-with the refund of the subscription amount.

The exposure limit/ investment restrictions prescribed under the Sixth Schedule of the Regulations and circulars issued there under (wherever applicable) shall be applicable to repo transactions in corporate bonds.

The Scheme will comply with the other Regulations applicable to the investments of Mutual Funds from time to time.

All the investment restrictions will be applicable at the time of making investments.

Apart from the investment restrictions prescribed under SEBI (MF) Regulations, the fund may follow any internal norms vis-à-vis limiting exposure to a particular scrip or sector, etc.

SO – 19 The AMC/Trustee may alter these above stated restrictions from time to time to the extent the Regulations change, so as to permit the Scheme to make its investments in the full spectrum of permitted investments for mutual funds to achieve its respective investment objective.

C. Fundamental Attributes SO – 60 Following are the Fundamental Attributes of the scheme, in terms of Clause 1.9. of SEBI Master Circular for

Mutual Funds:

(i) Type of a scheme An open ended equity scheme predominantly investing in dividend yielding stocks.

(ii) Investment Objective

Main Objective: To provide long term capital appreciation from an actively managed portfolio of equity and equity related instruments (including REITs) of dividend yielding entities.

SO - 5 There is no assurance that the investment objective of the Scheme will be achieved.

Investment Pattern: Please refer to Section – I Part – II A. ‘How will the Scheme Allocate its Assets?’.

(iii) Terms of Issue 50 Axis Dividend Yield Fundo Liquidity provisions such as listing, Repurchase, Redemption. ‘(Please refer to relevant provisions on listing, repurchase, redemption in Section II - Part II - Point G ‘Other Details’).

o Aggregate fees and expenses charged to the Scheme (Please refer to Section I – Part III C “Annual Scheme Recurring Expenses”). o Any safety or guarantee net provided. – Not applicable for the Scheme In accordance with Regulation 22(9)(C ), read with clause 1.9 and 22.10 of SEBI Master Circular for Mutual Funds, the Trustees and AMC shall ensure that no change in the fundamental attributes of the Scheme(s) and the Plan(s) / Option(s) thereunder or the trust or fee and expenses payable or any other change which would modify the Scheme(s) and the Plan(s) / Option(s) thereunder and affect the interests of Unitholders

is carried out unless: • SEBI has reviewed and provided its comments on the proposal • written communication (including digital modes such as email/sms etc.)about the proposed change is sent to each unit holder;

• details, as specified by the Board, are appropriately displayed on the website of asset management company; and • The Unitholders are given an option for a period of atleast 30 calendar days to exit at the prevailing Net Asset Value without any exit load.

D. Index methodology (for index funds, ETFs and FOFs having one underlying domestic ETF) - Disclosures regarding the index, index eligibility criteria, methodology, index service provider, index constituents, impact cost of the constituents- Not Applicable E. Principles of incentive structure for market makers (for ETFs) – Not Applicable F. Floors and ceiling within a range of 5% of the intended allocation against each sub class of asset, as per clause 14.5 of SEBI master circular for mutual funds (only for close ended debt schemes) – Not Applicable G. Other Scheme Specific Disclosures:

Listing and transfer of Listing units The Scheme is an open ended scheme under which Sale and Repurchase will be made on a continuous basis and therefore listing on stock exchanges is not envisaged. However, the Trustee reserves the right to list the Units as and when considered necessary in the interest of Unit holders of the Fund.

Transferability of units:

Units unless otherwise restricted or prohibited shall be freely transferable by act of parties or by operation of law. Transfer of units will be subject to submission of valid documents and fulfillment of the eligibility requirements by the unitholder/investor as stated under AMFI best Practice guideline No.135/BP/ 116 /2024-25 dated August 14, 2024 and AMC internal processes, if any.

Dematerialization of Investors shall have an option to receive allotment of Mutual Fund units in their units demat account while subscribing to the Scheme in terms of the guidelines/ procedural requirements as laid by the Depositories (NSDL/CDSL) from time to time.

SO – 58 Investors desirous of having the Units of the Scheme in dematerialized form should contact the ISCs of the AMC/Registrar.

Where units are held by investor in dematerialized form, the demat statement issued by the Depository Participant would be deemed adequate compliance with the requirements in respect of dispatch of statements of account.

51 Axis Dividend Yield FundIn case investors desire to convert their existing physical units (represented by statement of account) into dematerialized form or vice versa, the request for conversion of units held in physical form into Demat (electronic) form or vice versa should be submitted along with a Demat/Remat Request Form to their Depository Participants. In case the units are desired to be held by investor in dematerialized form, the KYC performed by Depository Participant shall be considered compliance of the applicable SEBI norms.

Further, demat option shall also be available for SIP transactions. Units will be allotted based on the applicable NAV as per Scheme Information Document and will be credited to investors Demat Account as per the settlement calendar.

Units held in Demat form are freely transferable in accordance with the provisions of SEBI (Depositories and Participants) Regulations, as may be amended from time to time. Transfer can be made only in favour of transferees who are capable of holding units and having a Demat Account. The delivery instructions for transfer of units will have to be lodged with the Depository Participant in requisite form as may be required from time to time and transfer will be affected in accordance with such rules / regulations as may be in force governing transfer of securities in dematerialized mode.

For details, Investors may contact any of the Investor Service Centres of the AMC.

Minimum Target Rs. 10 Crores amount This is the minimum amount required to operate the scheme and if this is not collected during the NFO period, then all the investors would be refunded the amount invested without any return. However, if AMC fails to refund the amount within 5 business days from date of closure of NFO, interest as specified by SEBI (currently 15% p.a.) will be paid to the investors from the expiry of 5 business days from the date of closure of the NFO.

Maximum Amount to Not Applicable be raised (if any) Dividend Policy Under the IDCW option, the Trustee will have the discretion to declare the IDCW,

(IDCW) subject to availability of distributable surplus calculated in accordance with the Regulations. The actual declaration of IDCW and frequency will inter-alia, depend on availability of distributable surplus calculated in accordance with SEBI (MF) Regulations and the decisions of the Trustee shall be final in this regard.

There is no assurance or guarantee to the Unit holders as to the rate of IDCW nor that it will be paid regularly.

The AMC/Trustee reserves the right to change the frequency of declaration of IDCW or may provide for additional frequency for declaration of IDCW.

IDCW Distribution Procedure In accordance with Chapter 12 of SEBI Master Circular on Mutual Funds as amended from time to time, the procedure for distribution would be as under:

1. Quantum of IDCW and the record date will be fixed by the Trustee. IDCW so decided shall be paid, subject to availability of distributable surplus.

2. Within one calendar day of the decision by the Trustees, AMC shall issue notice to the public communicating the decision including the record date.

The record date shall be two (2) working days from the date of publication in at least one English newspaper or in a newspaper published in the language of the region where the Head Office of the mutual fund is situated, whichever is issued earlier.

52 Axis Dividend Yield Fund3. Record date shall be the date, which will be considered for the purpose of determining the eligibility of investors whose names appear on the register of Unit holders for receiving IDCW.

4. The notice will be, in font size 10, bold, categorically state that pursuant to payment of IDCW, the NAV of the IDCW option of the Scheme would fall to the extent of payout and statutory levy (if applicable).

5. The NAV will be adjusted to the extent of IDCW distribution and statutory levy, if any, at the close of business hours on record date.

6. Before the issue of such notice, no communication indicating the probable date of IDCW declaration in any manner whatsoever will be issued by Mutual Fund.

However, the requirement of giving notice shall not be applicable for IDCW options having frequency up to one month.

Allotment (Detailed Allotment will be made to all valid applications received during the New Fund procedure) Offer Period. Allotment of Units, shall be completed not later than 5 business days after the close of the New Fund Offer Period.

(During NFO) On acceptance of the application for subscription, an allotment confirmation specifying the number of units allotted by way of e-mail and/or SMS within 5 business days from the date of receipt of transaction request/allotment will be sent to the Unit Holders registered e-mail address and/or mobile number.

In cases where the email does not reach the Unit holder, the Fund / its Registrar & Transfer Agents will not be responsible, but the Unit holder can request for fresh statement. The Unit holder shall from time to time intimate the Fund / its Registrar & Transfer Agent about any changes in his e-mail address.

Refund During NFO:

Fund will refund the application money to applicants whose applications are found to be incomplete, invalid or have been rejected for any other reason whatsoever. Refund instruments will be dispatched within 5 business days of the closure of NFO period. In the event of delay beyond 5 business days, the AMC shall be liable to pay interest at 15% per annum or such other rate of interest as maybe prescribed from time to time.

Ongoing Offer period:

The AMC will refund the subscription money to applicants whose applications are found to be incomplete, invalid or have been rejected for any other reason whatsoever in accordance with the AMFI best practice guidelines in the matter.

The AMC will endeavor to refund such amounts within 5 business days from the date of purchase transactions as per the timestamp / applicable NAV, where the application form / online transaction is received along with the payment and the funds have been realized. Where the subscription amount and the application/ online transaction are received separately, the period of 5 business days shall be reckoned from the later of the date of identifying the remitter details, based on the credit provided by the Bank or receipt and time stamping of application/ online transaction.

In the event of delay beyond 5 business days, the AMC in line with AMFI best practice guidelines on the matter, will pay interest at 15% per annum or such other rate of interest as may be prescribed from time to time.

Who can invest The following persons (subject to, wherever relevant, purchase of units of mutual funds, being permitted under respective constitutions, and relevant statutory This is an indicative list regulations) are eligible and may apply for Subscription to the units of the

and investors shall Scheme:

53 Axis Dividend Yield Fundconsult their financial 1. Resident adult individuals either singly or jointly (not exceeding three) or on an advisor to ascertain Anyone or Survivor basis; whether the 2. Hindu Undivided Family (HUF) through Karta;

scheme is 3. Minor (as the first and the sole holder only) through a natural guardian (i.e. suitable to their risk father or mother, as the case may be) or a court appointed legal guardian. profile. There shall not be any joint holding with minor investments;

4. Partnership Firms;

5. Limited liability partnership firms;

6. Proprietorship in the name of the sole proprietor;

7. Companies, Bodies Corporate, Public Sector Undertakings (PSUs.), Association of Persons (AOP) or Bodies of Individuals (BOI) and societies registered under the Societies Registration Act, 1860(so long as the purchase of Units is permitted under the respective constitutions);

8. Banks (including Co-operative Banks and Regional Rural Banks) and Financial Institutions;

9. Religious and Charitable Trusts, Wakfs or endowments of private trusts (subject to receipt of requisite approvals wherever applicable)and Private trusts authorised to invest in mutual fund schemes under their trust deeds;

10. Non-Resident Indians (NRIs) / Persons of Indian origin (PIOs) )/ Overseas Citizens of India (OCI)residing abroad on repatriation basis or on non- repatriation basis;

11. Foreign Portfolio Investor (FPI) registered with SEBI on repatriation basis. These investments shall be subject to the conditions prescribed by SEBI, RBI, Income Tax authorities and the AMC, from time to time;

12. Army, Air Force, Navy and other para-military units and bodies created by such institutions;

13. Scientific and Industrial Research Organisations;

14. Multilateral Funding Agencies / Bodies Corporate incorporated outside India with the permission of Government of India / RBI;

15. Provident/ Pension/ Gratuity Fund to the extent they are permitted;

16. Other schemes of Axis Mutual Fund or any other mutual fund subject to the conditions and limits prescribed by SEBI Regulations;

17. Schemes of Alternative Investment Funds;

18. The Trustee, AMC or Sponsor or their associates may subscribe to Units under the Scheme;

19. Such other category of person(s) permitted to make investments and as may be specified by the AMC / Trustee from time to time.

Subject to SEBI (Mutual Funds) Regulations, 2026, any application for subscription of units may be rejected if the application is found to be incomplete or due to unavailability of underlying security.

Who cannot invest 1. Any individual who is a foreign national or any other entity that is not an Indian resident under the Foreign Exchange Management Act, 1999 (FEMA Act) except where registered with SEBI otherwise explicitly permitted under FEMA Act/ by RBI/ by any other applicable authority.

2. Pursuant to RBI A.P. (DIR Series) circular no. 14 dated September 16, 2003, Overseas Corporate Bodies (OCBs) cannot invest in Mutual Funds.

3. NRIs residing in Non-Compliant Countries and Territories (NCCTs) as determined by the Financial Action Task Force (FATF), from time to time.

4. U.S. Persons and Residents of Canada as defined under the applicable laws of U.S. and Canada except the following: a. subscriptions received by way of lump sum / switches / systematic transactions received from Non-resident Indians (NRIs) /Persons of Indian origin (PIO) / Overseas Citizen of India (OCI) who at the time of such investment, are present in India and b. FPIs 54 Axis Dividend Yield Fund5. Such other persons as may be specified by AMC from time to time.

These investors need to submit a physical transaction request along with such documents as may be prescribed by Axis Asset Management Company Ltd. (‘AMC’)/Axis Mutual Fund Trustee Ltd.(‘the Trustee’)/Axis Mutual Fund(‘the Fund’) from time to time.

The AMC reserves the right to put the transaction requests on hold/reject the transaction request/reverse allotted units, as the case may be, as and when identified by the AMC, which are not in compliance with the terms and conditions notified in this regard.

The Trustee / the AMC /the Fund reserve the right to change/ modify the above provisions at a later date.

How to Apply and Investors can undertake transactions in the Schemes of Axis Mutual Fund either other details (where through physical, online / electronic mode or any other mode as may be can you submit the prescribed from time to time.

filled up applications including Physical Transactions purchase/redemption For making application for subscription / redemption / switches, switches be application form and Key Information Memorandum may be obtained from submitted.) / submitted to the Official Points of Acceptance (OPAs) of AMC or downloaded from the website of AMC viz. www.axismf.com.

SO – 35 Online / Electronic Transactions Investors can undertake transactions via electronic mode through various online facilities offered by Axis AMC / other platforms specified by AMC from time to time.

For name, address and contact no. of Registrar and Transfer Agent (R&T), email id of R&T, website address of R&T, official points of acceptance, collecting banker details etc. refer back cover page.

Please note it is mandatory for unitholders to mention their bank account numbers in their applications/requests for redemption.

Please refer to the SAI and Application form for the instructions.

The policy regarding Units once redeemed will be extinguished and will not be reissued. reissue of repurchased units, including the maximum extent, the manner of reissue, the entity (the scheme or the AMC) involved in the same.

Restrictions, if any, Pledge/Lien of Units on the right to The Unit under the Scheme may be offered as security by way of a pledge / freely retain or lien/charge in favour of scheduled banks, financial institutions, non-banking dispose of units being finance companies (NBFCs), or any other person. The AMC and / or the ISC will offered. note and record such Pledged/liened Units. The AMC shall mark a pledge/lien only upon receiving the duly completed form and documents as it may require.

Disbursement of such loans will be at the entire discretion of the bank / financial institution / NBFC or any other person concerned and the Mutual Fund assumes no responsibility thereof.

55 Axis Dividend Yield FundThe Pledger/ lienor will not be able to redeem/Switch-out Units that are pledged/liened until the entity to which the Units are pledged/liened provides written authorisation to the Mutual Fund that the pledge / lien charge may be removed. As long as Units are pledged/liened, the Pledgee/lienee will have complete authority to redeem / Switch-out such Units. IDCW declared on Units under lien/pledge will be paid / re-invested to the credit of the Unit Holder and not the lien holder unless specified otherwise in the lien letter.

If there are subsisting credit facilities secured by a duly created pledge/lien, I, the nominee(s) or legal heirs / legal representative(s) shall be required to obtain a due discharge certificate from the creditors at the time of transmission of units.

For NRIs, the Scheme may mark a lien on Units in case documents which need to be submitted are not given in addition to the application form and before the submission of the redemption / Switch-out request. The Units held in demat mode can be pledged/ liened as per the provisions of Depositories Act and Depositories Rules and Regulations.

However, the AMC reserves the right to change operational guidelines for pledge/ lien on Units from time to time.

Suspension/Restriction on Redemption of Units of the Scheme Subject to the approval of the Boards of the AMC and of the Trustee and subject also to necessary communication of the same to SEBI, the redemption of / switch-out of Units of Scheme, may be temporarily suspended/ restricted. In accordance with Para 5.3of SEBI Master Circular on Mutual Funds as amended from time to time and subject to prevailing regulations, restriction on/suspension of redemptions / switch-out of Units of the Scheme, may be imposed when there are circumstances leading to systemic crisis or event that severely constricts

market liquidity or the efficient functioning of markets such as: a) Liquidity issues: when market at large becomes illiquid affecting almost all securities rather than any issuer specific security; b) Market failures, exchange closures: when markets are affected by unexpected events which impact the functioning of exchanges or the regular course of transactions. Such unexpected events could also be related to political, economic, military, monetary or other emergencies;

c) Operational issues: when exceptional circumstances are caused by force majeure, unpredictable operational problems and technical failures (e.g. a black out).

Restriction on / suspension of redemption of Units of the Scheme may be imposed for a specified period of time not exceeding 10 working days in any 90 days period.

When restriction on / suspension of redemption of Units of the Scheme is imposed,

the following procedure shall be applied: i. No redemption / switch-out requests upto Rs. 2 lakhs shall be subject to such restriction. ii. Where redemption / switch-out requests are above Rs. 2 lakhs, the AMC shall redeem the first Rs. 2 lakhs without such restriction and remaining part over and above Rs. 2 lakhs shall be subject to such restriction.

In addition to the above, the AMC / Trustee may restrict / suspend redemptions / switch-out of Units of the Scheme pursuant to direction/ approval of SEBI.

In case of any of the above eventualities, the general time limits for processing 56 Axis Dividend Yield Fundrequests for redemption of Units will not be applicable.

Also refer to the paragraph ‘Suspension of Purchase and Redemption of Units’ in the Statement of Additional Information.

Cut off timing for Subscriptions/Purchases including Switch - ins: subscriptions/ The following cut-off timings shall be observed by the Mutual Fund in respect of redemptions/ purchase of units of the Scheme and the following NAVs shall be applied for such switches

purchase:

This is the time before 1. where the application is received upto 3.00 pm on a Business day and funds which your are available for utilization before the cut-off time – the closing NAV of the Business day shall be applicable;

application

2. where the application is received after 3.00 pm on a Business day and funds (complete in all are available for utilization on the same day or before the cut-off time of the respects) should next Business Day - the closing NAV of the next Business Day shall be reach the official applicable;

points of

3. irrespective of the time of receipt of application, where the funds are not acceptance. available for utilization before the cut-off time - the closing NAV of Business day on which the funds are available for utilization shall be applicable.

For determining the applicable NAV for allotment of units in respect of purchase / switch in the Scheme, it shall be ensured that: i. Application is received before the applicable cut-off time. ii. Funds for the entire amount of subscription/purchase as per the application are credited to the bank account of the Scheme before the cut-off time.

iii. The funds are available for utilization before the cut-off time. i. The aforesaid provisions shall also be applicable to systematic transactions like Systematic Investment Plan, Systematic Transfer Plan, etc offered by scheme(s).

Redemptions including Switch - outs:

The following cut-off timings shall be observed by the Mutual Fund in respect of

Repurchase of units: a. where the application received upto 3.00 pm – closing NAV of the day of receipt of application; and b. an application received after 3.00 pm – closing NAV of the next Business Day.

The above mentioned cut off timing shall also be applicable to transactions through the online trading platform.

In case of Transaction through Stock Exchange Infrastructure, the Date of Acceptance will be reckoned as per the date & time; the transaction is entered in stock exchange’s infrastructure for which a system generated confirmation slip will be issued to the investor.

Ongoing price for At the Applicable NAV. subscription

(purchase)/switch-in Para 11.7.1of SEBI Master Circular on Mutual Funds as amended from time to time (from other has decided that there shall be no entry Load for all Mutual Fund Schemes. schemes/plans of the Hence, no entry load is levied for subscription transactions by the Scheme.

mutual fund) by investors. Methodology of calculating subscription price:

Subscription Price = Applicable NAV*(1+Entry Load, if any)

This is the price you Example: If the Applicable NAV is Rs. 10, Entry Load is NIL then the subscription

need to pay for price will be:

57 Axis Dividend Yield Fundpurchase/switch-in. = Rs. 10* (1+NIL) = Rs. 10 Ongoing price for At the Applicable NAV subject to prevailing Exit Load. redemption (sale) Ongoing price for redemption /Switch out (to other Schemes/Plans of the Mutual /switch outs (to other Fund) is price which a Unit holder will receive for redemption/Switch-outs. During schemes/plans of the the continuous offer of the Scheme, the Unit holder can redeem the Units at Mutual Fund) by Applicable NAV, subject to payment of Exit Load, if any.

investors.

Methodology of calculating repurchase price:

This is the price you will Redemption Price = Applicable NAV*(1-Exit Load, if any) receive for

Example: If the Applicable NAV is Rs. 10, Exit Load is 1% then redemption price redemptions/switch

will be: outs. = Rs. 10* (1-0.01) = Rs. 9.99 Investors/Unit holders should note that the AMC/Trustee has right to modify existing Load structure and to introduce Loads subject to a maximum limits prescribed under the SEBI Regulations.

Any change in Load structure will be effective on prospective basis and will not affect the existing Unit holder in any manner.

However, the Mutual Fund will ensure that the Redemption Price will not be lower than 97% of the Applicable NAV. The Purchase Price shall be at applicable NAV.

Minimum amount for Refer Section I – Part I for Minimum amount for purchase/redemption/switches. purchase / Minimum Redemption Amount/Switch Out redemption / switches There will be no minimum redemption criterion. The Redemption / Switch-out would be permitted to the extent of credit balance in the Unit holder’s account of the Plan(s) / Option(s) of the Scheme (subject to completion of Lock-in period or release of pledge / lien or other encumbrances). The Redemption / Switch- out request can be made by specifying the rupee amount or by specifying the number of Units of the respective Plan(s) / Option(s) to be redeemed. In case a Redemption / Switch-out request received is for both, a specified rupee amount and a specified number of Units of the respective Plan(s)/ Option(s), the specified number of Units will be considered the definitive request. In case the value / number of available units held in the Unit holder’s folio / account under the Plan / Option of the Scheme is less than the amount / number of units specified in the redemption / switch-out request, then the transaction shall be treated as an all units redemption and the entire balance of available Units in the folio / account of the Unit holder shall be redeemed.

In case of Units held in dematerialized mode, the Unit Holder can give a request for Redemption only in number of Units which can be fractional units also.

Depository participants of registered Depositories can process only redemption request of units held in demat mode.

The AMC/ Trustee reserves the right to change/ modify the terms of minimum redemption amount/switch-out provision offered under the Scheme of the Fund.

Accounts Statements The AMC shall send an allotment confirmation specifying the units allotted by way of email and/or SMS within 5 working days of receipt of valid application/transaction to the Unit holders registered e-mail address and/ or SO – 61 mobile number (whether units are held in demat mode or in account statement 58 Axis Dividend Yield Fundform).

The AMC/RTA shall dispatch a Consolidated Account Statement (CAS) detailing all the transactions across all mutual funds and holding at the end of the month shall be sent to the Unit holders in whose folio(s) transaction(s) have taken place during the month by mail or email on or before 15th of the succeeding month.

For investor having demat account, the depositories shall dispatch a monthly consolidated statement with details across all schemes of mutual funds and securities held in dematerialized form across demat accounts and dispatch the same to investors who have opted for delivery via electronic mode (e-CAS) by the 12th day from the month end and to investors who have opted for delivery via physical mode by the 15th day from the month end.

For folios where there are no transactions during the half – year, the AMC/RTA shall dispatch a half – yearly CAS at the end of every six months (i.e.

September/March) on or before the 21st day of the succeeding month for holdings across all mutual funds at the end of the half-year.

For folios where there are no transactions during the half – year , the depositories shall dispatch a consolidated statement (for investors having a demat account) i.e. half-yearly CAS at the end of every six months (i.e. September/ March) to investors that have opted for e-CAS on or before the 18th day of April and October and to investors who have opted for delivery via physical mode by the 21st day of April and October to all investors providing the prescribed details across all schemes of mutual funds and securities held in dematerialized form across demat accounts, if applicable For further details, refer SAI.

Dividend/ IDCW The payment of dividend/IDCW to the unitholders shall be made within seven working days from the record date.

The AMC shall be liable to pay interest to the Unit holders at 15% p.a. or such other rate as may be prescribed by SEBI from time to time, in the event of failure of despatch of dividend payments within the stipulated time period calculated from the record date.

Redemption The redemption or repurchase proceeds shall be dispatched to the unitholders within three working days from the date of redemption or repurchase.

For list of exceptional circumstances refer para 15.3.3 of SEBI Master Circular for Mutual Funds.

For detailed procedure on how to redeem, kindly refer SAI.

Bank Mandate It is mandatory for investors to mention investor’s bank account details on the form. Applications without this information are liable to be rejected. The Mutual SO – 62 Fund / AMC reserves the right to hold redemption proceeds in case requisite bank details are not submitted.

Delay in payment of The Asset Management Company shall be liable to pay interest to the redemption / unitholders at rate as specified vide clause 15.4 of SEBI Master Circular for repurchase proceeds Mutual Funds by SEBI for the period of such delay.

/ dividend The AMC shall pay interest to the Unit holders at 15% or such other rate as may be prescribed by SEBI from time to time, in case the Redemption / Repurchase proceeds are not made within three (3) working Days of the date of Redemption / Repurchase.

59 Axis Dividend Yield FundHowever, the AMC will not be liable to pay any interest or compensation or any amount otherwise, in case the AMC / Trustee is required to obtain from the Investor / Unit holders verification of identity or such other details relating to Subscription for Units under any applicable law or as may be requested by a Regulatory Agency or any government authority, which may result in delay in processing the application.

Unclaimed As per Para 15.5of SEBI Master Circular on Mutual Funds as amended from time Redemption and to time, the unclaimed Redemption and IDCW amounts shall be deployed by Income Distribution the Fund in money market instruments and such other instruments/securities as cum Capital maybe permitted from time to time. The investment management fee charged Withdrawal Amount by the AMC for managing such unclaimed amounts shall not exceed 50 basis points. The circular also specifies that investors who claim these amounts during SO – 53 a period of three years from the due date shall be paid at the prevailing NAV.

Thus, after a period of three years, this amount can be transferred to a pool account and the investors can claim the said amounts at the NAV prevailing at the end of the third year. In terms of the circular, the onus is on the AMC to make a continuous effort to remind investors through letters to take their unclaimed amounts. The details of such unclaimed amounts shall be disclosed in the annual report sent to the Unit Holders.

Further, according to Para 15.5 of SEBI Master Circular on Mutual Funds as amended from time to time the unclaimed Redemption and IDCW amounts may be deployed in separate plan of Overnight scheme/Liquid scheme/Money market mutual fund scheme floated by Mutual Funds specifically for deployment of the unclaimed Redemption and IDCW amounts.

Disclosure w.r.t Following is the process for investments made in the name of a Minor through a

investment by minors Guardian: - • Payment for investment by any mode shall be accepted from the bank SO – 37 account of the minor, parent or legal guardian of the minor, or from a joint account of the minor with parent or legal guardian.

• Mutual Fund will send an intimation to Unit holders advising the minor (on attaining majority) to submit an application form along with prescribed documents to change the status of the account from ‘minor’ to ‘major’.

• All transactions / standing instructions / systematic transactions etc. will be suspended i.e. the Folio will be frozen for operation by the guardian from the date of beneficiary child completing 18 years of age, till the status of the minor is changed to major. Upon the minor attaining the status of major, the minor in whose name the investment was made, shall be required to provide all the KYC details, updated bank account details including cancelled original cheque leaf of the new bank account.

• No investments (lumpsum/SIP/ switch in/ STP in etc.) in the scheme would be allowed once the minor attains majority i.e. 18 years of age.

Any other disclosure in Nil terms of Consolidated Checklist on Standard Observations III. Other Details A. In case of Fund of Funds Scheme, Details of Benchmark, Investment Objective, Investment Strategy, TER, AUM, Year wise performance, Top 10 Holding/ link to Top 10 holding of the underlying fund should be

provided - Not Applicable 60 Axis Dividend Yield FundB. Periodic Disclosures Monthly The AMC will disclose the portfolio of the Scheme (alongwith ISIN) on Monthly on the

Disclosures: website of the Mutual Fund and AMFI within 10 days from the close of each month Portfolio in a user-friendly and downloadable spreadsheet format.

This is a list of Further, the AMC shall send monthly statements of scheme portfolio to unitholders securities where whose email addresses are registered via email within the timelines specified. the corpus of the scheme is currently The AMC shall also provide a link to investors to their registered mail to enable the invested. The investor to directly view/download only the portfolio of Schemes subscribed by the market value of respective investor, along with the scheme risk-o-meter, name of benchmark and these investments risk-o-meter of benchmark.

is also stated in The AMC shall issue a notification on its website, informing about the hosting of the portfolio monthly of its scheme’s portfolios on its respective website and on the website of disclosures. AMFI.The investors can obtain a physical copy of the statement of its scheme portfolio, without charging any cost, on specific request received from a unit holder.

The AMC will also provide a dashboard, in a comparable, downloadable

(spreadsheet) and machine readable format, providing performance and key disclosures like Scheme’s AUM, investment objective, expense ratios, portfolio details, scheme’s past performance etc. on website.

For details, please refer our website: https://www.axismf.com/statutory-disclosures Half Yearly Results The Mutual Fund shall within one month from the close of each half year, that is on 31st March and on 30th September, host a soft copy of its unaudited financial results on the website of the AMC and AMFI.

The unaudited financial results will also be displayed on the website of the AMC and AMFI.

For details, please refer our website: https://www.axismf.com/statutory-disclosures Monthly Portfolio Further, the AMC shall send monthly statements of scheme portfolio to unitholders Overlap disclosure whose email addresses are registered via email within the timelines specified.

Annual Report The scheme wise annual report, in machine readable format, shall be hosted on the website of the AMC and on the website of AMFI.

The AMC shall e-mail the scheme annual reports or abridged summary thereof, in machine readable formats, to all such unit holders, whose email addresses are registered with the Mutual Fund, within 4 months from the date of closure of the relevant financial year.

The AMC shall send an email/SMS to all unitholders regarding the hosting of scheme wise annual report on their website and on the website of AMFI.

Further, AMC shall provide a physical copy of the abridged summary of the Annual Report, on a specific request received from a unitholder.

For details, please refer our website: https://www.axismf.com/statutory-disclosures Risk-o-meter and The AMC shall review Risk-o-meters on a monthly basis based on evaluation of risk Benchmark Risk-o- level of Scheme’s month end portfolio. Any change in risk-o-meter of the scheme or meter its benchmark shall be communicated by way of Notice cum Addendum and by way of an e-mail or SMS to unitholders of that particular scheme. Investors may also SO – 38 refer to the website/portfolio disclosure for the latest Risk-o-meter of the Scheme.

Scheme Summary The AMC has provided on its website Scheme Summary Document which is a Document standalone scheme document for all the Schemes which contains all the details of the Scheme viz. Scheme features, Fund Manager details, investment details, SO – 38 61 Axis Dividend Yield Fundinvestment objective, expense ratios, portfolio details, etc.

For details, please refer our website: https://www.axismf.com/statutory-disclosures Any disclosure in Nil terms of consolidated checklist of standard observations C. Transparency/NAV Disclosure SO – 41 and 42 The AMC will calculate and disclose the first NAV of the Scheme within a period of 5 Business days from the date of allotment under the New Fund Offer Period. Subsequently, the AMC will calculate and disclose the NAVs on all Business Days. The AMC shall update the NAVs on its website (www.axismf.com) and of the Association of Mutual Funds in India - AMFI (www.amfiindia.com) by 11.00 p.m. on every Business Day.

If the NAVs are not available before the commencement of Business Hours on the following day due to any reason, the Mutual Fund shall issue a press release giving reasons and explaining when the Mutual Fund would be able to publish the NAV.

Information regarding NAV can be obtained by the Unit holders / Investors by calling or visiting the nearest ISC.

D. Transaction charges and stamp duty- Transaction Charges – Not applicable Stamp Duty Pursuant to Notification No. S.O. 1226(E) and G.S.R. 226(E) dated March 30, 2020 issued by Department of Revenue, Ministry of Finance, Government of India, read with Part I of Chapter IV of Notification dated February 21, 2019 issued by Legislative Department, Ministry of Law and Justice, Government of India on the Finance Act, 2019, stamp duty @0.005% of the transaction value would be levied on applicable mutual fund transactions.

Accordingly, pursuant to levy of stamp duty, the number of units allotted on purchase transactions (including IDCW reinvestment) to the unitholders would be reduced to that extent.

For further details on Stamp Duty, please refer SAI.

E. Associate Transactions - Please refer to Statement of Additional Information (SAI) F. Taxation- For details on taxation please refer to the clause on Taxation in the SAI apart from the

following:

Taxation of Equity-Oriented Mutual Funds (Rates applicable for the Tax Year 2026-27) This document primarily covers taxation of units of equity oriented mutual funds (Refer Note 2). The information is provided for general information only. However, in view of the individual nature of the implications, each investor is advised to consult his or her own tax advisors / authorised dealers with respect to the specific amount of tax and other implications arising out of his or her participation in the schemes.

62 Axis Dividend Yield FundTaxability in the hands of Individuals / Non-corporates / Corporates Particulars Resident Non-Resident Tax on distributed income Taxed in the hands of unit Taxed in the hands of unit holders at applicable rate holders at the rate of 20% u/s under the provisions of the 207/ 210 of the Act (plus Income-tax Act, 2025 (“Act”) applicable surcharge and (plus applicable surcharge health and education cess) and health and education cess) (Refer Note 3) Capital Gains

Long Term Capital Gains: 12.5% (plus applicable 12.5% (plus applicable surcharge and health and surcharge and health and (Held for a period of more education cess) without education cess) without than 12 Months) indexation indexation (Refer Note 7) (Refer Note 7) Short Term Capital Gains 20% (plus applicable 20% (plus applicable surcharge and health and surcharge and health and (Held for a period of 12 education cess) education cess) months or less) Notes –

1. Axis Mutual Fund is a Mutual Fund registered with the Securities & Exchange Board of India and hence the entire income of the Mutual Fund will be exempt from income tax in accordance with the provisions of section 11 read with Schedule VII, Table Sl. No. 20 of the Act.

2. An equity-oriented fund has been defined as: a) In case where the fund invests a minimum of 90% of the total proceeds in units of another fund, which is traded on recognized stock exchange, and such other fund also invests a minimum of 90% of its total proceeds in the equity shares of domestic companies listed on a recognized stock exchange; and b) In any other case, a minimum of 65% of the total proceeds of such fund is invested in the equity shares of domestic companies listed on a recognized stock exchange, and, for the purposes of this clause, the percentage of equity shareholding or unit held in respect of the fund, shall be computed with reference to the annual average of the monthly averages of the opening and closing figures.

3. Applicable rates for individual, corporates and non-corporates are as under:

Particulars Income slab Rate of tax Individual/ Hindu Where total income for a tax Nil Undivided Family (HUF)/ year (April to March) is less 63 Axis Dividend Yield FundAOP/ BOI# than or equal to Rs 2,50,000* (the basic exemption limit) Where such total income is 5% of the amount by which more than Rs 2,50,000* but is the total income exceeds less than or equal to Rs 2,50,000* Rs 5,00,000 Where such total income is Rs 12,500 plus 20% of the more than Rs 5,00,000* but is amount by which the total less than or equal to income exceeds Rs 10,00,000 Rs 5,00,000* Where such total income is Rs 1,12,500 plus 30% of the more than Rs 10,00,000 amount by which the total income exceeds Rs 10,00,000 Co-operative society Where total income for a tax 10% of the total income year (April to March) is less than or equal to Rs 10,000 Where such total income is Rs 1,000 plus 20% of the more than Rs 10,000 but is amount by which the total less than or equal to income exceeds Rs 10,000 Rs 20,000 Where the total income Rs 3,000 plus 30% of the exceeds Rs 20,000 amount by which the total income exceeds Rs 20,000 Co-operative society 22% availing concessional tax rate benefit (subject to prescribed conditions) under

section 203 of the Act Co-operative society 15% availing concessional tax rate benefit (subject to prescribed conditions) under

section 204 of the Act Domestic Corporate 30% (where the total turnover or gross receipts of such company for tax year 2024-25 exceeds Rs 400 crores)/ Partnership firm/ LLP/ Local authority/ FPIs Domestic company, 25% where the total turnover or gross receipts of such 64 Axis Dividend Yield Fundcompany for tax year 2024-25 does not exceed Rs 400 crores Domestic company 22% availing concessional tax rate benefit (subject to prescribed conditions) under

section 200 of the Act Domestic company 15% engaged solely in the business of manufacture/ production and availing concessional tax rate benefit (subject to prescribed conditions) under

section 201 of the Act AOP/ BOI 30% or such higher rate of tax applicable to the individual members of the AOP/ BOI Foreign Corporates 35% FPIs 30% *In case of resident individuals of age 60 years or more, but less than 80 years, the basic exemption limit is Rs 3,00,000. Income between Rs 3,00,000 and Rs 500,000 will be taxable at the rate of 5%.

In case of resident individuals of age 80 years or more, the basic exemption limit is Rs 5.00,000.

Income exceeding Rs 5,00,000 but less than or equal to Rs 10,00,000 will be taxable at the rate of 20%. #Section 202 of the Act provides individuals and HUFs to pay tax in respect of their total income at the following rates (default regime):

Income slab Tax rate Where total income for a tax year (April to Nil March) is less than or equal to Rs 4,00,000 (the basic exemption limit) Where such total income is more than Rs 5% of the amount by which the 4,00,000 but is less than or equal to Rs 8,00,000 total income exceeds Rs 4,00,000 Where such total income is more than Rs 20,000 plus 10% of the amount by Rs 8,00,000 but is less than or equal to which the total income exceeds Rs 12,00,000 Rs 8,00,000 Where such total income is more than Rs 60,000 plus 15% of the amount by Rs 12,00,000 but is less than or equal to which the total income exceeds Rs Rs 16,00,000 12,00,000 Where such total income is more than Rs 1,20,000 plus 20% of the amount Rs 16,00,000 but is less than or equal to by which the total income exceeds Rs 20,00,000 Rs 16,00,000 65 Axis Dividend Yield FundWhere such total income is more than Rs 2,00,000 plus 25% of the amount Rs 20,00,000 but is less than or equal to by which the total income exceeds Rs 24,00,000 Rs 20,00,000 Where such total income is more than Rs Rs 3,00,000 plus 30% of the amount 24,00,000 by which the total income exceeds Rs 24,00,000 Further, as per the section 156 of the Act, the threshold of total income for claiming the rebate under concessional tax regime (i.e. default regime) in case of resident individual is Rs 12,00,000 and the limit of rebate is Rs 60,000. However, the said rebate is not available on incomes chargeable to tax at special rates (for eg. capital gains under section 196, 197, etc.).

4. Surcharge at the following rate to be levied in case of individual /HUF /non-corporate non-firm

unit holders for equity oriented mutual fund:

Income Individual /HUF / non-corporate non- firm unit holders

(a) Above Rs 50 lakh upto 1 crore (including dividend income 10% and capital gains income under section 196, 197 and 198 of the Act)

(b) Above Rs 1 crore upto Rs 2 crores (including dividend 15% income and capital gains income under section 196, 197 and 198 of the Act)

(c) Above Rs 2 crores upto Rs 5 crores [excluding dividend 25% income (dividend received from domestic companies only) and capital gains income under section 196, 197 and 198 of the Act)

(d) Above Rs 5 crores [excluding dividend income (dividend 37%* received from domestic companies only) and capital gains income under section 196, 197 and 198 of the Act)

(e) Above Rs 2 crores [including dividend income (dividend 15% received from domestic companies only) and capital gains income under section 196, 197 and 198 of the Act)] but not covered in point (c) and (d) above *Surcharge rate shall not exceed 25% in case of individual and HUF pays tax under section 202 of the Act.

5. Surcharge rates for Companies/ firm Total Income Rate of Surcharge Rate of Surcharge for for Domestic Foreign Companies companies* Above Rs 1 crore upto Rs 7% 2% 10 crores Above Rs 10 crores 12% 5% *Surcharge rate shall be 10% in case domestic companies opting for taxation at lower tax rate (viz. 15% or 22%) under section 200 and section 201 of the Act on any income earned.

66 Axis Dividend Yield FundIn case of firm with total income exceeding Rs 1 crore, surcharge rate shall be 12%.

6. Health and Education cess at 4% on aggregate of base tax and surcharge.

7. As per section 198 of the Act, long-term capital gains, exceeding Rs 1,25,000, arising from transfer of equity oriented mutual funds, shall be chargeable at the rate of 12.5%% (plus applicable surcharge and health and education cess).

8. The Scheme will attract securities transaction tax (STT) at 0.001% on the redemption value.

9. Withholding of Taxation by Mutual Fund will as per applicable withholding tax rate.

10. All the above non-resident investors may also claim the tax treaty benefits available, if any.

For further details on taxation please refer to the clause on Taxation in the SAI G. Rights of Unitholders - Please refer to SAI for details.

H. List of official points of acceptance: For Details of official points of acceptance, please refer our

website: https://www.axismf.com/statutory-disclosures I. 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 SO – 49 For details, please refer our website: https://www.axismf.com/statutory-disclosures The Scheme under this Scheme Information Document was approved by the Trustee Company on August 18, 2026. The Trustee has ensured that the Scheme is a new product offered by Axis Mutual Fund and is not a minor modification of its existing schemes.

Notwithstanding anything contained in this Scheme Information Document, the provisions of the SEBI (Mutual Funds) Regulations, 2026 and the guidelines there under shall be applicable.

SO – 64 For and on behalf of Axis Asset Management Company Sd/- Gop Kumar Bhaskaran Managing Director & Chief Executive Officer

Date: __________ One Lodha Place, 22nd & 23rd Floor, Senapati Bapat Marg, Lower Parel, Mumbai, Maharashtra, Pin Code – 400013 TEL 022 6311 1001 and contact number 8108622211(Chargeable) EMAIL customerservice@axismf.com WEB www.axismf.com

The Sponsor: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.

Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.

67 Axis Dividend Yield Fund