finance investment · 2016. 12. 6. · , 3. cblo borrowing transactions by the portfolid managers...
TRANSCRIPT
~,MPLOYEES~PROVIDENT FUND OR ANISATION
NEW DELHI:. !
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FINANCE INVESTMENTCOMMITTEE
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[A SUB- COM1'VIITTEEOF THE CENEMPLOYEES' PROVIDENT if
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, 24.05.2016 at 11:00 A. •
VENUE:I Conference HaU,
3rd, Float, EPFO(Head Office),Bh~vishya Nidhi Bhawan,1~, Bhikaiji Cama Place,
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ElVfPLOYEES' PROVIDENT FUND ORGANISATIONI
AGENDA BOOK
125TH Meeting of the Finance Investment and Audit Committee,
Central Board, EPF.
INDEX OF ITEMS Time: 11.00 A.M.Date: 24.05.2016
Item AgendaNo. '1.
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Page No.
Confirmation of the Minutes· of 124m Meeting of the 'Finance Investment & Audit Committee (FlAC) held on i -5B22.03.2016. .
2.. Action taken report on the recommendation 0 the 124tnMeeting of: the Finance Investment & Audit Committee 6;,... t 0(fJAC) held on 22.03.2015. •
, 3. CBLO borrowing transactions by the Portfolid Managers II _ I 2-durin&the period 01.03.2016 to 31.03.2016. I
4. Request for Proposal (RFP) for Appointment ~ ExternalConcurrent Auditor (ECA) for the Employees Provident 1:3 - 54Fund Organisation (EPFO) Portfolio Managers.
5. Standard 'Operating Procedure for investment in' exchange 5'5'- 50Traded Fund (ETFl and Liquid Mutual Fund{L VlF). 0
6. Concurrent Audit Reports of Provident Func (including 5"9 Will,other funds) and' Pension Fund for the months of fL.., 'AS~tember, 2015 to March, 2016. ""'-YI?1-
7. Selection of Mutual Fund as ETF manu l-acturer for 6Q -" 6investment'in ETFs by EPFO-r<:tJ,lb3t ~Proposal for increasing the number of days fcr borrowingof funds from CBLO for participation in primary auctions 61 ~<31of Government Securjties and Corporate bonds from .'existing 15 to ]0 days. .
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9. Any other item (s) with the permission of the Chair.
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• Item No.l: Confirmation of the Minutes of 124th Meeting of the Finance, • Investment and Audit Committee held 0022.03.2016 at EPFO,• Headquarters, New Delhi.
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12sth lVleeting of FIAC 24.05.20 l6
Minutes of 124th Finance Investment and Audit Committee (FIAC)
meeting held on 22.03.2016 was circulated vide letter No. Invest.I1(124th)
Mtg.FIAC/2016/2231 dated 23.03.2016 (Copy of the minutes is enclosed as
ANNEXURE-' A' of this item. This office has not received any observations
from the memberson the minutes of the meeting.
Minutes may be taken as confirmed.
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Telephone: 26178450
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Fax No: 26194349
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Employees' Provident Fund Organisation(QQt~~,$fItR~
(Ministry of Labour & Employment, GeM, Of India)14f4i6l4 I Head Offlce
BhaylAbya Nldbl Qbowaa. 14-Bb'l!alJl Caro. Place. Hex« Delhl-11.go§, 2 3 MAR 2016
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Date: 2~ MAR 2016
All Members,Finance Investment & Audit Committee,Central Board of Trustees, Employees' Provident Fund
Sub: Forwarding of Minutes of 124th MeE!tin9 of the Flnance lnvestment & Audit Committee(AAC), CST, EPF held on 22.03.201.6 at EPFOHead Office, New Delhi - Reg.
Sir,
Minutes of 124th meeting of the Finance Investment & AUdit Committee (FlAe) held on22.03.2016 approved by th~ Chairperson Is enclosed herewith for your kind perusal andnecessary action please.
Encl:- As above
Yours faithfully,
-M~'(AM~H)
Regional P.Pr. Commissioner-II (Invest.)
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Copy aloog with a cooy of t-1ioutesof 12i.lth (FIAC) meeting fory/arded forinFormation and necessary action to;- .
t. P.S. to Central Provident Fund Commissioner, EPFO, Head Offlc~.
2. P.S. to FA & CAO, EPFO,Head Office.
3. ACe-II (F&A/U'lC/Invest.) EPFO, Head Office.4. ACC-II (Pension) EPFO, Head Office.S. ACe-II (Audit), EPFO, Head Office •6. Regional Provident Fund Commlssloner-! (FInance & Accounts) EPFO, Head
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Office.7. Regional Provident Fund Commissioner-ll (Conference), EPFO, Head Office.S. AJIReglonal ProvkJent Fund Commissioner-II (IMC), EPFO,Head Offlce.
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Regional P.f. CommissIoner-II (Invest.)
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Mmutes of the 124th l'Jleeting o'f the Flnance Investment &
Audit Committee (FIAC) held on 22.03.2016
1. The 124"' Meeting of Finance Investment &. Audit Committee was held on22.03.2010 from 11.00.A.M. onwards in the conrerencs Hall, 3niFloor, EPFO,Head Office, New De\hl.
2. The followIng members/representatives were present In the meeting.
1. Dr. V. P. Joy Chairman, FIAC,Central B9ard and Central ProvidentFund Commissioner
2. Sh. HeeraLal Samaria Additional Secretary ('-&E), 'Mlnistry of Labour &.Employment, Govt. of India.
3. ""s. Meenakshl Gupta, Joint Secretary &. Financial Advisor, Ministry of Labour&. Employment, Govt of India.
4. Sh. PrabhuDayal Under Secretary, Deptt.ofFinancial Services (PensionReform), Ministry of Finance, as representative ofJoint Secretary, MOF, Govt. of India; as Dornaln lExpert.·
S. Sh. Balasubrahmanyam Member, Central Board, (Employers' Representative)Kamarsu
6. Sh. J.P. Chowdhary Member, Centrat'Board,(Employers' Re.presentative)7. Sh. Prabhakar J. Member, Central Board, (employee~' Representative)
Banasure
ThEHoltOWlngmembers could rtot"airend the meeting:
11. IDr. G. Sanjeeva Reddy lMember, Central Board,($mployees' Representative)
In addition to the above, FA &. CAO, EPFOConvener was also present .during .the meetlng -.
3. The Chairman welComed all the members and officers present in the meeting.Thereupon the agenda were taken ·lIp....
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l1:em No.1~ Confirmation of the t-linutes of 123rd t;leeting of the FinanceI
Investment 8&Audit Committee (FIAC) hleld on 18.01.2016.I '.
The minutes of 123rdttleetlng of the FInance 'Investment & AuditCommIttee held on 18.01.2016 were connrmed,
Item No.2: Action taken report on the recornmendatlcn of the 123rd. .
Meetlng of Finance Investment 8&Auditi CommiUee (FIAC) held
18.01.2016.
The action taken report as placed was taken note of by the Committee.
Item No.3: Performance Evaluation of Portfolio Managers for the period
01.07.2015 to 31.12.2015.
The CPFC Informed the Performance Report of all EPFO PortfOliol'tlanagers for the period 1st July 2015 to 31st December 2015 to theCommittee •
The CPFCInformed that a system of re-allQcationof portfol1obased onlnter-se performance of the Fund Managers Is being consIdered by
EPFOwherein based on their performance, the re-al1ocationof EPF.Q'sportfolio may happen In a way that some portion of funds of lower .than average performers may be assigned to higher than averageperformers on annual basis.
Sh. l.P Chowdhary enquired whether this re-allocatlon Is, done aftertaking both yield and asset quality under consideration to which theCPFC replied that the CRISIL performance evaluation of portfoliOmanagers takes Into account both Portfolio yield and asset quality .
It was decided that for thi~ years re-allocation, the performance of ~\I
five Portfolio Managers since the start of this mandate till ~'larch 31,
2016 shall be considered.
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With the above observations, the agenda as placed was' taken note ofby the Committee.
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Item No.4: CBlO borrowing transactions by the Portfolio Managers during.the period 01.01.2016 to 29.02.2016.
The proposal as contained in the agenda was taken note of by, theCommittee with the' observation that the same may be placed beforethe Board for information.
Item 1'10.5: Alternate strategies of Investment in Exchange Traded Funds.
The Item was explained to the members by FA&CAO. The membershad some observationswhich have been summarized as under:...• S8! Mutual Fund Is the sole ETF Manufacturer for EPFO as of now.
In order to Instill competition & in~rease returns, there should to bemore than one ETF Manufacturer to be selected by open tenderingprocess. FA&CAO Informed that the process has already beenstartedand new ETF manufacturer 1slikely to get selected by June
,end.
• Members wanted that exit strategy for ETF l.e. modalltjesfor seilingETFunits should be in place so that when the market goes up EPFO
can book some profits. It was also suggested that selling of ETFs. ,
can happen in tranches after calculating profits .on investmentsmade during different time periods.
• ,Members were of the view that Ufe Insurance CorPoration of India(UC) is the biggest Investor in India and since it does all itsinvestments in-house, EPFO can discuss With, them in order tounderstand their Investment processes. ',I
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Item No.6: Concurrent Audit Reports of Provident Fund (Including otherfunds) and Pension Fund for the month of December 2015...&'January 2016.
It was decided that the monthly concurrent audit report given by the
External Concurrent Auditor shall be placed regularly In the FIAC
henceforth along with the action taken on the observationsof the auditreport.
Item No.7: Process of selection of new External Concurrent Auditor (ECA) .
The agenda was approved by the committee.
Table Agenda: Amendment In' pattern of Invesbnent notified by MOl&E .on 23rd April 2015.
The Committee was informed that Government has permitted'
investment in Government securities category from the present 45-50°A, to 45-65%. This additional leeway for investment in Government
securities would enhance EPFQ's investment in more securedInstruments. The members toQk note of the agenda.
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Themeeting ended with a vote of thanks to the Chair~
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Item No.2: Action Taken statement on the minutes of 124th Meeting ofFinance Investment &. Audit Committee held on 22.03.2016.
As regards Performance Evaluationof Portfolio Manages for the period01.01.2015 to 31.12.2015, theagenda was taken note of by theCommittee and the action stand
It was decided that for this year's re·· completed.allocation, the performance of allfive Portfolio Managers since the With regard to re•.allocatton ofstart of this mandate till March, 31, Portfolio based on inter-se2016 shall be considered. performance of the fund manager,
the matter was also discussed inreview meeting of PortfolioManagers for quarter ended March2016 held on 26.04.2016 wherein ithas been decided that CRISIL toshare analtemate method of re·allocation of funds basedon portfoliomanager yield and asset quality. MisCRISIL has shared the' altemateapproach using portfolio' managers'aggregate performance scores. Thematter is being placed in themeeting.
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(Item No.4 011.241' FtAC)
S.No DecisionsI Directions of FIC
Performance EvaluationPortfolio Managers forperiod 01.07.201531.12.2015.
(Item No.3 of 124h FIAC)
2. CBlO borrowing transactions bythe Portfolio Managers. duringthe period 01.01.2016 to29.02.2016.
The proposal as contained in theagenda was taken note of ~y theCommittee with the observation thatthe same may be placed before theBoardfor information.
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The agen~a of CBLO borrowingtransaction:by.the Portfolio Managesfor the period from 19.09.2015 to31.12.201S was placed in 211 thmeeting o~CST held on 16.02.2016wherein th~ Item was deferred and itwas considered and noted.by CST in212th mee~ngheld on 29.03.2016.The agencjiaon the same for theperiod Ol.OL2016 to 29.02.2016could not be placed in 212th meetingof CST due to paucity of time and
. 'shall be placed in the next CSTmeeting. 'I
Agenda item for CBlO borrowingtransactions by the Portfolio
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01.03.2016 to 31.03.2016 is beingplaced In 125111 FIAC.
Alternate strategies of In pursuance ..to· the decisions ofInvestment in Exchange Traded FIAC, a letter has been issued to allFunds. aforesald~ntitles Including CRISIL
;' with a request to make a nominationThe item was explained to the to the said Expert Group dulymembers by FA&. CAO. highlighting the Terms of Reference
as decided by the FIAC. The .developments are being placed asan agenda Item in 125111 FIACmeeting.
On the specific agenda' of alternatestrategies of Investment InExchange Traded Funds it wasdecided that since the matter ishighly technical in nature, an expertgroup may be constituted whichwould include representatives of thefollowing: .
1. SBI Mutual Fund2. Life Insurance
Corporation of India(UC)
3. India IndexServices&. ProductsLtd. (IISL), (NS.E)
4. ASia Index Pvt. Ltd(BS~ and S&PVenture)
5. National Institute ofSecurities Markets(NISM) establishedbySEB
It was further decided that CRISILwould coordinate the meetings andpresent recommendations of thesaidExpert Group to the FIAC.
The Terms of Reference of theExpert-Groupwould be as under:
1. Allocation to equityand relatedinstruments·for thenext financial"year.
2. f1-iSK diversification.strategy while !
making investmentin ETFs.
3. Alternate ETFs
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• DO Letters have been Issuedto Chief Secretary, StateGovernment of Punjab videD.O. letter no.Invest.!/ AT/PSIDC/2007/PT/960 'dated 19.04.2016 andD.O. letter no.Invest.I/PFC/2014/961dated19.04.2016 to claimdefault/delay amount.
• Reminder ' letterNo.lnvest.l/(171)/HDFC/2013/42932 dated 30.03.2016 hasbeen Issued to, ManagingDirector, HPFC,Shimla for thepayment of 'claimedoutstanding interest amountRs.l1,990/- throughelectronic mode.
• A meeting was held on15.03.2016 in State Bank ofHyderabad Head Office ondefault in payment by AndhraPradesh, Power FinanceCorporation attended by RC-II, RO,' Hyderabad ondCustodian representative on
. behalf of EPFO. Custodian,.."....__, .,,, .. ...._.r~presel1tativ~has~n'y~yed
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(Item No.6 011.24" FIAC)
other than Nifty 50and Sensexin orderto optimize returnwith minimum risk.
4... Strategy for" realizing profits andways to do it.
S. Any other issue thatmay be referred byFIAC.
(Item no. 5 of 124th,FIAC)Concurrent Audit Reports ofProvident Fund (Including otherfunds) and Pension Fund for themonth of December, 2015 &January, 2016.
It was decided that the, monthlyconcurrent audit report given by theExternal Concurrent Auditor shaUbeplaced regularly In the FIAChenceforth along with the actiontaken on the observations of theaudit report.
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Requisite action have been taken inrespect of following Issues asdetailed below:-(A) Instances of non-receipt I
d~lay and short In receiptof fund:
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ConsultantCRISILhas submitted thedraft RFP.'An agenda item on thesame - Request for Proposal
.' .., (RFP) . for Appointment as
The agenda was. approved by the External Concurrent' AuditorCommittee. (ECA) for the employees'
, Provident Fund. Organisation,---._.L_,._@~m_No. !..!!.f.. !:2¢", FIAC) .' (EPFO) Portfolio Manager~~_.is.!
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in the meeting that "EPFO asa bond holder may alsoexplore option of filing theSuit against the company fornon payment independently."
(8) Securities matured butstill reflected in thesystem and CustodianHolding:
Process of selection of newExternal Concurrent Auditor(ECA).
s' In case or security of UPSFCwhich is in default, RC, SRO,Lucknow vide this office letterNo.Invest.I/l(125)Vol. I/UPPICUP& UPSFC/32436dated26.05.2015 was advised toengage a duly empanelledadvocate in respect ofpending cases at the earliestand inform this officeaccordingly. Latest reminderhas been issued on04.04.2016.
s The status on· creditconfirmation for .GodavariMarathwada IrrigationDevelopment Corporation(GMIOC) security forRs.l,OO,OOO/-is still awaitedfrom SRO, Barrackpore.Latest reminder issued on09.05.2016.
• ConcurrentAudit Report givenby the External ConcurrentAuditor for the month of Feb.,2016 and March, 20i6 arebeing placed in 125th FlAC asagenda item.
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6.being placed in the 125m FIAC.
Amendment in Pattern of The agenda was taken note of byInvestment Notified by:.Mol8tE the Committee.on 23rdApril..~015. .
.'." The Committee was iriformed that
Government has permittedInvestment in Government securitiescategory from the present 45-50%to 45-65%. This additional leewayfor Investment In Governmentsecurities would enhance EPFO'sInvestment in more securedinstruments. The members took noteof the agenda.(Tabled Item of 124th FIAC')
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14. ~ .'.f.ItfI~. :rt ~.~I 110066~nut, . 011-26172671. tTi<m . 011·26189910
Employets' Provident Fund Organisation(Ministry of Labour & Employment. Govl of India)
Head Office Bhavishya Nldhl Shawano14, Bhlkalll!Cama Place. New Delhl·110 066Phone 011·26172671, Fax 011·26189910
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Dr...,V. P. Joy, IASCentral Provident Fund Commissioner
DO. No: Invest.!/AT/PSIDC/2007/Pk
~ ,Sk:.. ) . ~boApril is", 2016,
J 9 APR 2-016Central Board, Employees' Provident Fund Organisation (EPFO)has investment in various'
securities/bonds issued by M/s Punjab State Industrial Development Corporation Ltd. (PSIDC)•Chandigarh. These bonds are guaranteed by the State Government of Punjab.
2. MIs. Standard Chartered: Bank (SCB), as Custodian of EPFO.has informed that as on31.01.2016 MIs PSIDChas not paid the outstanding Interest/maturitY payment amount of Rs.85,67.044.42 on various securities and the Accrued delayed interest AmountRs. 7,82,087.24 tothe Central Board, EPF.(Details ason 31.01.2016 enclosed asAnnexure-A) .
3.' Unfortunately, In spite of regular follow up for recovery of these outstanding dues by this'office, our Regional Office at Chandigarhas well as by our Custodian, SCBand Portfolio Manager,SBIfrom time to tlrne, no progress hasbeen made so far. . .
4. Your kind attention is also drawn to my predecessor 0.0. letter No. Invest.II/A.T.S./E.P .&&0.1/2014/28174. dated 12.12.2014 addressed to the Chairman, Punjab State "IndustrialDevelopment Corporation ltd. (PSIDC)Chandigarh in this regard (copy enclosed) .
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5. I would also like to bring it to your notice that as these bonds are guaranteed by the StateGovernment of Punjab the default by Mis Punjab State Industrial Development Corporation Ud.Swould result in dalm by EPFOon the Government of Punjab•
6. I, therefore, request you to kindly look into the matter on priority and to issue necessarydirections to remit all the pending due payments immediately to the Central Board, EPF.
Shri Sarvesh Kausha], IAS"
b- ,~)I YoursSincerely,
h---(V.P. Joy) .
Enel.As above.
••Chief Secret1f'/,Govt. of Punjab,Chandigarh.
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Standard ,Chartered _
Date 02 Feb 2016. ,
To. ' ..Mr. Amul RaJ SinghRegional P.F. CommisslOner-llllnvest.)Employees' Provident Fund OrganisationBhavishya Nldhi Shawan .14.6hikaji Cama Place •New Delhi • 110066.'
Subject: Outstanding Interest and Maturity PaYment. as at the end of January 2016 •
Oear Sir.
With regard, to the captioned subject. we attached herewith list of outstanding Interest aMaturity Payments as at the end of January 2016 for ~ perusal.
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Summary 01 Company wise outstanding paymentsancll interest accrued for delayed period. at the end of January 2016 la aa menttoned below:
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O~lngTotalACcrued Delayedi . IntereJtl Maturity
Company Name P• ' ..•. Interest Amount.\ • I
tlAndhra Pradesh Power Finance Corporation212.891.00 4769.~Ltd .. . . ,
! ,I Punjab Anancial Corporation 2.795.237.43 244.523.14I Punjab State Industrial Oevlopment Co~
/8,567.044.42 .---782,087.24i LtdI
, \ Grand Total 11.575.172.85 1.031.379.74
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1~.\ ./In.case you need any further clarification, please c~"ct the undersigned.,~. ;/. Thanking you. "'
, . . -'Yours faithfully.For S dard Chartered Bank
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\Prabhakar nekarEnet: As above
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·'K. K. JaJan, IAS
Central Provident Fund CommISSIoner
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(MinIstry or LaOOur & EmolOyment. GI, 'Head Ome. Bhavllhyl Nidhl 9,.., Bb\kaiii Cam.a Place. New OlllhP"one 01f.2&17287t. II... 011·;
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D.O. No. Invest. iliA.T.~/E.~ ~ D.U2014/:< gJ t '1 December 11,2014
.1 2 OEe 2014II
I would like to draw your personal attention to~ards th~ default in payments towardsoutstanding interest claims .and the overdue interes~ claimed on the delayed payments ofmaturity procHdsltnterast on ..the'securities lJ.aued ~ your cqrporatlon. MIs. Punjab State
. Industrial Development Corporation Umlted,· (PSloe). Chandlgaih to the Central Board ofTrustees, EPF, . .
Mis.· Standard Chartered Bank (~CB). as C~stodian of EPFO, has informed thatPSIOC haa'1ot pajd~. C?utitandlng Interest dues al"npunt of~ •• 20.3~~150.00 I·on varioUssecurities. (Details as on 1~ Noy 2014 encloseda. Anf1exure-n-
. t. "sca has _lia Infqrmed Ihat payments on matlfitY I"adeinptionallnteresb in respect of
various securitiohavebfle!l made by PSJDCafter~ay.lnterest forth" delayed payments·has been daimedfrom PSIOC for the amount As. 30~92.94/r.(Oetail$ as on 12 NO'I.2014endoHCIas Annexure -2). l' .•
Further, d'urlng the period ·March 2002 to May 200~Set on behalf of EPFO claimedRs. 10082745.74 as Interest on delayed payments of\'/lnaturity prOceeds and couponllnterestpayments. out of which SBJ reported that Rio 946~9.00 haye hHnpaid leaving abalance of Rs. 61630,.74 still to be paid. (Detail of calculation enclosed).
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For recovery of these amounts many folloW ups have been done by; this offlce,ourfield omce at Chandfgarh, as well as by our Custodian ,nd Fund Managenl, .
y~ are,again requested to personally interven' and arrange to remit all the pendingdue payments of Ra. 2877849.6S/ ••lmmedlately througih electrOnIc payment mode.
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Enclosure: As above
Yours sincerely.
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(K.K. Jalan)•~•.'t
.. ; "••Shrt Avtar Singh HIt,Chairman,Mis. Punjab State Industrial ,Development Corporation Umlted (PSIDC),Udyog Shavan, 18, Himalaya Marg,.~ ,Seanr 17, P.Qo:-c.No.8',Chandtgarh •.1JOO'17
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Central Provident Fund Cornrrussioner
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EmplQyees' Provident Fund Organisation(r,;tllllslry of Labour & Employment. Govl of Indlal
, Head Office Bhavishya Nldht Bhawan,14. Bhik3111Cama Place', New Deihl .110066Phone 011·26172671, Fa.( 011·26189910,,
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April 19th, 2016
J 9 APR 2016Central Board, Employees' Provident Fund Organisation (EPFO)has investment in various
securities/bonds issued by MIs Punjab Financial Corporatlon,Chandigarh (PFC).These bonds are, guaranteed by the State Government of Punjab.
2. MIs. Standard Chartered Bank (SCB), as Custodian of EPfO, has inf~rmed that as on31,01.2016 MIs PFChas not paid the outstanding interest/maturity payment amount of Rs.27,95,237.43 on various securities and the Accrued delayed Interest Amount Rs. 2,44,S23.~4tothe Cen tral Board, EPF.(Details as on 31.01.2016 enclosed asAnnexure-A)
3. Unfortunately, In spite of regular follow up for retove,yof these outstanding dues by thisoffice, our Regional Office at Chandigarh as welt as by our Custodian, SCBand Portfolio Manager,SBIfrom time to tlme.mcprcgress has been made so far. .
4. Your kind attention Is also drawn to my pr.edecessorD.O. Letter No. lnvest.II/A.T.S./E.P,&&0.1/2014/28172 dated 12.12.2014 addressed to the Managing Olre¢tor, Punjab financialCorporation, (PFC)Chandigarh in this regard (copy enclosed).
S. I would also like to bring it to your notice that as these bonds are guaranteed by the StateGovernment of Punjab the default by MIs PFCwould result in daim by EPFOon the Governmentof Punjab.
6. I, therefore, request you to kindly look intQ the matter on priority and to issue necessarydirections to remit all the pending due payments Immediately to the Central Board, EPF••
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~ Yourssincerely.
-;~-Encl. As above.
.":hri ~:)rJesh Kaushal, IASChief Secretary,Govt. of Punjab,Chandigarh.
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Date' 02 Feb 2016'to
G~~.li' '-0/ ,:, /Standard if:. >J
Chartered RTO. P
Mr. A.mul Aa} SinghRegional P.F. Commlssloner-" (lnvest.)Employees' Provident Fund OrganisationBhavtshya N\dhi Shawan,t 4-Bhikaji Cama Ptace.'New Oelhl - 110066
SUbJect: OutstandIng Interest and Maturity Payments a, at the end of January 2016.
Dear Sir.
With regard to the captioned subject, we attachedher.~th list of outstanding Interest andMaturity Payments as at the end of January 2016 tor your ~erusa"
Summary of Company wise outstanding payments and interest accrued for delayed period asat the end of January 201618 as menfloned below! : '
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Intereat /IMaturity Accrued Delayed ;, Company Name. PQvmen~ Interest Amountj "
,, , I,: Andhra Pradesh Power Finance Corporation
1212.891.00 IiLtd • 4,769.36 i
/' 2.795,237.43. t
\ Puniab Financial Corporation ". v2"44,S23.14 I'..•.: Punjab State Industrial Oevlopment Corpn
a,5&7044.42: Ltd 782.087.24\...-Grand. Total 111,575.172.85 1,031,379.74
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" ' /.~.•. ,t", ~/1'\ ./ '0 case you need any further clarification. please contact! the undersigned.. ~".... :haokmg you '
. '. -'Yours faithfully.
• » , For~rd Chartered Bank" .. /
.: { -:/'Prabhak.a( ekarEncl, As above
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(Minist of Labour & Employment, GoY\. or IndIa), H ad Offica : 6havl$hya N1dhi Shaw an,14, hiftaiji Cama Place. New Oelhl·110 066Pho e :'011-26172871, Fax: 011-26189910, I
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K. K. Jalan, IASCentral provldenl Fund CommiSSioner
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D.O. No.lnv •• ~ WAoT.S/E.P ~ D.1/2014 / :l.e 17 '2 O,",cember 11. 2014
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I would like to 'draw. your personal ~ttention tow$r.ds the issue regardingsending payment through~ electronic mode Instead of pbfSic81 mode In respect ofsecurities issued 'by· . y~ur org"nlsation MIs. Punjai) Rnancial Corporation.Chandlgarh to the Cent~Board of Trustees, EPF. .~: .
Out"custodian •.M/.~,Standard Chartered Bank (sc~b),has reporte<;l that yourcorporation . Is making Interestl matu~ty paymtints through. physicalInstruments I.e. dem~nd draft/cheque and not through electronIc mode. (copyof a latest such letter dated 25',08.2014 is enclosed) follOwed by telephqnecalls inthe above respect. . '
"
Securities and Ex~ange Board of India (SeBI) ,~as also lssued guidelinesregarding 'usage of electronic payment modes for rnalidng payments .to Investor$(copy of Sf;.BI circular dated,,21 Mar 20,13enclosed). :-j:" , ,
. . ii'You. are once aga~., requested to personally inte",~ne an~ arrange to remit all
the pending 'due int$r~Jtlmatu(jty 'payments In ",spect of securities throughelectronic payment mOd.e. i .' '
, .
Yours sincerely,Enclosure: As abov~--
, .i
(K.K. Jalan)
Shri Sukhjeet Singh Bains. lASManaging Director. ,Mis. Punjab Financial Corporation,H.O: 95·9a.Bank Square,Sector 17-8,Chandlgarh ,160017
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134IH4 I HeadOffice IBhj\vj!~hyi\Nidhi SbilW3l\,l+Bbikaiii Cilma Plate. Nty 0s1hl-11QQ66
No. Invest. 11 (171)/HPFC/20131/ o / '3 H/, C111.
To Y\JV\Sh. Arun Kumar Sharma, lAS,Managing Director,Himachal Pradesh Anandal Corporatlon,~ew HlmrusBunding, Orcular Road,Shlmla-171001.
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Date: ~. 0 MAR 2016'
SUb: ClaImfor Interest on delayed payment.
Account:· The Central Board of Trustees, Employees Provident ',nd OrganlDtion.
Sir,
Piease refer to .Standard Chartered Bank letter No. SSlCA~2S022016/HPFC dated 2+02-2016addressed to Himachal Pradesh RnandaI. Corporation and ct>P'I endot1ed to .thls offtce on the. above citedsubject forwarding therewlththectetailsof payment of our claim for ln~ 00 delayed payment.
2. MIs. Standard Chartered Bank (SCB) being Custodian of EP". vide their above referred tetter hasdalmed addltlcnallnterest t:I Rs.l1,990-SO (rom HPFC on delayed payment. In thls regard many follow upshave been taken by our cuStcdtait with HPFC. :
3. Further HPFC ha~ already ~ requested to remit allpendlng due Interest/Maturity payments inrespect of securities through electronic payment mode vIde CPF<:OO.N~ •• I nvest. OJA.T.S/E.P3tO.I/2014/28175dated 12.12.2014. : :
"t. It Isthef'efore requested to look Into the matter personally land arrange for the payment of abovedaimed outstanding Interest amount Rs.ll,9go..OO/- tmmechatelv th~h electronic payment mode.
. ,
YOUB.faithfully,
I'.V .(Dr.V~jS.SINGH)
:'Adell.C. P. F. e-n (iM/IMC/lnvest.)
Copy to:- 1. Sh. Prabhakar Pednekar Standard Chartered Bank ,!5«urities ServIces Crescenzo, yo Flayr. C-38/39, G-Block Sandra KurlaComp\ex, Bandra (Eastl Mumbat 400 001 for informatIOn.
2. ACC(HP&'p~) with the request to pursue the matt~ with HPFC to realize the pending (nteresclaims and forward the report to Head Offlce at the ;eartlest. .
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.:mployc\!,· Provldent Fund Orpni,ntion., ~ =--.i(1J.ftf 11!f(I iI~1I<ti -"'I~·t. 1fl«I' ~ ('~''()(Ministry of Labour & Employment, Govt, ~f India)
• '164tt14 J Head OfficeBhavishya Nidhi Bhawa.n,14.Bhikuji Cama Place, N~\\ Delhi-I 10066
W\vw.epfll)1.tiQ,IIQWn www.epfindlafni~JuN('l.lnvest.liltl4I)1~faUherN~/2"~".s Dale~
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Regiona! Provident F\U1UCommissioner.Sub-Regional Office. Barraekpore,KOL KAT A.
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Sub: " Pending Receipt of payment confirmation for Godavari Marath\vaua Irrigation Development Corporatio«(Security Code No.7785.13) - Regarding
H.d:- RPFt·. SRl) tltlrrakllpore letter no R-NEJ368/SROIBKPlCC/ZO~E.-IV/411(i) dated U7.0S.2015
Sir.
Please refer to the subject and reference cited above addressed t~ the Director. Standard Chartered Bank..•ecurities Services Branch Mumbaa and copy endorsed to this otiice al~3'Yith II copy of SBI SSBI\.'fumooi letter
,bled \(}.06.~OI5on Ihl;! "hove: subject.tcopy enclosed]
, As per 581 SSH Mumbui letter referred to above. it has been informed that Trust has remitted the amount It'
concerned RPK' on 19.04.20 Iu.It i, therefore requcst\!d to intimate the S[iltus regarding credit confirmation of the above !>.lI.l
s~urity/amount in r.lVour of CRT. EPf account to this office at the earliest.Further, "Is" ensure that tlwintcn:stld.m\ag~s to. the delayed IX'ri<')\I.if nn:-. has hct:n recovered.
":cnl: as abevey ~)Uf':\Ja.uht'l.! I
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Anlslanl P. Y. Comlniuioner (lll\'~tn"~nt('opy to;-
Ii I lhe D,:pllt~ (jeneral \limagcr.St<ltl! Bank 01' India. SI..'1:urili~:;&r-vict.'S Branch. ~.'" Floor. Mumbui \1:1 111
Brunch Building. S.II11Olchnr Marg. ~\'llI;nb~li.:.400001 - ' lor necessary action.I
f II , Shn \{ili~\hM. Sharma Director. Iransacu. III Hankin~ ~rvi~(' Management SlmKlarJ Chartered Ball~.Securities Service (Ind"" CRF.SCENlO .. i··! f loor, c-3813fJ!<i.Block. BundraKurla Comple«, 13all\.lr"n:.i:->t'l M UID bat400051
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';3'C(~ ilS,:qf(ij4. *Ni$i/S\lo-R,,:gional Office. B ,ckporc''\ e -s ;fin {!'!~ ~ ~,mifmlt 700 "9.' H & '5. B.T. Road, Tit sarh. Kol\\ata- 100 u~
(JUt ~.m m1:2008 Jl111fiJm i1i1llIRrr/:\1I ISO 9OO1:Z008 C tit., Of/jet')-,,"-------...:.~...;-.----------"-- " ,-"'--- ----~(): R-NE/WB/36S/SRO/BKP/CC/ZONE-[V 14\' (;"'1 Date : 0'1 .08.2015 .
"To .•r ji..V' •.~The l),ra;lor:. 'z) ~ "\" ~~\unJ~\l-d~h~~rt'd Bank , "~I T) .-, s- f, ~ Jr , ~Scct'lt,es~ccs -; ~ •... ~\.i.L <..., •.....-rJ. I } L ~
Crescenzo, rdt1uor.C-38/3,9.G-SlOCk !\)~.."p ,t.9(i'~Bandra . Complex C"'~ r. f.,.. ').., \ \ "~
Bandra E, ,Mumbai - 400051. 'M "~",,'1 'v~ ~-v'"~~ -v0):"- , ' J ~ ~ .)- c;. 1 '
SUB: Pending receipt of pa!i~lcn,t \..'Ontirn,' luti(JO for Goda,vari MU, fa,t,UwadR'ifrig<ltion •.:.~ ¥,\ ~-(~1Oevelopme!ll Corporation (Security Code No. 778533) - r:c~3 ,.,'(1...., rJJ..' ,';.
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SIr iMadam, ' I" :. {"~' .'. ,". . ...~' , .~.,
With reference to above subj(."Ct you are hereby requested to send the information whether ,,~~.'~the above seeuritv has been credited in the uC(.'Uu:ltofCBT. EPF. "f.1
Kind".' treat the mutter as' MOST URG£~"'f. . . . (', 'I 'J ;c-.•••' /' f'! '.- ( )., •\: '-'; , ",r ..." \ 'l'
Yom<fllirht'\ln~"(' ~ .•• "~.k\.)'1,' 'I' .
~Jl- 'lS, BANDYOPADHYAY I
Rt..~io~ Provident fund CommissionerSuh- Regional Office, B;Irr:ll:k~)(1ft',
,
REF: Letter No. SSB/PMS/PVS/000914 dilled \OJo6.i:itH5
End: Copy of Letter dated 10.06.2015 of the SBI,SSB
l'llp~tl): .l.' The Rc~iullal Provident Fund Commissioner (lnvest], t.PFO~ He-old Office,, New bC\hi - 110066, tor kind infurll\ahoi~2. The Rt.'gional Provident Fund Commissioner (to_x). EPFO. Regional Office,
Kolkata-70oo91. fur kin~ information. ( /'
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The Regional Provident Fund Commissioner.Employees' Provident Fund Org!.nisation,Sub-Regional Office. Batrackpoto14 & n. B.T Road. Titagarh,KOLKATA-700 119.
Oear Sir.
We rder to your letter No.R-·~EIWB/36a/SRO/BKP/CCIZONE-IV/205 dated 27,05.2015
anc 8'iv;se that Code N) 178533 (Godavari Marathwadalrrigation Dovelopment
~o; iJOIt'l.on, w.JS' erroneously transferred by Trust 'o~ 25i/lOi2010 (post call opuon was
exercised by co-npany), The call option was exercised prior to the receipt of securales III
EPFO's account .md the Trust has remitted the amount to concerned RPFC on 19th
April 2.110, (copy 01 chattan was forwarded to Standard Chartered Bank for their record)
We therefore. request you to verify at your end and accordingly confirm it to EPFC.
N~w t);!!h: a:'1::1 Sta,h,:m,i :'hartered Bank to enables then:a to close the matter.
. Yours faithfully,...~.\" ..'\•
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09 MAY 2016
Sub: ~ ~ec4IIpt d payment ccntIrmatIcn ter Godivari MarathWadalmgatiOn~ment Corporatlon(SecurityCodeNo..778S33)• Regatding
Ref:. RPR:.SRO 8arraIcapore letter No. I'-Ne/368ISROJBI(JC,C.IZONE-IV14U(i)Dated 07,0&2015.
SIr,
Please reler to thI$ oIftatletter no. Inves&. l/1(141)1OeteuiterNoU1l393Ol-lOS.jatecf 0&-02"2016 on theabow sub)ect. (CqJy fndCsed far r&dy reI!I'enca.)
~ statlJSon credit contIrmatiOn tor GodavatI ••••• Mda 1m;at\oft ~mn
Corporation (G."tOC) IS stilt awatted.
It IS tt!4!ref0l'f! ~ to f\Jmish h status on the aboYe on a pricrIty basis.
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Telephone: 26178450
Cfis\:q Iff 3ffc) t\'lf f;riit ~ 316;f
Employees' Provident Fund Organisation .,~w~~.mm~ '.
(Ministry ofLabour.Il Emp1ormcm. ·Oo••.t. or India)~a<ilfj~ 11IeadOm"
Bhavishy. Nidbi Bhawan.. ••• ·tlhilllliii ClIma "'ace. Nft\ Oelhi·, 1llC)61"WWwteptiDdlj1.IW~.iu www.epOndta,Q1c.ln
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No. Invest. b1 (125)NoI.UUP PICUP & UP SF~
To ~~"~.
Date:
-By Name to Sh."Dv. AshutQsh Sharma,
RPFC-II.
*The Regional Provident Fund Commissloner-n,Sub Regional Office,Lucknow
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\/Sub: -Regarding WP No..17S9 oflOtl UP PltUP and WP No.1160 of 2011 UPFCBond:Settlement of dues- regardIng., .
Sir,:e•• . Please refer to your letter no.2163/Eftf!/SRO/LKO/Legal/PlCUP 8t UPFC) dated 12-0
2014 Wherein it was advised by you for change of :advocate and deputing some oth
advocate for early disposal of the case.In this connection, it is to inform you that your advice has-been considered a
accordingly you,may engage a duly·empaneUedadvocate in respect of pending cases at tearliest, and in(onn this office, accordingly.·
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(This Issueswith the approval of RPFC-l (IMC):.:.• I:.:('.-.(,
Yours faithfl1\ \_/~.JJ:/?
(AM~SINCRegionalP. F. Commissioner-II (INVESTME. .
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Employeest ProvideDt Fund OrganisationC-W~~.J!Im~
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No. Invest.lIl( 125)104NoI.lIUP PlCUP & UP ~.
Th H,b o~fAPR. ~tl16.-By Name to' Sh.Ashutosn Sharma.RPFC·Il
The RegIOnal ProvIdent Fund Commlssloner,Sub-Regional Offlce.luclmow
Subject:· Regarding WP No. 1759 of 2011 UP PlCUP and WP No.1760 of 2011 UPF<:Sonds- Settlement of dues reganfing.
Sr,
Please refer to your letter no 2163/EPF/SROJU(0I LegaI/ PlCUP • UPFC dated\2.08.2014 wherein it was acMsecl by you for chat\be of advocate and deputingsome other adv<x:ate for tartv ~ of the G5e .
In thas connection, your adv!ce was. ~ and accordingty you were·required to engage a duly f)mpanek;d iKMXate in respect of pending cases at ~.
earliest, and inform this offtce, accordingly •
However, no reply on the.5aId' subjeCt has been received from your enddesptte letter datal 26.05.2015 ·fctlowed by ~eral remlnder$ date4 25.06.2015,29..10.2015 and 22.12.2015 in this respect.
Therefore, yoo are once ageJin requested to take note of the said matter and
Inform thiS offlce accordmgty withtut any further delay.
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Item No.3: CSlO borrowing transactions by the Portfolio. Managers during the period01.03.2016 to 31.03.2016.
Pursuant to the recorllmendation of CST In Its 204~~Meeting held on 26.08.2014, theMinistry of Labour & Employment vide its letter no. G-2002S/1/2014-SS-11 dated 12thMay, 2015approved borrowing of funds from CBlO for participation In Primary Auctions of GovernmentSecurities and Corporate Bonds. Accordingly, the direction of Govt. on borrowing of funds fr.omCBlO was communicated to all Portfolio Managers, that inter-alia mentioned followingconditions:
a) No borrowing will be done for more than 15 days.b) Prior to enterihg Into such transaction, the Portfolio Managers shall intimate. through
email to Investment Monitoring Cell (IMe), at EPFOHead Office the details of proposedborrowing to be made and the matching purchase of security. The proposal should alsocontain the expected profit/gains from the transaction.
c) The Portfolio Managers. shall report full outcome of the transaction to the IMe after theborrowing is closed.
d) The IMe shall compile all such transactions and place the same before FIAC in its nextImmediately following meeting.
e) The outcome shall also be placed before the Board for information in next followingmeeting.
2. The information of the CBlO borrowing transactions till 29.02.2016 done by thePortfolio Managers has already been placed in 124th Meeting of the FIAc held on 22.03.2016that has taken note of with the observation that the same may be placed before the Board forinformation.
3. The CBlO borrowing transactions during the period 01.03.2016 to 31.03.2016 has beendone only by one Portfolio Manager i.e. ReUanceCapital Asset Management Ltd. in respect ofinvestment into UP's Special SOls issued under UOAYScheme.The Net gain for EPFO for the aboveperiod of borrowing is Rs.12,66,724/-.The details oftransactions are placed as Annexure-' A'.
4. It is highlighted that there were no CBlO borrowing transactions by the other PortfolioManagers during the above said period.
Net Gains of EPFOduring the period from 01.03.2016 to 31.03.2016 isRs. 12,66,724/-
The item is placed beior« the FIAClor inlormation. The same shall also be placed in i. !
the next CBT meeting Jor illlormatioll. -)
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51. Enti ties/Issuers Transaction Range of CBlO No. YTM Range of Net GainsNo. Date borrowing of .Rate of of EPFO In
Amount "', Days CBlO Rs.borrowlna
1 U.P Special Uday 21/03/2016 2,273,000,000~.00 7 8.73% 7.25% 645,158.36SOL Bonds .'
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..2 U.P Special Uday 21/03/2016 2,175,500,000.00 7 8.73% 7.25% 617,484.38
SOL Bonds -3 U.P Special Uday 28/03/2016 78,000,000.00 1 8.73% 6.82% 4,081.64
SOL Bonds
Net gains from CBla borrowing from 21-03-2016 upto 28-03-2016 and 1 day rollin. upto 29-03- 12,66,724.382016 .
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Hem Nc -l : Request l'ur Proposal tiU i') for Ah "'Il,,;\;lil ~t, L\tcrnal Concurrent Auditor (ECA)for the Employees' Provident Fund Organization (EPFO) Portfolio Managers.•
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l , As per the decision taken in \96th meeting of the Central Board,EPF held on 20.07.2011, MIsChundabhoy & Jassoobhoy, Chartered Accountants, Mumbni were appointed as External ConcurrentAuditor (EtA) for Portfolio Managers of EPFO for tenure of three years. The tenure of the ECAt MIsChandabhoy & Jassoobhoy commenced-from OUl.201l.
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2. The Central Board in its 204th meeting held on 26.08.2014 decided that»
(a) The task of selection of External Concurrent Audltoe (ECA) with the assistance ofconsultant may be carried out by FIAC. (Item No.16)
In the same meeting following was decided.-(b) Approved the appointment of MIs CRlSIL Ltd., as Consultant for selection of Concurrent. Auditor (ECA). (Item No.1S)
3. MIs CRISIL prepared the draft Request for Proposal (RFP) documents for the selection of theExternal Concurrent Auditor (ECA). and the same were placed- before the 11Sth FIAC held on11.11.2014. In the meeting, the Consultant tabled the changes in the selection process of the External.Concurrent Auditor that were agreed to by the FIAC. 11S'h FIAC further recommended that the tenureof present External Concurrent Auditor should be extended till October 2016 on the same tenns andconditions on which they were appointed.
4. The Central Board in its 20Sth meeting held on 19-12-2014 extended the tenure of appointment of MIsChandabhoy & Jassoobhoy as External Concurrent Auditor on nomination basis till October, 2016.
5. Now CRISIL has submitted the updated Request for proposal (RFP) documents for the selection ofExternal Concurrent Auditor (ECA). Draft RFP prepared by MIs CRlSIL is placed as Annexure A.
6. The' expected schedule of key activities for the purpose of this RFP (as also mentioned in the RFPdocument at para 5.5) is outlined below-
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2.3,
4.S.6.7.
Issue of Request For Proposal (RFP)Last date for submission of queries via.c-mail or post OR RFP
Pre-bid ConferenceLast dale for receipt of bidOpening of Pre-Qualification bidsOpening ofT~hnical bids for eligible ApplicantsOpening of Financial bids for the eligible: Applicants
or" June 2016 (Wednesday)I"" June 2016 (Friday)2111 June 2016 (Tuesday)
04111 Jllly 2016 (Monday)04110 July 2016 (Monday)
04'h July 2016 (Monday)14m July 2016 (Thursday)
After /lPproval of Central BoardWithin IS days of issue of letter intimatingappointment
s. Issuance of leuers to selected ECA9. Selected E(~Ato be ready in al\ respects
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••.,Proposal: Ol·;,rt 'Requestfor Proposal (ltFP) us above is placed before the Committee for
Ilnullzation of RFP documents for the nppointment of External Concurrent AuditorIF.CA) for the Employees' I' rovideut Fund OrJ~;mizlltion (F.PFO) PnrtfolioM~,"at.ters .
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REQUEST FOR PRO:POSAL (RFP)for
Appointment as External ConcurrentFor the audit of lnvestme
Employees' Provident Fund Oraa, ,~~~~:; .."'$.~:(.:.Manage,f§:.:J~:~··
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UCq;~;ln~ential-Pr0p.~2:!alfo-t:Appointment of External Concurrent Auditor". .;~::~;i~i~~;l~;\:. .:~1~ ....
'-:':To: be subriUtted in a sealed enveJopeand addressed to:. ::::~<,::\., <~..:~.~~;~~.~1;~' , c '
':.',','." - ..::\U::::~::\::··.. . Sh. M. Narayanappa,
Additional. CentralPF Commissioner-I (FA&IMClaEmploy •• s'Provfden~Fund Organization (EPFO).
. . Bhavishya Nidhi Bhavan.'S.' 14. Bhikaiji Cama Place.
. New Delhi - 110066
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1. Disclaimer •••••••••••••••~:~•••,•••••••••••••••••......••••••••••••.••••••.••••••••••.••••••••••••••••~••••••••••••••..•.•••..••••••••••••••~•••••••••3
2. rIntroduction .......................••............................ : ~..•...•........................................ 5
3. Terms of ~eference ••.••••••••••••••••••••••••••••••••.•••••••••••••••••••••••••••..•.•.•••••~••••••••••••••.••.••••••••••••••••••••••.•••••7
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wi 1·~··Disclaimer'" 1.1.. jhis doc~,mentis being published In con~j!!Ctjonwith the proposed appointme~ of External Concurrent Auditor by
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•• 1.2. This document does not constitute nor should it be interpreted as an offer or invitation for the appointment of.•.•• External ConcurrentAuditor describedherein. . '.,:;f~::::.••• ~4X4:••t;:~..:-":.
'lilt 1.3. This document Is meant to provide.. Information only and upon the exp.~re~;~landIng that recipientswill •••• ~only for the purposeor furnishing a Proposal for being appointed as an '~~oncurrent Auditor for the audit of
•• the investments done by EPFO's portfolio managers. It does not~~ ~"~~'1~inclusive or contain all the'II information regarding the appointment of External Concurrent:::~uditoror be"\~basls of any contract. No•••••:.;..:..~.;?-:. : .,,!<!O.,"»~.). ,
..•• representation or warranty, expressedor implied,will be m'N!1}1~ the·reliabi,ty, a~~~~9rthe completenessof .v .~::..~:..:~.,I .,:,:>.;:::!:~, .any of the informationcontainedherein. . .'?.(A'W.~~' '~~~l;;;,
A . ~ ~~.• .•••:;-=:;0;..::;. ..:.. '<:<::••, . . .'.~.~ '1.4. While this document has been prepared in gOOdl~if~~l%~.~therth~~~~{~P,:nor. any of itS·::····.!!'rs make any•• representation or warranty or shall have any responsibility.~~flj~bilit~:iljatsoever in respect of any statements or
~·~(~~::::~\.c;~!:}~(~:~;:;•.••• omissions here from. Any liability is accordifJglyand expressly CUsqt~i.(i:I·edby t~e .EPFOand any of its officers, even~ if any loss or damageis causedby any acfZ~~:~miSS.i(;>non the pa~%d~~-,EPFd or any of its officers,'or employeeor
•• consultant,whether negligentor otherwise"\l~\lt~~;:.;:):';~~::::;1~~~~;~:;$~;:::'r,:. ':::~~i\\~;th .1.5. By acceptance of this document,the recipie~ttig~ees th~f:~M~::tnf9rmatig~f~~rewithwin be supetseded by any
..,...:,~-.;.~....._ .~*::;~;.. ~F~~::';:::;:::'":~:\~::;;;:~:Z::'~'" .'; - .' ." subsequent written Infor"1~~!!n~\9~~~lQ~.same suI:)L~t-~~~ti!ivailabte;:@:~ l'eFipientby or on behalf of the EPFO.•• The EPFO or any o~A~t~,~~~~~::~!t~rs unde~l~I~" obligation, ~ong :otheri, to provide the recipient with.•• access to..any adc!i.~~~)'flnforrnation~f!9.update thlt:1focument or to correct any Inaccuracies therein which may., ~$::,. . .::~~~ ~ .
becomeapparent '.:-::t::~:;::.. .<~*~~:~ ~~~'\:'", •....• \0..... •..•~ •.•~ ..... ). . _ .: •••~..•....'a.•. '::::~~'~" A-;::;:lli..~::m:~::...;;.»;~, :l:-~;:?;:~. ."::''':::~ ..!:J.C;*~»;::.::.-:;»:s;~...::.-::~..... '::::·:·V .
1.6. EPFO r~~:.~,~!:<~e rigliti:;~~~:gi:~W'ij'·8ffCf:;WJ~$..~.notice•.to ~a~e the procedure for the selection of• Exte~~M~~M~nt~~ditoi·Ot.J~t.Part of the intereshSr'terrrlinatenegotiatlon~or the due diligenceprocess prior to
th.:~&:i)tijit·of an..·~li\(j}~.a e~iil. '.• "'2-:qf,::j!!." g y "~:;f{;~'»?' "!:;::'::;:;",. . .
• 1.7. '~~~~PFO reserves th~~:.to r~jl~lj\"ror all pro~1s orcancellwithdraw the Request for Proposal (RFP)• Wit~!~~ignin9 any rea~~.al$Oevef~ in such case no intendktgApplicant shaHhave any claim arising out
of suctf~n. At any time p~r.jothe deadline for submission of proposals.the EPFOmay modify, for any reason• deemed~~ij~, the RFp/bl'~mendment notified on EFFO'swebsite and:1such amendment shall be binding on
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•• 1.8. The recipients of t~i.~1'pshould carry out an independent assessment and analysis of the requirements forappointmentas ExternalConcurrentAuditor and of the information,facts andbbservationscontainedherein.•
•. 1.9. This document 'h'asnot been .filed, registered or approved in any jurisdictioli\.Recipients.of this document should
inform ther:nseivesof any applicable legai requirementsand conformto the same. . •••• Request for Proposal forAppOintmentof ECA for audit ofinvestments doneby EPF~)'sPortfolioManagers . Page 3 of41
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1.10. This docu"'~t constitutes no form of commitment on the part of the EPFO. Furthermore, this document confers"nelther..the right nor an expectation on any party to participate In the proposed External Concurrent Auditor'S".,
appoint~ef'lt process.
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1.11. This document confers neither a right nor an expectation on any pa~ to offer for appointment as Externa' 4ConcurrentAuditor.
• .'!'. f1.12. The EPFO reserves the right to, not consider for the purpose of qualifl¢atioQ~~'~;proposalwhich is found to be_
incompleteIn content andlor attachmentsandlor authenticationetc. orWhJQt).J~l~~i~edafter the specified date and «$.~..x..*-,'Jo'" •
time,or not d~Jlveredas per the specifiedprocedure.. . .(:~~~itnm~~.. •...~::~~~::r.:::::*~':-)'"
1.13. When any proposal is submittedpursuantto this RFP, it shall be~r~J.t~dby th1&l~?that the Applicant has fully.ascertainedan~ ensured about it~ eligibility to act as Extem~~~.rrent Auditor, irrW..t!;:~~entof it being selectee •Ultimatelyto a~t as External ConcurrentAuditor. under t~~~';~egoverning laws an~;;f:~atory regimen,.,~nd.• 'that there is no statutory or regulatory prohibition or tm~iriient to ading as External Coficu~t Auditor fOFtthe
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audit of the investments done by EPFO'sPortfolio Marj'aQ#.r~;andit ha~.~W~}ecessaryapprovari:~d permission to •'-!.'<':~.':<'. *~;~".;.>'.:.:.' •
act as ExternalConcurrentAuditor and further suffers no dfSilbmtyjn..~Worotherwise to act as such., . ":-~~::::::~~a~::;~;:' .tI1.14. ~thou~ prejudice t~ any other rI.9htsor::{~m!B~:~;~avaUable·t~~;'1t:~o.Exter~al Concurrent Auditor may bE tI
' disqualifiedand their proposals rejectedfOI\~~rr~~~~~pvhatsoeverl~g!P..g those listed below:~::;~~~,. . :.::;;;:;:<.;~:~:~:~:", ":~:!::~~~::' t·
1.14.1. Materialmisrepresentationby theAppi~nt in ·tfi.{?:·(~p'q$~1. ·)::tl{i~;::-,. :;~.•••• ~. . '.<s-, ' ••,••..••-:;-, '. ..'............. •.
1.14.2. Failure,b~ the App.l~tt9< ..provlde thl~~~rmatiQ:~1~~~~~i*a~l9:ti)!!::~~~~idedin the proposal pursuant to ••relevant sectiOn)~6i[OO~~:li&im!!lnl ·~~~t.~:::lW~f::" . ·'·~;:·:t:>:· . . €.r..:,· .~:- -,};-:..~_ . ::::~<l'O -:SO
~;~~ \'.tJ}·~~i"·1.14.3. If informatl~;{: .Ii: as known~,~r the Appliei~\ has beenappointed,·whichwould have.entitled the EPFO •
":'$;:i~ .~'t ~:::~:~~:. . .to reject o}ct~~~lify the .~l~~~~~~al Co~@l~~t Audit~r, the EPFO reserves the right to rej~t U1t. .•
applicant at tft'lilm~,.~:;~~;~~i~~~~!~::::~~i?'i·Information .becomes known to the. EPFO and 0( ..;~~e.~,~~~~.'whiilt~~~r;"shan be payaSl&'f~)t1eECAso rejected. " ' ,
~A'l'~~t:O~:;~tfJ~~~~~~j~':~~M:or indictment/adverseorder by a.regulatoryauthority that casts a doubt on •~:~~Wr.the ability of th8'1QQ'Pnt to'C9:g~yctaudit. . . ~....:;:-.:::~~::~:.:-- '~:~&~$~, "::;:;::::::~'.
1.15. AlI?p~9P~.alsand accompa~i!~9 docurTiliits received'within the stipulated time will become the property Of the •EPFO::W~:~.I!not be return~tlbe hardcopyversion will be consideredas the official proposal.
":~~~;~~:!:., .'~r~~I~~~:·' -1.16. Referenceto:~·~t!~wslre~~!:~~s/guldelines in this RFP docUmentis applicable to laws/regulations/guidelines il.. t
India. ··':\!~t;;::<...:;il~lf:··:':::{\\\;\f;~!~v "4
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4B~ue$! for·ecoposal foeAppointmeatof EciuOt- audit of lAve&tmeAt&-doM-by EPFG!$-PortfolioManage,s Page 4 of 4. 4
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'"2. Introduction
'1!'e ,Employees' Provident Fund Organization (EPFO), India Is an autonomous body under the aegis of the Ministryof Labour and Employment (MoL&E), Government of India. The main objective qf the organization is to provide old·age social security to the subscribers.
The Constitution of India under "Olrective Principles of State Policy" provides thatIts economic capacity and developm~nt. make effective provision. for securing .1<w:.IO~');fJ:lI". to work, to education and topublic assistance in cases of unemployment, old age, slcknessand in other cases of undesEHVedwant. The EPFO is one of the largest provident fund Institutions in theflnancral transactions that it has been carrying on.
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The organization structure of the EPFO is as follows:---_._-------_ ..._-_._------,
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The organizat\o.n functionS under the overall superintendence of theC,entrai Board of Trustees (CBT), a tripartite body" .••headed by the Union ~inister for Labour and Employment as Chairman.
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3. Terms of Reference3.t Paragraph '2 of the Employees' Pr!)Yident Fund Sche",., 1952 provides that all monle. petfainIng to the C'OfPU$
are to be deposited in the Reserve Bank oIlnd1. (RBI) or St.te Bank olInda or in such other Schedtlled Sanks ••may be approved by the Central Governmant and "'aI be invested. SCJbjectto such dlrectIoM •• the Cenb;aIGovernment may give from tIm. to tim•.
3.2 CST. EPF appoints PoItfotIo Managers for EPFO corpus who.,. ,.quil,cM~i~keal/nvestmenll a. per theinvestment pattern pmcrlbed by the MoL&E.investment guidellfl8$ =«~~ ,EPFO from /tme to tlrn. and thaagreement between t/It Pottfollo Manager and the EPFO. ; ;(: ; ; •. ':. ; : .'
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The investment pattern has graduaRy evolved to ~ greater,"~ty In Investm~~ oplIOfIS Iikct tnvestmeI/t8lnTerm Deposit Receipts. PubllCIPrivate Sector Bond$, IIId ~ i6ic:ked aec:c.tI1II8. ap*rt from Central arid St.teGovernment Securities; The EPFO appointed four Pottf9,Jq!Managers to manage it. c~. for two .eparat.tenures (2008-201111ld 201'-2015) each and fiv. portf01lJ'managera for thliiLenure2015-2018 with the objective
; . :n'i' ..of enhancing the performance on its portfolio and at ttie same timf('l8cintating comparative monitoring ofperformance. The EPFO has selected the following fivePortfolio Managera to manage the EPFO corpuS;
1, HSBC Asset Management Umifed
2. ICICI Securities Primary Dealership Limited '
3. Reliance Cap~ As,wt Management urriih,d, '. ~ : i'
4, State Sank oIlrx:J1~..; :~\f
5. un Assat ~",ement ConIP,t~1Umited
3.3 CST. EPF InteOO. to ~~ an E~ici,. e,udIt 0I~. done by EPFO'. portfolio managera. The ECA farequired to examl".. \I~ and repOit'W/,et;"fr the ~ managers have followed the iiwe.stmenI pettem.
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Investmenf·~ II1Id the'tenn. of agreeme'nl'iiItnd Into between EPFO and the poItfoIio managers IIId", ! 4{'", ':'
such dill., IfUdit cll~$ ••tmay N requ;,ed by EPFO from lime to filM.
3.4 As on ~1 March. 2015, tIie;(:PFO fJtiqa, corpus of Ra.495.125.22 CI'OfN III t.ce Value, DuIfng the finanCial yeer2014-16, (01 April. 2014 tJ.~t Malelt2015), the total Investment. t:arrIed out by the PoItfoIIo· Menagers wa.Ra.103,759.09 c:rore. (CoIum~E • Total 01Column 8. C IIId D in the table given below,)
(In Ra. CIOfN)
EPfI 326,613.15 71,338.82EPS 157,092.33 7,974.23 30,255.97 .EtJU 8,209.10 323.84 1,782.90Sf." PrcMdtMt 1,052,76 33.00 154.20FIIfI!I
Request lorftoposallor AppOintment of ECA for audit of investments don. by EPFO'; Portfolio Managers Pme 7 of 41. . . . ..-
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~~ , 2,157.88CUIIGrtIUIyFtindTotal 34,823.06 44,186.43 24,749.60
. JP~'n~Total number oftranaactJon. during 2014-15 for G-Sec and Non G-Sec ~~.u'~.ap(JfOXlmelely ww_, Apartfrom this the number of transactions In CBLO wa. approximately"". ,:~;;1), '
This document /s IIRequest for Proposal (RFPJ for the appointment of ECA for ~audlt 01 Investments done by
. EPFO', portfolio menagers, The Applicants that may wiSh to P~p.te In the $8ledl~ /NOCe•• must submit theirpropolala II.per the process defined in the document, , ;!!'" . . '.
~,t:' .. .3.7 For further i"formation about lheEPFO. one may vialt /he:~alte www.epn~ •. gov.inlwwvi.;.ptrndl •. com
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RFJquest for Proposal for Appointment of ECA for aucltt n~t1Vestments dohe by EPFO's Porlfolio Managers P:JqlJ 8 of 4' .
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• 4. Duties & Responsibilities of the Extern,at Concurrent AUdl.tor (I;~A). •. . .~.~:,:;..j\.\ ~. . -.,
• 4.1 The ECA. while conducting' audit of the fund of EPFO man~ged by the portfolio managers;"mu~t:I - ' •.
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4.1.1 Ensure that the audit is to be conducted.by a team consisting of one leader and at least two staff personnel.The leader of the team should be a qualified chartered accountant with at least five years of experience inthe field of Audit and at least three yeats of experience in the field oi P~ifOlio Audit The audit should becarried out under direct supervision of a Partner of the chartered acco4o.t~~lfirm if the leader of the Team is~~:.:::,..;.~.not a Partner of the Chartered Accountant firm. . ~~"tit>f.~';.'. .
4.1.2 Ensure that they are not engaged for audit of the same portfo~(i$.:"~ of EPFO for:any purpose otherthan the terms of reference contained in this RFP. .{~~,:::;~ ....."
4.1.3 Ensure. to the best possible extent, that the tearn le"1.f.l~:~ted to ~~b~l:i~\aUdit should Continue inhis role tin the completion ~f the assignment. ~~~)1-eason. If th~re is a'~l.W~-,in.·the team leaderappointed to conduct the audit, the same ShoUIc;t~~lb~ated to EPFO Immedlately.··~]~~?~.;
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4.2.1 Reconcile the Funds flow and Sank Accounts of ~~~&;~!!~.{«tfo~~OIlOManager(s) on a ~OnthlY basis.',~.~.'.~.'...' ..~~..."~"
4.2.2 Check the MIS from custodians of~~t,rjt'~s and repo~':~i5~uons, it any, on an Immediate basis.::·!~~~~~~~~~.·;:;~;:i~~~~~~~~.:... '·:~~~~~~~~l~·;~~>.
4.~.3 Check the receipt qf data and MIS ffQrn.Poi1(<)!!~:MC)"agersari(tr~~rt any exceptions to EPFO ..'::'~:~~:~';:'.'·~':::;;:~~;~1~;~:!~}!~..'\~Z~!~~.~ . .
4.2.4 Check ·thedaily transactions with the rfi'~ik~tdata a.mn~·P.9~.~.~viaMij~· .. -' ':{');"~'~"'~'.• =--,"::~~}. "~!::"::::::~"-",~:~:!:~~~:::,~::~"- . .'••••>.••...:.•••.~~ ••...•."... .~...... ~~•••••-:.~~•.., y,;x··~····"'·""'·
4.2.5 Check the cre~l:~.·::~f.~frngs;~~t)h!!·lnvestr1i~~:@~j:· daily b'a~li;::~nd report any downgrades or negative/:.,~.>•.._~<.... ·~x~,.:,~·;. ;.;....'-;:%':<...!.•
watch/OUtlo~i~{mfti~dlateIY. \@~ ~~"4.2.6 To examl~_t verify wh~~;llhe portfolio '~~ll:~ers have followed the investment pattern. investment
guidelines an<f.1l..iiverms~·o.f~rijfiEmt!e~!.r~ in~})etween EPFO and the portfolio managers. .".$~S'.~~ 'f,..:;"'.•ft.~ ).;':~":.:':':';<!':-:~"!"!*~;;:"-"." 'a:~1 "
4.2. 7 ..)r.o.:~l.aij;iUn~ethe '~~1tt transad;~l~AAfai~bY the portfolio managers on day-to-day basis to ensur~~:;t:;::::::~;::::~~*::.:::::::!::::;~:;:::~;-, - "'.!:~::~<., " ' ." . . . ' ','
.4~~i~<triat the 'sai'i't"~tas pij~~!:.attern as well as the guidelines issued by the CBT, EPF. Also to point out..:}~:~~~~..wherever devlat~a. have '6ein::made.'~~:;mrh:. . ..~~~;~~\. ··::q;mj~:>:· . ... .4.2~~:;@:]~ hl~h"9~t any pot~~1 conflfct;of interest Issues such as Investment of CBT, EPF funds. by Portfolio
'"<Managers In TORs oMfta banks under same management group. '':::{~i~:;:;~ !~~~;~I~ _. '. .
4.2.9To···VW~~:.whether t~~~~terest and maturity proceeds are collected promptly and re-invested as per the~.:.!.:~x. .'~";"~!.y.:.
provisiOti~:fm~d~d~:~e Pattern of Investment Also to poi~t out delays, if any, and the causes fot such: "::~$:;::::::';::::>:;/' •
delay. ..::~~:;.::~~;::;. .'.:::. ::..~.
,
4.2.10 To verify whether the incentives. wherever receivable from the institutions, are collected promptly and
invested as per the prescribed pattern/guidelines.
. • 4.2.11 To bring out case: of undue delay in the receipt of .incentives .••i • Requ~st for Pr~posal for -Appoi"tm~nt of ECA for audit of investments done by EPFO's Portfolio Managers Page 9 of41,'-. -22.- ..
•,/
\
4.2.12
~
To verify, from the daily transaction details, whet~er the charg~s are levied correctly by the Portfolio •Manager as per the terms and conditions ~~d to report anyaxeess charges levied by PortfoliO,.
Manageron a~count of splitting up or lnvestmentdeals.4
.•
.•
4.2.13 To verify whether the funds were invested promptly by Portfolio Managers. If the funds remained un-'~
invested for a significant period, then to assessopportunity cost/benefit due to delayed Investments for un-
Invested period. • .,~1~~~\\t:. f4.2.14 To verify whether proper records have beenmaintained In respect .Qt:!~{firansactionsand contracts and to •
. " .,,**~::::!;~~'ascertainwhether the records are updatedcorrectly.andon t'm~~l~i~:.,' .~
""I""~'ff' '~:;:"x.
4.2.15 To verify whether all shares, securities, debentures and..;?:.~~·~fJ~~es~~~tlt~~~:been held in the name oj '.
Central Board of Trustees, Employees' ProvidentFun~.(C·i;{T,EPF). '·:':~~:~;:h.. ..«:-;::>~~::~'. ":::::::~~:::' ~ 4.
4.2.16 To verify whether there is a reasonable system~~im~ation at proper lev:~t~~~ere are ad~lJate *Ii
systemof internal controls commensuratewitt:t;~~mum and valu~Mtfinvestment trari~~~r.s; ~: ~. ...••••.•,~ .~-::,'=:.... MV.·.·.·.":::::::.;~.;:, 4~::~::::~:' ":::~N' e4.2.17 To verify whether adequate records are kept in si:ip~~~~f e~.9t\;tiW'~tmentdecision. ".<
··:~!~~:~;:~:::".:~:~~:'i:\;:~::;:~· ~4.2.18 To ascertain and report whether t1J~::m~estmentshavff~~~¥~'been made at the optimal market rate. The
ECA will look into the price on the?d~t~:of..investmentaiid\::~heckthe proportion of investment closer to •. -. ':~;~:~~:;<'~~'::~:;;:;~!~~~~:~~!~.~-,-. ..!::~~;~:~~:~::!;;.
lowest,medium and highest rates. \:::;:~. .··::··;;:~:~tt~:::.;..' ·::;;:~~t> ~!~;:::}:~.:~. . .....::!:~~~~~:~:.... .~!~:!~~~~». 'if;
4.2.19 To verify whether investments are mad~::~~.the hig~~~l~~~l\~,l:)leyfet¢l& the particularperiod of maturity. G~,~;:::..~~l~'t~::~.··:{h~. ....l¥f;l}··~:~':;:i:~mf}~~~',' .
4.2.20 To comment ~~:~~R:~~.fnal:~~~~f.Imechan{~{;~r.~.elher the syst~ms are adequate to avoid any interna. 4• frauds. If n9.~i:~~~p~esta sti~~.~.lemechaniif: after discussing the matter with the Portfolio Manager
concernectt4ir.·:~::;: .~~~~f: -,~~ , f!~~' ,:~::"",,:, ":v·":·:".
4.2.21 To examin:~~\~{~ t~.~~t.l.lJ,re\~~r:~~% -,;~\~ken steps to address issues highlighted during the '••.,;~~~~~J.Wi.~reVie~;%~~~l:~IiOManage)'$:~~~~~ise. 4
4'l~~~-::bri~;~~t?).!?the·;~~$t~hlch comes to notice of ECA during the course of audit. . •,,:~:~~t~~~::::- ":;:;~~~~~:~;~~.'{~%:§~~~~::~::!~;~~~~Special care shal~;~\-,takent~j~~~;;l,minethe cases of tax deducted at source and the receipt of refund for ~
.:<\t::t~\t~.::J"esame or the ~~l~~.of TOS\:$rtificates in Form 18-As.for those cases. The details may be worked ou. ••.' •••..•••..-.... ~ v-;.:.- .•:(t9(.\I:lecases In resp~fQf which no refundsor TOSCertificates are received.
4.2.24 ~;f~~~ilprs' have J~Jsure that a" the guidelines/circulars issued by the Government/CBT, EPF frolr 4.. '-~.~." '~~§"~' >
time t~{~~ ..are.:f~'f6Jj~d and the various points mentioned in the scope of audit mentioned above are 4looked intJ::;:~t:jj\:~/}¥:-/· ~
• 'fIJo
4.2.25 The Audit Report shal~also identify shortcomings in the existing set up, which are to be taken care of by 4issuing suitableguidelines. -.
4.2.26 The concurrentaudit needs.to be ca~riedout and Report submitted to the EPFOon a monthly basis. Th taudit report for a given month needs to be submitted to EPFO by 15th day of the subsequentmonth.:
..
-'- __ --UB••aQ..,u•••..•e••••s.UQL2ropo.saUOLAppointmelltoLECA fgc audit Of investmeAt. ooAe by iPF~Managers-Page 1~ of 4. ~
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••••••••••••••••••..( ••
4.2.27 In Audit Reports. audit observations re9ac~ing Pension Fund, Provident Fund, EOL! Fund. EPF Staff
Provident Fund. EPF Staff Pension a~ Gratuity Fund. etc .• should be categorized separately as separate
. accoUf,lts are maintained by EPFO. ¢Onc:urrent Audit report on Pension fund shall be bound separately.. .~and a consolidated report on all other funds shall be bound separately for submission to EPFO.
4.2.28 Other than those mentioned above. the External Concurrent Auditor may be required to perform any other
audit related activity as required by E~FO from time to time. ,.;li\:."':::':i:~-,;.;.,
If appointed aa ECA for the audit of investments made by EPFO·S.,~f~ii8"·Managers. EPFO may verify the
records of audit through an external agency. ,for which theE~,~~'~~:~~provide necessary support..,,*'S.,. ..:::.".~.:~;:;~' "':~{':"::"
. . 44k$$t¥'~' "W%''f&.{:::,<~:}. ~1:~~·~\~!ti~ .=,~:~~. ..:::&. ~:~~·~$1:t:·.. ,,:.:.-~;::,:-:-......,. . .:;.!•• ".-::::~;~~~:~~:~;~;=:-... ..~
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4.2~29
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R~uest for Proposal for ApP9intment of ECA for audit of investments done by EPFO's Portfolio Managers Page 11 of 41
2.L~·::···.7,·. "., ... ,.
"
5. RFP Process
•,•••'f
"45.1
s.
Steps in RFP',process4
•5.1.2 The Applicants may respond to the RFP by submiUing the required Pre-Qualification, Technical and,Financialbids to the EPFO as detailed in 'Section7 of this document. "'i~ff~t;, <. ' .. 4
5.1.3' The authorized representative of the Applicants may be pres~oi:;)~~~~:~:time of opening of the Pre- •• • a a _.:, ~:~!~~;~;~~~;:::~;:~.
Qualification,TechnICaland Financialbids. .~::::::~*~{'··::::'.;;~:h-,<§.~;;~~~;~:'.'.":!~:W£~f~!~;A
5.1.4 The bids must be submitted In a sealed envelopeconsistlogoftwo (2) cOpj'~~::Qfall the bid documents (I.e., .,. . ;:::*:~::::~. "!!:~:::~::~.
two copies each of Pre-Qualification Bid, TechniC::h~iWa'nd Financial BidF~ffl~~:.~gsoftcopies of Pre- tQualification.Bid and Technical Bid In two (2) CD~~~~?i.:~:V . ··:~~t~:::"..' ·-.:~~l~::·· . "~~~~:$~~ 4
5.1.5 The bids must be submitted in a sealed e:n~1~~consistin~:;;~h~hreebids i.e. ·pr~~.atification Bid,Technical Bid and Financial Bid. ':~%~~~:.,.{d~~tl;;::··' -,,::::., 4
·':~:;;::m~~~;..d~~jtf;'· •5.1.6 Pre-Qualification,Technical and Financialbids should b~;$ubmitted in separate sealedenvelopeswith each
..:$:~;~:?:~:"'- . ....~~:~::~::::;~:... . . - , .envelopesuper-scribedin bold a&'~'!l!t~fQt:t~l.ifjcationbid", "T~h.r)jcal bid- and "Financialbid- respectively.
.~~$;...~:;:~~~:r:~~::::~;,.' '.:;:~~~~~~:~::~:,_ . .5.1.7 TheApplicant's'name and addresss'l\~~:f.e'riif~6~(~g~.the r@~~:~~~side of all envelopes. . C. ....;..... .••. ~.,,~ ~,... "-,'.'., '-",
5.1.8 All the three envelo~,~}~~:e~ldbe Plac~l;'!R:,ane~¥,~Pi~~ij~!~led;:~hd super-scribedas ·Confldentlal· •Proposal for ~~:git~tfui.fftj;8~External{$:~1$Wient AuCf'ft~?l a{ong with the Applicant's name and 4address, an~J~WMlme of th;(:~1!T1aryal'l«(~ndary contact person must be provided on the right handsideof th~~~tr~d envelope. .i\~ '..'!~l~~;:. .. •
··*<:~1:~~.. ..~:;~_:~{ ··t~!~!:;: .- '.,~.:-::~,~.:~~ .w:.~.:..:,~.:,;~ _. -!t!o>'Yo? ••5.1.9 Theremust ~:ij~Jadex ~.tJti~t~fQlijQ\!)''J.}?ttheP'iPsal detailing the summary of all informationcontained ~,,~d~~l~~t~~~~~1."::\~tt\~\~\;i~[;t~;:!:-'"'" ""'!;';:;::\;:::X::;;:~::'7[}: :" .., •
~J~l~WWfpages»o(~~~!,~{~~a~m~~ -,be serially numbered.The currency of the proposaland paymentsshall be in 4·~~ttt-:;·IndianNatiOna"~~~~~sonlYi:t1*~::::.. 4.'~'~~::~~:~" '.;::::~~~::". ··~::~!:~r:::,. :'~.f~:·t~1:~rh~proposalsmat~~~~t~be hanctcteliveredor sent through registered post or courier. •
5.1.12 'E,~§R witt not acceph~~livery of proposals by fax or e-mail. Proposals received in such manner will be 4tre~l~t~ Invalidal'\~l~~ted. '
~;':::1~;~~~~:~:...~::~~r:~::::. 45.1.13 THe AP?t,IOANTJytOSTENSURETHAT THE BIDS REACH EPFO IN TIME AND NO DELAY IN POST
OR OTHE~j$ft WILL BE ACCEPTABLE. RECEIPT OF ANY DELAYED PROPOSAL WILL BE ~
5.1.1 Submissionof Pre-Qualification,Technicaland Financialbids by Applicants.
f
STRAIGHTAWAYREJECTEDWITHOUTOPENINGTHE SAME. •••~
4Requestior prOposal.foF.~EGA-fer.,atJdit"()f1no/estmefits done b;EPFO'S ';;;rtfollO M;ageT!r"~~1nf"2ti ~
5.2 Completenessof bid document,s -.
-'2'C'"',.'.' " .., ;1, ;-~;, .
,:,(,•t•,•••• 5.3
•••••••••• 5.4
•••• 5.5
••••••
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5.2.1 "A ,Committee of officers of EPFO constituted for the purpose and consultant appointed by EPFO, will open...
arid evaluate the contents of the documents received to ascertain that all documentslinfonnation.,'
requirements are provided In the format and the manner specified. .
5.2.2 EPFO mey, where desired necessary, seek further clarifications from anyl all applicants in respect of any
Information provided in the RFP.
5.2.3 The Applicant must fumish clarifications within the stipulated time fram~J~j'~ng which the RFP submitted by
the Applicant concerned will be treated as incomplete. .~:&.i.iW'. .. .\::~~;l0~g~~£:.,
Evaluation. of Technical and Financial bids .';:::~::::::::?::::~:(~~::.·::~rili~~~1~~~1?:·"'~~:~~~~it,;?~
All Applicants, who qualify on the Pre-Qualifications bid criteria .~~ leii'd'down in $Ef¢~j9.J:' 6.1 would only be furth~r. . .'.. ..,,~;::~::~~:;. "~~::!;~~:::""
evaluated on technical and finanCial bids as follows: ..;;;::~:::::::;""::~:~:'::':::.. . . ...;:~d~~r:;·' ··::::ti~i;h:,<5.3.1 Technical bid .:;::t~~~::;c '-::~:;~:::'k<;
The Technical bids of all th~ Applicants will b~\!!~~~ted as ~rt~~~criteria Specifi~~~~\ittion 6~2of the
RFP.·:(~;;i~1t.§~.r.ir.~::.f~ ..·~\\?~~::··5.3.2 Financial bid <~..::.:;~.H.~.~;,..,:...:.:...:.. .:;:~::;:".,....;~~::.-.::-::::;','; "'~~~~,l~I~~i~~::;,
All Applicants, who score at least 65$" in"th~:T~nical Bid ~~~,pnly be short-listed for the evaluation of
Finan~ial bid. .+:~\~~[~~\' '~::~·;::·~~;,;}:}.\t::::..• ";::;~:::\t~~\\\:lt;:, _5.3.3 The final evaluatiory;~Qr~J?~_based on ~t~g.~kand·fl~.i)s;~J,bids as explained in Section 6.3 ..
, ._~:::,}{~~~:;:x~;~;;;7:::~:~~~:~%:., '::~~~~~~!:~::~:~m:~:*~"...:.::;.;:~:~~.;..5.3.4 The proposal,..~~~lrbe valid ~O~,period of ~~~.~6lmonths from the date of opening of the Financial Bid.
...~~~~:~:::.. ~;;~;!~~;~ ~::~~:t~..Finallsation of the;.~Ce;' .:~ "~~-:.<
':;;:i::'::::;:;;:-. ;.&-::~ ':~{:::~:;-5.4.1 The successrJ~t~~t~.~M~f"'~~k.f:~. '~~Jhe evaluation criteria as prescribed above and the
5.'4Jtl~~~1i~'~~!!~ie~CA~'~~W:·"':i:IU~\:~~f()rmed.. "':'::::':;~;:;;¥;;~;~p'. ··~~:Z*~~~~~:... ' ,-.;-:.-
rlgfl~;!~tg~ncel the appointment process, call for are-bid without assigning any reason
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.: ' ..••.•.••••_ ••••,-•.•.__ •.••... ~••,_ ""·~_l""'~.•_.· .,J,,-_ •.••• ,•••••...• -
': 3.-, .,Pi'e-bidConferena.t ...~~ '1/}l,,- ';' .: : '. . • . •
last date for receiptof bid21" June 2Q16lTuesdBY)04111 July 20J!HM()nd~Yi04111 July 20 IS (fl.1Qnday)04111 Jyly 2016 (MOnday)
._.~_ 14111 ~_!J.Ix.asu§(Thu[$,~~.Yl
-4.5.8.
Op~!n9 of Pr~QUaliflcationbidsOpeOlngof T~ bids for eligible Ap,*,ntl
• Request for Proposal for Appointment of ECAfor audit of investments done by EPFO's Portfolio Managers. Pag~·-;-3-0-f-4-1••• .' .-, ......•..,.:,',,' . ...•..
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• The EPFO reserves the right to change any dateAime mentioned in the schedule above.
..
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Request for Proposal fQr~of.E.CAJ()I:.<auc;~)Hfwe~Aeftts-OOtf\e'""'t"EPFe'S"'POitfullo Managers Page 14 Of 41 4
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(,.••••. "i~.;,;· 6. S'ld'··'·:e· ···v,a't·u··"'a·"ii,·ll.n',·j*Ii:r"it·e' ··r·".··a".·' ." .', ".' "~." .'. :: ..•.'..'•.....•:.,.~,..,.,~,,~!»..•....,..".:,..";:""~t.,":;" •••,.;;..:":·.~c,.:..,.••" ...'.:,." ••,••'...'....•" .•••• ~. . "u ""~ . ~ ',_ ...~~~~m..~"''io<_. 4"0 .~. __ • --..: x.. ', ~,:.-'.. ;~,:_- __.':::.3_4~~~k.~~r<;~~;,',f;~·.~~~i14fj,~;~'-'.(~~~.,-,o(·\4[..~::J.;:::'i.~,':~::i;-: ."\::fh ..v;,•.~:;.:,..•.···~~~},·:..;·;::ffi:4_~~:~'f<?J~-i~;~.~.<;-'?<~..
• 6.1 The Pre-Quallftcationcriteria for. selection of ecA for the EPFO'sP~io ManaGers Isas follow$; •
I
••••••
• annual turnover must be calculatttd on
• March. 2012. ..;::::~~~~l~l~:;
••••••'.•••'.••
,
evaluation of technicat proposals of the applicants shall,
"
Number of dlents
accoOnfS ofPOrttOlio ManagerSoi' . ,Of at'least Rs.5.000 Crores· sum of number of diems ~,Of ~1 ¥arcb.2016;,31Matdt. 20"5;31 March2014; 31 March~13 and 31 M~2012
SectIon7.3.~ 15%'.
~". Request for Proposal for Appointment of ECA for audit of investments done by ePFO's Portfolio Managers'- .• Pags15 of 41
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superannuation funds#Annual turnover aa on a given date must be calculated as the sum of ~(I.i!f(.M.;.t·sI9Rannual tumover must be calculated on the foHowing dates; 31 MBICh.March,2012.
6,2.2 Qualitative criteria
..
4
•t4
•••««••«••
e •"------------------
•44-'-"-----'" '", '-~~--------------.-----......•..--
~ __Re9Y.Utfotfrgpgl5al fo[Appointmen~of ECA-fot--audit-of-ifwestmertts-done-byEPFe's Portmlio Ma"age~'Page fl3 or-4T' 4'-\ i_") Jt
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•• 6.2.3I••,"•18•••••(t
•
Evaluation and scoring process (Please note that the numbers used! in this section are,for illustrativeI
purpose only),':
••
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";:•.•.;'~'",'::-.•~:';';',~~;~~~:_9;.~;~~.~.~~~~-~'.:'~':::.~\i!.~'~~~~.;;::-:':o/~{.::..'··>·:o~e7,~',:~.U:;:~f~)i';.();64i,.
, .
••••••
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Request for Proposal for Appointment ofECA for audit of investments done by EPFO's Portfolio Managers Page 17 of 41•.' -.." 0 -'
Table 3 (Qualitative parameters evaluation)","
••••
- ...
44
•~
4444t4
•44
~ "~_~_R!.9.~~stfor ProRQ!al for Agp'Qin.tmmltaf..ECA.for a.lditoLinveStmen~F()!5-Portfofio-Managers Page 18 'ot-41 •
on each parameter relative to thffl, score, , during the evaluation for that 4
m~xii1J,um"score is 4. Applicant 1 would therefore have a score - 4~"(ll" c'l/ctllatli(€l!ilallive 10the best score. Applicant 2, for instance would
. ..
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••
-.31~:.:. ;'. .,---~..' . ~ ~. , ,," '"
, "
) , ,i' ,:'
;:,,• 6,3 Overall evaluationscoring
,
•,,,••••••••'"" Note - Only Applicants a munmum score for the evaluation.
In arriving at the final score; the scores for each Bids are calculated separately.•• The scores for each Applicant. are scaled relative Financial Bids.. The best scores for
the Technical and Financial Bids are the maximum 01 the investments) respectively.• E.g. In case of Technical Bid, the,Jl1a~iroufJJscore is have a seore of 1 and the scores. of all other Applicants woul~ ~!:l~l¢'iJ1aj~~rft!~,t~e to instance would have a score of O.74••. (0.7010.95). In case 01the FmaneJal Bid, thft:mmlmum Applicant 3would therefore have a score of 1and the'
scores. of a/father APplic.'11~'fijuld be ca/~~!i~.~. relative best score. Applicant 4, for instance WOUldhave a score• of 0.50 (500001100000)~l l flnal evaluat'9fJ.fif each 0 would be demeon th, basis 01 th~lr weighted average. score on Techn.ical and ~'-~/tQf!lal BIds.,.im~, ..Jfl9!'.nica/ 0 Bids Woul(l have a weight 01 80% and 20"• to:'. Iy ':'~~~" .•.~~.«...l*:••0 'M'" 0 0 , • "respec ,v8 . . ..~~ ..;~;:;:.!~>::~'}~~~.!.:,::::~~:~~"1:~:.:-,,~.. .:
~.v;-:~:·:~:·.:·~·."" "~~~~~;~:~:~:~.'.::~;~~:~:~!.:;::!~'~~·····:·:::::-~:~:~:~~~~~~;;;~~i!;:>"'. "Worlcing fOf.f.:e.P!!.~~1~;~:"ff;:J~O%*(J.: ?:1..tf-.OOA "1.00) =0. 79 "o:'••-:••~;.:~:~"~¥~'1;;~~~0
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7. Format 'Of Pre-Qualification, Technical and Financial bld, ... - <h 1:: ....
7.1 Documents comp~sing the proposal
7.1.1 The proposal submitted by the Applicant shall comprise the following documents:
7.2
Sr. I PI' '- '," - .: I Supportfng d5lcument: :~ . Remarks if I Annexure, art cu ars " , '. ,. " ,;
No I : 'Submitted" ' t anv' i No.·.··'f .•-'
7.2.2
Sr;. No~ Supporting Oocuments submitted!)! Remarks In ant'I Annexure No~
7,2.3 4There must be at least FIVE (5) Qualified Chartered Accountants working as fulltime Partners as on date of. . ~application - Undertaking from the Managing Partner or equivalent official of the Audit firm certifying th ~ ,.
same. Refer section a.5 for the format of Undertaking «4
__ . ,_, .. , 4~--B!SY.UUQL£ro~ for AppointmenLolECAJor auditot..investment8-done-by-e~foIio-Managers--Page-26 of 41 C
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iii
••••••'\j.•••• 7.3
••••••••
7.2.4 Nurnb~r of Partners and detail profile of each partner with membership No. as·of 31 March, 2016 to be
stated~
7.2.5 The firm must have at least FIFTEEN (15) other accounting staff rnArnh •••r..date of application - Undertaking from the Managing Partner or eQ\JIVCille(1lt-,omciat of the Audit firm certifyingthe same. Refer section 8.5 for the format of Undertaking
7.2.6
7.2.7
Basis) :Of the accounts of PortfolioUndertaking from the Managing Partner or AI'IIlIIVa'lant
section 8.5 for the format of Undertaking
State details of audit conducted inJht.,area of Portfolio M'lal'i;~gement~::!:~~»~:::~-.,.
2011. List of major clients with the'~q~t~r~19t~~tivity nArl(]ll8!n
~~!~~l\.~..:~~~:~~~~~~::':.'"\ • ."~ ~ < ~ f "sr,; No-~, Supporting DocumentSlsubmitted· : Remarks illany : Annexufe-~(T";
7.2.8
functional offices at Mumbai & Deihl having responsible offICials as onIfttt,,,,,rt~lltinn"fr'nrn the Managing' Partner or equivalent official of the Audit firm certifying
sec1tiQ~:~.5for the format of Undertaking
Sr. No~ \ Supporting Documents submitted I RemarKSInani •
":::;:~:~;\~;;)t\~~J)t"::::"Technical Proposal FormatThe follOwingquantitative information is required to be submitted by the AppliQants:
7.3.1 Number of years. of continuous operations as of~1 March. 2016 -Undertaking from th~ Managing Partneror equivalent official of the Audit firm certifying the same. Refer section 8.5 for the format of Undertaking .
~~-------"""""--~-----------~--'---"---'-"----'---'--'--'~.... __ ....._ ... -Request for Proposal for Appointment of ECA for audit of investments done by EPFO's Portfolio Managers Page 21 of 41
:.... ,'; .
, •"-": -:.'Numbe~ol'lear5 of continuous operations' ,
7.3.2 Aggregate AAUMacross all accounts of Por~olioManagers (whose.concurrent audit is done by the firm) :" (sum of aggregate MUM as of 31 March, 2016; 31 March, 2015; 31 March 2014; 31 March 2013 and 31' C
March2012. Refer Illustrationgiven in section7.5.1..~.;:~~:~
.,:,:<ti\\:\'::}~\r~·
.~$~t~\l(~\\?(\~~l~j\jt::.. CExperienceof the firm in term of financial years as of 31 M~fC'ijf2016in ~n~ent audit of the accounts of •
Portfolio Managers having turnover of not less tha~:~::~~#toooCrores - JMt:_}ng from the Managing .tPartner ~r equivalent official of the Audit firms.i\.~"j~gthe same. Refer S~~\~..for the format ofUndertakmg. ..•. .~~.:~...
:, ..;!it.tiirc~:.;/;~;;'l~~~'!~~> . .,,~ :Numberof accounts of Portfolio turnover '6r~\Jeast Rs.5,QOOCrores .•sum of number of 4clients as of 31 March, 2016; 31 2014~q·t.M~rCh2013 and 31 March 2012. Refer 4
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7.3.3
..6pedence;(frwears) :
7.3.4
....
. Na. of partners ': 1 CumulatlvQ oxpertcnce of \ :' . Rema~ks.lf anyI the partners (In years) I "
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Profila of the Partners of the firm
Format for profile of Partners:
7.3.7 . are chartered as of 31
P::arfnAIr.:nr e:&~INa(lentofficial of the Audit firm certifying the
7.3.8 Business Continuity Plan & Disaster
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7.3.9 Average experience of the proposed execution team in portfolio aU.dit as on 31 March,2016
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·App'M::~mthinks would be worth mentioning in the proposal (nc..: 4~~m~~~:~~:~:.·.::
7.4
4Request for Proposal for ApllQil'rtmenLoL~tm~by-EPFe's POrtfolioMamIgl!rrpsge 24Of'Jn •
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Illustrations for calculations7.5.1 illustration for calculation of Aggregate AAUM
Step 1: Calculation of aggregate AAUM for a year ende4 date (assuming that the audit fir~ is doing audit ofPortfolio Manager 1 and Portfolio Manager 2)
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•••••••· •--",< •..-~ •···· ••••••••
2014; 31 March, 201~ and 31
Year ended date Number of accounts of Portfolio Managers having turnover of at least Rs,5,OOOCrams
..,:·.~t.M~:~Q1tt~:~-,'31Mateh;2(j'15~~~·"'··', ..31MareK 2014' " .31 March. 201331 March. 2012
Sumo' number of clients
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Request for Proposal for Appointment of ECA for audit of investments done by EPFO's Portfolio Managers Page 25 of 41
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8. Formats for Covering Letter anti Clarifications, Deviations and,.', .. . undertakh19 : " ,
8.1 Format for Pre-qualification Covering letter
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•She Me NarayanaQpa,e,dditignal Central PF Cgmmissioner-I lFMIMC}.Employees'Provident Fund Organization (EPFO),
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•For and on behalf of (lnsert company name)
Authorised Signatory., -.
'. ReQUestforPtoposaUou\ppoil'.ltment of eeA for aYdit.~ iAyest~~ne by EPFO's POitfolio Managers, Page 26 ,Of4,1 f
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• ,•• Ref: _
• Date: _...------
Technical Proposal Covering Letter
(To be forwarded on the letterhead of ,"e Applicant submitting the proposal).
" Sh, M. t:larayanappa,•• Additional Central PF Commissioner-I (FA&IMCl., Employees' Provident Fund Organization (EPFO),
• Bhavlshya Nldhl Bhavan,• 14, Bhikaiii Cama Place,
• New Deihl· 110066
..
• Further, the authorized signatory is vested' with requIsite powers to furni$h such lelter and authenticate the same.
•\, .'R~qUest for Proposal for Appointment of ECAfor auditof,invest":'entsdone by EPFO's Portfolio Managers• Page 27 of 41
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Yours faithfully.
For and on behalf b~_--.. (Insert company name)
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Authorised Signatory
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• 8,3 Financial PropOs~l.covering Letter
~ :(To be forwarded on the letterhead of the Applicant submitting the proposal).' Ref: _) Date: _
~~ Sh.M.N_gpa.III 8ddjtional Central PF Commissioner-I (FA§,IMCl.
J' .Employees' Provident Fund Organization (EPFO),• Shavlshya Nldhl Shavan,
, Having examined the RFP document, the r8L;l:tIUl,'•)•provide the services as required and outlined inPortfolio managers~
• To meet such requirementsrequired by the RFP••••••••
..
proposal or any' part thereof, including its schedules, and otherEPI;:~:tSi.lrua acCuJ'alte.and complete. This proposal includes all .information necessary to
in whole or in part, mislead the EPFO as to any material fact.
trI~~:nl.l~sertmOJIVIOJrJlJl.authorised tept8sentative's name) wiD act as our representative on our behalf andau~noli~I,J~::,!~I~~n~:ul';tloIAproposal.
~, .Yours faithfully,
• For and on behalf of (Insert company na~e) o..'
••Authotised SiQnatory .
Reguest for Proposai for Appointment of ECAfor audit of investments done by EPFO'sPortfolio Managers Page-29 of 41,--. ," '-. ", . - .•• :-. :
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8.4 Request forctarifications
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··~~!:~~~;:~I.. .!f:l~1I am authorized to siQfu~nd ~~~¥tathis undertaking on behalf of the External Concurrent Auditors for submitting a 4..•..•.;....... ....•.•....•!:.•proposal pursuant to tA~~:~ij~f' for proposal issued by the Employees' Provident Fund Organization ("EPFO") for •••appointment of External cti~G~t Auditors managers for audit of investment done by EFPO's portfolio managers. •. I. on behalf of the External Concurrent Auditors, solemnly affirm and declare that as on the date of application:
a. The External Concurrent Auditors has <Number> of qualined Chartered Acco\,mtants working as fulltime Partnersb. The External Concurrent JltKiitors has <Number> aecountinq staff members e:g:luding fulltime Partners, who are •
chartered accountants .c. The External Concurrent Auditors I any partner have functional offICes at Mumbai & Delhi having responsible ,
officials .
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d. The External Concurrent Auditors has <No. of years> years of experience In audit on (Concurrent Basis) of theaccounts of Portfolio Managers having turnover of not less than Rs.5,OOOCrores as on 31 March,20'16
e. The External Concurrent Auditors Is having the <No. of years> years of continuous operations as on 31 March,2016 .
f. The cumulative experience of partners of the firm is <No. of years> as on 31 March, 2016g. The External Concurrent Auditors has <Number> of qualified Chartered Accountants working asfulltlme Partners
as on 31 March, 2016 .h. The. average experience of the proposed execution team inproviding the portfollQ,.audit is <No. of years> as on 31a Marth, 2016 .~t:}~w:.,. ..•§,':f«~
•• ,.-;~~~:'$)r-f$~ .~;. .~.;:::~:!~:::~.••. Solemnly affirmed and undertaken on the day and year herein below written, ..~t:~~W:~@~:::..•• .·x·.'.·~!Y"~:-~x·:-.
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9. Terms and Conditions f,orRemuneration & Tenure
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9.1 The concurrent audit needs to be carried out and its report be submitted to)he EPFO on the monthly basis, ..Thfi •remuneration for carrying out the above assignments shall be paid on quarterly basis. However, if auditors art'required to travel outside Mumbai as required by EPFO, TAl OA will be paid at the rates applicable to Central, 4Government 'officers drawing a Grade Pay of S:9~Qo./.PM in respect of the Team ~~ader and at the rates applicable •
, ..~:;~~:~.to Central Government officers drawing a Grade Pay of 8.5400/· PM in respe:t~&\W~t'other members of,Team. 4Payment of audit fee and TA I DA applicable, if any, will be made on qy:~ttijilYbasis subjected to receipt of alt
. .';!:"::~;~~;~;:::~:::4.' , .I:monthly audit reports for the quarter.~~~p~::::-:~;&:~:~:~,. ~THE APPLICANT ECA MAY QUOTE THEIR FINANCIAL BID IN t:tl~:~u~{~ik.MONTH IRRESPECTIVE OF "..THE NUMBER OF FUND MANAGERS ENGAGED BY EPFO...;~§lt~~;:.,~~:.. ·'~::::~;:~~\\i):::..
. " ,.;;:~*::~::~:~., . .~:;::::::;::;:..TaxesapplicabJe on the services rendered by ECA win be~g{~:byEPFO. "';:"The tenure of 'ECA will be for three years from date .9ttt~~·ntment whiC~ will be extenda~t.w~er on mutually t!;agreed terms subject to approval from competent autho:n.M;:EPFOmay r~mQve the ECA in case~ItiiJervices are not C-found satlsfactoly. .",.'~~tli'Y ", •
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: .: R~4~illQr ProQO.Sa11or7Appoinlment.oLECA-.for~iAYestmentsdone by-Ef>F<Ys-PortfOtRrMa1l'agers-:Page-ltOr.rr· ~
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~ Patt~m of investment. as notified by Ministry of Labour & EmplOy?-,ent vide notification No. S.O. 1~~1!(E). dated 23 Apnl.
• 2015:\
0;"'1 O~· Investment Guidelines for Investments by FundMana'ger$- ~ ,- .,,', " ~., . . .....,. . -:•..;,~: ',:-'" ::~-i, ',. ·~l"":.i~·_·
• 10.1 Investment PatternJ•••~ ':•••••~
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,. an -OUtstanding maiUriiy Jatl~a~t~~~Is~'bi~so"th. '.. ,'" ". and OeveIopment.lnte~tfo08f.~nce~Corporationandtbe
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Irifk:I!lIjO\jmifljlHt have~f.ited bym6re than two ratingagenciel, thetwolo.west.Oftherating'shali be eonsldeited;
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10,2 Fr~sh accretions to the fund will be invested in the permissible <Jategoriesspecified in this investment pattem in a 4manner consistent with the above specified maximum permissible percentage amounts to be invested in each such ,investment category. while also complying with such other restrictions as made applicable for various sub-
categories of the permissible investments. .tt
•. ReqY~Prgposai ~()#'ECAklHudtt-cf-tnvesbllents-aone-byEPFCYSP-6iffOlio1Jli3nageis--pag'e3a~f4f' «•
-It"_ 10.5 Turnover ratio (thevalue of securities traded In the year/average lfaiiu.J~~~#olllo
and at the end of theyear) should not exceed two.If for any of the Instrumentsmentioned above the rating faIlSt~'~ the' Investment grade•............,~~... .
prescribed for liwe$bnentIn that Instrumentwhen it was~~~!)~~.as confirmed by ol'iEt:CiJeditrating agency, theoption of exit shall be considered and exercised. as.• p.i:~~~riate,in a manner that is in interest of the
.x):;;$.;~~· .~subscribers. ~:~~t::::~ 4-"%,J~<
& •• ~!~~;.. .....:,;'".••~::t~..10.7 On these guidelinescoming into effect, the above prescn~Jnves.tri.f~nfPattern shall be achieved separately for
.~~~:!::~'".~:~:%~:{~i···such successivefinancialyear through finEllyandappropriatept~nij.ipgf
. -;;:;;';;"~:"'. ":::;:~:::..-10,8 The investment of funds should be at ai'furT~ngt.h,keeping sofelV;:\Q~beneftt of the beneficiaries in mind. For
instance, investment(aggregatedacross sJti~~:f~:AA~:t.hl~~/,:~rganizati~~jJ.~.~~ribed-herein) beyond 5°", of the fresh: It accretions in a financialyear will not be mad~~Wt~~es~~fftil~:~~;:~-,compfftl~;~ganization or in the securitiesof a
'" - company/organizationin ,~W~~~~~~t.~compa~%~~~~ft~ifh<Sk!~l~\~g::~ 06~of the securities issued, by a fundcreated for the benefitA>.f.:;;,tfie·employees of thij:.:n£$.t:~:t!ompanyI organIZatIon, and the total volume of such
•• investmentswill nq.,:;j~~~ 5% Of::f~'.:\~.,total ~~~~~f the fund at· any time. The prescn'bed'process of due.-':'§:::::w ,"',.'.-. "":::'l>• diligence must bfiilifJElly fonowed In..:§W, cases ancl:tf!e securities in question must be permissible investments'.!:a~:::~., . ~;~:::::e :!!~:~:!:~
•under theseguideline'$t:ils. ~.~~~~~~~~.:,... '~~~:?~,' ,
'-:~~X':':::" "·::~·,,:::,,~·.··"·~-:·:,(·%~:s::,~~:,:::,~:!:.·,,,-::.:~.~i 10.9 i. The ~~~tr.~:!Q~~stmen~~t:m~~~~sof iiiWlt1t@~i'n the prescribed pattern i8the flduQaryrespon:;sibilityof
( • . the .JSt_'i~4.fflMds tc;':::~j~~ercised with approPriate due diligence. The Trustees would accordingly be• ',:~~~;ble for in~~~~deci~fiijl;:~~en to invest the funds. .
4j~$,trusteeswill tak~'1~1i!!e s~:';~;'~gntrol andoptimize the cost of managementof the fund. .• lit~'~twst will ensureth~n"l;proc~\Sh~vesbnent is ac~untable and transparent.
. "~:;:~~::::~;" ~:~::;::., ' .iv. It Wi\l::~,.ensuredthat duQ:(llpgenceis carried out to assess risks associated.with.any particular asset before
'~:~:;:::.~~:'" <:::~:~: . . .invesbnerlrfi:fu~e by the f4n_dJil that particularasset and also during the period over which it is held by the fund.
--'·'>:1~~~~~'. ..:.:.:«;':~ . .The requirem~HW9t..rati~~g~ mandated in this notlftcatlon merely intends to limit the risk associated With
.~:~~!:-:::~~-.,.:::::;::!:;:~~::.'investments at a-':'6.r.~~;ind general level. Accordingly, it should not be construed in any manner as an,:«.;.~~.:.,endorsement for inv~s6nent In any asset satisfying the minimum prescribed rating or a sUb$titutefor the duediligenceprescribedfor being carried out by the fundltrust.
v. The trust/fundshould,adoptand Implementprudent g,,~elines to prevent concentr~tionof investmentin'anyonecompany,corporategroup or sector.
10.10 If the fund has engaged services of professional fund/assel managers for management of its assets,payment towhom is being made on the basis of the value of each transaction, the value of funds invested by them In any
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Fresh accre~icmsto the funds shall be the sum of un-invested funds from the past and receipts like contributions tothe fu~~s, dividendllnterestlcommission,maturity amounts of earlier Investments etc., as reduced by obligatoryoutgo d,uringthe financialyear.Proceeds arising out of exercise of put option, tenure or asset switch or trade of any asset before maturity can beInvested In any of the pennissible categories descnbed above In such a manner that at any given point of time thepercentage of assets-under that category should not exceed the maximum for that category and
, .also shouldnot exceedthe maximum limit prescribedfor the sub-categories,
,
,L.. Request for ProposalforAppointmentof ECA for audit of investmentsdone by EPFO's PortfolioManagers Page37 of 41•• .- Sp --
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mutual funds mentioned in any of the categories or ETFs"or Index Funds shall be reduced before computing the~~
payment due tq them in order to avoid double.incidents of costs. Due caution will be exercised to ensure that the Csame investment are not churned with a view to enhancing the fee payable. In this regard, commissions "01
investments in Category (Hi) in~trumentSwill,~e carefully regulated, in particular. 4Note: The ~xI:ltlng Inve:ltmentpattern a:l above Is subject to change based on the notlflcatlons Issued by the 4Government of India from tlme to tlme. C10.11 InvestmentRestrictions ~~:i\\~\\;li~~;>·«
10.11.1 Investment decisions should be taken by Portfolio Managerwit,::i~!I.m emphasis on safety, prudence, 4optimum return,sound commercial judgment and avoidingfuo.g~]q:h;nr~rt:1::J~le.·~~:~:~7~~::~:'·.'~!;:~;::~:~~~::~. C
10.11.2 Ally moneys received on the maturity of earlier inv~~tfu'!l:!lts·reduced bY:~:~~!.!~atoryoutgoings shall be. invested in accordancewith the investment pattem~.;lJ~~J~t~stmentpattem ~~~:~),:~Chjevedby the end 0' .4
.<:::~~:::::!.--::.' "~';::::::::~:~:'.a financial year .:;~:::::*:::$' .'::::;~:::-..:;, •. '::)~:~\~?:::.. .§.~. ·:::\:&~L..
10.11.3 In case of any instruments mentioned above beIU~X~tedand t~~mJ~tingfalling below pf~~Cribedminimum «-~'~"'~.""'1\ .'f(,"'';':! '.",,'. •
rating, then the option of exit can be.exerciSedwith~t~i~~§tim~~ro\jalof CBT, EPF.CThe investment should be made l?i)~~)~ortfollo Manage(t!jt9.ugha Stock Exchange. or directly with othercounterpartias in respect of GovJ~~@~~t;§~.~~ritjesand ;ifi~;~~~~tinstruments at the best possible rate .-available on the day of transaction~;~:i:~orti~uJ;~nagersshall'~~t~~rchase or sell securities exceeding 5 t
.:;~~~::.. -,.~;:t!~:~~!:::~::'::~..r, . • -,!~:::::::~%-.~-.per cent or more, th~~~:?~any bro~er';~~~he ag~t(~~~WR:~w:~~se"s::~·i'idsales of securities made by the 4
. Fund, unless th~.:e?:~t9..!
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10.11.7 Pending deployment as per investment objective. the moneys under the respective Schemes may be
invested in short-term deposits of PubliC Sector Banks acceptable to the CBT, EPF.
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Glossary: Assets UnderMaha,gement: Central Board of Trustees
: Compact Disc: External Concurrent Auditor ..:~~~": Employees' Deposit Linked Insurance Scheme, 1976: Employees' Provident Fund Scheme, 1952~Employees' Provident Fund Organization: Employees' Pension Scheme, 1995: Financial Advisor and Chief Accounts Officer: Government of India: Ministry of Labour and Employment
: Not Applicable '::~~:~';.. ~...;.{.A.;..j.l••\l)· "::~,~G
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Contact Details:
Sb. M. Naoovanappa.Mdjtional Central PF Commissioner-I (FA&IMC).Employees' Provident Fund Organization (EPFO),Bhavlshya Nidhi Shavan,
14. Bhikaljl Cama Place,New Delhi. 110066Phone: 011·26172660Fax: 011·26194349Email [email protected]
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Request for ProPosal for Appointment of ECA for audit of investments done by EPFO's Portfolio Managers Page 41 of 41
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Item No.5: STANDARD OPERATING PROCEDURE FOR INVESTMENT IN EXCIL\i~GETRADED FUND (ETF) AND LIQUID l\nrrUAL FUND (LMF)
1. The Ministry of Labour, Oovt. Of India vide noii tication no. 1071 (E) dated 23rd April, 2015has issued a new Investment Pattern for investments by EPFO. This new Pattern ofInvestment 2015 prescribes OS to 15% investments in equity and related investment. The .Board in its 207th Meeting held on 31.03.2015 while recommending the said Pattern decidedto investment 5% of the total investments made during the year in Exchange Traded Fund(ETF) of Nifty and Sensex,
2. Investment in ETF started w.e.f from 06th August 2015 through SBI Mutual Fund which is,the ETF manufacturer for EPFO.
3. Subsequently the Central Board in its 208th meeting held on 1610912015 approved investtn6ntin Liquid mutual fund of S6t Mutual fund in order to manage flow of funds for inves£ent inRTF more prudently. Investment in liquid mutual fund of SBr mutual fund also started fromthe month of November.
4. Now in order to have standard subscription and redemption from Liquid Mutual Fund (LMF)for efficient deployment of funds in ETFs a Standard operating procedure for cashmanagement has been prepared as under:-
Process flow for subscription in LMF
Step Process Timeline1
EPFO will send an application for investment in liquid fund (LMF) T day before2.00 PM
2 ."
Simultaneously, EPFQ will transfer funds to the liquid fund scheme T day beforebank account 2.00 PM
3In case the application form is in order & the funds reecived:before Tday.2.00 PM. the EPFO will be allotted the previous daY's NAV
4In case the application form I funds received after 2.00 PM, the T day aft:er2.00EPFO will be allotted the End of day (EoD) NAV of the T-day PM
SStatement of Account for Liquid investment will be sent to EPFO TdayEoDby Smail
T- TransactionProcess flow for Redemption in LMF
Step Process I TimelineI
EPFO will send an application for redemption in liquid fund T day before 3.00(LMF) PM
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2In case the application form is in order, it will be processed as per Tdaythe previous day's NAV
In case the application form is received after 3 PM, investors to getEnd of day (EoD) NAV
3 Redemption proceed from the liquid fund are transferred to ,EPFO .T+1 day m~mingaccount.
4Statement of Account for Liquid investment will be sent to EPFO T+l dayby Emall
• In order to subscribe for ETFs there should be clear cash available in EPFO account and. -
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any redemption made on LMF made on T (transaction) day will result in credit of EPFOaccount by redemption proceeds on T+1 day. AccordinglyIn-order to subscribe in ETFson a particular day from the redemption proceeds of LMF; the redemption trade has to be
executed one day prior.• Data of fresh accretion flow during the past few month shows that the fund flow during
the first few days of fresh accretion which starts typically from 3rd week 'of the month issubstantially higher than the estimated amount to be invested in ETF for' the day.Accordingly 15th day of the month shall be treated as day 1 of Fresh Accretion. (FA) forthe purpose of this SOP. If 15th is a holiday the following working day shall be day 1 ofFresh accretion .
Based on the above facts following SOP i~ to be followed during a particular month:-
Step Day,
Event ProcessA 1 of FA If cash is less than DEVI Subscription in ETFs only
hilA,-
If cash -is more than Subscription in ETFs andDEV[ in IA balance amount subscribed in
LMFB 2ofFA$ Same as in step A Same as in step AC 3 of FA Same as in step A Same as in step A
...,-- Redemption from LMF ofDEVI in ETFs
D 4 of FA, Entire cash in IA Subscription of LMFThis process will Previous day redemption Subscription of ETFscontinue till 12th proceeds of LMF in NOday of the accountfollowing month. ---- Redemption from LMF of
DEVI in ETFs
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Subscription of ETFs onlyE Entire cash in lA13th day of the Previous day redemption Subscription of ETFsfollowing month. proceeds of LMF in NO
account-- Redemption of entire balance
. from LMF .F 14th day of the Entire cash in 1A Subscription Ci'fETFs only
following month Previous day redemption Subscription of ETFs .proceeds of LMF in NOaccount
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"'the process mentioned at step B shall continue if the units accumulated for carrymgout redemption is not enough as mentioned in step 3
DEVI: Daily estimated value of investment in ETFsFA: Fresh accretion1A: Investment accountNO account: Non Government account
S. The Standard operating procedure for investment in ETF was approved by the FIAC its 120·meeting held on 23/0612015 and it was suggested that it should be reviewed at the end of thefinancial year and the learnings thereof may be used to revise the SOP if required. This wasalso approved by the Central board in its 208tb meeting. The SOP for investment in ETFs hadthe following points:
A. The investment in ETF would only be made from Fresh Accretion received during themonth.
B. The quantum of investment to be made during the month would be daily equated andinvested on a daily basis over 15days from the start of fresh accretion inflow.
c. Investment on trigger of special event. The special event is defined as fall in marketindicesby (i) 2% or more (ii) 4% or' more.• In case the index falls by over 2% on a day of scheduled investment the entire
cash available for the week for investment in equity would be invested on the dayof trigger of special event. .
• 'In case the index falls by over 4% on a day of scheduled investment the entire, cash available for investment for month in equity would be invested on the day oftrigger of special event.
D. 650/0-85% of the total allocation to ETF be invested in Nifty based ETFE. 150/0·35%.of the total allocation to ETF be invested in Sensex based ETFF. These SOP would be reviewed after the end of financial year.
6. As mentioned above the Central Board in its 20ath meeting approved investment in Liquidmutual fund of SBI Mutual fund in order to manage flow of funds.. Since the implementationof investment in Liquid mutual fund (LMF) cash is invested temporarily till deployment inETF and aU surpluses beyond the daily estimated value of investment in ETF is invested inthe LMF. As a result at point "C;" of the SOP of investment 'in equity (as above). has becomeredundant since the, entire cash available for the week or the month remains parked in the
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LMF and is not available for investment on the day of trigger ofthe special event. The units ofLMF can be redeemed and cash will be available for investment only on T+l day,
7. In view of the above the SOP for investment in equity may also be updated as under:A. The investment in ETF would only be made from Fresh Accretion received during the
month.B. The quantum of investment to be made during the mont~ would be daily equated and ".',
invested on adally basis from 15th of the month (next working day if 15th is a holiday)till the 14t11 or the following month I.e. investment wiU be spr",,} over 30 days.
C. 65% ..85% of the total allocation to ETF be invested in Nifty based ETFD. 150/•..35%. of the total allocation to ETF be invested in Sensex based ETFE. In the month of March the portfolio for the year has to be aligned. to .the Pattern of
Investment. Following the same SOP of daily equated investment during March mayresult in statutory deviation. Acoordingly in the month of March in order to balancethe portfolio among different categories daily equated investment in not insisted.
Proposal: Para 4 & 7 oC the agenda item may be approved.
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Item No 6: Concurrent Audit Reports of Provident Fund (including other funds) andPension Fund for the months or September 2015 to March 2016.
1. As per the decision taken in the 1961h meeting of Central Board, EPF held on 20.07.2011,MIs Chnndabhoy & Jassoobhoy was appointed as External Concurrent Auditor (EC,A) forconducting Audit of the Fund of EPFO managed by UtePortfolio Manager. .': ' ,Central Board, EPF in its 2051h meeting held on 19.uzo 14 has approved the extensto~ ofthe period of appointment of Mis Chandabhoy & Jassoobhoy as ECA on nomination basistill October 20 160n the earlier terms and conditions.
2. As per the terms and conditions of appointment of ECA, following clause/sub-Clause ofChapter 2 of RFP i.e. Duties and Responsibilities of External ConcurrentAuditor(ECA) with regard to submission of monthly report according to scope ofwork, following important points arc mentioned below:
}> Reconcile the funds flow and Bank Accounts of EPFO with the Port folioManager(s) on a monthly basis.
}> To examine and verify whether the fund managers have followed the investmentpattern, investment guidelines and the terms of agreement entered into between:EPFO and the fund managers.
}> To verify whether the interest and maturity proceeds are collected promptly and re-invested as per the provisions made in the Pattern of Investment. Also to point outdelays, if any, and the causes for such delay.
. };;> To verify whether the incentives, whether receivable from the institutions, arecollected promptly and invested as per the prescribed pattern/guidelines.
}> To bring out cases of undue delay in the receipt of incentives .}> To verify whether proper records have been maintained in respect of all
transactions and contracts and to ascertain whether the records are correctly andtimely updated. '
> To verify whether all shares, securities, debentures and other investments havebeen held in the name of Central Board of Trustees, Employees' Provident Fund.
}> The concurrent audit needs to be carried out and Report submitted to the EPFO onmonthly basis. . ,
> In Audit Reports, audit observations regarding Pension Fund, Provident Fund.EDLI Fund, EPF Staff Provident Fund, EPF Staff Pension and Gratuity Fund etc.,should be categorized separately as separate accounts are. maintained by EPFO.Concurrent Audit report on Pension Fund shall be bound separately and aconsolidated report on all' other funds shall be bound separately for submission toEPFO. '
MIs Chandabhoy & Jassoobhoy, ECA has submitted Concurrent Audit Reports ofProvident Fund (including other funds) and Pension Fund for the months of September2015 to March 2016.The same are 'submitted before the FIAC for perusal and directions,ifany.
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ITEM No.8: Proposal for lncreaslns the number of days for borrowlns of funds' f'r~m CBlO forparticipation tn primary auctions of Government Securities and Corporate bonds from
existing 15 to 30 da.ys. .. :
Pursuant to the recommendation of CST in its 204th Meetlns held on 26.08.2014, th~Ministry of labour 8& Employment vide its letter no. G-20025/1/2014-55-11 dated 12thMay, 2015approved borrowing of funds from CBlO for participation In Primary Auctions of GovernmentSecurities and Corporate Bonds. Accordingly, the direction of Govt. on borrowing of funds fromCBlO was communicated to all Portfolio Managers, that Inter-alia mentioned followingconditions:
a) No borrowing will be done for more than 15 days.b) Prior to entering into such transaction, the Portfolio Managers shall intimate through
email to Investment Monitoring Cell (IMC), at EPFOHead Office the details of proposedborrowing to be made and the matching purchase of security. The proposal should alsocontain the expected profit/gains from the transaction.
c) The Portfolio Managers shall report full outcome of the transaction to the IMC after theborrowing is closed.
d) The IMe shall compile all such transactions and place the same before FIAC in its nextimmediately following meeting.
e) The outcome shall also be placed before the Board for information in next lollowing .meeting.
2. With reference to the above, the minutes of 12~ndMeeting of Finance Investment & .'..Audlt Committee (FIAC) held on 9-12-2Q15 (placed as Annexure tA') on agenda of "One time ex-post facto sanction of FIACfor continuing CBlO borrowing -regardlng HSBCcase" may bereferred wherein the decision on the same has been recorded as under: .
"The Committee took note of the facts presented In the Agenda Item. FA pointed out that thepermission may be given for borrowing upto 30 days. It was felt that a separate agenda may bebrought/or increasing the tenure of borrowing from 15 days to 30 days".
3. When the agenda for 15 days was p.ut up, at that time itself it was suggested thatborrowing should be allowed for 30 days. However, It was Initially decided by CBr that weshould allow borrowing for 15 days. It needs to be noted that EPFOgets funds only during aperiod of approximately 5 days and rest of the 25 days, EPFO remains short of money.Borrowing was allowed to take care of a good opportunity coming for investment during these.25 days. Therefore, it is necessary that borrowing for' Investment be open for 30 days insteadof is days. As we have seenln some circumstances, the borrowing is required for more than. isdays.
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4. One such case which" came on 31st December was that of y~s"".Bankwhere borrowingbecame necessary for more than 15 days to catch opportunity of l.,,~estment for Yes Bank BaselIII Tter 1\bonds Issue having rnaturltv'of 10 years @ 8.90% p.a. As i~;was felt that proposal maynot be available later on, accordingly, Investment was made for 1500 crores where theborrowing was required for 18 days Instead of 15 days.
S. Agenda on the same Issue was placed in 123rd meeting of FIAC held on 18.01.2016,wherein the Committee has approved the relaxation for extended CBlO borrowing upto 30days and directed that the same shall be further placed before the" next CBTmeeting( Minutesof the 123rd FIACIs placed asAnnexure-B). .
6. Accordingly, an agenda Item on "Proposal for Increasing the number of days forborrowing of funds from CBlO for participation In primary auctions of G"overnment securitiesand corporate bonds from existing 15 to 30 days" was placed In 211th meeting of CBTheldon16.02.2016 but the item could not be taken up for discussion and was deferred for nextmeeting. The agenda was again placed in ziz" meeting of CBr held on 29.03.2016 wherein theBoard has decided to refer the matter to FIACagain (Agenda & Minutes placed as Annexure-C).
7. In view of taking the agenda in FIAC,the justifications were also called from all PortfolioManagers of EPFOfor enhancing the no. of days from existing 15 to 30 days. On behalf of allPortfolio Managers, Reliance Capital AMl has provided few aspects on the- issues (e-mail copyplaced as Annexure-'D'), which are as under:
i) Investment Opportunity after- mid month: Usually the fresh accruals are received by thirdweek of the month; Any investments opportunity that may come up after that period whencurrent month's cash flow, Including fresh accruals have been deployed,might be missed dueto lack of visible cash flows In neXt 15 days, which is outer limit for CBlO borrowing. Increasingthe time period of CBlO borrowing to 30 calendar days enables the portfOlio managers toeffectively plan the next month's fresh accruals and make use of the market opportunities.
For Example: The Special Deposit Scheme (50S) money which is available for Investment In thefirst week of January can be effectively planned to invest in the primary market issuances,mainly B~nkner II bonds, issued in the early part of December.
ii) Bunching up of issuances: The bunching up of issuances like SOls (including UDAVbonds),Corporate bonds and CGS,constraints the Inv~tment opportunity due to limited availability ofcash at EPFOlevel. Increasing time period to 30 days enables to invest across all asset classeswithout missing on the market opportunities. "
For Example: In the Financial year 2015;.16, the SOL auction conducted in the month ofFebruary "and the first week of March saw higher cut-off. Similarly, corporate bond and Gsec
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yields also rose sharply providing good Investment opportun.IW. T~e flexibility would enablemaking use of such market anomalies by Investing future cash nows I~ high yield scenarios .
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m) Assumption of Fresh ffows: The borrowing by Portfcillo managrrs also takes Into accountsome proportion of fresh accruals. It is to be noted that borrowl~g against fresh acc.ruals isbased on assumption. It has been observed that fresh accruals ~eeps on varying betweenmonths and cannot be accurately calculated. In case the fresh acc~uals are In contrast to theassumption, the borrowing period may get extended In such cases. We request you to take intoaccount the variation in borrowing period due to this factor and alloW roll-over of borrowing byapplicable number of days In case the fresh accruals are lesser t,han expected .
Proposal: The matter Is again placed before FIACfor eonslderatlen,
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'"•••iVlinrltes of the 122m!Meeting ~fthe Finance Investment & Audit
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Committee (FIAC) held on 09.•12-2015
1. The 122"J Meeting, of Finance Investment &: Audit C« .uuitteewas held on 0~·12·
20\ S from 02.30 P.M. onwards in the Conference Hall, 3'" Floor, EPFO, Head Office,
New Delhi,
2. The following members/representatives were present in the meeting.
1. Sh. K.K. JalM'"---- - - Chairman, FIAC; Central Boardand Central Provident Fund
Commis ..ionerSh. Heera Lal Sarnariya Add:'ti'OnitC' Secretary (lJc:E),', Ministry-" f)f"T;bO\~;'.,.&
Employment, Govt. of India,~J. \ Sh-:'Sdl~i~'Shya~ Director,D,.:ptt. o{FTn:m';Gf'S~r"i.;~;.Ministry- or Finance:-aSI I represcn: vtive of Joint Secretary; Mor, (io·,t of India; as
i Domain Expert.j4. 'Sh,-B'lhl"uhi.l~)·am- MC'l'~ber,'Centrnl Bo~~d,(Employ«;', Re~.~se~!ati~-:-eT-.\ \ KamarsuP~'IsiLTP.1:-h-ow-d-h-a-ri-. ~terrtb«~'Centri!lBoard,(Emplo>~~s' Repr\!sen;:rtive)
r5 t Sh, Pawan Kumar Asrepr\O;,~;\iiUfve of So. Prabhakar 1. Bana.",~re, Meit;hu,I i Central Board, (Emp!·),e.:s· Representative)
~...•.--.....-.,", -------.~.The following members could not attentllh~ meeting:
1. \ 0:. (i: S;;'ccva Reddy' \ Member:Centrat l'\.:o.\;'j: (Employees' Rt!p~~~nt~li~'"cJ'P'.. '1-i:-'\ M3.-~i~~Il,lk·!\1;iGl1Ptl~"-l' )Oi',1 Secretary & 'Fin";ci.1 A,h'iror: Mini'try'or labour <I:I\ 1 Ernployment ._.- --- -_.. --------..,---- ---.. -.
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ltelnNo.6: Agenda Itemon.ene time ex-peat Iacto sllnc~ion or FlAC Fiji continuing
CBLO borrowing- Regarding HSBC Clf:ie.
T t': Committee look note of the facts presented in the Agenda item. •.A
pointed out tl.~t the permission may be glven for' borrowing upto 30 days. It
was felt that 11 separate agenda may be brought for increasing lh~ tenure of
borrowing (rom 1S days to 30 days .
Item No.7: Revised E:Jtlm;lh:s for the year 1015-16 and BUllget F.stimatl!s for the year1016-17 for EPl'O a/tel the schema Ildmlnbt~red by EPFO.
The agenda was approved b) the committee wi~ the following remarks anddirections:
On the receipt side, the Ccmmiuce observed th\lt the forecast/estimate:;for contribution received in20 16·17 are on th,; lower side and it shouldbc raised torninlmum 10% of the RE of:W 1$-16,
ii) The entire contribution to the Gratuity and the Pension fw>.t of the staffand officers of EPFO should be charged as a one time in expenditure inthe current financial year. .
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Item No.8: Uplltlte on Investment in E:tt'h:1nge Traded Fund (l-:Tf').
The Agenda on the inve snuent in ETf was discussed and it was further~b';ded that the investment in ETF was tlmher to be reviewed. For thi"pupose, CRIS(L, NSE & BSE will be. requested. to make a separate 'expertpresentation in the next meeting of FI.<\C. The eXIXrt'; in this meeting shall berequested to focus their presentation on the following broad points:
i) Relevance of investment in equity by Pension Fund.ii) Security of the lovestrnentmoney in th¢ Pension Fund.iii) The periodicity or review of the decisions of investment in equity,i~) The ideal siu of fresh accretions that should b-t! invested in equity
considering the AUM to EPFO and the-equity market of Indin .\) The right mix of thi: produces among the equity and related investment
for investment by EPFO at present andin future .
Tiremeetingended with (I vale of thanks to the chuir
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Minutes of the 123~~•.Meeting of the Finance Investment &,':' .
Audit ccmrnlnse (FI~C) held on 18.0'1.2016, ..
1. The 123" Meeting of Finane. Investment & Audit Committee was held on 18.01.20t6. ,
from 1tOO.A.M. onwards in the Conference HaU.3#4 Floor. EPfO. Head Omes, New
Oelhi.
2. Tha following memberslrepresentative3 wero present in the meeting.
Sh. KK Jalali,-
Chaitman. FtAC. CentraleOar1Commissioner
2. Sh "'eera La! Samariya Additional Secreta" (l&E).Employment. Go"t. of India_.
3. Ms. Meen:.l<shi Gupta. Joint Secretary & FinandalAEmeto~menll Govt. of Ind1a.
4 Sh, Sudhir Shyam DI(ector. Oeptt. of Financial,' ....
\a, representative 01 Joint SeCtOo~ajn Expert
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5. Sh.Balasublahmanyam Member. Central Board, 'tErn
, Kamarsu
6. Sh Prabhakar J. Member, Central Board, (EmBanasure .. .
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d and Central Provident Fund
Ministry of ,labour &
dvlsor, Ministry of Labour &
Services, Ministry of Finance,
olary. MOF. Govt. o' Ind1a: as
pIoyets'Representative) ,
ployees' Representative)
The foUowing members could not altend \he meeting:
Or;G. Sanjeeva R'eddy Member. Central Board. (Emptoyees' Representative)
Member. Centr'il Board. (EmployetS' RepresentaU~e)-Shrt J.P. Chowdhary --~-------~-------- -------- - _._---' ~
In addition 10 the above. FA & CAO. EPFO Convener was also plesent during the
meeb"9
:), ' The Chairman 'Nelc:clTI~d alt the members and offIcers present in the meeting••
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ltcrn No.1: Con~r~aUon of tho Minutes ·or, 122<1"Meeting of tho Flnanc. In'lestmont
& A\Jdii'Commlttoo hold on 09.12.20'5
The m~ut~\ Qf 1221'<1 M~eting or the Flnanc. l~vastmQnt & Audit Committee
"__held on 09.12.2015 were conformed.
ltem No~·2: Action t3kdh roport on the reccmrnendatlon of the 12~ MeetJnn or• • v
Finance tn'/o3tment a Audit Committee (FIAC) hold 09.12.2015.
The action t.l~~n report as placed was taken note of by the Committee.. .'tnrm-f+;:l •..J.:.... Pres~ntatton on In'lostm-lnts In ETF by Experts.--
Presentation on ETF was made by aSE, NSe. S8t Mutual Fund. CRISIL and
Shti A. Rama KotcSWtlta Rao (ex-Sal MF) In th9 meeting (copy enclosed).
The committ:!$ asked them to submit suggestionlS o!, asset allocation and
ETFs other than Sense:c and NIFTY ETFs fOtdivetsiftcaUon in Investment in
equity and related investments prefarably within 10 days, IMe thereafter shaH
compile the same and present before the committee in the next meeUng.
Itom No. -': Rolaxatlo.n '\)r e~tendlldCBlO borrowIng up to 30 days on cas. to casebasis by Chafrm"n. FIAC/CPFC ~ublect to ratlncatlon by the Board.
Relaxation for extended CBlO borrowing up to 30 days was approved by theFIAC Which shall be further placed before the flext CaT meeting.
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Item No.5: Selection of Mutual Fund ETF m3nufacturet for Investmenl ot tho,EPFOs
'"'Iostment.in ETF. . .it was decided to form a Sub·eommlUae 01 the FIAC in order to select MutualFund as ETF manufacturer which shall comprise or FAACAO.Shri8alasubf'ahmanyam Kamatsu (employer tepresentati'le) and Shri Prabhaksr
J,Banasure (employe;: representali'le),Tt\e committee may cc-cet any nthat
.member as per the requirement CRISIL shall assist the sub-committee In the
s'Jleetion of the mutual fund as ETF manufacturer,
Item No.6: calO borro'Nin9~ tr:ln~aetlons by the Portfolio Manag.tlrs during the
period 11.11.2015 to 31.12.2015.
The Item no 6 was taken nole of b'! the committee
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Item No.7: Continuation of MIs Chand<lbhoy & Jtl550bhoy as External
Concurrent Auditor (ECA).••It was decided to allow MIs Chandabhoy & Jassobhoy as (ECA) till
October 20 1~ ,and sin)ultaneousty start the process' of selection of new•
ECA for which th) same committee constituted for the selection orMutual Fund as ETF.rnanufacture shalt be engaged.
ItemNo.8: Rate of Interest (ROI) to be credited to EPF Members' Accounts
for the yotlr 2015·16.
Minutes have been recorded separately
The meeting ended with iJ vote of thanks to the chair .
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EMPLOYEES' PROVlDENT FUNOORGANISATIONMINUTES OF THE 212111 CBT MEEllNG .
(NEW DELHI: 29th MARCH 2016: 11 AM)
The 212t11 meeting of the Central Soard (EPF) was held under the Chairmanship ofShri Bandaru Dattatreya, Chairman Central Board (EPF)and Union Minister of labour &Employment. Following members attended the meetlngr-. .
1. Shrl Shankar AgLlrwal; Secretary (L&E)
2. Shei HL Samariya. AS (l&E)
3. Smt Meenakshi Gupta, JS(F&A) (l&.E)
4. Shri Manish Gupta, J5 (SS)(L&E)
S. Dr Sipln Bihar! Mallick, 15& DGLW
6. ShriSudhir ShYJm, Director, (Mini$try of Finance)
7. Dr UO Choubey
8. Shri Balasubrahmanyam Kamarsu
9. Shri KVShekhar Raju
Vice Cnahman
aNTRAl GOVERNMENTREPRESENTATIVES
10. Dr 5S Patil
11. 5hri Ravi Wig
12. 5hri GP Srivastava
13. Shri RS Maker
14. Shr;. SP Pant
15. Shri Sushanta Sen
16. Shrl M Jagadishl,yara Rao
17. Shr!Virijesh Upadhyay
18. Sllli PJ 8dndsure
19. Dr G Sanjeeva Reddv
20. Shri Ashok Singh
2l. Shri Ai<Padrnanabhan
22. Shri AONagpal
2l Shri DlSachdev
24. Shri Sankar Saha
15. Shn Rarnt>n Pandey
EMPlOVERS'REPRESENTATIVES
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Chairman also announced formation of Anomalv redressal cum ImplementationCommittee consisting of CPFC. J5(55) (l&E) and FA & CAO (EPFO) to complete the gaps in
one month.
b) The ratio of SSA to Section Superviso,:.l\ould be 1:4, instead of 1:1.46 in the, report.
c) The £0:./ AOs may be allowed NFSG of Grade Pay Rs. 5400/· after 4 years ofservice.
d) CPFC be autnonsed to operate OPFC APFC to promote officials. 5~lpernumeraryposts be created in fWFC cadre to ensure promotion of left out EOs/AOs. Thesesupe.rnun,erary posts be adjusted against' future . vacancies for promoting
EOs/AOs of 1999 batche} Any other anomaly/gap.
The Proposal as contained in the agenda Wih approved.
Item No.3: Rclaxatloll of provisions of Recruitment Rules for DPAs for conversion of 14DEOs toO?A '
The proposal as contalned in the agenda was approved.
Item l'h. 4: Information to be placed before the Central Board in accordance with para 23of the EPF Scheme
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The Board took note of the information as placed before it.
Item Nt). 5: Continuation of Mis Chandabhoy & Jas.soobhoy as External Concurrent\' '
Auditor (ECA)
The proposaf as contained in the agenda was approved.
Item No.6: Proposal for Increasing the number of days forborrowin& of funds from CBlOfor partfclpatlon In prImary auctions of Gov.ernment securities and Corporatebonds from existing 15 to 30 days
The Board decided to refer the matter to FIACagain.
Item No.7: Update Oil investment in Exchanae Traded Fund (ETF)
Tho! Board took note of the information as placed before it. Some membersraised the' issue of madequate in negative returns in ElF and demanded thatthe decision to deposit EPFO funds in ETFmay be rescinded,
Item No.8: C81.0 borrowing transactions by the Portfolio Managers from 19.09.2015 toll.U.201S .
'rhi' Board took note of tho? information <I~ pla(l~d b~(ore it
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Itom No 61 Proposal for Incroaslng the number of days for borrowing offunds. from CBLO for· p::arttclpatlon In primary auctions. ofGovernment Securltlos and Corpor3to bonds from existing 15 to30 days.
1. The Central Board of Trustees (C8T), EPF in its 204'" Meeting held on 26.08.2014• approved the Proposal for borrowing of funds for participation in primary auctions ofGovernment Securities and Corporate bonds (Item no. 10) with modification that theborrowing window should be limited to 15 days and an appropriate monitoringmechanism be developed for monitoring by FIAC.
2. Ministry of Labour & Employment vides its letter no. G-tOO2S/1/2014·SS-11 dated 12'"May, 2015 conveyed the approval of Government to the proposal of EPFO to borrowfunds from CBLO for participating in primary auctions of Government Securities andCorporate Bonds.
3. Subsequently the approval to borrow funds from C810 for participating in primaryauctions of Government Securities and Corporate Bond was conveyed to the PortfolioManagers with following conditions:-
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I. No borrowing wil! be done for more than 15 days.
II. Prior to entering into such transaction the Portfolio Managers shaH intimatethrough em ail to Investment Monitoring Cell (lMe). at EPFOHead Office the detailsof proposed borrowing to be made and the matching purchase of security. Theoroposal should also contain the expected profit/gains from the transaction.
III. file Portfolio M.lopge,s -shall report full outcome of the transaction to the IMCafter the borrowing is closed.
IV. The IMe shall compile all such transactions and place the same before FIAC in Itsnext immediately following meeting.
V. The outcome shall also be placed before the Board for information in nextfollov/ing meeting.
4; As approved by the Board, transactions for borrowing of funds from CBlO started w.eJ.29.07.2015 and as per directions of the 80ard the transactions are being reviewed byFIAC.The Committee in its 122"<.1and 123'd meeting held on 09.U.201S and 18.01.2016reviewed the CBLa borrowing transactions by the Portfolio Manaiers during 19:09.2015to 31.12.2015.
S. The net proflt gain to EPFO from the transactions made by Portfolio Managers by CBLOborrowing was Rs. 2.07 crore. till 31.12.2015
6. Recently, an e-mail dated 13.11.2015 was received from HSBCAMCwherein request forcontinUIng CBLO borrowing" was submitted as a one time permission due toadministrative exigencies. In the \Jld ernait, it has been Informed that HSRC ;\(I,,1C hadpurch.1St!d Axis Bank Infra Bond ••of I~R S2!) (rOrt: Ior whic.h the Ol.)trowing dfllOlltlt IN,I'>I'll' ..... , ;--.. ('"ntob . I r· L.. II' ..; : ..' '. -" r, .l~~p.~r .. 'h._., orrCl.~/~~··.:~-~L'.···.'.'·',A' .' ~l :n t'llt" J: or"".)t10n 'l! ",t, ·,i.~;tl(n~
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one of the schemes EPSwas allocated INR 3.15 Crore more itl place of EPF. They alsogot fresh accretion on [PF but not in EPS. Thus, .EPS had exhausted 1S days limit forborrowing and it was "requested to continue borrowing for EPS for 3·4 days more tillsuch time fresh accretion in EPSarrives. The HSBCwas allowed to roll over CBLO till 17'"of November, 201S stating following reasons:
(i) Administrative exigency.(ii) Clear cut case of profit in doing so.
It may be pertinent to highlight here that even though the borrowing was extended formore than 1S davs. it has resulted in overall profit to EPFO.
7. Since the Competent Authorit'l in the matter is FlAC/.C8T, the matter was placed beforeFI1\Cin its 122ndMeeting held on 09.12.2015 for information and ratification, whereinthe decision on the same has been recorded as under:
"The Committee took note of thefacts presented in the Agenda item. FApointed our thatthe permission may be given for borrowing upro 30 days. It was felt that a separateagenda may be brought fQt increasing the tenure of borrowing/rom 15 days to 30 days".
S. Whet) the agenda was placed before FlAC initia!ly in its 112\h Meeting of FIAC held onzs= April. 2014. at that time itself it was suggested that borrowing should be allowedfor 30 days. However, it was initially agreed that we should <l!10W berrowtng for 15dav s. It needs to be noted that EPfO gets funds only during a period of approximately5 days and rest of the 25 days. EPFO remains short of money. Borrowing way, allowedto take care of a good opportunity coming for investment. during these 2Sd.lys. Therefore. it is necessary that borrowing for investment be open for 30 daysinstead of 15 days. As we have seen insome circumstances. the borrowing is requiredfor more than 1S days.
9. The Committee in its 1B'd Meeting held on 18.01.2016 while deliberating on agendaitem on Relaxation for extended CBlO borrowing upto 30 days on case to case basis byChairmen. FIAC/CPFC subject to ratification by the Board (Item no. 4), approvedrelaxation for extended CBLO borrOWing up to lOdays (relevant portion of minutes isplnsed as Annexure 'A'l.
10. Accordingly, it is proposed to increase the number of days of borrowi.ng the fund fromCBLO from existing lS days to upto 30 days. Other terms and conditions laid down bythe Board for the purpose would remain.
Proposal: In view of.:lbovo, following Is submitted forconslderation~
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a. Ratification 0' one time ex-post 'Olcto sanctionedof beard for continuing CBLO borrowing by HSBCAMCbeyond mandated 15 days in purch:lso of AxisBank Infra Bonds.
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The proposal COJ1t>llmld In Para II & 10 Dro placedbefore the Central Board 01 Trustees lorInlormallon and consideration & approval;respectively.
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IMe EPFO <[email protected]:>
"•• CBLO borrowing· (increasing the time period to 30 Days)
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Punaei.t N Srivaslavva <[email protected]>To: IMe EPFO <[email protected]>
Tue. May 10. 2016 at 12:19PM
This is with reference to PCl'i1t NO.3 of Agenda Items of Quarterly Perir)l'mdf'lCe m~etmg held on 15th January2016 at EPFO HO<ld Oifb:: New Delhi. In the lTleeting. It was oeciaeo tnat the urne pence of caLO OOrrOWlf1~JbeinCm8S9(j from 15 w0rl<.!fiY days tv )0 calendar days In order to gr.(') addit.onal ftexit'\lity to portfolio managers A,;1)11f:) ume relaxation. for lht'! in\oestrnw~t made Yes Bank Her Ubonds on 315[ Ot~ctll\'be( 2015 Pt)rt(oIjo rnanaqerswon) !).)(mit\~d by the (;hamn~'m, FIM~; CPFC for hmrowlf1g IIp to2~lh Janu<.:lf'j 2016, wtw;t1 ,0; [1'(l(e than 15worl~lt;9 days
In '1;;;0'''1 of the In'<l'~<;trn(.',"t opp,)rtun,hA"; :1fi",ng 111thE' market <V1(1 as ,j,sc,;sSGd botwcen all EPFO Portfol,,'")Iv\ana.gors, mfaxing (b; ~r CBUJ ()c,ro~'{in~:Jto 30 C;.1it~nci.;lr:l~r/ s frol11 ,;urr.;:n! V'~:!ni:,s.:on of borroNinq Uj,J l\l1~l V',I():'klr"<9 days, { ..O\fft'.: ~rQ··-~.,rjt:.·;qr~,)d!_~;f~':,)Xtt;dltv ~~):n\{::71tfr!~n! tr) rn<Jk~·!d~;t.·of H;fi ~'!:)!"kt:' ~:r'},iOd'..;r~ttf.!.sF~~v'o'~'l~-iP\;~;'~ (~,tJ. iJr~:)t::ntl!-dciS UI iVt:I,
1'1 Invostlllpnt Opportunity after mid month; Ugll,iliv tfl~ frs-st" ;-j';'..Hii'ltS ""i; (f,c(,i',~::d t;·v \! .qd W!~til.. i,' Ii ,,..
month. Any inwstrnent:;,opportu>vty thaI. InRy come lip alief- thi'il periodwnel' curren: montn s casn HowIClch.folng fresh accruals ha,,'; bj.~e(' r:iepioyad f1l1gtlt be rrusaeo dup tc ;,lel-. of 'lsiblo i:a-:,.i"t 'flG'•.••:", in next 15 days..which Is outerUmlt for CBLO borrowing, l"Ut1asil"lg the time period or C8Lc) l)(l!rowin~J to 30 ,:i:jlendar ciayseuables the portfolio m.:ln'lgcr~ to cff-::(.tl'.cl', pl.;);, (I<:;; next months frosn <1(:~;r,.al:' <l1\:J;lI;\KH ,,:;H .)t tl"la marketopportumttes.
For Example The Spi:x:i;t! DepO~,il Scheme (SDS) n;ul1Hi which 'c; rl'ld:lahle It.r :1,··.t~~tm"'llt i(\ thl:' fifs! ',v>]>;,.o:Januar)l can b~ elfect",,~ly pkonned 10 Iti'~sl III thd pnrnat'j rnarb:u! 1S;~tJ;'lnCHS. m:1It'Ii' B.'lnk 1:.:", II bond, .... ' <, :';!\',yj
In tho early part 01 Dec('I'",!",.::r
Bunching up of Is:mances: T",.,~~"•..(j~;'~~·1 ·,1. ,'f ,S·:.,l;)/iCI~~' L\,., :;iH ,. ,",: ""' ..1,F:;l..·· i.,."<!",, Ltlrp s , r ..• :;.
;'Of\':r; .\I),j CGS com,tr:lint;; the mvestment -:ltmu::m11:r dll~. to Hpl!tPil a'4l1iaf)dll'l '.)i '·;I~t·, a\ :.:PF(lip'\f~1.;'··.~.r.;\··L";~r.q~HnC'~}\~;I;~Y}t.. :'~,';\.1HY:'; t:-;ndLit-;~':' ~~.:!::-:,:;""t dt':'h;S;;' a\l ~'S,Si~!l:t<"$~~)$ '·Nttn.lI,t n~,::;:~nh,;.:/: :,n~ flla(~~'-:~
liPiJ{ji"i",! ·H':'~s
For FX;Ullpl~' In !PP t:,,· 10cul ye;lr )01')·11) mf' SOL aucuon ::'j~11.";~\."i.I'" tht,: (w)nlh of Ff:bru;,l"f ,'f!l(j )h•• !i,,~t\I~/H""'K;)t ~"i1i'tn~J1c..;i'.\ ~\FT'I~"r l"'ut~oft ~).;r,rI:\(\·_-,. ri...)rp(';r•..l!f~ oonc t.1D:;! (J:)~'.:. i:t~!J~.!::-.\unJ:,c; shaq)I~;, pr;)'v1dul!.; Juno:n\{.,\·:;:tnr-'nt OPo(.rt-unH-i n~.,:~t·:.,,:!)d;t'l 1'.;';U:;i ,.:';j'·;:H}k~ fnrlt-ttlq lt~ •.! ;jJ ,,1;'_ f11~H~·-i ••t >'I~"i"~lk~~ ~~.y"),.-.):;t'nr.J f..:!t)n't
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9981137917
I A:v'l PROUD ro BE P.':"Y 1OF A V\'INNiNC; TEl\rvl
R~; \:..-~~~Cdc ,dJ~~'t ;1: 1'\S~8t tJ1 d~! ::.J:=ii:'--;.t ·'f·~!:~~L t<.!F~::;;t".l(~'::~~f" ·~~Jt."'l ~:; F":~.._\~_.;1~-;)'(::;.!-!; :~"' 'n~_'!_ ...:! -;-~. "-:.'
The inf,:;nnation contained 11'\ this electronic messag<1 (email) and any attachments to this email are intended forthe exclu;1ilJe use of the addressee(s) and access to this email by anyone else is unauthonsed The email maycontain proprietary, confidential or pri-.1legedinformation or information relating to Reliance Group. If you are .notthe intended recipient. please notify the sender by telephone. fax, or return email and delete trus communicationand any attactiments thereto, immediately from your computer. Any dissemination. distribution. or copying of thiscommunicalionand the attachments thereto (in whole or part). in any manner. is strictly prohibited andactionable at law. The recipient acknowledges that emails are susceptible to alteration arid their integrity can notbe guaranteed and that COmpany does not guarantee that any e-mail is \1l\is·free and accept no liability br anydamage caused by any 'virus transmitted by thisemail. ------------~------'----
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.....Item No.7: - Selection of Mutual Fund as ElF manufacturer for In~estment In ETFsby EPFO
1. Investment In ~F manufactured by SBt Mut~~1 Fund has started w.eJ 06th August, 2015.
2. The tenure of appointment of SBI Mutual Fund as ElF manufacturer for investments byEPFOis ending on 31st March, 2016 and mutual funds as ETF manufacture have to beappolnted for a fresh term.
3. Accordingly an agenda item on "Selection of Mutual Fund ETF manufacturer forinvestment of the EPFOsInvestment In ETF" wasplaced In 123rd meeting of FIAC held on18.01.2016. Wherein, it was decided to form a committee for selecting Mutual Fund asETF manufacturer: This committee shall comprise of FA&CAO, Sh. BalasubramanyamKamarsu (employer representative) and Sh.· Prabhakar J. Banasure (Employeerepresentative). CRISll shall assist the sub-committee in the selection of the mutual fundas ETF manufacturer. It was also decided that the committee may co-opt any othermember as per the requirement. The FIAC also approved the extension of tenure of SBIMutual Fund for another three months l.e. upto 30th June 2016 on the same fees @0.07%per annum on net assets. (Agenda & minutes of 123rd FIACare enclosed as Annexure-'A').
4. In pursuance to the decision of 123rd FIAC, the Committee for selection of Mutual Fundmanufacturer has been constituted by the Chain:nan, Central Board. The Terms ofreference of the Committee are as follows:
• To prepare and approve Request for ProposaHRFP) document for Selection ofMutual Fund ETFmanufacturer for investment of EPFOsinvestment in ETF.
.• To undertake the entire process of evaluation of RFP, technical bids, financialbids etc. and select a,Mutual Fund ETFmanufacturer for investment of EPFOsinvestment In ETF.
• To recommend the selected entity to the FIAC/CBT.
5. The decision of FIAC and Chairman, Central Board with regard to the constitution of thecommittee for Selection of Mutual Fund ETF manufacturer for investment of the EPFOs
. Investment in·ETF and extension of the tenure of SBIMutual Fund till so" June 2016, onthe same fees was approved by the Central Board.
6. The first meeting of the sub-Committee was held on 29.03.2016 (Annexure-'B') wherein itwas decided that CRISll would develop draft criteria (RFP)for selection of mutual fund ETFmanufacturer and also an activity schedule for selection process. MIs CRISll has prepareda draft RFPand the same was forwarded to all members for their comments. •.
7. The second meeting of thesub-Comrnlttee was held on·12.05.2016, wherein the RFPwasapproved by the sub - committee.
Proposal: The said RFPis enclosed herewith which may be aoproved.
It;. ' .'," t I·(.I 1").~••~,' 1_ (... ••••.• Meetmg ot the Finance inv strnent 6.
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A:)cllt Comrnittee (FlAG) held on 18.01.2Q16
'.!"·.ii;t::::.:""g 01 hn<lpce Ip"':::$'1"::[': s•. u,••cu Comr,·,'tt~e wa~ h~IO or', 1eel 2()1F
'.' .\ ~.\ '~'~'Naids,"the Cor+eence ri3!~:;. ;:-I::;<.r E:YFO, ~ead Off!ce New
Crm1lllISSlOnt=I
l f,b ,",~eraLat Sarnanya Audlflonai Secretary iL&Ei MInIstry: Of Labour" &Ernplo'~~p.nt GoVt 01 India
~"l~r~;.,;;,~a~.~hlGurA"J--'--joint Secretary s Financial Ad\liSOf M:n~t.tryQ1 Lc:lbOUt 8.. Err~pl~lm~n~,Q2Y.L9fInd~<!., " " .' ..
.! :-;."Suct-.:,- S~:'3r~ , Director Depn of F"1anoai Ser,lIces Mi~jstry of FI!lan:::e
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M~mbe'Central &ard iE"mp:oyeIS Repr~s'eti;atl\lelI
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_. . .C" .:, Sanjeeva Reddy
••••• L_ ••~_:.r.. : .! [7. (>:.'wd!la! 'IMember.Cer~tral·Boa·rd~(Emp1cye(:s 'Repr,seritatr~ej
~'~fl~~be'rCt;'~t:J;BCafa .. Et"f:p;oi'er!': R,;;p~~senta!iv(:'
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:q adOI{lon rc ''''e acove FA& C.A.OEPFO Convene' WitS also present dunng tIle' I
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~ t>: ()-: () ",I'e Chalrn'a:' Wel(,OI'1~d ~!I the :~e"lbe'$ dr'I(] ';)fhl:ers C:e:;~nt .nth!? meehr09,
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Item NO~'1'• I
'.Confirmation ot the Minutcs of 122'''' Meeting of thQ Finance tnvestment
& Audit Committee ')old Oil 09.12.2015i
II It:: nWlu~es of '22r~ MeetIng of the cmance Inve$tment & Auolt Cornmatee
lied 0;-,09 12.2'0'5 werecO!1firmeo
Item No.2: Action taken report on the recommondation of the 122"" Meeting of
Finance Investment & Audit Committee (FIAC) held 09.12.201 S.
The actio" taken report as place-d'Na<; taken note of hy the Ccmmlttee
Item No, 3: Presentation on Investments .inETF by Experts., .
Preseruauon on ETF was niaoeby S::;E. NSE~)61 f,,1uhial Fvnd ·CRISlt ana
Shll A Rama xoisswara Rao tex·S8t Mf) IfUhe Irf~etJny (cooy enclosecl. i .
The committee asked them to submIt sU9geilions:on asset allocafl6h andETr: s On~ef than Sensex ard NIFT'r E1"Fs for dlve"Sific8tlon tf'1 In'lestrne'l~ tr1
. equity ~Ir;jrelated l'westmenlS pi·eferao1y WI;rin~0 qays IMC thercdfte! 5hJ:I
co-neve ~Mesaine andpresent befof'': t+'le c<>mt1.)lt~~t;' :'" thf: ne~t meetIng
Item No.4: Relaxation fot extended CBLO borrowing up to ~O day" on case to case• , "I
I:)a•.isby Cbairm~rt, FIAC/CPFC subject to ratific~iOl1by the Soard.
RelaxatIon for exteooec CBLO OOrro\vlng up to 30 days was approved by me
FiAC WhiCh shailbe further P.laced before the next CaT meeting
Item No;S: $electton of Mutual Fund ETF manufactUJer for 'investment of the EPFOsInvestment In eTF.
It was d~lded to form a Sub·Com/lhUee of the r~A~ .11 vHJe, tv o;)t=let.t MU\Udl
Fund as ETF manufacturerwtllch sholl cop,pnso of FA&CAO.Shrt
Ba.lasubrahmanyaM Kamarsu (employer representatIVe) and ShrtPrabnaxar
JBar'lasurt{el'l'p!()yee representative) The ~omrniUee may co-opt any other
member as per the requirement CRISll shall aSSl~t the suo-comnvttee ,n the
selection of the mutual funda~ E l ~ manufa~tur~f •
Item No.6: caLO borrowings transactions by the Portfqlio Managers during theperiod 21.11.2015 to 31.12:2015. ••Tne Iten'\nO.6 was taken note ot by the commIttee;
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IIe·,." I~ No.5:SeJectlgD gf Mutual Fund UF manufacturer for ID~estment of EPEqJ"". 'Investmeot 10rn. . ,
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1. The Anance Investment &. Audit Committee (FIAt) In Its 120tlt ~leetlng held on 23nt
lune, 2015 recommended investments of EPFOcorpus In 581 manufactured m forthis current year I.e. 2015-2016.
The Hon'ble Chairman, CST EPT had approved the recomm$1datlons of FlAC on29.01.2015.
SUbsequently, the Board In Its 20a$ Meeting held on 16'" September, 2015 approv~by FIAe proposal also ratified the fees charged ,by SBt Mutual Fund for its ETF as ', negotiated by the SUb<ommlttee constituted by FlACwhich 1500.07% per annum onnet asset.
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3.
4. 1Jwestment In ETF manufactured by 581 Mutual Fund was ,started w.e.f 06111 August,2015.
5. The tenure of appointment of SBt t-1utual Fund as manufacture 9f ETF for InvestmentsbyEPFOIs ending on 31$tMarch, 20:16. Mutual Funds as m manufac:turehave to 'beappointed a fresh.
6. Accordingly, it is proposed to constitute a sub-<:ommittee'for Selection of Mutual Fund'ETFmanufacturer for investment of EPFOsIOVestn1entin ETF. The Terms of reference'of the proposed Committee may be as fotlows:
a) To prepare and approve Request for Proposal (RFP) doCument for Selection ofMutual.Fund eTF manufacturer tor Investment of EPFOsInvestment in ETF., '
b) To undertake the entire process of evaluation of RFP, technical bids, finandal bidsetc. and select a Mutual Fund ETF manufacturer' for1 Investment of EPFOsinvestment in ETF.
c) To recommend the selected entity to the FlAC/C6T.
7. Since the entire process of selection of Mutual Fund ETFmanufacturer for investmentof EPFOs Investment In ETF may take some time beyond 31st March, 2016, it ispropOsedto extend the tenure of 581 MutuaiFund for another three months I.e. upto30'" June, 2016 on the same fees l.e, @ 0.07% per annum.
-.Theproposal contained in Para 6and Para 7artJplaced before the Committee forapproval. '
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Minutes of meeting 9f Sub·Commlttee for selection 9f Mutu,. Fund ElF manufacturer for!Investment of EPFcYscorpus In equltJesand related Investments
Oate: March 29,2016Time; 3.30 PMVenue: EPFOHead Office, Bhikaiji Cama Place, New Delhi
Ftnancelnvestment· & Audit Committee (FIAC) members:1. Sh.Balasubrahmanyam Kamarsu (employer representative)2. Sh. Prabhakar J. 8anasure (employees representative)
EPFOofflcers present: ,L Ms. Meenakshi Gupta - Financial Advisor & Chief Accounts officer (FA & CAO)2. Or. VP Singh -- Addl. Central P.FCommissioner, IMC ,3. Mr. Alay Kumar - RegionalP FCommis$ioner, Grade II, IMC
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Consultant representatives: .1. Mr. iVlanishJaiswal- Business Head, CRISll Research and RiskSolution2. Mr. Jiju Vidyadharan - Director, CRISILResearch .3. Mr. Piyush Gupta - Associate ~irector,CRISll Research
The key poin,t~ discussed"during the meeting are summarised' below-
1. Review of terms of reference (TOR) assigned to sub-committee:· The meeting began with
review of the TOR aSsigned to sub-committee. The following' TOR assigned to this sub-
, committee were highlighted:
a. To prepare and approve Request for Proposal (RFP) document for selection of
mutual fund ETF manufacturer for EPFO'sinvestments in ETF
b. To undertake the entire process of evaluation of RFP. technical bids, financial bids
etc. and select a mutual fund ElF manufacturer for EPFO'sinvestments in ETF
c.T ().recommend the selected entity. to FIAC/CST
2. DeUberation on whether an RFP shou,ld be floated fot selection of mutual fund ETF ' ,,
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manufacturer. It was clarified by EPFO that as per the guidelines of Central Vigilance
Commission (CVC), selection ot mutual fund ETF' manlJfacturer should be carried out._,through tendering process based on RFP •.
3. Selection of .mutual fund elF manufac~'er to be done by May 30,2016: It was hIghlighted
that the term of Sf.n mutua.' fund wh 1<; currently man~ging EPfO'c, p.quity investments
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through ETFends on June. 30, 2016. Hence, it was decided that, the selection process of
mutual fund ElF manufacturer should be completed by May 30, 2016.
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4. Followinl aspects pertaining to EPFO's equity Investments were discussed durinl the
course of the maetlns:
a. One or multiple mutual fund ETF manufacturers: It was dlscussed if EPFOshould go
for one or multiple mutual fund ElF manufacturers and if EPFO should consider
investments through new ElFs.
However, sub-commlttee members agreed that since this was not in the s>urviewof
the TORassign~d. it may be taken up by the appropriate authority.
b. Index selection for elF: It was discussed whether the pereentage allocation between
NSENIFTYSO and BSES&P SENSEXshould be decided by this comrnlttee. It was
further discussed that a committee should be set up for selection ofiJ"ldices on
which elF would be based. However, sub-committee rhembersagreed that since
this was not in the purview of the. TORasslgned, it: may be taken up by the
appropriate authority. Further, it was also suggested th~t EPFOcould constitute ar:t
intern'ill investment and risk committee for its ,investments in equities and related \• I . •
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instruments.
s.. Based on the above discussion, the sub-committee- members decided that CRISILwould
develop draft criteria for selection of mutual fund ETF manufacturer. evaluate the
proposals submitted and fin~ny place its findings before the sub-committee.
at was also decided that an activity schedule for .the TOR assJaned to the sub-committee .
be prepared and circulated amongst the members of the sub-~ommittee.
Action point: CRISIlto share draft selection criteria and activity schedule with EPFOby April
4,2016
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REQUEST FOR PROPOSAL (R·FP)for
'Selection of Asset Management Companies fo'r EPFO'sinvestments in Exchange Traded Funds (ETFs)
Data oflasue:xxx, 2018
Deadline for submission of Proposal:xxx, 2016, by X pm
Consultants to the EPFO:CRISIL Limited
Proposal should be superscribed as'Confidential - Proposal for Selection'of Asset Management Companies for
EPFO's investments in ,Exchange Traded. Funds (ETFs)
To be submitted in a sealed envelope and addressed to:
Ms. Meanauhi Gupta,The Flnanel., Advisor and Chief Accounts Offtcer(FA & CAO),
Employe•• ' Provident Fund Organ~tlon (EPFO),Bhavlshya Nidhi Bhavan, ;,14, BhikalJ Cama Place,New Delhi -110066
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1 Disclalm.r•••••••.•.••••••••••••••••••••••••••••••••••••••••.••...••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••.•...•....3
2 ·'ntroductlon ..............••••••.••.••••••••••_••••••••••.••••.•••.•••..••.•.•.............•._.............•.•.•·•••••__••••.'..•.•.••••5·
3 Terms of Reference •••_••••.••.....•..•••••••,••••••••••••••••.••~•••••••••••••••••••••••••••••.••.......••••••••••••••••••••••••••••7
4 RFP Procass••••••••••_,••••••••••••••••••••••••••••••••••....•••••••••••••••••••••••••••••••••••_••••••.•••••••••••••••••••.•......••••8
5 Parameters for Evaluation •••••••••••••~••••••••••••••.•.•••.••.•...•...........•.•.••...••••.••_.•~._•••••••••••••••.•.....•10...:::/~~+,. .
Fonnat of Pre-quallflcatlon, Technical and Financial bids •••••••_,;~~;::MiL.•...•••__••••........_15. ..J~\:jmf:{:~t\... ,
Formats for Covering Letter and C'arlflcatlon;._ ••.••••••••••.••••:4j.~~:ii_.•.;~~~~~;t~~~ 23. ..~:~~:\t\~:;·..~. ":::;l:r\i~;;"
Investment Pattern •••••••••••••••••••••••••••••..•••••••••••••••••••••••••,;;:;~~~"i~';~••••••- ••••••••••••••,.~~~~.•1'•••••••••••• 30. <~\:I;;::::·· ·':::;:::;\\t:;;.G-Iossary ••••••.••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••_••••'!~ •.•_•••••••••••••••••• ':•••••••••••••••••••• _ •• II!~ ••• 38
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1 'Disclaimer, .
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1.1 This document Is being published In connectlon ..with the proposed selection of Asset Management Companies forePFO's InveS:knentsIn elF.. : :
1.2 This document does not constitute nor should it be interpreted as an offer or Invitation for the selection of AssetManagement Companies for EPFO's Investments In elF. described herein.
1.3 This document IImeant to provide information only and on the express understanding that recipients will use itonly for the purpose of furnishing a proposal for selection of Asset Management Companies for EPFO'sinvestments In ETFs.lt does not purport to be all Inclusive or contai":,!lJle information regarding the selection of
.~': •.:•.••~!'o••••Asset Management Companies for EPFO'. Investments In ETFs,~~;~~the basis of any contract. No representationor warranty, expressed or implled, wUlbe made as to the r.lia9illjy/,g~~racyorthe completeness of any of the
. .':':-:-.!~,.'.' '-~~;'!'!... .Information contained herein. :::::;;::;;.;' ....
1.4 While this document has been prepared in good faith.~a. EPFO nor a~t;~Jts offlcers make any representationor warranty or shaHhave any responsibility or nab\li~~;~~~ver in respect Of:~Ji:~tatements or omissions herefrom. Any liability Is accordingly and expressly dlsclaimed. by EPFO and any of Its·atlk:ers. even ifany loss or
. :'>'::":':'. . .':':'.. ''':':~;'~''''damage is caused by an act or omission on the part of ep~Q,.or a!1i~9l1ts offtcers, wlf«i,tb"r negligent or otherwise .
...:;~::... .:~::r~·::~N:::::;:;:{::::-· . ~.:~~:~::. .. '1.5 By acceptance 9f this document. the reciP.!~~~.;~9.reesthat ariYl~f9rrnation herewith will be'superseded by any
subsequent written Information on the san1~r~ubl~:made avaii~bi~JQ the recipient by or on behalf of EPFO.EPFOand any of its respective officers und~ffilke'·n~n;bl!9atlon. ariib~l..~thers, to provide the reCipient with accessto any additional information .Of:JC?4pdatethis d~~me~r:d~;t(fco~ect ~t1;~racies therein which may becomeapparent, and they resery~.fu~:rlgt¢· ~tany time ·~n.c:twit~t:actv~l1c.e. noti~~ to change the procedure for theselection qf Asset Manag.~fuent Com~;,s for EPFQ~'~~.$tmeni,t~)nFS ....;{, . «: . /;::::~:;.,
1.6 The EPFO reserves the righUo reject anyor;j" pr~ or canceVwithdrawthe RFP without assigning any \'.•... .'.. . ,-> -.'-,': ~ :. . . ..<~'.."-.'
reason what~'!tI.f.·~ndin such.(:ase !i9Jnteftding appli~ shaUhave any claim arising out of such action. At anytime pt10r.~~~~.~dtii'i~~~~JUbn1l~b of PrO~~!~;m~EPFO may modify, for any reason deemed necessary, .the RFP.:~t':~~endment na•. ;~ EF'~~::~bsite <"'epflndla.gov.in Iwww.epftndl •• com) and suchamendment~.;§~,allbe binding oi.Hb~. ':'~;:.::...
,,~~,:,~~, -~-::':~: <r>,
1.7 The interested ~pPl.icantshouldcatry:out an ~ent assessment and analysis of the requirements forselection as Asset M"I:\.~gement Companies for EPFO's Investments in ElFs and 01 the Information. facts andobservations contained·.~~~in. .
1.8 This document has not beeifftled/regl$tered or apprOved in any jurisdiction. Applicants should inrorm themselvesof any applicable legal requirements and conform to the same.
1.9 This document constitutes no form of commitment on the part of the EPFO.Furthennore. this document confersneither the right nor an expectation on any party to participate in the proposed selection process of AssetManagement Companies for EPFO's Investments In eTF •.
1.10 The EPFO may not consider for the purpose 01qualification, a proposal which 1$fOund to be incomplete in contentand/or attachments and/or authentication. etc. or which is received after the specifted date and time, or notdelivered as per the specified procedure.
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ReqUest for PCQPOSat for selection of Ass.etM3nagemerjt'Cornpan;es fpt EPFO's investments in ElFs
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1.11 Without pr~~dlca to any other rights or remedies available to the EPFO, Asset Management Companies forEPFO's investments in ETFs may be disqualified and their proposals rejected for any reason whatsoever includingthose listed below:
1.11.1- Material misrepresentation by the appl\cant In the proposal.
1.11.2 Failure by the applicant to provide Information required to be provided in the proposal pursuant to relevantsections of this document
1.11.3 If Information becomes known, after the applicant ha.sbeen selected, whlchytould have entitfed the EPFOto reject or disqualify the Asset Management Company, EPFO reserves the right to reject the applicant atthe same time, or at any time after, such information to the EPFO.
1.11.4 Any conviction by a.Court of Law or Indletmentfadv..- ••on the ability of the applicant to manage a fund,
1.12 When any proposal is submitted pursuant to this RFP, it sl')allf.:D.~plreSlt.ltll!~ascertained and ensured about its eligibility to managerespective governing laws and regulatory regimen, ~§JtiaImpediment to manage ETF for EPFO's inv •••",t.rn•••"tili:
an Asset Management Company for managing ETFs 2n/~'UlTn~.r
such. ··4;~~~:n.1.13 The Asset Management Company faiHn9:$l~ii~.J~e qu~iflcation criteria specified herein
Is not eligible to have its applications consi~~~:"'Alf~~saIS documents received within the- - stipulated time will become the property of th~~hP.Fo~·ritfWJlt..notbe The hardcopy version will be
considered althe official ~'~1l~~t:::·:",.~, -,o;:W:::; ·~:~¥M:!::::::;,., .'/~~x~ri:~s~~····~···~·;:~:~~~~~~~:.. ..~~~::~.., .~:::~~~~~~.~.~::!:;§~}::~:-.~., .~ :.~.;., .. "'" .•~ ••• <
~;~i.•.~:,.:::;-,,~~,~_·_..::·.::',·::'.:,'.',~.·-:,!_~1ili't:;;;)':T;;, '" "~~~~~:-:;; '~'::?:::
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'M:'errIA being setected, under the,"""nu\"I!'r.,~ regulatory prohibition or
aOE)ro"3ISand permission to act asor othetwise to act as
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2 Introduction - :. - -2.1 Tile. Employees' Provident Fund Organization (EPFO). India Is an autonomous body under the aegis of the Ministry
01 l:.~bout and Employment (MoL&E>, Government of India. The main objective of the organisation Is to provideold-age social securlty·to subscribers.
2.3
The EPFO Is one of the largest provident fund Institutions in the woc1dIn terms of members and volume of financialtranSactions that It has been carrying ~. The Constitution of India ynder 'Olrective Principles of State Policy'proVides that the State $hall, within the Umitsof Its economic capacity and development. make effective provisionfor securing the right to work, to education and to public assIstance In .~.~es of unemployment, old age, sickness
. _ . ';-"i -.•..x-and disablement, and in other cases of undeserved wanl ~~i~~~W" ..The em~loye.s· Provident Funds & MisceUaneous ProvisionsA~~liWas enacted by the Parliament and cameInto force with effect from March 14, 1952. A.series Of te9i~ati,tnteiV~'-9"s were made In this direction,Including the Employees' Provident i=unds "~ISCelJan~~:rrovislons ACt(~~52.At present, the following threeschemes ~e In operation under the Ad: .,d%1l,";·- -.:::~:!;}::.
. .;::~*~~~. ··~-::·i::!~~~.2.3.1 Employees' Provident Fund Scheme, 1952 '(~~t=J ·-\K~:..
. "';:::i;~., _"'~~.~ - '~:::::::;~., 2.3.2 Employees' Oeposit Linked Insurance Scheme,';l·~'t.i(E~t::~:· ··::;;~~~i~:::._
. I:~::~:!~:~'.'. ~:s~~~:,:~~::~:~:::::~:i! ~;:~~::~2.3.3 Employees' Pension Scheme, 1·S.Q$:(I;PS)(replaclnsj'tfift:Employees' Family Pension Scheme, 1971). <:~:=': :'~<::.~'!:-, -'?:':>., .
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R~"est {c)rProf.)O$alfor selediat\ at .A.se' MaRagemeRtCampeRi. fer EPFO'tirwettmel'lts il'lElF! Page'
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.;,.• The organisation functions under the overall superintendence of th., Centrai Board of Trustees (CaT), a tripartite body.. .. . .headed by the Union Minister for Labour and Employment as Chairman.
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3' Terms:oiReference ;3.1 Paragraph 52 of the Employees' Provident Fund SCheme, 1952 provides that aliimonies pertaining to the ~d are
to ~ deposited in the Reserve Bank of India (RBI) or other scheduled banks aSlmay be approved by the centralgovernment and·shaRbe Invested subject to such directions as the Central gov~mment may give from time to time.
3.2 EPFO win select Asset Management Companies regulated under SEBI (Mutual funds) Regulations, 1996. formaking elF investments. The investments will be made Into Sensex- and Nlfty-~ased ETFs or any other eTF asallowed by EPFO's investment guldeUnes from time to time. The allocation of tuf1dsbetween selected AMCs andtheir ETFs will be dedded by EPFO from time to time. The AMC sha.~:,~Q~eavorito keep the tracking error of ElFsas dose to zero as possible. ,.·:~~gN~v
··:~1:~;:::~::,. :3,3 T~e selected AMC shaft Invest and/or repurchase EPFO's "'~J~'J;~~'Crertlon Units' as per EPFO's
dIrections. . .,;:"..,' ":::~::::~.:. , .,<:.~:::::->' '~:~~~;~a;
3.4 The AM.~ s.hal.l.provide facbheetlproduct brochure .~l.r~nthIY ~asis; WhicR:~~.~.S the total expense ratio beingcharged In the ETFs of the Asset Management ~y pertalrung to the EP~~l9.vestments. Further. the AssetManagement Company shaDprovide all records, dat;{~""y other r~~vant m,*eri't~:~~~permitted by SeBI (MutualFl.mds)Regulations, 1996, to the Trust to.~able the Tru~H~~~~~!~~{lnvestrltents. Th~:~~ordsldatalrepot1srequired by the Trust pertaining to the ePfQ'~:.in.vestments Ik~l~"~fthe As,.t Manageinent Company shall besent to the Trust directly by the Asset Man~g~~~Companies '&;:~~mand and regularly on monthly basis. Themonthly reports should reach the trust,betof.:m! rifth~:wo/~!rgday ~f'th~JOI~9month in a pre-defined format.
3.5 The selection of Auet Managementcompan;::i~ePF~:~ j~~~~ent ~~i~1fl:~is valtd for a period of XX~ .•,•..~, ~.-.~:v...;,.••.a:< .., . . •.•.;.*:_ ..':1I~;":~~""·.~.",.•) •.•.: .-v:..., ,', _ , .thiS may be extended ~¥.9~T, ePF~:#,.pending ~l~~,~an~:~t~e ETFs managed by selected AssetManagementCompanie'sflbe perfo~rice 01 the etf:'~:rnanaged byS6iecte<t Asset Management Companle. .shall be reviewed based o~r~met~;~Uch as tracki~~.error and expense ~tio. The CST,EPF reserves the rightto terminate ~~.~J!~~r:' of thi=-"~~t Cotnp¥,es atan~ pOint df time if the performance Is not up to
., ,··-.,.-···~·\:t:-D "'<II'-".~}.~. • •.•• , '.. ,.... .1the satls~.~on·c)tea~:~J~·. 'I:"*¥.:. "':::':!:~::::,;..~. ..;.\:;::: ,, . .~~;~!~;~>.' "-·'··;~:~~i:~::.,-:.-..®.:~, _. ";~~;:~~~~;~.~:... '. :
3.6 The seI~~does not oblIge~f.O to:i\~t spedticJ~ny corput into the eT~s of selected AMC~Th~ investmentwill be ca~N sol.lbased(~EPFcr~:di~. '
":;\::;~;:..Y':::;:t: ·,·::t\; . ,3.7 The Asset Manag~erit Company".1 not undertake any corporate action, if1dudlngbut not limited to, mergers,
amalgamations, tak~~~., acqutsitio$;;divestment. etc. without·prior inU",atlq" to the CST; EPF.'.':;':::::~~::." .. .~;~~!:d" - . I . '
3.8 TiUMarCh31,·2016,·the EPFOhacJ'rnY:estedRs'XX crore in'equity thro~ ms.",.;:.~~:.~.!:~~:~?~~- ..' . :
3.9 This document is a Request f()( .~toposal (RFP) for the selectton of Asset Maragement Companies, regulatedunder Si:BI (Mutual Funds) Regulations, 1996 to invest in El'Fs. Applicants WiDingto participate in.the s~ectionprocess must submit their proposals as per the process defined in the document .
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3.10 Data and information related to ePFO's investments shall not be used by the selected Asset Management ;,Company or its personnel for unfair investment gain..· :
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3.11 For further information about the ePfO, one may visit the website www,epfi~dla.gOV.lnI www.epftndia.com
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.. Reql'est,or Proposal for ,eladloD of Asset MaDagemelltCompanies f«. EPFO's iA\i.atFR~" jRi+PI Pag87
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The selection process' for Asset Management Companies for EPFO's Inv'.stments
st~ps:,<
4.4.3 Financial bid
Applicants who meet the pre-qualification criteria will be eligible for evaluation of their ftnan'?al bid. TheAnaneialbids of all the applicants win be evaluated as per the criteria specified in Section 5:3 of Ule RFP.
. . .'4.4.4 In determination of the best value bid, the following weight wtI be given for technical and /lnaneial bid
scores of the appUcants: :' '. .
Technk:al bid score
Ananclal bid score
80"20"
Thetlnal ranklngs for applicants win be on the basis of the weighted av~ge score of technical and
~(, ..,:':...., (.::~::.
" The EPFO reserv8$ the rI~htt~.change aM~dateitime mentioned in the schedule allove..~;~~;;j>\.·:/;;tf· ...
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5 Parameters~forEValuation- - ~ -
The evaluation of the engible Asset Management CQrnpanles for EPFO's 'investments In ElF •. will be a three-step'
process
1. Evaluation. of pre-quaUftcation bids Of all applicants
2. Evaluation of tecnniealand financial bids 9f applicants satisfying the el~ibilltycriteriain the pre-qualificatlon bid
3, Combined scores assigned to apPl1Cantson the basis of technical.; financial bids aggregated using 80% an!..20% weight, respectively.
5.1
A/ncludes asset under management of actively man3l;~
balanced frinds ..~::~~\\\r:\\~\\\\~1i~~~lh.• Average assets under mana~trf'!1t durlng··t1J~.quartefel8lrdjrjl,1od
~: -,!~~:*:;::.. "~::;;',:5.2 Technical bld~(8~~~t) ··~::·~~\l~b~::::::{tf:~::.\::<:;~\-,
. Quantitative c:ti(~~~&~'~~:~~~i~:>\.:..:\{~;\~~i;t~.·..:.:....:.~:.....:.... "'-:<:::::;:~:~1~>::./~<%~~>.(.~ ; ···:~:~t~z~~"'"~.-.
equity index funds, equity ETFs anr'
" 2016 needs to be considered
Parameter:: : MeasurementCriterla . Weight...-.•... -'.
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5%
Tracking error of equity ETFs 'rac;king_~ _~S~&!::p~es:?e~·.~Sen!!!!se~lCt!!index~. ~ .. ~.fL.:"'::":'-----Qaily.Va_,...~~~hi,""~I'InIS"O~rar:n:-2Q1~--:----·---··-""'50rr\{i-_...--"c--_'-4'.
5% -...5%.5%
5%5%
5%
Paramatar: " Measurement Criteria \ Weight
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Total
(
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:7~~i;i~j:tf:·:~::·I,~.~~,;...'~.!.··.~.....,·.~:2l~~ll•.t~~ •. ~",: .• ~•. ,", " '. ,,,,,,,,I''00I.
~%·.1Average e~'of' <,_~15ye"-,,''the'BoardrrrUa~'" ' '. ..•...•"'~,":..~'-"'"
1.0%
Request for Proposal fotselection of Asset ManagernehtCornpanies for EPFO'sinvestments in ETF~ 'Page
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AnalySis 'Nil be doqe baAct Oft ~ew of~:t:~~by._ .:aPPIICarits 8nd relative ecOres wjI be
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~atIonofbrok.. .~iotoQhiis_
0.5%.,
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2.1.2 SlNdure Qf. lnvestment .team
2.2 O~Uo';sEfficiency ofback officeprOcesses, ':;';;~I:lr~~:
...-~.
2.2.2 Compliance - Compliance POilcy". _ ',' ~., .•_". ~ .. ~. ,U<, •••.•• ""
2.2.3 Data-SecUrity. -
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. TOTAL
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Requ~st for Proposal forselectio.n of Asset Management Companies for EPFO'sinvestments in ETFsL~;__.....__~ ~ __~ ~ ~ ~~~ _
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5.3 Financial bid (20% weight)
The applicant should submit the financial bid, I.e. total expense ratio of ttle ETFs bei~g managed by the applicant andlhebrokerage chargeable, as on the date of proposal. The weights for the evaluation. of the flnandal bid are as follows:
ElF based OntO \ Total expense ratio anditJ(OkerageschargOable (In percentagoi ' r Welght5-
Note:
.~;:~im~::~·1. The calculation of total expenSe ratio shOuld be as prescribe~it~I~BI (Mutual Funds) Regulations, 1996. •
2. During the selection period, the total expense ratio ;ncluditiirbfokj~~s chargeable sha' not exceed the abovequoted; ,except on account of any regulatory Changit!'S ·~JP'{~troctu~;?R.~~1 expense ratio. Further, the selected .Asset Management Company shall give prior Inti. . :"'~'toEPFO In, casi('9Uncrease in total expense ratio onaccount of regulatory change in the structura o( t6tif.Jxpense ratio. CeT, EF;ptt:~,$ervesthe right to ,terminate theselection of the Asset Management Companies ~f:~f:.point of Y"me I the ~;.6i.#~ratio charged to EPFO /$
unraasonab/e. ,.g;:~:~. . '~:::~ti\;;:::::~:~;;~f.l~~~~.":':'\\.:;:3. The applicant shall give an undertaklrt~.~tn.o.charges oth~fthan those quoted In the financial bid (i.e. total
expense ratio and brokerages) shall be ·cHtt9..e~~i~R$~PFOor 'g~l.~rsinvestments .
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6 Format.of'Pre-qualification, Techntcaaand Financial bids8.1 Documents comprising the proposal
The proposal submitted bY the applcant shaDcomprise the fOltowingdocuments:
6.1.5
Pre-qualiftcatlon bid with all the Information, .as laid down I" Section 8.2. duly ftUedIn along with allattachments/schedules duly completed and with a covering letter, as per the format defined in Section7.1, signed by the ~utho(i'led representative. of the applicant.
Technical bid including alt the Information. as laid down In S~on 6.3, duly filled in atong with anattachments/schedules duly completed and with a cov~i~' as per the formal defined In Section7.2, signed by the authortsed representative of the ape~ .
. ~..:~.~:§1:~~~~~:~. . ~The applicant's financial bid. as per the form~t~~~I1~1Jin~\.8.4, ~ with a covenng letter, as per.the format defined In Section 7.3, signed by ~r~sed repte~~etive of the appltcanl
Any deviation. from th.erequirements of ~ must be Included 'f(~parate statement as per theformat deftnec:l In Section 7.5. .. ":' ~~~::.~.
AnyqIIw InfcnnatIon _10 to submillad'~t# 01 tho ~ ••.
There must be an Index at of thil'~'~~al detailing the summary of all informationcon'tained in the proposal. An m~~f;~,serially numbered.
~~~.~'.~.'.;~.
8.1.1
6.1.2
6.1.3
) 8.1.4
6.2 ' Pre-qualification bid format
Name of appU~t:
6.2.1 .S&P sse Sensex and Nifty 50 asof S&p ase Sensexl Nifty 50 ElFs managed in
I '_ • \
~)iQjlt,E)ccel file named 'Bid Data_NAME! OF AMC' with tab
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6.2.2 The Asset Management Company musthave astets under management (AUM) of nOt leU than Rs 50,000crore; 'OR' assets under ma".gement (AUM) under equity mutual ~d (equity funds,sectorf\mds,equityIndex funds, equlty ETFs and balanced fUnds) of not less than Rs15,~ (:I"Of'eas on Match 31, 20t8 (alsoto beprOYided Ir\Microsoft.Excel file named 'Bid Data_NAME OFAMC' with tab named '6.2.2').
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Request for Proposal tOf selection of Asset Management Companies for EPFO', investments 'in'ElFs. Page
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"Funds having average m.onthIY&~{~~~~~l~March 31, 2018
the last three financial years ended
11I11
II1
.11
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__ ---'-__ Note~_The pre..qual~tion biddocume~ should be dulyatteste(l b)! auJbOfisec'rersoMel. I
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4. Appiicantdetails: • ' '\:t;jh:-.:::}11.',I. Nature of busmessl Produc~:91.~lCSs offeted by the appllcant(s):
":~:;'
il. Date of/nCQfPOf8tion: .
iii. Date of commencement ol-business:
.iv., ,
FuNaddress Includlngle/ephone Nos./Fax NO$.: .,v, ,Registered Otr1ce Address;
vi. Address f.orcommunication:
6.3.1.1 Net ~rth of the Asset Management Company
Net worth statement from the company. secretary (with signature and seal). 01 tnethe net worth in the following format (also to be provided in Microsoft Excel filenamed '6.3.1.1'). 't
',.6.3 Technical bid format
6.3.1 Quantitative information requirement:
The following quantitative Information Is required to be submitted by ~~plicants:e
·.: (
Management Company stating'Bid Data NAME OF AMC' with tab~ -.
:'<.. ' .••••• r ,
ETF. (also to"be provided intab named '8.3.1.3,) •
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: (. I . Quarterly Avoraqe Assets Under'Name of tno equity tndox fundi : Catcsory (oqulty indoltfundf !
S.No E" ""fF l E,rF ~tm1gem<,.1''';)R5Crorc)forthaqUh1<;. I equ.t"J • ) .': quarter ended March 31. 20i6
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Request for Proposal.forseleetiOl'lof Asset Management Companies for EPFO' investments in ETFs PageL~------ ~ __--~ ~ __~~ __~~~~ -r ~__~~ ~__~__
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6.3.1.4 Adjusted n. asset value (NAV) series (adjust~ for t"nn~t •• action like dividends, etc. on theinvestments) of equity lndex funds! equity ETFs tracking BSe Sensex or Nifty 50 index.
Provide dally adjusted NAV series of aU equity Index equity ETFs tracking S&P BSE
Sensex or Nifty 50 Index since May 31, 2015 to May 31, 6 In the followlrig fonnat (also to be
provided In Microsoft Excel file named 'Bid Data_NAME
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11.53 =12.18=11.53111.
8 ••I
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• =12.07.f1;43111. 10.85
7 ()G.Jun-2015 11.42 =12.06=11.42110.53~12.07
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6.3.1.5
tracking S&P ase Sensex or Nifty 50ended.J~alt 31, 2016 in .the following format (also
OF AMC' with tab named '6.3.1.5,') •
.~(
'One year ~ asondateof RFP. . . . I . .' ."
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• tracking error calculalaci ci~g S&P 8SS':Sansax total return Index (iRI) for lindeXfundsl ETFs ba$ed on S&P sseSansex and Nifty 50 total retu;;"~~ k1f. i~4&x(TRI) funds! ETFs based on Nitty 150
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-Request for Proposal for seletlion of Asset Management Companies for EPF~'S investments in ETFs Page
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illustration for ~alcu'atlng~kfng error
:'SD:-mc)Otn period ":om May 1; 2015 to OctOber 31, 2015.atUOdeix'fI_t:.~r&$tr:iliji'!ltirln S&p ase Sensex and Nifty50 for six months and
. ',:: SI'. No. . For the Financra(·Yea!"' I Remarks if 311'1 I Annexure No.
6.3.2
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6.3.2.2 Organisation chart- with names and responsibility(ies)
6.3.2.;) ", Ownership structure (as on March 31. 2016)· clarity of majori~ shareholder
Shareholding pattern Including details of all shareholders hold~ over 1% of the share capital
8:3.t.4 Parent support and quality - Commonanty 0; business. contrib~tion to parent', overall bottom line(PAT)-
Profile of the company and other businesses (if any). scale of ~erations and their contribution
8.3.2.5 Board strength -
•• Details of board members In the format given below
Profile of the Board of Directors of the Company
Averaga Experience of the Senior Management ; Remarks If an,!
Average. Experience of the Senio"M"anagement. . Remarks if ;lIlV
,• I
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. _.~.:,.~",.•.••..•~,_.;>..•••. ,"'."'_' ~_..- .._"'> .•••• ,,_ .•• -~ .• ~ •••• AoI... ',n" ••Or.'1.::"'",_¥ ••..•.••~ •.·••._~'·_~ .••r .•;t:."· _- .•..I~" -:'-,. ••••. - -" .• '~~ •.•..•• ~.~ •••• q.
. ..;;~.'::~j,... "'~::~;':~'., . .:~:,.-';~:.--~.:~:.:.:~~.. ... ~:•.{:.:~..'.:,. . ,. Provide brief profile of the seni9.tmanageme~l:klcluding ri~~:9VeraH exp~ and experience in current organisation .
·::':~>;t~!r.~. ~~~::~:.':\. .~~~;:~~<~.. .:6:3.2.8 , In~estmenn~~· ,~~~!,~n of the' t?1~$an.dre$pons~bi\i~eSof the inve~tment. and ~aling
.,:-:·:::J~~r'kA.redeallm'l:.~fl'irtct:m~emeql.c:~rned out as Ind.,pendent adlvltles? ArtiCulation of. ':"~,':.~.,,~.~.~.~"":-~"":"". -.....,'"....... ,..•~«~:- "" ..::./,:~:' .inveStmentproee'~:~ investiii~~: S!Fs~ articulation of ~oker empanelment norms, is the......•••,.'.... .....\ ...•~.. ...•.••...•. ..:.;., ...-:.~..~.,::.' . policy rev1eWP.fOcesi::tc).."vlewlnv8strri'ent process for ET~? What is the frequency of review?
" . "':'- "'~:::~~~~:.'-":"'~:;-;'. ':','"": ::Write-up on IriV~"~ent pOll~ .• investment process nOW ~ investment research practices.
6.3.2.9 '::;:b~tions - E~~fYOf b~;'offlce processes: Integra~ of front. mid and back officesystem,s, Oocumetl~on of disaster recovery and busine,* continuity plans
. /,~. .:~:::::~:.Write-~p ~.o~atlons procelles
6.3.2.10 Operations - e(,mpliance : Compliance PoUcy
Write-up on comp\i~nc::eprocesses
6.3.2. t 1 Data Security Policy
Write-up on technology p'latforms. dedicated system support team. backup processes anddisaster recovery system .
Write-up on any other information that the applicanllhinks would be worth mentioning in the proposal.. . ..,:. .
Each of the above write-ups should IS'anot more than twO A4 size sheets (500 words). However, in case of standarddocUments such as investment policy. risk policy. etc. the word limit is not applic~e.
·· ,<0.: (
Requ"t for Proposal for selection of Asset Management Companies for EPFO'$ investments in ElF! PageC:..•..------,. __ -'----: __ ..- ...;.... .:..- __ .;.R.--:.--------_- ..-.,-_-.,..._~
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Kindly note that the data needs to be provided In the format specified abov~ and in case the data caMot be given. pleasewrite N.A. Any deviation from the format specified above can lead to non-allotme.,t of .scores for that parameter during theevaluatlon'process.
6.4 Financial bid
S.4.1 Format for submitting ftnancial bids
.,,~i\...;~.~:;~-.;,
. . . ~l'1!~t~1. The calculation of total expense ratio should be as pr~.m~(funder ~~~~~~utual Funds) Regulatlons,i99S.'$.¥Jf} ' .2. During the selection period. the total expense ra~i~(l~~tdhig brokerage.·~~~~able shaHnot exceed the above
quoted. except on account of any regulatory ehang~iJI) the structure of ~otal·'>Ct"qse ratiO. Further. the selectedAsset Management Company shaH give priorl~timai~;!? EP~9)~~~e of ind~,ln total expense ratio onaccount of regulatory change In the stru#e of total exp".~tio)bBl;. EPF rese~the right to terminate thesel8cuon of· the Asset Management C~ort~,;;sat any rXtii\t~9flime .~the expense ~tlo charged to EPFO is
unreasonable. "::~~~:~~!.q\~\::::;:...'·::A~~:~~~., .3. .The applicant shaH give an,.~~ertaklng th~(~p ch;~~it~U!~r th~;lme quoted in. the· financial bid (i.e. total
expense ratio inCIUding-:~~!~_lf.1a" be Ji~~abl.t::!~~~Pf:9.:?f.EPlf&S investments.
Note:
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7: Formats for Covering, letter; and Olarification-7.1' Formal for Pre-qualiftcatlon Covering letter
(To be forwarded on the letterhead of the applicant submitting the proposal)
Ref: _"-- _,,
Date/Place: ..,... _
Ms. Meenakshl Gupta, ,The Flnanclal Advisor and Chief Accounts Offtcer (FA&CAO). ,"','Employees' Provident Fund Organization (EPFO);Bhavishya Nidhl Bhavan.14. Bhikaiji Cama Philce,New Delhi - 110066
Sir,
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,,:':::4:::~:;:~:". b-.~:~::~~:;... ..;~~;~::. .<~:~;::-:;" ""<::~~:;:~:>~._ ,Ref! Pre-quallflcaUon bid. R.q9~st for f'r~,.at (RFP)::~:~lection of ~sset ~anagementCompanl.s for EPFO's
.":-.-.; . '.: ••;.:,!- -,:.;.;,~~ . '. .Investments In ETF. ...;.:....~-;\' .~~~::~:. :>~('.
A]";;tltw,,,~ ..\\I}'~"W%~,'1~kWe re,~ to thEt;~inunicatlOIt"'~ Reti.~l,ror Pro~IRFP) for selectlon.oI Asset Management Comp~nies forEPFO's Investm~a~~, ETFs. We hav.f~~a~~erstood the contents of the dOcument and wish to par:ticipate in theselection process. ~~:,~ pleased to::;,~~1t ~::P.('8-qUalification bid along With all the .necessary documents. asmenUoned in theRFI(·~t~lection of (1t~ffpON NAie OFAMC) for EPFO's in~estments inETFs. We conftrm that wesatisfy the pre-qUalificatiori::~a set out ~~J;~erelevant sections of the RFP. , .
'.~!:!:~;:>. :;:~:m·. "We agree to unconditional acceptance Qf:jilUhe terms and conditions set out in the RFP documents. We confirm that the,information contained in this ~(,i~r'(,rany part thereof. including . ItS· exhltiiti. schedules. and other documentsdelivered to the EPFO is true, accurat~:: 'and complete. This proposal includes an ii')formation necessary to ensure that thestatements therein do not, in whole or in part. mislead the EPFO as to any material tact.
)We .have agreed that (In$ert Individual iJuthorised representative's name) will act as our representative and has beenduly authorlsed to submit the proposal .
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Further, the authOtised Signatory is vested with requisite powers to furnish such letter and authenticate the same,
Yours faithfully, , ••.:For and on behalf of (Insert company naMe)
uRequest for Proposalfof selection of Asset Management Companies for EPFO's investments in ETFs Page
.- .": ,,~,
-",
IAuthorised S!gnatory (signature along with,name of authorlsed signatory and co"pany seal)
Name:
<:+rrt: ,
, .
7.2 Technical Proposal Covering Letter
(To be forwarded on the letterhead of the applicant s~bmitting the proposal) .':
Ref: _
Date: _
Sir, ;~ti;h......;;:\;l;., ...'}1:,!> .
Ref: Technical bid. Request f~r:·.'f?r:c)'p~~al(RFP)for, sel.~~~\~f~~ssef ~anagement Companies for EPFO's
InvesUn.nW In Elfo ;~~).,:<:'i;1~,.':':~i¥tr:::'\;lb. .We refer to the R.$~~~;~::.e..n,?pos~~:;(ijn!)at"~ ..Of ~~ Management Oompanies for EPFO's investments in
ETFs. :tr~]1~:~"-'"":.;:%~:~~~~~::; ~:~"f#~:~;.' ""':::~~~;;:t~*~,,~:~:" " ,We have read riCaerstood the cOn(~ts of thi:tlfP documeotand pursuant to this.. we hereby conftrm that we satisfythe requirements lakf~:i" the RFP. ::'~~:~\:~, "\:;t.,;" ' '
. . _ ··~1;~~~!~·\. ":~,i;~~~:~, '..~:. . _ ,I
Havin9 examined the RFP{Wment. the::'.r~eipt of which is hereby duly acknoWledged. we. the undersigned. offer topr.ovlde the services as reqJt;~~nd ou. in tho RFP for selection of Asset ~Management Companies for EPFO'sInvestments in ElFs. ':::~~;~~;",J:~:W
" <:;~;~:;: :'.~::~'.
Ms. Meenakshl Gupta.The Financial Advisor' and Chief Accounts Officer (FA & CAO).Employees' Provident Fund Organization (EPFO).Bhavlshya Nidhi Bhavan,14, BhikaljiCama Place,New DeIhl· 110066
: (
: (
: (
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To meet such requirements and proJde such services as set ,out In'the RFP dOCl\ments. we attach hereto our responseto the RFP document, which constitutes our proposal for being considered for se~ction of (MENTION NAME OF AMC)for EPFO's investments In ETFs. •
We undertake, if our proposal is accepted. to adhere to the stipulations put forward in tho RFP.
We agree to unconditional acceptance of an the terms'and conditions set out in th~ RFP documents ..We confirm that the information contained in thls proposal or any part thereof,.inc~in9 its eXhibits. schedules. ~d otherdocuments delivered to the EPFO is true. accurate. and complete. This pto~ includes all information necessary toensure that the statements therein do not. in whole or in part, miSlead the EPFO aJto any materia' fact.
l_' ._R_eq..;,u_e.;s_t_fO_r_p_ro.;po;.-.s...•.3_'.,...'Of_se,;,.,'_ec,...t_io_n_o_'A__$s_e_t.,...M_a,;..ns..,:9:.,.e_m_e_n_tC~o~ml-':..,.PI_n_ie_'_f_or.,..E_P_F_O_'_s'!-in_v..,..e_st-.m_e_nt.,..:s"..i"_-:-ET_F_s--,'_-.-...-. ••.P_a_9-:.~_
; ."; '~.
For and on behalf of (Insert comp$ny mime) I
I
Aulhorlsed Signatory (signature aJon~with name 01authorlsod IIgnatory "":.:a:tny leal)
Name: . .<'W',y'
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We have agreed that (Insert Individual authorlsed representative's name)will act as our representative and has beenduly authorised to submit the' proposal. .,
Further, the authorlsed signatory Is vested with requisite powers to fumlsh such Ie ter and authenticate the same.
Yours faithfully,
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7.3 Financial Proposal Covering Letter
(To be forwarded on the letterhead of the applicant sU~rnitting the proposal). ,
Ms. Meenakshl Gupta,The Financial AcMsorand Chle' Accounts Officer (FA & CAO)Employees' Provident Fund Organization (EPFO),Bhavishya Nldhl Bhavano
14, Bhikaiji Cama Place,New Delhi· 110066 '
-,., '
Ret., _
Date: _
. ..
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Slr,8!~~(;lrt.."<;'0\'{~~':· "">Ref: Financial bid, Request for Proposal (R~~t f~t~'~,~~on of As~~,~Ma,,-agement Companies for EPFO'sInvestments in ETFs' ."';'-;'" ':::::\,' :::::.,::,c':.'}::: : "
. ., .. ' ~~~..~~'·;:-~:·t·.::!·~~:::::~::~... ':::::':::.. .. .
.{::\~;{:.~.". ',:.:~~~;:, ·;<~~;;:;[tt}·· , "Having examined the RFP docI.im~N,. the (~Ipt of whictft~::~ereby duly acknowl~ged, we, the undersigned, off8l;. toprovide the service,~:~r:~J~.~~ed a'rid~\;w~~:·!\;~-!::-~eque~~;rr. Proposal (RFP) for selection of Asset ManagementCompanies for EEF..c;;t$It've~.,nts in E1ftr ....;:~::~~::;-:.":;:::'. ',;~:tf[t\:~:·::· ' »e,~::t.~&~~~,."~~:~. ' ··~W~~~~'.:. ':To meet such~irements and (()-;mgvlde ~~s as set oUt In the RFP docum~nt we attach hereto our response asrequired by the R~#j\~ui'nent, wh~~~~;::~~U~roposal. ,
"':~!:~:;:;" :;:::~;. .~~::~:$!~ ; ..We undertake, If our prClliQsal1s accepte(t;tO adher,:iO the stipulations put fotwarcil in the RFPor such adjusted plan asmay subsequently be mutJ~&:.~reed betW~ us and the EPFO or its appointed ~presentatives.
Wh * :We undertake that during the ~.M(;lJ.QI):~, the total expense ratio, including ~kerages, shaHnot exceed the quotedexp~ses in the financial bid, ex~~ -,~ri·~ccount of any regulatory changes in tHe structure of total expense tatio. No
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charges other than those quoted In the ftnancial bid shal be chargeable to EPFO ot EPFO's investments.. . 'I
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We unconditionally accept alltle terms and conditions set out In the RFP docume~ .e
,
We confirm that .the information contained in this proposal' or any part ther~f, including, its schedules, and othe(documents delivered to the EPFO is true, accurate, and complete. this proposal inclUdes all information necessary to
I ..,
ensure that the statements therein do not. in whole or in part. mislead the EPFO as to any material fact. '• '. • I
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, ,Request for Proposal for selection of AssetManagement Companies for EPFO's:inveslmenls in ETFs Paget.,,,,,' ---,-----...... ..:._,--.....,...;.,-_..:..- __ ~I-....,.....----_,_-..:.---..,.._------- -
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We have agreed 'that (Insert Individual author/sed representative's name) Will act as our representative and has bee•• :. i
duly authorlsed to'submit the proposal.
Further, the authorised signatory Is vested with the requisite powers to furnish s~ch tetter and authenticate the same.
Yours faithfUlly,
For and on behalf of (Insert company name)
Authorised Signatory (signature along with nam~ of authorised signatory and company seal)"::;:;~:::'l
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714 Request for clarificatlons
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Pattern of In~estmenl, as notified by Mlntabyof Labour & Employment Vide notitlc~tlon No. S.O. 1071 (E). dated' April 23.2015:
8.1 Investment. Pattern
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Request for Proposal for selection of Asset Management Companies for £PFO's investments in eTF$, "" " '. n ' ",'
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aof ~ont~ Of the ob'iq~ widertaken. failsto aMbIe,1ts In~ as ~ Coveredunder.~c(ij (b)abOY •• ·~aib8~8s-in ei9ibte~under_~te9Orv. ~.'
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{il} Infr'altNdura and.~ houlingBondsi~~y anySCheduled~ercial bank. whichmeets 'the conditlonaspecifted In category (Ii) (d) abOve. '
(iii) Usted (or propoSfJdto be listed Incase bf freshlSsue) securitiesor.units i~bylnfrasttucture. debt·rund$ operating as a N~n-8ankln9FfnanciaI ~gnipanym~~ReaerVa.~~--· ..."-------
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(Iv) I.,iated(orProposed to be Ii~tediir! caseof fr~ iss\!8)unitS.is~ by inftasiructl,areOebtFul)<,fs .',,;9.J~er~_. ~,*,alFund'aftdteqiJl'lted bv·securities,~ftd:F=iii~.Ma.A";';"'''f,_... .. .
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Request for Proposal for selection of Asset Management
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Requ.e,st for eroposalJorselectiOf\ofAsset ManagernentCompanies for EPFO's investments in ETFs• '," - ., -:; : .•... ",c'· ',.' - - • " . ',' -, _ , I •
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pet'i'M!Wleca~e. ~pecifledinthts investment pattemln aspe~Jt!d ml:lVllrnltl'rl,ruHrt1t1!t~iblA perce~ge amounts to be invested In each such
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restrictions as "1adeapplfcable for various sub-I
Fresh ' urHnvested funds from ~ past and receipts like contributions tothe funds, maturity amounts of earlier investments, etc., as reduced by,obligatoryoutgo dUring the flnaritt~ty~ar. :- :;Proceeds arising out of e~~i~k:~J~t option, tenure or asset switch or tra~ of any asset before maturity ean beInvested in any of the permisSi~l'~~es deser1bed above In sueb a m~nner that at any given ,point of time thepercentage of assets under that category should not exceed the maximum ~Imitprescribed for that category andalso should not exceed the maximum limit prescribed for the sub-categorie" if any.,However,asset switchbecause of any RBI mandated govemment debt switCh wpuld not b. cover~ under thisrestrictiol:t.
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Turnover ratio (the valu-lt of securities traded In the year/average value of tI'IIeportfolio at the beginrling of the year• and at the end 01 the year) should not exceed tWo. 'I:" '
8.6 ,If for any of the instruments mentioned above the rating falls belOw the min~mumpermlsSible investment gradeprescnbed fOr investment in that in5trument when it was purchased; as corlfirmed by one credit rating agency, theoption .of~x!t shalf be .nsidereu' .:md eXerCised,as appropriate, in ~mannbr thaf is ill ttJe b~~ti.f)t!rf!~tQfJb.!..._.__ v.,
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IOn these guidelines coming Into effect, the above prescribed investment patter shall be achieved separately forsuch successive financial year tbI:~ugh finely and appropriate planning. i .I • ,
The Investment of fundssho~d ~ '~t arm's length, keeping solely the benefit ~f the beneficiaries In mind. For. Instance, Investment (aggreg~t.~ across such companies I organlsatlons desfibed herein) beyond 5% 01 the.rtesh" accretions In a financial year Wilrnot be made In the seeuritles or a company I~rgan~tion or in the securities of a-. company/organlsattOnlnwhlch Suc:ha company 10rganJsation holds over 100..+ of .the securities Issued, bya.fund
created for the benefit of the employees of the first company I organisation, aryd the total volUine of suchinvestments win not exceed 5% .of·the total portfonb of the fund at ~ny time. T~e prescribed process of duediligence must ba strictly followed In suchesses and the securltles!n questlo1' must be permissible Investmentsunder these guidelines. . .;.~, :
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8.9 i. The prudent Investment of the funds of Ii trust/fund within the PI!!~itpa'ern Is the ftd4c1ary responsibility ofthe Trustees and needs to be exercised with.appropriate due•.;!~~~,The Trustees would accordingly b.responsible for investment decisions taken to Invest ·the~~W·.,,,· ~~~;~. I ..
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i. The "".- wit take suitablostepO to !lOll"'" -21iP'.~~'(..~~'th,e cOstOf'~,'~r"""t oflh. fund<. ' • . .
iiI. The trust will ensure that U,e procesS of Investme"ccountable and tra~\W'l -.iv. It will be ensured that due diligence Is carried o~Wq~;J$sess rts~~ assocfat~~. any particular asset beforeinvestment is made by the fund In that particular asset a1iji·~I.~Oc:tvfMi:lhe~. oVi~Whlch itls held by the fund.The requirement of ratings as mandat@,:1;I.I"-this notifi~iI6:~::;lnW~ly· Inte~ds, to 1~~Whe risk· assoc;lated .with
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investments at a broad and general I~~::~~~fdlngly. it 'stl~I;IJd not ~e construed in any malUler as anendorsement for investment in any asset~~~~.~i~'>i.:$' !"inimuiri1J:~Fb~d rating or a substitu~ for the duediligence prescribed for being .CiJrriedOf,It by theJ~~n<:lltt'd-m:\>-,,.. <~;;~;~;:..,: .
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v. The, truSt/fundShOUldJ~ref'~ft~r.ment pfU~:~rt~~).~ii;t~:~~~.~~croncentration 'Of investment inariy' onecompany, corporate groug"or sector. ';~;" . :::~;;..;.:.;:.,:'.::.;.~.~. r
8.10 If the fund has engaged ~~~~~~. ol~Jsional fu~~t mana9~'~or ma~agement ofltsalsets. payment towhom Is, '.. .' . ,the b3$)~~~rl!1!~~M.{~~~n, the value pt.fundslnves~ by them In anymutual ot~~ones:'~il!1 Qt~. funds sha~ be redUCedb.fQrecomputfngtha
orc:Iref..ltoavOfl~~e inckiBltg.,costs, Due .,~wi. be exercised to ensure that theImelS~'M11na VJ.~.lO enhancing the foe payable. In this regard. commissions forInstll'OmlH\ts....;af.~:,;arerullyregulated~ in partictAar. .
.-;;:!):. - '.1'Note: The exgUltg 1nY<~fj~e,.,t~rattern "i'r•••••#" .• Is subject to change bas*<¥ on the notifications Issued by theGovernment 01 India :
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R.,est ror Proposal f.Orse1ttction'Of Asset Management Compa..nies for EPFO's 'nve~tments in ElFs,. ',' - -,' - .,' . - .. Page
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• AMC• AUM• CST
• CO• C'reation Units
• EOLI• EPF.• EPFO
• eps·• ETF• FA&CAO
• GOI
• MoL&e
• NAV
• N.A.• PSG.
• RBI• RFP•. sesl• TOR
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: Asset Management Company regulated under seel (Mutual Funds) Regulations, 1996: Assets Under Management: Central Board of Trustees
: Compact Otsc: Units of the ETF which is exc:hangedfor a basket of securities
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: Employees' Deposit Linked InsuraliceScheme. 1976: Employees'Provident Fund Scheme; 1952 ...;:::.>:: Employees' Provident Fund OrganiZation ,,:.:(mtjf~t:·': Employees'Pension seneme, 1995 ::::~t}:",·,::·~t:~:,.
.,••:"~!~:"" -,::::~"'.:,Exc;nangeTraded Fund managed bY.~.C under SeSf;~(M~tual Funds) Regulations, 1996
" ":;~:~-:::~:::~' "~':::~;'~: Financial Advisor and Chief A~v~:Officer . '\;:;k ..,: Government of"ndia .:';~::t>, '.';.:'.
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Telephone: 26178450 Fax No: 26194349
CfiA ill:fllt ~ iRI' f:rfit :8til 001Employees' Provide~t Fund Organisation
(JJm vet ~ ~/' '"«f lRCf;R)(Ministry of Labour s.. Employment, Govt. Of India)
'l"IR4 I HeadOffIceBhaylsbya NldM BhawJD.14-IhlkalJl ,ama ptace. Newi Delhi
No. lIIvest.Vl( 124"')iMtgIF1AC120 ~ ".> '-\
To
1 6 MAR 2016Date:
All Members,Finance Investment & Audit Committee, CBT,Employees'Provident Fund.
Sub: Agenda book for the .124thmeeting of the Finance Investment & Audit Com.mittee .scheduled to be held on 22.03.2016 at 11.00 AM in the Conference HaU, 3n1 Floor,Head Office, EPFO, 14- Bhavishya Nidhi Bhawan, Bhikaiji Cama Place, NewDelhi- 110 066.
SirlMadam,
In continuation of this office letter of even No. dated 14.03.2016 on the captionedsubject, please find enclosed Agenda Book in respect of 124th meeting of the FinanceInvestment & Audit Committee tobe held on 22.03.2016 at 11.00 AM. Venue of the meetingshall be in the Conference Hall, 3n1 Floor, Head Office. EPFO, 14- Bhavishya Nidhi Bhawan,Bhikaiji Cama Place, new Delhi -110 066.
2. You are requested to kindly acknowledge the same and make it convenient to attendthe said meeting.
Encl: Agenda Book as above
Yours faithfully,
J(~:J~(KUMAR PUNIT)
Assistant P.F. Commissioner (Investment)
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