American Embassy School

Provident Fund Trust

Investment Review
23rd Feb, 2017

India Life Capital

Contents

Investment regulation

Investment policy

Governance Framework

Fund review

P&L FY 2016-17

Recent Market Developments

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Investment regulation effective April
1, 2015

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Investment policy & objectives

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Governance Framework
Party
Board of Trustees, AES PF Trust
Investment Advisor, India Life
Administrator, India Life
The Sponsor, American Embassy
School
Banker to the Trust, HDFC Bank
Investment review
Role
Approval / feedback for recommended investments by Advisor
Management decisions
Direction on investment philosophy
Review fund performance
Approve benefits related transactions
Sign-off on financials post audit
Investment strategy formulation/ recommendation
Track investment compliance
Present review of investments to Trustees / other analytical
reports
Update Trustees on changes in investment regulation
Advise Trustees on new products for investment
Managing Investment Back Office & investment deal-execution
Handling investment related queries raised by Auditor /
Regulator
Administrative functions of Trusts
Maintenance of member records
Preparation of financials
Facilitation of audit
Compliance related reporting
Employee query-resolution
Funding the Trusts as per regulation
Appointment of vendors
Ensuring compliance
Banker to the Trust
Depository participant of the Trust/ CSGL A/C holders for the
Trust India Life Capital
Investment process flow
Process
Process Responsibility Timeline
No.
By 10th of every month
1 Communication of investible surplus to India Life AES PF
"T"

Preparation of an investment recommendation &
2 India Life Within T+1 working day
sending it to Levi for seeking approval / response

As-&-when investment
According approval to / reverting on the investment
3 AES PF recommendation is
recommendation
received

Immediately after an
Obtaining confirmation on availability of signatories
approval is accorded to
4 from Levi for deciding investment deal-execution India Life
the investment
dates
recommendation

Immediately after
Closure of investment deals, preparation of investment deal-
5 investment deal-execution documents & obtaining India Life execution dates are
signatures from Trustees communicated to India
Life

On designated deal-
6 Investment deal-execution India Life
execution dates

Within 2 working days
7 Intimation to AES Pf trust on deal-execution India Life from deal-execution
dates
Investment

Review
India Life

Capital
By 10th of every month
8 Sending of an Investment MIS to AES India Life
(for the previous month)
 Fund Review
Statistics as on December 31, 2016
Fund statistics

Statistics as on February 24, 2017 Figures in INR Millions.

a) Cost value of bonds 318.6

b) Invested value of Equity Mutual Funds 6.89

c) Value of Special Deposit Scheme (SDS) 45.2

d) Invested value in Fixed Deposits 4.9

Total corpus (a+b+c+d) 375.59

Market value of corpus 393.08

Average financial yield on corpus 8.79%

Average tenor of fixed income assets, in
4.49
years

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 Portfolio composition

Note:
1.Return on Equity Mutual Funds (including Index Funds) not annualized the absolute return is 7.43% as on 30-Nov-2016

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Rating exposure profile

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State exposure profile

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Maturity profile

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Equity mutual fund performance
comparison
As on 31-December-2016
Sl. No. Scheme Name 3-Months 6-Months 1-Year 3-Years
Return Rank Return Rank Return Rank Return Rank
Actively Managed Equity Mutual Funds
1 ICICI Prudential Dynamic Fund, Direct Plan - Growth Option 0.30% 1 7.91% 1 13.38% 1 15.91% 17
2 DSP Blackrock Opportunities Fund, Direct Plan - Growth Option -5.05% 10 5.17% 3 12.20% 2 20.52% 5
3 ICICI Prudential Multicap Fund, Direct Plan - Growth Option -5.50% 12 2.08% 9 11.35% 3 20.31% 6
4 HDFC Top 200 Fund, Direct Plan - Growth Option -3.78% 3 6.33% 2 11.28% 4 15.26% 18
5 Kotak Opportunities Fund, Direct Plan - Growth Option -4.71% 7 5.10% 4 11.08% 5 20.57% 4
6 Kotak Select Focus Fund, Direct Plan - Growth Option -5.00% 9 3.16% 7 10.75% 6 22.34% 2

7 ICICI Prudential Focused Bluechip Fund, Direct Plan - Growth Option -3.19% 2 2.57% 8 8.81% 7 15.96% 16

8 Birla Sun Life Frontline Equity Fund, Direct Plan - Growth Option -5.61% 14 4.29% 5 8.49% 8 17.36% 12
9 HDFC Equity Fund, Direct Plan - Growth Option -4.13% 5 4.10% 6 8.16% 9 17.03% 13
10 Birla Sun Life Top 100 Fund, Direct Plan - Growth Option -4.79% 8 0.77% 11 7.92% 10 17.80% 11
11 Franklin India Bluechip Fund, Direct Plan - Growth Option -4.52% 6 -0.88% 18 7.36% 11 15.19% 19
12 Franklin India Prima Plus Fund, Direct Plan - Growth Option -0.0554 1300.00% -0.0122 2100.00% 0.0617 1200.00% 0.2097 300.00%
13 SBI Blue Chip Fund, Direct Plan - Growth Option -6.95% 21 -0.59% 17 6.12% 13 19.82% 7
14 ICICI Prudential Value Discovery Fund, Direct Plan - Growth Option -3.99% 4 0.00% 14 5.97% 14 25.52% 1
15 DSP Blackrock Top 100 Equity Fund, Direct Plan - Growth Option -7.55% 23 1.12% 10 5.63% 15 12.78% 23
16 SBI Magnum Equity Fund, Direct Plan - Growth Option -7.44% 22 -0.31% 16 5.32% 16 15.96% 15
17 Franklin India Flexi Cap Fund, Direct Plan - Growth Option -5.73% 15 -1.20% 20 4.82% 17 19.11% 8
18 Tata Large Cap Fund, Direct Growth -6.27% 18 -0.07% 15 4.62% 18 13.86% 21
19 Kotak 50 Fund, Direct Plan - Growth Option -6.09% 17 -1.09% 19 4.34% 19 16.27% 14
20 Reliance Top 200 Fund, Direct Plan - Growth Option -5.41% 11 0.41% 12 3.43% 20 17.93% 10
21 Tata Equity Opportunities Fund, Direct Plan - Growth Option -6.78% 20 0.31% 13 3.07% 21 18.58% 9
22 UTI Top 100 Fund, Direct Plan - Growth Option -7.99% 24 -2.06% 22 2.34% 22 13.65% 22
23 UTI Equity Fund, Direct Plan - Growth Option -6.69% 19 -2.85% 23 1.60% 23 14.87% 20
24 UTI Opportunities Fund, Direct Plan - Growth Option -5.79% 16 -12.41% 24 0.32% 24 10.60% 24

Index Fund
1 UTI Nifty Index Fund, Direct Plan - Growth Option -4.90% - -1.32% - 3.88% - 10.45% -
2 Nifty Total Return Index (Benchmark) -4.81% - -1.21% - 4.17% - 10.89% -

Note:
1.Returns are as on 31-Dec-2016
2.Returns which are for a period less than 1-year are not annualized.
3.A universe of 24 schemes has been arrived at by using India Lifes Equity Mutual Fund scheme selection criteria.

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FY 2016-17 P&L forecast
Financial Year / Figures in INR Crs. 2016-17

Actual / forecast Forecast

PF rate / rate declared 8.65%

1. Total income [a+b+c] 12.27
a. Interest earned on investments 12.27
b. Interest earned from SB a/c 0.00
c. Miscellaneous income 0.00

2. Total expenditure [a+b+c] 12.13
a. Interest on contributions 11.83
b. Amortization of premium 0.30
c. Miscellaneous expenditure 0.00

Surplus (+) / deficit (-) [1-2] 0.14

Opening reserves 0.00

Closing reserves 0.14

Potential PF rate (excluding reserves) 8.75%

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Recent regulatory / market
developments 1
1. Central Board of Trustees of EPFO have approved a PF rate of
8.65% for FY 2016-17. The rate will have to be ratified by the
Ministry of Finance & notified for it to be applicable

2. Definition of inoperative amended effective November 11,

2016
Members who have retired / separated from service after 55 years
or migrated abroad and no application preferred within 36 months
only will be classified under inoperative accounts
Members ceased to be employed and no application preferred for
36 months either for settlement or for transfer of balances, the
unclaimed accumulation will continue to earn interest at statutory
rates declared by the EPFO

3. Limit for investment in Government Securities and Related

Investments category stands increased from 50% to 65%
retrospectively from March 17, 2016

4. Rate of interest on Special Deposit Scheme (SDS), 1975

reduced from 8.10% to 8.00%. The revised rate will be
applicable
Investments Review for the period October 01, 2016 to December 31,
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2016 15
EPFO stands to lose around 0.07% on its total portfolio due to this
Thank You

India Life Capital

P&L forecast assumptions
Asset Side
Attribute Particular

Average yield on incremental investments, assuming 0% return on

7.43%
equity investments

Remaining investments in...rating of bonds Sovereign & AAA rated bonds

Accounting policy Amortization of Premium
Income on equity mutual fund investment Not considered
Interest on SB account Not considered
Liability Side

Attribute Figures, INR Crs.

Opening balance of interest bearing liability including balance in

139.39
inoperative a/cs

Monthly contribution + VPF + transfer-ins 1.25

Monthly settlements + transfer-outs + loans 0.45

Back
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Allocation strategy to Govt.
Securities

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State ranking
State Rank 2016 Rank 2015 Rank 2014
Haryana 1 1 2
Maharashtra 2 2 5
Chhattisgarh 3 5 1
Orissa 4 3 3
Tamil Nadu 5 4 4
Madhya Pradesh 6 8 7
Jharkhand 7 9 9
Andhra Pradesh 8 6 6
Gujarat 9 11 13
Karnataka 10 7 8
Rajasthan 11 12 10
Kerala 12 13 14
Bihar 13 10 11
Punjab 14 16 15
Goa 15 14 12
West Bengal 16 17 17
Uttar Pradesh 17 15 16

Note:
1. State ranking is based on (a) Revenue Surplus (+) / Deficit (-) / GSDP and (b) Total Outstanding Liabilities / GSDP.
2. Data source is RBI reports on State Finances A Study of Budgets and India Life estimates.

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