'I

~ ...., •.:l~"

i•.i••

i•i•i•i•i•i•i•i•i•i•i•i•i•i•i•i•i•i•i•i•i•i•

•.:l •..:l ...:l .~ ....:l

EMPLOYEES' P,~OVIDENT FUND ORC?ANtSATION! .

!

! NEW DELHI;i.,

117th M · f h .. eeting 0 t ~ .., .

FINANCE ~NVESTMENT AN·DAUDITl' COMMITTEE!1ij::.

, On

lO~01.2015 at 12:00 (Noon) .

,•,,;

..rCENTRAL BOARD OF TRUSTEES, EMPLOYEES' P~OVIDENT FUND]

t""!

VENUE: ;'. Conference Hall, •

3rd;·Floor, EPFO ( Head Office), ,. Bhavishya Nidhi Bhawan, ;. 14, Bhikaiji Cama Place,

NEW DELHI - 110066. i

EMPLOYEES' PROVIDENT FUND ORGANISATION

AGENDASOOK117th Me~ting of the Finance Investment and Audit Committee,

. . CBT, EPF

Date: 20~01.2015 INDEX OF IT~MS!;;~,i:~

Time: 12:00 Noon

ItemNo. Agenda Page No.

1. Confirmation of the Minutes of 116th Meeting of the FinanceInvestment and Audit Committee held on ~9.01.2015 Regarding - 1-6Opening of bids for appointment of Portfoll~ Managers and furtheraction thereon. q

~~;

Takent

116th2. Action Report on the recommendations of the 1-Rnance Investment and Audit Committee held on 9.1.2015..

! 1-------------3. Opening of Financial bid of bidders successful in technical stage----

and further action thereon for Appointment of Portfolio E> -LlJManagers by EPFO.

.;

Any other item with the permission of the d~air! ~..

,;i·,

Item No. 1: Confi~mation of the Minutes 0~'116th Meeting of the FinanceInvestment and Audit Committee held on 09.01.2015 at EPFOHeadquarter, New Delhi

Minl:ltes of 116th Finance Investmentand Audit Committee meeting held

on 09.01.201.5 as approved by the Chairperson, !FIAC was circulated vide letter No.

Invest.1/(1i6)i=iAc/i014-15/15294-15312 dated 1:9.01.2015. Copy of the minutes is;~;

enclosed as Annexure -1of this item.

Minutes may be taken as confirmed':

I:pi

'.>.,;)

Telephone~ "26178450 Fax No: 26194349

CfiAilitl J:Ifcl6l4 firfit ~-16il. . , .

"" "~mployees'Provident Fund Organisation(~vcf~~, 3ffin~

(Ministry of Labour & Employment, GovtOf India). 1&..<1I (if <I I Head OfficeBbaylshyl Nldbl Bbawan.l4=Bhllsalil cama PlacerN.;w Delhl-110066" " "

Date: 15.01.2015

To '"

All Members,Finance Investment & Audit Committee, "Cen"tral I;k>ardof Trustees, Employees' Provident "~~.md.

. . it

""" " HSub: fTorwarding minutes of the 116th meeting of ~e Finance Investment & Audit

Committee "(FIAC), CBT,EPF held on 09.01.2015 Hat EPFO, Head Office, New Delhi." " I"-fteg. " ;

Sir,

Minutes of "116th meeting of the Finance Investment & Audit Committee held on

09.01.2015" are duly approved by the Chairman, FIAC. ~ minutes of l1Sth meeting of theFIAC held on 11/li/2014 ,duly "approved by the Chairma~, FIAC wete confirmed during the

116th RAC rneetmq. "" !"The" same are enclosed hereWith for your informafion and necessary action.'. ..',. I'

I

Encls:- As above

Yours faithfully,

Ii ~J::=:::f (AM~ SINGH)

REGIONAL!p.F. COMMISSIONER~II (INVEST.)!;:1I

t:

2

Minutes of bid oRen!nR for the selection process of Portfolio lVi~nagers for the EPFO's corpus

Date: January 9, 2015.Time: 2:30 PM'Venue: EPFO Head Office, Bhikaiji Cama Place, New Delhi

FIAC Members:

1. Mr. K. K:Jalan - The Central Provident Fund Commissioner2. Mr. D. S.Negi - Director, Ministry of labour & Employment, Government of India (on behalf

of Add!. Secretary) '.3. Dr. Ram S. Tarneja - Member, CBT, EPF (Employers'. Represeot'atlVe")4. Dr. G. Sanjeeva Reddy - Member, CBT, EPF (Employees' Reph~sentative)5. Mr. Prabhakar J •.Banasure - Member, CBT, EPF(Employees' !~epresentative)

I'

t:lr:[ ~EPFO Officers Pre~nt:·

1. Mr. Sanjay Kumar. - Financial Advisor and Chief Accounts Off;icer2. Mr. Abhay Ranjan - Regional P F Commissioner, Grade I, IM~3. Mr. Vishal Agarwal - Regional P FCommissioner, Grade II, IMe4. Mr. Ajay Kurnar > Regionai P F Commissioner, Grade II, IMC :5. Mr. Amul Raj Singh - Regional P F Commissioner, Gradetl, IMA

} ,

Consultant Representative: .

1; Mr. Mukesh Agarwal:"'President, CRISIL Research2. Mr. Manish Jaiswal- Senior Director, CRISILRisk Solution3. Mr. Jiju Vidyadharan"': Director, CRISILResearch4. Mr. Piyush Gupta - Associate Director, CRISll Research5. Mr. Vikram Shastry -.Manager, CRISIL Rese,mJi

Following are the minutes of bid opening on January 9, 2015;

'/.,

1. Shri Sanjay Kumar announced that EPFO had received a total of 8 bids before the deadline

of 11:00 AM on January 9, 2015. in response to the Reques~ for Proposal (RFP)for selection• I·,Hi" ~

of portfolio managers for EPFO's corpus.

2. It was decided by FIAC members not to open bid documents of State Bank of India (SBI),as

it was' decided to appoint S81 on nomination basis. (Representative of 5BI' Mohammad

Umar, Bid received at 9:50 AM on January 09, 2015) . i

3. The pre-qualification bids of the following applicants were opened during the meeting.

i. Axis Asset Management Company (Representative name: Neeraj Acharva, Bid

received at 9:30AM on January 09,2015).,

iL Birlasun LifeAsset Management Company (Repres~ntati\fe name: Sunny Singh, Bidii.j

recetved at9:35 AM on January 09,2015) i i

iii. HSBC Asset Management Company (Representa~ive name: Anurag Tvagi, Bid

received at.9;S5 AM on January 09, 201~)

iv. toci Securities Primary Dealership (Representative name: Ashutosh Garg, Bid

received at 1Q:15AM on January 09,2015)

v. ICiCIPrudential Asset Management Company (Representative name: Harish Iyer, Bid

received·at 10:30 AM on January 09,2015)

vi. .Reliance Capital Asset Management Company (Representative name: Gurbir Chopra,.Bid received at 9:50 AMon January 09,2015)

vii. UTI Asset Management Company (Representanve name: Dilip Kumar Mohantv, Bid

-received at 9:.45AM on January 09,2015)

4. Based on pre-qualiflcatlon criteria defined in the RFP, the pre-qualification documents were

examined' and it. was fOund· that apart from' bids of Birla Sun Life Asset Management

Company and Reliance Capital Asset Management Compa~y, the rest of the bidders have.:

submitted the affidavit and undertaking as required by EPfO. Though, Birla Sun life Asset

Management Company and Reliance Capital Asset Management Company have submitted

the affidavit and undertaking, the same are not in identic~1 format as prescribed by EPFO.'. I!. . ,:'

The FIACconsidered the same and decided to give chanq¢ to all such bidders to file thef

affidavit and undertaking in -exact format particularly in vi~W of the fact that the affidavit

and undertaking submitted by them has same substance asiasked and also the fact that the

deviation is non material and taking a rigid stance wilJ reduce the 'competltion The

qualification/disqualification of the applicants is as follows: .

i. ualified asA~sets Under Management (AUM).'i:, ... ,$':.<.:. i:

under debt funds aS~~}W~i I.Ss than Rs.1S, 000 Crore. The'_. . .,~" -: :::T::: ~:,;~:-:.~.':,~:::- , iH-. .

applicant hap'~·~.f_.;l~ded hybrid funds in tht!'.[~1.it~under debt funds. After

exclusion of ~~:.iri~dslAUM under debt funds was:'W~,'·;1.i656Crore. The same was

commuffl~ted·to the representative from Axis Asset Management Company, who

agreedwith the revision i,nAUM..'.

ii. ~irla Sun Life Asset Management Company:Qualified subject to tollowing,

• 'A'R,plicant'was requested to re-submit the CD of bid d~tU,.n,'lentswithout the

fin~ncial bid information (the applicant hadtncludedthe flnancial bid along. !

'~~'ttle pre-qualification and technical bids irl, the ~tn~i9D)

• A~~il~"twas requested tore-submit affidaJlt (a$'fl'~qI11redin sections 8.2.4, •

8.2.5an(H~.2.6 of RFP) and undertaking (as required in sections 8.27, 8.2.8

and 8,2.9 'of RFP)as per the required formats before 5:00 PM on Janu,uy '],',

.2015 ..

iii. MSBCAsset Management Company: Qualified:!Ii

iv. ICiCI Securitles Primary Dealership: Qualified, . .

v. ICfCI.Prudential Asset Management Company: Qualified

vi. Reliance Capit~' Asset Management Company: Qualified subject to following;

.' Applicant was requested to re-submit affidavit (as required in sections 8,) II,

8.25 and 8.2.6 of RFP) and undertaking (as required in sections 8.2.7, /3,/.B

-

''''''.

and'S.2.9 of RFP)as per the required format~ before 5:00 PM on January 14,

2015, .

vii. U'Tl.AssetManagement Company: Qualified subject to following;

.• legal opinion on pending investigations as indicated in the pre-qualification

bid document,. ,

5. The results of the technical bid evaluation will be shared with the FIAC on January 20, 2015,

The financial bids shall be

...

r,.; i!

:.,.') j'->3·,~

F'

Item No 2: Action Taken -Statement in respect of 116th meeting of FinanceInvestment and Committee held on 09.1.2015.

ItemNo.

3.

Decisions/Directions of FIAC

. .Opening of bids for the selection ofPortfolio Managers for the EPFO'sCorpu·s.

The bids of 7 Companies (Out of 8 bid$:received from. interested companies) exceptthe one from S8I were opened in 116~:,.Meeting of RAC. After evaluation of PreHQualification bid 6 companies except Axis AMq::were fOund' eligible for opening of Technic~1bids'. The technical bids of 6 companies wereopened in the said Meeting. It was decidedthat. the result of technical bids will be shared·with FIAC on zo= January, 2015 and thefinancial bids shall be opened after discussion.

Action Taken'.

}W""directed, technical bids of 6companies who successfullyqualified in Pre-qualificationstage have been evaluated bythe Consultant, MIs. CRISIL Ltdand the result /observatlons oftechnical bids evaluation arebeing placed in this Meeting.

;"

1/7·i.-r •. ~ _. I - (\f· ~., J 't 1- 1 ,,<.. ~; ! f (' i-' I.' fl~.""---'-'-'-'--"'-'-------' c-·----- - ..----...--.-- -... ,)

Item:3.Opening of Financial bids of bidders successful in technical stage andfurther action thereon for Appointment \of Portfolio Managers byEPFO.

::,

. i .

1. In response to advertisement and RFPuploaded on the EPFO website for appointment ofPortfolio Managers of EPFO,total 8 bids were received from following companies withinthe cutoff time i.e. 11:00 am on 09.01.2015 as detailed below that were placed before the116th Meeting of th~ FIAC held on Ogth January, 2015 called for the purpose:

.,Sr. Name of Company :i Bid receivedino. on 09.01.2015

at-. -.-.1. Axis Asset Management Company '. 9.30 am

-Asset ManagementCompany2. . Birla Sun life 9.35 am

- ~---3. ~11Asset Management Company 9.45 amt- ------:---- ._.-•.. --- --- . .4. State Bank of India 9.50 amf--- ---.-.-~--

"5. RelianceCapital 'AssetManagementCompany 9.50 am1-- .

,6. HSB~Asset ManagementCompany : 9.55 am.7. ICIeI ,SecuritiesPrimary Dealership Umit~ 10.15 am

--.--.- -;-,

8. ICIq Prudential Asset ManagementCompany 10:30 am"'-"'-

2. The minutes of the said Meeting ctwl, a,proved by the Chairman circulated vide letter, .,

dated 16.01.20~5 are placed as Annexure "A' for ready reference and perusal. As per the

approved minutes of the said FIACMeeting, the Committee decided not to open the bidsdocument of stete Bank of India (5BI), as the Board, in its 205th Meeting decided to

;

appoint SBI on nomination basis. Accordingly, the bid documents submitted by 5BI were; . .

not opened. Thereafter, the bid documents of remaining 7 bidders were opened for- :

evaluation.

3. After evaluation of Pre-Quaificatlon (PQ) bids, out of the' 7 bidders, one namely Axis Asset

Management Ltd. was disqualified for the reasons recorded in the minutes. As per the RFP

for the purpose; the technical bids of only those bidders were to be opened that qualified

in the PQ stage. Accordingly, the technical bids of re~aining 6 bidders (out of 8, one, . . i'

namely State' Bank of India was appointed on nornlnatlon basis, and two namely AxisAsset Management ltd,. was disqualified in PQstage) w,ereopened by the Committee for

.:.:L

t

evaluation of the same by the Consultant, Msl CRIS~~.It was directed by FIAC that they. '. .!~, may be evaluated by the Consultant latest by 19th Ja~uary, 2015 so that financial bids of

, , Lall those bidders' 'that qualify on technical parametdts are opened by the FIAC on 20th

", ,

January, 2015 i.e. the 'day scheduled for opening of fipancial bids.

I,

4. The,Consultant, MIs,. CRISIL evaluated the technical ~~s of 6 entities who qualified in pre-

qualificatipn stage. ,After evaluation of technical bids, list of the successful bidders for

opening of flnanclal bids shall be placed by the q{msultant before the FIAC on 20th

H

.Januarv, 2015. Ii!iH

. ~I5. It is highlighted that on the last occasion in 2011, wH~edeliberating the recommendation'. . ."

of Sub-Committee 'constituted for the .purpose (Minutes of Committee placed, as

Annexure 'B'),a'part from recommending the names of successful bidders for

appointment as Portfolio Managers of EPFO,FIACCl\SOrecommended the allocation of

funds' amongst the selected Portfolio Managers of EP'fO to the Central Board of Trustees

(CaD, EPF(Minutes of 10SthAC held on 27.07.2011 plaCedasAnnexUre 'C').:j

d;t

6. A,cordingly. the item is placed before the Committee FOr:.1!I

(i). '"Opening of financial bids of bidders successful in technical stage and evaluation,

(ii).

thereof.

RecOmm~nding to the CBT the number and names of Portfolio Managers to be

appointed to manage EPFOcorpus.

Also recornrnendmq to the CBT, allocation of ftinds amongst the selected Portfolio(ii).

M~nage~sof EPFO. i:

"Proposals contained' in Para 6 (i), (ii) and (iiDabo\le are placed before the

Committee for consideration.

"'. i

Iii:i:

Telephone: 26178450 Fax No: 26194349

CfiA;cutl ~ Rt tlf..4 f;rftt :8~1601

Employees' Provident Fund Organisation, (~''QCf ~~, m«f <Wm)

(Ministry of Labour & Employment, Govt.'Qf India):.;

, IHI4IIi'lC1 / Head Office i.2 .•• . :

Bhavlshxi Nidh! Bhawan.14-Bblkaij! Carol P"c:e. New DeJhl-ll0066

Date: 15.01.201S

Sub:

All f'1embers, .Flnance Investment & Audit Committee, :Ce'ntral Board of Trustees, Employees' Provident F4iJd.

. ; ~.I;:

Forwarding mmutes. of the 116th meeting of ~~ Finance Investment & AuditCqmmittee (FIAq, CBT,EPF held on 09.01.2015 :~~ EPFO, Head Office, New Delhi,'-Reg.. ! :':

Sir,

rvlinutes at ;116t!l meeting of the Fihance Investm~.nt & Audit Committee held on

09.01.2? 15 are' duly approved by the Chairman, FIAC. T~;;minutes of l1Sth meeting of the

FIAC held on 11/11/2014 duly approved by the Chalrman, ,F;IACwere confirmed during the::::

116th FIAC meeting; .1The same are enclosed herewith for your information and necessary action.

"

Enels:- 'As above

Yours faithfully I

, ~~-, ,: (AM~INGH)

REGIONALP~~.COMMISSIONER-II (INVEST.)'i~

'0-

t. -.-'

-,!.

Minutes of bid openin~ tor the selection process of Portfolio ~agers for the EPFO'scorpus. \\

: :

Date:' January 9, 2015Time: '2:30 PMVenue: EPFO Head office, Bhikaiji Cama Place, New Delhi

i:Ii

FIAC.Members:

1. Mr. K. K.Jalan - The Central Provident Fund Commission~r2. Mr. p. S. Negi - Director, Ministry of Labour & Employment, Government of India (on behalf

of Addl.Secretary) H3. Dt.Ram';S.Tarneja:- Member, caT, EPF(Employers' Rep~sentative)4:. Of. G. sanjeev.a Reddy.- Member,'CST, EPF(Employees' ~~presentative) "5. Mr. Prabhakar 1. Banasure - Member, CST, EPF(Employe~s' Representative)

L'·

EPFO Officers P.resen,t: ,r:

1. Mr..Sanjay Kumar - Financial Advisor and Chief Accounts OfficerI . ,

2. Mr. Abhay Ranjan - Regional P F Commissioner, Grade I, IMe3. Mr. Vishal Agarwal""- ~'egtonal P F Cornrnissloner, Grade II,:'MC4. 'Mr~ AjayKumar - Regional P F Comrnlssidner, Grade II, IMe5. Mr. Amul Raj StJlgh - kegional P F tommi~sionet, Grade II~lMA

Consultant Representative:1';

1. Mr:. M'ukt1sh Ag~lI1Nal"President, CRISll Research f2. Mr. M'an~ JajsW~I- '$enior Direct6r, CRI~ILRiskSolution !'r'3. Mr,.jiju vldyadharan ...•Dir:ector, calsu Reiearch '4. Mr: Piyush:G4pta - Associate Director, CRISILResearch5. Mr. Vikram Shastry - Manager, CRISIL Research ,

,.r:~!

Followi"ng are the minutes of bid ~pening on January 9, 2015; n~:\

I \

j-' \.,.:

.,-::'.. -) .~.

'\

1. "Shri Silnjay Kumar announced that EPFOhad received a total of 8 bids before the deadline

of 11:00 AM on ~anuary 9, 2015 in response to the Requ@ff;for Proposal (R~P) for selection

'. l!!of portfolio managers for EPFO's corpus. ."~!

i 2. It was decided ~Y i=,IACmembers not to open bid document~ of state Bank of India (S81), as

It was decided to appoint S8! on ncmmatrcn basis. (Representative of 581: Mohammad

Umar:,Bid received at 9:50 AM on January 09, 2015)

3. The pra-quahflcatfon bids of the following applicants were opened during the meeting:

I. Axis Asset' 'Mana.sement Company (Representative....cwne: Neeraj Acharya, Bid

received at 9:30 AM on January 09,2015)

ii., ,

BirlaSun.life· Asset Management Company (Repres~tative name: Sunny Singh, Bid.* , ,..

received at 9:35 AM on January 09, 2015) '. P .HSBC Asset' Management Company' .(Representa~ve name: Anurag Tvagi, .Bid. .' . . . preceived at 9:55 AM on January 09,2015) . ;:

ICICI Securities primary Dealership (Representative name: Ashutosh Garg, Bid

recerved at 10:15 AM on January 09,2015)

v. ICICI Prudential Asset Management Company (Representative name: Harish lyer, Bid

Iii.

iv.

received at 10:30 AM on January 09, 2015);

i:~~

vi. Reliance Capital Asset Management Company (Repre~ntative name: Gurbir Chopra,. I,. ,:Bid received ~t9:50 AM on January 09, 2015) .l i

vii. UTI Asset Management Company (Representative '~~me:Dilip Kumar Mohantv. Bid

received at 9:45AM on January 09, 2015)

4. B~sed on pre-qualification Criteria defined in the RFP,the pre-qualification documents were

examined and it 'was found that apart from bids of Birla Sun Life Asset Management

Company and Reliance Capital Asset Management Company, the rest of the bidders have

submitted the affidavit 'and undertaking as required by EP.f:~.Though, Blrla Sun life Asset• l:

Management Company and RelianceCapital Asset Manag~~ent Company have submitted. rj:;

/2 . !

~~lthe affidavit and undertaking, the same are not in ide~tical format as prescribed by EPFO.• . ":! "The' FIACconsidered the same and decided to give chance to all such bidders to file the

· .\

affidavit and undertaking in exact format particularly In view of the tact that the affidavit. . . .

~nd' undertaking submitted by them has same substance as asked and also the fact that the

deviation is non material and taking a rigid stance ;will reduce the competition: The

qualification/disqualification of the applicants is as folloWs:. ;i

i. Axi~Asset Management Company: Disqualified ~4Assets Under Management (AUM)d ;

under debt funds as on 31 October, 2014 w~!less than Rs.15, 000 (rare. The

~ppiican~ had also included hybrid funds In the AUM under debt funds. After

exclusion of such funds, AUM under debt funds Was Rs. 12,656 Crore. The same was'.' ;

.: communicated to the representative from Axis Asset Management Company, who

.agreed w.ith the revision InAUM.. ".,' J

ii.· Birta Sun Ufe Asset Management Company: Qualified subject to following;

• Applicant was. requested to re-submit the. ,CD of b'id documents without the

financial bid information (the applicant had included the financial bid along

~it~th~ pre-qualification and technical bid~I'I1"fJTl? Same CD)

• Applicant was requ~tted tb re-submit affidaVit (as tequired in sections 8.2.4,

.8.~.S and 8.2.6 of.RFP) and undertaking (as required in sections 8.2.7, 8.2.8

and 8.2.9 of RFP) as per the required formats before ':,:00 pr.;) on January 14,..

iii.

2015 ..

HSBCAsset MJnagement Cbmpanv: Qualified

iv. ICICI~~cur.ities ·Pri~ary Dealership: Qualified

v.j:

ICICIPr",dentia' Asset Manaaement Company: QualIfied" . . I"~

. Reliance Capital Asset Management Company: Qualified subject to following;

• Applicant was requested to re-submit affida.vit (as required in sections 8.2.4,

vi.

8.2.5 and 8.2.6 of RFP) and undertaking (as,required in sections 8.2.7, 8.2.8

\ .13

-:

. and 8.2.gof RFP) as per the required forma~ before 5:00 PM on January 14,i:ir1\;2015,

I':·

vii.· UTI Asset Management Company: Qualified subjeci!o following;• '. l •~.,

• legal opinion on pending investigations as;Indicated in the pre-qualification. ~.

hid document.

5. The results of the technical'bid evaluation will be shared with the FIAC on January 20, 2015.

The financial bids shall be opened after this discussion.

,.;:"

Pi

.~o\

r t 'A hY\JLxur(j~' t[:'

Meeting No.! 010Dat~:13)uly, 201lTime: 05:00 'PM .Held at: EPFOCentral Office

Minut~s .ofMeeting of the COmmlnee for·S.bectlon of Fund Manag~rs-". ~-.-" - '. .' r; ..t :

1 ~I:

Members Present; ,,I. Mr. 5amfrendra thatterjee- Central P FComm/ssloner,iEPFO(Chairman)II. fylr. Rajesh.Bansal.'FA & CO,EPFO(Member) 1· .III. M~.'K.LGoyal·- Regional P FCommissioner~Grade I, IMq, EPFO ( Member)

u:,

Consultant Represe'ntative:IV. Mr. Tarun Bhatia -olrecter, CRISILResearch

Keydlscusslon points '.

1. CR;Sll.St.ibmj~ed.th:e flnal report on the ItAssessment!~f p,roposals for appointment of FundMan~gers~ after evalu~ti!1gflnan~al bids of the apPIlCan~.

I. The financia' bids Qf the 5 ,quctlifledbJdders-w~ discussed. 'The technical bids of theappllca"ts had· been evaluated previously and ~isct.l$Sedat the committee held on 7'July, 2dU. . ,'.,:.. ~i

ii. The overall SCore and the tanking of the 5 qualified bldders Is as follows:

0.7566 5

0.7637 4

0.6178

iii. The final report was accepted by the committee.

15

. '.2. In line with RFP. the committee Identified the.4...• fun~ m~nagers ~ho will man~ge EPFO conThe same will. be tabled to FICand CSTor 14 JU~YI2011) ~. ~ ~~ .--

" .

<:J."~~-·'t ,~,,, .. ? ". V~'". i'- ~ ••• ~ • _, -.~-I':;·;Y:r:t,.:-.. ...•.-:.,-:-'-:':..'j [."-'':'- ...'~~'';; •..."T~,~;;rr;l-Af~'~\:#"{" P"",',- .. , \ ~ ~· ....jr.~~ f i t-... •.•. jJ~t~~;Q~~~2j.~~~!~~..f,~,;" Lr., ~'".- <"'~1/. ,r, H ,'".", :~.~:~~ -,~~:.,' ~~~"'J ••i:f~'"~:.t.~~~)~~?r~,

ICitl securities Primary Dea'er$hlp UniitedSta.tC!Bank of Indb.Rell_nee capita, ASset Management Umlted .~HS8C'Ass~ Managem,nt: (Iridla).Ptivat8l1mlt~

.,I'

3. In addition, the presentation for CST and FAas/were also discussed. ~. I'

I:

'. ~~.~ tI.r ~\~ti1\"~

(Rajesh Bansal)FA& CAD - Member

'(K LGoyal)RPFe-I (lMC) - Memt

~\~\1\\(Samirendr;Chatt~ee)

Central:P F Commlsslon,~r (Chairman)l: . 0--

(j-~~(1arul'l BH.tla)·

DIrector;.; CRIS(i Resea~chCbnsulta~tRepr~entative

.I

1

lI~

..16 i;;

.. ,atHlfljl

:~:i

:1

:.•.•..106THFIe Meeting (27.07.2011)

Annexure-A of Item No.1

Minutes of the 106TH meeting of Finance &~~nvestmentCommittee held, on 14.07'.2011.:.

The 105TH. meeting of the Finance and Inv~ent Committee, Central ~oard of

Trustees: EmpIOY~~S'Provident 'Fund was 'held at ~~.ooNoon on 14.07.2011, in the

Conference Room, '3R1 floor EPFO Head Office,New Delhi.(a) The following were present In the meeting:

Chairman, Fihanceand Investment Committee, CST, EPF-1. Shrj S. Chatterj~ and Central Provident Fund Cornmlssloner, Employees'

Provident FundOr anisation, Head Office.Vice Chairman, Finahc~tan nvestment Committee, CBT,

2. Shri Chaman Kumar EPF and Addl. ~ecret$ry, Financial Advisor, Ministry ofLabour & Em 10 ment,: (3ovemment of India

3. ~;~d G. "Sanjeeva' Me'niber,~BT.'EPF(E~~IOyees' Representative)

7 Shri S K Verma' Director Social Se~rity, Ministry of Labour and'. . Em loment, <3ovemmentof India

9. Shri Ratesh Bansal Convener and FA& CAO EPFO

Shri B N Rai ana S:h SantoSh Sataf cduld not atte~ 1the m.eting ~nd sought leave ofIi '\ ~Hi:

absence;(b) T:hefollowing officers attended:

1. Shri'K. L.,Goyai,¥RPFC-I(IMC)

. 2. Shri Raji~ Bisht, RPFC-II.(iMC)

i'!;;'j'

3.

4.

Shri. Sanjay Bisht, RPFC-II (Conference)", ,

Shri Rakesh-Kumar, RPFC-II (IMC) :1!:

Shri Manoranjan Kumar, RPFC-II (Investment) ;i~ ! :

,.. ~, ~ .

The Chairman welcomed all the membersand officers.present in the meeting.

I ~-1--I '7

.A--'-

.:

.' 2---~G r,:!106f FIe Meeting (27.07.2011)

0:,,•-Item 1: Confirmation Qf the Minutes of the 103rd " 104th meeting of the

Finance & Investment Committee held on 28;01.2011 & 03.02.2011 atEPFO, HQs, New Delhi !:: .

The minutes were approved by all the members.

Item No.2:. Statement showing the actions taken on th~: recommendations ofthe' 103rd Finance· & Investment ComnjJttee meeting' held on. ,;: .28.01.2011. 'it

(i

The Committee took note of the Action Taken Report

Item No.3. Appointment of new fund managers for managing the EPFO corpusfo~ a, period of 3 years. ' !

a) CPFC informed the members that the c~ronological sequence ofevents in the selection of fund managers: was given in the agenda, :1

. item. The" addendum placed on the' ~ableincluded the finalrecommendation of the three-memberCommittee regarding theseiecnon of the multiple fund managersU As per the evaluation of.,the technical and financial bids, following/four fund managers wererecommended for appointment as fundrnanaqers of EPFO for aperiod of 3 years: .

--1. ICICI Securities Prlmary Dealership Ltd.

2.. .state Bank of India

3.. Reliance Capital Asset Management Ltd

4'. HSBC Asset Management (India) Private Ltd.

The copy of the minutes of the selection Committee on 13.07.2011,in which tHe'selection was finalised, was al5ei»aced before the FIC.

b) C.RISIL, tne consultant, made a presentanon to, FIC pn the processand cnteria followed for the selection of Fund Managers., ,

I

'c) The' committee was informed that 11 E~pression of Interest (EOI)were received after the advertisement, and 10 of them were foundeligible for issuing the Request for Aioposal document. All 10

, I;

entities submitted the completed RFP d~ument including technicaland financial bids. The technical evaluation consisted of a detailed..set of quantitative and qualitative parameters and whightage ofeach suet) parameters as decided beforehand. It was also decidedto keep 65% as minimum qualifying .score in technical bid for

'"r g)r:r:r.r:r:rrr.r-

-------

106THFIe Meeting (27.07.2011)

conslderatlon for opening of fi~ancia' bid. The complete set ofscoring was made available in th$:addendum.

. . h:[ .

~) Out of '10 technical bids.only 5 a~licants qualified by scoring morethan minimum 65% criteria and tfleir financial bids were opened on

, 08.07,2011.. '

. e) .The final report on the basis of 'comblned score of technical andfinalJcial bids was submitted ;by the consultant, CRISIL on, 13.07.2011, which was placed land discussed by the selectionCommittee on the same day. Iii

IIIf) The FIC after examining the ~!genda note, the Addendum to

agenda note and the recommen~~tions of the' selection committeedecided to recommend the above mentioned 4 fund managers(Para ,~a) of Item No, 3) to th~ CST for appointment of fundmanagers from 01.09.2011 for a Reriodof 3 years..';'

Further, based on' the deliberations at FIC, it was observed thatth~te was a Widevariation among,the fund managers wi!h respectto the financial bids. On an 'average accretion of Rs. 20,000 croreper' annum to each bidder, the f,e payable to the lowest bidder(ICICI Securities Primary Pealer) iwould be RS.6 lacs, RS.B lacs tothe next lowest bidder (Reliance Capital AMC), RS.72 lacs to thenext lowest bidder (HSSC AMC) and RS.2 crore to the highestbidder (State Bank of India). The members of F=IC were notcomfortable with this wide variation and therefore recommendedthat the fund allocation should be, done in relation to the financialbidS.Accordingly, FIC recommenC(edthat the funds be allocated inthe tollowif)9proportion:' ,\• 'CICI S~rities Primary Peale~hip - 35%• Reliance GapitalAMC'- 35% ;i,• H'SBCAMO - 20% ':• State Bank of India.- 10%

The meeting ended with vote of thanks to the Chair.

************ -