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India Opportunity – The way ahead Wealth Creation from Indian Equities

ASK Investment Managers

April 2016

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• Introduction 3

• Investment Philosophy, Process and Themes 6

• Portfolio Construction 12

• Risk Management 13

• Investment Team 14

• Investment Offerings 17

• Performance Snapshot 20

• India Opportunity 22

Contents

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ASK Wealth Advisors

Since 2007

ASK Property Investment

Advisors Since 2009

Financial Planning &

Wealth Advisory

Introduction: ASK Group

Real Estate Advisory

ASK Investment Managers Since 1994

Discretionary

money management in Indian equities

ASK GROUP

ASK Pravi Since 2011

Private Equity Advisory

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Introduction : ASK Investment Managers

• Leading private money management firm in India

• Singular focus on managing money in Indian equities – ‘long only’ style

• Long term investors

• ‘Bottom-up’ fundamentals driven, value-based stock picking

• Disciplined research and investment process

• Experienced team of 3 portfolio managers and 5 investment professionals headed by a CIO

• Purely discretionary money management

• Clients include family offices, pension funds, private clients across the globe

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1) Capital Preservation

2) Capital Appreciation over a period of time

Key Investment Objectives

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• Greater certainty of earnings Vsmere quantum of earnings growth

• Superior and consistent quality of earnings Vs mere quantum of earnings growth

• High quality at a reasonable price Vs inferior quality at arithmetically “cheap” price.

Overarching Investment Philosophy and Principles

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• Price the value rather than valuing the price

• Buy “growth” businesses at “value” prices

• Disciplined investing into outstanding businesses

• Seek compounding opportunities

Investment Approach

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Value Creating Traits that we seek in our investments…

• Material Size of Opportunity

• Superior Management Quality

• Strong Earnings Growth – A Compounding Machine

• Superior Quality of Business

• Favorable Value

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Key Investment Attributes

Size of the Opportunity

• Size of pond Vs. size of fish

• Dominance

• Resilience

• Liquidity

Quality of Business

• High quality of business (Superior RoCE)

• Strong moat. Impregnability.

• Sustainability

• Key pivot of strong wealth creation

Earnings Growth

• Quantum

• Consistency

• Durability

• Predating (Early Vs Later)

• Compounding power

Value

• Favorable Price-Value Gap

• Margin of Safety

Four key investment attributes

In addition to the above, good management quality isa given constant

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Investment Themes and Concepts

Dominant Theme

Strategic Value Size of the

Opportunity Quality of Business

Size of the Opportunity

Quality of Business

Earnings Growth Value Growth Strategy

Life Strategy

Indian Entrepreneur

Strategy

Earnings Growth Value Size of the

Opportunity Quality of Business

Earnings Growth Value Size of the

Opportunity Quality of Business

Other Key Themes

Earnings Growth

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India Select*

* > Five best ideas from each of the four concepts, making total of 20 stocks in portfolio

> Portfolio to represent an eclectic mix of size, growth, quality and value; to achieve optimal balance

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• Disciplined adherence to investment philosophy / process

• Strong in-house proprietary research

• Team bandwidth and experience

• Strong relationships and industry interfaces

• Comprehensive understanding of Indian businesses and industries

• Comprehension of long term secular nature of India opportunity

Investment Edges

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Portfolio Construction

• Investment universe of nearly 200 companies

• Detailed evaluation of the character of business and valuation of each firm

• Optimal aggregation of about 20 stocks, to construct a stable and consistent portfolio, to generate superior returns over time

• Adequate sector diversification

• Model portfolios for all strategies

• “Portfolio Psychographics” - proprietary portfolio review tool

• Strict buy discipline: Focus on margin of safety, pre-defined levels for each strategy/concept

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Risk Management

• Integrated risk management and review mechanism throughout the investment process

• Disciplined Buy and Sell mechanism

• Discipline of buying businesses with reasonable margin of safety

• High discount factor (of 15%) for cash flows in our financial models builds conservatism in value estimation

• 6-8 interactions per year with the management team of every portfolio company

• Individual stock cap at 10%

• Risk Manager is responsible for monitoring and supervising the risk of the portfolio and implementing the risk management framework

• Regular and ongoing monitoring and reporting

• Independence of Risk Management Function – reports to Group CFO & Head Compliance

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Investment Team

The Investment Team is mentored by Bharat Shah, Group Director

Prateek Agrawal Business Head & CIO

Gaurav Misra Senior Portfolio Manager

Sumit Jain Portfolio Manager

Research Portfolio Managers

5 Research Analysts

Sudhir Kedia Associate Portfolio Manager

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Bharat Shah – Executive Director – ASK Group • Internationally renowned with over two decades of capital markets experience

• Prior to joining ASK, was CIO at Birla MF, one of India’s largest Mutual Fund houses managing nearly USD 1.65 bn

• Built ASK Investment Managers into one of India’s largest providers of discretionary PMS services, managing close to USD 900 mn.

• Significant domestic and international recognition for investment performance

Prateek Agrawal – Business Head & CIO – ASK Investment Managers • Has 21 years of experience in capital markets with SBI Capital Markets as Head of Research (10yrs) , and Head of

Equity with ABN Amro and Bharti Axa AMCs (3.5yrs each)

• In SBI Capital Markets besides heading research he was part of team that handled VSNL privatization for the government and handled Hindustan Zinc for Vedanta group. On the advisory side he was actively involved in the power sector and in the oil and gas space.

• At ABN AMRO MF, he was head of equity and managed nearly INR 1200 cr of equity domestically and advised offshore assets worth USD700 mn and delivered stellar performance. He then helped set up the equity business at Bharti Axa IM in the post Lehman period.

• He joined ASK Investment Managers as CIO in April 2011

Biography

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Gaurav Misra – Senior Portfolio Manager • Over 20 years of experience in Investment Research and Portfolio Management

• Manages Growth and Life strategies

• Includes 10 years of experience in Private Equity and sell side research. Has been with ASKIM for over 10 years and worked with IL&FS group prior to that

• Is an MBA from IIM Lucknow and BA Economics (Hons) from St. Stephen’s College, Delhi

Sumit Jain – Portfolio Manager • 10 years of experience with ASK Investment Managers

• Manages Indian Entrepreneur Portfolio strategy

• Also engaged in research of business within ASKIM universe, identifying new investment opportunities and tracking their performance at regular intervals

Sudhir Kedia – Associate Portfolio Manager • Started career with ASK and has over 10 years of experience in Investment Research and Portfolio Management

• Research exposure in diverse sectors like FMCG, Auto & Auto Ancillary, Cement, Media, Infrastructure, Real Estate, etc.

• Strong academic background and a qualified CA (ICAI), CMA (ICWAI) and PGPEB (MBA) and B.Com(H) from Calcutta University

Biography

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Investment Options - Offshore

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India Emerging Opportunities Fund (IEOF)

• Launched in 2003

• Regulated by FSC, Mauritius and SEBI, India

• Registered fund under FPI Category-II of Securities & Exchange Board of India (SEBI) FPI Regulations 2014

• Investment Manager - Enterprise Investment Managers Pvt. Ltd., Mauritius

• Investment Advisor- ASK Investment Managers Pvt. Ltd.

• Fund Administrator- Apex Fund Services Ltd.

• Auditors - Ernst & Young

• Bankers- Deutsche Bank, Mauritius

• Custodians - Kotak Mahindra Bank Ltd. (India)

• Tax efficient structure for investing in Indian markets

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India Emerging Opportunities Fund (IEOF)

NAV FUNDS

Growth

SEGREGATED ACCOUNTS

# Only select classes are shown here

IEOF - Investment Offerings

Indian Entrepreneur Fund

SHARE CLASSES#

India Select

Strategic Life Fund

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Performance Snapshot (INR)

Note: Performance figures are net of all fees and expenses.

(in % INR) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(29-Jan-2001)

Growth 15 -16 24 11 61 11 -1 137 15 21

Nifty 18 -25 28 7 31 -4 -1 51 7 12

(in % INR) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(1-Sept-2008)

Life 26 -7 24 15 53 5 -4 159 16 19

BSE 200 16 -27 31 4 35 -1 -2 52 7 9

(in % INR) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(25-Jan-2010)

IEP 29 -13 30 22 70 8 1 226 21 21

BSE 500 19 -27 31 3 37 -1 -2 56 7 7

(in % INR) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(Dec-2009)

Strategic 16 -22 32 16 73 12 -2 159 16 16

BSE 200 16 -27 31 4 35 -1 -2 52 7 7

(in % INR) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(4-Jan-2010)

India Select 25 -17 27 20 70 14 0 205 19 19

BSE 100 15 -26 30 6 32 -3 -2 48 6 6

GROWTH STRATEGY

LIFE STRATEGY

INDIAN ENTREPRENEUR STRATEGY

STRATEGIC

INDIA SELECT STRATEGY

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Performance Snapshot (USD)

Note: Performance figures are net of all fees and expenses.

(in % USD) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(29-Jan-2001)

Growth 19 -29 20 -2 57 6 -1 66 8 18

Nifty 23 -37 24 -6 28 -8 -1 6 1 10

(in % USD) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(1-Sept-2008)

Life 31 -22 21 2 50 0 -4 82 10 13

BSE 200 21 -39 27 -8 32 -6 -2 7 1 3

(in % USD) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(25-Jan-2010)

IEP 33 -27 26 8 66 3 1 126 14 14

BSE 500 23 -39 28 -9 34 -5 -2 8 1 1

(in % USD) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(Dec-2009)

Strategic 21 -35 28 2 69 7 -2 82 10 10

BSE 200 21 -39 27 -8 32 -6 -2 7 1 1

(in % USD) 2010 2011 2012 2013 2014 2015 2016 (Apr YTD)

Absolute

Returns Since

2010

CAGR

Since 2010

CAGR Since Inception

(4-Jan-2010)

India Select 30 -30 24 6 66 9 -1 113 13 13

BSE 100 19 -38 26 -6 29 -8 -2 3 1 1

GROWTH STRATEGY

LIFE STRATEGY

INDIAN ENTREPRENEUR STRATEGY

STRATEGIC

INDIA SELECT STRATEGY

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INDIA OPPORTUNITY

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Indian Economy – Size and Diversity • In current dollars terms, the GDP stands at US$ 2tn.

• In purchasing power parity terms, India is the third largest economy at US$ 4.5tn

• Holy trinity of key bulwarks: Consumption, Savings and Investments

• Consumption accounting for 57% of GDP, Savings at 31% and Investments also at 29%

• GDP is well-balanced across Services (56% of GDP), Manufacturing and Industry (29%)

and Agriculture (15%)

• Largely domestic economy (94% of GDP), making it more resilient to external shocks

• Rising middle class

• Robust banking sector and well-developed capital markets

• Strong capital efficiency of corporate sector

• Favorable demographics

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Global Developments

• Global situation challenging, may remain for some time

• Europe, China, EMs – Brazil, Russia & South Africa,

• Oil-based Gulf and commodity-based economies – Australia/Canada

• Recent volatility could sustain from

• US Fed rate hike / expectation

• Highly Leveraged EMs & their corporate sector

• India – not only doing well, but also improving

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India Update – Macros have been improving

• Concerted policy actions and monetary management have led to

• Early stages of pick up in activity

• Reduction of fiscal and current account deficits to comfortable levels

• India’s trade deficit at a decadal low

• Inflation controlled below RBI‘s upper limit

• Has helped 150 bps cut in interest rates; more expected

• INR might be volatile on short term global cues; expect medium term stability

• Pick up in FDI – 45% y-o-y growth

• Forex reserves at $360 billion – the highest ever

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India Update – Macros have been improving Early stages of pick up in activity

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India Update – Policy Actions

• Policy actions and Monetary management have led to

• Market determined pricing of retail fuels,

• To lead to more efficient utilization/consumption of fuels

• Auction of Natural resources - coal, minerals and spectrum

• Increase transparency and efficiency in capital allocation

• Opening of 200m bank accounts for the unbanked (financial inclusion)– Jandhan Yojana

• Along with Direct Benefit Transfer(DBT) for cooking gas, fertilizer and food subsidy

• Reduces leakages and government subsidy bill

• Strong focus on Manufacturing - Make in India

• Solid progress on Ease of Doing Business

• Defence opened up for private sector

• FDI liberalized across sectors

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India Update – Policy Actions

• Regulator for the real estate sector

• Flexibility in Import of crude oil for Public Sector Units

• Transparency in domestic gold consumption

• Large scale roll out of crop insurance

• Health and Life insurance cover for the needy

• “Housing for All” by 2022 and sanitation by 2019

• “Electricity for All” including un-electrified regions by 2018

• Strong ramp up in road and renewed focus on irrigation

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India – Outlook

• In spite of being bullish at the beginning, markets recorded negative returns for 2015

• Our portfolios still registered healthy positive gains

• Bitten by the challenges of 2015, as a reflex action, investors have turned cautious for 2016

• However, fundamentals are actually getting better

• Hence in our view, markets may actually do well in 2016

• We also remain positive on a longer-term period as well

• Our investment model continues to identify and invest into outstanding businesses and

investments

• which continue to do well over long run

• without much reference to underlying economy or markets

• our good micro stock-picking coinciding with improving macro economic fundamentals

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India – Outlook

Parameters Trends and Outlook

Inflation On a declining slope. To remain within RBI target of 5% (by FY17)

Oil Current drop helpful; Outlook steady

Interest Rate 150 bps rate cut; more expected

Earnings Growth outlook is bottoming out; FY17 expected to be stronger than FY16

Valuation Around Long-Term average

Capex Cycle Revival may take time; Stuck capacities being revived first and fresh capex

thereafter

Sentiments Are good

Rupee (Hopefully) should be range bound

Global Weak and Uncertain

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Road Ahead

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• GDP growth rate to expand from 4.5% in FY 14 to around 8% by FY 19

• The long-term GDP to Corporate Profit multiple has been 2.5 to 4 times

• This, therefore, should translate into 5-year CAGR earnings growth of 12 – 30%

• Let us assume a more modest range of 15 – 20%

The Road Ahead

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• Average Corporate Return on Capital Employed for FY 05 stood at 24% and has now fallen to 17%

• It is expected to climb back to 23% – 24% by FY 19

• Rising capital efficiency typically implies, and results into, expanding valuations

• Valuations are at 14.5 for FY 17E (below 10-year average)

The Road Ahead

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• Twin effects of rising corporate profits and improved valuations will imply healthy investment

returns over a long period of time

• Even if we don’t assume rising valuations, investment returns should at least match CAGR of

profits of 15 – 20%

• In sum, economy and markets are moving from a vicious cycle of past five years to a virtuous

cycle

The Road Ahead

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• Over last 25 years, Indian markets have never experienced a real bull market

• Previous cycles of 1987 – 89, 1991 – 92 and 2000 – 01 have all been shallow, narrow, of a short

duration or inadequately supported by fundamentals

• Even the rise of 2004 – 07, a relatively superior cycle, lost fundamental legs from 2006 onwards

• The decade ahead will witness the first, real, secular, compounding, transformational rise of

Indian equity markets

• Misallocation or under-allocation to equities, now, will result in serious real cost extracted from

the wealth

The Road Ahead

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Correlation of Indian markets with GDP Correlation of GDP growth vis-à-vis Corporate Earnings growth, Market Cap growth and rerating of Indian markets

Please refer to the next slide for notes

Year Real GDP

Growth (%) Index = 100

Nominal GDP Growth (%)

Index = 100 PAT Growth

(%) Index = 100

M.Cap Growth (%)

Index = 100 M.Cap /

GDP

Mar-04 8.1 108 12.2 112 44.3 144 99.3 199 46%

Mar-05 7.0 116 17.1 131 37.6 199 47.7 295 58%

Mar-06 9.5 127 14.1 150 21.3 241 68.5 496 86%

Mar-07 9.6 139 16.6 175 44.1 347 23.0 610 91%

Mar-08 9.3 152 15.9 203 26.9 440 36.0 830 107%

Mar-09 6.7 162 15.7 235 -18.5 359 -35.6 534 59%

Mar-10 8.6 176 15.2 270 36.9 491 97.7 1056 102%

Mar-11 8.9 191 18.7 321 17.3 576 9.7 1158 94%

Mar-12 6.7 204 15.8 371 -5.8 543 -16.7 965 68%

Mar-13 4.5 213 11.9 415 -1.6 534 5.5 1018 64%

Mar-14 4.7 223 11.5 463 7.3 573 17.3 1194 71%

Mar-15 7.2 239 10.8 513 2.5 587 36.4 1629 78%

Mar-16 7.6 257 11.0 569 2.7 603 -6.2 1528 69%

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Correlation between GDP growth and Corporate earnings

• Over last 12 years, real GDP more than doubled while Corporate net profits have risen more than six times

• Real GDP growth and Corporate earnings have shown a close correlation of over 2 times

Attractive valuation of Indian markets

• Market cap to GDP ratio of only 69% (March 2016) shows undervaluation

Correlation between GDP growth and Market cap growth

• Over last 10 years, the nominal GDP has increased five fold while market cap has risen more than fifteen fold

• Nominal GDP growth rate and Market cap growth has shown a strong correlation of 3 times

Correlation of Indian markets with GDP

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Returns from Global Markets (% CAGR) (as on 31 Mar ’16)

Markets 20 years 10 years 5 years 1 year

India 11 8 5 (9)

China 9 9 1 (20)

USA 6 5 7 (1)

UK 3 0 1 (9)

Japan (1) (0) 12 (13)

Australia 4 0 1 (12)

Brazil 12 3 (5) 0

Russia N.A. 4 1 15

MSCI EM Index 3 1 (6) (14)

Source: Bloomberg Note: Returns are in local currency of respective countries

Long-Term Returns of India vs. Global Markets

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RISK FACTORS: Equities as an asset class carry a higher risk in comparison to debt. While risk cannot be totally eliminated, it can be mitigated through a well-designed investment strategy. The ASK Investment Managers Portfolios seek to mitigate risk and deliver superior returns through research-based investing. However, this objective may not be fully achieved due to various reasons such as unfavorable market movements, misjudgment by portfolio manager, adverse political or economic developments etc.

DISCLAIMER: Any information contained in this material shall not be deemed to constitute an advice, an offer to sell/purchase or as an invitation or solicitation to do for security of any entity and further ASK Investment Managers Private Limited (ASKIM) and its employees/directors shall not be liable for any loss, damage, liability whatsoever for any direct or indirect loss arising from the use of this information. Recipients of this information should exercise due care and caution and read the offer document (if necessary obtaining the advice of finance/other professionals) prior to taking any decision on the basis of this information.

ASK Investment Managers Private Limited has not independently verified all the information and opinions given in this material. Accordingly, no representative or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this material.

Disclaimer

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Thank You