Investments Narrative

The Investments process covers the following sub-processes: Investment Proposal and Redemptions o o Acquisition Redemption

Accounting for Dividends and Interest Investment Valuation and Reporting

Investment Proposal and Redemptions Investment Policy and Procedure are decided by the Board of Directors at the Annual Board meeting. The minutes of meeting and Investment Policy and Procedure are archived for investment decisions. On a quarterly basis, the Financial Clerk prepares a cash flow statement highlighting the deficit/surplus funds with the company. The cash flow statement is reviewed by the Finance Manager. The cash flow statement is analyzed by the Finance Manager, identifying deficit/surplus, with the projected fund requirement in the following quarters and years. Investment Acquisition If a surplus of funds is identified, the Finance Manager prepares a detailed proposal for investment (long term/short term including classification of Investments) as per Investment Policy and Procedure and verifies that it aligns with the minutes of the board meeting. The detailed proposal is sent to the Finance Controller and VP of Finance for review and approval as per authority matrix (R_CEM1_3); (R_CEM1_9); (C_CEM1_3); (C_CEM1_6). Once approved, the Investment decisions are conveyed to the Finance Clerk for Investments. The Finance Clerk prepares a journal entry for acquiring investments and the journal entry is posted in the ERP once approved by the Finance Manager. The Financial Clerk maintains an Investment Schedule with the details of Investment acquired/redeemed by company. Finance Manager sends the detailed proposal (along with classification of investment) of investment to Treasury for procuring the Investment (R_CEM1_1); (R_CEM2_1); (R_CEM2_4); (R_CEM3_1); (R_CEM3_2); (C_CEM1_1); (C_CEM2_1); (C_CEM3_1). The Treasury Department procures the investment and a communication is sent to Finance Manager and Financial Clerk. Investment Redemption If a deficit of funds is identified, the Finance Manager prepares a detailed proposal for redeeming investment (long term / short term) as per Investment Policy and Procedure and verifies that it aligns with the minutes of the board meeting. The detailed proposal (along with penalty/charges as applicable)
Note: This document is an illustrative example and is for information and education purposes only. It is not a substitute for professional advice, services, nor an entitys own internal control procedures and should not be used or relied on as such.

is sent to the Finance Controller and VP Finance for review and approval as per authority matrix. Once approved, the redeeming decisions are conveyed to the Finance Clerk for redemption. The Finance Clerk prepares a journal entry for redeeming investments and the journal entry is posted in ERP, once approved by the Finance Manager. The Financial Clerk maintains an Investment Schedule with the details of Investment acquired/redeemed by company. The Finance Manager sends the detailed proposal of redemption to Treasury Department for redeeming the Investment (R_CEM1_1); (R_CEM1_5); (R_CEM2_1); (R_CEM2_4); (R_CEM3_1); (R_CEM3_5); (C_CEM1_1); (C_CEM2_1); (C_CEM3_1). The Treasury Department redeems the investment and a communication is sent to the Finance Manager and the Financial Clerk. Accounting for Dividends and Interest Dividend/Interest Certificates for Investment are received by the Finance Department. Once the Finance Department receives the Dividend/Interest Certificates, the Financial Clerk prepares a journal entry for accounting the certificates. If, in the case the Dividend/Interest, checks are also attached to the certificates it sent to Account Receivable Department and if the Company has received the Dividend/Interest through wire transfer, the Information is communicated to the Accounts Receivable Department. Dividend/Interest journal entries are reviewed by the Finance Manager before they are posted in ERP by the Financial Clerk (R_CEM3_8); (R_CEM3_9); (C_CEM3_5). Investment Valuation and Reporting On a quarterly basis, the Financial Clerk obtains the third-party confirmation/custodian statement for investment held by the Company. The Financial Clerk reconciles the third-party confirmation/custodian statement to the Investment Schedule and the general ledger for ensuring that all acquired/redeemed investments are correctly recorded in the ERP. Differences, if any, are investigated and resolved during this reconciliation process. The reconciliation is reviewed by the Finance Manager for accuracy and completeness (R_CEM1_4); (R_CEM1_6); (R_CEM1_7); (R_CEM2_6); (R_CEM3_4); (R_CEM3_7); (C_CEM1_4); (C_CEM2_4); (C_CEM3_3). The Finance Manager also performs an investment analysis for identifying any unusual items or errors in the Investment Schedule along with the initial investment/redemption proposal. Unusual items or errors in the Investment Schedule are investigated and resolved. The Investment Schedule Analysis Report is sent to the Finance Controller, Chief Financial Officer (CFO) and Chief Executive Officer (CEO). In the quarterly meeting, the investment patterns are discussed and agreed upon among the Finance Controller, CFO, and CEO (R_CEM1_2); (R_CEM2_2); (R_CEM2_3); (R_CEM3_3); (R_CEM3_12); (C_CEM3_8); (C_CEM1_2); (C_CEM2_2); (C_CEM3_2). Investments (long term/short term) are valued as per Investment Policy. On a quarterly basis, the Financial Clerk sends the Investment Schedule to the independent third-party actuarial service provider and obtains an Investment Valuation Report for the investment held by the Company. The Investment Valuation Report provides the FMV for the investments both i actively and not actively traded in market, the third-party actuarial service provider also determines the FMV for all the investments held by the Company at the quarter end. The Financial Clerk then prepares a detailed Investment Valuation Schedule for valuing the investment (including loan, advances, and accrued interest) as per Investment
Note: This document is an illustrative example and is for information and education purposes only. It is not a substitute for professional advice, services, nor an entitys own internal control procedures and should not be used or relied on as such.

Policy and applicable financial reporting frameworkU.S. GAAP, based on the Investment Valuation Report from independent third-party actuarial service provider. The Investment Valuation Schedule is sent to Finance Manager for review and approval. Once the Finance Manager agrees with the Investment Valuation Schedule, a Journal Entry ( valuing investment and accrued interest on investments, if any) is prepared for reflecting the investment value in the ERP (R_CEM2_7); (R_CEM2_8); (R_CEM2_9); (R_CEM2_10); (C_CEM2_5); (C_CEM2_6); (C_CEM2_7); (C_CEM2_8). The Investment Valuation Schedule and Journal Entry are sent to the Finance Controller for approval before being booked by the Financial Manager in the ERP (R_CEM1_8); (R_CEM1_10); (R_CEM1_11); (R_CEM3_10); (R_CEM3_11); (C_CEM1_5); (C_CEM1_7); (C_CEM1_8); (C_CEM3_7); (C_CEM3_6). The Financial Clerk reconciles the Investment Valuation Schedule to the general ledger. Differences, if any, are investigated and resolved. The reconciliation is reviewed by the Finance Manager for accuracy and completeness (R_CEM2_5); (R_CEM3_6); (C_CEM2_3); (C_CEM3_4). On quarterly basis, once the financial statements have been compiled, the Finance Controller performs a review of the financial statements, including all footnote disclosures. As part of this review, the Controller checks references to supporting documents (R_PDI_10); (R_PDI_11); (R_PDI_12); (R_PDI_13); (C_PDI_1); (C_PDI_6); (C_PDI_7).

IPE: o o o o o o o o o SEC_IPE_1 Investment Policy & Procedure SEC_IPE_2 Investment Proposal SEC_IPE_3 Investment Schedule SEC_IPE_4 Redemption Proposal SEC_IPE_5 Dividend / Interest Certificates SEC_IPE_6 Third-Party Confirmation/Custodian Statement SEC_IPE_7 Investment Schedule Analysis Report SEC_IPE_8 Investment Valuation Report
Formatted: Normal, No bullets or numbering

SEC_IPE_9 Investment Valuation Schedule

Note: This document is an illustrative example and is for information and education purposes only. It is not a substitute for professional advice, services, nor an entitys own internal control procedures and should not be used or relied on as such.